(2) SYTNER GROUP LIMITED (as Company and Original Borrower)
(3) THE COMPANIES LISTED IN PART 1 OF SCHEDULE 1 OF THIS AGREEMENT (as Original Guarantors)
(4) THE ROYAL BANK OF SCOTLAND PLC AND BMW FINANCIAL SERVICES (GB) LIMITED (as Mandated Lead Arranger)
(5) THE FINANCIAL INSTITUTIONS LISTED IN PART 2 AND PART 3 OF SCHEDULE 1 OF THIS AGREEMENT (as Original Lenders)
(6) THE ROYAL BANK OF SCOTLAND PLC (as Agent)
(7) THE ROYAL BANK OF SCOTLAND PLC (as Security Agent)
£100,000,000 REVOLVING FACILITY AGREEMENT
CONTENTS
Clause Page
THIS AGREEMENTis made on 2011
BETWEEN:-
(1) UAG UK HOLDINGS LIMITED(the “Parent”);
(2) SYTNER GROUP LIMITED(the “Company”);
(3)
THE SUBSIDIARIESof the Company listed in Part 1 of Schedule 1 (The Original Parties) as original guarantors (together with the Parent and the Company, the “Original Guarantors”);
(4)
THE ROYAL BANK OF SCOTLAND PLC AND BMW FINANCIAL SERVICES (GB) LIMITEDas mandated lead arrangers (whether acting individually or together) (the “Arranger”);
(5)
THE FINANCIAL INSTITUTIONSlisted in Part 2 and Part 3 of Schedule 1 (The Original Parties) as lenders (the “Original Lenders”);
(6)
THE ROYAL BANK OF SCOTLAND PLCas agent of the other Finance Parties (the “Agent”); and
(7)
THE ROYAL BANK OF SCOTLAND PLCas security trustee for the Secured Parties (the “Security Agent”).
IT IS AGREEDas follows:-
SECTION 1 INTERPRETATION
1.
DEFINITIONS AND INTERPRETATION
1.1
Definitions
In this Agreement:-
"Acceptable Bank”
means:- (a) a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A+ or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or A1 or higher by Moody’s Investor Services Limited or a comparable rating from an internationally recognised credit rating agency or (b) The Royal Bank of Scotland plc and National Westminster Bank Plc provided that they have a rating for their long term unsecured and non credit enhanced debt obligations of A- or higher by Standard & Poor’s Rating Services or Fitch Ratings Ltd or A3 or higher by Moody’s Investor Services Limited or a comparable rating from an internationally recognised credit rating agency or (c) any other bank or financial institution approved by the Agent
"Accession Deed”
means a document substantially in the form set out in Schedule 7 (Form of Accession Deed)
"Accounting Principles”
means generally accepted accounting principles in the United Kingdom, including IFRS
"Accounting Reference Date”
means 31 December
"Additional Borrower”
means a company which becomes an Additional Borrower in accordance with Clause 28 (Changes to the Obligors)
"Additional Cost Rate”
has the meaning given to it in Schedule 4 (Mandatory Cost Formulae)
"Additional Guarantor”
means a company which becomes an Additional Guarantor in accordance with Clause 28 (Changes to the Obligors)
"Additional Obligor”
means an Additional Borrower or an Additional Guarantor
"Affiliate”
means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company
"Agreed Security Principles”
means the principles set out in Schedule 11 (Agreed Security Principles)
"Ancillary Commencement Date”
means, in relation to an Ancillary Facility, the date on which that Ancillary Facility is first made available, which date shall be a Business Day within the Availability Period for the Facility
"Ancillary Commitment”
means, in relation to an Ancillary Lender and an Ancillary Facility, the maximum amount which that Ancillary Lender has agreed (whether or not subject to satisfaction of conditions precedent) to make available from time to time under an Ancillary Facility and which has been authorised as such under Clause 6 (Ancillary Facilities), to the extent that amount is not cancelled or reduced under this Agreement or the Ancillary Documents relating to that Ancillary Facility
"Ancillary Document”
means each document relating to or evidencing the terms of an Ancillary Facility
"Ancillary Facility”
means any ancillary facility made available by an Ancillary Lender in accordance with Clause 6 (Ancillary Facilities)
"Ancillary Lender”
means each Lender (or Affiliate of a Lender) which makes available an Ancillary Facility in accordance with Clause 6 (Ancillary Facilities)
"Ancillary Outstandings”
means, at any time, in relation to an Ancillary Lender and an Ancillary Facility then in force the aggregate of the following amounts outstanding under that Ancillary Facility:- (a) the principal amount under each overdraft facility and on-demand short term loan facility (net of any credit balances on any account of any Borrower of an Ancillary Facility with the Ancillary Lender making available that Ancillary Facility to the extent that the credit balances are freely available to be set off by that Ancillary Lender against liabilities owed to it by that Borrower under that Ancillary Facility) (b) the face amount of each guarantee, bond and letter of credit under that Ancillary Facility and (c) the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility in each case as determined by such Ancillary Lender, acting reasonably in accordance with its normal banking practice and in accordance with the relevant Ancillary Document
"Assignment Agreement”
means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee
"Auditors”
means any firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed)
"Authorisation”
means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration
"Availability Period”
means from and including the date of this Agreement to and including the date falling one week prior to the Termination Date
"Available Ancillary Commitment”
means in relation to an Ancillary Facility, an Ancillary Lender’s Ancillary Commitment less the Ancillary Outstandings in relation to that Ancillary Facility
"Available Commitment”
means, in relation to the Facility, a Lender’s Commitment minus (subject to Clause 6.8 (Affiliates of Lenders as Ancillary Lenders)and as set out below):- (a) the amount of its participation in any outstanding Utilisations and the amount of the aggregate of its Ancillary Commitments and (b) in relation to any proposed Utilisation, the amount of its participation in any other Utilisations that are due to be made under the Facility on or before the proposed Utilisation Date and the amount of its Ancillary Commitment in relation to any new Ancillary Facility that is due to be made available on or before the proposed Utilisation Date other than:- (i) that Lender’s participation in any Utilisations that are due to be repaid or prepaid on or before the proposed Utilisation Date and (ii) that Lender’s (or its Affiliate’s) Ancillary Commitments to the extent that they are due to be reduced or cancelled on or before the proposed Utilisation Date
"Available Facility”
means the aggregate for the time being of each Lender’s Available Commitment
"Base Reference Bank Rate”
means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Base Reference Banks in relation to LIBOR, as the rate at which the relevant Base Reference Bank could borrow funds in the London interbank market in the relevant currency and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period
"Base Reference Banks”
means the principal London offices of The Royal Bank of Scotland plc, Barclays Bank PLC and Lloyds TSB Bank plc or such other banks as may be appointed by the Agent in consultation with the Company
"Bilateral Overdraft Lender”
means The Royal Bank of Scotland plc as agent for National Westminster Bank Plc in its capacity as lender under the NatWest Overdraft Letter
"Borrower”
means the Company or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 28 (Changes to the Obligors) and, in respect of an Ancillary Facility only, any Affiliate of a Borrower that becomes a borrower of that Ancillary Facility with the approval of the relevant Lender pursuant to the provisions of Clause 6.9 (Affiliates of Borrowers)
"Borrowings”
has the meaning given to that term in Clause 23.1 (Financial definitions)
"Break Costs”
means the amount (if any) by which:- (a) the interest which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period exceeds:- (b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period
"Budget”
means:- (a) in relation to the period beginning on 1 January 2011 and ending on 31 December 2011, the budget delivered by the Company to the Lenders prior to the date of this Agreement and (b) in relation to any other period, any budget delivered by the Company to the Agent in respect of that period pursuant to Clause 22.4 (Budget)
"Business Day”
means a day (other than a Saturday or Sunday) on which banks are open for general business in London
"Capital Expenditure”
has the meaning given to that term in Clause 23.1 (Financial definitions)
"Cash”
means, at any time, cash denominated in Sterling in hand or at bank and (in the latter case) credited to an account in the name of an Obligor with an Acceptable Bank and to which an Obligor is alone (or together with other Obligors) beneficially entitled and for so long as:- (a) that cash is repayable within 30 days after the relevant date of calculation (b) repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition (c) there is no Security over that cash except for Transaction Security or any Permitted Security constituted by a netting or set-off arrangement entered into by members of the Group in the ordinary course of their banking arrangements and (d) the cash is freely and immediately available to be applied in repayment or prepayment of the Facility
"Cash Equivalent Investments”
means at any time:- (a) certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank (b) any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security (c) commercial paper not convertible or exchangeable to any other security:- (i) for which a recognised trading market exists (ii) issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State (iii) which matures within one year after the relevant date of calculation and (iv) which has a credit rating of either A-1 or higher by Standard & Poor’s Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody’s Investor Services Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long-term unsecured and non-credit enhanced debt obligations, an equivalent rating (d) sterling bills of exchange eligible for rediscount at the Bank of England and accepted by an Acceptable Bank (or their dematerialised equivalent) (e) any investment in money market funds which (i) have a credit rating of either A-1 or higher by Standard & Poor’s Rating Services or F1 or higher by Fitch Ratings Ltd or P-1 or higher by Moody’s Investor Services Limited, (ii) which invest substantially all their assets in securities of the types described in sub-clauses (a) to (d) above and (iii) can be turned into cash on not more than 30 days’ notice or (f) any other debt security approved by the Majority Lenders, in each case, denominated in Sterling and to which any Obligor is alone (or together with other Obligors beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security (other than Security arising under the Transaction Security Documents)
"Cashflow”
has the meaning given to that term in Clause 23.1 (Financial definitions)
"Change of Control”
means Penske Automotive Group Inc ceases to control directly or indirectly the
Company and/or any person or group of persons acting in concert gains direct or
indirect control of the Company. For the purposes of this definition:-
(a) “control” of the Company means:-
(i) the power (whether by way of ownership of shares, proxy, contract, agency or
otherwise) to:-
(A) cast, or control the casting of, 51% or more of the maximum number of votes that
might be cast at a general meeting of the Company or
(B) appoint or remove all, or the majority, of the directors or other equivalent
officers of the Company or
(C) give directions with respect to the operating and financial policies of the
Company with which the directors or other equivalent officers of the Company are
obliged to comply and/or
(ii) the holding beneficially of 51% of the issued share capital of the Company
(excluding any part of that issued share capital that carries no right to participate
beyond a specified amount in a distribution of either profits or capital)
(b) “acting in concert” means, a group of persons who, pursuant to an agreement or
understanding (whether formal or informal), actively co-operate, through the
acquisition directly or indirectly of shares in the Company by any of them, either
directly or indirectly, to obtain or consolidate control of the Company
"Charged Property”
means all of the assets of the Obligors which from time to time are, or are expressed
to be, the subject of the Transaction Security
"Closing Date”
means the date on which the Agent confirms to the Company in writing that all of the
conditions precedent in Part 1 of Schedule 2 have been satisfied or waived
"Commitment”
means:-
(a) in relation to an Original Lender, the amount set opposite its name under the
heading “Commitment” in Part 2 or Part 3 of Schedule 1 (The Original Parties) and the
amount of any other Commitment transferred to it under this Agreement or assumed by
it in accordance with Clause 2.2 (Increase) and
(b) in relation to any other Lender, the amount of any Commitment transferred to it
under this Agreement or assumed by it in accordance with Clause 2.2 (Increase)
to the extent not cancelled, reduced or transferred by it under this Agreement
"Compliance Certificate”
means a certificate substantially in the form set out in Schedule 9 (Form of
Compliance Certificate)
"Confidential Information”
means all information relating to the Parent, the Company, any Obligor, the Group,
the Finance Documents or the Facility of which a Finance Party becomes aware in its
capacity as, or for the purpose of becoming, a Finance Party or which is received by
a Finance Party in relation to, or for the purpose of becoming a Finance Party under,
the Finance Documents or the Facility from either:-
(a) the Parent or any member of the Group or any of its advisers or
(b) another Finance Party, if the information was obtained by that Finance Party
directly or indirectly from the Parent or any member of the Group or any of its
advisers
in whatever form, and includes information given orally and any document, electronic
file or any other way of representing or recording information which contains or is
derived or copied from such information but excludes information that:-
(i) is or becomes public information other than as a direct or indirect result of any
breach by that Finance Party of Clause 39 (Confidentiality) or
(ii) is identified in writing at the time of delivery as non-confidential by the
Parent or any member of the Group or any of its advisers or
(iii) is known by that Finance Party before the date the information is disclosed to
it in accordance with sub-clauses (a) or (b) above or is lawfully obtained by that
Finance Party after that date, from a source which is, as far as that Finance Party
is aware, unconnected with the Parent or the Group and which, in either case, as far
as that Finance Party is aware, has not been obtained in breach of, and is not
otherwise subject to, any obligation of confidentiality
"Confidentiality Undertaking”
means a confidentiality undertaking substantially in a recommended form of the LMA or
in any other form agreed between the Company and the Agent
"Contribution Notice”
means a contribution notice issued by the Pensions Regulator under section 38 or
section 47 of the Pensions Act 2004
"CTA”
means the Corporation Tax Act 2009
"DB Schemes”
means:-
(a) the Ryland Group Pension Scheme established by an interim deed dated 29 January
1974;
(b) the William Jacks PLC Retirement Benefits Scheme established by interim trust
deed dated 1 November 1953; (c) the industry-wide MIP Plan; and
(d) the Sytner of Nottingham Limited Retirement Benefits Scheme established by
interim trust deed dated 5 December 1980
"Debt Purchase Transaction”
means, in relation to a person, a transaction where such person:-
(a) purchases by way of assignment or transfer
(b) enters into any sub-participation in respect of or
(c) enters into any other agreement or arrangement having an economic effect
substantially similar to a sub-participation in respect of
the Commitment or amount outstanding under this Agreement
"Default”
means an Event of Default or any event or circumstance specified in Clause 25 (Events
of Default) which would (with the expiry of a grace period, the giving of notice, the
making of any determination under the Finance Documents or any combination of any of
the foregoing) be an Event of Default
"Defaulting Lender”
means any Lender (other than a Lender which is a Sponsor Affiliate):-
(a) which has failed to make its participation in a Loan available or has notified the Agent that it will not
make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 5.4
(Lenders’ participation)
(b) which has otherwise rescinded or repudiated a Finance Document or
(c) with respect to which an Insolvency Event has occurred and is continuing
unless, in the case of paragraph (a) above:-
(i) its failure to pay is caused by:-
(A) administrative or technical error or
(B) a Disruption Event and
payment is made within 3 Business Days of its due date or
(ii) the Lender is disputing in good faith whether it is contractually obliged to make the payment in question
"Delegate”
means any delegate, agent, attorney or co-trustee appointed by the Security Agent
"Designated Gross Amount”
has the meaning given to that term in Clause 6.2 (Availability)
"Designated Net Amount”
has the meaning given to that term in Clause 6.2 (Availability)
"Disruption Event”
means either or both of:-
(a) a material disruption to those payment or communications systems or to those
financial markets which are, in each case, required to operate in order for payments
to be made in connection with the Facility (or otherwise in order for the
transactions contemplated by the Finance Documents to be carried out) which
disruption is not caused by, and is beyond the control of, any of the Parties or
(b) the occurrence of any other event which results in a disruption (of a technical
or systems-related nature) to the treasury or payments operations of a Party
preventing that, or any other Party:-
(i) from performing its payment obligations under the Finance Documents or
(ii) from communicating with other Parties in accordance with the terms of the
Finance Documents
and which (in either such case) is not caused by, and is beyond the control of, the
Party whose operations are disrupted
"Dormant Subsidiary”
means a member of the Group which does not trade (for itself or as agent for any
person) and does not own, legally or beneficially, assets (including, without
limitation, indebtedness owed to it) which in aggregate have a value of £5,000 or
more or its equivalent in other currencies
"Environment”
means humans, animals, plants and all other living organisms including the ecological
systems of which they form part and the following media:-
(a) air (including, without limitation, air within natural or man-made structures,
whether above or below ground)
(b) water (including, without limitation, territorial, coastal and inland waters,
water under or within land and water in drains and sewers) and
(c) land (including, without limitation, land under water)
"Environmental Claim”
means any claim, proceeding, formal notice or investigation by any person in respect
of any Environmental Law
"Environmental Law”
means any applicable law or regulation which relates to:-
(a) the pollution or protection of the Environment (b) the conditions of the workplace or
(c) the generation, handling, storage, use, release or spillage of any substance
which, alone or in combination with any other, is capable of causing harm to the
Environment, including, without limitation, any waste
"Environmental Permits”
means any permit and other Authorisation and the filing of any notification, report
or assessment required under any Environmental Law for the operation of the business
of any member of the Group conducted on or from the properties owned or used by any
member of the Group
"Event of Default”
means any event or circumstance specified as such in Clause 25 (Events of Default)
"Existing Security Documents”
means those security documents granted before the date of this Agreement listed in
Schedule 15 (Existing Security Documents)
"Facility”
means the revolving credit facility made available under this Agreement as described
in Clause 2.1.1
"Facility Office”
means:-
(a) in respect of a Lender, the office or offices notified by that Lender to the
Agent in writing on or before the date it becomes a Lender (or, following that date,
by not less than five Business Days’ written notice) as the office or offices through
which it will perform its obligations under this Agreement or
(b) in respect of any other Finance Party, the office in the jurisdiction in which it
is resident for tax purposes
"Fee Letter”
means:-
(a) any letter or letters dated on or about the date of this Agreement between the
Agent and the Company or the Security Agent and the Company setting out any of the
fees referred to in Clause 14 (Fees) and
(b) any agreement setting out fees payable to a Finance Party referred to in
Clause 2.2.5, Clause 14.5 (Interest, commission and fees on Ancillary Facilities) of
this Agreement or under any other Finance Document
"Finance Document”
means this Agreement, any Accession Deed, any Ancillary Document, any Compliance
Certificate, any Fee Letter, any Hedging Agreement, the Intercreditor Agreement, any
Resignation Letter, any Transaction Security Document, any Utilisation Request, the
Vehicle Financier Deeds of Priority and any other document designated as a “Finance
Document” by the Agent and the Companyprovided thatwhere the term “Finance
Document” is used in, and construed for the purposes of, this Agreement or the
Intercreditor Agreement, a Hedging Agreement shall be a Finance Document only for the
purposes of:- (a) the definition of “Material Adverse Effect”
(b) sub-clause (a) of the definition of “Permitted Transaction”
(c) the definition of “Transaction Security Document”
(d) Clause 1.2.1(d) (e) Clause 20 (Guarantee and Indemnity) and
(f) Clause 25 (Events of Default) (other than Clause 25.13.2 and Clause 25.18
(Acceleration))
"Finance Party”
means the Agent, the Arranger, the Security Agent, a Lender, a Hedge Counterparty or
any Ancillary Lenderprovided thatwhere the term “Finance Party” is used in, and
construed for the purposes of, this Agreement or the Intercreditor Agreement, a Hedge
Counterparty shall be a Finance Party only for the purposes of:-
(a) the definition of “Secured Parties” (b) Clause 1.2.1(a)
(c) sub-clause (c) of the definition of Material Adverse Effect
(d) Clause 20 (Guarantee and Indemnity) and
(e) Clause 30 (Conduct of business by the Finance Parties)
"Financial Event of Default”
means an Event of Default arising under any of Clauses 25.1 (Non payment), 25.2
(Other obligations) (to the extent that such Event of Default arises as a breach of
Clause 23 (Financial covenants) or Clause 22 (Information Undertakings) (in relation
to the delivery of Annual Financial Statements, Quarterly Financial Statements,
(Legal and beneficial ownership) and Clause 21.27 (Centre of main interests and
establishments)
"Representative”
means any delegate, agent, manager, administrator, nominee, attorney, trustee or
custodian
"Resignation Letter”
means a letter substantially in the form set out in Schedule 8 (Form of Resignation
Letter)
"Rollover Loan”
means one or more Loans:-
(a) made or to be made on the same day that a maturing Loan is due to be repaid or
(b) the aggregate amount of which is equal to or less than the amount of the maturing
Loan
(c) made or to be made to the same Borrower for the purpose of refinancing that
maturing Loan
"Screen Rate”
means the British Bankers’ Association Interest Settlement Rate for Sterling for the
relevant period displayed on the appropriate page of the Reuters screen. If the
agreed page is replaced or service ceases to be available, the Agent may specify
another page or service displaying the appropriate rate after consultation with the
Company and the Lenders
"Secured Parties”
means each Finance Party from time to time party to this Agreement and any Receiver
or Delegate
"Security”
means a mortgage, charge, pledge, lien or other security interest securing any
obligation of any person or any other agreement or arrangement having a similar
effect
"Specified Time”
means a time determined in accordance with Schedule 10 (Timetables)
"Sponsor Affiliate”
means Penske Automotive Group Inc (“PAG”), each of its Affiliates, any trust of which
PAG or any of its Affiliates is a trustee, any partnership of which PAG or any of its
Affiliates is a partner and any trust, fund or other entity which is managed by, or
is under the control of, PAG or any of its Affiliatesprovidedthat any such trust,
fund or other entity which has been established for at least 6 months solely for the
purpose of making, purchasing or investing in loans or debt securities and which is
managed or controlled independently from all other trusts, funds or other entities
managed or controlled by PAG or any of its Affiliates which have been established for
the primary or main purpose of investing in the share capital of companies shall not
constitute a Sponsor Affiliate
"Stocking Facility”
means any facility provided to a member of the Group for vehicle stock, used
demonstrators and/or consignment stock
"Subsidiary”
means a subsidiary within the meaning of section 1159 of the Companies Act 2006 or a
subsidiary undertaking within the meaning of section 1162 of the Companies Act 2006
"TARGET2”
means the Trans-European Automated Real-time Gross Settlement Express Transfer
payment system which utilises a single shared platform and which was launched on
19 November 2007
"TARGET Day”
means any day on which TARGET2 is open for the settlement of payments in euro
"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)
"Termination Date”
means 30 November 2015
"Total Commitments”
means the aggregate of the Commitments, being £100,000,000 at the date of this
Agreement
"Trade Instruments”
means any performance bonds, or advance payment bonds or documentary letters of
credit issued in respect of the obligations of any member of the Group arising in the
ordinary course of trading of that member of the Group
"Transaction Security”
means the Security created or expressed to be created in favour of the Security Agent
pursuant to the Transaction Security Documents
"Transaction Security Documents”
means each of the documents listed as being a Transaction Security Document in
paragraph 2.6 of Part 1 of Schedule 2 (Conditions Precedent), any document required
to be delivered to the Agent under paragraph 13 of Part 2 of Schedule 2 (Conditions
Precedent) together with any other document entered into by any Obligor creating or
expressed to create any Security over all or any part of its assets in respect of the
obligations of any of the Obligors under any of the Finance Documents
"Transfer Certificate”
means a certificate substantially in the form set out in Schedule 5 (Form of Transfer
Certificate) or any other form agreed between the Agent and the Company
"Transfer Date”
means, in relation to an assignment or transfer, the later of:-
(a) the proposed Transfer Date specified in the relevant Assignment Agreement or
Transfer Certificate and
(b) the date on which the Agent executes the relevant Assignment Agreement or
Transfer Certificate
"Treasury Transactions”
means any derivative transaction entered into in connection with protection against
or benefit from fluctuation in any rate or price
"UAG Group”
means the Parent and each of its Subsidiaries from time to time
"Unpaid Sum”
means any sum due and payable but unpaid by an Obligor under the Finance Documents
"US GAAP Reconciliation Statement”
means a reconciliation, prepared by the Company, of (i) the Monthly Financial
Statements for the Company for the period ending on 31 December in each year and (ii)
generally accepted accounting principles in the United States of America which have
been applied in preparing the audited financial statements of the Parent referred to
in Clause 22.11.1 for the same year
"Utilisation”
means a Loan
"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 relevant form set out in Schedule 3 (Requests and
Notices)
"VAT”
means value added tax as provided for in the Value Added Tax Act 1994 and any other
tax of a similar nature
"Vehicle Financier Deeds of Priority”
means deeds of priority entered into between, among others, the Security Agent and
each of the following financiers (in their respective capacities as providers of
vehicle finance to certain members of the Group):- (a) BMW Financial Services (GB) Limited;
(b) Volkswagen Financial Services (UK) Limited and Volkswagen Bank GmbH (trading as
Volkswagen Bank United Kingdom Branch); and (c) Mercedes-Benz Bank AG UK Branch, (each, a “Vehicle Financier Deed of Priority”).
