LOAN AGREEMENT
between
THE SCOTTISH MINISTERS
and
FERGUSON MARINE ENGINEERING LIMITED
link to page 11
For the purposes of the Legal Writings (Counterparts and Delivery) (Scotland) Act 2015, this
Loan Agreement is delivered on September 2017.
between
(ONE) THE SCOTTISH MINISTERS in terms of the Scotland Act 1998 Victoria Quay, Leith, Edinburgh
EH6 6QQ (the
Scottish Ministers); and
(TWO) FERGUSON MARINE ENGINEERING LIMITED (Registered Number SC485060) and having
its Registered Office at 3 Redwood Crescent, East Kilbride, Glasgow, G2 5PA (the
Borrower).
WHEREAS
It is intended that the Scottish Ministers will provide certain credit facilities to the Borrower on the
terms of this Agreement.
1.
DEFINITIONS AND INTERPRETATION
1.1
In this Agreement:
Acceptable Form means, in relation to any document, a form which is acceptable to the
Scottish Ministers;
Account means each bank account held by the Borrower from time to time;
Agreement means this agreement (including the Schedule);
Authorisation means an authorisation, consent, approval, resolution, licence, exemption,
filing, notarisation or registration;
Available Facility means: the sum of FIFTEEN MILLION POUNDS (£15,000,000) to the
extent not cancelled or reduced under this Agreement
Availability Period means the period from and including the date of this Agreement to and
including [Redacted]
Business Day means a day (other than a Saturday) on which banks are open for business in
Edinburgh;
Business Plan means the plan of the Group describing the Group’s proposed business
activities and objectives setting out the plan to deliver objectives as updated in accordance
with this Agreement;
Completion Financial Model means the version of the Financial Model; to be delivered in
terms of Part 1 of the Schedule and updated annually in accordance with Clause 10.1.4;
Dangerous Substances means any substances capable of causing harm to man or any other
living organism or damaging the environment;
Disposal means any sale, transfer or other form or disposal of any asset by the Group where
the value of the asset exceeds £100,000 per annum;
Due Diligence Reports means those reports as may be required by the Scottish Ministers in
relation to the operations and business of the Borrower;
Environmental Law means all laws, regulations, directives, codes of practice, circulars,
guidance notices and court decisions (whether in the UK or the European Union) concerning
the protection of human health or welfare or the environment or the conditions of the work
place or the generation, transportation, storage, treatment or disposal of Dangerous
Substances;
Event of Default means each of the events listed in Clause
12;
Facility means the term loan facility made available to the Borrower under this Agreement as
described in Clause 2;
Final Repayment Date means, subject to the terms of this Agreement, the date [Redacted]
Finance Documents means this Agreement and each other document agreed by Scottish
Ministers and the Borrower to be a Finance Document from time to time;
Financial Indebtedness means any indebtedness for or in respect of
:
a)
monies borrowed other than any borrowed pursuant to this Agreement;
b)
any amount raised by acceptance under any acceptance credit facility or
dematerialised equivalent;
c)
any amount raised pursuant to any note purchase facility or the issue of bonds, notes,
debentures, loan stock or any similar instrument;
d)
the amount of any liability in respect of any lease or hire purchase contract which
would, in accordance with GAAP, be treated as a finance or capital lease;
e)
receivables sold or discounted (other than any receivables to the extent they are sold
on a non-recourse basis);
f)
any amount raised under any other transaction (including any forward sale or
purchase agreement) of a type not referred to in any other paragraph of this definition
having the commercial effect of a borrowing;
g)
any derivative transaction entered into in connection with protection against or benefit
from fluctuation in any rate or price (and, when calculating the value of any derivative
transaction, only the mark to market value (or, if any actual amount is due as a result
of the termination or close-out of that derivative transaction, that amount) shall be
taken into account);
h)
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby
or documentary letter of credit or any other instrument issued by a bank or financial
institution; and
i)
the amount of any liability in respect of any guarantee or indemnity for any of the items
referred to in paragraphs a) to h) above;
Financial Information means the financial projections of the Group as set out in the Financial
Model;
Financial Model means the Completion Financial Model updated annually in accordance with
Clause 10.1.4 and when the Business Plan is updated;
Group means the Borrower and its Subsidiaries and any other person in respect of which the
Borrower is a Subsidiary;
Loan means each loan made or to be made under the Facility or the principal amount
outstanding for the time being together with all interest thereon and all costs, charges and
expenses due or to become due by the Borrower to the Scottish Ministers;
Material Adverse Effect means a material adverse effect on:
a)
the financial condition of the Borrower; or
b)
the ability of the Borrower to perform its obligations under the Finance Documents; or
c)
the rights or remedies of the Scottish Ministers under any of the Finance Documents.
