STANDARD TERMS AND CONDITIONS OF:
THE FSE GROUP
INCORPORATED INTO EACH FACILITY LETTER
A copy of the Standard Terms and Conditions can be provided upon request.
The Facility will be available to the Borrower provided that (in the reasonable opinion of the Lender):
1.1.1 the Conditions Precedent have been met in full;
1.1.3 the representations and warranties referred to in Paragraph 6 are true on the First Drawdown Date and will remain so after provision of the Loan to the Borrower has occurred; and
The Borrower may only borrow under the Facility provided i) the Facility Letter is signed by the Borrower within 1 month of the Commencement Date and ii) the First Drawdown Date is within 2 months of the Commencement Date, otherwise and after which the Facility will cease to be available.
The Interest Rate applicable is as set out in Clause 2.6 of the Facility Letter. Interest will accrue on the Loan on the outstanding balance of the principal amount of the Loan from time to time at the Interest Rate and shall be payable in arrears on the Interest Payment Dates (except where other payment of Interest is expressly provided for under this letter).
Interest shall be paid by direct debit from the account of the Borrower, details of which are set out in Paragraph 4 (Method of Payment and Late Payments) below.
2.3 Arrangement Fee and other Expenses:
The Borrower will pay to the Lender an Arrangement Fee and the expenses, fees and charges detailed below, which are payable on acceptance of this letter. In the event that this Loan offer is accepted, and the Loan is not drawn, the Arrangement Fee and the Legal Fees will be payable immediately on demand from the Lender.
An Arrangement Fee (as set out in Clause 2.7 of the Facility Letter) is payable in full on acceptance of this offer letter although for administrative purposes it may be taken at time of the First Drawdown of the Loan.
A fixed fee (as set out in Clause 2.8 of the Facility Letter) contribution towards the Lender's legal costs.
A fixed fee (as set out in Clause 2.9 of the Facility Letter) is payable annually on the anniversary of the First Drawdown and on the last Business Day before each anniversary of the First Drawdown Date.
A fixed fee (as set out in Clause 2.10 of the Facility Letter) is payable on the Final Capital Repayment Date or if earlier, the date at which the Loan balance is reduced to zero.
To the extent that repayment occurs earlier than the dates outlined in the Agreement, the amount of such early repayment shall be deemed a prepayment ("Prepayment"). In such event, the fee charged by the Lender to the Borrower will be 10.0% of the Prepayment amount if such Prepayment occurs prior to the 2nd anniversary of the First Drawdown and 2.5% of the Prepayment Amount if such Prepayment occurs at any time thereafter, subject in each case to the Prepayment Minimum charge as set out in Clause 2.11 of the Facility Letter.
All amounts due under the Facility Letter, including repayment of the Loan, will be secured by the Security Documents.
The security will consist of all Security Documents as set out in Clause 3 of the Facility Letter but it is acknowledged that Permitted Security shall include any liens that arise solely by operation of law in the ordinary course of business and any charges already subsisting on the Register of Charges at Companies House relating to the Borrower at the date of the Facility Letter, subject at all times to the entering into of appropriate priority documentation acceptable to the Lender, if required by the Lender or any prior chargeholder.
The Lender may incur expenses in protecting, preserving or enforcing its rights under any Security Document. The Borrower will reimburse the Lender on demand and on an indemnity basis for the amount of these expenses provided that they are properly incurred.
4. METHOD OF PAYMENT AND LATE PAYMENTS
4.1 Method and timing of payments:
Payments will be taken by direct debit on the due date and the Borrower must ensure that cleared and immediately available funds are in the relevant account and are adequate to meet the payments which are due.
If any payments are not made on or before a due date, the Lender reserves the right on each such occasion to charge a £250 default fee, in addition and without prejudice to all of the Lender's other rights and remedies under this Agreement.
Any payment to the Borrower will be made to the account of the Borrower details of which will be provided by the Borrower to the Lender prior to First Drawdown.
The Borrower will execute and maintain a direct debit in favour of the Lender at all times. The Lender will provide 30 days notice in the event of a change of banking arrangements.
Any payment to the Lender will be made by direct debit from the Borrower's account to the Payment Account.
The Borrower may give notice that it will repay the whole or part of the Loan on any day prior to the Final Capital Repayment Date. This notice must state:
5.1.2 the amount to be prepaid which will be equal to:
5.1.2.1 the relevant instalment amounts indicated in Clause 2.4 of the Facility Letter applied in inverse order to the order in which the repayments are due to be made; or
5.1.2.2 the balance of the Loan.
5.1.3 No amount prepaid may be redrawn.
If a Change of Ownership is proposed or occurs, then the Lender may give notice to the Borrower in which case the Loan will become immediately due and payable. On a Sale or Listing, the Loan will automatically become due and payable.
The Borrower is responsible for assessing its position under State Aid Rules. If receipt of this Facility is in breach of any State Aid Rules or if repayment of all or part of the Facility is required to comply with any State Aid Rules or by the European Commission, the Lender may require the repayment of the Facility (partially or in full) and the Borrower will repay the same immediately upon demand, together with any interest required under State Aid Rules.
On the date of any prepayment under this paragraph, the Borrower agrees to pay the Lender a fee as set out in the Facility Letter.
The Borrower shall pay accrued interest at the Interest Rate on any prepaid amount on making the prepayment in question.
The Borrower may not prepay the Loan early except in the manner permitted or required by the Agreement.
The Borrower or the Lender may change its receiving account by giving not less than 10 Business Days' prior written notice to the other and the Borrower will set up a new direct debit accordingly, to ensure that all payments are made as they fall due.
If a payment would be due on a non-Business Day, the payment obligation will be deferred until the next Business Day.
All payments by the Borrower will be made in full and without set off or counterclaim. No payment will be made net of a withholding or deduction unless this is required by law. In this event Paragraph 16 will apply.
If the Borrower owes money to the Lender under this letter, the Lender may set off this obligation against any money owed by the Lender to the Borrower. This applies even where amounts due to the Lender are not immediately due and payable if there is an outstanding Termination Event or Potential Termination Event.