1.2
Construction
1.2.1
Unless a contrary indication appears, a reference in this Agreement to:-
(a)
the “Agent”, the “Arranger”, any “Finance Party”, any “Hedge Counterparty”, any “Lender”, any “Obligor”, any “Party”, any “Secured Party”, the “Security Agent”, the “Bilateral Overdraft Lender” or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents;
(b)
a document in “agreed form” is a document which is previously agreed in writing by or on behalf of the Company and the Agent or, if not so agreed, is in the form specified by the Agent;
(c)
"assets” includes present and future properties, revenues and rights of every description;
(d)
a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;
(e)
"guarantee” means (other than in Clause 20 (Guarantee and Indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
(f)
"indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(g)
a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
(h)
a “regulation” includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, being one which is customarily complied with in the relevant jurisdiction by persons or entities equivalent to the relevant person or entity in question) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;
(i)
a provision of law is a reference to that provision as amended or re-enacted; and
(j)
a time of day is a reference to London time.
1.2.2
Section, Clause and Schedule headings are for ease of reference only.
1.2.3
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
1.2.4
A Borrower providing “cash cover” for an Ancillary Facility means a Borrower paying an amount in the currency of the Ancillary Facility) to an interest-bearing account in the name of the Borrower and the following conditions being met:-
(a)
the account is with the Security Agent or with the Ancillary Lender for which that cash cover is to be provided;
(b)
until no amount is or may be outstanding under that Ancillary Facility, withdrawals from the account may only be made to pay a Finance Party amounts due and payable to it under this Agreement in respect of that Ancillary Facility; and
(c)
the Borrower has executed a security document over that account, in form and substance satisfactory to the Security Agent or Ancillary Lender with which that account is held, creating a first ranking security interest over that account.
1.2.5
A Default (other than an Event of Default) is “continuing” if it has not been remedied or waived and an Event of Default is “continuing” if it has not been waived.
1.2.6
A Borrower “repaying” or “prepaying” an Ancillary Outstandings means:-
(a)
that Borrower providing cash cover in respect of the Ancillary Outstandings;
(b)
the maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance with its terms; or
(c)
the Ancillary Lender being satisfied that it has no further liability under that Ancillary Facility,
and the amount by which the Ancillary Outstandings are, repaid or prepaid under Clauses 1.2.6(a) and 1.2.6(b) above is the amount of the relevant cash cover or reduction.
1.2.7
An amount borrowed includes any amount utilised under an Ancillary Facility.
1.3
Third party rights
A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Agreement.
1.4
Provision of information by directors
If any provision of a Finance Document requires a director or any member of the Group to provide any information, to certify any matter or to make any presentation, any such provision, certification or presentation shall, provided it is made in good faith, be made without personal liability on the part of such director (other than in the case of fraud or gross negligence).
1
SECTION 2 THE FACILITY
2.
THE FACILITY
2.1
The Facility
2.1.1
Subject to the terms of this Agreement, the Lenders make available a Sterling revolving credit facility in an aggregate amount equal to the Total Commitments.
2.1.2
The Facility will be available to the Company.
2.1.3
Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make available an Ancillary Facility to any of the Borrowers in place of all or part of its Commitment under the Facility.
2.2
Increase
2.2.1
The Parent or the Company may by giving prior notice to the Agent by no later than the date falling 10 Business Days after the effective date of a cancellation of:-
(a)
the Available Commitments of a Defaulting Lender in accordance with Clause 8.5 (Right of cancellation in relation to a Defaulting Lender); or
(b)
the Commitments of a Lender in accordance with Clause 8.1 (Illegality);
request that the Total Commitments be increased (and the Total Commitments under that Facility shall be so increased) in an aggregate amount in the Base Currency of up to the amount of the Available Commitments or Commitments so cancelled as follows:-
(c)
the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an “Increase Lender”) selected by the Parent or the Company (each of which shall not be a Sponsor Affiliate or a member of the Group and which is further acceptable to the Agent (acting reasonably)) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender;
(d)
each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender;
(e)
each Increase Lender shall become a Party as a “Lender” and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender;
(f)
the Commitments of the other Lenders shall continue in full force and effect; and
(g)
any increase in the Total Commitments shall take effect on the date specified by the Parent or the Company in the notice referred to above or any later date on which the conditions set out in Clause 2.2.2 below are satisfied.
2.2.2
An increase in the Total Commitments will only be effective on:-
(a)
the execution by the Agent of an Increase Confirmation from the relevant Increase Lender;
(b)
in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase:-
(i)
the Increase Lender entering into the documentation required for it to accede as a party to the Intercreditor Agreement; and
(ii)
the performance by the Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Parent and the Increase Lender.
2.2.3
Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.
2.2.4
Unless the Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Parent shall, on the date upon which the increase takes effect, promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by either of them and, in the case of the Security Agent, by any Receiver or Delegate in connection with any increase in Commitments under this Clause 2.2.
2.2.5
The Parent may pay to the Increase Lender a fee in the amount and at the times agreed between the Parent and the Increase Lender in a Fee Letter.
2.2.6
Clause 26.4 (Limitation of responsibility of Existing Lenders) shall applymutatis mutandisin this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:-
(a)
an “Existing Lender” were references to all the Lenders immediately prior to the relevant increase;
(b)
the “New Lender” were references to that “Increase Lender”; and
(c)
a “re-transfer” and “re-assignment” were references to respectively a “transfer” and “assignment”.
2.3
Finance Parties’ rights and obligations
2.3.1
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
2.3.2
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
2.3.3
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
2.4
Obligors’ Agent
2.4.1
Each Obligor (other than the Company) by its execution of this Agreement or an Accession Deed irrevocably appoints the Company to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:-
(a)
the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to execute on its behalf any Accession Deed, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and
(b)
each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company,
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
2.4.2
Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors’ Agent or given to the Obligors’ Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors’ Agent and any other Obligor, those of the Obligors’ Agent shall prevail.
3.
PURPOSE
3.1
Each Borrower shall apply all amounts borrowed by it under the Facility and any utilisation of any Ancillary Facility towards the general corporate and working capital purposes of the Group (but not, in the case of any utilisation of any Ancillary Facility, towards prepayment of any Utilisation).
3.2
Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4.
CONDITIONS OF UTILISATION
4.1
Initial conditions precedent
The Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation) in relation to any Utilisation if on or before the Utilisation Date for that Utilisation, the Agent has received (or waived its requirement to receive) all of the documents and other evidence listed in Part 1 of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Company and the Lenders promptly upon being so satisfied.
4.2
Further conditions precedent
Subject to Clause 4.1(Initial Conditions Precedent),the Lenders will only be obliged to comply with Clause 5.4 (Lenders’ participation), if on the date of the Utilisation Request and on the proposed Utilisation Date:-
4.2.1
in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan, and in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; and
4.2.2
in relation to any Utilisation on the Closing Date, all the representations and warranties in Clause 21 (Representations) or, in relation to any other Utilisation, the Repeating Representations to be made by each Obligor are true in all material respects.
4.3
Maximum number of Utilisations
A Borrower (or the Company) may not deliver a Utilisation Request if as a result of the proposed Utilisation more than 10 Utilisations would be outstanding.
2
SECTION 3 UTILISATION
5.
UTILISATION — LOANS
5.1
Delivery of a Utilisation Request
A Borrower (or the Company on its behalf) may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.
5.2
Completion of a Utilisation Request for Loans
5.2.1
Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless:-
(a)
the proposed Utilisation Date is a Business Day within the Availability Period;
(b)
the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and
(c)
the proposed Interest Period complies with Clause 12 (Interest Periods).
5.2.2
Only one Utilisation may be requested in each Utilisation Request.
5.3
Currency and amount
5.3.1
The currency specified in a Utilisation Request must be Sterling.
5.3.2
The amount of the proposed Utilisation must be an amount which is not more than the Available Facility and which is a minimum of £250,000 or, if less, the Available Facility.
5.4
Lenders’ participation
5.4.1
If the conditions set out in this Agreement have been met, and subject to Clause 7.1 (Repayment of Loans), each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.
5.4.2
The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
5.4.3
The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan and, if different, the amount of that participation to be made available in cash, in each case by the Specified Time.
5.5
Limitations on Utilisations
5.5.1
The maximum aggregate amount of the Ancillary Commitments of all the Lenders shall not at any time exceed £15,000,000.
5.5.2
The maximum aggregate amount of the Ancillary Commitments of all the Lenders made available by way of overdraft, same-day access LIBOR loan facility or other facility made available on a short term basis shall not at any time exceed £10,000,000.
5.6
Cancellation of Commitment
The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.
6.
ANCILLARY FACILITIES
6.1
Type of Facility
An Ancillary Facility may be by way of:-
6.1.1 6.1.2 6.1.3
an overdraft facility; a same-day access LIBOR loan facility; a guarantee, bonding, documentary or stand-by letter of credit facility; or
6.1.4
any other facility or accommodation required in connection with the business of the Group and which is agreed by the Company with an Ancillary Lender.
6.2
Availability
6.2.1
If the Company and a Lender agree and except as otherwise provided in this Agreement, the Lender may provide an Ancillary Facility on a bilateral basis in place of all or part of that Lender’s unutilised Commitment (which shall (except for the purposes of determining the Majority Lenders) be reduced by the amount of the Ancillary Commitment under that Ancillary Facility). For the avoidance of doubt, BMW Financial Services (GB) Limited shall not be an Ancillary Lender. The Royal Bank of Scotland plc (as agent for National Westminster Bank plc) shall make available to the Company within 45 days of the date of this Agreement, an Ancillary Facility by way of a same-day access LIBOR loan facility on an un-committed, on-demand basis provided that no Default has occurred or is continuing and that the other terms of this Agreement relating to the provision of Ancillary Facilities have been complied with in relation to that Ancillary Facility;
6.2.2
An Ancillary Facility shall not be made available unless, not later than 5 Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Agent has received from the Company:-
(a)
a notice in writing of the establishment of an Ancillary Facility and specifying:-
(i)
the proposed Borrower(s) (or Affiliates of a Borrower) which may use the Ancillary Facility;
(ii)
the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility;
(iii)
the proposed type of Ancillary Facility to be provided;
(iv)
the proposed Ancillary Lender;
(v)
the proposed Ancillary Commitment, the maximum amount of the Ancillary Facility and, if the Ancillary Facility is an overdraft facility comprising more than one account its maximum gross amount (that amount being the “Designated Gross Amount”) and its maximum net amount (that amount being the “Designated Net Amount”); and
(b)
any other information which the Agent may reasonably request in connection with the Ancillary Facility.
The Agent shall promptly notify the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility.
No amendment or waiver of a term of any Ancillary Facility shall require the consent of any Finance Party other than the relevant Ancillary Lender unless such amendment or waiver itself relates to or gives rise to a matter which would require an amendment of or under this Agreement (including, for the avoidance of doubt, under this Clause). In such a case, the provisions of this Agreement with regard to amendments and waivers will apply.
6.2.3
Subject to compliance with Clause 6.2.2 above:-
(a)
the Lender concerned will become an Ancillary Lender; and
(b)
the Ancillary Facility will be available,
6.3
with effect from the date agreed by the Company and the Ancillary Lender. Terms of Ancillary Facilities
6.3.1
Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and the Company.
6.3.2
However, those terms:-
(a)
must be based upon normal commercial terms at that time (except as varied by this Agreement);
(b)
may allow only Borrowers (or Affiliates of Borrowers nominated pursuant to Clause 6.9 (Affiliates of Borrowers)) to use the Ancillary Facility;
(c)
may not allow the Ancillary Outstandings to exceed the Ancillary Commitment;
(d)
may not allow the Ancillary Commitment of a Lender to exceed the Available Commitment with respect to the Facility of that Lender; and
(e)
must require that the Ancillary Commitment is reduced to nil, and that all Ancillary Outstandings are repaid (or cash cover provided in respect of all the Ancillary Outstandings) not later than the Termination Date (or such earlier date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to zero).
6.3.3
If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail except for (i) Clause 35.3 (Day count convention) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility; (ii) an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail to the extent required to permit the netting of balances on those accounts; and (iii) where the relevant term of this Agreement would be contrary to, or inconsistent with, the law governing the relevant Ancillary Document, in which case that term of this Agreement shall not prevail.
6.3.4
Interest, commission and fees on Ancillary Facilities are dealt with in Clause 14.5 (Interest, commission and fees on Ancillary Facilities).
6.4
Repayment of Ancillary Facility
6.4.1
An Ancillary Facility shall cease to be available on the Termination Date or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement.
6.4.2
If an Ancillary Facility expires in accordance with its terms the Ancillary Commitment of the Ancillary Lender shall be reduced to zero (and its Commitment shall be increased accordingly).
6.4.3
No Ancillary Lender may demand repayment or prepayment of any amounts or demand cash cover for any liabilities made available or incurred by it under its Ancillary Facility (except where the Ancillary Facility is provided on a net limit basis to the extent required to bring any gross outstandings down to the net limit) unless:-
(a)
the Total Commitments have been cancelled in full, or all outstanding Utilisations under the Facility have become due and payable in accordance with the terms of this Agreement, or the Agent has declared all outstanding Utilisations under the Facility immediately due and payable, or the expiry date of the Ancillary Facility occurs; or
(b)
it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility; or
(c)
the Ancillary Outstandings (if any) under that Ancillary Facility can be refinanced by a Utilisation and the Ancillary Lender gives sufficient notice to enable a Utilisation to be made to refinance those Ancillary Outstandings.
6.4.4
For the purposes of determining whether or not the Ancillary Outstandings under an Ancillary Facility mentioned in Clause 6.4.3(c) above can be refinanced by a Utilisation of the Facility:
(a)
the Commitment of the Ancillary Lender will be increased by the amount of its Ancillary Commitment; and
(b)
the Utilisation may (so long as Clause 6.4.3(a) above does not apply) be made irrespective of whether a Default is outstanding or any other applicable condition precedent is not satisfied (but only to the extent that the proceeds are applied in refinancing those Ancillary Outstandings) and irrespective of whether Clause 4.3 (Maximum number of Utilisations) or Clause 5.2.1(b) applies.
6.4.5
On the making of a Utilisation of the Facility to refinance Ancillary Outstandings:-
(a)
each Lender will participate in that Utilisation in an amount (as determined by the Agent) which will result as nearly as possible in the aggregate amount of its participation in the Utilisations then outstanding bearing the same proportion to the aggregate amount of the Utilisations then outstanding as its Commitment bears to the Total Commitments; and
(b)
the relevant Ancillary Facility shall be cancelled.
6.4.6
In relation to an Ancillary Facility which comprises an overdraft facility where a Designated Net Amount has been established, the Ancillary Lender providing that Ancillary Facility shall only be obliged to take into account for the purposes of calculating compliance with the Designated Net Amount those credit balances which it is permitted to take into account by the then current law and regulations in relation to its reporting of exposures to the Financial Services Authority as netted for capital adequacy purposes.
6.5
Ancillary Outstandings
Each Borrower and each Ancillary Lender agrees with and for the benefit of each Lender that:-
6.5.1
the Ancillary Outstandings under any Ancillary Facility provided by that Ancillary Lender shall not exceed the Ancillary Commitment applicable to that Ancillary Facility and where the Ancillary Facility is an overdraft facility comprising more than one account, Ancillary Outstandings under that Ancillary Facility shall not exceed the Designated Net Amount in respect of that Ancillary Facility; and
6.5.2
where all or part of the Ancillary Facility is an overdraft facility comprising more than one account, the Ancillary Outstandings (calculated on the basis that the words in brackets in sub-clause (a) of the definition of that term were deleted) shall not exceed the Designated Gross Amount applicable to that Ancillary Facility.
6.6
Adjustment for Ancillary Facilities upon acceleration
In this Clause 6.6:-
"Revolving Outstandings”
means, in relation to a Lender, the aggregate amount of (i) its participation in each Utilisation then outstanding (together with the aggregate amount of all accrued interest, fees and commission owed to it as a Lender under the Facility), and (ii) if the Lender is also an Ancillary Lender, the Ancillary Outstandings in respect of Ancillary Facilities provided by that Ancillary Lender (together with the aggregate amount of all accrued interest, fees and commission owed to it as an Ancillary Lender in respect of the Ancillary Facility)
"Total Revolving Outstandings”
means the aggregate of all Revolving Outstandings
6.6.1
If a notice is served under Clause 25.18 (Acceleration) (other than a notice declaring Utilisations to be due on demand), each Lender and each Ancillary Lender shall promptly adjust by corresponding transfers (to the extent necessary) their claims in respect of amounts outstanding to them under the Facility and each Ancillary Facility to ensure that after such transfers the Revolving Outstandings of each Lender bear the same proportion to the Total Outstandings as such Lender’s Commitment bears to the Total Commitments, each as at the date the notice is served under Clause 25.18 (Acceleration).