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
2
link to page 4 link to page 4
Permitted Fees means fees payable by the Borrower in terms of (1) service level agreements
up to a maximum of [Redacted] and (2) secondment fees of up to [Redacted] details of which
are to be included in the monthly financial reports provided pursuant to and in accordance with
Clause 10.1.2;
Permitted Financial Indebtedness means (a) finance leases entered into with third parties
up to a value of [Redacted], (2) foreign exchange contracts in respect of current or anticipated
exposures for spend identified in the Business Plan, (3) any other financing arrangements
existing at the date of this Agreement [Redacted] and (4) facilities for the provision of contract
guarantees and related indemnities arising in the ordinary course of business;
Permitted Security Rights means any Security created by the Group, or any member of it,
with the prior written approval of the Scottish Ministers and all existing security arrangements
currently entered into by the Group or to be entered into pursuant to facilities for the provision
of contract guarantees and related indemnities arising in the ordinary course of business;
Potential Event of Default means an event which, with the giving of notice, the lapse of time
or the making of any determination would constitute an Event of Default provided such event
is incapable of being remedied prior to the expiry of such notice, lapse of time or
determination;
Projected Cashflows means the cashflow produced by the Borrower from time to time to the
Scottish Ministers as part of the Financial Model;
Repeating Representations means each of the representations set out in Clauses 9.1 to 9.9
inclusive and Clauses 9.12 to 9.18 inclusive.
Representations and Warranties means those representations and warranties made in
terms of Clause 9 of this Agreement;
Schedule means the schedule (comprising 3 Parts) annexed to this Agreement;
Security means a mortgage, charge, assignation in security, standard security, pledge, lien
(other than a lien arising solely by operation of law in the normal course of business, the
aggregate amount of which is not material), deposit, undertaking, guarantee, indemnity or any
other security agreement or arrangement having a similar effect;
Subsidiary means a subsidiary within the meaning of section 1159 of the Companies Act
2006;
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature
(including any penalty or interest payable in connection with any failure to pay or any delay in
paying any of the same);
Utilisation means a utilisation of the Facility;
Utilisation Date means the date of a Utilisation, being the date on which the relevant Loan is
to be made;
Utilisation Request means a notice substantially in the form set out in Part 2 of the Schedule;
VAT means:
a)
any tax imposed in compliance with the Council Directive of 28 November 2006 on the
common system of value added tax (EC Directive 2006/112); and
b)
any other tax of a similar nature, whether imposed in a member state of the European
Union in substitution for, or levied in addition to, such tax referred to in paragrap
h a)
above, or imposed elsewhere
in each case as applicable in Scotland
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
3
1.2
Words denoting the singular number only include the plural and vice versa and words denoting
any gender include all genders and words denoting persons include firms and corporations
and vice versa.
1.3
Headings are used in this Agreement for convenience only and shall not affect its construction
or interpretation.
1.4
In this Agreement, unless otherwise specified, references to Clauses and to the Schedule (and
Parts thereof) are to Clauses of and the Schedule (and Parts thereof) to this Agreement.
1.5
In this Agreement, a reference to any document or this Agreement means this Agreement or
that document as supplemented, amended or varied from time to time.
1.6
A reference in any way to any party hereto shall be construed so as to include its successors
in title, permitted assignees and permitted transferees to, or of, its rights and/or obligations
under the Finance Documents.
1.7
The expression
party means each or any of the parties from time to time to this Agreement,
so long as they remain a party.
1.8
Where the words
include(s) or
including are used they are illustrative and shall not limit the
scope of the words preceding them.
1.9
Any notice, instruction, notification, direction, request, consent or approval contemplated
herein shall be made or given in writing.
1.10
A "
person" includes any individual, firm, company, corporation, government, state or agency
of a state or any association, trust, joint venture, consortium or partnership or other entity
(whether or not having separate legal personality);
1.11
A "
regulation" includes any regulation, rule, official directive, request or guideline (whether or
not having the force of law) of any governmental, intergovernmental or supranational body,
agency, department or of any regulatory, self-regulatory or other authority or organisation; and
1.12
A provision of law is a reference to that provision as amended or re-enacted.
2.
AMOUNT, NATURE AND PURPOSE OF THE LOAN
2.1
Subject to the terms of this Agreement, the Scottish Ministers agree to make available to the
Borrower a term loan facility in an aggregate amount not exceeding the amount of the
Available Facility.