5.11 Indemnity on late payment:
If the Borrower fails to make a payment on the due date, the Borrower agrees to reimburse the Lender on demand for the losses and expenses the Lender incurs, or will incur, as a result.
6. REPRESENTATIONS AND WARRANTIES
6.1 At the date of the Facility Letter, the Borrower represents and warrants for itself and for each other member of the Group that:
The Borrower is a company duly incorporated with limited liability and is incorporated in England and Wales;
The Borrower has power to conduct its business as it is now being conducted and also has power to sign and deliver each Security Document to which it is party and to exercise its rights and perform its obligations under those documents;
The signature and delivery of each Security Document to which it is party by the Borrower and each other member of the Group and the exercise of their respective rights and the performance of their obligations under those documents have been duly authorised by all necessary legislative, executive, administrative, governmental and corporation action;
The Borrower and each other member of the Group has power to own its assets and charge its right and interest in those assets under the terms of the Security Documents to which it is party. Neither the Borrower nor any member of the Group has any Debt or has granted any security over its assets (other than any Permitted Security);
The Security Documents have each been duly signed and delivered by the relevant members of the Group. Each Group Company's obligations described in those documents are their valid and binding obligations in accordance with their terms;
6.1.6 Legality and contraventions:
The signature and delivery of each Security Document to which it is party by the Borrower and each other member of the Group, the creation of security under those documents and the exercise of their rights and performance of their obligations under those documents:
6.1.6.2 do not require any approval, filing, registration or exemption; and
The borrowing of the full amount available under the Facility Letter will not cause any limitation on the powers to borrow of the Borrower or its directors to be exceeded;
All factual information supplied to the Lender in connection with the Security Document is true, complete and not misleading. All opinions contained in the information supplied to the Lender are reasonably held and are based on proper enquiry. The Borrower is not aware of any material facts or circumstances which have not been disclosed to the Lender which might, if disclosed, adversely affect the decision of a person considering whether or not to lend to the Borrower;
The Financial Statements most recently supplied to the Lender have been prepared in accordance with generally accepted accounting principles and:
No Termination Event or Potential Termination Event has occurred and remains unremedied;
6.1.11 Intellectual property rights:
The Borrower owns or is duly licensed to use all intellectual property rights used in its business and use of them does not breach or otherwise infringe any third party rights;
No stamp, registration or similar tax is payable, and no filing or registration is required, in connection with the execution, performance or enforcement of this letter;
The Borrower is not involved in any court, arbitration or other legal proceedings of any kind. The Borrower is not aware that any proceedings of this kind are being considered by any other person nor that any are likely to arise;
The Borrower has all appropriate insurance policies and these are in full force and effect. Nothing has occurred which could void any policy or make it unenforceable;
Any pension or similar fund offered by the Borrower to any of its current or former employees is a money purchase scheme which is not in deficit;
The Borrower is not in breach of any law, regulation, agreement or arrangement applicable to it or any of its assets, including relating to health and safety or the environment;
6.1.17 No Material Adverse Change:
Since the date of this letter there has been no Material Adverse Change.
In relation to any individual (including but not limited to a shareholder, director or other officer, (or in the case of a LLP, a member), employee, or any person giving a guarantee, indemnity, warranty or undertaking in respect of the Obligations under the Facility, the Borrower warrants that they have strictly complied, and will, until the termination of the Facility and the discharge of all Obligations, strictly comply with the provisions of Data Protection Laws and, in particular (but without limitation), that the Borrower has disclosed, and will disclose, to any such living individual that the Borrower may at any time pass to the Lender data which is held in respect of him (including Personal Data) for the purpose of carrying out the Borrower's Obligations and notified him of the manner and purposes for which the Lender may process Personal Data, and the Borrower shall keep a record of to whom they have notified, in what form and when notified and produce evidence to this effect to the Lender immediately on request.
6.1.19 Use of Funds
To the best of its knowledge, no funds invested by the Borrower or by its controlling entities are of illicit origin, including products of Money Laundering or linked to the Financing of Terrorism, and that to the extent permitted by law the Borrower will promptly inform the Lender if at any time it becomes aware of the illicit origin of any such funds.
All representations and warranties in Paragraph 6.1 will be deemed repeated by the Borrower on the date of First Drawdown and on each of the Repayment Dates. This repetition will be with reference to the facts on that day.
The Borrower for itself and for each other member of the Group undertakes that (except with the prior written approval of the Lender):
It will ensure that its obligations to the Lender are secured by the Security Documents.
7.1.2.2 The Borrower shall, annually or at the specific request of the Lender, supply to the Lender together with each set of Financial Statements delivered, a Compliance Certificate (in the form as set out in Schedule 5 of the Facility Letter), signed by a director of the Borrower.
7.1.3 Negative pledge:
It will not create or allow to exist any security, charges, liens or other encumbrances over any of its business, undertaking or assets. This sub-paragraph does not prohibit Permitted Security.
It will comply with all applicable laws and regulations and the terms of all permits, authorisations and licences. This requirement includes all laws, regulations, permits, authorisations and licences relating to health and safety or the environment.
There will be no Change of Ownership of the Borrower.
It will not amend its memorandum or articles of association.
The Borrower will only change its auditors to a firm of auditors considered suitable by the Lender;
This sub-paragraph does not prohibit sales of stock in the ordinary course of business.
It will not merge, cease or reduce its trade or make any material change in its business.
It will not incur or agree to incur any capital expenditure which exceeds 30% of the Forecast.
It will not offer any pension or similar fund to any employees except for a money purchase scheme and will ensure that any scheme is properly funded to the extent required by law (based on reasonable actuarial assumptions).
It will not operate any bank accounts other than that evidenced as part of the application for this facility.
It will not acquire any interest or hold any shares in any partnership, business, company or other trading entity.
It will maintain all its rights in Intellectual Property (including names, trademarks, patents and any other intellectual property rights) and will carry out any enforcement, registration or other activities which may be necessary or desirable to protect its Intellectual Property rights worldwide.
It will maintain insurance in respect of its business and all its assets with a reputable insurer. It will not default under any policy or do or omit to do anything which could void the policies or make them unenforceable. The level of insurance cover will be for the amounts and in respect of all the risks which would normally be insured against by companies in similar businesses. The insurance will include cover for fire, loss of profit, employers' liability, public and product liability and professional indemnity cover.