6.6.2
If an amount outstanding under an Ancillary Facility is a contingent liability and that contingent liability becomes an actual liability or is reduced to zero after the original adjustment is made under Clause 6.6.1 above, then each Lender and Ancillary Lender will make a further adjustment by corresponding transfers (to the extent necessary) to put themselves in the position they would have been in had the original adjustment been determined by reference to the actual liability or, as the case may be, zero liability and not the contingent liability.
6.6.3
Prior to the application of the provisions of Clause 6.6.1, an Ancillary Lender that has provided an overdraft comprising more than one account under an Ancillary Facility shall set-off any liabilities owing to it under such overdraft facility against credit balances on any account comprised in such overdraft facility.
6.6.4
All calculations to be made pursuant to this Clause 6.6 shall be made by the Agent based upon information provided to it by the Lenders and Ancillary Lenders.
6.7
Information
Each Borrower and each Ancillary Lender shall, promptly upon request by the Agent, supply the Agent with any information relating to the operation of an Ancillary Facility (including the Ancillary Outstandings) as the Agent may reasonably request from time to time. Each Borrower consents to all such information being released to the Agent and the other Finance Parties.
6.8
Affiliates of Lenders as Ancillary Lenders
6.8.1
Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender. In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment is the amount set out opposite the relevant Lender’s name in Part 2 or Part 3 of Schedule 1 (The Original Parties) and/or the amount of any Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement. For the purposes of calculating the Lender’s Available Commitment with respect to the Facility, the Lender’s Commitment shall be reduced to the extent of the aggregate of the Ancillary Commitments of its Affiliates.
6.8.2
The Company shall specify any relevant Affiliate of a Lender in any notice delivered by the Company to the Agent pursuant to Clause 6.2.2(a).
6.8.3
An Affiliate of a Lender which becomes an Ancillary Lender shall accede to the Intercreditor Agreement as an Ancillary Lender and any person which so accedes to the Intercreditor Agreement shall, at the same time, become a party to this Agreement as an Ancillary Lender in accordance with clause 20.5.2 (Deeds of Accession) of the Intercreditor Agreement.
6.8.4
If a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender (as defined in Clause 26 (Changes to the Lenders), its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document.
6.8.5
Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate.
6.9
Affiliates of Borrowers
6.9.1
Subject to the terms of this Agreement, an Affiliate of a Borrower may with the approval of the relevant Lender become a borrower with respect to an Ancillary Facility.
6.9.2
The Company shall specify any relevant Affiliate of a Borrower in any notice delivered by the Company to the Agent pursuant to Clause 6.2.2(a).
6.9.3
If a Borrower ceases to be a Borrower under this Agreement in accordance with Clause 28.3 (Resignation of a Borrower), its Affiliate shall cease to have any rights under this Agreement or any Ancillary Document.
6.9.4
Where this Agreement or any other Finance Document imposes an obligation on a Borrower under an Ancillary Facility and the relevant Borrower is an Affiliate of a Borrower which is not a party to that document, the relevant Borrower shall ensure that the obligation is performed by its Affiliate.
6.9.5
Any reference in this Agreement or any other Finance Document to a Borrower being under no obligations (whether actual or contingent) as a Borrower under such Finance Document shall be construed to include a reference to any Affiliate of a Borrower being under no obligations under any Finance Document or Ancillary Document.
6.10
Commitment amounts
Notwithstanding any other term of this Agreement, each Lender shall ensure that at all times its Commitment is not less than:-
6.10.1
its Ancillary Commitment; or
6.10.2
the Ancillary Commitment of its Affiliate.
3
SECTION 4 REPAYMENT, PREPAYMENT AND CANCELLATION
7.
REPAYMENT
7.1
Repayment of Loans
7.1.1
Each Borrower which has drawn a Loan shall repay that Loan on the last day of its Interest Period.
7.1.2
Without prejudice to each Borrower’s obligation under Clause 7.1.1 above, if one or more Loans are to be made available to a Borrower:-
(a)
on the same day that a maturing Loan is due to be repaid by that Borrower; and
(b)
in whole or in part for the purpose of refinancing the maturing Loan;
the aggregate amount of the new Loans shall be treated as if applied in or towards repayment of the maturing Loan so that:-
(i)
if the amount of the maturing Loan exceeds the aggregate amount of the new Loans:-
(1)
the relevant Borrower will only be required to pay an amount in cash in the relevant currency equal to that excess; and
(2)
each Lender’s participation (if any) in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender’s participation (if any) in the maturing Loan and that Lender will not be required to make its participation in the new Loans available in cash; and
(ii)
if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans:-
(1)
the relevant Borrower will not be required to make any payment in cash; and
(2)
each Lender will be required to make its participation in the new Loans available in cash only to the extent that its participation (if any) in the new Loans exceeds that Lender’s participation (if any) in the maturing Loan and the remainder of that Lender’s participation in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender’s participation in the maturing Loan.
8.
ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION
8.1
Illegality
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Utilisation:-
8.1.1
that Lender, shall promptly notify the Agent upon becoming aware of that event;
8.1.2
upon the Agent notifying the Company, the Commitment of that Lender will be immediately cancelled; and
8.1.3
each Borrower shall repay that Lender’s participation in the Utilisations made to that Borrower on the last day of the Interest Period for each Utilisation occurring after the Agent has notified the Company or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).
8.2
Voluntary cancellation
The Company may, if it gives the Agent not less than 10 Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount and an integral multiple, of £250,000) of the Available Facility. Any cancellation under this Clause 8.2 shall reduce the Commitments of the Lenders rateably under the Facility.
8.3
Voluntary prepayment of Utilisations
A Borrower to which a Utilisation has been made may, if it or the Company gives the Agent not less than 5 Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Utilisation (but if in part, being an amount that reduces the amount of the Utilisation by a minimum amount, and an integral multiple, of £250,000).
8.4
Right of cancellation and repayment in relation to a single Lender
8.4.1
If:-
(a)
any sum payable to any Lender by an Obligor is required to be increased under Clause 15.2.3; or
(b)
any Lender claims indemnification from the Company or an Obligor under Clause 15.3 (Tax indemnity) or Clause 16.1 (Increased costs),
the Company may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender’s participation in the Utilisations.
8.4.2
On receipt of a notice referred to in Clause 8.4.1 above in relation to a Lender, the Commitment of that Lender shall immediately be reduced to zero.
8.4.3
On the last day of each Interest Period which ends after the Company has given notice under Clause 8.4.1 above in relation to a Lender (or, if earlier, the date specified by the Company in that notice), each Borrower to which a Utilisation is outstanding shall repay that Lender’s participation in that Utilisation together with all interest and other amounts accrued under the Finance Documents.
8.5
Right of cancellation in relation to a Defaulting Lender
8.5.1
If any Lender becomes a Defaulting Lender, the Parent or the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 10 Business Days’ notice of cancellation of each Available Commitment of that Lender.
8.5.2
On the notice referred to in Clause 8.5.1 above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero.
8.5.3
The Agent shall as soon as practicable after receipt of a notice referred to in Clause 8.5.1 above, notify all the Lenders.
9.
MANDATORY PREPAYMENT
9.1
Exit
9.1.1
For the purpose of this Clause 9.1:-
"Flotation”
means:- (a) a successful application being made for the admission of any part of the share capital of any member of the Group (or Holding Company of any member of the Group) to the Official List maintained by the FSA and the admission of any part of the share capital of any member of the Group (or Holding Company of any member of the Group) to trading on the London Stock Exchange plc or (b) the grant of permission to deal in any part of the issued share capital of any member of the Group (or Holding Company of any member of the Group) on the Alternative Investment Market or the PLUS market (formerly Ofex) or on any recognised investment exchange (as that term is used in the Financial Services and Markets Act 2000) or in or on any exchange or market replacing the same or any other exchange or market in any country
"FSA”
means the Financial Services Authority acting in its capacity as the competent authority for the purposes of Part VI of the Financial Services and Markets Act 2000
9.1.2
Upon the occurrence of:-
(a)
any Flotation; or
(b)
a Change of Control; or
(c)
the sale of all or substantially all of the assets of the Group whether in a single transaction or a series of related transactions,
the Facility will be cancelled and all outstanding Utilisations and Ancillary Outstandings, together with accrued interest, and all other amounts accrued under the Finance Documents, shall become immediately due and payable.
10.
RESTRICTIONS
10.1
Notices of Cancellation or Prepayment
Any notice of cancellation, prepayment, authorisation or other election given by any Party under Clause 8 (Illegality, voluntary prepayment and cancellation) shall (subject to the terms of those Clauses) 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.
10.2
Interest and other amounts
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
10.3
Reborrowing of Facility
Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement.
10.4
Prepayment in accordance with Agreement
No Borrower shall repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
10.5
No reinstatement of Commitments
Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
10.6
Agent’s receipt of Notices
If the Agent receives a notice under Clause 8 (Illegality, voluntary prepayment and cancellation) it shall promptly forward a copy of that notice or election to either the Company or the affected Lender, as appropriate.
10.7
Effect of Repayment and Prepayment on Commitments
If all or part of a Utilisation under the Facility is repaid or prepaid and is not available for redrawing (other than by operation of Clause 4.2 (Further conditions precedent)), an amount of the Commitments (equal to the amount of the Utilisation which is repaid or prepaid) in respect of the Facility will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this Clause 10.7 shall reduce the Commitments of the Lenders rateably under the Facility.
4
SECTION 5 COSTS OF UTILISATION
11.
INTEREST
11.1
Calculation of interest
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:-
11.2
11.1.1Margin; 11.1.2LIBOR; and 11.1.3Mandatory Cost, if any. Payment of interest
11.2.1
The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six Monthly intervals after the first day of the Interest Period).
11.2.2
If the annual audited financial statements of the Group and related Compliance Certificate received by the Agent show that a higher Margin should have applied during a certain period, then the Company shall (or shall ensure the relevant Borrower shall) promptly pay to the Agent any amounts necessary to put the Agent and the Lenders in the position they would have been in had the appropriate rate of the Margin applied during such period.
11.3
Default interest
11.3.1
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to Clause 11.3.2 below, is 2.0 per cent higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 11.3 shall be immediately payable by the Obligor on demand by the Agent.
11.3.2
If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:-
(a)
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(b)
the rate of interest applying to the overdue amount during that first Interest Period shall be 2.0 per cent higher than the rate which would have applied if the overdue amount had not become due.
11.3.3
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
11.4
Notification of rates of interest
The Agent shall promptly notify the Lenders and the relevant Borrower (or the Company) of the determination of a rate of interest under this Agreement.
12.
INTEREST PERIODS
12.1
Selection of Interest Periods and Terms
12.1.1
A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan.
12.1.2
Subject to this Clause 12, a Borrower (or the Company) may select an Interest Period of one week or one, three or six months or any other period agreed between the Company and the Agent (acting on the instructions of all the Lenders in relation to the relevant Loan).
12.2
12.1.3An Interest Period for a Loan shall not extend beyond the Termination Date. 12.1.4A Loan has one Interest Period only. Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
13.
CHANGES TO THE CALCULATION OF INTEREST
13.1
Absence of quotations
Subject to Clause 13.2 (Market disruption) if LIBOR is to be determined by reference to the Base Reference Banks but a Base Reference Bank does not supply a quotation by the Specified Time on the Quotation Day, the applicable LIBOR shall be determined on the basis of the quotations of the remaining Base Reference Banks.
13.2
Market disruption
13.2.1
If a Market Disruption Event occurs in relation to a Loan for any Interest Period, then the rate of interest on each Lender’s share of that Loan for the Interest Period shall be the percentage rate per annum which is the sum of:-
(a)
the Margin;
(b)
the rate notified to the Agent by that Lender as soon as practicable and in any event by close of business on the date falling two Business Days after the Quotation Day (or, if earlier, on the date falling two Business Days prior to the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select; and
(c)
the Mandatory Cost, if any, applicable to that Lender’s participation in the Loan.
13.2.2
If:-
(a)
the percentage rate per annum notified by a Lender pursuant to Clause 13.2.1(b) above is less than LIBOR; or
(b)
a Lender has not notified the Agent of a percentage rate per annum pursuant to Clause 13.2.1(b) above,
the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of Clause 13.2.1 above, to be LIBOR.
13.2.3
In this Agreement:-
"Market Disruption Event”
means:
(a) at or about noon on the Quotation Day for the relevant Interest Period the Screen Rate is not available and none or only one of the Base Reference Banks supplies a rate to the Agent to determine LIBOR for the relevant currency and Interest Period or (b) before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 35 per cent of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR
13.3
Alternative basis of interest or funding
13.3.1
If a Market Disruption Event occurs and the Agent or the Company so requires, the Agent and the Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.
13.3.2
Any alternative basis agreed pursuant to Clause 13.3.1 above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties.
13.4
Break Costs
13.4.1
Each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
13.4.2
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
14.
FEES
14.1
Commitment fee
14.1.1
The Company shall pay to the Agent (for the account of each Lender) a fee in Sterling computed at the rate of 35 per cent of the applicable Margin per annum on that Lender’s Available Commitment for the Availability Period.
14.1.2
The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and on the cancelled amount of the relevant Lender’s Commitment at the time the cancellation is effective.
14.2
Arrangement fee
The Company shall pay to the Arrangers (for their own account) an arrangement fee in the amount and at the times agreed in a Fee Letter.
14.3
Agency fee
The Company shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
14.4
Security Agent fee
The Company shall pay to the Security Agent (for its own account) the Security Agent fee in the amount and at the times agreed in a Fee Letter.
14.5
Interest, commission and fees on Ancillary Facilities
The rate and time of payment of interest, commission, fees and any other remuneration in respect of each Ancillary Facility shall be determined by agreement between the relevant Ancillary Lender and the Borrower of that Ancillary Facility based upon normal market rates and terms (provided that the rate and time of payment of interest, commission, fees and any other remuneration in respect of the same-day access LIBOR facility referred to in clause 6.2.1 shall be on terms no more onerous than the Facility as at the date of this Agreement).
5
SECTION 6 ADDITIONAL PAYMENT OBLIGATIONS
15.
TAX GROSS UP AND INDEMNITIES
15.1
Definitions
In this Agreement:-
"Protected Party”
means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document
"Qualifying Lender”
means:- (a) a Lender (other than a Lender within sub-clause (b) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:- (i) a Lender:- (A) which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document or (B) in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made, and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance (ii) a Lender which is:- (A) a company resident in the United Kingdom for United Kingdom tax purposes (B) a partnership each member of which is:- (1) a company so resident in the United Kingdom or (2) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA (C) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company or (iii) a Treaty Lender or (b) a building society (as defined for the purposes of section 880 of the ITA) making an advance under a Finance Document
"Tax Confirmation”
means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:- (a) a company resident in the United Kingdom for United Kingdom tax purposes (b) a partnership each member of which is:- (i) a company so resident in the United Kingdom or (ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA or (c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company
"Tax Credit”
means a credit against, relief or remission for, or repayment of, any Tax
"Tax Deduction”
means a deduction or withholding for or on account of Tax from a payment under a Finance Document
"Tax Payment”
means either the increase in a payment made by an Obligor to a Finance Party under Clause 15.2 (Tax gross-up) or a payment under Clause 15.3 (Tax indemnity)
"Treaty Lender”
means a Lender which:- (a) is treated as a resident of a Treaty State for the purposes of the Treaty and (b) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender’s participation in the Loan is effectively connected
"Treaty State”
means a jurisdiction having a double taxation agreement (a “Treaty”) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest
"UK Non-Bank Lender”
means:- (a) where a Lender becomes a Party on the day on which this Agreement is entered into, a Lender listed in Part 3 of Schedule 1 (The Original Parties); and (b) where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a Tax Confirmation in the Assignment Agreement or Transfer Certificate which it executes on becoming a Party
Unless a contrary indication appears, in this Clause 15 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.
15.2
Tax gross-up
15.2.1
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
15.2.2
The Company shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Company and that Obligor.
15.2.3
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
15.2.4
A payment shall not be increased under Clause 15.2.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due:-
(a)
the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or
(b)
the relevant Lender is a Qualifying Lender solely by virtue of sub-clause (a)(ii) of the definition of Qualifying Lender and:-
(i)
an officer of HM Revenue & Customs has given (and not revoked) a direction (a “Direction”) under section 931 of the ITA which relates to the payment and that Lender has received from the Obligor making the payment or from the Company a certified copy of that Direction; and
(ii)
the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or
(c)
the relevant Lender is a Qualifying Lender solely by virtue of sub-clause (a)(ii) of the definition of Qualifying Lender and:-
(i)
the relevant Lender has not given a Tax Confirmation to the Company; and
(ii)
the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company, on the basis that the Tax Confirmation would have enabled the Company to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or
(d)
the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under Clause 15.2.7 below.
15.2.5
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
15.2.6
Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
15.2.7
(a)
Subject to paragraph (b) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.
(b)
Nothing in paragraph (a) above shall require a Treaty Lender to:-
(i)
register under the HMRC DT Treaty Passport scheme;
(ii)
apply to the HMRC DT Treaty Passport scheme to any Utilisation if it has so registered; or
(iii)
file Treaty Forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with Clause 15.2.10 or Clause 15.6 (HMRC DT Treaty Passport scheme confirmation) and the Obligor making that payment has not complied with its obligations under Clause 15.2.11 or Clause 15.6.2 (HMRC DT Treaty Passport scheme confirmation).
15.2.8
A UK Non-Bank Lender which becomes a Party on the day on which this Agreement is entered into gives a Tax Confirmation to the Company by entering into this Agreement.
15.2.9
A UK Non-Bank Lender shall promptly notify the Company and the Agent if there is any change in the position from that set out in the Tax Confirmation.
15.2.10
A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Agent and without liability to any Obligor) by including its scheme reference number and its jurisdiction of residence opposite its name in Part 2 of Schedule 1 (The Original Parties).
15.2.11
Where a Lender includes the indication described in Clause 15.2.10 in Part 2 of Schedule 1 (The Original Parties):-
(a)
the Original Borrower shall to the extent that the Lender is a Lender under the Facility made available to that Original Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of the date of this Agreement and shall promptly provide the Lender with a copy of that filing; and
(b)
each Additional Borrower shall to the extent that the Lender is a Lender under the Facility made available to that Additional Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of becoming an Additional Borrower and shall promptly provide the Lender with a copy of that filing.
15.2.12
If a Lender has not included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with Clause 15.2.10 or Clause 15.6.1 (HMRC DT Treaty Passport scheme confirmation), no Obligor shall file any form relating to the HMRC DT Treaty Passport scheme in respect of that Lender’s Commitment(s) or its participation in any Utilisation.
15.3
Tax indemnity
15.3.1
The Company shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
15.3.2
Clause 15.3.1 above shall not apply:-
(a)
with respect to any Tax assessed on a Finance Party:-
(i)
under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
(ii)
under the law of the jurisdiction in which that Finance Party’s Facility Office is located in respect of amounts received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(b)
to the extent a loss, liability or cost:-
(i)
is compensated for by an increased payment under Clause 15.2 (Tax gross-up); or
(ii)
would have been compensated for by an increased payment under Clause 15.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in Clause 15.2.4 applied.
15.3.3
A Protected Party making, or intending to make a claim under Clause 15.3.1 above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Company.
15.3.4
A Protected Party shall, on receiving a payment from an Obligor under this Clause 15.3, notify the Agent.
15.4
Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:-
15.4.1
a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part or to that Tax Payment; and
15.4.2
that Finance Party has obtained, utilised and retained that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
15.5
Lender Status Confirmation
Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate, Assignment Agreement or Increase Confirmation which it executes on becoming a Party, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in:-
15.5.1 15.5.2 15.5.3
not a Qualifying Lender; a Qualifying Lender (other than a Treaty Lender); or a Treaty Lender.
If a New Lender fails to indicate its status in accordance with this Clause 15.5 then such New Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Agent which category applies (and the Agent, upon receipt of such notification, shall inform the Company). For the avoidance of doubt, a Transfer Certificate, Assignment Agreement or Increase Confirmation shall not be invalidated by any failure of a Lender to comply with this Clause 15.5.
15.6
HMRC DT Treaty Passport scheme confirmation
15.6.1
A New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which then wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Agent and without liability to any Obligor) in the Transfer Certificate or Assignment Agreement which it executes by including its scheme reference number and its jurisdiction of tax residence in that Transfer Certificate or Assignment Agreement.