2.2
The Borrower must apply all amounts borrowed by it under the Facility for [Redacted] in
accordance with the Financial Model, payment of accounts payable outstanding at the date of
this agreement, and otherwise for its working capital purposes and general cash flow
requirements identified in the Business Plan and/or Financial Model.
3.
CONDITIONS OF UTILISATION
3.1
The Scottish Ministers will only be obliged to comply with their obligations under this Clause 3
in relation to any Utilisation if on or before the Utilisation Date for that Utilisation, the Scottish
Ministers have received all of the documents and other evidence listed in (i) Part A of Part 1 of
the Schedule in respect of the first Utilisation and, (ii) Part B of Part 1 of the Schedule in
respect of each subsequent Utilisation. The Scottish Ministers shall notify the Borrower
promptly upon being so satisfied.
3.2
If the conditions set out in this Agreement have been met, and subject to there being no
Potential Event of Default or Event of Default having occurred which is continuing unwaived
and to the Utilisation Request being made for a date within the Availability Period, the Scottish
Ministers shall advance the Loan on the Utilisation Date specified in a Utilisation Request.
3.3
The Borrower may drawdown the Facility in such number of tranches as it may determine not
exceeding in aggregate the Available Facility provided that:
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
4
3.3.1
no drawing of the Facilities shall be for an amount less than [Redacted]
3.3.2
no more than one [Redacted];
3.3.3
each Utilisation Request may only be made in accordance with details contained in
the Utilisation Request; and
3.3.4 the first Utilisation Request shall be for the amount of, or less than, [Redacted]
4.
CANCELLATION OF FACILITY
Any amount of the Facility which, at that time, is unutilised shall be immediately cancelled at
the end of the Availability Period.
5.
INTEREST
5.1
For so long as no Event of Default has occurred which is continuing unwaived, interest is
payable on the Loans (but subject to clauses 5.2 and 5.3) at a fixed rate of 15% per annum
annually in arrears on the anniversary of first utilisation of the Loans, on the date of any early
repayment, cancellation or prepayment and on the Final Repayment Date.
5.2
Following the occurrence of any Event of Default, interest is payable on any overdue sum at
the rate of [Redacted] per annum.
5.3
[Redacted].
6.
REPAYMENT AND PREPAYMENT
6.1
Subject to the terms of this Agreement the Loans shall be repaid in full on the Final
Repayment Date.
6.2
The Borrower may without [Redacted]
6.3
If it becomes unlawful for the Scottish Ministers to perform any of its obligations as
contemplated by this Agreement or to fund or maintain its participation in any Loan then upon
the Scottish Ministers notifying the Borrower, the Available Facility will be immediately
cancelled and the Borrower shall repay the Loans made to it on the last day of the calendar
month occurring after the Scottish Ministers have so notified the Borrower or, if earlier, the
date specified by the Scottish Ministers in a notice delivered to the Borrower (being no earlier
than the last day of any applicable grace period permitted by law).
6.4
Any notice of cancellation or prepayment given by any Party under this Clause 6 shall be
irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date
or dates upon which the relevant cancellation or prepayment is to be made and the amount of
that cancellation or prepayment. Any prepayment under this Agreement shall be made
together with accrued interest on the amount prepaid. The Borrower shall not repay or prepay
all or any part of the Loans or cancel all or any part of the Available Facility except at the times
and in the manner expressly provided for in this Agreement. No amount of the Available
Facility cancelled under this Agreement may be subsequently reinstated. Amounts repaid or
prepaid shall not be available for re-borrowing.
7.
FEES AND EXPENSES
7.1
Expenses
(a) All reasonable costs charges and expenses in each case properly incurred
[Redacted].
(b) All reasonable costs charges and expenses (internal and external) properly incurred
[Redacted].
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
5
(c) All reasonable costs charges and expenses properly incurred [Redacted].
(d) For the avoidance of doubt, fees and costs of [Redacted] as adviser to the Scottish
Ministers incurred in connection with work undertaken in relation to the Borrower up
to and including the date of drawdown hereunder shall not be for the account of the
Borrower.
7.2
Exit Fee
The Borrower shall pay to the Scottish Ministers an exit fee of [Redacted] on the Final
Repayment Date or on such other date on which the Facility is repaid in full.
8.
PAYMENTS AND TAX
8.1
All payments by the Borrower hereunder shall be made without set-off or counterclaim in same
day funds to such account of the Scottish Minsters in such place as the Scottish Ministers
shall notify to the Borrower from time to time.