It will not permit the redemption of any of its share capital.
7.1.17 Notification of Litigation:
The Borrower will notify the Lender as soon as it becomes aware that any proceedings have been or are being considered against it or any Group Company by any other person (other than in relation to routine debt collection). For the avoidance of doubt this includes any insolvency advice. Such consultation will allow the Lender to review the Facility and is a Potential Termination Event.
If the Lender requests, it will deliver written evidence to the Lender that the monies provided under the Facility have been applied towards the Purpose.
Except with the prior written consent of the Lender, the Borrower shall not:
The obligations of the Borrower under this paragraph will cease to have effect when the Facility has ceased to be available and there are no amounts outstanding under the Facility.
8. FINANCIAL COVENANTS AND OTHER SPECIFIC CONDITIONS
8.1 Conditions Precedent: The Lender to receive and be satisfied with the items specified in Part 1 of Schedule 1 of the Facility Letter.
8.2 Conditions Subsequent: The Lender to receive and be satisfied with the items specified in Part 2 of Schedule 1 of the Facility Letter.
8.3 Financial Covenants: The Borrower shall at all times comply with the financial covenants specified in Schedule 2 of the Facility Letter (as applicable).
8.4 Testing Covenants: The Borrower agrees that any covenants set out in Paragraph 8.3 above will be tested monthly (unless otherwise stated in Schedule 2 of the Facility Letter) in each case by reference to the most recent Financial Statements. The covenants will first be tested as at the first month end following First Drawdown.
9. FINANCIAL AND OTHER INFORMATION
The Borrower will deliver to the Lender in respect of itself and each other member of the Group if incorporated and on a consolidated basis:
9.1.1 Monthly Management Accounts
Information outlined in Paragraph 9, detailing actual versus forecast performance with commentary where appropriate, within 28 days of the end of each month. If the Borrower fails to deliver the Management Accounts to the Lender in the period allowed then the Lender reserves the right to increase the Interest Rate by up to 2% per annum until the position is remedied. Such increased fee is to cover the additional administrative work the Lender will be required to undertake to obtain such information. Accordingly, the Borrower acknowledges that such fees represent a genuine pre-estimate of the loss the Lender is likely to sustain in consequence of the Borrower not providing this information in a timely manner. Alternatively, the Lender may treat the failure to provide them with such Management Accounts in a timely manner as a Termination Event in accordance with Paragraph 15.
The Borrower is strongly encouraged to provide the Lender with its VAT Returns and Management Accounts in good time and no later than 28 days post their respective due dates
Accountant prepared annual accounts for each Group Company within 120 days of the financial year-end to which they relate, accompanied by a certificate from the directors, certifying compliance with the covenant set out in this Paragraph 9 as applicable.
The Lender may request the Borrower to deliver to the Lender information about the Borrower or the Group, its assets and business (including any financial or statistical information). The Borrower will promptly deliver the information requested to the Lender. The Lender may provide information about the Borrower or the Group to the UK Department for Business Innovation and Skills as a condition of its government funding, or to Barclays Bank plc, and the Borrower consents in each case to this disclosure by the Lender.
The Borrower will, and will procure that each Group Company will, obtain or permit the Lender to obtain valuations of any of its assets which the Lender requests. This will be at the expense of the Borrower unless the relevant assets have been valued more recently than 3 years ago and neither a Termination Event nor a Potential Termination Event has occurred, in which case it will be at the Lender's expense.
10. CONTENT OF FINANCIAL AND OTHER STATEMENTS:
The Borrower will ensure that the Financial Statements include the following information:
10.1 detailed profit and loss account and balance sheet;
10.3 a monthly statement confirming that VAT, PAYE & NICs payments are up to date;
10.4 if requested by the Lender, monthly rolling consolidated cash flow Forecast for the Group and the Borrower with details of the assumptions made for periods of 3-6 months forward;
10.6.2 any additional private sector funding obtained by the Borrower or the Group;
in each case to extent that such job creation or job safeguarding or private sector funding has been facilitated or enabled via the support provided by the Lender, which for the avoidance of doubt includes this Facility.
If requested by the Lender, the Borrower will deliver to the Lender Forecasts in a form acceptable to the Lender in respect of itself and depicting the overall Group to include a full year cash-flow, Profit & Loss and Balance Sheet to be received no later than the end of the final month of the preceding financial year of the Borrower.
The Borrower will deliver a copy of its VAT Return within 28 days after the end of each quarter.
It is intended that quarterly reviews will be undertaken by the Lender for the next year and half yearly thereafter. However, the Lender is under no obligation to conduct reviews and conversely, the Borrower consents to more frequent reviews if required by the Lender.
14. WITHHOLDINGS AND DEDUCTIONS
14.1 Withholdings and deductions:
This paragraph applies if the Borrower is required by law to make a payment under the Facility Letter net of a withholding or deduction.
The Borrower agrees to notify the Lender if it becomes aware that this sub-paragraph applies.
The Borrower agrees to increase the amount of any payment which is subject to a withholding or deduction. As a result of this increase the Lender will be entitled to receive the same amount it would have received if there had been no withholding or deduction.
The Borrower will pay to the appropriate authority all amounts withheld or deducted. If a receipt or other evidence of payment can be issued, the Borrower agrees to deliver this to the Lender as soon as practicable.
15. DEFAULT AND EARLY TERMINATION
Each of the following is a Termination Event:
The Borrower fails to pay an amount due under the Agreement or any Group Company fails to pay an amount due under any Security Document or a direct debit cannot be drawn by the Lender on any due date for payment or a direct debit mandate is cancelled for any reason.
The Borrower fails to comply with any of the undertakings including the Conditions Subsequent, the covenants as set out in the Standard Conditions including but not limited to Paragraphs 8 (Financial Covenants), 7 (General Undertakings) or 9 (Financial and Other Information) or the Borrower or any other Group Company fails to comply with any other obligations under any Security Document, the Facility Letter or the Standard Conditions and the failure is not remedied within 5 Business Days.
