Senior Facility Agreement - IFCO Europe Beteiligungs-GmbH
CONFORMED COPY
SENIOR FACILITY AGREEMENT
between
IFCO INTERNATIONAL FOOD CONTAINER ORGANISATION GmbH
as Borrower
and
IFCO EUROPE BETEILIGUNGS-GmbH
as IFCO Europe
BARCLAYS CAPITAL
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
and
BHF BANK AKTIENGESELLSCHAFT
as Joint Arrangers
BARCLAYS BANK PLC
BHF BANK AKTIENGESELLSCHAFT
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
CREDITANSTALT AG
DEUTSCHE BANK AKTIENGESELLSCHAFT, Munich Branch
NORDDEUTSCHE HYPOTHEKEN-UND WECHSELBANK AG
and
OLDENBURGISCHE LANDESBANK AG
as Co-Arrangers
BHF BANK AKTIENGESELLSCHAFT
as Agent and Security Trustee
Clifford Chance
<PAGE>
CONTENTS
Clause Page No.
Part 1
INTERPRETATION
1. Interpretation..................................................... 1
Part 2
THE FACILITIES
2. The Facilities..................................................... 26
3. Purpose............................................................ 26
4. Conditions Precedent............................................... 26
5. Nature of Banks' Rights and Obligations............................ 26
Part 3
UTILISATION OF THE FACILITIES
6. Utilisation of the Term Facility................................... 28
7. Utilisation of the Revolving Facility.............................. 29
8. Bank Guarantees.................................................... 30
9. Indemnity Relating to Bank Guarantees Issued by the Fronting Bank.. 32
10. Indemnity Relating to Bank Guarantees issued by the Agent on behalf
of the Revolving Banks............................................. 36
11. Guarantee Commission and Fees...................................... 36
Part 4
INTEREST
12. Interest Periods (Term Advances)................................... 38
13. Interest Rate and Payment.......................................... 39
14. Market Disruption (Term Advances).................................. 40
15. Market Disruption (Cash Advances).................................. 41
Part 5
REPAYMENT, PREPAYMENT AND CANCELLATION
16. Repayment of Term Loan and Cash Advances........................... 43
17. Prepayment......................................................... 43
18. Reductions in Revolving Commitments................................ 45
19. Cancellation....................................................... 46
Part 6
CHANGES IN CIRCUMSTANCES
20. Taxes.............................................................. 47
21. Tax Credits........................................................ 48
22. Tax Receipts....................................................... 48
23. Increased Costs.................................................... 48
24. Illegality......................................................... 50
25. Mitigation......................................................... 51
Part 7
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
26. Representations.................................................... 52
27. Financial Information.............................................. 56
28. Financial Condition................................................ 60
29. Covenants.......................................................... 70
30. Events of Default.................................................. 78
Part 8
DEFAULT INTEREST AND INDEMNITY
31. Default Interest and Indemnity.................................... 83
Part 9
PAYMENTS
32. Currency of Account and Payment.................................... 85
33. Payments........................................................... 85
34. Set-Off............................................................ 86
35. Redistribution of Payments......................................... 86
<PAGE>
Part 10
FEES, COSTS AND EXPENSES
36. Fees...................................................... 88
37. Costs and Expenses........................................ 88
Part 11
AGENCY PROVISIONS
38. The Agent, the Arrangers and the Banks.................... 90
Part 12
ASSIGNMENTS AND TRANSFERS
39. Benefit of Agreement...................................... 95
40. Assignments and Transfers by the Borrower................. 95
41. Assignments and Transfers by Banks........................ 95
42. Disclosure and Syndication................................ 96
Part 13
MISCELLANEOUS
43. Calculations and Evidence of Debt......................... 98
44. Remedies, Waivers, Amendments and Consents................ 98
45. Partial Invalidity........................................ 99
46. Notices................................................... 100
47. European Monetary Union................................... 100
48. Intercreditor and Security Trust Agreement
Acknowledgements and Undertakings......................... 101
Part 14
LAW AND JURISDICTION
49. Law....................................................... 103
50. Jurisdiction.............................................. 103
<PAGE>
THE FIRST SCHEDULE
The Banks and their Commitments................................................ 104
THE SECOND SCHEDULE
Form of Transfer Certificate................................................... 105
THE THIRD SCHEDULE
Conditions Precedent........................................................... 108
THE FOURTH SCHEDULE
Notice of Drawdown of Term Advances/Revolving Advances/Bank
Guarantees................................................................ 113
THE FIFTH SCHEDULE
Terms of Indemnity in relation to Bank Guarantees.............................. 114
THE SIXTH SCHEDULE
PART I
Form of Bank Guarantee to be issued by the Fronting Bank....................... 117
PART II
Bank Guarantee to be issued by the Agent on behalf of the Banks................ 118
THE SEVENTH SCHEDULE
Group Structure Chart.......................................................... 121
THE EIGHTH SCHEDULE
Existing Indebtedness.......................................................... 122
THE NINTH SCHEDULE
Material Intellectual Property................................................. 123
<PAGE>
THIS AGREEMENT is made the 20 day of February 1998
BETWEEN
(1) IFCO INTERNATIONAL FOOD CONTAINER ORGANISATION GmbH as borrower (the
"Borrower");
(2) IFCO EUROPE BETEILIGUNGS-GmbH ("IFCO Europe");
(3) BARCLAYS CAPITAL, DG BANK DEUTSCHE GENOSSENSCHAFTSBANK and BHF BANK
AKTIENGESELLSCHAFT as joint arrangers of the Facilities (the "Joint
Arrangers");
(4) BARCLAYS BANK PLC, BHF BANK AKTIENGESELLSCHAFT, DG BANK DEUTSCHE
GENOSSENSCHAFTSBANK, CREDITANSTALT AG, DEUTSCHE BANK AKTIENGESELLSCHAFT,
Munich Branch, NORDDEUTSCHE HYPOTHEKEN-UND WECHSELBANK AG and
OLDENBURGISCHE LANDESBANK AG as co-arrangers (together with the Joint
Arrangers, the "Arrangers");
(5) BHF BANK AKTIENGESELLSCHAFT as security trustee for the Beneficiaries (the
"Security Trustee");
(5) BHF BANK AKTIENGESELLSCHAFT as agent for the Banks (the "Agent");
(6) THE FINANCIAL INSTITUTIONS named in Part I of the First Schedule (the "Term
Banks"); and
(7) THE FINANCIAL INSTITUTIONS named in Part II of the First Schedule (the
"Revolving Banks").
NOW IT IS HEREBY AGREED as follows:
Part 1
INTERPRETATION
1. Interpretation
1.1 In this Agreement:
"Accountant's Report" means the report of C&L Deutsche Revision dated 10 October
1997 with a reliance letter in favour of the Security Trustee as security
trustee for the Beneficiaries from time to time;
"Accounting Principles" means accounting principles generally accepted in the
Relevant Jurisdiction in effect from time to time and consistently applied
Provided that, in respect of any consolidated financial statements of the Group,
"Accounting Principles" means
<PAGE>
accounting principles generally accepted in Germany from time to time and
consistently applied;
"Accounting Reference Period" means, in respect of any Group Entity, the
financial year or other period in respect of which the audited accounts of such
Group Entity are drawn up;
"Adjusted EBITDA" shall have the meaning ascribed to it in Clause 28.5;
"Advance" means, save as otherwise provided herein, an advance made or to be
made by the Banks hereunder;
"Apollo" means Apollo Verwaltungsgesellschaft mbH & Co.;
"Applicable Fronting Bank Rate" means in relation to a Bank Guarantee:
(i) where the original duration of such Bank Guarantee is equal to or less
than one year, nought point two per cent. (0.2%) per annum;
(ii) where the original duration of such Bank Guarantee is greater than one
year but less than four years, nought point two five per cent. (0.25%) per
annum; and
(iii) where the original duration of such Bank Guarantee is equal to or greater
than four years, nought point three per cent. (0.3%) per annum.
"Auditors" means any of Coopers & Lybrand, Price Waterhouse, Arthur Andersen,
KPMG, Ernst & Young or such other firm of auditors of international repute
approved in writing by the Agent (such approval not to be unreasonably withheld
or delayed) and being the auditors for the time being of all Group Entities;
"Authorised Signatory" in relation to either the Borrower or IFCO Europe and any
communication to be made, or any document to be executed or certified, by it,
means, at any time, any person:
(i) who is duly authorised at such time, in such manner as may be
reasonably acceptable to the Agent, to make such communication, or to
execute or certify such document on its behalf; and
(ii) in respect of whom the Agent has received a certificate signed by a
director or other authorised officer of it, or by another of its
Authorised Signatories, setting out the name and, where such person
is authorised to execute or certify documents, signature of such
person and confirming such person's authority to act as aforesaid;
"Available Revolving Facility" means, at any time, the aggregate from time to
time of the Revolving Available Commitments of the Revolving Banks at such time,
adjusted for the purposes of Clauses 7.1(iv), 7.1(v) and 7.1(vi) and a proposed
Revolving Advance only, so as to take into account any reduction in the
Revolving Commitment of a Revolving Bank which will occur prior to the
commencement of or during the Term relating to such proposed Revolving
<PAGE>
Advance consequent upon a cancellation of the whole or any part of the relevant
Revolving Commitment of such Revolving Bank pursuant to the terms hereof;
"Available Term Facility" means, at any time, the aggregate amount of the Term
Available Commitments of the Term Banks at such time;
"Banks" means the Term Banks, the Fronting Bank, the Revolving Banks and the
Hedging Counterparty and "Bank" means any of them (and, for the avoidance of
doubt, defining any person as a "Bank" does not imply that such person is a bank
for regulatory purposes);
"Bank Guarantee" means a bank guarantee (Garantie or Burgschaft) issued or to be
issued by the Agent on behalf of the Revolving Banks or by the Fronting Bank
pursuant to the terms and subject to the conditions hereof substantially in the
relevant form set out in the Sixth Schedule or in such other form as may be
requested by the Borrower and which is acceptable to the Fronting Bank (where
applicable), the Revolving Banks and the Agent;
"Bardusch" means Helmut Bardusch GmbH & Co.;
"Bardusch Loan" means a loan from Bardusch to the Borrower dated 30 September
1997 in an amount of DM3,438,028.60;
"Beneficiaries" means the Agent, the Arrangers, the Banks, each Hedge
Counterparty and the Security Trustee, and "Beneficiary" means any of them;
"Budget" means the consolidated budget of the Group for a financial year
delivered by the Borrower to the Agent pursuant to Clause 27.2;
"Business" means the business carried on by the Group at the date hereof;
"Business Plan" means the medium term profit and loss forecast for the Group
provided to the Banks in relation to the proposed Facilities and the financial
model initialled by the Agent and the Borrower and designated by the Agent and
the Borrower as "the Business Plan";
"Capital Expenditure" shall have the meaning ascribed thereto in Clause 28.5;
"Cash Advance" means a Revolving Advance made by way of cash advance (as from
time to time reduced by payment or prepayment);
"Cash Flow" shall have the meaning ascribed thereto in Clause 28.5;
"Commission Payment Date" means each date upon which guarantee commission is
payable pursuant to the terms of Clause 11.3;
"Commitment" means, in relation to any Bank, the aggregate amount of such Bank's
Term Commitment and such Bank's Revolving Commitment;
"Confidentiality Undertaking" means a confidentiality undertaking substantially
in the standard form from time to time of the LMA or in such other form as may
be agreed between
<PAGE>
the Borrower and the Agent;
"Contribution Contract" means the contribution contract dated 4 November/5
November 1997 between Schoeller Packaging Systems GmbH and IFCO Europe as set
out in the Seventh Schedule to the Investment Agreement;
"Current Assets" shall have the meaning ascribed thereto in Clause 28.5;
"Dangerous Substance" means any radioactive emissions and any solid, liquid or
gaseous matter which is dangerous or toxic to living things or which damages the
environment;
"Disclosure Letter" means the letter from the Borrower to the Agent dated the
date hereof in the agreed form;
"Drawdown Date" means, in relation to any Advance, the proposed date for the
making of such Advance or, in relation to any Bank Guarantee, the proposed date
for the issue of such Bank Guarantee;
"Duly Authorised Officer" means, in relation to any certification to be given by
or on behalf of either the Borrower or IFCO Europe, its Authorised Signatory
whose office and identity has been notified to the Agent where the Agent is
reasonably satisfied that such person is the appropriate person to give such
certification;
"EBITA" shall have the meaning ascribed thereto in Clause 28.5;
"EBITDA" shall have the meaning ascribed thereto in Clause 28.5;
"Encumbrance" includes any mortgage, charge, pledge, lien, hypothecation or
other encumbrance securing any obligation of any person or any other type of
preferential arrangement (including, without limitation, title transfer and
retention arrangements (other than those entered into in the ordinary course of
trading and liens and retention of title rights created by operation of law or
standard business terms), sale and leaseback, sale and purchase or deferred
purchase arrangements and the discounting or factoring of receivables on
recourse terms) having a similar effect or any other arrangement having
substantially the same economic effect as any of the foregoing;
"Environmental Approvals" means any permit, approval, identification number,
consent, licence or other authorisation required under any applicable
Environmental Laws;
"Environmental Claims" means any and all actions, suits, demands, demand
letters, claims, notices, investigations, proceedings, consent orders or consent
agreements relating in any way to any Environmental Law or any Environmental
Approval (hereafter "Claims"), including without limitation (a) any and all
Claims by governmental or regulatory authorities for enforcement, clean-up,
removal, response, remedial or other actions or damages pursuant to any
applicable Environmental Law and (b) any and all Claims by any third party
seeking damages, contribution, indemnification, cost recovery, compensation or
injunctive relief arising from alleged injury or threat to health, safety or the
environment;
<PAGE>
"Environmental Laws" means all laws and regulations compliance with which is
mandatory for any Group Entity in any jurisdiction, relating to waste or
contamination or pollution of air, water (including ground water and underground
water) or soil;
"Environmental Report" means the report of Environmental Resources Management
dated September 1997 with a reliance letter in favour of the Agent as agent for
the Beneficiaries from time to time;
"Event of Default" means any of those events specified in Clause 30.1;
"Excess Cash Flow" means, in respect of any Accounting Reference Period of the
Group ending on and after 31 December 1998, EBITDA for such Accounting Reference
Period adjusted as follows:
(i) deducting taxes paid during the relevant Accounting Reference
Period;
(ii) deducting increases (or adding decreases) in Working Capital over
the relevant Accounting Reference Period;
(iii) deducting Capital Expenditure;
(iv) deducting Total Debt Service;
(v) deducting the actual cash effect of extraordinary charges and
adding the actual cash effect of extraordinary income under the
Accounting Principles during the relevant Account Reference Period;
(vi) deducting the actual cash effect of currency losses and adding the
actual cash effect of currency gains during the relevant Accounting
Reference Period;
(vii) adding the actual cash effect of disposals (deducting any profit
element and/or adding any loss made on) of any asset made during
the relevant Accounting Reference Period permitted hereunder;
(viii) plus any net increase or minus any net decrease in the capital
element of any Permitted External Leasing entered into during such
Accounting Reference Period;
(ix) less the sum of (a) DM5,000,000 after deducting (b) the amount of
any taxes which are payable by any member of the Group in respect
of the Investment and in respect of any potential tax liabilities
identified in the Tax Report and which are not indemnified by SPS
pursuant to the Investment Agreement,
(without any double counting) each as determined by reference to the
relevant audited consolidated financial statements of the Group delivered
pursuant to the provisions of Clause 27.1;
"Existing Crates" means crates which are in existence at the date hereof and
which are the
<PAGE>
subject of the Leasing Facilities or which are manufactured after the date
hereof but for the sole purpose of replacing broken crates which are in
existence at the date hereof and which are the subject of Leasing Facilities and
which are otherwise dealt with in accordance with the terms of the Facility
Documents;
"Existing Indebtedness" means the Pool Indebtedness, the SPS Shareholder Loan,
the Bardusch Loan, the Hannover Finanz Loan, the Schroder Loan and the
indebtedness under the Leasing Facilities;
"External Finance Lease" means any Finance Lease where the lessor is not a
member of the Group;
"Facilities" means the Term Facility, the Tranche A Revolving Facility and the
Tranche B Revolving Facility and "Facility" shall mean any one of them;
"Facility Documents" means this Agreement, the Intercreditor Agreement, each
Bank Guarantee the Senior Security Documents, the Security Trust Agreement, the
Hedging Agreements, the fee letters referred to in Clauses 36.2 and 36.3, any
documents evidencing the terms of any other agreement or document that may be
entered into or executed pursuant to or in connection with any of the foregoing
by the Borrower or IFCO Europe or any of them or entered into by any person
creating or evidencing security for the obligations of the Borrower hereunder
whether by way of personal covenant, charge, security interest, mortgage,
pledge, or otherwise or regulating the priorities of such security, and any
other agreement or document designated in writing as a "Facility Document" by
the Borrower and the Agent;
"Facility Office" means, in relation to the Agent or any Bank, the office
identified with its signature below (or, in the case of a Transferee, at the end
of the Transfer Certificate to which it is a party as Transferee) or such other
office as it may from time to time select;
"FIBOR" means, in relation to any Advance or unpaid sum and any specified
period, the rate per annum determined by the Agent to be equal to either:
(i) the offered rate appearing on the relevant page (being currently page
"22000") of the Telerate screen which displays interest rates for the
currency in which such Advance or unpaid sum is denominated (or, if such
page or such service shall cease to be available, such other page or such
other service (as the case may be) for the purpose of displaying interest
rates for such currency as the Agent, after consultation with the Banks and
the Borrower, shall select) and for such specified period at or about 11.00
a.m. on the Quotation Date for such specified period; or
(ii) if the Agent is unable to access the Telerate Screen or if no such display
rate is then available for such currency or such specified period and, at
such time, the Agent has not selected any alternative service as
contemplated in (i) above, the arithmetic mean (rounded upwards, if
necessary, to four decimal places) of the rates (as notified to the Agent)
at which each of the Reference Banks was offering to prime banks in the
Frankfurt Interbank Market deposits in the currency in which such Advance
or unpaid sum is denominated and for such specified period at or about
11.00 a.m. on the Quotation Date for such specified period,
<PAGE>
and, for the purposes of this definition, "specified period" means the Interest
Period or Term for such Advance or, as the case may be, the relevant period in
respect of which FIBOR falls to be determined in relation to such unpaid sum;
"Final Maturity Date" means 30 September 2004 provided that if such day is not a
business day the Final Maturity Date shall be the immediately preceding business
day;
"Finance Lease" means a contract between a lessor and a lessee for lease or hire
of a specific asset in respect of the financing of crates and/or plant and
equipment;
"Financial Indebtedness" means in relation to any Group Entity at any time any
indebtedness incurred in respect of:
(i) the principal amount, and the capitalised element (if any), of money
borrowed or raised and debit balances at banks and premiums if any
and capitalised interest in respect thereof;
(ii) the principal and premiums (if any) and capitalised interest in
respect of any debenture, bond, note, loan stock or similar
instrument;
(iii) liabilities (including pursuant to counter-indemnities and
reimbursement obligations) in respect of any letter of credit,
standby letter of credit securing Financial Indebtedness arising
under this definition, acceptance credit, bill discounting or note
purchase facility and any receivables purchase, factoring or
discounting arrangements (to the extent that such arrangement is
with recourse to any Group Entity);
(iv) the capital value of any Finance Lease;
(v) the deferred purchase price of assets or services (except any such
arrangement entered into in the ordinary course of trading and
having a term not exceeding 180 days from the date on which the
liability was originally incurred);
(vi) liabilities in respect of any foreign exchange agreement (other than
foreign exchange agreements for spot delivery), currency or interest
purchase or swap or other derivative transactions or similar
arrangements (and the amount of the Financial Indebtedness in
relation to any such transaction shall be calculated by reference to
the mark-to-market valuation of such transaction at the relevant
time);
(vii) all obligations to purchase, redeem, retire, defease or otherwise
acquire for value any share capital of any person or any warrants,
rights or options to acquire such share capital in respect of
transactions which have the commercial effect of borrowing or which
otherwise finance its or the Group's operations or capital
requirements;
<PAGE>
(viii) any other transactions having the commercial effect of borrowing
entered into by such Group Entity; and
(ix) all Financial Indebtedness of other persons of the kinds referred to
in paragraphs (i) to (viii) above guaranteed or indemnified directly
or indirectly in any manner by such Group Entity, or having the
commercial effect of being guaranteed or indemnified directly or
indirectly by such Group Entity;
"Financial Quarter" shall have the meaning ascribed thereto in Clause 28.5;
"Financial Statements" shall be deemed to be a reference to the most recent
audited consolidated financial statements of the Group delivered pursuant to
paragraph (i) of Clause 27.1;
"Flotation" means the listing of any shares on any stock exchange or the grant
of permission to deal in any such shares on any recognised exchange;
"Fronting Bank" means BHF Bank Aktiengesellschaft or such alternative Bank as
may have agreed in writing with the Borrower and the Agent to issue any Bank
Guarantee in accordance with the provisions of this Agreement;
"GBL" means GISO Verwaltungsgesellschaft mbH & Co. Behalterleasing KG;
"GE" means General Electric Erste Beteiligungs GmbH, a wholly owned subsidiary
of General Electric Capital Corporation;
"Group" means the Borrower and its subsidiaries from time to time;
"Group Entity" means any member of the Group;
"Growth Capital Expenditure" shall have the meaning ascribed thereto in Clause
28.5;
"Hannover Finanz Loan" means a loan from Hannover Finanz to the Borrower dated 7
November 1995 in an amount of DM5,000,000;
"Hedge Counterparty" means any Bank which is a party to an outstanding Hedging
Agreement with the Borrower from time to time;
"Hedging Agreements" means any agreements entered into from time to time by the
Borrower with a Bank in relation to Permitted Treasury Transactions entered into
as described in the Hedging Strategy Letter;
"Hedging Strategy Letter" means the letter addressed to the Agent from the
Borrower setting out the approved and agreed hedging strategy in agreed terms
(to include interest rate hedging as well as foreign exchange rate hedging);
"Information Memorandum" means the document concerning the Group and the
Investment dated October 1997 prepared by the Borrower in relation to this
transaction and distributed by
<PAGE>
the Arrangers to certain banks or financial institutions during October and
November 1997 as the same may be updated from time to time with the agreement of
the Borrower and further circulated to certain banks or financial institutions
after the date hereof;
"Insurance Report" means the report regarding the insurances of each Group
Entity prepared by Burmester, Duncker & Joly insurance brokers to the Borrower
and addressed to the Agent on behalf of the Beneficiaries dated 14 January 1998
(as the same may be updated on or about the date hereof);
"Instructing Group" means:
(a) whilst no Advances or Bank Guarantees are outstanding hereunder, a
Bank or group of Banks whose aggregate Commitments, calculated on the
date on which the Agent seeks instructions from the Banks, amount (or,
if each Bank's Commitment has been reduced to zero, did immediately
before such reduction to zero, amount) in aggregate to more than sixty
six and two thirds per cent. (66%) of the aggregate of the Total
Commitments;
(b) whilst at least one Advance or Bank Guarantee is outstanding
hereunder, a Bank or group of Banks to whom in aggregate more than
sixty six and two thirds per cent. (66%) of the Outstandings is owed;
"Intellectual Property" means the Material Intellectual Property interests
together with any renewals or redesignations thereof and all other material
intellectual property now or in the future owned by any member of the Group;
"Intercreditor Agreement" means the intercreditor agreement entered into on or
before the date on which the first Advance is made hereunder between, inter alia
the Agent, the Security Trustee, the Hedge Counterparties, the Banks, the Senior
Subordinated Agent and the Senior Subordinated Lenders;
"Interest Period" means, in relation to the Term Advances, any of the periods
determined pursuant to Clauses 12.1 to 12.4 (inclusive);
"Investa" means Investa Projektentwicklungs-und Verwaltungs GmbH;
"Investment" means the investment of DM45,000,000 by way of equity in IFCO
Europe by GE in accordance with the Investment Agreement and the Contribution
Contract;
"Investment Agreement" means the investment agreement (including all schedules
thereto) dated 21/22 August 1997 and amended by amendment agreements dated 15
October 1997 and 4/5 November 1997 between Christoph Schoeller, Schoeller
Packaging Systems GmbH, Andrea Schoeller, Martin Alexander Schoeller, Schoeller
KG, Schoeller Plast Industries GmbH, General Electric Erste Beteiligungs GmbH
and GE Capital Corporation;
"IT Schedule" means a schedule setting out the planned timetable for the
installation of an information technology system within the Group;
<PAGE>
"Leasing Facilities" means the leasing facilities provided pursuant to
agreements dated 1 October 1995, 5 November 1996, 17 December 1996, 8 August
1997 and 30 September 1997 relating to a maximum aggregate amount of 4,980,770
crates between the Borrower and Bardusch and the leasing facility provided
pursuant to an agreement dated 1 October 1994 between Investa and the Borrower
relating to a maximum amount of 1,005,369 crates;
"Legal Due Diligence Report" means the legal due diligence report in relation to
the Investment prepared by Feddersen Laule Scherzberg & Ohle Hansen Ewerwahn
dated 17 October 1997 addressed to or with a reliance letter in favour of the
Agent for and on behalf of the Beneficiaries from time to time;
"Legal Opinions" means the opinions in the agreed form referred to in part F of
the Third Schedule and delivered on or before the date on which the first
Advance is made hereunder;
"Liabilities" shall have the meaning ascribed thereto in Clause 28.5;
"LMA" means the Loan Market Association;
"Margin" means one point seven five per cent. (1.75%) per annum or such lesser
rate per annum as may be in effect from time to time in accordance with Clause
13.5;
"Market Report" means the report of LEK dated 5 September 1997 with a reliance
letter in favour of the Agent as agent for the Beneficiaries from time to time;
"Material Adverse Effect" shall mean a material adverse effect on the business,
operations, liabilities, assets or condition (financial or otherwise) of any
Material Group Entity or on the ability of either of the Borrower or IFCO Europe
to perform its obligations under any of the Facility Documents;
"Material Group Entity" means the Borrower, IFCO Europe, GBL or any Group
Entity:
(a) having (when consolidated with the earnings before interest and tax or
turnover or gross assets of its subsidiaries) more than five per cent.