8.2
All payments due to be made by the Borrower hereunder, whether of principal, interest or
otherwise, shall be made free and clear of and without deduction for any present or future
taxes (including, without limitation, VAT, stamp duty land tax, corporation tax, income tax,
capital gains tax and any penalty or interest payable in connection with any failure to pay or
any delay in paying the same), levy, duties or other charges or withholdings (“Tax”). If the
Borrower is compelled by law to deduct or withhold any Tax it will ensure that such deduction
or withholding does not exceed the minimum liability therefor and will promptly pay to the
Scottish Minsters such additional amount as is necessary to ensure that the net amount
received by the Scottish Minsters is equal to the amount payable by the Borrower had there
been no deduction or withholding.
8.3
The Borrower shall within 10 Business Days of demand pay to the Scottish Ministers an
amount equal to the loss, liability or cost which the Scottish Ministers determine will be or has
been (directly or indirectly) suffered for or on account of Tax by the Scottish Ministers in
respect of a Finance Document.
8.4
All amounts expressed to be payable under a Finance Document to the Scottish Ministers
which (in whole or in part) constitute the consideration for any supply for VAT purposes are
deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly if
VAT is or becomes chargeable on any supply made by the Scottish Ministers to the Borrower
under a Finance Document and the Scottish Ministers are required to account to the relevant
tax authority for the VAT, the Borrower shall pay to the Scottish Ministers (in addition to and at
the same time as paying any other consideration for such supply) an amount equal to the
amount of that VAT (and the Scottish Ministers must promptly provide an appropriate VAT
invoice to the Borrower).
9.
REPRESENTATIONS AND WARRANTIES
9.1
The Borrower makes each of the representations and warranties set out in this Clause 9.
9.2
The rights and remedies of the Scottish Ministers in respect of any misrepresentation or
breach of warranty on the part of the Borrower shall not be prejudiced or affected by any
investigation of the Borrower or any other person by or on behalf of the Scottish Ministers or
(without limitation) any other matter which but for this provision would or might prejudice or
affect any such rights or remedies.
9.3
The representations and warranties set out in this Clause 9 are deemed to be made by
reference to the facts and circumstances then existing on each day the representations and
warranties are given.
9.4
The Borrower is a limited liability body, duly incorporated and validly existing under the laws of
Scotland and has the power to own its assets and carry on its business as it is being
conducted.
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
6
9.5
The Borrower has the power (and all necessary corporate authorisations have been obtained)
to enter into the Finance Documents to which it is a party and to perform its obligations under
the Finance Documents and has complied, or will comply, with all material statutory and other
legal requirements relative to its business.
9.6
No limit on the powers of the Borrower will be exceeded as a result of the borrowing
contemplated by the Finance Documents.
9.7
On execution each of the Finance Documents:
9.7.1
will constitute legal, valid and binding obligations of the Borrower enforceable in
accordance with its terms;
9.7.2
does not and will not breach any law or regulation applicable to the Borrower;
9.7.3
does not and will not breach the constitution of the Borrower; and
9.7.4
does not and will not breach any agreement or instrument by which the Borrower is
bound, or constitute a default or termination event (however described) under any
such agreement or instrument or breach any judgment, decree, judicial order or
determination of any court or applicable national or supranational judicial or
governmental authority.
9.8
All Authorisations required or desirable to enable the Borrower lawfully to enter into, exercise
its rights and comply with its obligations under each Finance Document and to make each
Finance Document admissible in evidence in Scotland have been obtained or effected and are
in full force and effect.
9.9
All Authorisations necessary for the conduct of the business of each Obligor have been
obtained or effected and are in full force and effect.
9.10
The choice of Scots law as the governing law of each of the Finance Documents will be
recognised and enforced by the Scottish courts.
9.11
The Borrower is not required to make any deduction for or on account of tax from any payment
it may make under any Finance Document.
9.12
Under the laws of Scotland it is not necessary that any of the Finance Documents be
registered, filed, recorded or enrolled with any court or other authority in Scotland or that any
stamp, registration or similar tax be paid on or in relation to any of the Finance Documents.