15.1.3 Incorrect representations and warranties:
Any representation or warranty made, or deemed repeated, in Paragraph 6 (Representations and Warranties) or in any document delivered by the Borrower in connection with any Security Document or this letter is incorrect, untrue or misleading when made or deemed repeated.
Any Debt of any member of the Group:
15.1.4.1 is not paid or repaid when due or within any applicable grace period; or
15.1.4.2 becomes capable of being declared due and payable before its stated date of payment.
15.1.5 Material Adverse Change:
The occurrence of a Material Adverse Change.
15.1.6 Insolvency and reorganisation:
Any procedure commenced with a view to the winding-up or re-organisation of the Borrower or any other member of the Group, or with a view to the appointment of an administrator or receiver. This procedure may be a court procedure or out of court procedure or any other step which under applicable law is a possible means of achieving any of those results. For the avoidance of doubt this shall include (but not be limited to) if any step is taken (including a letter inviting the Lender to appoint administrators) or notice is filed or a petition is presented or an order made or a resolution passed or analogous proceedings are taken for appointing an administrator or administrative receiver or receiver of or winding up of the Borrower or if a notice is issued convening a meeting for the purpose of passing any such resolution (save for the purpose of and followed within four months by an amalgamation or reconstruction not involving or arising out of insolvency and on terms previously approved in writing by the Lender) or of complying with Section 656 of the Companies Act 2006 or a members meeting (or written resolution) being proposed by the board of directors of the Borrower for the purpose of passing a resolution to place the Borrower or any member of the Group into voluntary liquidation;
15.1.7 Attachment or distress:
Any assets which are referred to in any Debenture or Chattel Mortgage are subject to attachment, sequestration, execution or any similar process. This shall include but not be limited to if an encumbrancer takes possession or exercises or attempts to exercise any power of sale or otherwise enforces its security or a receiver is appointed of the whole or any part of the undertaking property assets revenues or rights of the Borrower or if any Security Interest now or hereafter created by the Borrower becomes enforceable;
15.1.8 Inability to pay debts:
Any Group Company is unable to pay its debts as they fall due or it makes a statement that it is likely to become unable to pay its debts in order to access a moratorium. Alternatively, the value of its assets is less than the amount of its liabilities (taking into account its contingent and prospective liabilities) or the relevant Group Company admits its inability to pay its debts as and when they fall due or seeks a composition or arrangement with its creditors or any class of them. If any judgment or order made against the Borrower is not complied with within seven days or if an execution distress sequestration or other process is levied or enforced upon or sued out against any part of the undertaking, property, assets, revenues or rights of the Borrower;
15.1.9 Unlawfulness or repudiation:
Either:
Any moratorium on the payment of Debt is declared or any Group Company ceases generally to pay Debt(s) as they fall due or if the Borrower agrees to declare a moratorium with respect to all or any class of its debts or is deemed to be insolvent or unable to pay its debts as they fall due within the meaning of section 123 of the Insolvency Act 1986 when they fall due or if a notice is issued convening a meeting of, or the Borrower proposes or enters into any composition or arrangement with, the Borrower's creditors generally or any class of its creditors and/or a Monitor is appointed;
If the Borrower without the prior consent in writing of the Lender ceases or threatens to cease to carry on its business or any material part thereof;
If any material part of the assets or revenues of the Borrower are nationalised compulsorily acquired seized or appropriated or if any notice served upon the Borrower with a view to forfeiture pursuant to Section 146 of the Law of Property Act 1925 is not complied with within the period specified;
If any licence authorisation consent or registration at any time necessary or desirable to enable the Borrower to comply with its obligations to the Lender or to carry on its business in the normal course shall be revoked withheld or materially modified or shall fail to be granted or perfected or shall cease to remain in full force and effect;
15.1.14 Change of Control:
If control (as defined in Section 435(10) of the Insolvency Act 1986) or the power to take control of the Borrower is acquired by any person or company or group of associates (as defined in such section) not having control of the Borrower at the date hereof (unless with the prior consent in writing of the Lender);
15.1.15 Validity of any Security Document:
Any of the rights given to the Lender in any Security Document cease to be in full force and effect, or capable of being exercised, in accordance with their terms or becomes in jeopardy, invalid or unenforceable;
15.2 Notification of a Termination Event:
The Borrower will notify the Lender immediately of the occurrence of a Termination Event or Potential Termination Event.
If a Termination Event occurs, the Lender may by notice to the Borrower:
15.3.1 cancel the Facility; or
15.3.2 demand immediate repayment of the Loan,
or both. In the case of cancellation, the Lender will be under no further obligation to comply with a Drawdown Notice. In the case of a demand for repayment, the Borrower will pay the Lender in accordance with the terms of such demand.
If a Termination Event occurs, the Borrower will reimburse the Lender for the losses and expenses the Lender incurs, or will incur, as a result.
Any notice, demand, drawdown request or other communication (a "Notice") given or made under or in connection with the matters contemplated by this Agreement to the Borrower by the Lender shall be in writing and shall be delivered personally or sent by email or prepaid first class and shall be validly served or made:
16.1.1 if handed to any of the Borrower's officers; or
16.1.2 if delivered or sent by first class prepaid post to the address stated in Clause 2.1 of the Facility Letter or to any address at which the Borrower carries on business or to the Borrower's registered office; or
16.2 Notice to the Lender:
Any notice which you have to or may give to us shall be validly given if sent to us at the address below by prepaid first-class post and it will be effective on its receipt by the Lender:
For the attention of:
The Chief Executive
FSE Group
First Floor, Linea House
Harvest Crescent
Fleet, Hampshire
GU51 2UZ
Any Notice shall be deemed to have been duly given or made as follows:
16.3.1 if personally delivered, at the time of delivery;
16.3.2 if sent by first class post, two Business Days after the date of posting; and
16.3.3 if sent by email, at the time of transmission,
provided that if, in accordance with the above provisions, any Notice would otherwise be deemed to be given or made outside 9.00am – 5.00pm on a Business Day such Notice shall be deemed to be given or made at 9.00am on the next Business Day.