(5%) of the earnings before interest and tax or turnover or gross
assets of the Group all as determined by reference to the most latest
audited consolidated accounts of such Group Entity and the Group
Provided that:
(1) in the case of a Group Entity acquired after the end of the
financial period to which the latest relevant audited accounts
relate, the reference to the latest audited accounts for the
purposes of the calculation above shall, until audited accounts
for the financial period in which the acquisition is made are
published, be deemed to be a reference to such first-mentioned
accounts as if such subsidiary had been shown in such accounts by
reference to its own latest audited accounts, adjusted as deemed
appropriate by the Auditors; and
(2) if, in the case of any subsidiary which itself has subsidiaries,
no consolidated accounts are prepared and audited, its earnings
before
<PAGE>
interest and tax or, as the case may be, gross assets shall be
determined on the basis of pro forma consolidated accounts of the
relevant subsidiary and its subsidiaries prepared for this
purpose by the Auditors or the auditors for the time being of the
relevant subsidiary; or
(b) not falling within paragraph (a) above but which, as a result of any
intra-group transfer or re-organisation would, adopting either test
referred to in paragraph (a) above and as if the accounts referred to
in such paragraph had been drawn up immediately following such
transfer or reorganisation, be a Material Group Entity Provided that
such subsidiary shall only become a Material Group Entity upon the
completion of such transfer or reorganisation,
and a report by the Auditors that in their opinion a subsidiary is or is not, or
was or was not, at any particular time or during any particular period a
Material Group Entity shall, in the absence of manifest error, be conclusive and
binding on all parties hereto;
"Material Intellectual Property" means the intellectual property specified in
the Ninth Schedule and any other Intellectual Property which is material to the
Group's business;
"Material Leasing Agreements" means each of the Leasing Facilities and the
leasing agreements between the Borrower and GBL dated 1 January 1995, 31
December 1995, 31 October 1996, 1 January 1997, 1 July 1997 and 1 October 1997,
for an aggregate amount of 41,166,662 crates and any other leasing agreement or
contract entered into by the Borrower or any other Group Entity where the
duration of such agreement or contract is in excess of twelve months and the
capital amount of such leasing facility is in excess of DM1,000,000;
"MTS" means MTS Okologistik Verwaltungs GmbH;
"Net Disposal Proceeds" means the gross total proceeds of disposals, leases or
transfers of the right to receive any revenues or of any assets (including
marketable securities) of any Group Entity (other than disposals which
constitute Permitted Leasing or Permitted Factoring) which (when aggregated with
the proceeds of all other such disposals, leases or transfers by Group Entities)
exceed DM1,500,000 (or its equivalent) in any financial year of the Group less:
(i) out of pocket expenses properly incurred;
(ii) sales of stock and other disposals in the ordinary course of
business;
(iii) the unpaid principal balance on the date of such disposal, lease or
transfer of any Permitted Indebtedness secured by a Permitted
Encumbrance on the asset disposed of, leased or transferred which
must be repaid by the seller on such disposal (together with any
premiums, interests or fees required to be paid in connection
therewith);
(iv) any sale taxes paid or payable by the seller due to such sale; and
(v) any income, capital gains or other taxes incurred and required to be
paid by the seller in connection with such disposal, lease or
transfer as reasonably
<PAGE>
determined in good faith by the seller on the basis of the existing
average tax rates applicable to the gain (if any) and after taking
into account all available credits, deductions and allowances;
"Net Worth" shall have the meaning ascribed thereto in Clause 28.5;
"New Crates" means any crates not owned by any member of the Group at the date
hereof and which have not been used by the Borrower or any other member of the
Group for trading purposes;
"Non-Group Entity" means any person which is not a member of the Group;
"Notice of Drawdown" means a duly completed notice substantially in the form set
out in Part I of the Fourth Schedule;
"Original Financial Statements" means the audited consolidated financial
statements of the Group for its financial year ending 31 December 1996;
"Outstandings" means, at any time, the aggregate of:
(i) the amounts of each outstanding Revolving Advance; and
(ii) the amounts of each outstanding Bank Guarantee (a Bank's share of the
Outstandings in respect of a Bank Guarantee being the amount thereof
allocated to such Bank pursuant to the provisions of Clause 8 as
reduced pursuant to the terms hereof); and
(iii) the amount of the Term Loans at such time;
"Patent" means the Patent relating to a plastic container, especially a
vegetable container with hinged sides (registered at the European Patent Office
under number EP93902215 and with the World Intellectual Property Organisation
under number PCT/EP93/00091);
"Permitted Crate Disposals" means any disposal of New Crates made for the
purposes of sale and leaseback arrangements forming part of any Permitted
Leasing transaction;
"Permitted Disposals" means in any financial year disposals of assets not being
Material Intellectual Property which are:
(i) disposals by a Group Entity in its ordinary course of trade;
(ii) disposals of assets and/or revenues for cash by a Group Entity where
the value of the aggregate net consideration received in respect of
all such disposals by Group Entities does not exceed DM2,500,000 or
its equivalent in any one financial year; or
(iii) disposals which are Permitted Transactions, Permitted Crate
Disposals or made pursuant to Permitted Factoring;
<PAGE>
"Permitted Encumbrances" means:
(i) Encumbrances arising hereunder or under any of the Senior
Subordinated Security Documents or Senior Security Documents;
(ii) any Encumbrance which the Agent, acting on the instructions of an
Instructing Group, has at any time in writing agreed shall be a
Permitted Encumbrance, provided that the amount secured thereby is
not increased in amount or extended in terms of repayment date;
(iii) up to the date falling six months after the date hereof only, any
Encumbrance securing up to a maximum of 3,300,000 Existing Crates
created pursuant to the agreement dated 4 July/12 July 1996 between
the Borrower and Rewe-Zentral AG, Koln, Cologne;
(iv) liens arising by operation of law in the ordinary course of
business and not by reason of default and liens and retention
rights created pursuant to standard business terms (and not by
reason of default);
(v) any Encumbrance created in relation to the netting of Group bank
account balances;
(vi) any retention of title to goods supplied to the relevant Group
Entity where such retention is agreed in the ordinary course of its
trading activities;
(vii) any Encumbrance constituted by a Finance Lease, hire purchase or
conditional sale agreement, where the Financial Indebtedness
arising under such arrangement constitutes Permitted Indebtedness;
or
(viii) any Encumbrance arising under condition 14 of the general business
conditions of German banks with whom any Group Entity maintains a
banking relationship in the ordinary course of business;
"Permitted Expenditure" means, in respect of any financial year of the Group,
(i) capital expenditure made in accordance with the Business Plan; (ii) capital
expenditure financed by way of lease financing falling within paragraph (vi) of
the definition of Permitted Indebtedness (to the extent not already included in
(i) above) and (iii) other capital expenditure in a maximum aggregate amount
equal to 50% of the Excess Cash Flow for the previous financial year (or its
equivalent) (or such greater figure as may be agreed to in writing by an
Instructing Group);
"Permitted External Leasing" means any leasing of crates under External Finance
Leases where the aggregate Financial Indebtedness created thereunder falls
within the provisions of sub-paragraph (vi) of the definition of Permitted
Indebtedness and where the number of Existing Crates leased thereunder does not
exceed (when aggregated with the number of Existing Crates leased under all such
other leasing transactions) 6,000,000;
<PAGE>
"Permitted Factoring" means the non-recourse factoring arrangements between the
Borrower and DG Diskontbank GmbH as the same are in existence at the date hereof
or any other factoring arrangement made by the Borrower with any Bank provided
that the aggregate amount permitted to be outstanding at any relevant time under
all such factoring arrangements does not exceed DM80,000,000 or its equivalent
and in respect of which the Borrower has granted an assignment (in form and
substance satisfactory to the Agent) to the Security Trustee of all of the
Borrower's rights under such factoring agreement;
"Permitted Indebtedness" means:
(i) any Financial Indebtedness arising under the Facility Documents;
(ii) any Financial Indebtedness arising in respect of Senior
Subordinated Debt;
(iii) any Financial Indebtedness arising under Permitted Treasury
Transactions;
(iv) any Financial Indebtedness arising in respect of Permitted
Factoring;
(v) any Financial Indebtedness supported by a Bank Guarantee;
(vi) any Financial Indebtedness arising under or in respect of any
External Finance Lease where the amount of such Financial
Indebtedness when aggregated with the Financial Indebtedness under
or in respect of any other External Finance Lease does not exceed
(subject to the provisions of Clause 18.2), (a) at any time on or
before 1 January 1999, DM60,000,000 (or its equivalent) or (b) at
any time after 1 January 1999, DM75,000,000 (or its equivalent);
(vii) any Financial Indebtedness arising under or pursuant to Permitted
Internal Leasing;
(viii) any Financial Indebtedness arising under any Permitted Loans; and
(ix) any Financial Indebtedness secured by a Permitted Encumbrance
referred to in paragraph (ii) of the definition thereof;
"Permitted Internal Leasing" means any leasing of crates under a Finance Lease
where the Lessor is GBL and the Lessee thereunder is the Borrower and where the
terms of such leasing are substantially the same as the terms of the existing
leases between GBL and the Borrower referred to in the definition of Leasing
Facilities;
"Permitted Leasing" means Permitted External Leasing and Permitted Internal
Leasing;
"Permitted Loan" means:
(i) any loan made by the Borrower to GBL where the purpose of such loan is
to facilitate Permitted Internal Leasing; and
(iv) any loan or other financial accommodation made by the Borrower to any
of its
<PAGE>
employees provided that the amount of such loans to employees, when
aggregated with the amount of loans made by other Group Entities to
their employees, does not exceed DM500,000 (or its equivalent);
"Permitted Transactions" means the payment or declaration of any dividend,
return on capital, repayment of capital contributions or other distributions by
any Group Entity to the Borrower or to any other Group Entity for the purpose of
immediate distribution through other relevant Group Entities to the Borrower;
"Permitted Treasury Transactions" means the following Treasury Transactions:
(i) forward foreign exchange contracts for hedging currency exposures in
the ordinary course of trade; and
(ii) transactions entered into in accordance with the Hedging Strategy
Letter;
"Pool Indebtedness" means the indebtedness created pursuant to (i) agreements
dated 28 July 1995, 26 March/2 April 1997 and 24/30 June 1997 between the
Borrower and DG Bank Deutsche Genossenschaftsbank in an amount of DM32,000,000,
(ii) agreements dated 14 December 1995 and 14 March 1997 between the Borrower
and Deutsche Bank Aktiengesellschaft, Munich Branch in an amount of
DM24,500,000, (iii) an agreement dated 9 August 1995 between the Borrower and
Oldenburgische Landesbank in an amount of DM17,100,000 and (iv) an agreement
dated 20 December 1994 between the Borrower and Norddeutsche Hypotheken-und
Wechselbank AG in an amount of DM17,000,000;
"Portion" means the participation of a Bank under or in respect of a Bank
Guarantee as determined under Clause 7.2;
"Potential Event of Default" means any event which would (but for the passage of
any period of time provided for in Clause 30.1, the giving of notice, the making
of any determination hereunder or any combination thereof) be an Event of
Default;
"Proportion" means, in relation to a Bank at any time, the proportion borne, at
such time, by its Commitment to the Total Commitments (or, if all the Total
Commitments are then zero, by its Commitment to the Total Commitments
immediately prior to their reduction to zero);
"Qualifying Bank" means any bank or other financial institution in respect of
which the Borrower will not be obliged to make any withholding or deduction on
account of tax from payments of interest made to such bank under German law at
the date hereof (or, in the case of a Transferee, the date of the relevant
Transfer Certificate);
"Quarter Date" means each of 31 March, 30 June, 30 September and 31 December;
"Quotation Date" means, in relation to any period for which an interest rate is
to be determined hereunder, the day on which quotations would ordinarily be
given by prime banks in the Frankfurt Interbank Market for deposits in the
currency in relation to which such rate is to be determined for delivery on the
first day of that period Provided that, if for any such period quotations would
ordinarily be given by prime banks in the Frankfurt Interbank
<PAGE>
Market for deposits in such currency on more than one date, the Quotation Date
for that period shall be the last of those dates;
"Reference Banks" means the principal Frankfurt offices of BHF Bank
Aktiengesellschaft, Barclays Bank PLC and DG Deutsche Genossenschaftsbank or
such other bank or banks as may from time to time be agreed between the Borrower
and the Agent (acting on the instructions of an Instructing Group);
"Relevant Jurisdictions" means, in respect of any person, the jurisdiction of
the country in which such person is incorporated and, if different, where it is
resident or has its principal place of business, and each jurisdiction or state
in which it owns or leases property or otherwise conducts its business;
"Relevant Laws" means, in respect of any person, the laws of its Relevant
Jurisdictions;
"Relevant Period" shall, save as otherwise provided herein, have the meaning
ascribed thereto in Clause 28.5;
"Relevant Ratio" shall have the meaning ascribed thereto in Clause 13.4;
"Relevant Reduction" shall have the meaning ascribed thereto in Clause 13.4;
"Relevant Taxes" means, in relation to any payment which falls to be made by the
Borrower any present or future Taxes of any nature (other than Taxes imposed on
or measured by net income) now or hereafter imposed by the laws of (a) its
Relevant Jurisdictions, (b) any other jurisdiction from which, or through which,
such payment is made or any country to whose taxation laws the Borrower is at
the time of such payment subject, (c) any political sub-division of one or more
of its Relevant Jurisdictions or any other such jurisdictions or (d) any
federation or association of which one or more of its Relevant Jurisdictions or
any other such jurisdiction is or are, at the time of such payment, a member or
members;
"Repayment Date" means, in relation to any Cash Advance, the last day of the
Term thereof;
"Replacement Capital Expenditure" shall have the meaning ascribed thereto in
Clause 28.5;
"Reports" means the Accountant's Report, the Legal Due Diligence Report, the
Environmental Report, the Tax Report, the Insurance Report and the Market
Report;
"Reservations" means the principle that equitable remedies are remedies which
may be granted or refused at the discretion of the court, the limitation of
enforcement by laws relating to bankruptcy, insolvency, liquidation,
reorganisation, court schemes, moratoria, administration and other laws
generally affecting the rights of creditors, the time barring of claims under
any applicable limitation acts, the possibility that a court may strike out
provisions of a contract as being invalid for reasons of oppression, undue
influence or similar reasons and any other reservations or qualifications of law
(but not of fact) expressed in any of the Legal Opinions;
"Revolving Advance" means, save as otherwise provided herein, a Tranche A Cash
Advance
<PAGE>
or a Tranche B Cash Advance made or to be made and any Bank Guarantee issued or
to be issued under the Revolving Facilities;
"Revolving Available Commitment" means, in relation to a Revolving Bank at any
time and save as otherwise provided herein, such Bank's Tranche A Revolving
Commitment and Tranche B Revolving Commitment at such time less the aggregate of
its portions of the Tranche A Revolving Advances and Tranche B Revolving
Advances which are then outstanding Provided that such amount shall not be less
than zero;
"Revolving Commitment" means, in relation to a Revolving Bank at any time and
save as otherwise provided herein, the aggregate of such Bank's Tranche A
Revolving Commitment and Tranche B Revolving Commitment;
"Revolving Facility" means each of the Tranche A Revolving Facility and the
Tranche B Revolving Facility and "Revolving Facilities" means both of them;
"Rolling Basis" shall have the meaning ascribed thereto in Clause 28.5;
"Schroder Loan" means the loan from Schroder, Munchmeyer, Hengst & Co made
pursuant to an agreement dated 1/10 December 1993 to the Borrower in an amount
of DM1,000,000;
"Secured Obligations" in relation to any Senior Security Document has the
meaning ascribed thereto in that Senior Security Document;
"Security Trust Agreement" means the security trust agreement entered into on or
about the date hereof between, amongst others, the Borrower, the Beneficiaries,
the Security Trustee, the Agent, the Senior Subordinated Agent and the Senior
Subordinated Lenders;
"Senior Interest Expense" shall have the meaning ascribed thereto in Clause
28.5;
"Senior Security Documents" means the documents, in the agreed form, listed in
paragraphs E1 and E2 of the Third Schedule together with any other document
entered into by any person creating or evidencing security for all or any part
of the obligations of the Borrower under any of the Facility Documents whether
by way of personal covenant, charge, security interest, mortgage, pledge or
otherwise;
"Senior Subordinated Agent" means the agent under the Senior Subordinated
Facility Agreement or any refinancing thereof;
"Senior Subordinated Debt" means at any time all amounts outstanding under the
Senior Subordinated Facility Agreement at such time;
"Senior Subordinated Facility" means the term loan facility in an amount of
DM35,000,000 or any refinancing thereof made available to the Borrower by the
Senior Subordinated Lenders;
"Senior Subordinated Facility Agreement" means the agreement dated on or about
the date hereof pursuant to which the Senior Subordinated Facility is made
available to the Borrower or any refinancing thereof;
<PAGE>
"Senior Subordinated Facility Documents" means the Senior Subordinated Facility
Agreement and any other agreement or document that may be entered into or
executed pursuant thereto or in connection therewith or any refinancing thereof;
"Senior Subordinated Lenders" means Barclays Bank PLC and any bank becoming a
party to the Senior Subordinated Facility Agreement pursuant to the provisions
thereof or any lenders providing the refinancing thereof;
"Senior Subordinated Loan" means at any time the amount outstanding in respect
of principal under the Senior Subordinated Facility Agreement at such time;
"Senior Subordinated Security Documents" has the meaning ascribed to that term
in the Senior Subordinated Facility Agreement;
"SPI" means Schoeller Plast Industries GmbH;
"SPS" means Schoeller Packaging Systems Europe GmbH;
"SPS Shareholder Loan" means a loan from SPS to the Borrower made pursuant to an
agreement dated 21 November 1996 in an amount of DM37,500,000;
"Supply Agreement" means the supply agreement dated 4/5 November 1997 between
the Borrower and Schoeller Plast Industries GmbH together with the supplemental
agreements thereto dated 3 February 1998 and 11 February 1998 and any other
agreement which may, from time to time and with the approval of the Agent
(acting on the instructions of an Instructing Group) replace such agreement;
"Syndication" means the first transfer or assignment of rights, benefits and
obligations pursuant to Clause 41.1 by the Banks set out in the First Schedule;
"Tax Report" means the report of Arthur Andersen dated 18 September 1997
addressed to General Electric Capital Corporation entitled "Project Pineapple
Tax Due Diligence (Final Report)" together with confirmation that calculations
in relation to the VAT tax treatment are correctly integrated in the Business
Plan;
"Taxes" includes all present and future income and other taxes, levies,
assessments, imposts, deductions, charges, compulsory loans and withholdings
whatsoever together with interest thereon, additions to tax and penalties and
surcharges and fines with respect thereto, if any, and any payments made on or
in respect thereof and "Tax" and "Taxation" shall be construed accordingly;
"Term" means, save as otherwise provided herein, in relation to any Cash
Advance, the period for which such Cash Advance is borrowed as specified by the
Borrower in the Notice of Drawdown relating thereto and, in relation to any Bank
Guarantee, the period from the date on which such Bank Guarantee is issued until
its expiry date (as specified in the Notice of Drawdown relating thereto);
<PAGE>
"Term Advance" means, save as otherwise provided herein, the advance made or to
be made by the Term Banks under the Term Facility;
"Term Available Commitment" means, in relation to a Term Bank at any time and
save as otherwise provided herein, such Bank's Term Commitment at such time less
the aggregate of its portion of the Term Loan at such time;
"Term Commitment" means, in relation to any Term Bank at any time and save as
otherwise provided herein, the amount set opposite its name under the heading
"Term Commitment" in Part I of the First Schedule;
"Term Facility" means the term loan facility granted by the Term Banks to the
Borrower pursuant to Clause 2.1;
"Term Loan" means the aggregate amount of the Term Advances for the time being
outstanding under the Term Facility;
"Term Repayment Dates" means each 31 March and 30 September falling on or during
the period between the date upon which the first Term Advance is made hereunder
and the Final Maturity Date and "Term Repayment Date" means any of them
provided that if any such day is not a business day, such Term Repayment Date
shall be the immediately preceding business day;
"Termination Date" means 28 February 1998;
"Total Debt" shall have the meaning ascribed thereto in Clause 28.5;
"Total Commitments" means the aggregate for the time being of the Banks'
Commitments;
"Total Fixed Charges" shall have the meaning ascribed thereto in Clause 28.5;
"Total Interest Expense" shall have the meaning ascribed thereto in Clause 28.5;
"Total Loan" means the aggregate of the Term Loan and the Revolving Facility
Outstandings;
"Total Revolving Commitment" means the aggregate of each Bank's Revolving
Commitment;
"Total Tranche A Revolving Commitment" means the aggregate for the time being of
the Revolving Banks' Tranche A Commitments;
"Tranche A Available Revolving Facility" means, at any time, the aggregate at
such time of the Tranche A Revolving Available Commitments of the Revolving
Banks at such time adjusted, for the purposes of Clause 8.1(iv) and a proposed
Tranche A Revolving Advance only, so as to take into account any reduction in
the Tranche A Revolving Commitment of a Revolving Bank which will occur prior to
the commencement of or during the Term relating to such proposed Tranche A
Revolving Advance consequent upon a cancellation of the whole or any part of the
Tranche A Revolving Commitment of such Revolving Bank pursuant to the terms
hereof;
<PAGE>
"Tranche A Cash Advance" means an advance made by way of cash advance under the
Tranche A Revolving Facility;
"Tranche A Revolving Advance" means, save as otherwise provided herein, an
advance made or to be made by the Revolving Banks under the Tranche A Revolving
Facility;
"Tranche A Revolving Available Commitment" means the aggregate of, in relation
to a Revolving Bank at any time and save as otherwise provided herein, such
Bank's Tranche A Revolving Commitment at such time less the aggregate of its
portion of the Tranche A Revolving Outstandings at such time;
"Tranche A Proportion" means, in relation to a Revolving Bank, at any time, the
proportion borne at such time, by its Tranche A Revolving Commitment to the
Total Tranche A Revolving Commitment (or, if the Total Tranche A Revolving
Commitment is then zero, by its Tranche A Revolving Commitment to the Total
Tranche A Revolving Commitment immediately prior to its reduction to zero);
"Tranche A Revolving Commitment" means, in relation to a Revolving Bank at any
time and save as otherwise provided herein, the amount opposite its name under
the heading "Tranche A Revolving Commitment" in Part II of the First Schedule;
"Tranche A Revolving Facility" means the revolving loan facility granted to the
Borrower by the Revolving Banks pursuant to Clause 2.2;
"Tranche A Revolving Facility Outstandings" means the aggregate Outstandings for
the time being under the Tranche A Revolving Facility;
"Tranche B Available Revolving Facility" means, at any time, the aggregate at
such time of the Tranche B Revolving Available Commitments of the Revolving
Banks adjusted, for the purposes of Clauses 7.1(v) and (vi) and a proposed
Tranche B Revolving Advance only, so as to take into account any reduction in
the Tranche B Revolving Commitment of a Revolving Bank which will occur prior to
the commencement of or during the Term relating to such proposed Trance B
Revolving Advance consequent upon a cancellation of the whole or any part of the
Tranche B Revolving Commitment of such Revolving Bank pursuant to the terms
hereof;
"Tranche B Cash Advance" means an advance made by way of cash advance under the
Tranche B Revolving Facility;
"Tranche B Revolving Advance" means, save as otherwise provided herein, an
advance made or to be made by the Revolving Banks under the Tranche B Revolving
Facility;
"Tranche B Revolving Available Commitment" means the aggregate of, in relation
to a Revolving Bank at any time and save as otherwise provided herein, such
Bank's Tranche B Revolving Commitment at such time less the aggregate of its
portion of the Tranche B Revolving Facility Outstandings at such time;
<PAGE>
"Tranche B Revolving Commitment" means, in relation to a Revolving Bank at any
time and save as otherwise provided herein, the amount opposite its name under
the heading "Tranche B Revolving Commitment" in Part II of the First Schedule;
"Tranche B Revolving Facility" means the revolving loan and guarantee facility
granted to the Borrower by the Revolving Banks pursuant to Clause 2.3;
"Tranche B Revolving Facility Outstandings" means the aggregate Outstandings for
the time being under the Tranche B Revolving Facility;
"Transaction Costs" means all up-front fees, out-of-pocket costs and expenses,
stamp and registration Taxes or the equivalent in any jurisdiction incurred by
IFCO Europe or any Group Entity in connection with the Investment, the
Facilities, the Senior Subordinated Facility or the transactions entered into in
accordance with the Hedging Strategy Letter;
"Transfer Certificate" means a certificate substantially in the form set out in
the Second Schedule (with such amendments as may be approved by the Agent)
signed by a Bank and a Transferee whereby:
(i) such Bank seeks to transfer to such Transferee all or a part of such
Bank's rights and obligations under the Facility Documents upon and
subject to the terms and conditions set out in Clause 41; and
(ii) such Transferee undertakes to perform the obligations it will assume
as a result of delivery of such certificate to the Agent as is
contemplated in Clause 41.3;
"Transfer Date" means, in relation to any Transfer Certificate, the date for the
making of the transfer as specified in the schedule to such Transfer
Certificate;
"Transferee" means a person to which a Bank seeks to assign all or part of such
Bank's rights and by which all or part of such Bank's obligations hereunder are
assumed;
"Treasury Transaction" means any currency or interest purchase, cap or collar
agreement, forward rate agreements, interest rate or currency future or option
contract, foreign exchange or currency purchase or sale agreement and any
similar agreement, interest rate swap, currency swap or combined interest rate
and currency swap agreement and any other similar agreement entered into prior
to, on or after the date hereof by any Group Entity; and
"Working Capital" shall have the meaning ascribed thereto in Clause 28.5.
1.2 Any reference in this Agreement to:
"acting together in concert" means persons who pursuant to an agreement or
understanding (whether formal or informal) actively co-operate together with a
view to achieving a common objective or to control another body corporate;
"affiliate" of any person shall be construed as a reference to the ultimate
holding company of
<PAGE>
that person or an entity of which that person or its ultimate holding company
(a) has direct or indirect control or (b) owns directly or indirectly more than
fifty per cent. (50%) of the share capital or similar rights of ownership;
the "Agent", the "Arrangers", a "Beneficiary", the "Security Trustee", the
"Borrower", "IFCO Europe" or any "Bank" shall be construed so as to include its
and any subsequent successors, permitted Transferees and assigns in accordance
with their respective interests;
a document in "agreed form" or on "agreed terms" is if it is initialled for the
purposes of identification as such by or on behalf of the Borrower and the
Agent;
on "arm's-length terms" means on terms that are fair and reasonable to the
relevant Group Entity and no more or less favourable to the relevant person
(being the other party to the relevant transaction) than could reasonably be
expected to be obtained in a comparable arm's length transaction with a person
which is not an affiliate of the relevant Group Entity;
the "assets" of any person shall be construed as a reference to the whole or any
part of its business, undertakings, property, intellectual property, shares,
securities, debts, accounts, revenues (including any right to receive revenues),
goodwill, shareholdings and uncalled capital including premium whether now or
hereafter acquired and any other assets whatsoever;
"Barclays Capital" shall be construed as a reference to Barclays Capital Group,
the investment banking division of Barclays Bank PLC;
a "business day" shall be construed as a reference to a day (other than a
Saturday or Sunday) on which banks are generally open for business in Frankfurt
and Munich;
a "Clause" shall, subject to any contrary indication, be construed as a
reference to a clause hereof;
"control" of a body corporate means:
(i) the power to:
(a) cast or control the casting of more than one-half of the maximum
number of votes that might be cast at a general meeting of the
body corporate; or
(b) appoint or remove all, or the majority, of the directors of the
body corporate (and the relevant person or persons shall be
deemed to have power to make such an appointment if:
(1) an individual cannot be appointed as a director of the body
corporate without the exercise by the relevant person or
persons of such power in the individual's favour; or
(2) an individual's appointment as a director of the body
corporate
<PAGE>
follows necessarily from the individual being a director or
other officer of any of the relevant person or persons); or
(c) to give directions with respect to the operating and financial
policies of the body corporate which the directors of the body
corporate are obliged to comply with; or
(ii) the holding of more than one-half of the issued share capital of the
body corporate (excluding any part of that issued share capital that
carries no right to participate beyond a specified amount in a
distribution of either profits or capital);
"disposal" shall be construed as any sale, lease, transfer, conveyance,
assignment or other disposal (including, without limitation, any other
transaction or arrangement pursuant to which the economic or other commercial
benefit of the existing and/or remaining assets of the relevant person is lost
or materially diluted) and "dispose" shall be construed accordingly;
the "equivalent" on any given date in one currency (the "first currency") of an
amount denominated in another currency (the "second currency") is a reference to
the amount of the first currency which could be purchased with the amount of the
second currency at the rate of exchange quoted by the Agent at or about 11.00
a.m. Frankfurt time on such date (or such other time as may be appropriate) for
the purchase of the first currency with the second currency;
a "holding company" of a legal person shall be construed as a reference to any
legal person of which the first-mentioned legal person is a subsidiary;
a "guarantee" means any guarantee, suretyship, bond, indemnity, letter of
credit, third party security or other legally binding assurance against
financial loss granted by one person in respect of any indebtedness of another
person, or any agreement to assume any indebtedness of any other person or to
supply funds or to invest in any manner whatsoever in such other person by
reason of or otherwise in relation to indebtedness of such other person;
"indebtedness" shall be construed so as to include any obligation (whether
incurred as principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
"legal person" shall be construed as a reference to any person having separate
legal personality under the jurisdiction of its incorporation or establishment;
"loans" shall be construed so as to include, without limitation, any transaction
or arrangement pursuant to which any Financial Indebtedness is or may be owed by
or to any Group Entity to or by any other person;
a "month" is a reference to a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar month save
that, where any such period would otherwise end on a day which is not a business
day, it shall end on the next business day, unless that day falls in the
calendar month succeeding that in which it would otherwise
<PAGE>
have ended, in which case it shall end on the preceding business day Provided
that, if a period starts on the last business day in a calendar month or if
there is no numerically corresponding day in the month in which that period
ends, that period shall end on the last business day in that later month (and
references to "months" shall be construed accordingly);
a "Part" shall, subject to any contrary indication, be construed as a reference
to a part hereof;
a "person" shall be construed as a reference to any person, firm, company, body
corporate, corporation, government, state or agency of a state or any
association or partnership (whether or not having separate legal personality) of
two or more of the foregoing;
a "Schedule" shall, subject to any contrary indication, be construed as a
reference to a schedule hereto;
a "subsidiary" of a legal person shall be construed as a reference to any legal
person:
(i) which is controlled, directly or indirectly, by the first-mentioned
legal person;
(ii) more than half the issued share capital (or equivalent right of
ownership) of which is beneficially owned, directly or indirectly, by
the first-mentioned legal person; or
(iii) which is a subsidiary of another subsidiary of the first-mentioned
legal person;
and, for these purposes, a legal person shall be treated as being controlled by
another if that other legal person is able to direct its affairs and/or to
control the composition of its board of directors or equivalent body;
"VAT" shall be construed as a reference to value added tax including any similar
tax which may be imposed in place thereof from time to time;
a "wholly-owned subsidiary" of a company or corporation shall be construed as a
reference to any company or corporation which has no other members except that
other company or corporation and that other company's or corporation's wholly-
owned subsidiaries or persons acting on behalf of that other company or
corporation or its wholly-owned subsidiaries; and
the "winding-up", "dissolution" or "administration" of a partnership, company or
corporation shall be construed so as to include any equivalent or analogous
proceedings under the law of the jurisdiction in which such company or
corporation or partnership is incorporated or any jurisdiction in which such
company or corporation carries on business including the seeking of liquidation,
winding-up, reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors.
1.3 "DM" or "Deutsche Mark" denotes the lawful currency for the time being of
the Federal Republic of Germany (and, for the avoidance of doubt, such term
shall include, where appropriate and where such currency is the lawful currency
of the Federal Republic of Germany, the European Single Currency Unit (Euro)).
<PAGE>
1.4 Save where the contrary is indicated:
(i) any reference in this Agreement to this Agreement, any other Facility
Document or any other agreement or document shall be construed as a
reference to this Agreement, such other Facility Document or, as the
case may be, such other agreement or document as the same may have
been, or may from time to time be, amended, varied, novated,
supplemented or replaced;
(ii) any reference in this Agreement to a statute shall be construed as a
reference to such statute as the same may have been, or may from time
to time be, amended or re-enacted to the extent such amendment or re-
enactment is substantially to the same effect as such statute on the
date hereof;
(iii) any reference in this Agreement to a time of day shall be construed
as a reference to Frankfurt time;
(iv) a Bank Guarantee shall be "repaid" or "prepaid" by providing the
Fronting Bank or the Agent on behalf of the Revolving Banks with cash
cover in the currency in which that Bank Guarantee is denominated, by
reducing, whether by partial cancellation or otherwise, (in
accordance with the terms of this Agreement and the relevant Bank
Guarantee) the amount that may be demanded under that Bank Guarantee
(or by such amount automatically reducing in accordance with the
terms of the relevant Bank Guarantee) or by cancelling that Bank
Guarantee by returning the original to the Fronting Bank or the Agent
on behalf of the Revolving Banks (as appropriate) together with
written confirmation (in form and substance satisfactory to the
Fronting Bank or the Agent on behalf of the Revolving Banks (as
appropriate)) from the beneficiary that the Fronting Bank has (or, as
the case may be, the Revolving Banks have) no further liability under
that Bank Guarantee;
(v) "cash cover" is provided, in whole or in part, in respect of a Bank
Guarantee at any time by paying an amount, in the currency in which
that Bank Guarantee is denominated, equal to the whole or a part of
the outstanding amount of such Bank Guarantee at such time to the
Fronting Bank (or, as the case may be, to the Agent on behalf of the
Revolving Banks) and the Fronting Bank (or, as the case may be, the
Agent) paying the amount so received by it into an account with it in
the name of the Borrower from which the only withdrawals which may be
made are withdrawals to pay the Fronting Bank (or, as the case may
be, the Revolving Banks) amounts due and payable to it (or them)
under this Agreement following any payment made by it (or, as the
case may be, the Revolving Banks) under such Bank Guarantee and in
respect of which account and all claims arising thereunder, the
Borrower has granted to the Fronting Bank (or, as the case may be, to
the Agent on behalf of the Revolving Banks) pursuant to agreed upon
documentation, a first priority security interest in order to secure
all amounts which may become payable by such Borrower in respect of
such Bank Guarantee; and
<PAGE>
(vi) an amount "outstanding" at any time under or in respect of a Bank
Guarantee is the maximum amount that may be demanded under that Bank
Guarantee at that time in accordance with its express provisions less
(i) the aggregate amount of cash cover held in relation to that Bank
Guarantee at that time and (ii) (save to the extent that this is taken
into account in the express provisions of that Bank Guarantee) the
aggregate of all payments made by the Fronting Bank or the Revolving
Banks pursuant to demands made under that Bank Guarantee on or prior
to such time (save to the extent that the Fronting Bank or the
Revolving Banks have not been reimbursed in respect of the same
(unless the context otherwise requires)) and each provision of this
Agreement which requires reference to the concept contained in this
paragraph (vi) shall be construed accordingly.
1.5 Clause, Part and Schedule headings are for ease of reference only.
1.6 The general terms and conditions (Allgemeine Geschaftsbedingungen) of the
Agent (as the same are in force from time to time) shall apply to this
Agreement as if set out in full herein and as if any references to
"customer" therein were a reference to the Borrower save that, where those
terms and conditions conflict with the terms of this Agreement, the terms
of this Agreement shall prevail Provided that it is understood that,
without limitation, Clause 19 of the Allgemeine Geschaftsbedingungen does
not conflict with the terms of this Agreement.
<PAGE>
Part 2
THE FACILITIES
2. The Facilities
2.1 The Term Banks grant to the Borrower, upon the terms and subject to the
conditions hereof, an amortising term loan facility in an amount of DM76,000,000
(the "Term Facility").
2.2 The Revolving Banks grant to the Borrower a revolving credit facility in an
aggregate principal amount of DM45,000,000 (the "Tranche A Revolving Facility").
2.3 The Revolving Banks grant to the Borrower upon the terms and subject to the
conditions hereof a revolving advance and bank guarantee facility in an
aggregate principal amount of DM25,000,000 (the "Tranche B Revolving Facility").
3. Purpose
3.1 The Term Facility is intended for the purpose of refinancing certain of the
Existing Indebtedness (not including any Leasing Facilities) and funding certain
of the costs of the Investment (the details and amounts of which have been
agreed with the Agent prior to making payment) and the Borrower shall apply
amounts drawn by it under the Term Facility accordingly.
3.2 The Tranche A Revolving Facility is intended for refinancing certain of the
Existing Indebtedness (not including any Leasing Facilities) and financing the
general corporate purposes of the Borrower and the Borrower shall apply amounts
drawn under the Tranche A Revolving Facility accordingly.
3.3 The Tranche B Revolving Facility is intended for the purposes of providing
guarantees to providers of finance under External Finance Leases with the
Borrower and to fund Replacement Capital Expenditure and Growth Capital
Expenditure of the Borrower and the Borrower shall apply amounts drawn under the
Tranche B Revolving Facility accordingly.
3.4 Without prejudice to the obligations of the Borrower under this Clause 3,
none of the Beneficiaries shall be obliged to concern themselves with the
application of amounts raised by the Borrower hereunder.
4. Conditions Precedent
Save as the Banks may otherwise agree, the Facilities will not be available for
utilisation unless the Agent has received all of the documents and other
evidence listed in the Third Schedule (or the Agent has confirmed to the
Borrower in writing that it is satisfied that, subject only to the making of the
requested Advances, it will receive the same) in form and substance satisfactory
to the Agent and the Joint Arrangers.
5. Nature of Banks' Rights and Obligations
<PAGE>
5.1 The obligations of each Beneficiary under the Facility Documents are
several.
5.2 The failure by any Beneficiary to perform its obligations under the
Facility Documents shall not affect the obligations of the Borrower or IFCO
Europe towards any other party hereto or to any other Facility Document nor
shall any other party be liable for the failure by such Beneficiary to perform
its obligations under the Facility Documents.
5.3 The amounts outstanding at any time hereunder from the Borrower to any of
the other parties hereto shall be a separate and independent debt, and except as
otherwise stated herein each such party shall be entitled to protect and enforce
its individual rights arising out of the Facility Documents independently of any
other party, and it shall not be necessary for any party hereto to be joined as
an additional party in any proceedings for such purposes Provided that if any
Bank commences proceedings in respect of this Agreement it shall notify the
Agent as soon as practicable thereafter and the Agent shall notify the other
Banks accordingly.
5.4 No Bank shall be entitled to terminate its relationship with the Borrower
hereunder unless such termination is expressly permitted hereunder.
5.5 Where any Bank fails to perform its obligations hereunder, then such Bank
shall, at the request of the Borrower (and upon reasonable notice), transfer its
participation hereunder (at par value) to another bank or financial institution
nominated by the Borrower and acceptable to the Fronting Bank which is willing
to participate in the Facilities Provided that such transfer is made in
accordance with the terms hereof (and in particular but without limitation, in
accordance with the provisions of Part 12 hereof).
<PAGE>
Part 3
UTILISATION OF THE FACILITIES
6. Utilisation of the Term Facility
6.1 Save as otherwise provided herein, a Term Advance under the Term Facility
will be made by the Term Banks to the Borrower, if:
(i) not later than 10.00 a.m. on the third business day (or such lesser
period as the Agent may agree) before the proposed date for the
making of the Term Advance, the Agent has received from the Borrower
an irrevocable Notice of Drawdown therefor, receipt of which shall
oblige the Borrower to borrow the amount therein requested in the
currency (being Deutsche Mark) and on the date therein stated upon
the terms and subject to the conditions contained herein;
(ii) the proposed date for the making of the Term Advance is a business
day which is or precedes the Termination Date;
(iii) none of the events described in Clause 14 have occurred in such a way
that, in accordance with the provisions of that clause, would operate
to prevent the Advance from being made;
(iv) the proposed amount of the Term Advance is equal to the amount of the
Available Term Facility; and
(v) either:
(a) no Event of Default or Potential Event of Default has occurred
and is continuing and has not been waived or would result from
the making of the Term Advances; and
(b) the representations set out in Clause 26.1 are true on and as of
the proposed date for the making of such Term Advance in all
material respects,
or each of the Term Banks agrees (notwithstanding any matter mentioned
at (a) or (b) above) to participate in the making of the Term Advance.