9.13
In each case:
(1) in respect of any matters occurring on or before the date of this agreement, save as
disclosed to the Scottish Ministers or their advisers or matters of which the Scottish
Ministers or any of their wholly owned companies are aware; and
(2) in respect of any matters occurring after the date of this agreement, save as disclosed to
the Scottish Ministers or their advisors:
(a) no litigation, arbitration or administrative proceedings is/are pending nor, to the Borrower’s
knowledge after due enquiry, threatened against the Borrower or any of its assets which
could or might have a Material Adverse Effect;
(b) the Borrower is not (nor would, with the giving of notice or passing of time or both, be) in
default in respect of any Financial Indebtedness and the borrowing and repayment by the
Borrower of the Loans will not contravene any existing applicable law or regulation or any
contractual or other restriction or limitation binding on it;
(c) no Event of Default is continuing or might reasonably be expected to result from the
drawing of any part of the Loans or the entry into, or the performance of, the Finance
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
7
Documents or any transaction contemplated by the Finance Documents;
(d) no other event or circumstance is outstanding which constitutes, or (with the expiry of a
grace period, the giving of notice, the making of any determination or any combination of
any of the above) would constitute, a default or a termination event (however described)
under any other agreement or instrument which is binding on the Borrower or to which any
of the assets of the Borrower are subject which could or might have a material adverse
effect on its financial condition;
(e) the financial projections contained in the Financial Information represent a fair and
reasonable assessment of the anticipated future performance of the Group based on the
assumptions (if any) stated in the Financial Information;
(f) so far as the Borrower is aware having made due enquiry, the Financial Information did
not omit any information which, if disclosed, might reasonably be expected to adversely
affect the decision of a person considering whether to provide financial assistance to the
Borrower.
9.14
The Borrower has not taken any corporate action, nor have any steps been taken, or legal
proceedings started or threatened against it for its winding up or dissolution, or for the
appointment of a trustee in sequestration or similar officer of it or all or any part of its assets or
revenues.
9.15
The Borrower holds all types of insurances, and for insured sums, which a prudent operator of
the business would hold.
9.16
Any financial projections contained in the Financial Information have been prepared as at their
date, on the basis of recent historical information and on the basis of reasonable assumptions.
9.17
For the purposes of the Regulation (EU) 2015/848 of the European Parliament and of the
Council of 20 May 2015 on insolvency proceedings (recast) (the "Regulation"), its centre of
main interest is situated in Scotland and it has no "establishment" in any other jurisdiction.
9.18
It owns, or, as appropriate, any of its Subsidiaries, will have rights to use under licence, all of
its or their assets, including the intellectual property rights, necessary for the operation of its
business and is not in breach of any law, rule or order.
9.19
Nothing has occurred since the date of any information referred to in this Clause 9 which, if
disclosed, would make that information untrue or misleading in any material respect.
9.20
The Repeating Representations are deemed to be made by the Borrower by reference to the
facts and circumstances then existing on the date of each Utilisation Request.
10.
UNDERTAKINGS BY THE BORROWER
The Borrower undertakes to the Scottish Ministers that throughout the Loan Period it shall:
10.1
deliver to the Scottish Ministers such information as the Scottish Ministers may reasonably
require including the following:
10.1.1 any changes in key personnel or office bearers of the Borrower;
10.1.2 monthly financial reports including a profit and loss, balance sheet and actual cashflow
against budget (to be submitted within one month of the end of the relevant month and
in a format acceptable to the Scottish Ministers), such monthly financial reports to
include details of the Permitted Fees and all details in relation thereto;
10.1.3 [Redacted] which shall be received by [Redacted];
10.1.4 within 30 days after the beginning of each financial year an updated Business Plan
which includes an updated Financial Model;
10.1.5 as soon as reasonably practicable after the same become available (but in any event
within 30 days of the month end to which the management accounts relate)
management accounts, such management accounts to be accompanied by
commentary in reasonable detail on the financial performance of the Borrower,
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
8
[Redacted] in connection therewith and any such other information as relevant to the
[Redacted].
10.1.6 an annual operating budget consistent with the Financial Model within 30 days after
the beginning of each financial year.