15.6.2
Where a New Lender includes the indication described in Clause 15.6.1 in the relevant Transfer Certificate or Assignment Agreement:-
(a)
each Borrower which is a Party as a Borrower as at the relevant Transfer Date shall, and to the extent that that New Lender becomes a Lender under the Facility which is made available to that Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of that Transfer Date and shall promptly provide the Lender with a copy of that filing; and
(b)
each Additional Borrower which becomes an Additional Borrower after the relevant Transfer Date shall, to the extent that that New Lender is a Lender under the Facility which is made available to that Additional Borrower pursuant to Clause 2.1 (The Facility), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of becoming an Additional Borrower and shall promptly provide the Lender with a copy of that filing.
15.7
Stamp taxes
The Company shall pay and, within three Business Days of demand, indemnify each Secured Party and Arranger against any cost, loss or liability that Secured Party or Arranger incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
15.8
VAT
15.8.1
All amounts set out or expressed in a Finance Document to be payable by any Party to a Finance Party which (in whole or in part) constitute the consideration for a supply or supplies for VAT purposes shall be deemed to be exclusive of any VAT which is chargeable on such supply or supplies, and accordingly, subject to Clause 15.8.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document, that Party shall pay to the Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of such VAT (and such Finance Party shall promptly provide an appropriate invoice to such Party).
15.8.2
If VAT is or becomes chargeable on any supply made by any Finance Party (the “Supplier”) to any other Finance Party (the “Recipient”) under a Finance Document, and any Party other than the Recipient (the “Subject Party”) is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse the Recipient in respect of that consideration), such Party shall also pay to the Supplier (in addition to and at the same time as paying such amount) an amount equal to the amount of such VAT. The Recipient will promptly pay to the Subject Party an amount equal to any credit or repayment obtained by the Recipient from the relevant tax authority which the Recipient reasonably determines is in respect of such VAT.
15.8.3
Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
15.8.4
Any reference in this Clause 15.8 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term “representative member” to have the same meaning as in the Value Added Tax Act 1994).
16.
INCREASED COSTS
16.1
Increased costs
16.1.1
Subject to Clause 16.3 (Exceptions) the Company shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement.
16.1.2
In this Agreement “Increased Costs” means:-
(a)
a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;
(b)
an additional or increased cost; or
(c)
a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or an Ancillary Commitment or funding or performing its obligations under any Finance Document.
16.2
Increased cost claims
16.2.1
A Finance Party intending to make a claim pursuant to Clause 16.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Company.
16.2.2
Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
16.3
Exceptions
16.3.1
Clause 16.1 (Increased Costs) does not apply to the extent any Increased Cost is:-
(a)
attributable to a Tax Deduction required by law to be made by an Obligor;
(b)
compensated for by Clause 15.3 (Tax indemnity) (or would have been compensated for under Clause 15.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 15.3.2 applied);
(c)
compensated for by the payment of the Mandatory Cost; or
(d)
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
16.3.2
In this Clause 16.3 reference to a “Tax Deduction” has the same meaning given to the term in Clause 15.1 (Definitions).
17.
OTHER INDEMNITIES
17.1
Currency indemnity
17.1.1
If any sum due from an Obligor under the Finance Documents (a “Sum”), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the “First Currency”) in which that Sum is payable into another currency (the “Second Currency”) for the purpose of:-
(a)
making or filing a claim or proof against that Obligor; or
(b)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify the Arranger and each other Secured Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
17.1.2
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
17.2
Other indemnities
17.2.1
The Company shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify the Arranger and each other Secured Party against any cost, loss or liability incurred by it as a result of:-
(a)
the occurrence of any Event of Default;
(b)
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 31 (Sharing among the Finance Parties);
(c)
funding, or making arrangements to fund, its participation in a Utilisation requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
(d)
a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Company.
17.3
Indemnity to the Agent
The Company shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:-
17.3.1
investigating any event which it reasonably believes is a Default; or
17.3.2
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised.
17.4
Indemnity to the Security Agent
17.4.1
Each Obligor shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:-
(a)
the taking, holding, protection or enforcement of the Transaction Security,
(b)
the exercise of any of the rights, powers, discretions and remedies vested in the Security Agent and each Receiver and Delegate by, and in accordance with, the Finance Documents or by law; or
(c)
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents.
17.4.2
The Security Agent may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 17.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.
18.
MITIGATION BY THE LENDERS
18.1
Mitigation
18.1.1
Each Finance Party shall, in consultation with the Company, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 8.1 (Illegality), Clause 15 (Tax gross-up and indemnities) or Clause 16 (Increased Costs) or paragraph 3 of Schedule 4 (Mandatory Cost Formulae) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
18.1.2
Clause 18.1.1 above does not in any way limit the obligations of any Obligor under the Finance Documents.
18.2
Limitation of liability
18.2.1
The Company shall promptly indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 18.1 (Mitigation).
18.2.2
A Finance Party is not obliged to take any steps under Clause 18.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
19.
COSTS AND EXPENSES
19.1
Transaction expenses
The Company shall promptly on demand pay the Agent, the Arranger and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, syndication and perfection of:-
19.1.1
this Agreement and any other documents referred to in this Agreement and the Transaction Security; and
19.1.2
any other Finance Documents executed after the date of this Agreement.
19.2
Amendment costs
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 32.10 (Change of currency), the Company shall, within three Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent and the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
19.3
Security Agent’s ongoing costs
19.3.1
In the event of (i) a Default or (ii) the Security Agent considering it necessary (acting reasonably) or (iii) the Security Agent being requested by an Obligor or the Majority Lenders to undertake duties which the Security Agent and the Company agree to be of an exceptional nature and/or outside the scope of the normal duties of the Security Agent under the Finance Documents, the Company shall pay to the Security Agent any additional remuneration that may be agreed between them.
19.3.2
If the Security Agent and the Company fail to agree upon the nature of the duties or upon any additional remuneration, that dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Company or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Company) and the determination of any investment bank shall be final and binding upon the parties to this Agreement.
19.4
Enforcement and preservation costs
The Company shall, within three Business Days of demand, pay to the Arranger and each other Secured Party the amount of all costs and expenses (including legal fees) properly incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights.
6
SECTION 7 GUARANTEE
20.
GUARANTEE AND INDEMNITY
20.1
Guarantee and indemnity
Each Guarantor irrevocably and unconditionally jointly and severally:-
20.1.1
guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor’s obligations under the Finance Documents;
20.1.2
undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
20.1.3
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 20 if the amount claimed had been recoverable on the basis of a guarantee.
20.2
Continuing Guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
20.3
Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 20 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
20.4
Waiver of defences
The obligations of each Guarantor under this Clause 20 will not be affected by an act, omission, matter or thing which, but for this Clause 20, would reduce, release or prejudice any of its obligations under this Clause 20 (without limitation and whether or not known to it or any Finance Party) including:-
20.4.1
any time, waiver or consent granted to, or composition with, any Obligor or other person;
20.4.2
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
20.4.3
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
20.4.4
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
20.4.5
any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;
20.4.6
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
20.4.7
any insolvency or similar proceedings.
20.5
Guarantor Intent
Without prejudice to the generality of Clause 20.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: business acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
20.6
Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 20. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
20.7
Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:-
20.7.1
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
20.7.2
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor’s liability under this Clause 20.
20.8
Deferral of Guarantors’ rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 20:-
20.8.1
to be indemnified by an Obligor;
20.8.2
to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
20.8.3
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
20.8.4
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 20.1 (Guarantee and Indemnity);
20.8.5
to exercise any right of set-off against any Obligor; and/or
20.8.6
to claim or prove as a creditor of any Obligor in competition with any Finance Party.
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 32 (Payment mechanics).
20.9
Release of Guarantors’ right of contribution
If any Guarantor (a “Retiring Guarantor”) ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:-
20.9.1
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and
20.9.2
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
20.10
Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
20.11
Guarantee Limitations
This guarantee does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of sections 678 or 679 of the Companies Act 2006 or any equivalent and applicable provisions under the laws of the jurisdiction of incorporation of the relevant Guarantor and, with respect to any Additional Guarantor, is subject to any limitations set out in the Accession Deed applicable to such Additional Guarantor.
7
SECTION 8 REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
21.
REPRESENTATIONS
21.1
General
Each Obligor makes the representations and warranties set out in this Clause 21 to each Finance Party.
21.2
Status
21.2.1
It and each of its Subsidiaries is a limited liability corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.
21.2.2
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.
21.3
Binding obligations
Subject to the Legal Reservations:-
21.3.1
the obligations expressed to be assumed by it in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations; and
21.3.2
(without limiting the generality of Clause 21.3.1 above), each Transaction Security Document to which it is a party creates the security interests which that Transaction Security Document purports to create and those security interests are valid and effective.
21.4
Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the granting of the Transaction Security pursuant to the Agreed Security Principles do not and will not conflict with:-
21.4.1
any law or regulation applicable to it;
21.4.2
the constitutional documents of any member of the Group; or
21.4.3
(any agreement or instrument binding upon it or any member of the Group or any of its or any member of the Group’s assets or constitute a default or termination event (however described) under any such agreement or instrument which has or is reasonably likely to have a Material Adverse Effect.
21.5
Power and authority
21.5.1
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents.
21.5.2
No limit on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Finance Documents to which it is a party.
21.6
Validity and admissibility in evidence
21.6.1
All Authorisations required:-
(a)
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and
(b)
to make the Finance Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
have been obtained or effected and are in full force and effect except any Authorisation referred to in Clause 24.9, which Authorisations will be promptly obtained or effected after the date of this Agreement.
21.6.2
All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect if failure to obtain or effect those Authorisations has or is reasonably likely to have a Material Adverse Effect.
21.7
Governing law and enforcement
21.7.1
Subject to the Legal Reservations, the choice of governing law of the Finance Documents will be recognised and enforced in its Relevant Jurisdictions.
21.7.2
Subject to the Legal Reservations, any judgment obtained in relation to a Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in its Relevant Jurisdictions.
21.8
Insolvency
No:-
21.8.1
corporate action, legal proceeding or other procedure or step described in Clause 25.7.1; or
21.8.2
creditors’ process described in Clause 25.8 (Creditors’ process),
is being taken or, to the knowledge of the Parent or the Company, is threatened in writing in relation to the Parent or a member of the Group; and none of the circumstances described in Clause 25.6 (Insolvency) applies to the Parent or a member of the Group.
21.9
No filing or stamp taxes
Under the laws of its Relevant Jurisdiction it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except registration of particulars of the Transaction Security Documents at the Companies Registration Office in England and Wales under section 860 of the Companies Act 2006 and Regulation 10 of the Overseas Companies (Execution of Documents and Registration of Charges) Regulations 2009 and payment of associated fees which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.
21.10
Deduction of Tax
It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender which is:-
21.10.1
a Qualifying Lender:-
(a)
falling within paragraph (a)(i) of the definition of Qualifying Lender; or
(b)
except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (a)(ii) of the definition of Qualifying Lender; or
(c)
falling within paragraph (b) of the definition of Qualifying Lender; or
21.10.2
a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488).
21.11
No default
21.11.1
No Event of Default and, on the date of this Agreement, no Default is continuing or will result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document.
21.11.2
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 foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any Material Company or to which its (or any Material Company’s) assets are subject,
21.12
which in each case has or is reasonably likely to have a Material Adverse Effect. No misleading information
Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement:-
21.12.1
all material information provided to a Finance Party by or on behalf of the Parent or the Company in connection with this Agreement and the provision of the Facility and/or the Group on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and
21.12.2
all other written information provided by the Parent or any member of the Group (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any material respect.
21.13
Original Financial Statements
21.13.1
Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied unless expressly disclosed to the Agent in writing to the contrary. However in the case of monthly and quarterly statements, normal year end adjustments were not made.
21.13.2
Its unaudited Original Financial Statements fairly represent its financial condition and results of operations for the relevant month or financial quarter.
21.13.3
Its audited Original Financial Statements give a true and fair view of its financial condition and results of operations during the relevant Financial Year.
21.13.4
There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Parent and/or the Company) since the date of the Original Financial Statements.
21.13.5
The Original Financial Statements of the Company do not consolidate the results, assets or liabilities of any person or business which does not form part of the Group.
21.13.6
Its most recent financial statements delivered pursuant to Clause 22.1 (Financial Statements):-
(a)
have been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements; and
(b)
give a true and fair view of (if audited) or fairly present (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
21.13.7
The budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied.
21.13.8
Since the date of the most recent financial statements delivered pursuant to Clause 22.1(Financial Statements)there has been no material adverse change in the business, assets or financial condition of the Group.
21.14
No proceedings pending or threatened
No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started and are ongoing or threatened in writing against it or any of its Subsidiaries.
21.15
No breach of laws
21.15.1
It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
21.15.2
No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against the Parent or any member of the Group which have or are reasonably likely to have a Material Adverse Effect.
21.16
Environmental laws
21.16.1
The Parent and each member of the Group is in compliance with Clause 24.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.
21.16.2
No Environmental Claim has been commenced and is outstanding or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against the Parent or any member of the Group where that claim has or is reasonably likely, if adversely determined against the Parent or that member of the Group, to have a Material Adverse Effect.
21.17
Taxation
21.17.1
It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment of any amount in respect of Tax of £500,000 (or its equivalent in any other currency) or more unless such payment is being contested in good faith and is adequately reserved against in accordance with the Accounting Principles.
21.17.2
Save for claims being contested in good faith and which have been adequately reserved against (in accordance with the Accounting Principles) no claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any of its Subsidiaries) with respect to Taxes such that a liability of, or claim against, any member of the Group of £250,000 (or its equivalent in any other currency) or more is reasonably likely to arise.
21.17.3
It is resident for Tax purposes only in the jurisdiction of its incorporation.
21.18
Security and Financial Indebtedness
21.18.1
No Security or Quasi-Security exists over all or any of the present or future assets of the Parent or any member of the Group other than as permitted by this Agreement.
21.18.2
The Parent and no member of the Group has any Financial Indebtedness outstanding other than as permitted by this Agreement.
21.19
Ranking
Subject to the terms of the Vehicle Financier Deeds of Priority, the Transaction Security has or will have first ranking priority and it is not subject to any prior ranking orpari passuranking Security other than Permitted Security.
21.20
Good title to assets
It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted in all material respects (save for certain motor vehicles and diagnostic equipment which are subject to retention of title provisions and which the relevant member of the Group has the appropriate Authorisations to use).
21.21
Legal and beneficial ownership
It and each of its Subsidiaries is the sole legal and beneficial owner of the respective assets over which it purports to grant Security under the Transaction Security Documents.
21.22
Shares
The shares of any member of the Group and of PAE GmbH which are subject to the Transaction Security are fully paid and not subject to any option to purchase or similar rights. The constitutional documents of companies whose shares are subject to the Transaction Security do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security. There are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of any member of the Group or of PAE GmbH (including any option or right of pre-emption or conversion).
21.23
Intellectual Property
It and each of its Subsidiaries:-
21.23.1
is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted;
21.23.2
does not (nor does any of its Subsidiaries), in carrying on its businesses, infringe any Intellectual Property of any third party in any respect which has or is reasonably likely to have a Material Adverse Effect; and
21.23.3
has taken all formal or procedural actions (including payment of fees) required to maintain any material Intellectual Property owned by it.
21.24
Group Structure Chart
21.24.1
The Group Structure Chart delivered to the Agent pursuant to Part 1 of Schedule 2 (Conditions Precedent) is true, complete and accurate in all material respects and shows the following information:-
(a)
the Parent and each member of the Group, including current name and company registration number, its jurisdiction of incorporation and/or establishment, a list of shareholders and indicating whether a company is a Dormant Subsidiary or is not a company with limited liability; and
(b)
all minority interests in any member of the Group and any person in which the Parent or any member of the Group holds shares in its issued share capital or equivalent ownership interest of such person.
21.25
Obligors
21.25.1
Each Material Company is or will be an Obligor on the Closing Date.
21.25.2
The aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA (as defined in Clause 23 (Financial Covenants)) and the aggregate gross assets, the aggregate net assets and the aggregate turnover of the Guarantors (other than the Parent) on the Closing Date (calculated on an unconsolidated basis and excluding all intra-Group items and investments in Subsidiaries of any member of the Group) exceeds 90% of Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) and the consolidated gross assets, net assets and turnover of the Group.
21.26
Accounting reference date
The Accounting Reference Date of the Parent and each member of the Group is 31 December.
21.27
Centre of main interests and establishments
For the purposes of The Council of the European Union Regulation No 1346/2000 on Insolvency Proceedings (the “Regulation”), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in England and Wales and it has no “establishment” (as that term is used in Article 2(h) of the Regulations) in any other jurisdiction.
21.28
Pensions
Except for the DB Schemes:-
21.28.1
neither it nor any of its Subsidiaries is or has at any time been an employer (for the purposes of sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993); and
21.28.2
so far as the Company is aware (having made due and diligent enquiries), neither it nor any of its Subsidiaries is or has at any time been “connected” with or an “associate” of (as those terms are used in sections 38 and 43 of the Pensions Act 2004) such an employer.
21.29
No adverse consequences
21.29.1
It is not necessary under the laws of its Relevant Jurisdictions:-
(a)
in order to enable any Finance Party to enforce its rights under any Finance Document; or
(b)
by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,
that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.
21.29.2
No Finance Party is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of any Finance Document.
21.30
Times when representations made
21.30.1
All the representations and warranties in this Clause 21 are made by each Original Obligor on the date of this Agreement.
21.30.2
All the representations and warranties in this Clause 21 are deemed to be made by each Obligor on the Closing Date.
21.30.3
The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each Utilisation Date and on the first day of each Interest Period (except that those contained in Clauses 21.13.1 – 21.13.5 will cease to be so made once subsequent financial statements have been delivered under this Agreement).
21.30.4
All the representations and warranties in this Clause 21 except Clause 21.12 (No misleading information) and Clause 21.24 (Group Structure Chart) are deemed to be made by each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an Additional Obligor with respect to itself and (if applicable) its Subsidiaries.
21.30.5
Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made.
22.
INFORMATION UNDERTAKINGS
The undertakings in this Clause 22 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
In this Clause 22:-
"Annual Financial Statements”
means the financial statements for a Financial Year delivered pursuant to Clause 22.1.1
"Monthly Financial Statements”
means the financial statements delivered pursuant to Clause 22.1.3
"Quarterly Financial Statements”
means the financial statements delivered pursuant to Clause 22.1.2
22.1
Financial statements
The Company shall supply to the Agent in sufficient copies for all the Lenders:-
22.1.1
as soon as they are available, but in any event within 270 days after the end of each of its Financial Years:-
(a)
its audited consolidated financial statements for that Financial Year; and
(b)
the audited financial statements (consolidated if appropriate) of each Obligor for that Financial Year;
22.1.2
as soon as they are available, but in any event within 30days after the end of each Financial Quarter of each of its Financial Years its consolidated financial statements for that Financial Quarter; and
22.1.3
as soon as they are available, but in any event within 30 days after the end of each month its financial statements on a consolidated basis for that month (to include cumulative management accounts for the Financial Year to date).
22.2
Provision and contents of Compliance Certificate
22.2.1
The Company shall supply a Compliance Certificate to the Agent with each set of its audited consolidated Annual Financial Statements and each set of its consolidated Quarterly Financial Statements.
22.2.2
The Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with Clause 23 (Financial Covenants).
22.2.3
Each Compliance Certificate shall be signed by two directors (one of whom shall be the finance director) of the Company and two directors (one of whom shall be the finance director) of the Parent and, if required by the Agent (acting on the instructions of the Majority Lenders) following the occurrence of a Default which is continuing each Compliance Certificate to be delivered with the consolidated Annual Financial Statements of the Company, shall be reported on by the Company’s Auditors in the form agreed by the Company and the Majority Lenders.
22.3
Requirements as to financial statements
22.3.1
The Company shall procure that each set of Annual Financial Statements, Quarterly Financial Statements and Monthly Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition the Company shall procure that:-
(a)
each set of Annual Financial Statements shall be audited by the Auditors;
(b)
each set of Monthly Financial Statements is in a format acceptable to each Lender.