A party may notify the other party to the Facility Letter of a change to its name, relevant addressee, address, email address for the purposes of this paragraph, provided that such notification shall only be effective on:
16.4.1 the date specified in the notification as the date on which the change is to take place; or
17.12 For further information about how the Lender uses Personal Data the Lender's privacy policy may be viewed at https://www.thefsegroup.com/content/privacy-policy
The Borrower may not assign or otherwise transfer all or any of its rights, obligations or benefits under this letter.
The Lender may assign or transfer all or any of its rights, obligations or benefits under this letter in whole or in part.
18.1.2 in the case of multiple tranche loans, the Lender may assign or transfer by novation all or any of its rights, obligations or benefits under any Finance Document to the New Lender on the terms set out in Schedule 4 of the Facility Letter.
18.2 Disclosure of information:
The Lender may disclose to an assignee or other transferee, or to a proposed assignee or transferee, any information received by the Lender under or in connection with this Agreement and any of the Security Documents.
If any of the Key Individuals or Personal Guarantor(s):
19.2 Is disqualified from being a director;
19.3 Is unable to pay any of his/her debts as they fall due;
19.4 Has a petition for a bankruptcy order presented or a bankruptcy order is made against him/her;
19.5 Is charged with an offence involving dishonesty;
Then this will be treated as a Termination Event in accordance with Paragraph 15. For other Termination Events, see 'Default and Early Termination' at Paragraph 15.
If the Security includes a Personal Guarantee, any of the Personal Guarantor(s):
20.2 Is disqualified from being a director;
20.3 Is unable to pay any of his/her debts as they fall due;
20.4 Has a petition for a bankruptcy order presented or a bankruptcy order is made against him/her;
20.5 Is charged with an offence involving dishonesty;
Then this may be treated by the Lender at its sole discretion as reason for Termination of the Agreement in accordance with Paragraph 15. For other reasons for 'Termination', see 'Default and Early Termination' at Paragraph 15.
21.1 The Borrower will commence repayment of this Facility by way of equal monthly instalments commencing on the Capital Repayment Start Date as set out in Clause 2.4(i) of the Facility Letter and thereafter for the number of months as set out in the Capital Repayment Period (Clause 2.4(ii) of the Facility Letter), in a sum equal to the Monthly Capital Repayment Amount. The final repayment will be on the Final Capital Repayment Date 2.4(iii) of the Facility Letter and will be in a sum equal to the Final Capital Repayment Amount.
21.2 If the Facility Amount is being paid in Tranches as set out in Clause 2.2 of the Facility Letter then at the time the Second Tranche (or Subsequent Tranche as applicable) is paid to the Borrower then the Monthly Capital Repayment Amounts will be re-calculated and if requested by the Borrower, a letter of variation stating the revised Monthly Repayment Amount (and if applicable a revised Final Capital Repayment Amount) will be sent to the Borrower.
21.3 If a Capital Repayment Holiday is applicable to the Facility it is set out in Clause 2.4(vi) of the Facility Letter.
21.4 No amount repaid may be redrawn.
In the event that the Borrower shall prepay any principal amount due on the Loan any such prepayment shall be applied in inverse order to the order that repayments are made. For the sake of clarity, the repayment on the Final Capital Repayment Date therefore would be eliminated first with the preceding month etc. following until the prepayment amount is fully applied.
If the Lender does not exercise a right or power when it is able to do so, this will not prevent it exercising that right or power. When it does exercise a right or power, it may do so again in the same or a different manner. The Lender's rights and remedies under the Agreement are in addition to any other rights and remedies it may have. Those other rights and remedies are not affected by this letter.
The Facility Letter may be executed in 2 or more counterparts, each of which shall constitute an original but which, when taken together, shall constitute one instrument.
A person who is not a party to the Agreement will have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms. This paragraph does not affect any right or remedy of any person which exists or is available other than under that Act.
A waiver or amendment of a term or condition of this letter will only be effective if it is in writing and signed by the party or parties affected by such waiver or amendment. The Borrower will reimburse the Lender for the expenses the Lender incurs as a result of any request made by the Borrower to waive or amend a term of this letter or any of the Security Documents.
If any provision of this Agreement is held to be invalid or unenforceable no other provision will be affected and all such other provisions will remain in full force and effect.
This Agreement will be governed by and construed in accordance with English law and the Borrower submits to the non-exclusive jurisdiction of the English courts.
24. DEFINITIONS AND INTERPRETATIONS
In this Agreement, unless otherwise specified, references to:
a "Clause" or "Schedule" are to a clause and schedule to the Facility Letter, references to "Paragraphs" are to paragraphs of the Standard Conditions a schedule and references to "this letter" means the Facility Letter including the schedules;
a document in "agreed form" is a reference to that document in the form approved by each party and initialled by, or on behalf of, them for the purpose of identification;
a "party" means a party to the Facility Letter and, in the case of the Lender, includes its assignees and the successors in title to substantially the whole of its undertaking;
other documents include any amendments made to those documents;
statutory provisions refer to those provisions as amended, extended or re-enacted and include any statutory replacement;
the "Lender" includes its successors and assigns;
"includes" and "including" means including without limitation;
"costs", "fees" or "expenses" exclude any value added tax which will be payable or applicable.
Headings: All headings and titles are inserted for convenience only and shall not affect the interpretation of this letter.
Corporate terms: The terms "holding company", "subsidiary" and "subsidiary undertaking" have the same meanings as in the Companies Act 2006.
Schedules included: The schedules form part of the operative provisions of the Facility Letter and references to the Facility Letter shall, unless the context otherwise requires, include references to the schedules.