6.2 Each Term Bank participating in the Term Facility will participate in the
Term Advance made pursuant to Clause 6.1 through its Facility Office in the
proportion borne by its Term Available Commitment to the Available Term Facility
immediately prior to the making of the Term Advance.
6.3 If a Bank's Term Available Commitment is reduced in accordance with the
terms hereof after the Agent has received a Notice of Drawdown then the amount
of the Term Advance shall be reduced accordingly.
<PAGE>
6.4 Each Bank's Term Available Commitment shall be reduced to zero at the close
of business on the day on which the Term Advance is made.
7. Utilisation of the Revolving Facility
7.1 Save as otherwise provided herein, a Cash Advance will be made by the
Revolving Banks to the Borrower or a Bank Guarantee will be issued by the
Fronting Bank or the Agent on behalf of the Banks if:
(i) not more than ten business days nor later than 10.00 a.m. on the
third business day before the proposed date for the making of such
Cash Advance or the issuing of such Bank Guarantee, the Agent has
received from the Borrower an irrevocable Notice of Drawdown
therefor (such Notice of Drawdown in the case of a Bank Guarantee to
include the additional information required by Clause 8.1) receipt
of which shall oblige the Borrower to borrow the amount therein
requested (or have the relevant Bank Guarantee issued), in the
currency (being Deutsche Mark) and on the date therein stated upon
the terms and subject to the conditions contained herein;
(ii) the proposed date for the making of such Cash Advance or the issuing
of such Bank Guarantee is on or after the making of the Term Advance
and is a business day falling one month or more before the Final
Maturity Date;
(iii) (in respect of Cash Advances) none of the events described in Clause
15 have occurred in such a way that would, in accordance with the
provisions of that clause, prevent the Advance from being made;
(iv) (in respect of Cash Advances to be made under the Tranche A
Revolving Facility) the proposed amount of such Cash Advance is (a)
a minimum amount of DM5,000,000 and an integral multiple of
DM1,000,000 which is less than the amount of the Tranche A Available
Revolving Facility or (b) equal to the amount of the Tranche A
Available Revolving Facility;
(v) (in respect of Cash Advances to be made under the Tranche B
Revolving Facility), the proposed amount of such Cash Advance is (a)
a minimum amount of DM5,000,000 and an integral multiple of
DM1,000,000 which is less than the Tranche B Available Revolving
Facility or (b) equal to the amount of the Tranche B Available
Revolving Facility;
(vi) (in respect of a Bank Guarantee) the proposed amount of such Bank
Guarantee does not exceed the Tranche B Available Revolving Facility
and is a minimum amount of DM1,000,000;
(vii) (in respect of a Bank Guarantee) the issuing of the proposed Bank
Guarantee would not result in more than six Bank Guarantees being
outstanding;
(viii) the proposed Term of such Revolving Advance is (if a Cash Advance) a
<PAGE>
period of one, three or six months (or such other period as may be
previously agreed to by the Banks) or (if a Bank Guarantee) is for a
period not exceeding one year or, if so required by the beneficiary of
the relevant Bank Guarantee as a consequence of the duration of the
relevant Finance Lease, such other period which is commensurate with
the duration of the relevant Finance Lease and in any case such period
ends on or before the Final Maturity Date;
(ix) in the case of a Bank Guarantee, the Fronting Bank or the Revolving
Banks (as appropriate) have approved the terms of the Bank Guarantee
which is to be issued pursuant to the Notice of Drawdown (which,
unless the Agent (acting on the instructions of all the Banks)
otherwise agrees in writing, shall be substantially in the relevant
form set out in the Sixth Schedule) and have approved the identity of
the beneficiary of the Bank Guarantee to be issued pursuant to the
Notice of Drawdown (which approval may only be withheld on legal
grounds or on the grounds of the requirements of any applicable
fiscal, monetary, regulatory or other authority); and
(x) either:
(a) no Event of Default or Potential Event of Default has occurred
and is continuing and has not been waived, or would result from
the making of such Revolving Advance; and
(b) the representations set out in Clause 26.1 (save, in the case of
any Revolving Advance made or (as the case may be) issued after
the date hereof, for the representations which are not repeated
pursuant to Clause 26.2) are true in all material respects or
have been waived on and as of the proposed date for the making or
(as the case may be) issuing of such Revolving Advance,
or each of the Revolving Banks agrees (notwithstanding any matter
mentioned at (a) or (b) above) to participate in the making of such
Revolving Advance (if it is a Cash Advance) or each of the Banks
agrees (notwithstanding any matter mentioned at (a) or (b) above) that
such Revolving Advance may be issued (if it is a Bank Guarantee).
7.2 Each Revolving Bank participating in the Revolving Facility will
participate in the Revolving Advance made pursuant to Clause 7.1 through its
Facility Office in the proportion borne by its Revolving Available Commitment to
the Available Revolving Facility immediately prior to the making of that
Revolving Advance.
7.3 If a Bank's Revolving Commitment is reduced in accordance with the terms
hereof after the Agent has received the Notice of Drawdown for a Revolving
Advance (or is scheduled to be reduced during the period in which such Advance
or Bank Guarantee is expected to be outstanding) and such reduction was not
taken into account in determining the Available Revolving Facility for the
purposes of Clause 7.1(iv), (v) or (vi), then the actual amount of that
Revolving Advance shall be reduced accordingly.
<PAGE>
8. Bank Guarantees
8.1 A Notice of Drawdown requesting the issue of a Bank Guarantee (in addition
to complying with Clause 7.1) must specify in respect of the Bank Guarantee to
be issued pursuant to such Notice of Drawdown:
(i) the purpose of its issue;
(ii) the issue date;
(iii) the final expiry date as selected in accordance with Clause 7.1(vii);
(iv) the beneficiary agreed in accordance with Clause 7.1(viii);
(v) the currency of denomination of the proposed Bank Guarantee which
shall be Deutsche Mark;
(vi) its face value in accordance with Clause 7.1(vi); and
(vii) whether the Bank Guarantee is to be issued by the Agent on behalf of
the Revolving Banks or by the Fronting Bank.
8.2 Where the Tranche B Revolving Facility is to be drawn by way of the issue
of a Bank Guarantee, such Bank Guarantee shall be made available either by the
Fronting Bank which shall then act as the principal of any such guarantee given
to a third party at the request of the Borrower or by the Agent on behalf of
each of the Revolving Banks in which case each Revolving Bank shall be severally
liable as the principal of any such guarantee up to the amount of its Portion in
respect of such Bank Guarantee.
8.3 If the proposed issue of a Bank Guarantee to a proposed beneficiary is
prohibited under any law, statute, regulation, order or decree to which a Bank
(by or on behalf of which such Bank Guarantee is to be issued) or the Fronting
Bank is subject or pursuant to any request from a requirement of any central
bank or other fiscal, monetary or other authority to which a Bank or the
Fronting Bank is subject, the Bank or the Fronting Bank shall notify the Agent
thereof not later than two business days before the proposed date for the
issuing of such Bank Guarantee and that Bank (or, where applicable) the Fronting
Bank shall not be obliged to participate in the issue of such proposed Bank
Guarantee.
8.4 The Agent is hereby authorised to issue any Bank Guarantee to be issued on
behalf of the Banks pursuant hereto by:
(i) completing the issue date and expiry date of such Bank Guarantee
(which shall be a date falling no later than the Final Maturity
Date);
(ii) completing the schedule to such Bank Guarantee with the amount of
each Revolving Bank's Portion calculated pursuant to Clauses 7.2 and
7.3; and
(iii) executing and delivering such Bank Guarantee to the relevant
recipient on the
<PAGE>
date upon which such Bank Guarantee is issued.
8.5 The Borrower (in respect of any Bank Guarantee issued at its request)
hereby:
(i) authorises the Agent, the Revolving Banks and the Fronting Bank to,
and the Agent, the Revolving Banks and the Fronting Bank shall, make
any payment and comply with any demand made by a third party in
respect of a Bank Guarantee which is valid on its face, appears to
comply with the terms thereof and which may be claimed from or made
upon it without any reference to or further authority from the
Borrower unless it has actual knowledge that any such demand is
fraudulent;
(ii) agrees that its authorisation under paragraph (i) above shall remain
in full force and effect and shall not be discharged until such date
as the Agent (acting on the instructions of all of the Banks) shall
notify the Borrower that it is fully satisfied that the Revolving
Banks or, as the case may be, the Fronting Bank remain under no
liability (actual or contingent) in respect of any Bank Guarantee;
(iii) agrees that each Bank Guarantee is issued subject to and with the
benefit of the provisions of the Fifth Schedule; and
(iv) agrees that it will at all times indemnify the Revolving Banks on
demand of such Revolving Bank (or the Agent on its behalf) and keep
each of the Revolving Banks indemnified on demand of such Revolving
Bank (or the Agent on its behalf) from and against all actions,
suits, proceedings, claims, demands, liabilities, damages, costs,
expenses, losses and charges whatsoever in relation to or arising out
of the issue of any Bank Guarantee, the payment of any claim made
thereunder or arising out of each such Bank's obligations pursuant to
Clause 9.1 Provided that the Borrower shall be entitled to finance a
payment under such indemnity by utilising the Revolving Facility if
it is then entitled to draw under the Revolving Facility in
accordance with the terms of this Agreement.
8.6 The Agent shall notify the Borrower upon its receipt of a demand by a
beneficiary under a Bank Guarantee issued hereunder and, where the Fronting Bank
or, as the case may be, the Revolving Banks make a payment under any such Bank
Guarantee, such payment shall be made no earlier than the third business day
after the date on which the Fronting Bank (or, as the case may be, the Agent on
behalf of the Revolving Banks) received such demand from such beneficiary (and,
for the avoidance of doubt, it is expressly agreed that neither the Agent, the
Revolving Banks nor the Fronting Bank shall be obliged to give any further
notice to the Borrower before making such payment to such beneficiary).
8.7 The Agent shall provide each of the Revolving Banks on whose behalf a Bank
Guarantee has been issued with a copy of such Bank Guarantee as soon as
practicable after the same has been issued and where the Fronting Bank has
issued a Bank Guarantee it shall, as soon as practicable after the same has been
issued, provide each Revolving Bank with a copy of such Bank Guarantee.
<PAGE>
9. Indemnity Relating to Bank Guarantees Issued by the Fronting Bank
9.1 In the event of any failure of the Borrower to perform its obligations
under Clause 8.5(iv) or as set out in the Fifth Schedule or the Borrower revokes
the authorisations given under Clause 8.5(i) or (ii), each Revolving Bank, in
relation to any Bank Guarantee issued by the Fronting Bank pursuant hereto,
hereby irrevocably and unconditionally:
(i) EITHER:
(a) guarantees to the Fronting Bank severally up to the amount of its
Portion and as a primary obligation, the due and punctual
observance and performance of all of the payment obligations of
the Borrower in respect of any Bank Guarantee issued by the
Fronting Bank in its capacity as such;
OR
(b) (if it is not permitted by its constitutive documents or any
applicable law to grant guarantees), agrees that:
(A) upon any failure of the Borrower to make timely payment of
any amount due in respect of a Bank Guarantee issued by the
Fronting Bank in its capacity as such, each such Revolving
Bank, without any further action, shall be deemed to have
taken, as of the date of issuance of each such outstanding
Bank Guarantee, an undivided participating interest from the
Fronting Bank in such Bank Guarantee outstanding at such
time (and upon the occurrence of an Event of Default
specified in Clause 30.1(viii), (ix), (x), (xi) or (xii)
each Revolving Bank shall be deemed to have taken, as of the
date of issuance by the Fronting Bank of each outstanding
Bank Guarantee, an undivided participating interest from the
Fronting Bank in each such Bank Guarantee outstanding at
such time) in a proportion equal to such Revolving Bank's
Portion and each such Revolving Bank agrees that it shall
hold the Fronting Bank harmless and indemnify the Fronting
Bank for such Revolving Bank's Portion of any drawing under
any such Bank Guarantee in which it has taken such an
undivided participating interest under this Clause 9.1; and
<PAGE>
(B) the obligation of each Revolving Bank to make payments to
the Fronting Bank with respect to any Bank Guarantee issued
by the Fronting Bank after having taken a portion thereof as
provided above shall be irrevocable and shall not be subject
to any qualification or exception whatsoever and shall be
made in accordance with the terms and conditions of this
Agreement under all circumstances, including without
limitation any of the following circumstances:
(1) any lack of validity or enforceability of this
Agreement, any of the Facility Documents, and all other
documents and instruments executed by the Borrower or
any of its affiliates and delivered to the Agent, the
Fronting Bank or any other Bank in connection with or
related to the Facilities, the Bank Guarantees or the
assets subject to the Senior Security Documents,
together with any and all amendments, extensions,
renewals and modifications thereof;
(2) the existence of any claim, set-off, defence or other
right which the Borrower or any other person may have
at any time against the beneficiary named in any Bank
Guarantee or any transferee of any Bank Guarantee (or
any person for whom any such transferee may be acting),
the Agent, the Fronting Bank, any other Bank or any
other person, whether in connection with this
Agreement, such Bank Guarantee, the transactions
contemplated herein or any unrelated transactions
(including any underlying transactions between the
Borrower or any of its affiliates and the beneficiary
named in such Bank Guarantee);
(3) any demand presented under any Bank Guarantee proving
to be forged, fraudulent, invalid or insufficient in
any respect or any statement therein being untrue or
inaccurate in any respect;
(4) the surrender or impairment of any security for the
performance or observance of any of the terms of any of
this Agreement or any of the Facility Documents; or
(5) the occurrence of any Potential Event of Default or
Event of Default;
<PAGE>
AND
(ii) agrees to pay to the Agent for the account of the Fronting Bank on
demand made through the Agent and in the currency in which the
relevant Bank Guarantee is denominated, its Portion of any and every
sum or sums of money which the Borrower shall from time to time be
liable to pay to the Fronting Bank in respect of a Bank Guarantee
issued by the Fronting Bank; and
(iii) agrees to pay to the Fronting Bank full cash cover for its Portion of
the outstanding contingent liabilities at any time after the Fronting
Bank has become entitled to demand an indemnity in respect thereof
from the Borrower and which shall not have been paid at the time such
demand is made.
9.2 Any payment made or to be made by a Revolving Bank pursuant to Clause 9.1
and any unreimbursed amount on the part of the Fronting Bank shall (for the
purpose of calculating interest thereon which is due from the Borrower) be
deemed to have been made available to the Borrower by way of cash advance
pursuant to the Revolving Facility on the date such payment is made or is to be
made (or unreimbursed) and accordingly is subject to the terms and conditions
hereof as if it were a Cash Advance with an initial Term of one month but for
all other purposes shall be immediately due and payable by the Borrower.
9.3 (i) The obligations of each Revolving Bank contained in Clause 9.1 shall
constitute and be continuing obligations notwithstanding any
settlement of account, Event of Default or other matter or thing
whatsoever.
(ii) As a separate and independent stipulation each Revolving Bank agrees
that any sum or sums of money intended to be the subject of the
guarantee in Clause 9.1 and subject to Clause 9.1(ii) shall be
recoverable from each Revolving Bank (in their respective
proportions) as sole principal debtor even if they would not be
recoverable from the Borrower by reason of any legal limitation,
disability or incapacity or liquidation or any other fact or
circumstance (whether known to the Fronting Bank or not) but which
would have been recoverable from such Revolving Bank if it were the
sole or principal debtor in respect of such as liability in place of
the Borrower.
(iii) The obligation of each Revolving Bank contained in Clause 9.1 shall
not be affected in any way by any time or indulgence granted to the
Borrower or by any variation compromise or release of any its
obligations to the Fronting Bank under the Revolving Facility.
(iv) Any settlement or discharge between any Revolving Bank and the
Fronting Bank shall be conditional upon no security or payment to the
Fronting Bank by any Revolving Bank or any other person on behalf of
any Revolving Bank being avoided or reduced by virtue of any
provisions or enactments relating to bankruptcy, insolvency or
liquidation for the time being in force and, if any such security or
payment shall be avoided or reduced, the Fronting Bank shall
<PAGE>
be entitled to recover the value or amount of such security or
payment from such Revolving Bank subsequently as if such settlement
or discharge had not occurred.
9.4 The Fronting Bank shall not be obliged before requesting counter-
indemnification from any Revolving Bank by this Agreement to:
(i) obtain judgment in any court against the Borrower or any other
Group Entity;
(ii) make or file any claim or proof in a winding-up or dissolution of
the Borrower or any other Group Entity; or
(iii) enforce or seek to enforce any other security taken in respect of
any of the obligations of the Borrower or any other Group Entity.
9.5 If a Revolving Bank (a "Defaulting Bank") fails to make payment on the
due date therefor of any amount due from it for the account of the Fronting Bank
pursuant to Clause 8.4 (the balance thereof for the time being unpaid being
referred to in this Clause as an "overdue amount") then until the Fronting Bank
(or the Agent on its behalf) has received payment of that amount in full (and
without prejudice to any other rights or remedies of the Fronting Bank in
respect of such failure):
(i) the Fronting Bank shall be entitled to receive any remuneration
which such Defaulting Bank would otherwise have been entitled to
receive in respect of the Revolving Facility; and
(ii) the overdue amount shall bear interest at the rate of one per cent.
per annum over the Fronting Bank's cost of borrowing for the time
being and any such interest which accrues shall be invoiced
monthly.
10. Indemnity Relating to Bank Guarantees issued by the Agent on behalf of
the Revolving Banks
10.1 If, at any time after the date hereof but prior to the expiry of a Bank
Guarantee which is issued by the Agent on behalf of the Revolving Banks a demand
for payment (the amount so demanded being herein referred to as the "Amount
Demanded") is made under such Bank Guarantee the Agent shall:
(i) promptly notify the Borrower of such demand and make demand of such
Borrower for an amount equal to the Amount Demanded; and
(ii) notify the Revolving Banks of the Amount Demanded and the date of
payment therefor.
10.2 The Borrower shall, after receipt of the notice under Clause 10.1(i), no
later than 11.00 a.m. on the second business day preceding the payment date
therefor (calculated in accordance with Clause 8.6), pay to the Agent the amount
demanded of it and, for the avoidance of doubt, the Borrower shall be entitled
to finance such a payment by utilising the
<PAGE>
Revolving Facility if it is then entitled to draw under the Revolving Facility
in accordance with the terms of this Agreement.
10.3 If the Agent has required the Borrower to pay an amount pursuant to
Clause 10.1 and has not, by 11.00 a.m. on the second business day preceding the
payment date therefor, received such amount in full from the Borrower;
(i) the Agent shall make a demand of each Revolving Bank for payment to
the Agent on the business day following the date of the Agent's
demand of an amount equal to such Bank's Portion in relation to the
relevant Bank Guarantee; and
(ii) each Revolving Bank shall, on the business day following the date
of the Agent's demand under (i) above, pay to the Agent the amount
so demanded of such Bank.
10.4 The Agent shall pay amounts received by it pursuant to Clauses 10.2 or
10.3, to the beneficiary of such Bank Guarantee.
10.5 Each Bank accepts each Bank Guarantee issued by the Agent on its behalf
for itself and the Agent, in its capacity as such, without power of attorney,
accepts and issues each such Bank Guarantee for each Transferee. Each Transferee
to whom a Bank has transferred or assigned any right or obligation in accordance
with the terms of this Agreement ratifies the issuing of such Bank Guarantee on
its behalf by accepting such transfer or assignment, thereby becoming a Bank.
All parties to this Agreement hereby confirm that the validity of the Bank
Guarantees shall not be affected by the Agent, in its capacity as such, acting
as representative without power of attorney for each Transferee.
11. Guarantee Commission and Fees
11.1 The Borrower shall pay guarantee commission to the Agent for the account
of the Revolving Banks (in their respective Portions) on the issue of any
Bank Guarantee requested by it hereunder at a rate per annum equal to the
Margin prevailing in respect of the Revolving Facility from time to time
on the Fronting Bank's exposure under such Bank Guarantee from the date
of issuance of such Bank Guarantee until such date as the Fronting Bank
and the Revolving Banks have ceased to be under any liability (actual or
contingent) in respect thereof.
11.2 Where a Bank Guarantee is issued by the Fronting Bank, the Borrower shall
pay to the Fronting Bank for its own account a fronting fee on the issue
of any Bank Guarantee for the account of the Borrower at the Applicable
Fronting Bank Rate on the Fronting Bank's exposure under such Bank
Guarantee calculated from the date of issuance of such Bank Guarantee
until such date as the Fronting Bank has ceased to be under any liability
(actual or contingent) in respect thereof.
11.3 The commission payable under Clause 11.1 above and the fronting fee
payable under Clause 11.2 above shall be paid quarterly in advance during
the continuance of the Revolving Facility (and if such day is not a
business day, on the preceding business
<PAGE>
day) commencing on the date of issuance of the relevant Bank Guarantee.
11.4 For the avoidance of doubt, the Fronting Bank's Proportion of the
commission at the rate and calculated in the manner specified in Clause
11.1 above shall be payable to the Fronting Bank in its capacity as a
Revolving Bank, notwithstanding that it may not be legally capable of
guaranteeing itself in its capacity as Fronting Bank.
<PAGE>
Part 4
INTEREST
12. Interest Periods (Term Advances)
12.1 The period for which each Term Advance is outstanding shall be divided
into successive periods each of which (other than the first) shall start on the
last day of the preceding such period.
12.2 The duration of each Interest Period shall, save as otherwise provided
herein, be one, three or six months (or such other period as the Borrower and
the Banks may agree), in each case as the Borrower may, by not less than three
business days' prior notice to the Agent, select (and the Agent shall promptly
notify the Banks participating in the relevant Term Advance of the duration
selected by the Borrower) Provided that:
(i) if the Borrower fails to give such notice of its selection in
relation to an Interest Period, the duration of that Interest
Period shall, subject to (ii) and (iii) below, be three months;
(ii) any Interest Period which begins during or at the same time as any
other Interest Period shall end at the same time as that other
Interest Period; and
(iii) any Interest Period in respect of a Term Advance which would
otherwise end during the month preceding, or extend beyond, a Term
Repayment Date shall be of such duration that it shall end on such
Term Repayment Date.
12.3 The Borrower may, by not less than three business days' prior notice to
the Agent, direct that any Term Advance shall, at the beginning of any Interest
Period relating thereto, be divided into (and thereafter, save as otherwise
provided herein, treated in all respects as) two or more Term Advances having
such amounts (in aggregate, equalling the amount of the Term Advance being so
divided) as shall be specified by the Borrower in such notice Provided that the
Borrower shall not be entitled to make such a direction if:
(i) as a result of so doing, there would be more than four outstanding
Term Advances; or
(ii) any Term Advance thereby coming into existence would be in an
amount of less than DM5,000,000
12.4 If following a direction under Clause 12.3 two or more Interest Periods
in respect of a Term Advance made to the Borrower end at the same time, then, on
the last day of those Interest Periods, the Term Advances to which such Interest
Periods relate shall be consolidated into (and thereafter, save as otherwise
provided herein, treated in all respect as) a single Term Advance.
<PAGE>
13. Interest Rate and Payment
13.1 On the last day of each Interest Period relating to a Term Advance (and,
if such Interest Period is longer than six months, on the day falling six months
after the first day of such Interest Period and on the last day of each
successive period of six months during such Interest Period) the Borrower shall
pay accrued interest on such Term Advance.
13.2 On the Repayment Date relating to each Cash Advance, the Borrower shall
pay accrued interest on such Cash Advance.
13.3 The rate of interest on each Term Advance during each Interest Period
relating thereto and on each Cash Advance during the Term relating thereto shall
be the rate per annum which is the sum of the Margin and FIBOR on the Quotation
Date therefor.
13.4 If the aggregate amount of the Term Loan and the Total Revolving
Commitment has been permanently reduced by an amount at least equal to one of
the amounts set out in Column 1 of Clause 13.5 (the "Relevant Reduction") and at
the time of delivery to the Agent of the financial statements for any period (in
this Clause 13, the "Relevant Time Period") pursuant to Clause 27.1(i)(a),
Clause 27.1(ii)(a) or Clause 27.1(iii)(a), a Duly Authorised Officer of the
Borrower certifies or (in the case of delivery of any audited financial
statements) the Auditors certify to the Agent in the certificate provided by him
or them (as the case may be) under Clause 27 in relation to such accounts that
such financial statements show that the ratio of Total Debt to Adjusted EBITDA
(in this Clause 13, the "Relevant Ratio") in respect of that Relevant Time
Period falls within one of the ranges specified in column 2 of Clause 13.5, then
(Provided that no Event of Default or Potential Event of Default has occurred
and is continuing and subject to Clause 13.7) the Margin in respect of the
Facilities for the period referred to in Clause 13.6 shall be the percentage in
column 3 of Clause 13.5 set opposite the amount of such Relevant Reduction and
the range into which that Relevant Ratio falls.
13.5 Column 1 Column 2 Column 3
Relevant Reduction Relevant Ratio Margin%
(DM)
25,000,000 or more 3.00:1 or less 1.625
30,000,000 or more 2.75:1 or less 1.50
40,000,000 or more 2.50:1 or less 1.375
50,000,000 or more 2.25:1 or less 1.250
and, for the avoidance of doubt where the amount of the Relevant Reduction and
the amount of the Relevant Ratio fall in different lines across the columns set
out above then:
(i) where the Relevant Reduction falls on a line which is above the
line on which the Relevant Ratio appears, the Margin shall be the
figure set out in the same line as the applicable Relevant
Reduction; and
<PAGE>
(ii) where the Relevant Ratio falls on a line which is above the line on
which the Relevant Reduction falls, the Margin shall be the figure
set out in the same line as the applicable Relevant Ratio.
13.6 Any revised Margin provided for in Clause 13.5 in relation to each
Advance will become effective on the first day of each Interest Period or Term
commencing (or, in the case of a Bank Guarantee, the next Commission Payment
Date occurring) immediately after the date on which the accounts for the
Relevant Time Period are delivered to the Agent under Clause 27 together with
the certificate relating to covenant performance referred to in Clause
27.1(i)(c), 27.1(ii)(c) or 27.1(iii)(b) (as applicable) but shall cease to be
effective as from the first day of the Interest Period or Term commencing (or,
in the case of a Bank Guarantee, the next Commission Payment Date occurring)
after the Relevant Reduction and/or Relevant Ratio ceases to be achieved.
13.7 Any amendment to the Margin provided for in Clause 13.5 in relation to
each Advance will cease for each Interest Period or Term on the first day of the
Interest Period or Term commencing (or, in the case of a Bank Guarantee, on the
next Commission Payment Date occurring), immediately after the date that any
accounts of the Borrower or any certificates of a Duly Authorised Officer of the
Borrower or the Auditors are due to be delivered under Clause 27 if not
delivered by then and shall be suspended after the occurrence of any Event of
Default and shall only be reinstated once such Event of Default has been
remedied or waived specifically for the purpose of this Clause 13.7 and
financial statements have been delivered for the relevant financial period after
such remedy or waiver which show that the Relevant Reduction and Relevant Ratio
have been (or continue to be) achieved in which case such amendment to the
Margin shall commence on the first day of each Interest Period or Term beginning
(or, in the case of a Bank Guarantee, on the next Commission Date occurring),
after the financial statements showing that the Relevant Reduction and Relevant
Ratio have been (or continue to be) achieved are delivered.
14. Market Disruption (Term Advances)
14.1 If, in relation to any Term Advance:
(i) the Agent determines that at or about 11.00 a.m. on the Quotation
Date for an Interest Period in respect of such Term Advance FIBOR
cannot be ascertained; or
(ii) before the close of business in Frankfurt on the Quotation Date for
an Interest Period in respect of such Term Advance, the Agent has
been notified by a Bank or each of a group of Term Banks to whom in
aggregate fifty per cent or more of the Term Facility is (or, if a
Term Advance were then made, would be) owed that the FIBOR rate
does not accurately reflect the cost to it of obtaining such
deposits in Deutschemark for the relevant period,
then, notwithstanding the provisions of Clauses 6, 12 and 13:
(a) the Agent shall promptly notify the Borrower and the Term Banks of
such
<PAGE>
event; and
(b) where, in the opinion of the Agent, the events described in
paragraph (i) or (ii) above have occurred pursuant to events in the
banking market generally such that it is not feasible for such Term
Advance to be made, the Term Advance shall not be made; and
(c) where paragraph (b) does not apply, such Term Advance shall be
made; and
(d) the rate of interest applicable to the Term Advances from time to
time during the relevant Interest Periods shall be the rate per
annum which is the sum of the Margin and the rate per annum
determined by the Agent to be the weighted average (rounded to four
decimal places) of the rates notified by each Term Bank to the
Agent before the last day of such Interest Period to be those which
express as a percentage rate per annum the cost to such Term Bank
of funding from whatever sources it may select its portion of such
Term Advance during such Interest Period; and
(e) if the Agent or the Borrower so requires, within five days of such
notification the Agent and the Borrower shall enter into
negotiations with a view to agreeing a substitute basis (1) for
determining the rates of interest from time to time applicable to
the Term Advances and/or (2) upon which the Term Advances may be
made or maintained thereafter and any such substitute basis that is
agreed shall take effect in accordance with its terms and be
binding on each party hereto.
14.2 Interest on a Term Advance during an Interest Period specified in Clause
12.1 shall be distributed by the Agent to the Term Banks in proportion to the
amounts which represent the cost to each Term Bank of funding its share of such
Term Advance during such Interest Period provided that any such interest which
is attributable to the Margin shall be distributed by the Agent to the Term
Banks in proportion to their respective participations in such Term Advance.
15. Market Disruption (Cash Advances)
15.1 If in relation to any Cash Advance:
(i) the Agent determines that at or about 11.00 a.m. on the Quotation
Date for the Term in respect of such Cash Advance FIBOR cannot be
ascertained; or
(ii) before the close of business in Frankfurt on the Quotation Date for
such Term the Agent has been notified by a Revolving Bank or each
of a group of Revolving Banks to whom in aggregate fifty per cent.
or more of the Revolving Facility Outstandings is (or, if a Cash
Advance were then made, would be) owed, that the FIBOR rate does
not accurately reflect the cost to it of obtaining such deposits
for the relevant period Deutschemark,
then, notwithstanding the provisions of Clauses 7 and 13:
<PAGE>
(a) the Agent shall notify the Borrower and the Revolving Banks of such
event;
(b) where, in the opinion of the Agent, the events described in
paragraph (i) or (ii) above have occurred pursuant to events in the
banking market generally such that it is not feasible for such Cash
Advance to be made, the Cash Advance shall not be made; and
(c) where paragraph (b) does not apply such Cash Advance shall be made;
and
(d) the rate of interest applicable to such Cash Advance during such
Term shall be the rate per annum which is the sum of the Margin and
the rate per annum determined by the Agent to be the weighted
average (rounded to four decimal places) of the rates notified by
each Revolving Bank to the Agent before the last day of such
Interest Period to be those which express as a percentage rate per
annum the cost to such Revolving Bank of funding from whatever
sources it may reasonably select its portion of such Cash Advance
during such Interest Period; and
(e) if the Agent or the Borrower so requires, within five days of such
notification the Agent and the Borrower shall enter into
negotiations with a view to agreeing a substitute basis for
determining the rates of interest which may be applicable to Cash
Advances in the future and any such substitute basis that is agreed
shall take effect in accordance with its terms and be binding on
each party hereto.
15.2 Interest on a Cash Advance during a Term specified in Clause 15.1 shall
be distributed by the Agent to the Revolving Banks in proportion to the amounts
which represent the cost to each Revolving Bank of funding its share of such
Cash Advance during such Term provided that any such interest which is
attributable to the Margin shall be distributed by the Agent to the Revolving
Banks in proportion to their respective participations in such Cash Advance.
<PAGE>
Part 5
REPAYMENT, PREPAYMENT AND CANCELLATION
16. Repayment of Term Loan and Cash Advances
16.1 The Borrower shall repay the Term Loan in instalments by repaying on each
Term Repayment Date set out below an amount equal to the amount which appears
opposite such date in the column headed "Repayment Amount" below:
Term Repayment Dates Repayment
Amount
(DM,000,000)
30 September 1998 4
31 March 1999 4
30 September 1999 4
31 March 2000 4.5
30 September 2000 4.5
31 March 2001 6.0
30 September 2001 6.0
31 March 2002 8.0
30 September 2002 8.0
31 March 2003 8.0
30 September 2003 8.0
31 March 2004 5.5
30 September 2004 5.5
16.2 The Borrower shall repay in full each Cash Advance on its Repayment Date
and all amounts outstanding under the Revolving Facility shall be repaid on or
before the Final Maturity Date.