22.3.2
Each set of financial statements delivered pursuant to Clause 22.1 (Financial statements):-
(a)
shall be certified by a director of the relevant company as giving a true and fair view of (in the case of Annual Financial Statements for any Financial Year), or fairly representing (in other cases), its financial condition and operations as at the date as at which those financial statements were drawn up and, in the case of the Annual Financial Statements, shall be accompanied by any letter addressed to the management of the relevant company by the Auditors and accompanying those Annual Financial Statements;
(b)
in the case of consolidated financial statements of the Group, shall be accompanied by a statement by the directors of the Company comparing actual performance for the period to which the financial statements relate to:-
(i)
the projected performance for that period set out in the Budget; and
(ii)
the actual performance for the corresponding period in the preceding Financial Year of the Group; and
(c)
shall be prepared using the Accounting Principles, accounting practices and financial reference periods consistent with those applied in the case of any Obligor, in the preparation of the Original Financial Statements for that Obligor,
unless, in relation to any set of financial statements, the Company notifies the Agent that there has been a change in the Accounting Principles or the accounting practices and its Auditors (or, if appropriate, the Auditors of the Obligor) deliver to the Agent:-
(i)
a description of any change necessary for those financial statements to reflect the Accounting Principles or accounting practices upon which that Obligor’s Original Financial Statements were prepared; and
(ii)
sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 23 (Financial covenants) has been complied with, to determine the Margin as set out in the definition of “Margin” and to make an accurate comparison between the financial position indicated in those financial statements and that Obligor’s Original Financial Statements.
Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the Accounting Principles applied in the preparation of the the Original Financial Statements.
22.4
Budget
22.4.1
The Company shall supply to the Agent in sufficient copies for all the Lenders, as soon as the same become available but in any event within 30 days after the start of each of its Financial Years, an annual Budget for that Financial Year.
22.4.2
The Company shall ensure that each Budget:-
(a)
is in a form reasonably acceptable to the Agent and includes a projected consolidated profit and loss, balance sheet and cashflow statement for the Group, projected financial covenant calculations and such other information requested by each Lender (acting reasonably)
(b)
is prepared in accordance with the Accounting Principles and the accounting practices and financial reference periods applied to financial statements under Clause 22.1 (Financial statements); and
(c)
has been approved by the board of directors of the Company.
22.4.3
If the Company updates or changes the Budget, it shall promptly deliver to the Agent, in sufficient copies for each of the Lenders, such updated or changed Budget together with a written explanation of the main changes in that Budget.
22.5
Group companies
At the request of the Agent:
22.5.1
the Company shall supply to the Agent a report signed by two directors of the Company stating which of its Subsidiaries are Material Companies and confirming that the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) and the aggregate gross assets, aggregate net assets and aggregate turnover of the Guarantors (other than the Parent) (calculated on an unconsolidated basis and excluding all intra-Group items and investments in Subsidiaries of any member of the Group) exceeds 90% of Consolidated EBITDA (as defined in Clause 23 (Financial Covenants)) and the consolidated gross assets, net assets and turnover of the Group; and
22.5.2
the Parent shall supply to the Agent a report signed by two directors of the Parent confirming that the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) but on the basis that references in the definition of Consolidated EBITDA and related definitions to “Group” shall be to the German Group) of the German Group and the aggregate gross assets, the aggregate net assets and aggregate turnover of the German Group (in each case calculated on an unconsolidated basis and excluding all intra-group items and investment in Subsidiaries of any member of the German Group) does not exceed 10 per cent of the consolidated earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) but on the basis that references in the definition of Consolidated EBITDA and related definitions to “Group” shall be to the UAG Group) of the UAG Group and consolidated gross assets, consolidated net assets and consolidated turnover of the UAG Group.
22.6
Presentations
If requested to do so by the Agent if the Agent reasonably suspects a Default is continuing or may have occurred or may occur, at least two directors of the Parent (one of whom shall be the chief financial officer) must give a presentation to the Finance Parties about the on-going business and financial performance of the Group.
22.7
Year-end
The Company shall procure that each Financial Year-end of each member of the Group falls on 31 December.
22.8
Information: miscellaneous
The Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):-
22.8.1
promptly following the same being dispatched, copies of all documents required to be dispatched by the Company to its shareholders generally (or any class of them) or dispatched by the Company or any Obligors to its creditors generally (or any class of them);
22.8.2
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;
22.8.3
promptly, such information as the Security Agent may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Transaction Security Documents; and
22.8.4
promptly on reasonable request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement, any changes to management of the Group and an up to date copy of its shareholders’ register (or equivalent in its jurisdiction of incorporation)) as any Finance Party through the Agent may reasonably request.
22.9
Notification of default
22.9.1
Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
22.9.2
Promptly upon a request by the Agent (acting reasonably), the Company shall supply to the Agent a certificate signed by two of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
22.10
"Know your customer" checks
22.10.1
If:-
(a)
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(b)
any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or
(c)
a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
obliges the Agent or any Lender (or, in the case of sub-clause (c) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in sub-clause (c) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in sub-clause (c) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
22.10.2
Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
22.10.3
The Company shall, by not less than 10 Business Days’ prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 28 (Changes to the Obligors).
22.10.4
Following the giving of any notice pursuant to Clause 22.10.3 above, if the accession of such Additional Obligor obliges the Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor.
22.11
Parent’s financial statements
If the Company intends to make a Permitted Distribution or any Permitted Loan falling within paragraph (h) of the definition of “Permitted Loan” in any Financial Year:-
22.11.1
the Parent shall, at least 10 Business Days before making any Permitted Distribution or loan falling within paragraph (h) of the definition of “Permitted Loan”, supply to the Agent in sufficient copies for all the Lenders the audited consolidated financial statements of the Parent (prepared by the auditors of the Parent using generally accepted accounting principles in the United States of America for the purposes of reporting to the auditors of Penske Automotive Group Inc) for the previous financial year of the Parent; and
22.11.2
the Company shall, at least 10 Business Days before making any Permitted Distribution or loan falling within paragraph (h) of the definition of “Permitted Loan”, supply to the Agent in sufficient copies for all the Lenders, the US GAAP Reconcilation Statement.
23.
FINANCIAL COVENANTS
23.1
Financial definitions
In this Agreement:-
"Capital Expenditure”
means, in respect of any Relevant Period, any amount paid to acquire tangible fixed assets where such expenditure is capitalised on the balance sheet of the Group but excluding:
(a) net proceeds received from sale and leaseback transactions (b) rental payments in respect of Finance Leases; (c) fixed assets acquired through the acquisition of a business and (d) maintenance payments which are charged to the profit and loss account
"Consolidated Borrowing Costs”
means, in respect of any Relevant Period, the aggregate of all interest, commission, fees and charges payable by the Group in respect of its Consolidated Gross Borrowings in respect of such Relevant Period including, without limitation:
(a) capitalised interest (b) Finance Lease charges (c) dividends on shares issued on the basis that they are or may become redeemable, but excluding interest payable by Affiliates and Joint Ventures
"Consolidated EBIT”
means, in respect of any Relevant Period, the consolidated profit/loss of the Group on ordinary activities before taxation and after exceptional items butafter adding back:- (a) exceptional losses charged below operating profit (b) Consolidated Borrowing Costs (net of capitalised interest and dividends on redeemable shares) (c) interest payable by associates and Joint Ventures (d) the Group’s share of the operating losses arising in associates and Joint Ventures (e) the Group’s share of exceptional losses arising in associates and Joint Ventures andafter deducting (f) interest receivable and other similar income (g) income from fixed asset investments (h) exceptional gains credited below operating profit (i) interest receivable by associates and Joint Ventures (j) the Group’s share of operating profits arising in associates and Joint Ventures (k) the Group’s share of exceptional gains arising in associates and Joint Ventures provided thatno amount included, added or deducted shall be taken into account more than once in calculating Consolidated EBIT
"Consolidated EBITAR”
means, in respect of any Relevant Period, Consolidated EBIT for that Relevant Periodafter adding backany amount attributable to the amortisation of goodwill and intangible assets of members of the Group and rental paid by any member of the Group during that Relevant Period
"Consolidated EBITDA”
means, in respect of any Relevant Period, Consolidated EBIT for that Relevant Periodafter adding backany amount attributable to the amortisation of goodwill and intangible assets of members of the Group and any amount attributable to the depreciation of assets of members of the Group
"Consolidated Gross Borrowings”
means at any time, the aggregate of all obligations of the Group for the repayment of money, whether present or future, actual or contingent incurred in respect of:- (a) money borrowed from all sources (b) any bonds, notes, loan stock, debentures or similar instruments (c) eligible debt securities, bills of exchange or documentary credits (d) shares issued on the basis that they are or may become redeemable (at redemption value) (e) gross obligations under Finance Leases (f) the factoring of debts (g) guarantees, indemnities or other assurances against financial loss and (h) amounts raised or obligations incurred in respect of any other transaction which has the commercial effect of borrowing
"Consolidated Interest and Rental Payable”
means, in respect of any Relevant Period, Consolidated Borrowing Costs plus rental paid and due to be paid by any member of the Group during that Relevant Period
"Consolidated Net Borrowings”
means, at any time, Consolidated Gross Borrowings less:- (a) any Cash or Cash Equivalent Investments held by any member of the Group (b) any Financial Indebtedness arising in respect of any loan from any member of the Group which is subordinated to the Facility and (c) any Financial Indebtedness in respect of Stocking Finance
"Finance Lease”
means any lease or hire purchase contract which would, in accordance with the Accounting Principles, be treated as a finance or capital lease provided that any lease or hire purchase contract which is classified as an operating lease in accordance with the Accounting Principles as applied to the Original Financial Statements shall not be treated as a Finance Lease
"Financial Quarter”
means the period commencing on the day after one Quarter Date and ending on the next Quarter Date
"Financial Year”
means the annual accounting period of the Group ending on or about 31 December in each year
"Quarter Date”
means each of 31 March, 30 June, 30 September and 31 December
"Relevant Period”
means each period of twelve months ending on or about the last day of the Financial Year and each period of twelve months ending on or about the last day of each Financial Quarter
"Stocking Finance”
means, at any time, all funding provided to any member of the Group for vehicle stock, used demonstrators and consignment stock
"Stocking Interest”
means, in respect of any Relevant Period, interest charged on funding provided for vehicle stock, used demonstrators and consignment vehicles
23.2
Financial condition
The Company shall ensure that:-
23.2.1
EBITAR: Interest and Rental Payable: the ratio of Consolidated EBITAR to Consolidated Interest and Rental Payable in respect of any Relevant Period shall not be less than 1.55:1.
23.2.2
Net Debt :Consolidated EBITDA: the ratio of Consolidated Net Borrowings to Consolidated EBITDA less Stocking Interest in respect of any Relevant Period shall not be more than 2.75:1
23.2.3
Capital Expenditure: The aggregate Capital Expenditure of the Group in respect of any Financial Year shall not exceed £50,000,000.
23.3
Financial testing
The financial covenants set out in Clause 23.2 (Financial condition) shall be calculated in accordance with the Accounting Principles and tested by reference to each of the financial statements delivered pursuant to Clauses 22.1.1(a) and 22.1.2 and/or each Compliance Certificate delivered pursuant to Clause 22.2 (Provision and contents of Compliance Certificate).
24.
GENERAL UNDERTAKINGS
The undertakings in this Clause 24 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
24.1
Authorisations and compliance with laws Authorisations
Each Obligor shall promptly obtain, comply with and do all that is necessary to maintain in full force and effect any Authorisation required under any law or regulation of a Relevant Jurisdiction to:-
24.1.1
enable it to perform its obligations under the Finance Documents;
24.1.2
ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and
24.1.3
carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.
24.2
Compliance with laws
Each Obligor shall (and the Parent and the Company shall ensure that each member of the Group will) comply in all respects with all laws to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
24.3
Environmental compliance
Each Obligor shall (and the Parent and the Company shall ensure that each member of the Group will):-
24.3.1
comply with all Environmental Law;
24.3.2
obtain, maintain and ensure compliance with all requisite Environmental Permits;
24.3.3
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,
24.4
where failure to do so has or is reasonably likely to have a Material Adverse Effect. Environmental claims
Each Obligor shall (through the Company), promptly upon becoming aware of the same, inform the Agent in writing of:-
24.4.1
any Environmental Claim against the Parent or any member of the Group which is current, pending or threatened; and
24.4.2
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
where the claim, if determined against the Parent or that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
24.5
Taxation
24.5.1
Each Obligor shall (and the Parent and the Company shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:-
(a)
such payment is being contested in good faith;
(b)
adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 22.1 (Financial statements) or will be and are disclosed in the financial statements to be delivered immediately following such Taxes being imposed; and
(c)
such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
24.5.2
The Parent and no member of the Group may change its residence for Tax purposes.
24.6
Restrictions on business focus Merger
No Obligor shall (and the Parent and the Company shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Transaction.
24.7
Change of business
The Parent and the Company shall procure that no material change is made to the general nature of the business of the Parent, the Company, the Obligors or the Group taken as a whole from that carried on by the Group at the date of this Agreement.
24.8
Acquisitions
24.8.1
Except as permitted under Clause 24.8.2 below, no Obligor shall (and the Parent and the Company shall ensure that no other member of the Group will):-
(a)
acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them); or
(b)
incorporate a company.
24.8.2
Clause 24.8.1 above does not apply to an acquisition of a company, of shares, securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company which is:-
(a)
a Permitted Acquisition; or
(b)
a Permitted Transaction.
24.9
Joint ventures
24.9.1
Except as permitted under Clause 24.9.2 below, no Obligor shall (and the Parent and the Company shall ensure that no member of the Group will):-
(a)
enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
(b)
transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).
24.9.2
Clause 24.9.1 above does not apply to any acquisition of (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Acquisition, a Permitted Disposal, a Permitted Loan or a Permitted Joint Venture.
24.10
Restrictions on dealing with assets and Security Preservation of assets
Each Obligor shall (and the Parent and the Company shall ensure that each member of the Group will) maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary in the conduct of its business.
24.11
Pari passu ranking
Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party or Hedge Counterparty against it under the Finance Documents rank at leastpari passuwith the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
24.12
Negative pledge
In this Clause 24.12, “Quasi-Security” means an arrangement or transaction described in Clause 24.12.2 below.
Except as permitted under Clause 24.12.3 below:-
24.12.1
No Obligor shall (and the Parent and the Company shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.
24.12.2
No Obligor shall (and the Parent and the Company shall ensure that no other member of the Group will):-
(a)
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(b)
sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(c)
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(d)
enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
24.12.3
Clauses 24.12.1 and 24.12.2 above do not apply to any Security or (as the case may be) Quasi-Security, which is:-
(a)
Permitted Security; or
(b)
a Permitted Transaction.
24.13
Disposals
24.13.1
Except as permitted under Clause 24.13.2 below, no Obligor shall (and the Parent and the Company shall ensure that no member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
24.13.2
Clause 24.13.1 above does not apply to any sale, lease, transfer or other disposal which is:-
(a)
a Permitted Disposal; or
(b)
a Permitted Transaction.
24.14
Arm's length basis
24.14.1
Except as permitted by Clause 24.14.2 below:-
(a)
no Obligor shall (and the Parent and the Company shall ensure no member of the Group will) enter into any transaction with any person except on arm’s length terms and for full market value; and
(b)
the Parent shall ensure that no member of the German Group will enter into any transaction with any person that is not a member of the German Group except on arm’s length terms and for full market value.
24.14.2
The following transactions shall not be a breach of this Clause 24.14:-
(a)
intra-Group loans permitted under Clause 24.15 (Loans or credit);
(b)
fees, costs and expenses payable under the Finance Documents in the amounts set out in the Finance Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent; and
(c)
any Permitted Transaction.
24.15
Restrictions on movement of cash — cash out Loans or credit
24.15.1
Except as permitted under Clause 24.15.2 below, no Obligor shall (and the Parent and the Company shall ensure that no member of the Group will) be a creditor in respect of any Financial Indebtedness.
24.15.2
Clause 24.15.1 above does not apply to:-
(a)
a Permitted Loan; or
(b)
a Permitted Transaction.
24.16
No Guarantees or indemnities
24.16.1
Except as permitted under Clause 24.16.2 below, no Obligor shall (and the Parent and the Company shall ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.
24.16.2
Clause 24.16.1 does not apply to a guarantee which is:-
(a)
a Permitted Guarantee; or
(b)
a Permitted Transaction.
24.17
Dividends and share redemption
24.17.1
Except as permitted under Clause 24.17.2 below, the Parent and the Company shall not (and the Parent and the Company will ensure that no other member of the Group will):-
(a)
declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);
(b)
repay or distribute any dividend or share premium reserve;
(c)
pay or allow any member of the Group to pay any management, advisory or other fee to or to the order of any of the shareholders of the Parent or the Company; or
(d)
redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so.
24.17.2
Clause 24.17.1 above does not apply to:-
(a)
a Permitted Distribution; or
(b)
a Permitted Transaction (other than one referred to in sub-clause (c) of the definition of that term).
24.18
Restrictions on movement of cash — cash in Financial Indebtedness
24.18.1
Except as permitted under Clause 24.18.2 below, no Obligor shall (and the Parent and the Company shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
24.18.2
Clause 24.18.1 above does not apply to Financial Indebtedness which is:-
(a)
Permitted Financial Indebtedness; or
(b)
a Permitted Transaction.
24.19
Share capital
No Obligor shall (and the Parent and the Company shall ensure no member of the Group will) issue any shares except pursuant to a Permitted Transaction.
24.20
Miscellaneous Insurance
24.20.1
Each Obligor shall (and the Parent and the Company shall ensure that each member of the Group will) maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.
24.20.2
All insurances must be with reputable independent insurance companies or underwriters.
24.21
Pensions
24.21.1
The Parent and the Company shall ensure that each member of the Group, where applicable, complies with its obligations under Part 3 of the Pensions Act 2004 in respect of all pension schemes operated by or maintained for the benefit of members of the Group and/or their employees and will ensure that no action or omission is taken by the Parent, the Company or any other member of the Group in relation to such a pension scheme which has or is reasonably likely to have a Material Adverse Effect (including, without limitation, the termination or commencement of winding-up proceedings of any such pension scheme or any member of the Group ceasing to employ any member of such a pension scheme).
24.21.2
Except for the DB Schemes the Parent and the Company shall ensure that neither the Parent nor any member of the Group is or has been at any time an employer (for the purposes of Sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or “connected” with or an “associate” of (as those terms are used in sections 38 or 43 of the Pensions Act 2004) such an employer.
24.21.3
The Parent and the Company shall deliver to the Agent at such times as those reports are prepared in order to comply with the then current statutory or auditing requirements (as applicable either to the trustees of any relevant schemes or to the Parent and the Company), actuarial reports in relation to all pension schemes mentioned in Clause 24.21.1 above.
24.21.4
The Parent and the Company shall promptly notify the Agent of any material change in the rate of contributions to any pension schemes mentioned in 24.21.1 above paid or recommended to be paid (whether by the scheme actuary or otherwise) or required (by law or otherwise).
24.21.5
Each Obligor shall immediately notify the Agent of any investigation or proposed investigation by the Pensions Regulator of which an Obligor becomes aware which may lead to the issue of a Financial Support Direction or a Contribution Notice to it or any other member of the Group.
24.21.6
Each Obligor shall immediately notify the Agent if it receives a Financial Support Direction or a Contribution Notice from the Pensions Regulator.
24.22
Access
Each Obligor shall, and the Parent and the Company shall ensure that each member of the Group will, (not more than once in every Financial Year unless the Agent reasonably suspects a Default is continuing or may occur) permit the Agent and/or the Security Agent and/or accountants or other professional advisers and contractors of the Agent or Security Agent free access at all reasonable times and on reasonable notice to (a) the premises, assets, books, accounts and records of each member of the Group and (b) meet and discuss matters with the senior management of the Group (including the chief executive officer and the chief financial officer).
24.23
Service contracts
24.23.1
The Parent and the Company must ensure that there is in place in respect of each Obligor and each Material Company qualified management with appropriate skills.
24.23.2
If either the chief financial officer or chief executive officer of the Group ceases (whether by reason of death, retirement at normal retiring age or through ill health or otherwise) to perform his or her duties as required under his or her service contract the Parent must as soon as reasonably practicable thereafter:-
(a)
notify the Agent; and
(b)
after consultation with the Agent as to the identity of such replacement person, find and appoint an adequately qualified replacement for him or her as promptly as practicable.