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DEFINITION |
MEANS |
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"Anti-Bribery" and "Anti Bribery Laws" |
Any and all statutes, statutory instruments, bye-laws, orders, directives, treaties, decrees and laws (including any common law, judgment, demand, order or decision of any court, regulator or tribunal) which relate to anti-bribery and/or anti-corruption, including the Bribery Act 2010; |
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"Asset Statement" |
a statement substantially in the form set out in Schedule 6 of the Facility Letter; |
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"Assignment Agreement" |
an agreement in the form agreed between the Lender and the relevant New Lender; (as set out in Schedule 4 of the Facility Letter) |
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"Base Rate" |
the Barclays Bank Plc base rate; |
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"Business Day" |
a weekday on which banks are open for business in the City of London; |
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"Capital Repayment Start Date |
the date upon which the Borrower shall start to repay by instalments the principal amount of the Loan to the Lender, details of which are set out in Clause 2.4(i) of the Facility Letter |
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"Capital Repayment Period" |
the period over which the Loan is repaid by the Borrower to the Lender as set out at Clause 2.4 (ii) of the Facility Letter; |
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"Change of Ownership" |
a disposal of substantially all of the Borrower's or the Group's assets, or any change in the shareholding of the Borrower which results in 25% or more of the Borrower's share capital being held by one person or a group acting in concert; |
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"Chattel Mortgage" |
any chattel mortgage in an agreed form over those assets of the Borrower set out therein granted by the Borrower in favour of the Lender on or before the date of this Facility Letter; |
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"Compliance Certificate" |
a certificate substantially in the form set out in Schedule 5 of the Facility Letter; |
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"Conditions Precedent" |
the conditions to be met by the Borrower set out in Part 1 of Schedule 1 of the Facility Letter; |
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"Conditions Subsequent" |
the conditions to be met by the Borrower set out in Part 2 of Schedule 1 of the Facility Letter; |
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"Corporate Guarantor" |
any corporate entity which has granted a corporate guarantee in favour of the Lender; |
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"Criminal Offence" |
fraud, corruption, coercion, collusion, obstruction, money laundering or the financing of terrorism; |
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"Data Privacy Manager" |
the person appointed by the Lender to manage Personal Data who can be contacted at privacy@thefsegroup.com ; |
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"Data Privacy Notice" |
a notice of the manner in which the Lender shall process Personal Data in the form supplied by the Lender to the Borrower from time to time; |
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"Data Protection Laws" |
all laws (whether of the UK or any jurisdiction) relating to the use, protection and privacy of Personal Data (including without limitation, the privacy of electronic communications) which are from time to time applicable to the Borrower or its business and/or any director or employee and including to extent applicable, statutes, laws, secondary legislation and regulations pertaining to privacy, confidentiality and/or data protection of Personal Data or corporate data, the Data Protection Act 2018, the General Data Protection Regulation (Regulation (EU) 2016/679), the Privacy and Electronic Communications (EC Directive) Regulations 2003 (SI 2003/2426), the Regulation of Investigatory Powers Act 2000 and the Telecommunications (Lawful Business Practice) (Interception of Communications) Regulations 2000 (SI 2000/2699) and any relevant national laws implementing Directives 95/46/EC and 2002/58/EC; |
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"Debenture" |
any debenture in an agreed form granted by the Borrower and each of the other members of the Group in favour of the Lender on or before the date of the Facility Letter; |
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"Debt" |
a) all indebtedness for borrowed money; b) all indebtedness under any bond, debenture, note, redeemable preference share capital or similar c) instrument; d) any liability for acceptance or documentary credits or discounted instruments; e) all payment obligations under any debt purchase, factoring, finance lease, hire purchase or conditional sale or any similar arrangements; f) the liability under any derivative transaction in relation to any fluctuations in rate or price; g) all actual or contingent liabilities under any guarantee, bond security, indemnity or other agreement in respect of the Debt of any other person; h) any other actual or contingent liability undertaken for the purpose of raising finance; |
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"Drawdown (s)" |
means receipt by the Borrower of the First Tranche, Second Tranche or any Subsequent Tranches or Facility Amount in full (as applicable); |
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"Drawdown Date" |
a date which must be no earlier than 3 Business Days after the date the Lender receives the Drawdown Notice provided that if the Lender receives a Drawdown Notice on a day which is not a Business Day or after 10.00 am on a Business Day, it will be treated as having been received on the following Business Day; |
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"Drawdown Notice" |
a notice, delivered to the Lender by the Borrower, specifying the proposed Drawdown Date and setting out detailed instructions sufficient to enable the Lender to make payment of the Facility Amount (or if being paid in Tranches details of the particular Tranche) to the Borrower; |
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"Environment" |
the following insofar as they affect human health and social well-being : a) fauna & flora, b) any soil, climate, landscape, air (including air within natural or man-made structures above or below ground), water (including territorial, coastal and inland waters and ground water and water in drains & sewers) and land (including surface land, sub-surface land, seabed & riverbed under any water) c) cultural heritage and the built environment including occupational & community health & safety |
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"Environmental and Social Standard" |
a) Environmental Law and Social Law applicable to a Partnership, the Investor or the Borrower; b) Any UK Government Environmental and Social Standards as at the date of this Agreement |
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"Environmental Laws" |
UK and to extent applicable EU Law, including principles and standards, English Laws and regulations and applicable international treaties of which a principal objective is the preservation, protection or improvement of the Environment; |
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Equality Legislation |
all legislation relating to equality and diversity that is applicable in the UK, including but not limited to the Equality Act 2010 together with the guidance contained in The EHRC Employment Statutory Code of Practice |
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"EU Law" |
the acquis communautaire of the European Union as expressed through the Treaties of the European Union (including, without limitation, the EU Treaties), the regulations, directives, delegated acts, implementing acts, and the case law of the Court of Justice of the European Union |
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"EU Treaties" |
means the Treaty on the Functioning of the European Union and the Treaty on European Union |
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"Exit Fee" |
shall have the meaning ascribed to it in Paragraph 2.3.4; |
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"Facility" |
means the Loan granted by the Lender to the Borrower on the terms of the Agreement; |
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"Facility Amount" |
the amount of the Loan as set out at Clause 2.2 of the Facility Letter; |
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"FCA" |
the Financial Conduct Authority of 12 Endeavour Square, London, E20 1JN or any successor regulator; |
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"Final Capital Repayment Date" |