10.2
maintain its existence and carry on its activities in accordance with its constitutional
documents substantially in the form carried on as at the date of this Agreement and obtain and
maintain in force all licences, consents, permits and insurances necessary for its business and
assets;
10.3
not amend its constitutional documents without the prior written consent of the Scottish
Ministers, which consent shall not be unreasonably withheld
10.4
take all steps and actions for the purpose of perfecting and giving effect to the terms hereof;
10.5
[Redacted];
10.6
supply to the Scottish Ministers promptly upon becoming aware of them, details of any
litigation, arbitration or administrative proceedings which are current, threatened or pending,
and which might, if adversely determined, have a material adverse effect on the financial
condition of the Borrower or on the ability of the Borrower to perform its obligations under this
Agreement;
10.7
immediately upon becoming aware of it, inform the Scottish Ministers of the occurrence of an
Event of Default or Potential Event of Default (and the steps, if any, being taken to remedy it);
10.8
not incur any Financial Indebtedness other than Permitted Financial Indebtedness;
10.9
operate each Account and any other bank account held by it in accordance with the Financial
Transparency (EC) Regulations 2009;
10.10 [Redacted];
10.11 not to create or attempt to create or allow to be created or to exist any security, charge
(whether fixed or floating) or lien of any kind without the prior written consent of the Scottish
Ministers, other than a Permitted Security Right;
10.12 not to make any loans or advance or enter into any guarantee or indemnity other than in the
ordinary course of business unless with the prior consent of the Scottish Ministers;
10.13 not to change the nature of the business undertaken by it from that undertaken as at the date
of this Agreement;
10.14 promptly upon a request by the Scottish Ministers, supply to the Scottish Ministers a certificate
signed by two of its directors or senior officers on its behalf certifying that no Event of Default
is continuing (or if an Event of Default is continuing, specifying the Event of Default and the
steps, if any, being taken to remedy it);
10.18 notify the Scottish Ministers in writing of any actual or threatened claim against it in respect of
an alleged breach of Environmental Law or remedial obligation or liability under such law
which could, if well-founded, (1) have a Material Adverse Effect or (2) constitute a material
liability of the Borrower (which shall be judged solely by the Scottish Ministers acting
reasonably);
10.19 indemnify the Scottish Ministers against all costs and expenses suffered or properly incurred
by them which arise as a result of (1) any actual or threatened breach of Environmental Law,
(2) any actual or threatened release of or exposure to a Dangerous Substance on, at or from
the premises or operations of the Borrower or (3) any actual or threatened claim referred to in
paragraph 10.19 above whether such claim has a Material Adverse Effect or not;
10.20 not make any Disposal, or agree to do so, other than in the ordinary course of its business
whether absolutely or in security;
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
9
10.21 maintain all of its assets in a good state or repair and maintenance and in good working order;
and
10.23 comply in all respects with all laws to which it may be subject, if failure so to comply would
materially impair its ability to perform its obligations under the Finance Documents;
10.24 not to [Redacted] or otherwise satisfy in any way or make any [Redacted].
11.
SECURITY
The parties agree that the Facility shall be [Redacted].
12.
EVENTS OF DEFAULT
12.1
If any of the following events shall occur:
12.1.1 any sum owing under any Finance Document is not paid on the date it falls due save
where such default was due to administrative error and is remedied within 3 Business
Days; or
12.1.2 the Facilities are used for a purpose other than that specified in Clause 2.2, without
the prior written consent of the Scottish Ministers; or
12.1.3 the Borrower defaults under any other provision of this Agreement and, if capable of
remedy, the default is not remedied within 15 Business Days after notice to the
Borrower requesting action to remedy the same; or
12.1.4 any representation or warranty of the Borrower made in or deemed made pursuant to
any provision of this Agreement proves to have been incorrect in a material respect;
12.1.5 the holder of any Security takes possession or a trustee in sequestration or similar
officer is appointed of the whole or any part of the undertaking, property, assets or
revenues of the Borrower; or
12.1.6 the Borrower enters into any composition or arrangement with its creditors or
proceedings are commenced in relation to the Borrower under any law, regulation or
procedure relating to reconstruction or re-adjustment of debts; or
12.1.7 the Borrower is adjudicated or found bankrupt or insolvent or any order is made by
any competent court or any petition is presented for the winding-up or dissolution of,
or for the appointment of a trustee in sequestration or similar officer of, the Borrower
or of a substantial part of its assets save for the purposes of amalgamation or
reorganisation (not involving insolvency) the terms of which shall have been previously
approved in writing by the Scottish Ministers; or
12.1.8 in relation to borrowings (including any grant, loan or subsidy received or receivable
by the Borrower) of the Borrower raised other than under this Loan Agreement ("
Other
Borrowings") any Other Borrowings become prematurely due and payable or capable
of being declared due and payable, or any Other Borrowings or any sums payable in
respect thereof are not paid when due or within any applicable grace period, or any
Security securing any such borrowing becomes enforceable or a demand is made
upon any guarantee given by the Borrower which is not paid when due (taking into
account any applicable grace periods); or
12.1.9
the Borrower ceases or threatens to cease to carry on business or a substantial part
of the business, properties or assets of the Borrower is seized or appropriated;
then on the occurrence of any of those events the Scottish Ministers may, whilst such event is
continuing:
(a)
cancel the Facility whereupon it shall immediately be cancelled;
(b)
declare that all or part of the Loans, together with accrued interest, and all other amounts
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
10
link to page 12 link to page 12 link to page 12 link to page 12
accrued or outstanding under the Finance Documents be immediately due and payable,
whereupon they shall become immediately due and payable;
(c)
declare that all or part of the Loans be payable on demand, whereupon they shall
immediately become payable on demand; and/or
(d)
exercise any or all of its rights, remedies, powers or discretions under the Finance
Documents.