24.24
Intellectual Property
24.24.1
Each Obligor shall (and the Parent and the Company shall procure that each Group member will):-
(a)
preserve and maintain the subsistence and validity of the Intellectual Property necessary for the business of the relevant Group member;
(b)
use reasonable endeavours to prevent any infringement in any material respect of the Intellectual Property;
(c)
make registrations and pay all registration fees and taxes necessary to maintain the Intellectual Property in full force and effect and record its interest in that Intellectual Property;
(d)
not use or permit the Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil the right of any member of the Group to use such property; and
(e)
not discontinue the use of the Intellectual Property,
where failure to do so, in the case of sub-clauses (a) and (b) and above, or, in the case of sub-clauses (d) and (e) above, such use, permission to use, omission or discontinuation, is reasonably likely to have a Material Adverse Effect.
24.24.2
Failure to comply with any part of Clause 24.24.1 above shall not be a breach of this Clause 24.24 to the extent that any dealing with Intellectual Property which would otherwise be a breach of Clause 24.24.1 is contemplated by the definition of Permitted Transaction.
24.25
Amendments
24.25.1
No Obligor shall (and the Parent and the Company shall ensure that no member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of a Finance Document except in writing:-
(a)
in accordance with the provisions of Clause 38 (Amendments and Waivers);
(b)
to the extent that that amendment, variation, novation, supplement, superseding, waiver or termination is permitted by the Intercreditor Agreement; and
(c)
after the Closing Date (other than an amendment which is administrative or technical in nature), in a way which could not be reasonably expected materially and adversely to affect the interests of the Lenders.
24.25.2
The Parent and the Company shall promptly supply to the Agent a copy of any document relating to any of the matters referred to in sub-clauses (a) to (c) above.
24.26
Financial assistance
Each Obligor shall (and the Parent and the Company shall procure each member of the Group will) comply in all respects with sections 678 and 679 of the Companies Act 2006 and any equivalent legislation in other jurisdictions including in relation to the execution of the Transaction Security Documents and payment of amounts due under this Agreement.
24.27
Group bank accounts
24.27.1
Except as permitted under Clause 24.27.2 below, the Parent and the Company shall ensure that all bank accounts of the Parent and the Group shall be opened and maintained with a Finance Party or an Affiliate of a Finance Party and are subject to valid Security under the Transaction Security Documents.
24.27.2
Clause 24.27.1 above does not apply to bank accounts of any business or company which is acquired by any member of the Group after the Closing Date where such bank account is in existence prior to the date on which that business or company becomes a member of the Group, provided that such bank account shall be closed within one month of the date of completion of the relevant acquisition.
24.28
Treasury Transactions
No Obligor shall (and the Parent and the Company will procure that no members of the Group will) enter into any Treasury Transaction, other than a Permitted Treasury Transaction.
24.29
Further assurance
24.29.1
Subject to the Agreed Security Principles, each Obligor shall (and the Parent and the Company shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Agent may reasonably specify (and in such form as the Security Agent may reasonably require in favour of the Security Agent or its nominee(s)):-
(a)
to perfect the Security created or intended to be created under or evidenced by the Transaction Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Agent or the Finance Parties provided by or pursuant to the Finance Documents or by law;
(b)
to confer on the Security Agent or confer on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Transaction Security Documents; and/or
(c)
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.
24.29.2
Each Obligor shall (and the Parent and the Company shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Agent or the Finance Parties by or pursuant to the Finance Documents.
24.29.3
In the event that:
(a)
the provisions of Clause 24.32.1 are not complied with; and/or
(b)
the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) but on the basis that references in the definition of Consolidated EBITDA and related definitions to “Group” shall be to the German Group) of the German Group and the aggregate gross assets, the aggregate net assets and aggregate turnover of the German Group (in each case calculated on an unconsolidated basis and excluding all intra-group items and investment in Subsidiaries of any member of the German Group) exceeds 10 per cent of the consolidated earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) but on the basis that references in the definition of Consolidated EBITDA and related definitions to “Group” shall be to the UAG Group) of the UAG Group and consolidated gross assets, consolidated net assets and consolidated turnover of the UAG Group (the “German Group Threshold Test”),
the Parent shall as soon as reasonably practicable following the earlier of (i) the Agent giving notice to the Parent and (ii) the Parent or an Obligor becoming aware of the failure to so comply with the provisions of Clause 24.32.1 or the German Group Threshold Test being exceeded (as the case may be), execute and deliver to the Security Agent a charge over the shares held by the Parent in PAE GmbH (in such form as the Security Agent may reasonably require) in favour of the Security Agent or its nominee(s) (the “German Share Charge”) together with such legal opinions (in form and substance and from legal counsel satisfactory to the Security Agent) relating to the German Share Charge as the Security Agent may reasonably require and any notices or documents required to be given or executed under the terms of the German Share Charge.
24.30
Syndication, Assignment or Transfer
24.30.1
The Obligors acknowledge that a Lender may syndicate all or any part of the Facility, assign any of its rights or transfer by novation any of its rights and obligations (a “Syndication, Assignment or Transfer”) under any Finance Document in accordance with Clause 26 (Changes to the Lenders). Where a Syndication, Assignment or Transfer is to be effected in accordance with Clause 26 (Changes to the Lenders), the Company shall enter into negotiations in good faith for a period of time of not longer than 60 days (the “Time Limit”) with a view to agreeing all amendments to any Finance Document and/or replacement of or variation to any document and all ancillary documentation required by the relevant Lender and any New Lender (as defined in Clause 26.1 (Assignments and transfers by the Lenders)) to effect the Syndication, Assignment or Transfer.
24.30.2
Upon the request of the Agent, the Company shall supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (on behalf of a relevant Lender, whether for itself or on behalf of any prospective New Lender) in order for any prospective New Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in each Finance Document.
24.30.3
The Company agrees to meet all reasonable costs, charges and expenses incurred (including the reasonable fees and expenses of any legal and other professional advisors whether directly employed by the Agent, the relevant Lender or any prospective New Lender or who provide other services to the Agent, the relevant Lender or any prospective New Lender) by the Agent, the relevant Lender and/or any prospective New Lender in connection with any proposed Syndication, Assignment or Transfer.
24.31
Wider group loans
No Obligor shall and the Parent and the Company shall procure that no member of the Group will) make any loan to or repay or pay any principal or interest on any loan granted to it by any member of the German Group except with the prior written consent of the Agent (such consent not to be unreasonably withheld or delayed).
24.32
Guarantors
24.32.1
The Parent and the Company shall ensure that at all times after the Closing Date, the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants)) of the Guarantors (other than the Parent) and the aggregate gross assets, the aggregate net assets and aggregate turnover of the Guarantors (other than the Parent) (in each case calculated on an unconsolidated basis and excluding all intra-group items and investment in Subsidiaries of any member of the Group) represents not less than 90 per cent of Consolidated EBITDA (as defined in Clause 23 (Financial Covenants)) and consolidated gross assets, consolidated net assets and consolidated turnover of the Group.
24.32.2
The Parent and the Company need only perform its obligations under Clause 24.32.1 above if it is not unlawful for the relevant person to become a Guarantor and that person becoming a Guarantor would not result in personal liability for that person’s directors or other management. Each Obligor must use, and must procure that the relevant person uses, all reasonable endeavours lawfully available to avoid any such unlawfulness or personal liability. This includes agreeing to a limit on the amount guaranteed. The Agent may (but shall not be obliged to) agree to such a limit if, in its opinion, to do so would avoid the relevant unlawfulness or personal liability.
24.33
Conditions subsequent
24.33.1
Each Obligor must use, and must procure that any other member of the Group that is a potential provider of Transaction Security uses, all reasonable endeavours lawfully available to avoid or mitigate the constraints on the provision of Security provided for in the Agreed Security Principles.
24.33.2
The Parent and the Company shall procure that the Vehicle Financier Deed of Priority to be entered into by Mercedes-Benz Bank AG UK Branch, Cruickshank Motors Limited, the Bilateral Overdraft Lender and the Security Agent is entered into by all parties to that deed and delivered to the Agent on or before the date falling 45 days after the date of this Agreement.
24.33.3
At the same time as the facility referred to in paragraph (m) of the definition of Permitted Financial Indebtedness is made available to the Company, the Parent and the Company shall (and shall ensure that each other member of the Group which is a party to the Intercreditor Agreement will) enter into such amendment agreement to the Intercreditor Agreement as the Agent shall require in order to, among other things, regulate the priority of such new facility, the Facility and the overdraft made available pursuant to the terms of the NatWest Overdraft Letter.
25.
EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 25 is an Event of Default (save for Clause 25.18 (Acceleration).
25.1
Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:-
25.1.1
its failure to pay is caused by:-
(a)
administrative or technical error; or
(b)
a Disruption Event; and
25.1.2
payment is made within three Business Days of its due date.
25.2
Financial covenants and other obligations
25.2.1
Any requirement of Clause 23 (Financial covenants) is not satisfied or an Obligor does not comply with the provisions of Clause 22 (Information Undertakings), Clause 24.10 (Preservation of assets), Clause 24.11 (Pari passu ranking), Clause 24.12 (Negative pledge), Clause 24.13 (Disposals), Clause 24.14 (Arm’s length basis), Clause 24.15 (Loans or credit), Clause 24.16 (No Guarantees or indemnities), Clause 24.17 (Dividends and share redemption) and/or Clause 24.18 (Financial Indebtedness).
25.2.2
An Obligor does not comply with any provision of any Transaction Security Document.
25.3
Other obligations
25.3.1
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 25.1 (Non-payment) and Clause 25.2 (Financial covenants and other obligations)).
25.3.2
No Event of Default under Clause 25.3.1 above will occur if the failure to comply is capable of remedy and is remedied within 7 Business Days of the earlier of (i) the Agent giving notice to the Company or relevant Obligor and (ii) the Company or an Obligor becoming aware of the failure to comply.
25.4
Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading when made or deemed to be made.
25.5
Cross default
25.5.1
Any Financial Indebtedness of the Parent or any member of the Group is not paid when due nor within any originally applicable grace period.
25.5.2
Any Financial Indebtedness of the Parent or any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
25.5.3
Any commitment for any Financial Indebtedness of the Parent or any member of the Group is cancelled or suspended by a creditor of the Parent or any member of the Group as a result of an event of default (however described).
25.5.4
Any creditor of the Parent or any member of the Group becomes entitled to declare any Financial Indebtedness of the Parent or any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).
25.5.5
No Event of Default will occur under this Clause 25.5 if:-
(a)
the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within Clauses 25.5.1 to 25.5.4 above is less than £3,000,000 (or its equivalent in any other currency or currencies); or
(b)
the Financial Indebtedness or commitment for Financial Indebtedness arises under the NatWest Overdraft Letter unless any amount demanded in accordance with the terms of the NatWest Overdraft Letter has not been paid within 30 days of demand.
25.6
Insolvency
25.6.1
The Parent or any member of the Group is unable or admits inability to pay its debts as they fall due or is deemed to or declared to be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
25.6.2
The value of the assets of the Parent or any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities).
25.6.3
A moratorium is declared in respect of any indebtedness of the Parent or any member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
25.7
Insolvency proceedings
25.7.1
Any corporate action, legal proceedings or other procedure or step is taken in relation to:-
(a)
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Parent or any member of the Group;
(b)
a composition, compromise, assignment or arrangement with any creditor of the Parent or any member of the Group;
(c)
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Parent or any member of the Group or any of its assets; or
(d)
enforcement of any Security over any assets of the Parent or any member of the Group,
25.7.2
or any analogous procedure or step is taken in any jurisdiction. Clause 25.7.1 shall not apply to:-
(a)
any corporate action, legal proceedings or other similar procedure initiated by a person which is not the Parent or a member of the Group which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement; or
(b)
any step or procedure contemplated by sub-clause (b) of the definition of Permitted Transaction.
25.8
Creditors’ process
Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of the Parent or a member of the Group having an aggregate value of £3,000,000 and is not discharged within 14 days.
25.9
Unlawfulness and invalidity
25.9.1
It is or becomes unlawful for an Obligor or any other member of the Group that is a party to the Intercreditor Agreement to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Transaction Security Documents ceases to be effective or any subordination created under the Intercreditor Agreement is or becomes unlawful.
25.9.2
Any obligation or obligations of any Obligor under any Finance Documents or any other member of the Group under the Intercreditor Agreement are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents.
25.9.3
Any Finance Document ceases to be in full force and effect or any Transaction Security or any subordination created under the Intercreditor Agreement ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective.
25.10
Intercreditor Agreement
25.10.1
Any party to the Intercreditor Agreement (other than a Finance Party or an Obligor) fails to comply with the provisions of, or does not perform its obligations under, the Intercreditor Agreement; or
25.10.2
a representation or warranty given by that party in the Intercreditor Agreement is incorrect in any material respect.
25.11
Cessation of business
The Parent or any member of the Group suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business except as a result of a Permitted Disposal or a Permitted Transaction.
25.12
Expropriation
The authority or ability of the Parent or any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to the Parent or any member of the Group or any of its assets where such occurrence has or is reasonably likely to have a Material Adverse Effect.
25.13
Repudiation and rescission of agreements
25.13.1
An Obligor rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security.
25.13.2
Any party (other than a Finance Party) to the Intercreditor Agreement rescinds or purports to rescind or repudiates or purports to repudiate the Intercreditor Agreement in whole or in part where to do so has or is, in the reasonable opinion of the Majority Lenders, likely to have a material adverse effect on the interests of the Lenders under the Finance Documents.
25.14
Litigation
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Finance Documents or the transactions contemplated in the Finance Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.
25.15
Pensions
The Pensions Regulator issues a Contribution Notice to the Parent or any member of the Group unless the aggregate liability of the Obligors under all Contribution Notices is less than £20,000,000.
25.16
Franchise Agreements
Any breach occurs under any Material Franchising Agreement which has or is reasonably likely to have a Material Adverse Effect.
25.17
Material adverse change
Any event or circumstance occurs which the Majority Lenders reasonably believe has or is reasonably likely to have a Material Adverse Effect.
25.18
Acceleration
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Company:-
25.18.1
cancel the Total Commitments and/or Ancillary Commitments at which time they shall immediately be cancelled;
25.18.2
declare that all or part of the Utilisations, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable;
25.18.3
declare that all or part of the Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders;
25.18.4
declare all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities to be immediately due and payable, at which time they shall become immediately due and payable;
25.18.5
declare that all or any part of the amounts (or cash cover in relation to those amounts) outstanding under the Ancillary Facilities be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or
25.18.6
exercise or direct the Security Agent to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.
8
SECTION 9 CHANGES TO PARTIES
26.
CHANGES TO THE LENDERS
26.1
Assignments and transfers by the Lenders
Subject to this Clause 26 and to Clause 27 (Restriction on Debt Purchase Transactions) a Lender (the “Existing Lender”) may:-
26.1.1
assign any of its rights; or
26.1.2
transfer by novation any of its rights and obligations,
under any Finance Document to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the “New Lender”).
26.2
Conditions of assignment or transfer
26.2.1
The consent of the Parent is required for an assignment or transfer by an Existing Lender, unless the assignment or transfer is:-
(a)
to another Lender or an Affiliate of a Lender;
(b)
if the Existing Lender is a fund, to a fund which is a Related Fund of the Existing Lender; or
(c)
made at a time when an Event of Default is continuing.
26.2.2
The consent of the Parent to an assignment or transfer must not be unreasonably withheld or delayed. The Parent will be deemed to have given its consent 5 Business Days after the Existing Lender has requested it unless consent is expressly refused by the Parent within that time.
26.2.3
The consent of the Parent to an assignment or transfer must not be withheld solely because the assignment or transfer may result in an increase to the Mandatory Cost.
26.2.4
An assignment will only be effective on:-
(a)
receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties and the other Secured Parties as it would have been under if it was an Original Lender;
(b)
the New Lender entering into the documentation required for it to accede as a party to the Intercreditor Agreement; and
(c)
the performance by the Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender.
26.2.5
A transfer will only be effective if the New Lender enters into the documentation required for it to accede as a party to the Intercreditor Agreement and if the procedure set out in Clause 26.5 (Procedure for transfer) is complied with.
26.2.6
If:-
(a)
a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(b)
as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 16 (Increased Costs),
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under that Clause to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
26.2.7
Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
26.3
Assignment or transfer fee
Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a Lender, (ii) to a Related Fund or (iii) made in connection with primary syndication of the Facilities, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of £2,500.
26.4
Limitation of responsibility of Existing Lenders
26.4.1
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:-
(a)
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents, the Transaction Security or any other documents;
(b)
the financial condition of any Obligor;
(c)
the performance and observance by any Obligor or any other member of the Group of its obligations under the Finance Documents or any other documents; or
(d)
the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,
and any representations or warranties implied by law are excluded.
26.4.2
Each New Lender confirms to the Existing Lender, the other Finance Parties and the Secured Parties that it:-
(a)
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender or any other Finance Party in connection with any Finance Document or the Transaction Security; and
(b)
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
26.4.3
Nothing in any Finance Document obliges an Existing Lender to:-
(a)
accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 26; or
(b)
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Transaction Documents or otherwise.
26.5
Procedure for transfer
26.5.1
Subject to the conditions set out in Clause 26.2 (Conditions of assignment or transfer) a transfer is effected in accordance with Clause 26.5.3 below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 26.5.2 below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
26.5.2
The Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or similar other checks under all applicable laws and regulations in relation to the transfer to such New Lender.
26.5.3
Subject to Clause 26.10 (Pro rata interest settlement), on the Transfer Date:-
(a)
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents and in respect of the Transaction Security each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and in respect of the Transaction Security and their respective rights against one another under the Finance Documents and in respect of the Transaction Security shall be cancelled (being the “Discharged Rights and Obligations”);
(b)
each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor or other member of the Group and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;
(c)
the Agent, the Arranger, the Security Agent, the New Lender, the other Lenders and any relevant Ancillary Lender shall acquire the same rights and assume the same obligations between themselves and in respect of the Transaction Security as they would have acquired and assumed had the New Lender been an Original Lender with the rights, and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arranger, the Security Agent and any relevant Ancillary Lender and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
(d)
the New Lender shall become a Party as a “Lender”.
26.6
Procedure for assignment
26.6.1
Subject to the conditions set out in Clause 26.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with Clause 26.6.3 below when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to Clause 26.6.2 below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.
26.6.2
The Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
26.6.3
Subject to Clause 26.10 (Pro rata interest settlement), on the Transfer Date:-
(a)
the Existing Lender will assign absolutely to the New Lender its rights under the Finance Documents and in respect of the Transaction Security expressed to be the subject of the assignment in the Assignment Agreement;
(b)
the Existing Lender will be released from the obligations (the “Relevant Obligations”) expressed to be the subject of the release in the Assignment Agreement (and any corresponding obligations by which it is bound in respect of the Transaction Security); and
(c)
the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.
26.6.4
Lenders may utilise procedures other than those set out in this Clause 26.6 to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with Clause 26.5 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender)provided that they comply with the conditions set out in Clause 26.2 (Conditions of assignment or transfer).
26.7
Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company
The Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, an Assignment Agreement or an Increase Confirmation, send to the Company a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation.
26.8
Accession of Hedge Counterparties
Any person which becomes a party to the Intercreditor Agreement as a Hedge Counterparty shall, at the same time, become a Party to this Agreement as a Hedge Counterparty in accordance with clause 20.5.2 (Deeds of Accession) of the Intercreditor Agreement.
26.9
Security over Lenders’ rights
In addition to the other rights provided to Lenders under this Clause 26, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:-
26.9.1
any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
26.9.2
in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
except that no such charge, assignment or Security shall:-
(a)
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other Security for the Lender as a party to any of the Finance Documents; or
(b)
require any payments to be made by an Obligor or grant to any person any more extensive rights than those required to be made or granted to the relevant Lender under the Finance Documents.
26.10
Pro rata interest settlement
If the Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 26.5 (Procedure for transfer) or any assignment pursuant to Clause 26.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):-
26.10.1
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (“Accrued Amounts”) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and
26.10.2
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts so that, for the avoidance of doubt:-
(a)
when the Accrued Amounts become payable, those Accrued Amounts will be payable for the account of the Existing Lender; and
(b)
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause 26.10, have been payable to it on that date, but after deduction of the Accrued Amounts.
27.
RESTRICTION ON DEBT PURCHASE TRANSACTIONS
27.1
Prohibition on Debt Purchase Transactions by the Group
Neither the Parent nor the Company shall procure that each other member of the Group shall not, enter into any Debt Purchase Transaction or beneficially own all or any part of the share capital of a company that is a Lender or a party to a Debt Purchase Transaction of the type referred to in sub-clauses (b) or (c) of the definition of Debt Purchase Transaction.