17. Prepayment
17.1 The Borrower may, if it has given to the Agent not less than ten business
days' prior written notice to that effect, prepay the whole or any part of the
Term Loan (being an amount such that the Term Loan is reduced by at least
DM1,000,000) on the last day of any Interest Period relating thereto (or at any
other time on payment of the appropriate breakage costs and accrued interest in
accordance with Clause 33.4).
17.2 The Borrower and IFCO Europe shall apply the following or procure that
the following are applied, within the time limits specified below, in repayment
of the Term Facility and permanent reduction of the Available Revolving Facility
in the manner specified in Clause 17.4:
(i) within one month of delivery of the annual consolidated accounts
under Clause 27.1 in each year, fifty per cent. (50%) of Excess
Cash Flow of the Group for the financial year to which those
consolidated accounts relate;
<PAGE>
(ii) within fourteen business days of receipt, all Net Disposal Proceeds
save to the extent that it is demonstrated to the reasonable
satisfaction of the Agent that such Net Disposal Proceeds have been
or will, within six months of their receipt be reinvested by the
relevant member of the Group in assets within the Group which are
of a similar nature to those which have been disposed of;
(iii) within fourteen business days of receipt, the proceeds (net of
costs and expenses associated with such claim together with
transmission and foreign exchange costs and expenses) of any
insurance claim received by any Group Entity, other than where such
proceeds do not exceed DM1,000,000 (or its equivalent in any other
currency) in aggregate or where such proceeds arise from claims
under third party or public liability insurance policies and save
to the extent that such proceeds are demonstrated to the reasonable
satisfaction of the Agent to be paid to such Group Entity by way of
reimbursement of such Group Entity for amounts applied by such
Group Entity in respect of the damage or liability in relation to
which such relevant insurance claim was made prior to receipt of
such proceeds or to meet a liability in respect of which such
monies were received or are, within a period of 12 months of
receipt by the relevant Group Entity, demonstrated to the
reasonable satisfaction of the Agent to be applied to the
replacement and/or repair of the assets in respect of which the
relevant insurance claim was made or to meet such liability;
(iv) within two business days of receipt, the net proceeds received by
IFCO Europe or any Group Entity as a result of any Flotation of its
shares or any Flotation of the shares of any of its subsidiaries;
(v) within two business days of receipt, an amount equal to all amounts
which are raised out of (a) any loans or other Financial
Indebtedness (other than Permitted Loans and Permitted
Indebtedness) raised by the Borrower or any other member of the
Group and (b) the proceeds of any equity subscribed for in the
Borrower save to the extent that proceeds of any capital increase
need to be retained by the relevant company in order to comply with
applicable companies law; and
(vi) within fourteen business days of receipt, an amount equal to all
amounts paid by MTS to IFCO Europe by way of share dividends.
17.3 Any amount prepaid pursuant to Clauses 17.2(iv) or 17.2(v) shall be
immediately applied by the Agent in accordance with Clause 17.4 and any other
amounts prepaid pursuant to Clause 17.2 shall, at the Borrower's option, either
be immediately applied by the Agent in accordance with Clause 17.4 (in which
case the Borrower shall also pay any amounts payable pursuant to Clause 31.4) or
shall be held by the Agent in an interest bearing account (which shall be
secured to the reasonable satisfaction of the Agent) and shall then be applied
by the Agent on the last day of the then relevant current Interest Periods (in
the case of the Term Facility) or on the relevant Repayment Dates (in the case
of the Revolving Facilities) in accordance with the terms of Clause 17.4 and the
Agent is authorised to purchase with any amounts held by it hereunder, such
other currencies as may be necessary to enable it to make
<PAGE>
such applications.
17.4 Any amount prepaid pursuant to Clause 17.2 shall be applied as follows:
(a) first, against outstandings under the Term Facility against
instalments due on the remaining Term Repayment Dates in inverse
order of maturity;
(b) secondly, (after the Term Loan has been repaid) in prepayment of
outstanding Cash Advances (as specified by the Borrower or, failing
such specification, as the Agent shall determine) and permanent
reduction of the Available Revolving Facility; and
(c) thirdly, in procuring the release of the obligations of the Banks
and the Fronting Bank in respect of any Bank Guarantees (together
with the corresponding permanent reduction of the Available
Revolving Facility).
17.5 If, at any time, any person other than the Borrower or IFCO Europe
becomes the owner of any shares in any member of the Group then the Agent may,
by giving five business days' notice, require the Facilities to be prepaid in
full and the Borrowe r shall prepay the Outstandings in accordance with such
notice.
17.6 Any prepayments shall be made together with accrued interest thereon and
all other amounts (including, without limitation, any amounts payable under
Clause 33.4) payable under this Agreement in relation to the amount prepaid
calculated up to the date of prepayment.
17.7 The Borrower shall not repay or prepay all or any part of the Term Loan
or any Cash Advance except at the times and in the manner expressly provided in
this Agreement and shall not be entitled to reborrow any such amount of the Term
Loan repaid or prepaid.
17.8 Any notice of prepayment given by the Borrower pursuant to Clause 17.1
shall be irrevocable and shall specify the date upon which such prepayment is to
be made and the amount of such prepayment and shall oblige the Borrower to make
such prepayment on such date.
17.9 Nothing in this Clause 17 will permit any Group Entity to make any
disposal, sale, lease or transfer or undertake any other transaction not
otherwise permitted in accordance with the Facility Documents.
17.10 The rate of interest payable on any amounts held pursuant to Clause 17.3
pending application shall be the rate of interest then payable by the Agent to
its similar customers for deposits of similar amounts and duration.
18. Reductions in Revolving Commitments
18.1 On 30 September 2002 and 30 September 2003 part of the Tranche A
Revolving Commitments of the Revolving Banks shall be cancelled so that the
aggregate of the Tranche A Revolving Commitments shall be reduced on each of
those dates by DM5,000,000 (such
<PAGE>
cancellation to be applied amongst the Revolving Banks in their Tranche A
Proportions) and the Borrower shall ensure that sufficient amounts of the
Revolving Advances mature on such dates as are necessary to ensure that the
Tranche A Revolving Facility Outstandings do not exceed the aggregate Tranche A
Revolving Commitments as so reduced.
18.2 Where any Cash Advances are made under the Tranche B Revolving Facility
then the relevant limit set out in paragraph (vi) of the definition of Permitted
Indebtedness in relation to Finance Leases shall be reduced by an equal amount.
18.3 On the Final Maturity Date, each Bank's Revolving Commitment shall be
cancelled and reduced to zero.
19. Cancellation
19.1 The Borrower may, by giving to the Agent not less than thirty business
days' prior notice to that effect, cancel the whole or any part of the Available
Revolving Facility, being an amount of at least DM5,000,000 and an integral
multiple of DM1,000,000. Any such cancellation shall reduce the Revolving
Available Commitment of the Revolving Banks rateably.
19.2 Any notice of cancellation given by the Borrower pursuant to Clause 19.1
shall be irrevocable and shall specify the date upon which such cancellation is
to be made and the amount of such cancellation.
19.3 Each Bank's Commitment shall automatically be cancelled at the close of
business on the Termination Date.
<PAGE>
Part 6
CHANGES IN CIRCUMSTANCES
20. Taxes
20.1 All payments to be made by the Borrower to any person hereunder shall be
made free and clear of and without deduction for or on account of Tax except to
the extent that the Borrower is required to make such a payment subject to the
deduction or withholding of Tax. If the Borrower is required to make any
payment to any person hereunder subject to any deduction or withholding on
account of any Relevant Tax then the sum payable by the Borrower in respect of
which such deduction or withholding is required to be made shall be increased to
the extent necessary to ensure that, after the making of the required deduction
or withholding, such person receives and retains (free from any liability in
respect of any such deduction or withholding) a net sum equal to the sum which
it would have received and so retained had no such deduction or withholding been
made or required to be made Provided that the Borrower shall not be obliged to
increase any payment under this Clause 20.1 to any Bank not being or ceasing to
be a Qualifying Bank unless (i) the requirement to deduct or withhold would have
applied had such Bank been or continued to be a Qualifying Bank (in which case
the amount payable will not exceed the amount which would have been payable to a
Qualifying Bank) or (ii) such Bank is not or ceases to be a Qualifying Bank as a
result of a change of law or application of a double taxation treaty or
generally applied practice of the tax authorities in Germany required to make
such deduction or withholding.
20.2 Without prejudice to the provisions of Clause 20.1, if any person or the
Agent on its behalf is required to make any payment on account of Tax (not being
a tax imposed on the net income of its Facility Office by the jurisdiction in
which it is incorporated or in which its Facility Office is located) or
otherwise on or in relation to any sum received or receivable hereunder by such
person or the Agent on its behalf (including, without limitation, any sum
received or receivable under this Clause 20) or any liability in respect of any
such payment is asserted, imposed, levied or assessed against such person or the
Agent on its behalf, the Borrower shall, upon demand of the Agent, promptly
indemnify such person against such payment or liability, together with any
interest, penalties and expenses payable or incurred in connection therewith.
20.3 A Bank intending to make a claim pursuant to Clause 20.2 shall notify the
Agent of the event by reason of which it is entitled to do so, whereupon the
Agent shall notify the Borrower thereof showing reasonably detailed calculations
of such claim Provided that nothing herein shall require such Bank to disclose
any confidential information relating to the organisation of its affairs.
20.4 Each Bank confirms that it is not its intention to require any support or
securities from any foreign shareholder of the Borrower or any related party of
any such shareholder (other than the Borrower itself and its affiliates) other
than where such support arises by operation of applicable law and confirms that,
to the best of its knowledge and belief as at the date hereof, it has not
required any such support or securities Provided that, if any such support or
securities are deemed to have been provided and this gives rise to a liability
for any member of the Group or any shareholder of any such member or any related
party, notwithstanding this
<PAGE>
expression of intention, no Bank shall be liable in respect thereof and the
Borrower agrees that it will not assert any claim against any Bank in respect of
any such liability.
20.5 Each Bank confirms that, upon request from the Borrower, it will take
such steps as may be reasonable and practical in all the circumstances to
support the Borrower in providing evidence to the German tax authorities that no
such support or securities have been provided by any such foreign shareholders
or related parties, provided that no Bank shall be under any obligation to do
anything which would or might have an adverse effect upon its business,
operations or financial condition or the management of its Tax affairs and
provided further that nothing herein shall require any Bank to disclose any
confidential information relating to the organisation of its affairs.
21. Tax Credits
21.1 If, following any increase in any sum payable under this Agreement under
Clause 20.1, any Beneficiary shall receive or be granted a credit against or
remission for any Tax payable by it, that Beneficiary shall, subject to the
Borrower having made any increased payment in accordance with Clause 20.1 and to
the extent that such Beneficiary can do so in its sole opinion without
prejudicing the retention of the amount of such credit or remission and without
prejudice to its right to obtain any other relief or allowance which may be
available to it and to conduct its own tax affairs as it thinks fit, reimburse
such amount as that Beneficiary shall in its absolute discretion certify to be
the proportion of such credit or remission as will leave that Beneficiary (after
such reimbursement) in no worse position than it would have been in had no
increase been required under Clause 20.1.
21.2 Nothing contained in this Agreement or any of the Facility Documents
shall oblige any Beneficiary to rearrange its tax affairs or to disclose any
information regarding its tax affairs and computations.
22. Tax Receipts
22.1 If, at any time, the Borrower is required by law to make any deduction or
withholding from any sum payable by it hereunder (or if thereafter there is any
change in the rates at which or the manner in which such deductions or
withholdings are calculated), the Borrower shall promptly notify the Agent.
22.2 If the Borrower makes any payment hereunder in respect of which it is
required to make any deduction or withholding, it shall pay the full amount
required to be deducted or withheld to the relevant taxation or other authority
within the time allowed for such payment under applicable law and shall deliver
to the Agent for each Bank, within thirty days after it has made such payment to
the applicable authority, an original receipt (or a certified copy thereof)
issued by such authority evidencing the payment to such authority of all amounts
so required to be deducted or withheld in respect of that Bank's share of such
payment (or, if no such receipt is issued, evidence of such payment in form and
substance satisfactory to the Agent (acting reasonably)).
23. Increased Costs
<PAGE>
23.1 If, by reason of (i) any change in law after the date hereof or in its
interpretation or administration and/or (ii) compliance with any request from or
requirement of any central bank or other fiscal, monetary or other authority
after the date hereof (including, without limitation, a request or requirement
which affects the manner in which a Bank or any holding company of such Bank is
required to or does maintain capital resources having regard to such Bank's
obligations hereunder and to amounts owing to it hereunder) which, in either
case, affects banks such as the relevant Bank generally and with which it is
customary for banks such as the relevant Bank to comply:
(a) a Bank or any holding company of such Bank incurs a cost as a
result of such Bank's having entered into and/or performing its
obligations under the Facility Documents and/or assuming or
maintaining a commitment under the Facility Documents and/or making
one or more Advances hereunder and/or participating in any Bank
Guarantee;
(b) a Bank or any holding company of such Bank is unable to obtain the
rate of return on its overall capital which it would have been able
to obtain but for such Bank's having entered into and/or performing
its obligations and/or assuming or maintaining a commitment under
this Agreement;
(c) there is any increase in the cost to a Bank or any holding company
of such Bank of funding or maintaining all or any of the Advances
comprised in a class of Advances formed by or including the
Advances made or to be made by such Bank hereunder; or
(d) a Bank or any holding company of such Bank becomes liable to make
any payment on account of tax (not being a tax imposed on the net
income of such Bank's Facility Office by the jurisdiction in which
it is incorporated or in which its Facility Office is located) or
otherwise on or calculated by reference to the amount of the
Advances made or to be made by such Bank hereunder and/or such
Bank's participation in any Bank Guarantee issued or to be issued
hereunder and/or to any sum received or receivable by it hereunder;
then the Borrower shall, from time to time on demand of the Agent, promptly pay
to the Agent for the account of that Bank amounts sufficient to indemnify that
Bank or any such holding company against, as the case may be, (1) such cost, (2)
such reduction in such rate of return (or such proportion of such reduction as
is, in the opinion of that Bank, attributable to its obligations hereunder), (3)
such increased cost (or such proportion of such increased cost as is, in the
opinion of that Bank, attributable to its funding or maintaining Advances
hereunder) or (4) such liability.
23.2 Clause 23 shall not apply so as to oblige the Borrower to compensate or
indemnify the Agent or any Bank for any cost, interest cost, liability or
reduction:
(i) resulting from the introduction of or any change in or in the
interpretation or application by any relevant authority of, any
law, regulation, directive or request relating to the deduction,
withholding, payment or other imposition of any tax to which the
provisions of Clause 20.1 and/or 20.2 apply; or
<PAGE>
(ii) resulting from any change, request or requirement relating to tax
imposed on the overall net income of the Agent or any Bank by the
jurisdiction in which it is incorporated or in which its Facility
Office is located.
23.3 A Bank intending to make a claim pursuant to Clause 23.1 shall notify the
Agent of the event by reason of which it is entitled to do so, whereupon the
Agent shall notify the Borrower thereof showing reasonably detailed calculations
of such claim Provided that nothing herein shall require such Bank to disclose
any confidential information relating to the organisation of its affairs.
24. Illegality
If, at any time after the date hereof, it is or becomes unlawful or
contrary to any request from or requirement of any applicable fiscal, monetary
or other authority which it is customary for banks to comply with for a Bank to
make, fund or allow to remain outstanding all or any of the Advances made or to
be made by it hereunder or for such Bank or, as the case may be, the Fronting
Bank, to participate in the issue of, or allow to remain outstanding all or any
of its liabilities under, any Bank Guarantee, then that Bank or, as the case may
be, the Fronting Bank shall, promptly after becoming aware of the same, deliver
through the Agent to the Borrower a certificate to that effect and, unless such
illegality is avoided in accordance with Clause 25:
(a) such Bank (or, where relevant, the Fronting Bank) shall not
thereafter be obliged to participate in any Advances or to
participate in the issue of any Bank Guarantee and the amount (if
any) of its Commitment shall be reduced to zero on the earliest
date required by law; and
(b) if the Agent on behalf of such Bank so requires or, in the case of
(ii) below (if appropriate), the Fronting Bank so requires, the
Borrower shall:
(i) on the earliest date required by law or, if earlier, the
last day of the Term or current Interest Period thereof (as
applicable), repay such Bank's share of any such outstanding
Advances together with accrued interest thereon and all
other amounts owing to such Bank; and/or
(ii) on the earliest date required by law procure that such
Bank's or, as the case may be, Fronting Bank's obligations
under or in respect of any Bank Guarantees will be reduced
to zero or otherwise secured at the cost of the Borrower
(with one hundred per cent. (100%) cash security in Deutsche
Mark) in a manner acceptable to such Bank or, as the case
may be, the Fronting Bank,
Provided that any sums received by a Bank or, as the case may be, the
Fronting Bank under paragraph (ii) hereof shall be credited to an account
by such Bank or Fronting Bank bearing interest at such rate as such Bank
or Fronting Bank shall determine and the Bank or Fronting Bank shall
until the expiry date of any such outstanding Bank Guarantees or, if
earlier, the date on which the Agent declares any Advances
<PAGE>
outstanding hereunder to be due and payable pursuant to Clause 30.2,
account to the Borrower for such interest.
25. Mitigation
If circumstances arise in respect of the Agent or any Bank which would, or would
upon the giving of notice, result in:
(i) the reduction of its Commitment to zero pursuant to Clause 24;
(ii) the prepayment of its share of the Advances pursuant to Clause 24;
(iii) an increase in the amount of any payment to be made to it for its
account pursuant to Clause 20.1; or
(iv) a claim for indemnification pursuant to Clause 20.2 or 23.1
then, without in any way limiting, reducing or otherwise qualifying the
obligations of the Borrower under Clauses 20 to 24 inclusive, the Agent or such
Bank (as the case may be) shall, upon written request from the Borrower take
such steps as may be reasonable and practical in all the circumstances to
mitigate the effects of those circumstances including (without limitation)
submitting all forms required by a national taxation authority in connection
with the payment of gross sums under any applicable double tax treaty, the
transfer of its lending office to another jurisdiction or the assignment of all
its rights hereunder to and assumption of all its obligations hereunder by
another bank or financial institution acceptable to the Borrower (acting
reasonably) and the Fronting Bank which is willing to participate in the
Facilities in its place, provided that neither the Agent nor the Bank shall be
under an obligation to submit any such forms or to make any such transfer or
assignment and transfer if, in its reasonable opinion, it would or might have an
adverse effect upon its business, operations or financial condition or the
management of its Tax affairs.
<PAGE>
Part 7
REPRESENTATIONS, COVENANTS AND EVENTS OF DEFAULT
26. Representations
26.1 Subject to the provisions of the Disclosure Letter, the Borrower hereby
represents to each of the Beneficiaries in respect of itself and in respect of
each other Group Entity (but in relation to any such other Group Entity to the
best of the Borrower's knowledge and belief (having made all due enquiries))
and, in the case of Clauses 26.1(i) to (iv) inclusive, Clauses 26.1(ix) to (xi)
inclusive, Clause 26.1(xiii) (but only in relation to the Facility Documents),
and Clause 26.1(xvi), IFCO Europe represents in respect of itself that:
(i) it is a corporation duly incorporated, validly existing and
registered under the laws of the jurisdiction in which it is
incorporated, capable of being sued in its own right and not
subject to any immunity from any proceedings and has the power and
all necessary governmental and other material consents, approvals,
licences and authorisations under any applicable jurisdiction to
own its property and assets and to carry on its business
substantially as currently conducted;
(ii) subject to the Reservations it has the power to enter into and
perform its obligations under each of the Facility Documents to
which it is a party and has taken all necessary corporate and other
action to authorise the execution, delivery and performance of each
of the Facility Documents, to which it is a party;
(iii) (subject to the Reservations) no limit on its powers will be
exceeded as a result of the borrowings, granting of security or
giving of guarantees contemplated by the Facility Documents to
which it is a party and (subject to the Reservations) those
documents constitute its legal, valid and binding and enforceable
obligations;
(iv) the execution by it of each of the Facility Documents to which it
is a party and the exercise by it of its rights and the performance
of its obligations thereunder including, without limit, borrowing
hereunder, granting any security or giving guarantees contemplated
by the Facility Documents will not (a) result in the existence or
imposition of nor oblige it or any Group Entity to create any
Encumbrance (other than any Permitted Encumbrance) in favour of any
person over all or any of its present or future revenues or assets
(b) conflict in any material respect with any agreement, mortgage,
bond or other instrument to which it is a party or which is binding
upon it or any of its assets (c) conflict with its constitutive
documents and rules and regulations or (d) (subject to the
Reservations) conflict with any existing applicable law, regulation
or official or judicial order in its jurisdiction of incorporation;
(v) no litigation, arbitration, administrative proceedings, or
governmental or regulatory investigations, proceedings or disputes
have been commenced or,
<PAGE>
to the best of its knowledge and belief (having made all due
enquiries), threatened against any Group Entity or its respective
assets or revenues nor, to its knowledge, are there any
circumstances likely to give rise to any such litigation,
arbitration, administrative proceedings, or governmental or
regulatory investigations, proceedings or disputes which in any
such case might reasonably be expected to have a Material Adverse
Effect;
(vi) neither it nor any member of the Group has any Financial
Indebtedness (other than (i) Existing Indebtedness which will be
repaid on the date on which the first Advance is made hereunder or
(ii) Permitted Indebtedness) and no Encumbrances (other than
Permitted Encumbrances) existing over all or any of its or their
present or future revenues, undertakings or assets;
(vii) to the best of its knowledge and belief (having made all due
enquiry) no Event of Default has occurred which has not been either
remedied (or otherwise ceased to be continuing) or expressly waived
in writing;
(viii)the Information Memorandum, the Business Plan and any lists or
other reports prepared by the Borrower and supplied to the Agent in
connection herewith have been prepared after due and careful
consideration and, to the best of its knowledge and belief (having
made all due enquiry)
(a) it is not aware of any material inaccuracy as to factual
matters relating to the Group in the Reports, the Information
Memorandum or the Business Plan;
(b) it does not (as at the date thereof) disagree with nor regard
as unreasonable or unattainable any of the forecasts or
projections set out in the Reports, the Information
Memorandum or the Business Plan;
(c) the assumptions upon which the forecasts and projections
contained in the Reports, the Information Memorandum and the
Business Plan are based are in its opinion (having made all
reasonable enquiries) fair and reasonable;
(d) it is not aware of any significant facts or matters not
stated in the Reports the Information Memorandum or the
Business Plan, the omission of which in its reasonable
opinion might make any statements contained therein
misleading in any material respect; and
(e) it has made full disclosure of all requested information
relevant to the preparation of the Reports and the
Information Memorandum to all the persons responsible for or
involved in preparing the Reports and the Information
Memorandum;
(ix) the Original Financial Statements and the latest Financial
Statements delivered hereunder were prepared in accordance with the
Accounting Principles and give (in conjunction with the notes
thereto) a true and fair view
<PAGE>
of the financial condition of the Group at the date as of which
they were prepared and the results of the Group's operations during
the Accounting Reference Period then ended and any other accounts
delivered under this Agreement fairly represent (or in the case of
any management accounts the Borrower believes, acting reasonably,
that they fairly represent) the financial condition of the Group at
the date at which they were prepared and the results of the Group's
operations during the period to which such accounts relate;
(x) to the best of its knowledge and belief (having made all due
enquiry) neither it nor any Group Entity, as at the date as of
which any Financial Statements were prepared, failed to disclose or
reserve against any liabilities (contingent or otherwise) material
in relation to the Group as a whole nor any material unrealised
anticipated losses of the Group (which were material to the Group
as a whole) arising from commitments entered into by it which, in
accordance with the Accounting Principles, it should have disclosed
or reserved against;
(xi) there has been no material adverse change in the financial
condition or business of the Group since 30 September 1997;
(xii) to the best of its knowledge and belief (having made all due
enquiry), (a) it is and has been in full compliance in all material
respects with all applicable Environmental Laws and (b) it has been
and is in all material respects in compliance with the terms of all
Environmental Approvals necessary for the ownership and operation
of its facilities and businesses as presently owned and operated
and as presently proposed to be owned and operated the failure to
comply with which might reasonably be expected to have a Material
Adverse Effect;
(xiii)all necessary consents to the transactions constituted by the
Investment, the Facility Documents and the Senior Subordinated
Facility Documents have been obtained where failure to obtain them
might reasonably be expected to have any significant effect on the
rights or entitlements of the Beneficiaries under this Agreement or
the commercial value of the security granted pursuant to the Senior
Security Documents;
(xiv) to the best of its knowledge and belief (and in reliance upon
information supplied by GE), all necessary consents, licences and
other things (other than any necessary corporate action on the part
of GE) have been obtained or carried out to enable GE to own
(beneficially as well as legally) up to and including 100% of the
shares in IFCO Europe;
(xv) to the best of its knowledge, information and belief the Material
Group Entities have complied in all material respects with all
Taxation laws in the jurisdiction of their incorporation and where
they carry on their business;
(xvi) the claims of the Beneficiaries against it under any of the
Facility Documents to which it is a party will rank at least pari
passu with the claims of all its
<PAGE>
other unsecured and unsubordinated creditors save, in either case,
those whose claims are preferred solely by any bankruptcy,
insolvency, liquidation, merger or other similar laws of general
application;
(xvii) to the best of its knowledge and belief having made all due
enquiries it is not in breach of or in default under any agreement
to which it is a party or which is binding on it or any of its
assets to an extent or in a manner which might reasonably be
expected to have a Material Adverse Effect;
(xviii) it is not aware of any matter which would materially affect the
validity, subsistence or use of any of the Material Intellectual
Property;
(xix) it has and each Group Entity has good title to or valid leases or
licences of all of its assets necessary to carry on its business as
presently conducted, the absence of which might reasonably be
expected to have a Material Adverse Effect;
(xx) the Material Intellectual Property is, in the case of the Material
Intellectual Property set out in the Ninth Schedule, owned by the
Group Entity disclosed as the owner of such Material Intellectual
Property in such Schedule, and in the case of any other Material
Intellectual Property owned by the Borrower or such other Group
Entity as has been disclosed in writing to the Agent;
(xxi) GBL has no creditors other than the Borrower and SPI and SPI is a
creditor of GBL only to the extent of that part of the purchase
price for the Patent which remains unpaid;
(xxii) there has been no significant amendment, variation or waiver of the
terms of the Investment Agreement or the Supply Agreement save as
approved in writing by the Agent and it is acknowledged that, for
the avoidance of doubt, any amendment having the effect (in the
opinion of the Banks) of reducing the extent of the rights and
obligations of either GE or General Electric Capital Corporation
under the Investment Agreement shall be considered to be
significant;
(xxiii) it is not aware that any of the representations and warranties made
in favour of General Electric Capital Corporation contained in the
Investment Agreement were incorrect or untrue in any material
respect when made;
(xxiv) all crate rental contracts entered into by the Borrower with
growers are expressly governed by German law and all arrangements
entered into by the Borrower with its subsidiaries in relation to
crates are governed by German law;
(xxv) the chart showing the structure of the Group and set out in the
Seventh Schedule is true, correct and accurate in all material
respects;
(xxvi) the Existing Indebtedness is as set out in the Eighth Schedule and
the
<PAGE>
definition of Leasing Facilities;
(xxvii) Apollo is a dormant company, has no assets and is not trading;
and
(xxviii) at the date of this Agreement, the aggregate amount of all
receivables owed to the Borrower is at least 70% of the
aggregate amount of all receivables owed to the Group.
26.2 The representations and warranties in Clause 26.1 and the Disclosure
Letter shall survive the execution hereof and the making of each Advance under
this Agreement and (save for the representation at Clause 26.1(xxviii)) shall be
repeated in the notification made by the Borrower to the Agent pursuant to
Clause 12.2 and (save for the representations contained in sub-clause (viii) of
Clause 26.1 (which shall only be repeated upon each date that any update of the
Information Memorandum is agreed with the Agent pursuant to Clause 29.11 and
then only in respect of such updated information)) on the first day of each
Interest Period and at the end of each successive period of six months ending
during an Interest Period or Term, by reference to the facts and circumstances
then existing.
27. Financial Information
27.1 So long as any of the Beneficiaries have any amounts outstanding to them
or are under any commitment, obligation or liability (whether actual or
contingent) to make Advances or provide other financial accommodation to the
Borrower under or pursuant to this Agreement or any other Facility Document
(including any Bank Guarantee) the Borrower shall:
(i) as soon as the same become available, but in any event within
120 days after the end of each of its financial years deliver
to the Agent:
(a) the audited consolidated financial statements (including
balance sheet (Bilanz), profit and loss (Gewinn-und
Verlustrechnung) and cash flow statements (Lagebericht
including Vermogens-und Finanzlange and
KapitalfluBrechnung) of IFCO Europe for such financial
year Provided that if, at any time, the difference between
the consolidated financial statements of IFCO Europe and
the consolidated financial statements of the Group (if
such had been prepared at such time) would represent
something other than solely the capital value of IFCO
Europe at such time and its investment (if any) in MTS or
if the Agent (acting reasonably) requires, the Borrower
shall provide the audited consolidated financial
statements of the Group;
(b) the unconsolidated financial statements (including balance
sheet (Bilanz) and profit and loss (Gewinn-und
verlustrechung)) of each Group Entity for such financial
year (which shall be audited where such financial
statements are, in accordance with applicable law,
required to be audited);
(c) a certificate from a Duly Authorised Officer of the
Borrower (confirmed by a certificate from the Auditors)
setting out in reasonable detail the
<PAGE>
Excess Cash Flow calculation for such financial year and
certifying the Total Debt to Adjusted EBITDA ratio for the
purposes of Clause 13.4 for such financial year (supported
by reasonably detailed calculations), together with a list
of the then Material Group Entities;
(d) a compliance certificate in a form reasonably acceptable to
the Agent issued by the Auditors certifying whether or not
the financial covenants in Clause 28 have been observed,
supported by reasonably detailed calculations and confirming
that VAT has been correctly treated by the Group during the
financial year to which such certification relates (the
first such compliance certificate to be provided in relation
to the audited financial statements for the Accounting
Reference Period ending 31 December 1998);
(e) a certificate of an Authorised Signatory of the Borrower
certifying that as of the date thereof and to the best of
his/her knowledge and belief (having made all due enquiry)
no Event of Default has occurred or, if it has occurred, a
description thereof and the action taken or proposed to be
taken to remedy it; and
(f) a comparison against the Budget for such period;
(ii) as soon as the same become available, but in any event within (x)
in the case of each Financial Quarter falling before the first
anniversary hereof, 60 days and (y) in any other case 45 days
after the end of each Financial Quarter deliver to the Agent:
(a) the unaudited consolidated financial statements of the Group
for such period, including consolidated balance sheet
(Bilanz), consolidated profit and loss accounts (Gewinn-und
Verlustrechnung) and cash flow statements (Lagebericht
including Vermogens-und Finanzlange and
KapitalfluBrechnung), and a report on the business
comprising a consolidated statement of the revenues and
expenditures of the Group, all such financial statements to
be in a format acceptable to the Agent;
(b) a compliance certificate in a form reasonably acceptable to
the Agent given on behalf of the Borrower by a Duly
Authorised Officer certifying whether or not the financial
covenants in Clause 28 have been observed and certifying the
Total Debt to Adjusted EBITDA ratio for the purpose of
Clause 13.4 for such Financial Quarter, in each case
supported by reasonably detailed calculations;
(c) a written report of a Duly Authorised Officer of the
Borrower explaining in reasonable detail any material
differences between the actual performance of the Group
during such Financial Quarter and the performance of the
Group forecast in the budget for such period and providing a
forecast of the performance of the Group for the next twelve
months; and
<PAGE>
(d) a written report of a Duly Authorised Officer of the
Borrower setting out, in reasonable detail, an analysis of
the status of the crates over the previous four Financial
Quarters including details of crate breakages and the rate
of turnover per crate (including the number of cycles per
crate for such Relevant Period).
(iii) as soon as the same become available, but in any event within (x)
in the case of each calendar month falling on or after 31 January
1998 but before the first anniversary of the date hereof, 45 days
and (y) in any other case 30 days after the end of each calendar
month, deliver to the Agent:
(a) the management accounts of the Group (on a consolidated and
unconsolidated basis) for such calendar month (on a
month-to-month and cumulative basis and in a form reasonably
acceptable to the Agent) and providing a management
commentary thereon as to, inter alia, the Group's
performance during such calendar month and any material
developments or proposals affecting the Group or its
business;
(b) a compliance certificate in a form reasonably acceptable to
the Agent given on behalf of the Borrower by a Duly
Authorised Officer certifying the Total Debt to Adjusted
EBITDA ratio for the purpose of Clause 13.4 for such
calendar month, supported by reasonably detailed
calculation; and
(c) a report containing sufficiently detailed information
regarding the extent (both as to volume and amount) of
leasing which each Group Entity (on a subsidiary by
subsidiary basis) enters into as principal with growers and
the amount of receivables owing to each such Group Entity;
and
(iv) from time to time on the request of the Agent, furnish the Agent
with such information about the business, operations,
performance, prospects and financial condition of the Group or
any Group Entity or any other information as the Agent or any
Bank through the Agent may reasonably require, in particular all
information and documents as may be required under Sections 13,
13(a) and 18 of the German Banking Act (Gesetz uber das
Kreditwesen).