the last capital repayment date as set out in Clause 2.4(iii) of the Facility Letter; |
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"Finance Document" |
this Agreement, any Assignment Agreement, all compliance certificates issued hereunder, any Drawdown Notice, the Security Documents, any Guarantee, any Intercreditor Agreement, any amendment letters relating hereto any other deeds and documents entered into from time to time pursuant to this letter or in relation to this letter and any other document designated as a "Finance Document" by the Lender and the Borrower; |
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"Financial Statements" |
the accountant prepared annual accounts of the Borrower, the consolidated accountant prepared annual accounts for the Group (as applicable) and the Management Accounts referred to in the Facility Letter |
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"First Drawdown" |
the First Drawdown in relation to the First Tranche or Facility Amount in full as applicable; |
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"First Drawdown Date" |
the date of the First Drawdown; |
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"First Tranche" |
the first instalment of the Facility Amount as set out in Clause 2.2(i) of the Facility Letter; |
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"Forecasts" |
the forecasts for the forthcoming financial year which will set out projected annual trading and capital expenditure; |
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"Group" |
at any time, the Borrower and any subsidiary (which is not dormant), subsidiary undertaking and holding company (in each case) of the Borrower and "Group Company" shall be construed accordingly; |
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"Guarantee" |
a personal guarantee in an agreed form given by a director or other person (including any other Group Company under a composite guarantee or otherwise) in favour of the Lender on or before the date of this letter; |
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"Guarantor" |
A Corporate or Personal Guarantor who has granted a Guarantee to the Lender; |
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"HMRC" |
HM Revenue & Customs; |
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"ILO" |
International Labour Organisation |
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"ILO Standards" |
any treaty, convention or covenant of the ILO signed and ratified by or otherwise applicable and binding on the United Kingdom and the Core Labour Standards (as defined in the ILO Declaration on Fundamental Principles and Rights at Work) |
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"Intellectual Property Rights" |
means patents, registered designs, registered trademarks, domain name registrations (together with all applications for any such rights), unregistered design rights, trade name or unregistered trademarks, copyright, database rights, know-how and other rights in confidential information or trade secrets throughout the world including (without limitation) all such rights in design documents or software and any transferable licences and permissions to use such rights from time to time belonging to the Borrower including incoming telephone numbers, domain names, internet sites and email addresses of the Borrower; |
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"Inter-creditor Agreement" |
any inter-creditor agreement in an agreed form entered into by the Business and any other relevant Group Company with the Lender on or before the date of the Facility; |
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"Interest Rate" |
the margin quoted in the Facility Letter as varied from time to time plus the Base Rate; |
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"Interest Payment Dates" |
means on or around the last Business Day in each month and the Final Capital Repayment Date; |
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"Investor" |
the relevant investment fund for the Partnership; |
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"Key Individuals" |
those listed in 2.12 of the particulars of the Facility Letter; |
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"Listing" |
the admission of the Borrower or any Group Company of the Borrower to the official list of the UK Listing Authority or the admission of any part of the share capital of the Borrower or any Group Company of the Borrower to listing, trading or dealing on any of the Alternative Investment Market of the London Stock Exchange plc or any reverse takeover or admission to any other duly constituted market for the public trading of shares and other securities (and "Listed" shall be construed accordingly); |
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"Loan" |
a sum equal to the Facility Amount and at any time thereafter, the principal amount owing to the Lender on the terms of the Facility Letter; |
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"Management Accounts" |
the profit and loss account, balance sheet and other financial information for the relevant month or other period in question, details of which are set out in the Facility Letter; |
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"Material Adverse Change" |
anything which is likely, in the reasonable opinion of the Lender, to: a) materially and adversely affect the Borrower's or any other Group Company's ability to perform its obligations under any Security Document; b) give rise to a breach of the financial covenants set out in Paragraph 1 of the Standard Conditions, c) materially and adversely affect the financial position, business or assets of the Group as a whole; or d) materially and adversely affect the enforceability or validity of any Security Document; |
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"Money Laundering" |
a) the conversion or transfer of property, knowing that such property is derived from criminal activity or from an act of participation in such activity, for the purpose of concealing or disguising the illicit origin of the property or of assisting any person who is involved in the commission of such activity to evade the legal consequences of his or her action; b) the concealment or disguise of the true nature, source, location, disposition, movement, rights with respect to, or ownership of property, knowing that such property is derived from criminal activity or from an act of participation in such activity; c) the acquisition, possession or use of property, knowing, at the time of receipt, that such property was derived from criminal activity or from an act of participation in such activity; d) participation in, association to commit, attempts to commit and aiding, abetting, facilitating and counselling the commission of any of the actions mentioned in the foregoing points; or e) any breach of compliance with the Money Laundering Terrorist Financing and Transfer of Funds (Information on the Payer) Regulations 2017 (as amended) |
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"Monitor" |
means a licensed insolvency practitioner appointed as a 'Monitor' to independently oversee a company moratorium; |
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"Monitoring Fee" |
shall have the meaning ascribed to it in Paragraph 2.3.3; |
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"Monthly Capital Repayment Amount" |
the sum payable by the Borrower to the Lender on a monthly basis in repayment of the Loan as set out at Clause 2.4(iv) of the Facility Letter; |
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"New Lender" |
any new lender who has entered into an Assignment Agreement; |
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"NICs" |
National Insurance Contributions; |
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"Notice” |
has the meaning ascribed to it in Paragraph 17 of the Standard Conditions; |
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"Obligations" |
the Borrower's present and future monetary and other actual or contingent or prospective obligations incurred at any time to the Lender whether arising under the Facility or otherwise and whether arising in or by contract tort restitution or assignment; |
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"Obligor" |
the Borrower, any person who enters into a Guarantee, and any person who enters into a Security Document; |
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"Partnership" |
the relevant FSE C.I.C (company number 4463599) limited partnership, a list of which is available to view at https://www.thefsegroup.com/content/fse-cic-companies |
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"PAYE" |
a system under which employers deduct income tax and employee's NICs from the employee's gross salary and pay them (together with the employer's NICs) to HMRC; |