13.
INDEMNITY
The Borrower shall indemnify the Scottish Ministers against any loss (including interest) or
expense which the Scottish Ministers shall certify as sustained or incurred by it as a
consequence of the occurrence of any other Event of Default.
14.
DISCLOSURE OF INFORMATION
14.1
Subject to Clauses
14.2 and
14.3, each party shall treat the other party’s Confidential
Information as confidential, and shall not disclose it to any other person without the owner's
prior written consent.
14.2
Clause
14.1 and 15 shall not apply to the extent that:
14.2.1 such disclosure is a requirement of law placed upon the party making the disclosure;
14.2.1 such information was in the possession of the party making the disclosure without
obligation of confidentiality prior to its disclosure by the information owner;
14.2.2 such information was obtained from a third party without obligation of confidentiality;
14.2.3 such information was already in the public domain at the time of disclosure otherwise
than by a breach of this Agreement; or
14.2.4 such information was independently developed without access to the other party's
Confidential Information.
14.3
Nothing in this Agreement shall prevent either party from disclosing the other party’s
Confidential Information:
14.3.1 to any consultant, contractor or other person engaged by the Borrower or the Scottish
Ministers; or
14.3.2 for the purpose of the examination and certification of the Borrower’s accounts.
14.4
In this Claus
e 14:
Confidential Information means information that ought to be considered as confidential and
may include information whose disclosure would or would be likely to prejudice the
commercial interests of any person, trade secrets, intellectual property rights, or know-how of
any party;
FOISA means the Freedom of Information (Scotland) Act 2002 and any subordinate legislation
made under such Act from time to time together with any guidance and/or codes of practice
issued by the Scottish Information Commissioner or relevant government department in
relation to such legislation;
EISR means the Environmental Information (Scotland) Regulations 2004 together with any
guidance and/or codes of practice issued by the Scottish Information Commissioner or
relevant government department in relation to such legislation; and
Information has the meaning given in section 73 of FOISA.
14.5
The Borrower acknowledges that the Scottish Ministers are subject to the requirements of the
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
11
FOISA and the EISR and the Borrower shall assist and cooperate with the Scottish Ministers
to enable them to comply with their information disclosure obligations.
14.6
The Scottish Ministers shall be responsible for determining in its absolute discretion whether
Information is exempt from disclosure in accordance with the provisions of the FOISA or the
EISR.
14.7
For the avoidance of doubt, the Borrower shall be entitled to disclose the terms of this
Agreement to any commercial lender which is giving consideration to the provision of loan
finance to the Borrower.
15.
PUBLICITY
Subject to clause 14.2, the Borrower agrees there shall be no publicising of this Agreement
nor a disclosure of the role of the Scottish Ministers in the provision of the Loan without the
prior written consent of the Scottish Ministers.
16.
ASSIGNATION AND FURTHER ASSURANCE
16.1
The Borrower may not assign or transfer its rights and/or obligations under this Agreement.
16.2
The Scottish Ministers may assign or transfer its rights and/or obligations, at its own costs,
under this Agreement at will.
16.3
The Borrower will, at its own cost and whenever required by the Scottish Ministers, do
anything and sign and deliver all such deeds, instruments, notices or other documents of any
kind, in such form as the Scottish Ministers may reasonably require, in order to exercise any of
the powers and rights given herein or by law.
17.
MISCELLANEOUS
17.1
Every notice under this Agreement shall be in writing and may be given or made by hand, post
or e-mail to the Borrower or the Scottish Ministers at their respective addresses given above
(or to such other address as either party may intimate to the other party in writing from time to
time as being the appropriate address for service of notices) and, in the case of an e-mail, to
any e-mail address published as belonging to them for this purpose. Every notice shall be
deemed to have been received, in the case of an e-mail, at the time of despatch (provided that
if the date of despatch is not a working day, it shall be deemed received on the next such
working day) and in the case of a letter at the time of its delivery if delivered personally or four
days after its posting if sent by mail.
17.2
No failure or delay by the Scottish Ministers in exercising any right or remedy hereunder shall
operate as a waiver thereof nor shall any single or partial exercise of any right or remedy
preclude any further exercise thereof or the exercise of any other right or remedy. The rights
and remedies herein are cumulative and not exclusive of any rights and remedies provided by
law.
17.3
No variation of this Agreement shall be effective unless it is effected by way of a written
agreement, duly executed by the Scottish Ministers and by the Borrower.