27.2 The Borrower shall, as soon as the same become available, and in any
event not later than 30 days before the beginning of any Accounting Reference
Period commencing with the financial year beginning 1 January 1999, deliver to
the Agent in sufficient copies for the Banks an annual Budget prepared by
reference to each month in respect of such financial year of the Group
including:
(i) forecasts of projected disposals (including timing and amount
thereof) of the Group for such Accounting Reference Period and
for the next two succeeding Accounting Reference Periods;
<PAGE>
(ii) projected annual profit and loss accounts for, and projected
balance sheets and cash flow statements on a monthly basis for,
such Accounting Reference Period and for the next two succeeding
Accounting Reference Periods on a consolidated basis for the
Group including a detailed working capital plan with an
explanation of the assumptions made with respect to the Group's
working capital requirements;
(iii) a qualitative analysis and commentary from the management on its
proposed activities for such Accounting Reference Period and for
the next two succeeding Accounting Reference Periods and such
financial years;
(iv) projections of Capital Expenditure; and
(v) targets for the turnover rate of the container pool and the
average annual breakage rate
and the Borrower shall forthwith provide the Agent with details of any material
changes in the projections delivered under Clause 27.2 as soon as it becomes
aware of any such change.
27.3 The Borrower shall ensure that:
(i) each set of financial statements delivered by it pursuant to
Clause 27.1 and 27.2 is prepared in accordance with the
Accounting Principles and (other than changes to the basis in
order to accord with the Accounting Principles where an
appropriate agreement has been reached in accordance with Clause
27.4) on the same basis as is used in the preparation of the
Original Financial Statements together with an appropriate
reconciliation statement in relation to financial statements not
prepared in accordance with the Accounting Principles and that
each statement in respect of the Group is prepared on a
consolidated and consolidating basis;
(ii) each set of financial statements delivered by it pursuant to
Clause 27.1(i), (ii) or (iii) is certified on behalf of the
Borrower by an Authorised Signatory of the Borrower (a) (in the
case of each set of financial statements delivered by it under
Clause 27.1(i)) as giving (where such financial statements are
audited) a true and fair view of the financial condition of the
Group and each Group Entity as at the end of the period to which
those financial statements related and of the results of its
operations during such period or (where such financial statements
are not audited) fairly represent the financial condition of the
Group and each Group Entity as at the end of the period to which
those financial statements related and of the results of its
operations during such period and (b) (in the case of each set of
financial statements delivered by it under Clause 27.1(ii) and
(iii)) as being (to the best of his/her knowledge and belief)
accurate in all material respects; and
(iii) each set of financial statements delivered by it pursuant to
Clause 27.1(i)(a) has been audited by the Auditors.
<PAGE>
27.4 Without prejudice to the obligations contained in Clause 27.3(i), if any
accounts to be delivered under Clause 27.1 are prepared on a basis not
contemplated by Clause 27.3(i) or the Accounting Principles in effect on the
date as of which the Original Financial Statements were prepared (as
appropriate) change in a way that affects the financial covenants contained in
Clause 28 or the calculation of Excess Cash Flow:
(i) the Agent (acting on the instructions of an Instructing Group)
and the Borrower shall, at the Agent's request, negotiate in good
faith with a view to agreeing such amendments to the financial
covenants in Clause 28 or the calculation of Excess Cash Flow
and/or the definitions used therein as may be necessary to grant
to the Banks protection comparable to that granted on the date
hereof, and any amendments as agreed will have effect on the date
agreed between the Agent and the Borrower; and
(ii) if no such agreement is reached within 30 days of the Agent's
request, the Agent shall (if so requested by an Instructing
Group) instruct independent accountants to determine any
amendments to Clause 28 or the calculation of Excess Cash Flow
which those accountants (acting as experts and not as
arbitrators) consider appropriate to grant to the Banks
protection comparable to that granted on the date hereof, which
amendments shall be binding and shall take effect when so
determined by those accountants. The reasonable cost and expenses
of those accountants shall be for the account of the Borrower.
27.5 Each set of accounts, financial reports and other documents delivered to
the Agent under Clause 27 shall be delivered in sufficient copies for each Bank.
27.6 The Borrower shall promptly on the appointment of any replacement
Auditors execute and deliver a letter in the agreed form to authorise the
Auditors to confirm to and discuss with the Agent (upon or after the occurrence
of an Event of Default which is continuing unremedied and unwaived and having
given the Borrower an opportunity to attend such discussions) the factual
accuracy of information related to or arising out of the annual audit of the
Group by the Auditors and the due application of the Accounting Principles to
the audit process and shall procure that the Auditors acknowledge such
authorisation. Under conditions that normally apply to audits in accordance with
generally accepted audit standards, the Borrower shall provide the Auditors with
unrestricted access to all and any information available to or in the possession
of the Borrower or any other Group Entity in this regard and shall otherwise
ensure that full co-operation is afforded to the Auditors.
27.7 The Borrower hereby undertakes to provide to the Agent on a monthly basis
(in sufficient copies for the Banks) information (in such form and containing
such details as the Agent may reasonably require) regarding the installation of
information technology systems within the Group and regarding the appointment of
a Chief Operations Co-ordinator for the Group and a Financial Controller for the
Group and, in any case, to ensure that a Chief Operations Co-ordinator for the
Group and a Financial Controller of the Group (in each case acceptable to IFCO
Europe) is appointed within three months of the date hereof and to ensure that
the information technology systems are installed in a timely fashion and in
accordance with the timetable set out in the IT Schedule.
<PAGE>
27.8 The Borrower shall supply to the Agent in sufficient copies for the
Banks:
(i) all documents despatched to the shareholders of the Borrower
which are required to be sent to such shareholders by law without
their specific request; and
(ii) all documents despatched by or on behalf of the Borrower to its
creditors generally in their capacity as such,
in all cases at the same time as such documents are despatched.
27.9 The Borrower shall provide to the Agent, in sufficient copies for the
Banks, the annual Budget for 1998 prepared by reference to each month in respect
of the financial year of the Group ending on 31 December 1998 and containing all
of the information set out in Clauses 27.2 (i) to (v) inclusive by no later than
31 March 1988.
28. Financial Condition
28.1 The Borrower shall ensure that:
(i) Senior Interest Cover Ratio
(a) the ratio of EBITA to Senior Interest Expense, calculated on an
Adjusted Rolling Basis, shall not, in respect of any Adjusted
Relevant Period ending on each Financial Quarter set out below be
less than the ratio set out below as applicable in relation to
that Financial Quarter:
Financial Quarter Ending Ratio
31 March 1998 1.7:1
30 June 1998 2.3:1
30 September 1998 2.6:1
and
(b) the ratio of EBITA to Senior Interest Expense, calculated on a
Rolling Basis, shall not in respect of any Relevant Period ending
on each Financial Quarter be less than the ratio set out below as
applicable in relation to that Financial Quarter:
Financial Quarter Ending Ratio
31 December 1998 3.0:1
31 March 1999 3.5:1
30 June 1999 4.0:1
30 September 1999 4.5:1
31 December 1999 4.7:1
<PAGE>
30 March 2000 5:1
and
(c) the ratio of EBITA to Senior Interest Expense, calculated on a
Rolling Basis, shall not, in respect of any Relevant Period
ending in each Financial Quarter beginning after 30 March 2000 be
less than 5:1;
(ii) Total Interest Cover
(a) the ratio of EBITA to Total Interest Expense, calculated on an
Adjusted Rolling Basis, shall not, in respect of any Adjusted
Relevant Period ending on the last day of each Financial Quarter
set out below be less than the ratio set out below as applicable
in relation to that Financial Quarter:
Financial Quarter Ending Ratio
31 March 1998 1.2:1
30 June 1998 1.7:1
30 September 1998 1.9:1
and
(b) the ratio of EBITA to Total Interest Expense, calculated on a
Rolling Basis, shall not, in respect of any Relevant Period
ending on the last day of each Financial Quarter be less than the
ratio set out below as applicable in relation to that Financial
Quarter:
Financial Quarter Ending Ratio
31 December 1998 2.1:1
31 March 1999 2.5:1
30 June 1999 2.8:1
30 September 1999 3:1
31 December 1999 3:1
30 March 2000 4:1
30 June 2000 4:1
30 September 2000 4:1
31 December 2000 4:1
31 March 2001 4:1
30 June 2001 4:1
30 September 2001 4:1
31 December 2001 4:1
31 March 2002 4:1
30 June 2002 4:1
30 September 2002 4:1
31 December 2002 4:1
31 March 2003 4:1
<PAGE>
30 June 2003 4:1
30 September 2003 4:1
31 December 2003 4:1
31 March 2004 4:1
30 June 2004 4:1
30 September 2004 4:1
(iii) Total Cash Cover
(a) the ratio of Cash Flow in respect of any Adjusted Relevant Period
to Total Debt Service shall not be less than 1.1:1.
and
(b) the ratio of Cash Flow in respect of any Relevant Period to Total
Debt Service shall not be less than the amount set out below
alongside such period:
Financial Quarter Ending Ratio
31 December 1998 1.1:1
31 March 1999 1.1:1
30 June 1999 1.1:1
30 September 1999 1.1:1
31 December 1999 1.1:1
30 March 2000 1.1:1
30 June 2000 1.1:1
30 September 2000 1.1:1
31 December 2000 1.1:1
31 March 2001 1.1:1
30 June 2001 1.1:1
30 September 2001 1.1:1
31 December 2001 1.1:1
31 March 2002 1.1:1
30 June 2002 1.1:1
30 September 2002 1.1:1
31 December 2002 1.1:1
31 March 2003 1.1:1
30 June 2003 1.1:1
30 September 2003 1.1:1
31 December 2003 1.1:1
31 March 2004 1.1:1
30 June 2004 1.1:1
30 September 2004 1.1:1
(iv) Net Worth
the Net Worth of the Group shall not at any time during any period
specified below be less than the amount set out below alongside such
period:
<PAGE>
Financial Quarter Ending Amount (DM,000,000)
31 March 1998 63.8
30 June 1998 64.4
30 September 1998 65.3
31 December 1998 66.5
31 March 1999 67.6
30 June 1999 69.0
30 September 1999 70.7
31 December 1999 72.3
30 March 2000 74.0
30 June 2000 75.0
30 September 2000 76.0
31 December 2000 77.5
31 March 2001 78.0
30 June 2001 79.0
30 September 2001 80.0
31 December 2001 80.0
31 March 2002 85.0
30 June 2002 90.0
30 September 2002 95.0
31 December 2002 100.0
31 March 2003 105.0
30 June 2003 110.0
30 September 2003 115.0
31 December 2003 120.0
31 March 2004 130.0
30 June 2004 140.0
30 September 2004 160.0
(v) Leverage
(a) the ratio of Total Debt on the last day of the Financial Quarter
set out below to Annualised Adjusted EBITDA for the Adjusted
Relevant Period shall not exceed the ratio set out below as
applicable for that Financial Quarter;
Financial Quarter Ending Ratio
31 March 1998 6.5:1
30 June 1998 5.8:1
30 September 1998 5.3:1
and
(b) subject to clause 28.2 the ratio of Total Debt on the last day of
the Financial Quarter set out below to Adjusted EBITDA for the
Relevant Period shall not exceed the ratio set out below as
applicable for that Financial Quarter;
<PAGE>
Financial Quarter Ending Ratio
31 December 1998 5.3:1
31 March 1999 4.7:1
30 June 1999 4.4:1
30 September 1999 4:1
31 December 1999 4:1
30 March 2000 3.7:1
30 June 2000 3.5:1
30 September 2000 3.4:1
31 December 2000 3.3:1
31 March 2001 3.1:1
30 June 2001 2.7:1
30 September 2001 2.6:1
31 December 2001 2.5:1
31 March 2002 2.5:1
30 June 2002 2.5:1
30 September 2002 2.5:1
31 December 2002 2.5:1
31 March 2003 2.5:1
30 June 2003 2.5:1
30 September 2003 2.5:1
31 December 2003 2.5:1
31 March 2004 2.5:1
30 June 2004 2.5:1
30 September 2004 2.5:1
28.2 If either:
(a) at the end of any Financial Quarter referred to below the number of
CrateTurns Per Year calculated on a Rolling Basis exceeds, by ten per
cent or more, the figure set out for such Financial Quarter in the
Business Plan; or
(b) at the end of any Financial Quarter referred to below, the Breakage
Rate set out in the Business Plan exceeds the actual Breakage Rate by
ten per cent or more (calculated on a Rolling Basis), for such
Financial Quarter;
and, in either case,
(c) Adjusted EBITDA for the Relevant Period is greater than ten per cent
of the Adjusted EBITDA for such Relevant Period set out in the
Business Plan,
then the ratio for the relevant Financial Quarter set out in Clause 28.1(v)(b)
shall be adjusted so that the Borrower shall ensure that the ratio of Total Debt
on the last day of the Financial Quarter set out below during which the
conditions set out above have been met shall not exceed the ratio set out below
as applicable thereto:
<PAGE>
Financial Quarter Ending Ratio
30 June 1999 4.6:1
30 September 1999 4.5:1
31 December 1999 4.3:1
30 March 2000 4.0:1
30 June 2000 3.7:1
30 September 2000 3.5:1
28.3 (i) The covenants contained in Clauses 28.1(i), (ii), (iii) and (v) will
be tested as of the dates specified in those Clauses, by reference to
the quarterly accounts delivered pursuant to Clause 27.1(ii) and by
reference to the audited accounts delivered pursuant to Clause
27.1(i).
(ii) The covenant contained in Clause 28.1(iv) shall be complied with at
all times and for this purpose Net Worth shall be subject to
adjustment on a continuing basis by any losses or profits
demonstrated by the monthly accounts delivered pursuant to Clause
27.1(iii), the quarterly accounts delivered pursuant to Clause
27.1(ii) and the audited accounts delivered pursuant to Clause
27.1(i).
28.4 If, at any time the covenants contained in Clauses 28.1 are breached, the
Borrower shall ensure that no Capital Expenditure shall be made by any member of
the Group for so long as the covenants contained in those clauses (or any of
them) are not met and the Borrower shall provide a proposal to remedy such
breach in form and substance satisfactory to an Instructing Group.
28.5 The expressions used in Clause 13, Clause 27, this Clause 28 and in the
definition of Excess Cash Flow shall, subject as provided herein, be calculated
by reference to the Group and be construed in accordance with the Accounting
Principles but so that the capitalised terms used in such Clauses and in such
definitions shall, for the purposes of those Clauses and definitions have the
following meanings:
(i) "Adjusted EBITDA" means, in relation to any Relevant Period (or,
where appropriate, Adjusted Relevant Period), EBITDA for such period
plus the amount of rentals under Finance Leases during such Relevant
Period less any Replacement Capital Expenditure made in that period;
(ii) "Adjusted Relevant Period" means, (a) in respect of the First
Financial Quarter ending in 1998, such Financial Quarter, (b) in
respect of the Second Financial Quarter ending in 1998, the period
from 1 January 1998 to 30 June 1998 and (c) in respect of the third
Financial Quarter ending in 1998, the period from 1 January 1998 to
30 September 1998;
(iii) "Adjusted Rolling Basis" refers to any calculation of a ratio or an
amount made at the end of a Financial Quarter in respect of that
Financial Quarter, or, where the relevant Financial Quarter is not
the first Financial Quarter of 1998:
<PAGE>
(a) where the calculation is made in relation to the second Financial
Quarter of 1998, that Financial Quarter and the previous
Financial Quarter; and
(b) where the calculation is made in relation to the third Financial
Quarter of 1998, that Financial Quarter and the previous two
Financial Quarters;
(iv) "Annualised Adjusted EBITDA" means:
(a) in relation to the Financial Quarter ending on 31 March 1998,
Adjusted EBITDA for such period multiplied by four;
(b) in relation to the Financial Quarter ending on 30 June 1998, the
sum of Adjusted EBITDA for such period divided by two and
multiplied by four; and
(c) in relation to the Financial Quarter ending on 30 September 1998,
the sum of Adjusted EBITDA for such period divided by three and
multiplied by four;
(v) "Breakage Rate" means, in respect of any Relevant Period, the average
number of crates which have been leased by any Group Entity to
growers which are broken during a crate cycle expressed as a
percentage of the number of completed crate cycles during such
Relevant Period;
(vi) "Capital Expenditure" means, in respect of any Relevant Period (or,
where appropriate, Adjusted Relevant Period), Replacement Capital
Expenditure, Growth Capital Expenditure and any other capital
expenditure;
(vii) "Cash Flow" means, in respect of any Relevant Period or, where
applicable, any Adjusted Relevant Period, EBITDA for such period
adjusted as follows:
(a) deducting taxes paid during the relevant Accounting Reference
Period;
(b) deducting increases (or adding decreases) in Working Capital over
the relevant Accounting Reference Period;
(c) deducting Capital Expenditure;
(d) deducting the actual cash effect of extraordinary charges and
adding the actual cash effect of extraordinary income under the
Accounting Principles during the relevant Account Reference
Period;
(e) deducting the actual cash effect of currency losses and adding
the actual cash effect of currency gains during the relevant
Accounting Reference Period;
<PAGE>
(f) adding the actual cash effect of disposals (deducting any
profit element and/or adding any loss made on) of any asset
made during the relevant Accounting Reference Period permitted
hereunder; and
(f) plus any net increase or minus any net decrease in the capital
element of any Permitted External Leasing entered into during
such Accounting Reference Period;
(viii) "Crate Turns Per Year" means, in respect of any Relevant Period, the
average number of income generating completed crate cycles made by
all crates owned by or leased to all Group Entities during such
Relevant Period;
(ix) "Current Assets" means at any time the sum of Inventory, trade
receivables, receivables from affiliates and other receivables,
marketable securities and prepaid expenses, in each case as set out
in sections 266(2)B and C of the Commercial Code (HGB), but
excluding cash at bank and in hand;
(x) "EBIT" means for any Relevant Period (or, where appropriate,
Adjusted Relevant Period), the consolidated earnings of the Group
for such Relevant Period (or, where appropriate, Adjusted Relevant
Period) before (or, if already taken into account in calculating the
consolidated earnings of the Group, after adding back):
(a) any expense or income on account of income taxes and deferred
taxation;
(b) any interest (excluding the amount of rentals under Finance
Leases), commissions, discounts and other fees incurred by any
Group Entity in respect of Financial Indebtedness and of the
costs relating to hedging permitted under the Permitted
Treasury Transactions;
(c) any interest earned by any Group Entity; and
(d) items treated as extraordinary income or charges under the
Accounting Principles;
(xi) "EBITA" means, in respect of any Relevant Period (or, where
appropriate, Adjusted Relevant Period), EBIT for such Relevant
Period (or, where appropriate, Adjusted Relevant Period) plus
amortisation;
(xii) "EBITDA" means in respect of any Relevant Period (or, where
appropriate, Adjusted Relevant Period), EBIT for such Relevant
Period (or, where appropriate, Adjusted Relevant Period) plus
depreciation and amortisation;
(xiii) "Financial Quarter" means each of those periods of approximately
three calendar months in any financial year of the Group ending on
any Quarter Date;
<PAGE>
(xiv) "Growth Capital Expenditure" means, in respect of any Relevant
Period (or, where appropriate, Adjusted Relevant Period),
expenditure by a Group Entity in financing the purchase of crates
which results in an increase in the number of crates owned by or
leased to the Group;
(xv) "Liabilities" means at any time the sum of all liabilities
(including trade creditors, accruals, amounts payable to affiliates
and pension provisions and other provisions and liabilities
(including, for the avoidance of doubt, any provisions made in
respect of amounts representing deposits for crate rentals which
are expected to be returned) and excluding any Financial
Indebtedness) and prepayments and deferred income;
(xvi) "Net Worth" means the equity of the Borrower (including its
subscribed capital, capital reserves, earnings reserves, profit or
loss carried forward and annual surplus or deficit) in each case as
set out in section 266(3)A of the Commercial Code (HGB) and as
shown in the Borrower's consolidated balance sheet:
(a) less any dividend or other distribution declared, recommended
or made by any Group Entity to the extent such distribution is
not provided for in such accounts;
(b) less the cumulative amount of any writing up of the book value
of any assets of any Group Entity;
(c) less or plus (as the case may be) any amount attributable to
minority interests;
(d) not making any adjustments for any amounts positive or
negative attributable to goodwill or amortisation;
(xvii) "Relevant Period" means the period of four Financial Quarters
ending on the date on which the relevant calculation falls to be
made;
(xviii) "Replacement Capital Expenditure" means, in respect of any Relevant
Period, expenditure by a Group Entity on the improvement or
replacement of crates (together with costs properly incurred in
connection therewith) (which are necessary in order to maintain the
total number of crates within the Group);
(xix) "Rolling Basis" refers to the calculation of a ratio or an amount
made at the end of a Financial Quarter in respect of that Financial
Quarter and the preceding three Financial Quarters;
(xx) "Senior Interest Expense" means, in respect of any Relevant Period,
Total Interest Expense less such part of Total Interest Expense as
is incurred in connection with the Senior Subordinated Facility
Documents plus amounts paid and/or costs charged during the
----
Relevant Period (or, where appropriate, Adjusted Relevant Period)
relating to hedging arrangements entered into in
<PAGE>
connection with the obligations under the Facility Documents;
(xxi) "Total Debt" means, at any time, the aggregate of all Financial
Indebtedness of the Group Entities at such time incurred under or
pursuant to this Agreement, the Senior Subordinated Facility
Agreement or any Permitted External Leasing;
(xxii) "Total Debt Service" means in respect of any Relevant Period (or,
where appropriate, Adjusted Relevant Period), the aggregate of:
(a) Total Interest Expense (excluding capitalised interest); and
(b) the aggregate of the scheduled repayments, prepayments or
other payments of principal under the Term Facilities; and
(c) any dividends on shares or similar payments made to
warrantholders by the Borrower (which for the avoidance of
doubt, is prohibited pursuant to Clause 29); and
(xxiii) "Total Interest Expense" means in respect of any Relevant Period
(or, where appropriate, Adjusted Relevant Period), the aggregate
(on a consolidated basis) of all interest, commission, fees and
other charges incurred by all Group Entities in respect of
Financial Indebtedness (other than Financial Indebtedness incurred
pursuant to Permitted Leasing facilities and Financial
Indebtedness incurred pursuant to Permitted Factoring) accruing or
paid in the Relevant Period or Adjusted Relevant Period (as
appropriate):
(a) less amounts received pursuant to interest hedging
arrangements entered into in connection with the obligations
under the Facility Documents and permitted as Permitted
Treasury Transactions; and
(b) plus amounts paid and/or costs charged during the relevant
period relating to hedging arrangements entered into in
connection with the obligations under the Facility Documents,
(xxiv) "Working Capital" means on any date:
(a) Current Assets of the Group; less
(b) Liabilities of the Group.
29. Covenants
29.1 The Borrower and (in the case of Clauses 29.1(i), (ii), (v), (xiv), (xvii)
and (xviii) only) IFCO Europe shall itself and (in the case of the Borrower)
shall (to the extent legally possible) procure that each Group Entity shall
(except as may be otherwise agreed in writing by an Instructing Group):
(i) do all such things as are necessary to maintain its existence as a
legal person
<PAGE>
save for ceasing to exist by virtue of a solvent reorganisation
which has previously been consented to by the Agent and the Banks;
(ii) obtain, comply with the terms of, promptly renew from time to time
and do all that is necessary to maintain in full force and effect
all authorisations, approvals, licences, consents and exemptions
available and required under or by any applicable law or regulation
to enable it to lawfully enter into and perform its obligations
under the Facility Documents to which it is expressed to be party
or, so far as it is possible to do so, to ensure the legality,
validity or admissibility in evidence of such Facility Documents
and, on request of the Agent, supply copies (certified by a director
of the Borrower, IFCO Europe or relevant Group Entity (as
appropriate) as true, complete and up to date), of any such
authorisations, approvals, licences, consents and exemptions;
(iii) effect and maintain insurances on and in relation to its business,
assets and rights of an insurable nature (against loss or damage by
fire, storm, explosion and other consequential losses) and in
relation to product and third party liability and for such amounts
as a reasonably prudent person carrying on a similar business to
that Group Entity might be expected to maintain and as may from time
to time be required by the Agent (acting reasonably). The relevant
Group Entity shall (if so requested in writing) supply the Agent
with copies of all such insurance policies or certificates of
insurance in respect thereof or such other evidence of the existence
of such policies as may be reasonably acceptable to the Agent and
shall, in any event, notify the Agent of any material changes to its
insurance cover made from time to time. The Borrower shall certify
(by way of a Certificate from a Duly Authorised Officer) within 30
days of the end of each Accounting Reference Period that all
insurance premiums for the Group have been paid in respect of such
Accounting Reference Period and that all insurances for the Group
are up to date;
(iv) promptly inform the Agent of the occurrence of any Event of Default
or Potential Event of Default upon becoming aware of the same and,
upon receipt of a written request to that effect from the Agent,
confirm to the Agent that, save as previously notified to the Agent
or as notified in such confirmation, no Event of Default or
Potential Event of Default has occurred and is continuing;
(v) ensure that, to the extent such action is legally possible, at all
times the claims of the Beneficiaries against it under any of the
Facility Documents to which it is expressed to be a party rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors save, in each case, those whose claims are
preferred by any bankruptcy, insolvency, liquidation or other
similar laws of general application;
(vi) comply with all applicable laws, rules, regulations and orders and
obtain and maintain all governmental and regulatory consents and
approvals the failure to comply with which might reasonably be
expected to have a Material Adverse Effect;
<PAGE>
(vii) ensure that it has the right and is duly qualified to conduct its
business as it is conducted from time to time in all applicable
jurisdictions and does all things necessary to obtain, preserve and
keep in full force and effect all rights including, without
limitation, all rights which are necessary for the conduct of its
business, the absence of which might reasonably be expected to have
a Material Adverse Effect;
(viii) duly and punctually pay and discharge (a) prior to the imposition of
any material penalties in respect thereof, all Taxes, assessments
and governmental charges imposed upon it or its assets and (b) all
lawful claims which, if unpaid, would by law become Encumbrances
upon its assets save to the extent payment thereof is being
contested in good faith by the relevant Group Entity and where
payment thereof can be lawfully withheld;
(ix) maintain and preserve all of its assets that are used or useful in
the conduct of its business in good working order and condition,
ordinary wear and tear excepted, where the failure to maintain or
preserve might reasonably be expected to have a Material Adverse
Effect;
(x) comply with all Environmental Laws and maintain and comply with the
terms and conditions of all Environmental Approvals, in each case as
may be necessary for the conduct of its business, the failure to
comply with which might reasonably be expected to have a Material
Adverse Effect;
(xi) maintain and preserve all of the Material Intellectual Property and
use reasonable endeavours to maintain and preserve all other
Intellectual Property which a prudent person carrying on a similar
business to the Group would use;
(xii) procure that the Material Intellectual Property is registered with
all appropriate registries and authorities (including, in the case
of any patents) at the European and International Patent offices or
other appropriate local registries in the name of the owner of such
intellectual property and, in particular but without limiting the
generality of the foregoing, the Borrower shall, within four weeks
of the date of this Agreement, submit all applications for
registration and other documents or forms necessary to ensure that
the Patent is registered in the name of GBL at Patent Offices in
Germany, Austria, France, Switzerland, Denmark, Spain, the United
Kingdom and Italy (and shall provide the Agent with confirmation of
the submission of such applications and shall not withdraw such
applications) and shall do all things necessary, recommended or
required (including, without limitation, co-operating to the fullest
extent possible with such Patent offices, answering all
requisitions, paying all fees and submitting all documents requested
or required) to ensure that the registrations are completed in a
timely fashion and shall maintain or procure the maintenance of all
such registrations and pay all fees and do all such other things as
may be required to ensure the protection of such registrations;
(xiii) promptly notify the Agent upon the creation or acquisition of
Material
<PAGE>
Intellectual Property and, at the request of the Agent, grant
security in favour of the Security Trustee over all such Material
Intellectual Property;
(xiv) at its own expense, take all such action as the Agent, or the
Security Trustee, may require for the purpose of perfecting or
protecting the Agent's and the pledgees' or Security Trustee's
rights under and preserving the security interests intended to be
created by any of the Facility Documents or for facilitating the
realisation of any such security or any part thereof;
(xv) advise the Agent forthwith of the details of each litigation,
arbitration or administrative proceeding pending or (to its
knowledge) threatened against any Group Entity which may (together
with any legal or other costs in connection therewith) result in a
liability of such Group Entity in an amount in excess of
DM1,000,000 or its equivalent;
(xvi) ensure that any one or more authorised representatives of the
Agent will be allowed to have access to the assets, books and
records of each Group Entity and to inspect the same at any time
upon or after the occurrence of an Event of Default which is
continuing unremedied and unwaived on the giving of reasonable
notice;
(xvii) to the extent legally possible and as required by the Agent
(acting on the instructions of an Instructing Group) and at the
Borrower's expense (which, for the avoidance of doubt, may include
the cost of obtaining legal opinions regarding such security in
accordance with the requirements of the Agent or the terms of any
Facility Document) from time to time (and, in the case of any
shares in MTS, within five business days of acquiring the same
(unless otherwise such requirement is waived by the Agent acting
on the instructions of an Instructing Group)), create or procure
the creation of such security over the shares or assets of MTS or
any Group Entity in favour of the Beneficiaries where such company
becomes a Group Entity or where it becomes necessary to replace
any security which secured all or any of the obligations of the
Borrower under the Facility Documents which has lapsed or become
unenforceable;
(xviii) at its own expense, take all such action as the Agent or the
Security Trustee (each acting on the instructions of an
Instructing Group) may reasonably require for the purpose of
perfecting or protecting the Beneficiaries' rights under, and
preserving the security interests intended to be created by, any
of this Agreement and the Senior Security Documents (including,
where necessary, the provision of security over the shares of IFCO
Contenedores S.A. or other Group Entities to secure the
obligations of the Borrower under any Hedging Agreements not
otherwise secured) or for facilitating the realisation of any such
security or any part thereof Provided that this does not restrict
the ability of the Borrower or any member of the Group to conduct
its business or assets so pledged prior to an Event of Default in
the ordinary course of business;
(xix) where any report provided pursuant to Clause 27.1(iii)(c) shows
that the
<PAGE>
amount of receivables owing to the Borrower are less than 70% of
all receivables owing to the Group, provide or procure the
provision to the Security Trustee on behalf of all the
Beneficiaries at the Borrower's expense (which, for the avoidance
of doubt, may include the cost of obtaining any legal opinions
required by the Agent or pursuant to the Finance Documents) such
additional security (including security over the receivables or
other assets of individual Group Entities) as the Agent may
specify;
(xx) ensure that at all times amounts payable, including interest and
principal, under the Senior Subordinated Facility Documents are
(unless otherwise provided herein or in any other Facility
Document) subordinated to the claims of the Banks under the
Facility Documents;
(xxi) ensure adequate contributions are made to pension schemes in
respect of employees of the Group where such pension schemes are
required in the Relevant Jurisdiction of such Group Entity; and
(xxii) promptly notify the Agent of any termination before the end of its
usual contractual term of the Supply Agreement or any material
adverse change to the Supply Agreement.
29.2 The Borrower shall not and shall procure that no Group Entity shall,
without the prior written consent of an Instructing Group (and, in the case of
Clauses 29.2(iv) and 29.2(v) only, IFCO Europe shall procure that the Borrower
shall not, without the prior written consent of an Instructing Group):
(i) create (or agree to create) or permit to subsist any Encumbrance
over all or any of its present or future revenues or assets or
undertaking other than a Permitted Encumbrance;
(ii) save for Permitted Transactions and Permitted Loans, make or
provide any loans or give any guarantees or grant any credit or
other financial accommodation to or for the benefit of any person
(or agree so to do) whether or not such person is a Group Entity
other than (a) trade credit granted in the ordinary course of
trading provided that such trade credit is on arm's-length terms
and upon terms usual for such trade or (b) loans made to IFCO
Europe Provided that the amount of such loans does not exceed, in
aggregate DM500,000 (or its equivalent);
(iii) incur, create or permit to subsist or have outstanding any
Financial Indebtedness other than Permitted Indebtedness;
(iv) pay, make or declare any dividend, return on capital, repayment of
capital contributions or other distribution or make any
distribution of assets or any payment in respect of interest or
principal or other payment whatsoever whether directly or
indirectly to any warrantholder;
(v) agree any amendment to or variation of any document delivered to
the Agent
<PAGE>
pursuant to Clause 4 or waive any right thereunder nor alter any
rights attaching to the authorised and issued share capital of
any Group Entity which, in any such case, (in the opinion of the
Banks) might reasonably be expected materially and adversely to
affect the interests of the Banks (for avoidance of doubt,
nothing in this Clause 29.2 (v) shall prevent GE or General
Electric Capital Corporation from exercising any of its rights to
increase its shareholding in IFCO Europe under the Investment
Agreement in accordance with its terms);
(vi) enter into any receivables purchase, factoring or discounting
arrangements other than Permitted Factoring;
(vii) enter into any Treasury Transactions other than Permitted
Treasury Transactions;
(viii) incur any Replacement Capital Expenditure other than Permitted
Expenditure;
(ix) enter into any Finance Leases with any Non-Group Entity other
than Permitted External Leasing.