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"Permitted Security" |
shall have the meaning ascribed to it in Paragraph 3.2; |
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"Personal Data" |
has the meaning given to that term in the General Data Protection Regulation (EU) 2016/679 as it applies in England & Wales from time to time (including as retained, amended, extended or re-enacted on or after 11pm on 31 January 2020) plus any personal data (including sensitive personal data) that the Lender, or employees, agents or sub-contractors process on the Lender's behalf in connection with the Facility; |
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"Personal Guarantor" |
Any individual that has granted a personal guarantee in favour of the Lender; |
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"Potential Termination Event" |
an event or state of affairs which could become a Termination Event if a period of time passes, a notice is given or a determination is made; |
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"Prepayment Fee" |
shall have the meaning ascribed to it in Paragraph 2.3.5; |
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"Procured Contract" |
the purchase of equipment, securing of services and ordering of works in relation to the business of the Borrower |
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"Procurement Procedure" |
in relation to any Procured Contract: either the Guide to Procurement in force at the date of this Contract or any procedures applicable in the United Kingdom which are consistent with the Guide to Procurement |
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"Prohibited Conduct" |
any Financing of Terrorism, Money Laundering or Prohibited Practice |
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"Prohibited Practice" |
any: a) Coercive Practice, meaning the impairing or harming, or threatening to impair or harm, directly or indirectly, any party or the property of a party or to influence improperly the actions of a party; b) Collusive Practice, meaning an arrangement between two or more parties designed to achieve an improper purpose, including to influence improperly the actions of another party; c) Corrupt Practice, meaning the offering, giving, receiving or soliciting, directly or indirectly, of anything of value by a party to influence improperly the actions of another party; d) Fraudulent Practice, meaning any act or omission, including a misrepresentation, that knowingly or recklessly misleads, or attempts to mislead, a party in order to obtain a financial or other benefit or to avoid an obligation; or e) Obstructive Practice, meaning in relation to an investigation into a Coercive, Collusive, Corrupt or Fraudulent Practice in connection with the business of the Borrower, (a) deliberately destroying, falsifying, altering or concealing of evidence material to the investigation; and/or threatening, harassing or intimidating any party to prevent it from disclosing its knowledge of matters relevant to the investigation or from pursuing the investigation, or (b) acts intending to materially impede the exercise of the contractual rights of audit or access to information |
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"Purpose" |
shall have the meaning ascribed to it in Clause 2.5 of the Facility Letter; |
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"Repayment Dates" |
the date(s) falling at the end of the first month after the Capital Repayment Start Date and every month thereafter when the Monthly Capital Repayment Amounts are paid to the Lender; |
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"Sale" |
the sale to a third party or parties of (a) at least 90% of the equity share capital of the Borrower or (b) all or substantially all the assets and undertaking of the Borrower or the Group or any Group Company; |
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"Sanctioned Person" |
any individual or entity listed in one or more Sanction Lists |
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"Sanction Lists" |
a) any economic, financial or trade restrictive measures or arms embargoes issued by the UK Government; https://www.gov.uk/government/publications/the-uk-sanctions-list b) any economic, financial or trade restrictive measures or arms embargoes issued by the European Union pursuant to Chapter 2 of Title V of the Treaty on European Union as well as Article 215 of the Treaty on the Functioning of the European Union, as available on the official EU websites https://data.europa.eu/apps/eusanctionstracker/ and http://eeas.europa.eu/cfsp/sanctions/docs/measures_en.pdf, as amended and supplemented from time to time or on any successor page; or c) any economic, financial or trade restrictive measures or arms embargoes issued by the United Nations Security Council pursuant to Article 41 of the UN Charter as available on the official UN website http://www.un.org/sc/suborg/en/sanctions/un-sc-consolidated-list, as amended and supplemented from time to time or on any successor page. |
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"Second Tranche" |
the second instalment of the Facility Amount as set out in Clause 2.2(ii) of the Facility Letter; |
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"Security Documents" |
the Facility letter, together with the deeds and documents listed in the Facility Letter and any other documents given in favour of the Lender from time to time by or on behalf of the Borrower or any Group Company or Guarantor; |
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"Social Law" |
each of: a) any law applicable in the United Kingdom relating to Social Matters; b) any ILO Standards; and any United Nations treaty, convention or covenant on human rights signed and ratified by or otherwise applicable and binding on the United Kingdom |
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"Social Matters" |
all, or any of, the following: (i) labour and employment conditions; (ii) occupational health and safety; (iii) protection and empowerment of rights and interests of indigenous peoples, ethnic minorities and vulnerable groups; (iv) cultural heritage (tangible and intangible); (v) public health, safety and security; (vi) involuntary physical resettlement and/or economic displacement and loss of livelihood of persons; and (vii) public participation and stakeholder engagement |
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"Specific Conditions" |
those conditions set out in Paragraph 9; |
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"Subsequent Tranche" |
any additional instalments of the Facility Amount after the First Tranche and Second Tranche; |
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"Small Medium Enterprise" |
a "small medium enterprise" or "SME" within the meaning of small and medium-sized enterprises set out in European Commission Recommendation 96/280/EC as amended or replaced from time to time; |
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"State Aid Rules" (Subsidy Control) |
any state aid legislation or rules specified and in force by the UK Government as at the date of this Agreement and, to extent applicable, rules set out in Article 107 (1) of the Treaty on the Functioning of the European Union ("TFEU"); |
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"Tangible Net Worth" |
the aggregate of the paid up share capital of the Borrower plus any share premium or capital redemption reserves and retained earnings but excluding the costs and expenses relating to goodwill; |
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"Termination Event" |
any of the events set out in Paragraph 16 of the Standard Conditions. |
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The FSE Group |
Any of the subsidiary companies of FSE C.I.C (company number 4463599), a list of which is available to view at https://www.thefsegroup.com/content/fse-cic-companies |
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"Tranches" |
the First Tranche, Second Tranche and all other Subsequent Tranches as set out in Clause 2.2 of the Facility Letter and "Tranche" shall mean any one of them; |
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"VAT" |
value added tax as imposed by the VAT Act and any other tax of a similar fiscal nature whether imposed in the United Kingdom (instead of or in addition to value added tax) or elsewhere from time to time; |
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"VAT Act" |
The Value Added Tax Act 1994 as modified or re-enacted or both from time to time whether before or after the date of this Agreement and any subordinate legislation made under it from time to time whether before or after the date of this Agreement; |
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VAT Return" |
VAT return as required to be submitted periodically to HMRC. |