27.2
Disenfranchisement on Debt Purchase Transactions entered into by Sponsor Affiliates
27.2.1
For so long as a Sponsor Affiliate (i) beneficially owns a Commitment or (ii) has entered into a sub-participation agreement relating to a Commitment or other agreement or arrangement having a substantially similar economic effect and such agreement or arrangement has not been terminated:-
(a)
in ascertaining the Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents such Commitment shall be deemed to be zero; and
(b)
for the purposes of Clause 38.3 (Exceptions), such Sponsor Affiliate or the person with whom it has entered into such sub-participation, other agreement or arrangement shall be deemed not to be a Lender (unless in the case of a person not being a Sponsor Affiliate it is a Lender by virtue otherwise than by beneficially owning the relevant Commitment).
27.2.2
Each Lender shall, unless such Debt Purchase Transaction is an assignment or transfer, promptly notify the Agent in writing if it knowingly enters into a Debt Purchase Transaction with a Sponsor Affiliate (a "Notifiable Debt Purchase Transaction”), such notification to be substantially in the form set out in Part 1 of Schedule 13 (Forms of Notifiable Debt Purchase Transaction Notice).
27.2.3
A Lender shall promptly notify the Agent if a Notifiable Debt Purchase Transaction to which it is a party:-
(a)
is terminated; or
(b)
ceases to be with a Sponsor Affiliate,
such notification to be substantially in the form set out in Part 2 of Schedule 13 (Forms of Notifiable Debt Purchase Transaction Notice).
27.2.4
Each Sponsor Affiliate that is a Lender agrees that:-
(a)
in relation to any meeting or conference call to which all the Lenders are invited to attend or participate, it shall not attend or participate in the same if so requested by the Agent or, unless the Agent otherwise agrees, be entitled to receive the agenda or any minutes of the same; and
(b)
in its capacity as Lender, unless the Agent otherwise agrees, it shall not be entitled to receive any report or other document prepared at the behest of, or on the instructions of, the Agent or one or more of the Lenders.
28.
CHANGES TO THE OBLIGORS
28.1
Assignment and transfers by Obligors
No Obligor or any other member of the Group may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
28.2
Additional Borrowers
28.2.1
Subject to compliance with the provisions of Clauses 22.10.3 and 22.10.4, the Company may request that any of its wholly owned Subsidiaries which is not a Dormant Subsidiary becomes a Borrower. That Subsidiary shall become a Borrower if:-
(a)
all the Lenders approve the addition of that Subsidiary;
(b)
the Company and that Subsidiary deliver to the Agent a duly completed and executed Accession Deed;
(c)
the Subsidiary is (or becomes) a Guarantor on or prior to becoming a Borrower;
(d)
the Company confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and
(e)
the Agent has received all of the documents and other evidence listed in Part 2 of Schedule 2 (Conditions precedent) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent (acting reasonably).
28.2.2
The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) (acting reasonably) or has waived the requirement to receive all the documents and other evidence listed in Part 2 of Schedule 2 (Conditions precedent).
28.2.3
Upon becoming an Additional Borrower that Subsidiary shall make any filings (and provide copies of such filings) as required by Clause 15.2.11 (Tax gross-up) and Clause 15.6.2 (HMRC DT Treaty Passport scheme confirmation) in accordance with those clauses.
28.3
Resignation of a Borrower
28.3.1
In this Clause 28.3, Clause 28.5 (Resignation of a Guarantor) and Clause 28.7 (Resignation and release of Security on disposal), “Third Party Disposal” means the disposal of an Obligor to a person which is not a member of the Group where that disposal is permitted under Clause 24.13 (Disposals) or made with the approval of the Majority Lenders (and the Company has confirmed this is the case).
28.3.2
If a Borrower is the subject of a Third Party Disposal, the Company may request that such Borrower (other than the Parent or the Company) ceases to be a Borrower by delivering to the Agent a Resignation Letter.
28.3.3
The Agent shall accept a Resignation Letter and notify the Company and the other Finance Parties of its acceptance if:-
(a)
the Company has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter;
(b)
the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents; and
(c)
where the Borrower is also a Guarantor (unless its resignation has been accepted in accordance with Clause 28.5 (Resignation of a Guarantor)), its obligations in its capacity as Guarantor continue to be legal, valid, binding and enforceable and in full force and effect (subject to the Legal Reservations) and the amount guaranteed by it as a Guarantor is not decreased (and the Company has confirmed this is the case).
28.3.4
Upon notification by the Agent to the Company of its acceptance of the resignation of a Borrower, that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents as a Borrower except that the resignation shall not take effect (and the Borrower will continue to have rights and obligations under the Finance Documents) until the date on which the Third Party Disposal takes effect.
28.3.5
The Agent may, at the cost and expense of the Company, require a legal opinion from counsel to the Agent confirming the matters set out in Clause 28.3.3(c) above and the Agent shall be under no obligation to accept a Resignation Letter until it has obtained such opinion in form and substance satisfactory to it.
28.4
Additional Guarantors
28.4.1
Subject to compliance with the provisions of Clauses 22.10.3 and 22.10.4, the Company may request that any of its wholly owned Subsidiaries become a Guarantor.
28.4.2
The Company shall procure that any other member of the Group which is a Material Company shall, as soon as possible after becoming a Material Company become an Additional Guarantor and subject to the Agreed Security Principles grant Security as the Agent may require and shall accede to the Intercreditor Agreement unless the Company certifies to the Agent that it is intended that the relevant Material Company is to become a Dormant Subsidiary within 150 days after the date on which it is reactivated or acquired and the relevant Material Company becomes a Dormant Subsidiary within that period of 150 days.
28.4.3
A member of the Group shall become an Additional Guarantor if:-
(a)
the Company and the proposed Additional Guarantor deliver to the Agent a duly completed and executed Accession Deed; and
(b)
the Agent has received (or waived the requirement to receive) all of the documents and other evidence listed in Part 2 of Schedule 2 (Conditions Precedent) in relation to that Additional Guarantor, each in form and substance satisfactory to the Agent.
28.4.4
The Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) or waived the requirement to receive all the documents and other evidence listed in Part 2 of Schedule 2 (Conditions precedent).
28.5
Resignation of a Guarantor
28.5.1
The Company may request that a Guarantor (other than the Parent or the Company) ceases to be a Guarantor by delivering to the Agent a Resignation Letter if:-
(a)
that Guarantor is being disposed of by way of a Third Party Disposal (as defined in Clause 28.3 (Resignation of a Borrower)) and the Company has confirmed this is the case; or
(b)
all the Lenders and (unless each Hedge Counterparty has notified the Security Agent that no payment is due to it from that member of the Group under Clause 20 (Guarantee and indemnity)) the Hedge Counterparties have consented to the resignation of that Guarantor.
28.5.2
Subject to Clause 28.5.3 below, the Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if:-
(a)
the Company has confirmed that no Default is continuing or would result from the acceptance of the Resignation Letter;
(b)
no payment is due from the Guarantor under Clause 20.1 (Guarantee and indemnity); and
(c)
where the Guarantor is also a Borrower, it is under no actual or contingent obligations as a Borrower and has resigned and ceased to be a Borrower under Clause 28.3 (Resignation of a Borrower).
28.5.3
The Agent shall not accept a Resignation Letter from a Guarantor unless each Hedge Counterparty has notified the Security Agent that no payment is due from that Guarantor to that Hedge Counterparty under Clause 20.1 (Guarantee and indemnity) (and the Security Agent shall, upon receiving that notification, notify the Agent).
28.5.4
The resignation of that Guarantor shall not be effective until the date of the relevant Third Party Disposal at which time that company shall cease to be a Guarantor and shall have no further rights or obligations under the Finance Documents as a Guarantor.
28.6
Repetition of Representations
Delivery of an Accession Deed constitutes confirmation by the relevant Subsidiary that the representations and warranties referred to in Clause 21.30.4 are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
28.7
Resignation and release of security on disposal
If a Borrower or Guarantor is or is proposed to be the subject of a Third Party Disposal then:-
28.7.1
where that Borrower or Guarantor created Transaction Security over any of its assets or business in favour of the Security Agent, or Transaction Security in favour of the Security Agent was created over the shares (or equivalent) of that Borrower or Guarantor, the Security Agent shall, at the cost and request of the Company, release those assets, business or shares (or equivalent) and issue certificates of non-crystallisation;
28.7.2
the resignation of that Borrower or Guarantor and related release of Transaction Security referred to in Clause 28.7.1 above shall not become effective until the date of that disposal; and
28.7.3
if the disposal of that Borrower or Guarantor is not made, the Resignation Letter of that Borrower or Guarantor and the related release of Transaction Security referred to in Clause 28.7.1 above shall have no effect and the obligations of the Borrower or Guarantor and the Transaction Security created or intended to be created by or over that Borrower or Guarantor shall continue in such force and effect as if that release had not been effected.
9
SECTION 10 THE FINANCE PARTIES
29.
ROLE OF THE AGENT, THE ARRANGER AND OTHERS
29.1
Appointment of the Agent
29.1.1
Each of the Arranger and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents.
29.1.2
Each of the Arranger and the Lenders authorises the Agent to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
29.2
Duties of the Agent
29.2.1
Subject to Clause 29.2.2 below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.
29.2.2
Without prejudice to Clause 26.7 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company), Clause 29.2.1 above shall not apply to any Transfer Certificate, any Assignment Agreement or Increase Confirmation.
29.2.3
Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.
29.2.4
If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
29.2.5
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent, the Arranger or the Security Agent) under this Agreement it shall promptly notify the other Finance Parties.
29.2.6
The Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.
29.3
Role of the Arranger
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
29.4
No fiduciary duties
29.4.1
Nothing in this Agreement constitutes the Agent and/or the Arranger as a trustee or fiduciary of any other person.
29.4.2
None of the Agent, the Security Agent, the Arranger or any Ancillary Lender shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
29.5
Business with the Group
The Agent, the Security Agent, the Arranger and each Ancillary Lender may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
29.6
Rights and discretions
29.6.1
The Agent may rely on:-
(a)
any representation, notice or document (including, without limitation, any notice given by a Lender pursuant to Clause 27.2.2 or 27.2.3) believed by it to be genuine, correct and appropriately authorised; and
(b)
any statement made by a director, authorised signatory or employee of any person regarding any matters which may reasonably be assumed to be within his knowledge or within his power to verify.
29.6.2
The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:-
(a)
no Default has occurred (unless it has actual knowledge of a Default arising under Clause 25.1 (Non-payment));
(b)
any right, power, authority or discretion vested in any Party or the Majority Lenders has not been exercised;
(c)
any notice or request made by the Company (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors; and
(d)
no Notifiable Debt Purchase Transaction:-
(i)
has been entered into;
(ii)
has been terminated; or
(iii)
has ceased to be with a Sponsor Affiliate.
29.6.3
The Agent may engage, pay for and rely on the advice or services of any lawyers, accountants, surveyors or other experts.
29.6.4
The Agent may act in relation to the Finance Documents through its personnel and agents.
29.6.5
The Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
29.6.6
Without prejudice to the generality of Clause 29.6.5 above, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Parent and shall disclose the same upon the written request of the Parent or the Majority Lenders.
29.6.7
Notwithstanding any other provision of any Finance Document to the contrary, none of the Agent or the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
29.6.8
The Agent is not obliged to disclose to any Finance Party any details of the rate notified to the Agent by any Lender or the identity of any such Lender for the purpose of Clause 13.2.1(b).
29.7
Majority Lenders’ instructions
29.7.1
Unless a contrary indication appears in a Finance Document, the Agent shall (i) exercise any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by the Majority Lenders (or, if so instructed by the Majority Lenders, refrain from exercising any right, power, authority or discretion vested in it as Agent) and (ii) not be liable for any act (or omission) if it acts (or refrains from taking any action) in accordance with an instruction of the Majority Lenders.
29.7.2
Unless a contrary indication appears in a Finance Document, any instructions given by the Majority Lenders will be binding on all the Finance Parties other than the Security Agent.
29.7.3
The Agent may refrain from acting in accordance with the instructions of the Majority Lenders (or, if appropriate, the Lenders) until it has received such security as it may require for any cost, loss or liability (together with any associated VAT) which it may incur in complying with the instructions.
29.7.4
In the absence of instructions from the Majority Lenders, (or, if appropriate, the Lenders) the Agent may act (or refrain from taking action) as it considers to be in the best interest of the Lenders.
29.7.5
The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender’s consent) in any legal or arbitration proceedings relating to any Finance Document. This Clause 29.7.5 shall not apply to any legal or arbitration proceeding relating to the perfection, preservation or protection of rights under the Transaction Security Documents or enforcement of the Transaction Security or Transaction Security Documents.
29.8
Responsibility for documentation
None of the Agent, the Arranger or any Ancillary Lender:-
29.8.1
is responsible for the adequacy, accuracy and/or completeness of any information (whether oral or written) supplied by the Agent, the Arranger, an Ancillary Lender, an Obligor or any other person given in or in connection with any Finance Document or the transactions contemplated in the Finance Documents;
29.8.2
is responsible for the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or the Transaction Security or any other agreement, arrangement or document entered into, made or executed in anticipation of or in connection with any Finance Document or the Transaction Security; or
29.8.3
is responsible for any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
29.9
Exclusion of liability
29.9.1
Without limiting Clause 29.9.2 below (and without prejudice to the provisions of Clause 32.11.5), none of the Agent or any Ancillary Lender will be liable (including, without limitation, for negligence or any other category of liability whatsoever) for any action taken by it under or in connection with any Finance Document or the Transaction Security, unless directly caused by its gross negligence or wilful misconduct.
29.9.2
No Party (other than the Agent or an Ancillary Lender (as applicable)) may take any proceedings against any officer, employee or agent of the Agent or any Ancillary Lender, in respect of any claim it might have against the Agent or an Ancillary Lender or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent or any Ancillary Lender may rely on this Clause subject to Clause 1.3 (Third party rights) and the provisions of the Third Parties Act.
29.9.3
The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.
29.9.4
Nothing in this Agreement shall oblige the Agent or the Arranger to carry out any “know your customer” or other checks in relation to any person on behalf of any Lender and each Lender confirms to the Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arranger.
29.10
Lenders’ indemnity to the Agent
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 32.11 (Disruption to Payment Systems etc.) notwithstanding the Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).
29.11
Resignation of the Agent
29.11.1
The Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and the Company.
29.11.2
Alternatively the Agent may resign by giving 30 days notice to the Lenders and the Company, in which case the Majority Lenders (after consultation with the Company) may appoint a successor Agent.
29.11.3
If the Majority Lenders have not appointed a successor Agent in accordance with Clause 29.11.2 above within 20 days after notice of resignation was given, the retiring Agent (after consultation with the Company) may appoint a successor Agent (acting through an office in the United Kingdom).
29.11.4
If the Agent wishes to resign because (acting reasonably) it has concluded that it is no longer appropriate for it to remain as agent and the Agent is entitled to appoint a successor Agent under Clause 29.11.3 above, the Agent may (if it concludes (acting reasonably) that it is necessary to do so in order to persuade the proposed successor Agent to become a party to this Agreement as Agent) agree with the proposed successor Agent amendments to this Clause 29 and any other term of this Agreement dealing with the rights or obligations of the Agent consistent with then current market practice for the appointment and protection of corporate trustees together with any reasonable amendments to the agency fee payable under this Agreement which are consistent with the successor Agent’s normal fee rates and those amendments will bind the Parties.
29.11.5
The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.
29.11.6
The Agent’s resignation notice shall only take effect upon the appointment of a successor.
29.11.7
Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 29. Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
29.11.8
After consultation with the Company, the Majority Lenders may, by notice to the Agent, require it to resign in accordance with Clause 29.11.2 above. In this event, the Agent shall resign in accordance with Clause 29.11.2 above.
29.12
Replacement of the Agent
29.12.1
After consultation with the Parent, the Majority Lenders may, by giving 30 days’ notice to the Agent, (or, at any time the Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Agent by appointing a successor Agent (acting through an office in the United Kingdom).
29.12.2
The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.
29.12.3
The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause 29 (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).
29.12.4
Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
29.13
Confidentiality
29.13.1
In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
29.13.2
If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the Agent shall not be deemed to have notice of it.
29.13.3
Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or a breach of a fiduciary duty.
29.14
Relationship with the Lenders
29.14.1
Subject to Clause 26.10 (Pro rata interest settlement), the Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:-
(a)
entitled to or liable for any payment due under any Finance Document on that day; and
(b)
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement,
29.14.2
Each Lender shall supply the Agent with any information required by the Agent in order to calculate the Mandatory Cost in accordance with Schedule 4 (Mandatory Cost Formulae).
29.14.3
Each Lender shall supply the Agent with any information that the Security Agent may reasonably specify (through the Agent) as being necessary or desirable to enable the Security Agent to perform its functions as Security Agent. Each Lender shall deal with the Security Agent exclusively through the Agent and shall not deal directly with the Security Agent.
29.14.4
Any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause 34.5 (Electronic communication)) electronic mail address and/or any other information required to enable the sending and receipt of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address, department and officer by that Lender for the purposes of Clause 34.2 (Addresses) and Clause 34.6.1(c) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
29.15
Credit appraisal by the Lenders and Ancillary Lenders
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender and Ancillary Lender confirms to the Agent, the Arranger and each Ancillary Lender that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:-
29.15.1
the financial condition, status and nature of each member of the Group;
29.15.2
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and the Transaction Security and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document or the Transaction Security;
29.15.3
whether that Secured Party has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the Transaction Security, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
29.15.4
the adequacy, accuracy and/or completeness of any information provided by the Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
29.15.5
the right or title of any person in or to, or the value or sufficiency of any part of the Charged Property, the priority of any of the Transaction Security or the existence of any Security affecting the Charged Property.
29.16
Base Reference Banks
If a Base Reference Bank (or, if a Base Reference Bank is not a Lender, the Lender of which it is an Affiliate) ceases to be a Lender, the Agent shall (in consultation with the Company) appoint another Lender or an Affiliate of a Lender to replace that Base Reference Bank.
29.17
Agent’s management time
29.17.1
Any amount payable to the Agent under Clause 17.3 (Indemnity to the Agent), Clause 19 (Costs and expenses) (other than Clause 19.1.1 to the extent any such amount relates to the negotiation, preparation, printing and execution of this Agreement or any other documents referred to in this Agreement or the Transaction Security in each case where those other documents are, or the Transaction Security is, dated the same date as, or prior to the date of, this Agreement) and Clause 29.10 (Lenders’ indemnity to the Agent) shall include the cost of utilising the Agent’s management time or other resources and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Company and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause 14 (Fees).
29.17.2
Any cost of utilising the Agent’s management time or other resources shall include, without limitation, any such costs in connection with Clause 27.2 (Disenfranchisement on Debt Purchase Transactions entered into by Sponsor Affiliates).
29.18
Deduction from amounts payable by the Agent
29.18.1
If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
29.18.2
Any cost of utilising the Agent’s management time or other resources shall include, without limitation, any such costs in connection with Clause 27.2 (Disenfranchisement on Debt Purchase Transactions entered into by Sponsor Affiliates).
29.19
Reliance and engagement letters
Each Finance Party and Secured Party confirms that each of the Arranger and the Agent has authority to accept on its behalf (and ratifies the acceptance on its behalf of any letters or reports already accepted by the Arranger or Agent) the terms of any reliance letter or engagement letters relating to the Reports or any reports or letters provided by accountants in connection with the Finance Documents or the transactions contemplated in the Finance Documents and to bind it in respect of those Reports, reports or letters and to sign such letters on its behalf and further confirms that it accepts the terms and qualifications set out in such letters.
30.
CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:-
30.1.1
interfere with the right of any Finance Party to arrange its affairs (tax or otherwise) in whatever manner it thinks fit;
30.1.2
oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or
30.1.3
oblige any Finance Party to disclose any information relating to its affairs (tax or otherwise) or any computations in respect of Tax.
31.
SHARING AMONG THE FINANCE PARTIES
31.1
Payments to Finance Parties
31.1.1
Subject to Clause 31.1.2 below, if a Finance Party (a “Recovering Finance Party”) receives or recovers any amount from an Obligor other than in accordance with Clause 32 (Payment mechanics) and applies that amount to a payment due under the Finance Documents (a “Recovered Amount”) then:-
(a)
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Agent;
(b)
the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause 32 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and
(c)
the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the “Sharing Payment”) equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 32.5 (Partial payments).
31.1.2
Clause 31.1.1 above shall not apply to any amount received or recovered by an Ancillary Lender in respect of any cash cover provided for the benefit of that Ancillary Lender.