29.3 The Borrower undertakes that it shall itself and shall procure that each
Group Entity shall ensure that without prejudice to any other restriction
contained in any of the Facility Documents and save as permitted by an
Instructing Group:
(i) no account of any Non-Group Entity shall be included in any
profit and loss pooling arrangements (Ergebnisabfuhrungs-und
Beherrschungsvertag) or arrangements whereby credit or debit
balances on accounts of one or more Group Entity may be netted
against debit or credit balances on accounts in the name of other
Group Entities;
(ii) no payment of principal or interest, charges, fees or other
amounts on any loan or other financial accommodation made by any
Non-Group Entity to any Group Entity shall be made other than
such payments made in relation to Permitted Indebtedness Provided
that, for the avoidance of doubt, payments of trade credit
otherwise permitted hereunder by any Group Entity to Schoeller
Plast Industries GmbH made pursuant to any arrangements for
deferred payment or any such payments where the proceeds of such
payment are immediately used (directly or indirectly) in the
repayment of Existing Indebtedness which is required to be repaid
pursuant to this Agreement may be made;
(iii) all arrangements made by any Group Entity with any other person
(whether or not such person is a Group Entity) shall be on arm's
length terms (and the Auditors shall confirm to the Agent
annually that any such arrangements made during the year to which
the relevant confirmation relates were made on arm's length
terms).
29.4 (i) The Borrower shall, within ninety (90) days of the date hereof
enter into the
<PAGE>
Treasury Transactions envisaged by the Hedging Strategy Letter.
(ii) The Borrower agrees and each Hedge Counterparty agrees that:
(a) any Hedging Agreement to which it is at any time party
governing the terms of a hedging transaction will be in the
form of either the German Framework Contract for Financial
Markets (Rahmenvertrag fur Finanztermingeschafte) or the
ISDA 1992 Master Agreement and will provide for "two way
payments" in the event of a termination of that hedging
transaction entered into under such Hedging Agreement
whether upon a termination event or an Event of Default (as
defined herein), meaning that the defaulting party under
that Hedging Agreement will be entitled to receive payment
under the relevant termination provisions if the net
replacement value of all terminated transactions effected
under that Hedging Agreement is in its favour;
(b) if on termination of any hedging transaction under any
Hedging Agreement to which it is party a settlement amount
or other amount falls due from the Hedge Counterparty to the
Borrower then, if the security constituted by the Senior
Security Documents has become enforceable, that amount shall
be paid by such Hedge Counterparty to the Security Trustee
and treated as proceeds of enforcement of the security
conferred by the Senior Security Documents for application
in the order prescribed in the Security Trust Agreement and
Intercreditor Agreement;
(c) until service of a notice by the Agent under Clause 30.1, no
Hedge Counterparty will exercise any right it might
otherwise have pursuant to any Hedging Agreement to
terminate any hedging transactions under such Hedging
Agreement or to refuse to make any payment due from it
thereunder; and
(d) each Hedge Counterparty shall, promptly after the Agent has
served a notice under Clause 30.1, exercise any and all
rights it may have to terminate the hedging transactions
under each Hedging Agreement to which it is party, unless
the Agent (acting on the instructions of an Instructing
Group) otherwise agrees or requires.
29.5 The Borrower shall give the Agent not less than 25 business days' prior
written notice of the intention of it or of its subsidiaries to:
(i) change its accounting reference date or financial year end;
(ii) pay, make or declare any dividend, return on capital, repayment
of capital contributions or other distribution or make any
distribution of assets or any payment in respect of interest or
principal or other payment whatsoever (each such payment referred
to herein as a "distribution") whether directly or indirectly to
any shareholder save for Permitted Transactions or otherwise
<PAGE>
where the proceeds of such distribution are to be immediately
utilised in the repayment of Existing Indebtedness which is
intended to be repaid pursuant to the terms hereof or a
prepayment hereunder;
(iii) (a) issue or redeem or repurchase, purchase, defease or retire
any shares other than pursuant to any Flotation of such shares or
(b) alter any rights attaching to its issued shares in existence
(including preference shares) at the date hereof which would
increase amounts payable in respect of those shares or materially
adversely affect the rights and interests of the Beneficiaries;
(iv) dispose of, by one or more transactions or series of transactions
(whether related or not and whether involuntarily or
voluntarily), the whole or any part of or any interest in its
revenues, assets, business or undertaking other than Permitted
Disposals;
(v) make any material changes to the general nature of the business
of the Borrower or the Group on the date hereof, or carry on any
other business which results in any change to the nature of such
business.
29.6 The Agent shall be entitled within 10 business days of receipt of the
Borrower's notice under Clause 29.5 to request the Borrower to supply to the
Agent in sufficient copies for the Banks any relevant information in connection
with the proposed action or steps referred to in such notice.
29.7 The Agent shall notify the Borrower, within 10 business days of receipt
of the Borrower's notice under Clause 29.5, or if additional information has
been requested by the Agent within the prescribed time, within 10 business days
of receipt of such information, whether the proposed action or steps under
Clause 29.5 is or is, in the reasonable opinion of the Agent, acting on the
instructions of an Instructing Group, likely to have a Material Adverse Effect.
29.8 If the proposed action or steps under Clause 29.5 is so considered by the
Agent to have a Material Adverse Effect and the relevant member of the Group
nevertheless takes such action or steps under Clause 29.5, the Agent shall be
entitled to make (and, if so instructed by an Instructing Group, shall make) the
declaration, request and/or instruction set out in Clause 30.1 and call for
repayment of the Advances and exercise the other rights in accordance with
Clause 30.2.
29.9 The Borrower covenants that it will procure that for a period of 30
consecutive days in each financial year beginning after 31 December 1998, the
Tranche A Available Revolving Facility Outstandings are not more than fifty per
cent. (50%) of the aggregate of each Bank's Tranche A Revolving Commitment
during such period.
29.10 IFCO Europe hereby undertakes that it shall procure that so long as any
amount remains outstanding under any of the Facility Documents or the Senior
Subordinated Facility Documents, MTS shall not utilise any Intellectual Property
or other property or assets owned, leased, licensed or otherwise made available
to any Group Entity.
<PAGE>
29.11 The Borrower hereby undertakes to provide the Agent and the Arrangers
with any information or other assistance they may require in updating the
Information Memorandum with a view to undertaking a Syndication of the
Facilities.
29.12 The Borrower shall, promptly upon becoming aware of the same, notify the
Agent (and provide the Agent with reasonable details) of any claims which are
made or any breach alleged pursuant to or in respect of any warranties and
indemnities contained in the Investment Agreement where the potential claim
exceeds DM1,000,000 (or its equivalent).
29.13 The Borrower shall not and shall procure that no Group Entity shall,
except with the prior written consent of the Banks:
(i) (a) purchase, subscribe for or otherwise acquire any shares (or
other securities or any interest therein) in, or incorporate, any
other company or agree to do any of the foregoing, (b) purchase
or otherwise acquire any assets (other than in the ordinary
course of trading) or revenues or (without limitation to any of
the foregoing) acquire any business or interest therein or (c)
form or enter into any partnership, consortium, joint venture or
other like arrangement or agree to do so; or
(ii) enter into any merger or consolidation with any other person
other than as permitted pursuant to Clause 29.13(i),
and it is hereby acknowledged and agreed that where the Borrower makes any
request for consent pursuant to this Clause 29.13, the Banks and the Borrower
shall consult in good faith.
29.14 The Borrower shall procure that any Encumbrance created pursuant to the
agreement dated 4 July/12 July between the Borrower and Rewe-Zentral AG, Koln,
Cologne is released or discharged on or before the date falling six months after
the date hereof and that all assets subject to such Encumbrances are, forthwith
upon their release from such Encumbrance, secured in favour of the Beneficiaries
to the satisfaction of the Agent.
29.15 The Borrower shall ensure that any member of the Group which has any
interest in any crates or in any leasing or ancillary transactions relating to
crates shall provide effective security over such interest in favour of the
Security Trustee to the satisfaction of the Agent and shall notify the Agent
forthwith upon taking delivery of any New Crates or purchasing any crates from
any lessors (such notification to contain details as to the number, type and
identification of such crates or any other information the Agent may reasonably
require).
29.16 IFCO Europe shall procure that at least DM1,000,000 of additional capital
is invested by way of equity into the Borrower no later than 31 March 1998.
29.17 The Borrower shall procure that the only creditors of GBL remain, at all
times, the Borrower and SPI and, in the case of SPI, such company is a creditor
of GBL only to the extent of that part of the purchase price for the Patent
which remains unpaid at such time.
29.18 The Borrower shall provide security, in form and substance satisfactory
to the Security Trustee over any shares acquired by it in Gelog AG after the
date hereof and shall procure that
<PAGE>
any shares acquired by any of the directors of Gelog AG are so secured in favour
of the Security Trustee.
30. Events of Default
30.1 If:
(i) the Borrower fails to pay any sum due from it under this
Agreement at the time (or within three business days of the due
date for payments therefor where such failure is due to a
technical or administrative difficulty in payment of funds) and
in the manner specified therein; or
(ii) any representation, warranty or statement made or repeated by
either the Borrower, IFCO Europe or any other person granting
security pursuant to the Facility Documents in any of the
Facility Documents to which it is a party or in any notice or
other document, certificate or statement delivered by it pursuant
thereto or in connection therewith is or proves to have been
incorrect or misleading in any material respect when made or
repeated and it is not remedied (if capable of being remedied)
within 10 business days of the earlier of the Borrower's
knowledge that such representation, warranty or statement was
inaccurate or notice thereof to the Borrower by the Agent; or
(iii) the Borrower fails to perform or comply with any of the
obligations expressed to be assumed by it in Clause 28; or
(iv) either the Borrower, IFCO Europe or any other person granting
security pursuant to the Facility Documents fails duly to perform
or comply with any other obligation expressed to be assumed by it
in any of the Facility Documents to which it is a party and such
failure is not remedied (if capable of being remedied) within 10
business days of the earlier of the Borrower's knowledge of such
failure or notice thereof to the Borrower by the Agent; or
(v) at any time the Borrower, IFCO Europe or any other person
granting security pursuant to the Facility Documents no longer
has the legal power to perform its obligations under the Facility
Documents to which it is a party or to own its assets or to carry
on its business substantially as presently conducted or at any
time it is or becomes unlawful for either the Borrower, IFCO
Europe or any other person granting security pursuant to the
Facility Documents to conform or comply with any or all of its
obligations under any Facility Document to which it is a party or
any of the obligations of either of the Borrower, IFCO Europe or
any other person granting security pursuant to the Facility
Documents thereunder are not or cease to be legal, valid and
binding and enforceable; or
(vi) any Financial Indebtedness (not being Financial Indebtedness owed
solely by one Group Entity to another Group Entity) of IFCO
Europe or any Group Entity or Group Entities in an amount in
aggregate exceeding DM5,000,000 or its equivalent is not paid
when due (or within any grace period originally
<PAGE>
provided), or is declared to be or otherwise becomes due and
payable prior to its specified maturity or any creditor or
creditors of IFCO Europe or any Group Entity or Group Entities
become entitled to declare any such Financial Indebtedness due
and payable prior to its specified maturity; or
(vii) any Material Group Entity shall cease or suspend or threaten to
cease or suspend all or a material part of its operations or
business; or
(viii) any Material Group Entity or IFCO Europe ceases or suspends
generally payment of its debts or announces an intention so to do
or is (or is deemed for the purposes of any law applicable to it
to be) unable to pay its debts as they fall due, commences
negotiations with any one or more of its creditors with a view to
a general readjustment or rescheduling of its indebtedness or
makes a general assignment for the benefit of or a composition
with its creditors or a moratorium is declared in respect of any
of the indebtedness of any Material Group Entity; or
(ix) any Material Group Entity takes any corporate action or legal
proceedings (which proceedings are not discharged of within 14
days provided such proceedings are contested in good faith) are
started for its winding-up, dissolution or administration (or its
equivalent in any other applicable jurisdiction) (other than
pursuant to a solvent reorganisation previously approved in
writing by an Instructing Group) or for the appointment of a
liquidator, receiver, administrator, administrative receiver,
trustee or similar officer of it or of any or all of its revenues
and assets or any application is made or petition is lodged for
the making of an administration order in relation to any Material
Group Entity and not discharged within 14 days (provided such
proceedings are contested in good faith) or any analogous
proceedings shall be commenced against any Material Group Entity
under the laws of any jurisdiction; or
(x) any execution or distress is levied against, or encumbrancer
takes possession of the whole or any part of, the property,
undertaking or assets of any Material Group Entity or any
analogous proceedings shall be commenced against any Material
Group Entity under the laws of any jurisdiction and not
discharged within 14 days provided such proceedings are contested
in good faith where such execution or distress has a Material
Adverse Effect; or
(xi) any event occurs or proceedings are taken with respect to any
Material Group Entity in any jurisdiction to which it is subject
or in which it has assets which has an effect similar to or
equivalent to any one of the events mentioned in sub-clauses
(viii) to (x) inclusive to this Clause 30.1; or
(xii) the security created by any Encumbrance created by any Material
Group Entity becomes enforceable and any steps are taken by the
beneficiary of such Encumbrance to enforce the same; or
(xiii) all or a majority of the issued shares of any Material Group
Entity or the
<PAGE>
whole or any part (not being a wholly immaterial part) of its
revenues or assets is seized, nationalised, expropriated or
compulsorily acquired; or
(xiv) GE ceases to hold at least 24% of the shares of IFCO Europe or,
at any time, the level of control which GE holds in IFCO Europe
is decreased or the shareholding which it holds in IFCO Europe at
such time is decreased (other than where there is a dilution in
the shareholding which GE has in IFCO Europe at any time which is
less than five per cent of the total share capital issued by IFCO
Europe at such time and (a) GE continues to hold at least 20% of
the shares of IFCO Europe; (b) such dilution (in the opinion of
an Instructing Group) does not reduce GE's rights and obligations
under the Investment Agreement; (c) none of the obligations of
any person under any of the Facility Documents would be affected
by such dilution; (d) no previous dilution in GE's investment in
IFCO Europe has occurred; and (e) the Borrower has given to the
Agent at least ten business days' prior notice of such dilution
and the Agent (acting on the instructions of an Instructing Group
(acting reasonably)) has not informed the Borrower that it does
not agree to such dilution; or
(xv) GE ceases to be a wholly-owned subsidiary of General Electric
Capital Corporation; or
(xvi) the Borrower is no longer a wholly-owned subsidiary of IFCO
Europe; or
(xvii) any Facility Document or the security intended to be constituted
by any of the Facility Documents is repudiated or the validity or
applicability thereof to any sums due or to become due thereunder
is disaffirmed by or on behalf of any party thereto; or
(xviii) the Borrower's auditors qualify their annual audited report to
the consolidated accounts of the Group in a manner which is, in
the reasonable opinion of an Instructing Group, material in the
context of the Facilities; or
(xix) any Group Entity breaches any Environmental Law or any
Environmental Claim is made or threatened against any Group
Entity which, in either case, might reasonably be expected to
have a Material Adverse Effect; or
(xx) any litigation, arbitration, administrative proceedings or
governmental or regulatory investigations, proceedings or
disputes are commenced or threatened against any Group Entity or
its respective assets or revenues or there are any circumstances
likely to give rise to any such litigation, arbitration,
administrative proceedings or governmental or regulatory
investigations, proceedings or disputes which is likely to be
adversely determined and, if adversely determined, would be
reasonably likely to have a Material Adverse Effect; or
(xxi) any circumstances occur or exist which (in the reasonable opinion
of an Instructing Group) have a Material Adverse Effect; or
<PAGE>
(xxii) any of the pledges over the shares or other security over MTS or
any Group Entity forming part of the Senior Security Documents
ceases to be legal, valid and binding and this has not been
remedied to the satisfaction of an Instructing Group within 10
business days of the earlier of the Borrower's board of directors
knowledge thereof or notice thereof to the Borrower by the Agent;
or
(xxiii) any event occurs under any Senior Subordinated Facility Document
which, but for the terms of the Intercreditor Agreement, would
entitle the Senior Subordinated Lenders to make a declaration of
acceleration thereunder; or
(xxiv) the average price of crates supplied pursuant to the Supply
Agreement increases above the level of DM6.10 or there is any
other alteration to the Supply Agreement where such alteration
is, in the opinion of an Instructing Group, likely to have a
Material Adverse Effect; or
(xxv) there is a reduction in the level of shareholding (if any) which
IFCO Europe has in MTS; or
(xxvi) any Material Leasing Agreement is terminated by reason of a
default (howsoever described) on the part of a Group Entity and
such termination, in the opinion of an Instructing Group, has a
Material Adverse Effect,
then, subject to the provisions of the Disclosure Letter and in any such case
and at any time thereafter the Agent may (and, if so instructed by an
Instructing Group, shall) by written notice to the Borrower:
(a) declare that the Total Commitments shall be cancelled whereupon
the same shall be cancelled and the Term Commitment and the
Revolving Commitment of each Bank shall be reduced to zero;
and/or
(b) declare the Advances to be immediately due and payable (whereupon
the same shall become so payable together with accrued interest
thereon and any other sums then owed by the Borrower hereunder)
or declare the Advances to be due and payable on demand of the
Agent; and/or
(c) require the Borrower to repay each Bank Guarantee then in issue
(whereupon the Borrower shall do so); and/or
(d) subject to the provisions of the Intercreditor Agreement,
exercise or direct the Security Trustee to exercise all rights
and remedies of a mortgagee or a secured party at such time,
whether or not applicable to the affected assets subject to the
Senior Security Documents, and otherwise, including, without
limitation, the right to demand cash collateral with respect to
Bank Guarantees outstanding as of such date, the right to
foreclose the Encumbrances granted herein or in any of the Senior
Security Documents by any available judicial procedure and/or to
take possession of any or all of the assets subject to the
<PAGE>
Senior Security Documents, the other security for the Advances
and the books and records relating thereto, with or without
judicial process. For the purposes of the preceding sentence, the
Security Trustee may enter upon any or all of the premises where
any of the assets subject to the Senior Security Documents, such
other security or books or records may be situated and take
possession and remove the same therefrom.
30.2 If, pursuant to Clause 30.1, the Agent declares the Advances and/or any
other amount to be due and payable on demand of the Agent, then, and at any time
thereafter, the Agent may (and, if so instructed by an Instructing Group, shall)
by written notice to the Borrower:
(i) call for payment or repayment of the Advances and/or any other
amount owing by the Borrower hereunder on such date as it may
specify in such notice (whereupon the same shall become due and
payable on such date together with accrued interest thereon) or
withdraw its declaration with effect from such date as it may
specify in such notice; and/or
(ii) select as the duration of any Interest Period which begins whilst
such declaration remains in effect a period of six months or
less; and/or
(iii) declare that the Senior Security Documents (or any other them)
shall have become enforceable subject to and in accordance with
the provisions thereof.
<PAGE>
Part 8
DEFAULT INTEREST AND INDEMNITY
31. Default Interest and Indemnity
31.1 If any sum due and payable by the Borrower under the Facility Documents
is not paid on the due date therefor in accordance with the provisions of Clause
33 or if any sum due and payable by the Borrower under any judgment of any court
in connection therewith is not paid on the date of such judgment, the period
beginning on such due date or, as the case may be, the date of such judgment and
ending on the date upon which the obligation of the Borrower to pay such sum
(the balance thereof for the time being unpaid being herein referred to as an
"unpaid sum") is discharged shall be divided into successive periods, each of
which (other than the first) shall start on the last day of the preceding such
period and the duration of each of which shall (except as otherwise provided in
this Clause 31) be selected by the Agent having regard to when such unpaid sum
is likely to be paid.
31.2 During each such period relating thereto as is mentioned in Clause 31.1
an unpaid sum shall bear interest or, insofar as it relates to unpaid interest,
shall give rise to a claim for lump sum damages, at the rate per annum which is
the sum from time to time of three per cent. per annum and FIBOR on the
Quotation Date therefor Provided that:
(i) if, for any such period, FIBOR cannot be determined, the rate of
interest or, as the case may be, lump sum damages applicable to
each Bank's portion of such unpaid sum shall be the rate per
annum which is the sum of three per cent. per annum and the rate
per annum notified to the Agent by such Bank as soon as
practicable after the beginning of such period as being that
which expresses as a percentage rate per annum the cost to such
Bank of funding from whatever source it may select its portion of
such unpaid sum for such period; and
(ii) if such unpaid sum is all or part of an Advance which became due
and payable on a day other than the last day of the Term or the
Interest Period in respect thereof (as the case may be), the
first such period applicable thereto shall be of a duration equal
to the unexpired portion of that Term or Interest Period (as the
case may be) and the rate of interest or, as the case may be,
lump sum damages applicable thereto from time to time during such
period shall be that which would have been applicable to it had
it not so fallen due plus such rate as is necessary to increase
the Margin that would be otherwise payable on such amount to
three per cent per annum.
31.3 Any interest or lump sum damages which shall have accrued under Clause
31.2 in respect of an unpaid sum shall be due and payable and shall be paid by
the Borrower at the end of the period by reference to which it is calculated or
on such other date or dates as the Agent may specify by written notice to the
Borrower.
31.4 If any Bank or the Agent on its behalf receives or recovers all or any
part of such Bank's share of an Advance otherwise than on the last day of the
Term or the Interest Period in respect thereof (as the case may be), the
Borrower shall pay to the Agent on demand for
<PAGE>
account of such Bank an amount equal to the amount (if any) by which (i) the
additional interest (excluding the Margin) which would have been payable on the
amount so received or recovered had it been received or recovered on the last
day of the Term or the Interest Period in respect thereof (as the case may be)
exceeds (ii) the amount of interest which in the opinion of the Agent would have
been payable to the Agent on the last day of the Term or Interest Period in
respect thereof (as the case may be) on the basis of the rate determined by the
Agent to be the arithmetic mean (rounded to four decimal places) of the rates
specified by each Reference Bank to the Agent at which each of the Reference
Banks was offering to prime banks in the Frankfurt Interbank Market deposits in
the currency of the amount so received or recovered equal to the amount so
received or recovered for a period starting on the third business day following
the date of such receipt or recovery and ending on the last day of the Term or
Interest Period (as the case may be) in respect thereof.
31.5 The Borrower undertakes to indemnify (to the extent that such indemnity
does not in any relevant jurisdiction contravene any law which restricts the
incurring of any obligation or liability by the Borrower in connection with the
Investment):
(i) each of the Beneficiaries against any cost, claim, loss, expense
(including legal fees) or liability together with any VAT thereon,
which any of them may sustain or incur as a consequence of the
occurrence of any Event of Default or any default by the Borrower or
IFCO Europe or any Group Entity or any of them in the performance of
any of the obligations expressed to be assumed by them in any of the
Facility Documents;
(ii) the Agent against any cost or loss it may suffer or incur as a
result of its entering into or performing any foreign exchange
contract for the purposes hereof; and
(iii) each Bank against any loss it may suffer as a result of its funding
its portion of an Advance requested by any Borrower hereunder but
not made available by reason of the operation of any one or more of
the provisions hereof.
31.6 Any unpaid sum shall (for the purposes of this Clause 31 and Clause 23.1)
be treated as an advance and accordingly in this Clause 31 the term "Advance"
includes any unpaid sum and "Term" and "Interest Period", in relation to an
unpaid sum, includes each such period relating thereto as is mentioned in Clause
31.1.
<PAGE>
Part 9
PAYMENTS
32. Currency of Account and Payment
32.1 Deutsche Mark is the currency of account and payment for each and every
sum at any time due from the Borrower hereunder Provided that:
(i) each payment in respect of costs and expenses shall be made in the
currency in which the same were incurred;
(ii) each payment pursuant to Clause 20.2 or Clause 23.1 shall be made in
the currency specified by the party claiming thereunder; and
(iii) any amount expressed to be payable in a currency other than Deutsche
Mark shall be paid in that other currency.
32.2 If any sum due from the Borrower under any of the Facility Documents or
any order or judgment given or made in relation thereto has to be converted from
the currency (the "first currency") in which the same is payable thereunder or
under such order or judgment into another currency (the "second currency") for
the purpose of (i) making or filing a claim or proof against the Borrower, (ii)
obtaining an order or judgment in any court or other tribunal or (iii) enforcing
any order or judgment given or made in relation hereto, the Borrower shall
indemnify and hold harmless each of the persons to whom such sum is due from and
against any loss suffered as a result of any discrepancy between (a) the rate of
exchange used for such purpose to convert the sum in question from the first
currency into the second currency and (b) the rate or rates of exchange at which
such person may in the ordinary course of business purchase the first currency
with the second currency upon receipt of a sum paid to it in satisfaction, in
whole or in part, of any such order, judgment, claim or proof.
33. Payments
33.1 On each date on which this Agreement requires an amount to be paid by the
Borrower or any of the Banks hereunder, the Borrower or, as the case may be,
such Bank shall make the same available to the Agent by payment in Deutsche Mark
(or, where applicable, Euro) in immediately available, freely transferable,
cleared funds to such account with such bank as the Agent shall have specified
for this purpose.
33.2 If, at any time, it shall become impracticable (by reason of any action of
any governmental authority or any change in law, exchange control regulations or
any similar event) for the Borrower to make any payments hereunder in the manner
specified in Clause 33.1, then the Borrower may agree with each or any of the
Banks alternative arrangements for the payment direct to such Bank of amounts
due to such Bank hereunder Provided that, in the absence of any such agreement
with any Bank, the Borrower shall be obliged to make all payments due to such
Bank in the manner specified herein. Upon reaching such agreement the Borrower
and such Bank shall immediately notify the Agent thereof and shall thereafter
promptly notify the Agent of all payments made direct to such
<PAGE>
Bank.
33.3 Save as otherwise provided herein, each payment received by the Agent for
the account of another person pursuant to Clause 33.1 shall be made available by
the Agent to the person for whose account such payment was received (in the case
of a Bank, for the account of the Facility Office) for value the same day by
transfer to such account of such person with such bank in the principal
financial centre of the country of the currency of such payment as such person
shall have previously notified to the Agent.
33.4 All payments required to be made by the Borrower hereunder shall be
calculated without reference to any set-off or counterclaim and shall be made
free and clear of and without any deduction for or on account of any set-off or
counterclaim.
33.5 Where a sum is to be paid hereunder to the Agent for account of another
person, the Agent shall not be obliged to make the same available to that other
person or to enter into or perform any exchange contract in connection therewith
until it has been able to establish to its satisfaction that it has actually
received such sum, but if it does so and it proves to be the case that it had
not actually received such sum, then the person to whom such sum or the proceeds
of such exchange contract was so made available shall on request refund the same
to the Agent together with an amount sufficient to indemnify the Agent against
any cost or loss it may have suffered or incurred by reason of its having paid
out such sum or the proceeds of such exchange contract prior to its having
received such sum.
34. Set-Off
The Borrower authorises each Bank for so long as an Event of Default is
continuing to apply any credit balance to which the Borrower is entitled on any
account with that Bank in satisfaction of any sum due and payable from the
Borrower to such Bank hereunder but unpaid; for this purpose, each Bank is
authorised to purchase with the moneys standing to the credit of any such
account such other currencies as may be necessary to effect such application.
No Bank shall be obliged to exercise any right given to it by this Clause 34.
35. Redistribution of Payments
35.1 If, at any time, the proportion which any Bank (a "Recovering Bank") has
received or recovered (whether by payment, the exercise of a right of set-off or
combination of accounts or otherwise) in respect of its portion of any payment
(a "relevant payment") to be made under this Agreement by the Borrower for
account of such Recovering Bank and one or more other Banks is greater (the
portion of such receipt or recovery giving rise to such excess proportion being
herein called an "excess amount") than the proportion thereof so received or
recovered by the Bank or Banks so receiving or recovering the smallest
proportion thereof, then:
(i) such Recovering Bank shall pay to the Agent an amount equal to such
excess amount;
(ii) there shall thereupon fall due from the Borrower to such Recovering
Bank an amount equal to the amount paid out by such Recovering Bank
pursuant to paragraph (i) above, the amount so due being, for the
purposes hereof, treated
<PAGE>
as if it were an unpaid part of such Recovering Bank's portion of
such relevant payment; and
(iii) the Agent shall treat the amount received by it from such Recovering
Bank pursuant to paragraph (i) above as if such amount had been
received by it from the Borrower in respect of such relevant payment
and shall pay the same to the persons entitled thereto (including
such Recovering Bank) pro rata to their respective entitlements
thereto.
35.2 If any sum (a "relevant sum") received or recovered by a Recovering Bank
in respect of any amount owing to it by the Borrower becomes repayable and is
repaid by such Recovering Bank, then:
(i) each Bank which has received a share of such relevant sum by reason
of the implementation of Clause 35.1 shall, upon request of the
Agent, pay to the Agent for account of such Recovering Bank an
amount equal to its share of such relevant sum; and
(ii) there shall thereupon fall due from the Borrower to each such Bank
an amount equal to the amount paid out by it pursuant to paragraph
(i) above, the amount so due being, for the purposes hereof, treated
as if it were the sum payable to such Bank against which such Bank's
share of such relevant sum was applied.
35.3 If any Bank shall commence any action or proceeding in any court to
enforce its rights hereunder and, as a result thereof or in connection
therewith, shall receive any excess amount (as defined in Clause 35.1), then
such Bank shall not be required to share any portion of such excess amount with
any Bank which has the legal right to, but does not, join in such action or
proceeding or commence and diligently prosecute a separate action or proceeding
to enforce its rights in another court.
<PAGE>
Part 10
FEES, COSTS AND EXPENSES
36. Fees
36.1 The Borrower shall pay to the Agent for the account of each Revolving Bank
a commitment commission on the amount of such Bank's Revolving Available
Commitment from day to day during the period beginning on the date hereof and
ending on the Final Maturity Date, such commitment commission to be calculated
at the rate of nought point seven five per cent. (0.75%) per annum and payable
in arrear on the last day of each successive period of three months which ends
during such period and on the Final Maturity Date.
36.2 The Borrower shall pay to the Joint Arrangers on the date hereof the
underwriting and arrangement fees specified in the letter dated the date hereof
from the Joint Arrangers to the Borrower at the times, and in the amounts,
agreed in such letter.
36.3 The Borrower shall pay to the Agent and the Security Trustee for its own
account the agency and security agency fees specified in the letter of even date
herewith from the Agent to the Borrower at the times, and in the amounts, agreed
in such letter.
37. Costs and Expenses
37.1 The Borrower shall pay to the Agent at the time and in the amount
specified in the letter of even date herewith from the Agent to the Borrower the
amounts payable by it in respect of legal and other expenses (including
disbursements and printing costs) together with any VAT thereon incurred by it
in connection with the negotiation, preparation and execution of the Facility
Documents and the completion of the transactions herein and therein
contemplated.
37.2 The Borrower shall, from time to time on demand of the Agent, reimburse
the Beneficiaries for all reasonable costs and expenses (including legal fees)
together with any VAT thereon incurred in or in connection with any actual or
proposed amendment, waiver or restructuring of the Facilities, or with the
preservation and/or enforcement of any of the rights of the Beneficiaries under
the Facility Documents or any of the documents referred to therein in any
jurisdiction.
37.3 The Borrower shall pay all stamp, registration and other taxes to which
the Facility Documents or any judgment given in connection herewith is or at any
time may be subject and shall, from time to time on demand in writing of the
Agent, indemnify the Beneficiaries against any liabilities, costs, claims and
expenses resulting from any failure to pay or any delay in paying any such tax.
37.4 The Borrower shall, from time to time on demand of the Agent (and without
prejudice to the provisions of Clause 37.2) compensate the Agent for the time
and expenditure, all costs and expenses (including telephone, fax, copying,
travel and personnel costs) reasonably incurred by the Agent in connection with
its taking such action as it may deem appropriate or in complying with any
instructions from an Instructing Group or any request by the Borrower
<PAGE>
or IFCO Europe in connection with:
(a) the granting or proposed granting of any waiver or consent requested
hereunder by the Borrower or IFCO Europe;
(b) any actual, potential or suspected breach by the Borrower or IFCO
Europe of its obligations hereunder;
(c) the occurrence of any event which is an Event of Default or a
Potential Event of Default; or
(d) any amendment or proposed amendment hereto requested by the Borrower
or IFCO Europe.