17.4
The Borrower consents to the registration of this Agreement for execution.
17.5
For the avoidance of doubt, nothing in this Agreement will infer any obligation on the Scottish
Ministers to provide any further assistance to the Borrower.
18.
COUNTERPARTS, DELIVERY ETC
18.1
This Agreement may be executed in any number of counterparts and this has the same effect
as if the signatures on the counterparts were on a single copy of this Agreement.
18.2
Where this Agreement is executed in counterparts:
18.2.1 it shall not take effect until all counterparts have been delivered;
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
12
18.2.2 all counterparts shall be held as undelivered for the purposes of The Legal Writings
(Counterparts and Delivery) (Scotland) Act 2015 until the parties agree the date on
which they are to be treated as delivered; and
18.2.3 such date of delivery shall be inserted in the blank provided for that purpose on page 1
of this Agreement.
19.
LAW AND JURISDICTION
This Agreement is governed by and shall be construed in accordance with the laws of
Scotland and the Borrower irrevocably submits to the exclusive jurisdiction of the Scottish
Courts:
IN WITNESS WHEREOF this Agreement consisting of this and the preceding 13
pages, together with the Schedule annexed, is executed as follows and are delivered for the
purposes of the Legal Writings (Counterparts and Delivery) (Scotland) Act 2015 on the date
specified on page 1 of this Agreement:-
SUBSCRIBED for and on behalf of the said
SCOTTISH MINISTERS
at ……………………………..
on …………………………….
by
___________________________
……………………………………..
Authorised Signatory
Print name
in the presence of:
Witness: ……………………………………..
Full Name: ……………………………………..
Address: ……………………………………..
……………………………………..
……………………………………..
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
13
SUBSCRIBED for and on behalf of the said
FERGUSON MARINE ENGINEERING LIMITED
at ……………………………..
on …………………………….
by
___________________________
……………………………………..
Director / Authorised Signatory
Print name
in the presence of:
Witness: ……………………………………..
Full Name: ……………………………………..
Address: ……………………………………..
……………………………………..
……………………………………..
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
14
This is the Schedule in 3 parts referred to in the foregoing Agreement between the Borrower
and the Scottish Ministers.
SCHEDULE
PART 1
Part A
Initial Conditions Precedent
1.
This Agreement duly executed by the Borrower;
2.
An officer’s certificate substantially in the form set out in Part 3 of the Schedule;
3.
A signed Utilisation Request;
4.
The Business Plan incorporating projected cash flow, profit and loss and balance sheet figures
together with any associated financial models/projections and Completion Financial Model and
an appropriate Certificate from [Redacted] as financial advisers;
5.
The most recent management accounts of the Borrower
6.
Letter of intent from Clyde Blowers Capital Fund III LP addressed to the Scottish Ministers in
relation to [Redacted] equity to be secured in respect of the Borrower.
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
15
Part B
Subsequent Conditions Precedent
1.
A signed Utilisation Request.
2.
No Potential Event of Default or Event of Default remaining outstanding, unwaived or
unsatisfied.
3.
Evidence, where requested by the Scottish Ministers, that the proposed drawdown is being
made in accordance with the approved Business Plan (being either invoices evidencing cost
incurred or payroll information or similar company records evidencing costs).
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
16
PART 2
LOAN CLAIM FORM
Organisation:
Bank details:
Total agreed loan for:
Loan funding claimed to date:
CLAIM FOR LOAN FUNDING FOR THE PERIOD FROM TO
We hereby claim loan funding £ in respect of the above period in accordance with the
terms and conditions of the offer of the Loan Agreement dated
Completed by:
Position:
Contact Details:
Date:
Appeal - Stage 2 - FoI 18 02623 - FMEL Loan Agreement Further Release
17
PART 3
Form of Officer’s Certificate
Officer’s Certificate
(To be completed on letterhead of the Borrower)
To:
The Scottish Ministers
1.
I hereby certify that attached is a copy of the Minutes of a Meeting of the Directors of the
Borrower dated 5 September 2017.
2.
I hereby certify that:
2.1.
the Borrower is duly incorporated or established under Scots law with the power to
own its assets and carry on its businesses and the Loan Agreement is its legally
binding obligation enforceable in accordance with its terms;
2.2.
all consents and Authorisations in relation to the Loan Agreement has been obtained;
2.3.
neither the Loan Agreement nor any sums paid thereunder will contravene any
agreement to which the Borrower is a party nor entitle any person to exercise any
rights against it or any of its assets
Officer: ……………………………….. [Name]
Signing for and on behalf of the Borrower
Date: …………………………………….