37.5 If the Borrower fails to perform any of its obligations under this
Clause 37, each Bank shall, in its Proportion, indemnify each of the
Beneficiaries against any loss incurred by any of them as a result of such
failure and the Borrower shall forthwith reimburse each Bank for any payment
duly made by it pursuant to this Clause 37.5.
<PAGE>
Part 11
AGENCY PROVISIONS
38. The Agent, the Arrangers and the Banks
38.1 Each Arranger and Bank hereby appoints the Agent to act as its agent in
connection with the Facility Documents and to exercise such rights, powers,
authorities and discretions as are specifically delegated to the Agent by the
terms of the Facility Documents together with all such rights, powers,
authorities and discretions as are reasonably incidental thereto Provided that
the Agent shall not be authorised to commence any legal actions or proceedings
on behalf of any Bank without such Bank's written consent. The Agent shall be
released from the restrictions set out in Section 181 of the German Civil Code.
The Agent can grant substitute powers of attorney and release any sub-agent from
such restrictions and revoke such substitute powers of attorney.
38.2 For the purposes of Part 11: "Agent's Liabilities" means all liabilities
(including any liability in respect of tax), costs, fees, charges, damages,
losses and expenses (including legal fees and expenses and, in each case, VAT or
any similar tax charged or chargeable in respect thereof):
(i) to which the Agent becomes subject by reason of it acting as agent
under the Facility Documents; and
(ii) incurred by the Agent or any attorney, agent, delegate or other
person appointed by the Agent under any Facility Document in
relation to or arising out of the taking or holding of any of the
security given or created by or pursuant to any of the Facility
Documents or in the execution or purported execution of the rights,
trust, powers, authorities, discretions and obligations vested in
it,
in each case under the Facility Documents or by law, including but not
limited to those relating to all actions, proceedings, claims and demands
in respect of any matter or thing done or omitted in any way relating to
the Facility Documents and all amounts due to the Agent by way of
remuneration for acting as agent or trustee (as the case may be) under any
of the Facility Documents.
38.3 The Agent may:
(i) assume that:
(a) any representation made by the Borrower or IFCO Europe or any
Group Entity in connection herewith or in connection with any
other Facility Document is true;
(b) no Event of Default or Potential Event of Default has occurred;
(c) neither the Borrower nor IFCO Europe nor any Group Entity is in
<PAGE>
breach of or default under its obligations hereunder or under
any other Facility Document; and
(d) any right, power, authority or discretion vested herein or in
any other Facility Document upon an Instructing Group, the
Banks or any other person or group of persons has not been
exercised,
unless it has, in its capacity as agent for the Banks, received
notice to the contrary from any other party hereto;
(ii) assume that the Facility Office of each Bank is that identified
with its signature below (or, in the case of a Transferee, at the
end of the Transfer Certificate to which it is a party as
Transferee) until it has received from such Bank a notice
designating some other office of such Bank to replace its Facility
Office and act upon any such notice until the same is superseded
by a further such notice;
(iii) engage and pay for the advice or services of any lawyers,
accountants, surveyors or other experts whose advice or services
may to it seem necessary, expedient or desirable and rely upon any
advice so obtained;
(iv) rely as to any matters of fact which might reasonably be expected
to be within the knowledge of the Borrower upon a certificate
signed by or on behalf of the Borrower;
(v) rely upon any communication or document believed by it to be
genuine;
(vi) refrain from exercising any right, power or discretion vested in
it as agent hereunder unless and until instructed by an
Instructing Group as to whether or not such right, power or
discretion is to be exercised and, if it is to be exercised, as to
the manner in which it should be exercised; and
(vii) refrain from acting in accordance with any instructions of an
Instructing Group to begin any legal action or proceeding arising
out of or in connection with any of the Facility Documents until
it shall have received such security as it may require (whether by
way of payment in advance or otherwise) for all costs, claims,
losses, expenses (including legal fees) and liabilities together
with any VAT thereon which it will or may expend or incur in
complying with such instructions.
38.4 The Agent shall:
(i) promptly inform each Bank of the contents of any written notice or
document received by it in its capacity as Agent from either of
the Borrower or IFCO Europe or any Group Entity under any Facility
Document;
(ii) promptly notify each Bank of the occurrence of any Event of
Default or any default by either of the Borrower or IFCO Europe or
any Group Entity in the due performance of or compliance with its
obligations under any Facility
<PAGE>
Document of which the Agent has written notice from any other
party hereto;
(iii) save as otherwise provided herein, act as agent under the Facility
Documents in accordance with any instructions given to it by an
Instructing Group, which instructions shall be binding on the
Beneficiaries; and
(iv) if so instructed by an Instructing Group, refrain from exercising
any right, power or discretion vested in it as agent under the
Facility Documents.
38.5 Notwithstanding anything to the contrary expressed or implied herein
neither the Agent nor the Arrangers shall:
(i) be bound to enquire as to:
(a) whether or not any representation made by either of the
Borrower or IFCO Europe or any Group Entity in connection
with any Facility Document is true;
(b) the occurrence or otherwise of any Event of Default or
Potential Event of Default;
(c) the performance by either of the Borrower or IFCO Europe or
any Group Entity of its obligations under any Facility
Document; or
(d) any breach of or default by either of the Borrower or IFCO
Europe or any Group Entity of or under its obligations under
any of the Facility Documents;
(ii) be bound to account to any Bank for any sum or the profit element
of any sum received by it for its own account;
(iii) be bound to disclose to any other person any information relating
to any Group Entity if such disclosure would or might in its
opinion constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person;
(iv) be under any obligations other than those for which express
provision is made herein.
38.6 Each Bank shall, from time to time on demand by the Agent, indemnify the
Agent, in its Proportion, against any and all costs, claims, losses, expenses
(including legal fees) and liabilities together with any VAT thereon which the
Agent may incur, otherwise than by reason of its own gross negligence or wilful
misconduct, in acting in its capacity as agent under any of the Facility
Documents.
38.7 Neither the Agent nor the Arrangers accepts any responsibility for the
accuracy and/or completeness of the Reports, the Information Memorandum or the
Business Plan or any other information supplied by either of the Borrower or
IFCO Europe or any Group Entity in connection with any of the Facility Documents
(whether on, before or after the date hereof)
<PAGE>
or for the legality, validity, effectiveness, adequacy or enforceability of the
Facility Documents and neither the Agent nor the Arrangers shall be under any
liability as a result of taking or omitting to take any action (whether on,
before or after the date hereof) in relation to any of the Facility Documents,
save in the case of its gross negligence or wilful misconduct.
38.8 Each of the Banks agrees that it will not assert or seek to assert
against any director, officer or employee of the Agent or the Arrangers any
claim it might have against any of them in respect of the matters referred to in
Clause 38.7.
38.9 Each of the Banks agrees that the liability of the Agent in performing
its duties hereunder shall be limited only to claims arising out of the Agent's
own gross negligence or wilful misconduct; further, with respect to any claim,
the Agent shall not be liable for any indirect or consequential loss or damage
suffered by any person.
38.10 The Agent and the Arrangers may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any Group Entity.
38.11 The Agent may resign its appointment hereunder at any time without
assigning any reason therefor by giving not less than thirty days' prior written
notice to that effect to each of the other parties hereto Provided that no such
resignation shall be effective until a successor for the Agent is appointed in
accordance with the succeeding provisions of this Clause 38.
38.12 If the Agent gives notice of its resignation pursuant to Clause 38.11,
then any reputable and experienced bank or other financial institution may after
consultation with the Borrower be appointed as a successor to such Agent by an
Instructing Group during the period of such notice but, if no such successor is
so appointed, the Agent may appoint such a successor itself.
38.13 If a successor to the Agent is appointed under the provisions of
Clause 38.12, then (i) the retiring Agent shall be discharged from any further
obligation hereunder but shall remain entitled to the benefit of the provisions
of this Clause 38 and (ii) its successor and each of the other parties hereto
shall have the same rights and obligations amongst themselves as they would have
had if such successor had been a party hereto.
38.14 It is understood and agreed by each Bank that it has itself been, and
will continue to be, solely responsible for making its own independent appraisal
of and investigations into the financial condition, creditworthiness, condition,
affairs, status and nature of IFCO Europe and each Group Entity and,
accordingly, each Bank warrants to the Agent and the Arrangers that it has not
relied on and will not hereafter rely on the Agent and the Arrangers nor either
of them:
(i) to check or enquire on its behalf into the adequacy, accuracy or
completeness of any information provided by either of the Borrower
or IFCO Europe or any Group Entity in connection with any of the
Facility Documents or the transactions therein contemplated
(whether or not such information has been or is hereafter
circulated to such Bank by the Agent and/or the Arrangers); or
(ii) to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature
of IFCO Europe or any
<PAGE>
Group Entity.
38.15 In acting as Agent for the Banks, the Agent's agency divisions shall be
treated as a separate entity from any other of its divisions or departments and,
notwithstanding the foregoing provisions of this Clause 38, in the event that
the Agent should act for IFCO Europe or any Group Entity in any capacity in
relation to any other matter, any information given by IFCO Europe or such Group
Entity to the Agent in such other capacity may be treated as confidential by the
Agent.
38.16 Notwithstanding anything to the contrary expressed or implied herein and
without prejudice to the provisions of Clause 38.15 the Agent shall not as
between itself and the Banks be bound to disclose to any Bank or other person
any information which is supplied by IFCO Europe or any Group Entity to the
Agent in its capacity as agent hereunder for the Banks and which is identified
by IFCO Europe or such Group Entity at the time it is so supplied as being
confidential information Provided that the consent of IFCO Europe or the
relevant Group Entity to such disclosure shall not be required in relation to
any information which in the opinion of the Agent relates to an Event of Default
or Potential Event of Default or in respect of which the Banks have given a
confidentiality undertaking in a form satisfactory to the Agent and IFCO Europe
or the relevant Group Entity.
38.17 To the extent that the Agent or the Security Trustee receives or recovers
monies following the service of a notice in accordance with Clause 30.1 or 30.2
pursuant to or as a result of any breach of any Facility Document to be applied
in discharging any obligation (whether actual or contingent, present or future)
of the Borrower under any Facility Document, such monies shall (without
prejudice to the respective rights of the Agent or the Security Trustee pursuant
to any Facility Document to credit any monies received by it to any suspense
account) be applied as between the Beneficiaries:
(a) first, in or towards payment of all costs and expenses incurred
by the Agent, the Fronting Bank and the Security Trustee in
acting in those capacities under the Facility Documents;
(b) secondly, in or towards payment of any amounts which are due and
payable at such time by the Borrower to any Beneficiary under any
of the Facility Documents in respect of interest, guarantee
commission, commitment commission and other fees pro rata to the
respective entitlements of such Beneficiaries;
(c) thirdly, in or towards payment of any amounts which are due and
payable at such time by the Borrower to any Beneficiary under any
of the Facility Documents in respect of principal pro rata to the
respective entitlements of such Beneficiaries;
(d) fourthly, in or towards payment of any other sums whatsoever then
due and payable to the Beneficiaries pursuant to the Facility
Documents pro rata to their respective entitlements;
(e) fifthly, if the Borrower is under no further actual or contingent
liability
<PAGE>
hereunder or under any other Facility Document, in application
against the obligations of the Borrower under the Senior
Subordinated Facility Documents or, if the Borrower is under no
further actual or contingent liability thereunder, in payment to
any person to whom the Security Trustee is obliged to pay in
priority to the Borrower otherwise entitled thereto, to the
extent it is so obliged; and
(f) sixthly, thereafter, in payment to the Borrower.
<PAGE>
Part 12
ASSIGNMENTS AND TRANSFERS
39. Benefit of Agreement
This Agreement shall be binding upon and enure to the benefit of each party
hereto and its or any subsequent successors, Transferees and assigns.
40. Assignments and Transfers by the Borrower
The Borrower shall not be entitled to assign or transfer all or any of its
rights, benefits and obligations under any of the Facility Documents.
41. Assignments and Transfers by Banks
41.1 Any Bank may at any time assign all or any of its rights and benefits
under the Facility Documents or assign and transfer in accordance with Clause
41.3 all or any of its rights, benefits and obligations to any Qualifying Bank
with (subject to Clause 41.7) the prior written consent of the Fronting Bank and
the Borrower (such consent, in the case of the Borrower, not to be unreasonably
withheld).
41.2 If any Bank assigns all or any of its rights and benefits under the
Facility Documents in accordance with Clause 41.1 (but otherwise than in
accordance with Clause 41.3), then, unless and until the assignee has agreed
with the Agent and the other Banks that it shall be under the same obligations
towards each of them as it would have been under if it had been an original
party hereto or thereto as a Bank, the other Beneficiaries shall not be obliged
to recognise such assignee as having the rights against each of them which it
would have had if it had been such a party thereto.
41.3 If any Bank wishes to assign and transfer all or any of its rights and
benefits under any of the Facility Documents as contemplated in Clause 41.1,
then such assignment and transfer may (subject to the proviso to Clause 41.1) be
effected by the delivery to the Agent of a duly completed and duly executed
Transfer Certificate in which event, on the later of the Transfer Date specified
in such Transfer Certificate and the fourth business day after (or such earlier
business day endorsed by the Agent on such Transfer Certificate falling on or
after) the date of execution of such Transfer Certificate by the Agent:
(i) to the extent that in such Transfer Certificate the Bank party
thereto seeks to transfer any of its obligations hereunder and/or
under or in respect of the other Facility Documents, the
Borrower, IFCO Europe and such Bank shall be released from
further obligations towards one another hereunder and/or under or
in respect of the other Facility Documents to such extent and
their respective rights against one another shall to that extent
be cancelled (such rights, benefits and obligations being
referred to in this Clause as "discharged rights and
obligations");
<PAGE>
(ii) to the extent that in such Transfer Certificate the Bank party
thereto seeks to assign any of its rights and benefits hereunder
and/or under or in respect of the other Facility Documents, they
shall be so assigned and each of the Borrower and IFCO Europe
agrees (subject to, in relation to the proposed transfer of the
benefit of the Senior Security Documents in such Transfer
Certificate, compliance with relevant laws) that it is an
effective assignment of such rights and benefits;
(iii) each of the Borrower, IFCO Europe and the Transferee party
thereto shall assume obligations towards one another and/or
acquire rights and benefits against one another which differ from
such discharged rights and obligations only insofar as the
Borrower, IFCO Europe and such Transferee have assumed and/or
acquired the same in place of the Borrower, IFCO Europe and such
Bank; and
(iv) the Beneficiaries shall acquire the same rights and benefits and
assume the same obligations between themselves as they would have
acquired and assumed had such Transferee been an original party
hereto as a Bank with the rights, benefits and/or obligations
acquired or assumed by it as a result of such transfer.
41.4 On the date upon which a transfer takes effect pursuant to Clause 41.3,
other than pursuant to the Syndication, the Transferee in respect of such
transfer shall pay to the Agent for its own account a transfer fee of DM10,000.
41.5 The Borrower shall from time to time at the request of the Agent promptly
execute any accession agreement to any of the Senior Security Documents and do
any other act or thing or execute such further documents as directed by the
Agent in connection with the transfer of rights and benefits under Clause 41.1.
41.6 Any transfer pursuant to Clause 41.3 of part of a Bank's Commitment shall
be in a minimum amount of DM7,500,000 and where any Bank transfers part of its
Commitment only, it shall transfer pro rated portions of its Commitments under
each Facility.
41.7 Any consent required to be given by a party under Clause 41.1 shall be
deemed to have been given unless such party shall have notified the requesting
party to the contrary within five business days of the request for such consent.
42. Disclosure and Syndication
42.1 Any Bank may disclose to any person:-
(a) to (or through) whom such Bank assigns or transfer (or may
potentially assign or transfer) all or any of its rights,
benefits and obligations hereunder;
(b) with (or through) whom such Bank enters into (or may potentially
enter into) any sub-participation in relation to, or any other
transaction under which
<PAGE>
payments are to be made by reference to, the Facility Documents,
the Borrower or IFCO Europe; or
(c) to whom information may be required to be disclosed by any
applicable law or regulation,
such information about the Borrower, IFCO Europe the Group and as such Bank
shall consider appropriate, provided that (in the case of (a) and (b) only) the
person to whom such information is to be given has entered into a
Confidentiality Undertaking. If requested to do so by the Borrower, a Bank
shall inform the Borrower as to the identity of any person to whom it has given
such information.
42.2 The Borrower acknowledges that syndication of the Facilities in
accordance with this Clause 42.2 may take place and undertakes to assist and co-
operate with the Arrangers in such Syndication by, inter alia:
(i) expediting site visits at reasonable times upon reasonable notice
by the Agent and persons who have been invited by the Arrangers
to participate in the Facilities ("Invitees");
(ii) participating at reasonable times upon reasonable notice in
presentations to the Banks and the Invitees concerning the
Borrower, the Group Entities and their activities;
(iii) using all reasonable efforts (if necessary) to obtain appropriate
authorisations from the Auditors, other accountants, consultants
and professional advisers to release to the Banks and the
Invitees any information, including the Reports;
(iv) refraining from making any statement, announcement or publication
or doing any act or thing calculated to obstruct syndication of
the Facilities in any way other than as required by applicable
law or good commercial practice; and
(v) if so requested by the Arrangers, procuring the assistance of its
directors and other officers in the updating of the Information
Memorandum.
<PAGE>
Part 13
MISCELLANEOUS
43. Calculations and Evidence of Debt
43.1 Interest, fronting fees, guarantee commission and commitment commission
shall accrue from day to day and shall be calculated on the basis of a year of
360 days (or, in any case where market practice differs, in accordance with
market practice) and the actual number of days elapsed.
43.2 If on any occasion a Reference Bank or Bank fails to supply the Agent
with a quotation required of it under the foregoing provisions of this
Agreement, the rate for which such quotation was required shall be determined
from those quotations which are supplied to the Agent.
43.3 Each Bank shall maintain in accordance with its usual practice accounts
evidencing the amounts from time to time lent by and owing to it hereunder.
43.4 The Agent shall maintain on its books a control account or accounts in
which shall be recorded (i) the amount of any Advance made or arising hereunder
and each Bank's share therein and the face amount of any Bank Guarantee issued
by the Fronting Bank and each Bank's share therein, (ii) the amount of all
principal, interest and other sums due or to become due from the Borrower to any
of the Banks hereunder and each Bank's share therein and (iii) the amount of any
sum received or recovered by the Agent hereunder and each Bank's share therein.
43.5 In any legal action or proceeding arising out of or in connection with
this Agreement, the entries made in the accounts maintained pursuant to Clauses
43.3 and 43.4 shall, in the absence of manifest error, be conclusive evidence of
the existence and amounts of the obligations of the Borrower therein recorded.
43.6 A certificate of a Bank as to (i) the amount by which a sum payable to it
hereunder is to be increased under Clause 20.1 or (ii) the amount for the time
being required to indemnify it against any such cost, payment or liability as is
mentioned in Clause 20.2 or 23.1 shall, if supported by relevant documentation,
be conclusive for the purposes of this Agreement.
44. Remedies, Waivers, Amendments and Consents
44.1 No failure to exercise, nor any delay in exercising, on the part of the
Agent and the Banks or any of them, any right or remedy hereunder shall operate
as a waiver thereof, nor shall any single or partial exercise of any right or
remedy prevent any further or other exercise thereof or the exercise of any
other right or remedy. The rights and remedies herein provided are cumulative
and not exclusive of any rights or remedies provided by law.
44.2 The Agent may agree with the Borrower any amendment to or the
modification of the provisions of any of the Facility Documents or any schedule
thereto, which is necessary to correct a manifest error.
<PAGE>
44.3 Subject to Clause 44.4, the Agent (acting on the instructions of an
Instructing Group) may agree with the Borrower any amendment to or modification
of the provisions of any of the Facility Documents or any schedule thereto, or
grant any waiver or consent in relation thereto.
44.4 (a) Any amendment, modification, waiver, variation or consent which
relates to:
(i) the definitions of "Final Maturity Date", "Instructing
Group" or "Margin" in Clause 1.1;
(ii) Clauses 3, 40, 37, 17, 18, 13.4 or 13.5;
(iii) this Clause 44;
(iv) any extension of the date of payment for or a decrease in
the amount of, or a change in the currency of, any sum
payable to a Beneficiary under any of the Facility
Documents;
(v) the priority of liabilities under the Facility Documents
or the order or manner in which liabilities are reduced
thereunder;
(vi) an amendment to any Senior Security Document which is, in
the sole opinion of the Security Trustee, material;
(vii) the release of any asset which is the subject of the
security granted in favour of the Beneficiaries;
(viii) any increase in the Total Commitment of any Bank;
(ix) any provision which expressly contemplates the need for
the consent or approval of all the Banks,
may be effected with (and only with) the consent of all the
Banks.
(b) Any amendment, modification, waiver, variation or consent which
relates to any provision of this Clause 44, Clause 39 or Part 11
or would otherwise affect any of the Agent's, the Security
Trustee's or the Fronting Bank's rights hereunder or subject the
Agent, the Security Trustee or the Fronting Bank to any
additional obligations hereunder may be affected with (and only
with) the consent of the Agent and the Fronting Bank (as
applicable).
45. Partial Invalidity
If, at any time, any provision hereof is or becomes illegal, invalid or
unenforceable in any respect under the law of any jurisdiction, neither the
legality, validity or enforceability of the remaining provisions hereof nor the
legality, validity or enforceability of such provision under the law of any
other jurisdiction shall in any way be affected or impaired thereby and the
<PAGE>
relevant provision shall be replaced with a new provision reflecting the same
commercial intent of the parties, which provision shall be legal, valid and
enforceable under the law of the relevant jurisdiction.
46. Notices
46.1 Each communication to be made under any of the Facility Documents shall
be made in writing but, unless otherwise stated, may be made by telex, facsimile
or letter.
46.2 Any communication or document to be made or delivered by one person to
another pursuant to this Agreement shall (unless that other person has by
fifteen days' written notice to the Agent specified another address) be made or
delivered to that other person at the address telex or facsimile identified with
its signature below (or, in the case of a Transferee, at the end of the Transfer
Certificate to which it is a party as Transferee) and shall be deemed to have
been made or delivered when despatched, with appropriate answerback received (in
the case of any communication made by telex), when received (in the case of any
communications made by facsimile) or (in the case of any communication made by
letter) when left at that address or (as the case may be) ten days after being
deposited in the post postage prepaid in an envelope addressed to it at that
address Provided that any communication or document to be made or delivered to
the Agent shall be effective only if the same is expressly marked for the
attention of the department or officer identified with the Agent's signature
below (or such other department or officer as the Agent shall from time to time
specify for this purpose).
46.3 Save where the Agent agrees otherwise each communication and document
made or delivered by one party to another pursuant to this Agreement shall be in
the English language or accompanied by a translation thereof into English
certified (by an officer of the person making or delivering the same) as being a
true and accurate translation thereof.
47. European Monetary Union
47.1 The European Economic and Monetary Union (EMU) provides for the
introduction of a single currency (Euro) and the substitution of the national
currencies of the Member States participating in EMU.
47.2 On the date of the introduction of the single currency (Euro) for the
Federal Republic of Germany, the currency specified in this Agreement and the
currency specified for payments under this Agreement shall be substituted by the
single currency and the changeover into the single currency (Euro) shall take
place. Conversions shall be based on the officially fixed conversion rate.
47.3 Neither the introduction of the single currency (Euro) nor the
substitution of the national currencies of the Member States participating in
the EMU nor the fixing of the official conversion rate for replacement nor any
economic consequences that arise from any of the aforementioned events or in
connection with the EMU shall give rise to any right to prematurely terminate,
contest, cancel, rescind, modify or renegotiate this Agreement or any of its
provisions or to raise any other objections and/or exceptions or to assert any
claims for compensation. The Agreement and all its provisions shall be continued
unchanged.
<PAGE>
48. Intercreditor and Security Trust Agreement Acknowledgements and
Undertakings
48.1 The Borrower and IFCO Europe hereby expressly authorise the Security
Trustee to enforce the security constituted by the Senior Security Documents in
the manner provided for in the Facility Documents and irrevocably waive any
rights (and shall procure that each Group Entity providing security hereunder
shall waive such rights) which they may now or in the future have to challenge
or have set aside any arrangements relating to:
(a) the placing of the proceeds of the enforcement of any security in
a suspense account bearing interest at the applicable interest
rate from time to time of the Security Trustee; or
(b) any other matter or thing regarding the order of enforcement of
security and the priority of the application of the proceeds of
such enforcement in accordance with the provisions of the
Facility Documents.
48.2 The Borrower and IFCO Europe acknowledge and agree (and shall procure the
agreement of each other Group Entity providing security hereunder) that, except
as otherwise provided in the Facility Documents, they shall have no right to be
consulted in relation to or to object to any enforcement or other action by the
Beneficiaries in relation to the Facility Documents and, for the avoidance of
doubt, none of the Beneficiaries shall incur any liability to IFCO Europe or any
Group Entity in relation to such action in the absence of fraud, wilful
misconduct or the failure by the Beneficiaries to comply with the standard of
care which could reasonably be expected to be given by any similar person in
similar circumstances.
48.3 The Borrower acknowledges each of the terms of the Intercreditor
Agreement and the Security Trust Agreement and undertakes and agrees to be bound
by their terms.
48.4 The Borrower and IFCO Europe hereby agree and acknowledges that the
Senior Liabilities (other than the Postponed Senior Liabilities) shall rank pari
passu between themselves and, whether secured or unsecured, shall rank in
priority to the Senior Subordinated Liabilities and that the Senior Subordinated
Liabilities shall rank in priority to the Postponed Senior Liabilities.
48.5 The Borrower undertakes that prior to the Senior Discharge Date it will
not, unless the Majority Lenders otherwise previously consent in writing:
(i) pay, prepay, redeem, purchase or otherwise acquire or satisfy in
any manner (including by set-off or combination of accounts) the
whole or any part of the Senior Subordinated Liabilities
otherwise than pursuant to the terms of the Intercreditor
Agreement;
(ii) (other than those created pursuant to the Senior Subordinated
Facility Documents (as the same are in force at the date hereof)
or otherwise permitted pursuant to the terms of the Intercreditor
Agreement) create or permit to subsist any security interest over
any of its assets for, or any guarantee, indemnity or other
assurance against financial loss in respect of, any of the
<PAGE>
Senior Subordinated Liabilities;
(iii) make any Material Variation to any term of the Senior
Subordinated Facility Documents (other than an extension to, or
postponement of, a date for payment of any amount thereunder);
(iv) exercise any right or take any other action which would cause any
amount (other than amounts referred to in Clause 9.1 of the
Intercreditor Agreement) to become due and payable in connection
with any of the Senior Subordinated Facility Documents or the
Senior Subordinated Liabilities; or
(v) take or omit to take any action whereby the subordination
contemplated by the Intercreditor Agreement may be impaired.
48.6 The Borrower and IFCO Europe hereby consent, so long as any of the
Facility Documents remain subsisting, to the disclosure by any of the Agent, the
Senior Subordinated Agent, the Security Trustee and the Lenders to each other of
such information concerning IFCO Europe or any member of the Group to such
extent as such persons see fit.
48.7 The Borrower agrees that, if the Senior Discharge Date would have
occurred on any date but for the fact that the Hedging Liabilities remain
outstanding, all outstanding Hedging Agreements in relation to any Hedge
Counterparty shall automatically terminate on that date unless the Senior
Subordinated Agent agrees to the contrary.
48.8 Any capitalised term used in this Clause 48 and not defined herein shall
bear the meaning ascribed to it in the Intercreditor Agreement.
<PAGE>
Part 14
LAW AND JURISDICTION
49. Law
This Agreement shall be governed by, and shall be construed in accordance with,
German law.
50. Jurisdiction
50.1 Each of the Borrower and IFCO Europe hereby irrevocably agrees for the
benefit of each of the Beneficiaries that the District Court (Landgericht) of
Frankfurt am Main shall have jurisdiction to hear and determine any suit, action
or proceeding, and to settle any disputes, which may arise out of or in
connection with this Agreement and, for such purposes, irrevocably submits to
the jurisdiction of such courts.
50.2 Each of the Borrower and IFCO Europe irrevocably waives any objection
which it might now or hereafter have to the courts referred to in Clause 50.1
being nominated as the forum to hear and determine any suit, action or
proceeding, and to settle any disputes, which may arise out of or in connection
with this Agreement and agrees not to claim that any such court is not a
convenient or appropriate forum.
50.3 The submission to the jurisdiction of the courts referred to in Clause
50.1 shall not (and shall not be construed so as to) limit the right of the
Beneficiaries or any of them to take proceedings against either of the Borrower
or IFCO Europe in any other court of competent jurisdiction nor shall the taking
of proceedings in any one or more jurisdictions preclude the taking of
proceedings in any other jurisdiction (whether concurrently or not) if and to
the extent permitted by applicable law.
50.4 Each of the parties hereto hereby waives trial by jury in any judicial
proceeding involving, directly or indirectly, any matter (whether sounding in
tort, contract or otherwise) in any way arising out of, related to, or connected
with any of the Facility Documents or the relationships established hereunder
and whether arising or asserted before or after the date hereof or before or
after the payment, observance and performance in full of such party's
obligations hereunder.
AS WITNESS the hands of the duly authorised representatives of the parties
hereto the day and year first before written.
<PAGE>
THE FIRST SCHEDULE
The Banks and their Commitments
Part I
The Term Banks Term Commitment (DM)
BHF Bank Aktiengesellschaft 21,111,280.00
DG Bank Deutsche Genossenschaftsbank 21,111,280.00
Creditanstalt AG 14,777,440.00
Barclays Bank PLC 6,504,586.67
Deutsche Bank AG, Munich Branch 6,333,333.33
Norddeutsche Hypotheken-und Wechselbank AG 3,081,040.00
Oldenburgische Landesbank AG 3,081,040.00
-------------
Total Term 76,000,000.00
=============
Part II
The Revolving Banks Tranche A Tranche B
Revolving Revolving
Commitment Commitment
(DM) (DM)
BHF Bank Aktiengesellschaft 12,500,100.00 6,944,500.00
DG Bank Deutsche Genossenschaftsbank 12,500,100.00 6,944,500.00
Creditanstalt AG 8,749,800.00 4,861,000.00
Barclays Bank PLC 3,851,400.00 2,139,666.67
Deutsche Bank AG, Munich Branch 3,750,000.00 2,083,333.33
Norddeutsche Hypotheken-und Wechselbank AG 1,824,300.00 1,013,500.00
Oldenburgische Landesbank AG 1,824,300.00 1,013,500.00
------------- -------------
Total Revolving 45,000,000.00 25,000,000.00
============= =============
<PAGE>
THE SECOND SCHEDULE
Form of Transfer Certificate
To: BHF Bank Aktiengesellschaft
TRANSFER CERTIFICATE
relating to the agreement (as from time to time amended, varied, novated or
supplemented, the "Facility Agreement") dated [ ] whereby a
DM76,000,000 term loan facility and DM70,000,000 revolving loan and guarantee
facilities were made available to IFCO International Food Container Organisation
GmbH as Borrower by a group of banks on whose behalf BHF Bank
Aktiengesellschaft acted as agent in connection therewith.
1. Terms defined in the Facility Agreement shall, subject to any contrary
indication, have the same meanings herein. The terms Bank, Transferee, Bank's
Participation and Amount Transferred are defined in the schedule hereto.
2. The Bank (i) confirms that the Bank's Participation is an accurate summary
of its participation in the Facility Agreement and (ii) requests the Transferee
to accept and procure the assignment and transfer to the Transferee of a
percentage of the Bank's Participation (equal to the percentage that the Amount
Transferred is of the aggregate of the component amounts (as set out in the
schedule hereto) of the Bank's Participation) by counter-signing and delivering
this Transfer Certificate to the Agent at its address for the service of notices
specified in the Facility Agreement.
3. The Transferee hereby requests the Agent to accept this Transfer
Certificate as being delivered to the Agent pursuant to and for the purposes of
Clause 41.3 of the Facility Agreement and the Bank hereby assigns its rights
under the Facility Documents (including the security pursuant to the Senior
Security Documents) and transfers its obligations thereunder to the extent set
out in the schedule hereto so as to take effect in accordance with the terms of
the Facility Agreement thereof on the Transfer Date or on such later date as may
be determined in accordance with the terms thereof.
4. The Transferee confirms that it has received a copy of the Facility
Documents together with such other information as it has required in connection
with this transaction and that it has not relied and will not hereafter rely on
the Bank to check or enquire on its behalf into the legality, validity,
effectiveness, adequacy, accuracy or completeness of any such information and
further agrees that it has not relied and will not rely on the Bank to assess or
keep under review on its behalf the financial condition, creditworthiness,
condition, affairs, status or nature of the Borrower or IFCO Europe or any Group
Entity.
5. The Transferee hereby undertakes with the Bank and each of the other
parties to the Facility Agreement that it will perform in accordance with their
terms all those obligations which by the terms of the Facility Documents
(including any Bank Guarantees which have been issued prior to the date hereof)
will be assumed by it after delivery of this Transfer
<PAGE>
Certificate to the Agent and satisfaction of the conditions (if any) subject to
which this Transfer Certificate is expressed to take effect.
6. The Transferee accepts any Bank Guarantees which have been issued prior to
the date hereof for itself and accepts that the Agent, without power of
attorney, has issued such Bank Guarantees for such Transferee and the Transferee
ratifies the issuing of such Bank Guarantee by the Agent on its behalf by
accepting the transfer referred to herein and by its execution of this Transfer
Certificate.
7. The Bank makes no representation or warranty and assumes no responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of the Facility Documents or any document relating thereto and
assumes no responsibility for the financial condition of the Borrower or IFCO
Europe or any Group Entity or for the performance and observance by the Borrower
and IFCO Europe or any Group Entity of any of their obligations under the
Facility Documents or any document relating thereto and any and all such
conditions and warranties, whether express or implied by law or otherwise, are
hereby excluded.
8. The Bank hereby gives notice that nothing herein or in the Facility
Documents (or any document relating thereto) shall oblige the Bank to (i) accept
a re-assignment or re-transfer from the Transferee of the whole or any part of
its rights, benefits and/or obligations under the Facility Documents transferred
pursuant hereto or (ii) support any losses directly or indirectly sustained or
incurred by the Transferee for any reason whatsoever including, without
limitation, the non-performance by the Borrower or IFCO Europe or any other
party to the Facility Documents (or any document relating thereto) of its
obligations under any such document. The Transferee hereby acknowledges the
absence of any such obligation as is referred to in (i) or (ii) above.
9. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with German law.
10. The benefit of the Senior Security Documents (subject to compliance with
applicable law) shall in respect of each of the Facilities pass automatically to
the Transferee to the extent of the Amount Transferred in respect thereof and
the security granted thereby will be kept and administered by the Agent for the
benefit of the Transferee.
The Schedule
1. Bank:
2. Transferee:
3. Transfer Date:
4. Bank's Participation:
<PAGE>
Term Commitment: [ ]
Tranche A Revolving Commitment: [ ]
Tranche B Revolving Commitment: [ ]
Bank's Commitment Bank's Portion of the Total Loan
Term Facility:
Tranche A Revolving Facility:
Tranche B Revolving Facility:
5. Amount Transferred:
Commitment Transferred Loan Transferred
Term Facility:
Tranche A Revolving Facility:
Tranche B Revolving Facility:
Details of Bank Guarantees
issued and outstanding: Portion Transferred
[Transferor Bank] [Transferee Bank]
By: By:
Date: Date:
Administrative Details of Transferee
Address:
Contact Name:
Account(s) for Payments:
Telex:
Facsimile:
Telephone:
<PAGE>
* The Transferee must also accede to the Intercreditor Agreement, the
Security Trust Agreement and certain of the Senior Security Documents by
execution of relevant accession agreements.
<PAGE>
THE THIRD SCHEDULE
Conditions Precedent
A. Corporate Documents
1. In relation to each of SPI, MTS, the Borrower, IFCO Europe and each member
of the Group (a "Member") which is party to a Facility Document:
(a) copies, certified by a director of each such company as being true,
complete and up to date, of the constitutional documents including the
certificate of incorporation or officially certified recent excerpts
from the Commercial Register (Handelsregisterauszug) and articles of
association of such company (or its equivalent in the relevant
jurisdiction);
(b) copies, certified by a director of each of the Borrower, IFCO Europe
and each such company or Member as being true, complete and up to
date, of the necessary resolutions by the shareholders authorising the
execution, delivery and performance of the Facility Documents and the
terms and conditions thereof and authorising a named person or persons
to sign each Facility Document and any documents to be delivered by
the Borrower, IFCO Europe, SPI, MTS or Member (as the case may be)
pursuant thereto; and
(c) a certificate of a duly authorised officer of the Borrower, IFCO
Europe and each such Member or other company, setting out the names
and signatures of the persons authorised to sign, on behalf of such
person each Facility Document to which it is or is to be party and any
document to be delivered by such person pursuant thereto.
2. A copy, certified a true copy by the Borrower on behalf of the Borrower,
IFCO Europe, SPI, MTS and each Group Entity of each such law, decree,
material consent, licence, approval and authorisation as is necessary to
render the Facility Documents legal, valid and binding, to make the
Facility Documents admissible in evidence in its jurisdiction of
incorporation and to enable each of the Borrower, IFCO Europe, SPI, MTS and
the members of the Group to perform its obligations thereunder, and a copy
of each such law, decree, material consent, licence, approval and other
authorisation (other than any corporate authorisations) required to permit
GE to own (beneficially as well as legally) 100% of the shares of IFCO
Europe.
B. Business Plan, Accounts, Supply Agreement and Reports
1. The Business Plan in the agreed form.
2. The Reports.
3. The Supply Agreement together with all annexes thereto showing, inter alia,
that (a) the maximum average price per crate will not, during the time at
which any amount is outstanding hereunder, exceed DM6.10 and (b) the
Borrower has purchased or has an
<PAGE>
option to purchase the crate manufacturing tools at a total price not
exceeding their current market value.
4. Where any of the Reports are not addressed to the Agent or any Joint
Arranger for and on behalf of the Beneficiaries from time to time, in each
case a reliance letter from the person who prepared such Report in an
agreed form in favour of the Agent on behalf of the Beneficiaries from time
to time.
5. Original Financial Statements, the Financial Statements of the Group for
the Financial Quarter ended 30 September 1997 and the Financial Statements
of the Group for the eleven months ending 30 November 1997, in each case
certified by a Duly Authorised Officer of the Borrower (such certification
to include a confirmation that no material adverse change in the financial
position or operating results of the Group during the period to which those
financial statements relate).
C. Investment Agreement and Related Matters
1. A photocopy of an executed copy, certified by a director of the Borrower
and a duly authorised officer of General Electric Capital Corporation as
true, complete and up to date of the Investment Agreement and the
Contribution Contract.
2. Evidence (in the form of a confirmation from the Borrower and GE) that all
conditions to the Investment have been satisfied without waiver, amendment,
variation or modification.
3. Confirmation from the Borrower and GE in the agreed terms, addressed to the
Agent (on behalf of the Banks) that the Investment has been completed in
accordance with the terms of the Investment Agreement and the Contribution
Contract and that no material right or entitlement of IFCO Europe or GE
(whether to receive documents or otherwise) thereunder has been waived or
modified except with the written consent of the Agent.
4. A certificate from a director of the Borrower certifying that no amendment
(save as previously approved in writing by the Agent) has been made to the
Investment Agreement, the Supply Agreement or the Contribution Contract and
that such documents contain the full agreement of the parties thereto as to
the matters set out therein relating to the Group.
5. A certificate from an Authorised Signatory of the Borrower and each person
granting an Encumbrance hereunder confirming that the constitutional
documents of each of their subsidiaries whose shares are to be pledged
pursuant to the Senior Security Documents:
either:
(i) do not contain any provisions allowing the Board of Directors or
shareholders of the relevant subsidiary to refuse the transfer to and
approval and registration of; and
<PAGE>
(ii) do not contain any pre-emption rights or other need for approvals of
the transfer to,
any persons as shareholders of the relevant subsidiary pursuant to any
enforcement by the Security Trustee (acting on behalf of the Beneficiaries)
of the security created by the relevant Senior Security Document,
or
that the relevant shareholders resolutions, consents and approvals have
been obtained to the granting and enforcement of the Encumbrances (and that
no corporate bar therefore exists to the enforcement of the Encumbrances).
6. Confirmation from the Borrowers auditors that at least DM45,000,000 (less
DM300,000 applied in respect of fees incurred in relation to the
Investment) have been invested by GE into IFCO Europe in accordance with
the Investment Agreement and that an amount of at least DM43,700,000 of
such funds so invested by GE has been invested in the Borrower by IFCO
Europe as an additional capital contribution into the capital reserves
(Kapitalrucklage) of the Borrower.
D. Senior Subordinated Financing Documents
1. Evidence that the aggregate of fully paid in equity capital of the Borrower
is at least DM45,000,000 and that an advance will be made to the Borrower
of DM35,000,000 on the date on which the first Advance will be made
hereunder under the Senior Subordinated Facility.
2. A certified true, complete copy of the Senior Subordinated Facility
Documents duly executed by the parties hereto.
E. Security and Priority Documents
1. The following security documents, together with all documents to be
delivered pursuant thereto:
(a) a pledge agreement pledging all shares in the Borrower dated on or
about the date hereof by IFCO Europe;
(b) a pledge agreement (or other similar agreement) by each member of the
Group of all of such member's shares in its subsidiaries (and the
delivery (where appropriate) of Share Certificates for all shares in
such subsidiary endorsed (where necessary) by the relevant Group
Entity in blank to the Agent or an undertaking to deliver such Share
Certificates forthwith to the Agent following their issue) and all
other documents ancillary thereto;
(c) a pledge agreement by Mr. Luitpold Roever in favour of the Security
Trustee pledging all shares owned by him in GISO Verwaltungs
Gesellschaft mbH and
<PAGE>
the delivery of all relevant share certificates (if any are issued) to
the Security Trustee and any other documents ancillary thereto;
(d) a share pledge from each of Mr T Maurer and Mr W Zingg in favour of
the Security Trustee, pledging all shares owned by them in IFCO
(Schweiz) A.G. and the delivery of all relevant share certificates to
the Security Trustee and all other documents ancillary thereto;
(e) a share pledge from MTS Okologistik GmbH in favour of the Security
Trustee pledging all shares owned by it in IFCO International Food
Container Organisation S.r.l (and the delivery (if the Security
Trustee requires) of all share certificates held by it) and any other
documents ancillary thereto;
(f) a share pledge from Schoeller Plast Industries GmbH in favour of the
Security Trustee pledging all shares owned by it in IFCO International
Food Container Organisation S.A.S. and the delivery (if the Security
Trustee requires) of all share certificates in such company held by it
or on its behalf and any other documents ancillary thereto;
(g) an assignment of receivables (including an assignment of all factoring
agreements and leasing agreements) by the Borrower and any other
member of the Group specified by the Agent in accordance with normal
German practice in the form of a Globalzession and any other documents
ancillary thereto;
(h) an agreement between SPI, GBL, the Borrower and the Security Trustee
relating to licences granted in relation to the Patent and other
ancillary items.
2. Security in form and substance satisfactory to the Agent over all crates
(including New Crates and any Existing Crates currently encumbered which
are, pursuant to the terms hereof, to be released from such Encumbrance)
owned by the Group (including security in respect of crates held at
depots), the Material Intellectual Property and the Supply Agreement.
3. The Intercreditor Agreement
4. The Security Trust Agreement.
5. Evidence that all existing Encumbrances over the assets or undertakings of
each Group Entity other than Permitted Encumbrances have been released or
discharged (or will be released or discharged on the making of the first
Advance hereunder) and/or transferred to the Security Trustee.
F. Legal Opinions
Legal Opinions of:
(a) lawyers acceptable to the Joint Arrangers in relation to the Borrower,
IFCO Europe and each company providing security hereunder.
<PAGE>
(b) Clifford Chance in relation to the laws of the Federal Republic of
Germany addressed to the Agent on behalf of the Banks.
G. Miscellaneous
1. Evidence that all fees and reimburseable expenses payable to the Agent, the
Security Trustee, the Arrangers and/or the Banks in connection herewith
shall be made out of the first Advance and that all costs in connection
with the Investment have been paid or will be paid out of the proceeds of
the first Advance.
2. The Hedging Strategy Letter.
3. The fee letters referred to in Clauses 36.2, 36.3 and 37.1.
4. Estimated details of all Transaction Costs certified by a Duly Authorised
Officer of the Borrower.
5. Certified true copies of all of the Services Agreements (or similar
agreement) of Messrs Gerland, Tofflinger and Benz.
6. Information in the form of an update of the report prepared by General
Electric Capital Corporation regarding the installation of Information
Technology Systems within the Group including details of their current
status and the IT Schedule.
7. Evidence that the Existing Indebtedness (other than indebtedness under the
Leasing Agreements) has been cancelled and/or repaid (or will, upon the
making of the first Advance hereunder and under the Senior Subordinated
Facility be repaid).
8. A letter from the Borrower addressed to the Auditors instructing them to
co-operate with the Agent where the Agent approaches the Auditors for
information regarding any Group Entity following the occurrence of an Event
of Default which is continuing unremedied and unwaived and with the
Borrower having been offered an opportunity to attend any such discussions
and a letter from the Auditors addressed to the Borrower and the Agent
confirming their acceptance of such instructions.
9. A budget showing the forecast monthly profit and loss account for the
financial year beginning 1 January 1998 including confirmation that VAT
treatment is consistent with the advice set out in the Tax Report.
10. A letter from GE Capital Corporation regarding the utilisation of any
payments received by it relating to claims made by it following a breach of
warranty or misrepresentation pursuant to the Investment Agreement in the
prepayment of the Facilities.
11. Copies of each of the Material Leasing Agreements.
12. A confirmation letter confirming, inter alia, the extent of External
Finance Leases and
<PAGE>
that no objections to the European Commission's decision not to take anti-
trust action against the Borrower have been received.
<PAGE>
THE FOURTH SCHEDULE
Notice of Drawdown of Term Advances/Revolving Advances/Bank Guarantees
From: IFCO International Food Container Organisation GmbH
To: BHF Bank Aktiengesellschaft
Dear Sirs
1. We refer to the agreement (as from time to time amended, varied, novated
or supplemented, the "Facility Agreement") between, amongst others, IFCO
International Food Container Organisation GmbH as Borrower and you as Agent
dated [ ] whereby a term facility of up to DM76,000,000 was made available
to the Borrower and revolving facilities of up to DM70,000,000 (or its
equivalent) was made available to the Borrower. Terms defined in the Facility
Agreement shall have the same meaning in this notice.
2. We hereby give you notice that, pursuant to the Facility Agreement and
upon the terms and subject to the conditions contained therein, we wish [a Term
Advance/Tranche A Cash Advance/Tranche B Cash Advance to be made to us/the
Fronting Bank to issue a Bank Guarantee/the Agent to issue a Bank Guarantee on
behalf of the Revolving Banks] as follows:
(i) Drawdown Date
(ii) Term or Interest Period:
[(iii) Details of Bank Guarantee as required under Clause 8.1].
3. We confirm that subject to the provisions of the Disclosure Letter, at the
date hereof, the representations set out in Clause 26.1 (other than the
representations not required to be repeated pursuant to Clause 26.2) are true in
all material respects and no Event of Default or Potential Event of Default has
occurred and is continuing and has not been waived or would result from the
making of such Advance.
4. The proceeds of this drawdown should be credited to the account of [ ]
numbered [ ] with [ ].
Yours faithfully
...............................
for and on behalf of
IFCO International Food Container Organisation GmbH
<PAGE>
THE FIFTH SCHEDULE
Terms of Indemnity in relation to Bank Guarantees
1. The Borrower hereby unconditionally and irrevocably agrees and undertakes
to the Agent, the Revolving Bank and the Fronting Bank as follows:
(a) subject to Clause 8.5(i), the Borrower will at all times indemnify the
Revolving Banks and the Revolving Banks and the Fronting Bank on
demand of the Agent and keep the Fronting Bank indemnified on demand
of the Agent from and against all actions, suits, proceedings, claims,
demands, liabilities, damages, costs, expenses, losses and charges
whatsoever in relation to or arising out of any utilisation of the
Revolving Facility and the Borrower will pay to the Agent for account
of the Fronting Bank (or, as the case may be, the Revolving Banks) the
amount of all payments made (whether directly or by way of set-off,
counterclaim or otherwise howsoever) and all losses, costs or expenses
suffered or incurred from time to time by the Fronting Bank or the
Revolving Banks, by reason or in consequence of its incurring a
liability under any utilisation of the Revolving Facility and any of
the aforesaid indemnities relating thereto Provided that neither the
Fronting Bank nor the Revolving Banks have acted negligently;
(b) the liability of the Borrower under this indemnity shall not be
discharged, lessened or impaired by any time being given or by
anything being done by the Revolving Banks or the Fronting Bank.
2. The Borrower specifically releases and indemnifies the Agent, the Revolving
Banks and the Fronting Bank from and against the consequences of the
Fronting Bank's, the Agent's or any Revolving Bank's failure and/or the
failure of any other person to receive any telex, facsimile or telephone
message in a form in which it was despatched and from and against the
consequences of any delay that may occur during the course of the
transmission of any such message unless the Fronting Bank, Agent or
Revolving Bank has acted negligently in relation to such failure.
3. The obligations of the Borrower hereunder and under each document executed
pursuant to or in relation to this Agreement shall not be in any way
discharged or impaired by reason of any time or other indulgence which may
be granted (a) to the Agent, the Revolving Banks or the Fronting Bank in
writing by any beneficiary of any utilisation of the Revolving Facility or
(b) by the Agent, the Revolving Banks or the Fronting Bank in writing to
any person from whom it may seek reimbursement in respect of sums paid out
by it under any utilisation of the Revolving Facility or any other
obligation pursuant thereto or pursuant to this Agreement, as the case may
be, by any variation of any underlying agreement (or utilisation of the
Revolving Facility) relates, this Agreement or any such document nor by any
circumstance which would or might (but for this provision) constitute a
legal or equitable discharge or defence of the Borrower.
<PAGE>
4. The Agent, the Revolving Banks or the Fronting Bank may, with the
Borrower's written consent, at any time, without thereby discharging,
impairing or otherwise affecting any security created by, pursuant to or in
relation to this Agreement or the rights, powers and remedies conferred
upon it by this Agreement, any such security or by law, (a) offer or agree
to or enter into agreement for the extension or variation of any
utilisation of the Revolving Facility or (b) offer to give or agree to give
any time or other indulgence to any sums paid out by it under any
utilisation of the Revolving Facility, any obligation pursuant thereto or
any other obligation pursuant to this Agreement.
5. Any rights conferred on the Agent, the Revolving Banks or the Fronting Bank
by this Agreement and by each document executed pursuant to or in relation
to this Agreement shall be in addition to and not in substitution for or
derogation of any other rights which the Agent, the Revolving Banks or the
Fronting Bank may at any time have to seek from the Borrower or any other
person reimbursement of or indemnification against payments made or
liabilities incurred under any utilisation of the Revolving Facility, any
obligation pursuant thereto or any other obligation pursuant to this
Agreement.
6. For the purposes of this Agreement, a utilisation of the Revolving Facility
shall be considered to be outstanding until the latest of (a) the date of
return of the document evidencing the Revolving Banks' or the Fronting
Bank's (as the case may be) liability to the relevant beneficiary under
such utilisation of the Revolving Facility to the Fronting Bank, the Agent
or the Revolving Banks (as appropriate) from such beneficiary together with
written confirmation from such beneficiary (in form and substance
satisfactory to the Fronting Bank, the Agent and/or the Revolving Banks (as
appropriate) that the Fronting Bank has (or, as the case may be, the
Revolving Banks have) no further liability under such document; (b) the
expiry date referred to in that document (being the latest date by which
the beneficiary thereof shall be entitled to make a demand of the Fronting
Bank, the Agent, the Revolving Banks (as appropriate) thereunder); and (c)
the date on which all liabilities referred to in that utilisation of the
Revolving Facility or arising under the claims secured by such utilisation
have been discharged.
7. The Borrower hereby confirms and agrees that:
(a) the Fronting Bank, the Agent and the Revolving Banks shall be entitled
and bound to make any payment requested or demanded in writing by any
beneficiary under any utilisation of the Revolving Facility regardless
of whether or not the Borrower shall be in any way in breach of any of
its obligations under or by virtue of the transaction to which that
utilisation of the Revolving Facility refers and without making any
investigation as to the bona fide nature, validity or genuineness of
any such request or demand (unless, under applicable law, the Fronting
Bank or the Revolving Banks (as the case may be) is under no
obligation to make such payment), and
(b) the liability of the Borrower hereunder and the right and obligation
of the
<PAGE>
Fronting Bank or the Revolving Banks (as the case may be) to make such
payment shall be in no way diminished or prejudiced if it should
appear that, as between the Borrower and that beneficiary, that
beneficiary was not entitled for whatever reason to demand payment
under such utilisation of the Revolving Facility or that such demand
was not valid or genuine (subject as mentioned in paragraph (a)
above).
8. It is acknowledged that the Agent shall notify the Borrower upon its
receipt of a demand by a beneficiary under a Bank Guarantee and, where the
Fronting Bank or, as the case may be, the Revolving Banks make a payment
under any Bank Guarantee, such payment shall be made no earlier than the
third business day after the date on which the Fronting Bank (or, as the
case may be, the Agent on behalf of the Revolving Banks) received such
demand from such beneficiary (and, for the avoidance of doubt it is
expressly agreed that neither the Agent, the Revolving Banks nor the
Fronting Bank shall be obliged to give any further notice to the Borrower
before making such payment to such beneficiary).
<PAGE>
THE SIXTH SCHEDULE
PART I
Form of Bank Guarantee to be issued by the Fronting Bank
(Note: This form shall be used unless otherwise agreed by the Agent)
[___________________
(Beneficiary)
Bank Guarantee No. __________
We have been informed that you are prepared to enter into a finance leasing
contract (a "Finance Lease") in relation to crates with IFCO International Food
Container Organisation GmbH, hereinafter "borrower" in the amount of _________,
provided payments and interest obligations under such Finance Lease are
guaranteed by a bank.
This being premised, we, BHF Bank Aktiengesellschaft, hereby irrevocably
guarantee and undertake to pay to you on your first written demand any amount up
to
____________________
(say: _____________________)
including accrued interest, fees and commission provided you confirm to us at
the same time in writing that the amount required from us constitutes the
outstanding credit amount (including accrued interest, fees and commission)
which the borrower, in spite of your respective demand, has failed to pay when
due.
This guarantee shall expire on ____________ or, if earlier, upon this document
being returned to us, unless your written demand under this guarantee in
accordance with the above-mentioned conditions has been received by us in
Frankfurt by the end of that day.
This guarantee is not assignable.
All rights and obligations arising from this guarantee shall be governed by the
laws of the Federal Republic of Germany. The court having non-exclusive
jurisdiction shall be the district court (Landgericht) of Frankfurt am Main.
[Appropriate EMU language to be inserted]
BHF Bank Aktiengesellschaft
<PAGE>
THE SIXTH SCHEDULE
PART II
Bank Guarantee to be issued by the Agent on behalf of the Banks
THIS GUARANTEE made on the [ ] day of [ ] by BHF BANK
AKTIENGESELLSCHAFT of [ ], as agent (the "Agent") for the
banks listed in the First Schedule hereto (together with their successors,
transferees and assigns the "Banks"), in favour of [ ] (the "Beneficiary")
witnesses as follows:
1. Subject to the terms hereof, each of the Banks, acting through the Agent
hereby unconditionally and severally guarantees the payment in accordance
with paragraph 4 below of its Portion of the payment obligations IFCO
International Food Container Organisation GmbH (the "Company") under
[insert defaults of relevant leasing agreement between the Beneficiary and
the Company] (the "Agreement").
2. No Bank shall be obliged to make payments hereunder exceeding in aggregate
the maximum amount specified in relation to that Bank in the First Schedule
hereto (as the same may be amended from time to time). Any payment made by
a Bank hereunder shall reduce such Bank's liability to make payment
hereunder accordingly.
3. No demands may be made hereunder after 5.00 p.m. Frankfurt time on [ ]
(the "Expiry Date") or, if earlier after this document has been returned to
the Agent. Neither the Banks nor the Agent will have any liability in
respect of any demand delivered after such time.
4. Subject to paragraph 3 above, within three business days of receiving a
written demand hereto from the Beneficiary (addressed to the Agent on
behalf of all the Banks and signed by two authorised officers of the
Beneficiary) at [details of Agent's office to be inserted] each Bank hereby
agrees to pay to the Beneficiary in the currency specified in the First
Schedule hereto it Portion of any amount due and owing by the Company but
unpaid under the Agreement, subject to the maximum amount referred to in
paragraph 2 above.
5. If any Bank (for the purpose of this Guarantee, the "Transferor") transfers
all or any of its rights and obligations under the Facility Agreement (the
"Facility Agreement") dated [ ] and made between, inter alia,
the Company as Borrower and the Agent as Agent in accordance with the terms
of that agreement to another financial institution (the "Transferee") this
Guarantee shall be deemed to be amended and reference herein to a Bank
shall include reference to such Transferee and such Transferor shall be
discharged from any obligations hereunder to the extent that the same are
transferred to the Transferee and so that the Transferor's Portion shall be
reduced to the extent of the transfer.
6. The rights of the Beneficiary under this Guarantee may not be assigned or
transferred.
<PAGE>
7. The Agent has entered into this Guarantee in its capacity as agent for
disclosed principals and accordingly shall be under no obligation to the
Beneficiary hereunder (other than in its capacity as a Bank).
8. The Obligations of each Bank hereunder are several and in the event of any
demand being made hereunder each Bank shall only be liable for its Portion
of any amount so demanded. The Beneficiary may not make demand through the
Agent on any Bank in respect of any amount in respect of which it has
previously made a demand, but which remains unpaid as a result of the
failure by another Bank to make payment in accordance with the terms
hereof.
9. The failure of a Bank to perform its obligations hereunder shall not affect
the obligations of any other Bank to the Beneficiary nor shall the Agent or
any other Bank be liable for the failure by any Bank to perform its
obligations hereunder.
10. In this Guarantee "Portion" in relation to a Bank means the percentage
figure specified in relation to that Bank in the First Schedule hereto (as
the same may be amended from time to time) or, in the case of a Transferee,
the percentage transferred to it by the Transferor in accordance with the
terms of the Facility Agreement.
11. All rights and obligations arising from this Guarantee shall be governed by
the law of the Federal Republic of Germany. The court having non-exclusive
jurisdiction shall be the district court (Landgericht) of Frankfurt am
Main.
[appropriate EMU language to be inserted]
..................................
For and on behalf of
BHF BANK AKTIENGESELLSCHAFT as agent for
the Banks
<PAGE>
THE SCHEDULE
The Banks Maximum Amount Portion
<PAGE>
THE SEVENTH SCHEDULE
Group Structure Chart
<PAGE>
THE EIGHTH SCHEDULE
Existing Indebtedness
Description Amount outstanding as at
19 February 1998
A *Pool Indebtedness
Payable to:
*DG Bank Deutsche
Genossenschaftsbank 30,000,000
*Deutsche Bank
Aktiengesellschaft, Munich Branch 24,500.000
*Oldenburgische Landesbank 17,000,000
*Norddeutsche Hypotheken-und
Wechsellbank AG 17,000,000
B *SPS Shareholder Loan
Payable to SPS 37,500,000
C *Bardusch Loan
Payable to Bardusch 3,400,000
D *Hannover Finanz Loan
Payable to Hannover Finanz 5,000,000
E *Schroder Loan
Payable to:
Schroder, Munchmyer,
Hugst & Co 500,000
-------------
134,900,000
_________________
* This Indebtedness is to be repaid on the date of the making of the first
Advance hereunder.
<PAGE>
THE NINTH SCHEDULE
Material Intellectual Property
Description of Property Owner of Intellectual Property
1. European Patent entitled "Plastic GBL
Container, especially a vegetable
container with hinged sides".
Patent No: 0575594 (Europe).
(European patent application no.
EP93902215 which has now been
granted). Registered in: Austria,
Belgium, Switzerland, Germany,
Denmark, Sweden, Spain, France,
Great Britain, Greece, Italy, The
Netherlands.
Expiry: 2013
2. International Patent Application No. GBL
International Patent PCT/EP93/00091.
Registered in Norway (registered on
02.07.1997), Poland (registered on
02.08.1996), Russia (registered on
27.06.1997), Czech Republic
(registered on 18.02;.1997) with
pending applications in Slovakian
Republic, Hungary and Ukraine.
Expiry: 2013
3. German Patent Application No. GBL
P4201145.0 (pending).
4. Utility Model (Gebrauchsmuster) GBL
Number: G9321234
Expiry: 17.01.2002 (prolongation
possible)
Country: Germany
5. Utility Model (Gebrauchsmuster) GBL
Number: G92189776
Expiry: 17.01.2000 (prolongation
possible)
Country: Germany
<PAGE>
6. Design Protection (Geschmacksmuster) GBL
Number: M92086764
Expiry: 16.11.2002
Country: Germany
7. Trademarks GBL
IFCO
Registered in Benelux, Denmark,
Germany, Finland, France,
Greece, Great Britain, The
Netherlands, Norway, Austria,
Sweden, Switzerland and Spain.
<PAGE>
EXECUTION PAGES
As Borrower
IFCO INTERNATIONAL FOOD CONTAINER ORGANISATION GmbH
By: /s/ DR. FRANK TOFFLINGER
Address: Zugspitzstrasse 15
D-8209 Pullach
Germany
Telephone: +49 89
Facsimile: +49 89 74491 239
Attention: Dr. Frank Tofflinger
copy notices: Martin and Christoph Schoeller (Fax No: +49 89 74491 298)
As IFCO Europe
IFCO EUROPE BETEILIGUNGS-GmbH
By: /s/ MARTIN SCHOELLER
Address: Zugspitzstrasse 15
D-82049 Pullach
Germany
Telephone: +49 89 74491 240
Facsimile: +49 89 74491 239
Attention: Dr. Frank Tofflinger
copy notices: Martin and Christoph Schoeller (Fax No: +49 89 74491 298)
The Security Trustee
BHF BANK AKTIENGESELLSCHAFT
By: /s/ GERD P. BIEDING /s/ MICHAEL FOCKING
Address: Berliner Handels und Frankurter Bank
Bockenheimer Landstrasse 10
D-60323 Frankfurt am Main
Germany
Telephone: +49 69 718
Facsimile: +49 69 718 4480
Attention: Dr. P. Koch
<PAGE>
The Agent
BHF BANK AKTIENGESELLSCHAFT, Head Office, Frankfurt am Main
By: /s/ GERD P. BIEDING /s/ MICHAEL FOCKING
Address for notice: Niederlassung Munchen
Max-Joseph-Strasse 6
80333 Munchen
Telephone: +49 89 55173 267
Facsimile: +49 89 55173 292
Attention: Jorg Salven
The Joint Arrangers
BARCLAYS CAPITAL
By: /s/ TIM TAYLOR
Address: 5 The North Colonnade
Canary Wharf
London E14 4BB
Telephone: +44 171 773 2358
Facsimile: +44 171 773 4894
Attention:
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: /s/ MARKUS KASCH /s/ ANDREAS THONHAUSER
Address: Turkenstrasse 16
80268 Munich
Germany
Telephone:
Facsimile: +49 89 2134 2639
Attention:
<PAGE>
BHF BANK AKTIENGESELLSCHAFT, Head Office, Frankfurt am Main
By: /s/ GERD P. BIEDING /s/ MICHAEL FOCKING
Address for notices: Niederlassung Munchen
Max-Joseph-Strasse
80333 Munchen
Telephone: +49 89 55173 267
Facsimile: +49 89 55173 292
Attention: Jorg Salven
The Co-Arrangers and the Banks
BARCLAYS BANK PLC
BY: /s/ TIM TAYLOR
ADDRESS: Bockenheimer Landstrasse 38-40
60323 Frankfurt am Main
Germany
Telephone: +49 69 7161 1862
Facsimile: +49 69 7161 1889
Attention: Rolf-Peter Ruoff/Diva Cortellini
DG BANK DEUTSCHE GENOSSENSCHAFTSBANK
By: /s/ MARKUS KASCH /s/ ANDREAS THONHAUSER
ADDRESS: Turkenstrasse 16
80268 Munich
Germany
Telephone:
Facsimile: +49 89 2134 2639
Attention:
<PAGE>
BHF BANK AKTIENGESELLSCHAFT, Head Office, Frankfurt am Main
By: /s/ GERD P. BIEDING /s/ MICHAEL FOCKING
Address for notices: Niederlassung Munchen
Max-Joseph-Strabe
80333 Munchen
Telephone: +49 89 55173 267
Facsimile: +49 89 55173 292
Attention: Jorg Salven
CREDITANSTALT AG
By: /s/ BETTINA STEINHAUER
Address: Creditanstalt AG
Wasagasse 2
A-1090 Vienna
Telephone:
Facsimile: +431 310 0554
Attention: Mr. Martin Benger
NORDDEUTSCHE HYPOTHEKEN-UND WECHSELBANK AG
By: /s/ BETTINA STEINHAUER
Address: Postflach 10
Domstrasse 9
20033 Hamburg
Germany
Telephone:
Facsimile: +49 40 324 122
Attention: Mr. Klaus Bruning
<PAGE>
OLDENBURGISCHE LANDESBANK AG
By: /s/ BETTINA STEINHAUER
Address: Postflach 26
26016 Oldenburg
Germany
Telephone:
Facsimile: +49 441 210 362
Attention: Mr. Heinrich Rawe
DEUTSCHE BANK AKTIENGESELLSCHAFT, Munich Branch
By: /s/ BETTINA STEINHAUER
Address: Riesstrasse 25
80992 Munich
Germany
Telephone:
Facsimile: +49 89 2390 2033
Attention: Mr. Manfred Graeff