31.2
Redistribution of payments
The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the “Sharing Finance Parties”) in accordance with Clause 32.5 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
31.3
Recovering Finance Party’s rights
On a distribution by the Agent under Clause 31.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor, as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
31.4
Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:-
31.4.1
each Sharing Finance Party shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the “Redistributed Amount”); and
31.4.2
as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
31.5
Exceptions
31.5.1
This Clause 31 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.
31.5.2
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:-
(a)
it notified the other Finance Party of the legal or arbitration proceedings; and
(b)
the other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
31.6
Ancillary Lenders
31.6.1
This Clause 31 shall not apply to any receipt or recovery by a Lender in its capacity as an Ancillary Lender at any time prior to service of notice under Clause 25.18 (Acceleration).
31.6.2
Following service of notice under Clause 25.18 (Acceleration), this Clause 31 shall apply to all receipts or recoveries by Ancillary Lenders except to the extent that the receipt or recovery represents a reduction from the Designated Gross Amount for an Ancillary Facility to its Designated Net Amount.
10
SECTION 11 ADMINISTRATION
32.
PAYMENT MECHANICS
32.1
Payments to the Agent
32.1.1
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document excluding a payment under the terms of an Ancillary Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
32.1.2
Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) with such bank as the Agent specifies.
32.2
Distributions by the Agent
Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause 32.3 (Distributions to an Obligor) and Clause 32.4 (Clawback) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days’ notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London).
32.3
Distributions to an Obligor
The Agent may (with the consent of the Obligor or in accordance with Clause 33 (Set-Off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
32.4
Clawback
32.4.1
Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
32.4.2
If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.
32.5
Impaired Agent
32.5.1
If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents to the Agent in accordance with Clause 32.1 (Payments to the Agent) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank within the meaning of paragraph (a) of the definition of “Acceptable Bank” and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents. In each case such payments must be made on the due date for payment under the Finance Documents.
32.5.2
All interest accrued on the amount standing on the credit of the trust account shall be for the benefit of the beneficiaries of that trust accountpro ratato their respective entitlements.
32.5.3
A Party which has made a payment in accordance with this Clause 32.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.
32.5.4
Promptly upon the appointment of a successor Agent in accordance with Clause 29.12 (Replacement of the Agent), each Party which has made a payment to a trust account in accordance with this Clause 32.5 shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution in accordance with Clause 32.2 (Distributions by the Agent).
32.6
Partial payments
32.6.1
If the Agent receives a payment for application against amounts due in respect of any Finance Documents that is insufficient to discharge all the amounts then due and payable by an Obligor under those Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under those Finance Documents in the following order:-
(a)
first, in or towards paymentpro rataof any unpaid fees, costs and expenses of the Agent and the Security Agent under those Finance Documents;
(b)
secondly, in or towards paymentpro rataof any accrued interest, fee or commission due but unpaid under those Finance Documents;
(c)
thirdly, in or towards paymentpro rataof any principal due but unpaid under those Finance Documents; and
(d)
fourthly, in or towards paymentpro rataof any other sum due but unpaid under the Finance Documents.
32.6.2
The Agent shall, if so directed by the Majority Lenders, vary the order set out in Clause 32.6.1(a) to (d) above.
32.6.3
Clauses 32.6.1 and 32.6.2 above will override any appropriation made by an Obligor.
32.7
Set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
32.8
Business Days
32.8.1
Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).
32.8.2
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
32.9
Currency of account
32.9.1
Subject to Clauses 32.9.2 to 32.9.5 below, Sterling is the currency of account and payment for any sum due from an Obligor under any Finance Document.
32.9.2
A repayment of a Utilisation or Unpaid Sum or a part of a Utilisation or Unpaid Sum shall be made in the currency in which that Utilisation or Unpaid Sum is denominated on its due date.
32.9.3
Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.
32.9.4
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
32.9.5
Any amount expressed to be payable in a currency other than Sterling shall be paid in that other currency.
32.10
Change of currency
32.10.1
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:-
(a)
any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Company); and
(b)
any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).
32.10.2
If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Company) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.
32.11
Disruption to Payment Systems etc
If either the Agent determines (in its discretion) that a Disruption Event has occurred or the Agent is notified by the Company that a Disruption Event has occurred:-
32.11.1
the Agent may, and shall if requested to do so by the Company, consult with the Company with a view to agreeing with the Company such changes to the operation or administration of the Facility as the Agent may deem necessary in the circumstances;
32.11.2
the Agent shall not be obliged to consult with the Company in relation to any changes mentioned in Clause 32.11.1 if, in its opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
32.11.3
the Agent may consult with the Finance Parties in relation to any changes mentioned in Clause 32.11.1 but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
32.11.4
any such changes agreed upon by the Agent and the Company shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 38 (Amendments and Waivers);
32.11.5
the Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 32.11; and
32.11.6
the Agent shall notify the Finance Parties of all changes agreed pursuant to Clause 32.11.4 above.
33.
SET-OFF
33.1.1
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.
33.1.2
Any credit balances taken into account by an Ancillary Lender when operating a net limit in respect of any overdraft under an Ancillary Facility shall on enforcement of the Finance Documents be applied first in reduction of the overdraft provided under that Ancillary Facility in accordance with its terms.
34.
NOTICES
34.1
Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.
34.2
Addresses
The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:-
34.2.1
in the case of an Original Obligor, that identified with its name below;
34.2.2
in the case of each Lender, each Ancillary Lender or any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and
34.2.3
in the case of the Agent or the Security Agent, that identified with its name below,
or any substitute address, fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days’ notice.
34.3
Delivery
34.3.1
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:-
(a)
if by way of fax, when received in legible form; or
(b)
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its address details provided under Clause 34.2 (Addresses), if addressed to that department or officer.
34.3.2
Any communication or document to be made or delivered to the Agent or the Security Agent will be effective only when actually received by the Agent or Security Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent’s or Security Agent’s signature below (or any substitute department or officer as the Agent or Security Agent shall specify for this purpose).
34.3.3
All notices from or to an Obligor shall be sent through the Agent.
34.3.4
Any communication or document made or delivered to the Company in accordance with this Clause 34.3 will be deemed to have been made or delivered to each of the Obligors.
34.4
Notification of address and fax number
Promptly upon receipt of notification of an address or fax number or change of address or fax number pursuant to Clause 34.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties.
34.5
Communication when Agent is Impaired Agent
If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent, communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed.
34.6
Electronic communication
34.6.1
Any communication to be made between the Agent or the Security Agent and a Lender under or in connection with the Finance Documents may be made by electronic mail or other electronic means, if the Agent, the Security Agent and the relevant Lender:-
(a)
agree that, unless and until notified to the contrary, this is to be an accepted form of communication;
(b)
notify each other in writing of their electronic mail address and/or any other information required to enable the sending and receipt of information by that means; and
(c)
notify each other of any change to their address or any other such information supplied by them.
34.6.2
Any electronic communication made between the Agent and a Lender or the Security Agent will be effective only when actually received in readable form and in the case of any electronic communication made by a Lender to the Agent or the Security Agent only if it is addressed in such a manner as the Agent or Security Agent shall specify for this purpose.
34.7
Use of websites
34.7.1
The Company may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the “Website Lenders”) who accept this method of communication by posting this information onto an electronic website designated by the Company and the Agent (the “Designated Website”). If any Lender (a “Paper Form Lender”) does not agree to the delivery of information electronically then the Agent shall notify the Company accordingly and the Company shall at its own cost supply the information to the Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Company shall at its own cost supply the Agent with at least one copy in paper form of any information required to be provided by it.
34.7.2
The Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website following designation of that website by the Company and the Agent.
34.7.3
The Company shall promptly upon becoming aware of its occurrence notify the Agent if:-
(a)
the Designated Website cannot be accessed due to technical failure;
(b)
the password specifications for the Designated Website change;
(c)
any new information which is required to be provided under this Agreement is posted onto the Designated Website;
(d)
any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
(e)
the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
If the Company notifies the Agent under Clause 34.7.3(a) or Clause 34.7.3(e) above, all information to be provided by the Company under this Agreement after the date of that notice shall be supplied in paper form unless and until the Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
34.7.4
Any Website Lender may request, through the Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Company shall at its own cost comply with any such request within ten Business Days.
34.8
English language
34.8.1
Any notice given under or in connection with any Finance Document must be in English.
34.8.2
All other documents provided under or in connection with any Finance Document must be:-
(a)
in English; or
(b)
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
35.
CALCULATIONS AND CERTIFICATES
35.1
Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party areprima facieevidence of the matters to which they relate.
35.2
Certificates and determinations
Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, conclusive evidence of the matters to which it relates.
35.3
Day count convention
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 365 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.
36.
PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
37.
REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any Finance Party or Secured Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.
38.
AMENDMENTS AND WAIVERS
38.1
Intercreditor Agreement
38.2
This Clause 38 is subject to the terms of the Intercreditor Agreement. Required consents
38.2.1
Subject to Clause 38.3 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Company and any such amendment or waiver will be binding on all Parties.
38.2.2
The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause 38.
38.2.3
Each Obligor agrees to any such amendment or waiver permitted by this Clause 38 which is agreed to by the Company. This includes any amendment or waiver which would, but for this Clause 38.2.3, require the consent of all of the Guarantors.
38.3
Exceptions
38.3.1
An amendment or waiver that has the effect of changing or which relates to:-
(a)
the definition of “Majority Lenders” in Clause 1.1 (Definitions);
(b)
an extension to the date of payment of any amount under the Finance Documents;
(c)
a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(d)
a change in currency of payment of any amount under the Finance Documents;
(e)
an increase in or an extension of any Commitment or the Total Commitments;
(f)
a change to the Borrowers or Guarantors other than in accordance with Clause 28 (Changes to the Obligors);
(g)
any provision which expressly requires the consent of all the Lenders;
(h)
Clause 2.2 (Finance Parties’ rights and obligations), Clause 26 (Changes to the Lenders) or this Clause 38;
(i)
(other than as expressly permitted by the provisions of any Finance Document) the nature or scope of:-
(i)
the guarantee and indemnity granted under Clause 20 (Guarantee and Indemnity);
(ii)
the Charged Property; or
(iii)
the manner in which the proceeds of enforcement of the Transaction Security are distributed
(except in the case of sub-clause (ii) and sub-clause (iii) above, insofar as it relates to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document);
(j)
the release of any guarantee and indemnity granted under Clause 20 (Guarantee and Indemnity) or of any Transaction Security unless permitted under this Agreement or any other Finance Document or relating to a sale or disposal of an asset which is the subject of the Transaction Security where such sale or disposal is expressly permitted under this Agreement or any other Finance Document; or
(k)
any amendment to the order of priority or subordination under the Intercreditor Agreement,
shall not be made without the prior consent of all the Lenders.
38.3.2
An amendment or waiver which relates to the rights or obligations of the Agent, the Arranger, the Security Agent, any Ancillary Lender or a Hedge Counterparty (each in their capacity as such) may not be effected without the consent of the Agent, the Arranger, the Security Agent, that Ancillary Lender or, as the case may be, that Hedge Counterparty.
38.4
Disenfranchisement of Defaulting Lenders
38.4.1
For so long as a Defaulting Lender has any Available Commitment, in ascertaining Majority Lenders or whether any given percentage (including, for the avoidance of doubt, unanimity) of the Total Commitments has been obtained to approve any request for a consent, waiver, amendment or other vote under the Finance Documents, that Defaulting Lender’s Commitments will be reduced by the amount of its Available Commitments.
38.4.2
For the purposes of this Clause 38.4, the Agent may assume the following Lenders are Defaulting Lenders:-
(a)
any Lender which has notified the Agent that it has become a Defaulting Lender;
(b)
any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of “Defaulting Lender” has occurred,
unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.
38.5
Replacement of a Defaulting Lender
38.5.1
The Parent may, at any time a Lender has become and continues to be a Defaulting Lender, by giving 10 Business Days’ prior written notice to the Agent and such Lender:-
(a)
replace such Lender by requiring such Lender to (and such Lender shall) transfer pursuant to Clause 26 (Changes to Lenders) all (and not part only) of its rights and obligations under this Agreement;
(b)
require such Lender to (and such Lender shall) transfer pursuant to Clause 26 (Changes to Lenders) all (and not part only) of the undrawn Revolving Commitment of the Lender; or
(c)
require such Lender to (and such Lender shall) transfer pursuant to Clause 26 (Changes to Lenders) all (and not part only) of its rights and obligations in respect of the Facility,
to a Lender or other bank, financial institution, trust, fund or other entity (a "Replacement Lender”) selected by the Parent, and which (unless the Agent is an Impaired Agent) is acceptable to the Agent (acting reasonably), which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender (including the assumption of the transferring Lender’s participations or unfunded participations (as the case may be) on the same basis as the transferring Lender) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender’s participation in the outstanding Utilisations and all accrued interest and/or fees, Break Costs and other amounts payable in relation thereto under the Finance Documents.
38.5.2
Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions:-
(a)
the Parent shall have no right to replace the Agent or Security Agent;
(b)
neither the Agent nor the Defaulting Lender shall have any obligation to the Parent to find a Replacement Lender;
(c)
the transfer must take place no later than 10 days after the notice referred to in Clause 38.5.1 above; and
(d)
in no event shall the Defaulting Lender be required to pay or surrender to the Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents.
39.
CONFIDENTIALITY
39.1
Confidential Information
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 39.2 (Disclosure of Confidential Information) and Clause 39.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
39.2
Disclosure of Confidential Information
Any Finance Party may disclose:-
39.2.1
to any of its Affiliates and Related Funds and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this Clause 39.2.1 is informed in writing prior to disclosure of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
39.2.2
to any person:-
(a)
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
(b)
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Related Funds, Representatives and professional advisers;
(c)
appointed by any Finance Party or by a person to whom Clause 39.2.2(a) or (b) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under Clause 29.14.4);
(d)
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in Clause 39.2.2(a) or 39.2.2(b) above;
(e)
to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(f)
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 26.9 (Security over Lenders’ rights);
(g)
to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
(h)
who is a Party; or
(i)
with the consent of the Company;
in each case, such Confidential Information as that Finance Party shall consider appropriate;
(i)
in relation to Clauses 39.2.2(a), 39.2.2(b) and 39.2.2(c) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(ii)
in relation to Clause 39.2.2(d) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
(iii)
in relation to Clauses 39.2.2(e), 39.2.2(f) and 39.2.2(g) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
39.2.3
to any person appointed by that Finance Party or by a person to whom Clause 39.2.2(a) or 39.2.2(b) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this Clause 39.2.3 if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party;
39.2.4
to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information; and
39.2.5
to any investor or a potential investor in a securitisation (or similar transaction of broadly equivalent economic effect) of that Finance Party’s rights or obligations under the Finance Documents the size and term of the Facility and the name of each of the Obligors .
39.3
Disclosure to numbering service providers
39.3.1
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:-
(a)
names of Obligors;
(b)
country of domicile of Obligors;
(c)
place of incorporation of Obligors;
(d)
date of this Agreement;
(e)
the names of the Agent and the Arranger;
(f)
date of each amendment and restatement of this Agreement;
(g)
amount of Total Commitments;
(h)
currencies of the Facility;
(i)
type of Facility;
(j)
ranking of Facility;
(k)
Termination Date for Facility;
(l)
changes to any of the information previously supplied pursuant to sub-clauses (a) to (k) above; and
(m)
such other information agreed between such Finance Party and the Company,
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
39.3.2
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
39.3.3
Each Obligor represents that none of the information set out in sub-clauses (a) to (m) of Clause 39.3.1 above is, nor will at any time be, unpublished price-sensitive information.
39.3.4
The Agent shall notify the Company and the other Finance Parties of:-
(a)
the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Obligors; and
(b)
the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.
39.4
Entire agreement
This Clause 39 (Confidentiality) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
39.5
Inside information
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
39.6
Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Company:-
39.6.1
of the circumstances of any disclosure of Confidential Information made pursuant to Clause 39.2.2(e) except where such disclosure is made to any of the persons referred to in that sub-clause during the ordinary course of its supervisory or regulatory function; and
39.6.2
upon becoming aware that Confidential Information has been disclosed in breach of this Clause 39 (Confidentiality).
39.7
Continuing obligations
The obligations in this Clause 39 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of twelve months from the earlier of:-
39.7.1
the date on which all amounts payable by the Obligors under or in connection with the Finance Documents have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
39.7.2
the date on which such Finance Party otherwise ceases to be a Finance Party.
40.
COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
11
SECTION 12 GOVERNING LAW AND ENFORCEMENT
41.
GOVERNING LAW
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
42.
ENFORCEMENT
42.1
Jurisdiction of English courts
42.1.1
The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement or any non-contractual obligation arising out of or in connection with this Agreement) (a “Dispute”).
42.1.2
The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
42.1.3
This Clause 42.1 is for the benefit of the Finance Parties and Secured Parties only. As a result, no Finance Party or Secured Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction. To the extent allowed by law, the Finance Parties and Secured Parties may take concurrent proceedings in any number of jurisdictions.
42.2
Service of process
42.2.1
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):-
(a)
irrevocably appoints the Company as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document and the Company by its execution of this Agreement, accepts that appointment); and
(b)
agrees that failure by an agent for service of process to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
42.2.2
If any person appointed as an agent for service of process is unable for any reason to act as agent for service of process, the Company (on behalf of all the Obligors) must immediately (and in any event within 5 days of such event taking place) appoint another agent on terms acceptable to the Agent. Failing this, the Agent may appoint another agent for this purpose.
42.2.3
The Company expressly agrees and consents to the provisions of this Clause 42 and Clause 41 (Governing law).
This Agreement has been entered into on the date stated at the beginning of this Agreement.
SCHEDULE 1
12
THE ORIGINAL PARTIES PART 1 THE ORIGINAL OBLIGORS
Name of Original Borrower
Registration number (or equivalent, if any)
Jurisdiction of Incorporation
Sytner Group Limited
2883766
Name of Original Guarantor
Registration number (or equivalent, if any)
Jurisdiction of Incorporation
UAG UK Holdings Limited
4334322
Sytner Group Limited
2883766
Sytner Cars Limited
2832086
Sytner Limited
813696
Sytner Holdings Limited
2681878
Goodman Retail Limited
3097514
R Stratton & Co Limited
2696872
Cruickshank Motors Limited
1837492
Graypaul Motors Limited
3079284
Sytner Coventry Limited
1979805
William Jacks Limited
215293
William Jacks Properties Limited
1120920
Ryland Group Limited
4813103
Rydnal Limited
4814756
Ryland Investments Limited
491856
Rycroft Vehicles Limited
248481
Sytner Retail Limited
833930
Ryland Group Services Limited
1356615
Ryland Properties Limited
2286173
John Fox Limited
1359925
Edmond & Milburn Limited
3008457
Sytner Vehicles Limited
7089922
Sytner Properties Limited
3611990
Maranello Holdings Limited
2001186
Maranello Concessionaires Limited
655104
Maranello Sales Limited
1443371
Goodman TPS Limited
6821483
Guy Salmon Limited
3574418
Mar Parts Limited
827692
PART 2
13
THE ORIGINAL LENDERS — OTHER THAN UK NON-BANK LENDERS
Name of Original Lender
Commitment
Treaty Passport scheme reference number and jurisdiction of tax residence (if applicable)
National Westminster Bank Plc
£50,000,000
PART 3
14
THE ORIGINAL LENDERS — UK NON-BANK LENDERS
Name of Original Lender
Commitment
BMW Financial Services (GB) Limited
£50,000,000
SCHEDULE 2
15
CONDITIONS PRECEDENT PART 1 CONDITIONS PRECEDENT TO SIGNING OF THE AGREEMENT
1.
Obligors
1.1
A copy of the constitutional documents of each Original Obligor.
1.2
A copy of a resolution of the board of directors of each Original Obligor:-
1.2.1
approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party and resolving that it execute, deliver and perform the Finance Documents to which it is a party;
1.2.2
authorising a specified person or persons to execute the Finance Documents to which it is a party on its behalf;
1.2.3
authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; and
1.2.4
in the case of an Obligor other than the Company, authorising the Company to act as its agent in connection with the Finance Documents.
1.3
A specimen of the signature of each person authorised by the resolution referred to in paragraph 1.2 above in relation to the Finance Documents and related documents.
1.4
A copy of a resolution signed by all the holders of the issued shares in each Original Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Original Guarantor is a party.
1.5
A copy of a resolution of the board of directors of each corporate shareholder of each Original Guarantor (other than the Parent) approving the terms of the resolution referred to in paragraph 1.4 above.
1.6
A certificate of the Company (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guarantee, security or similar limit binding on any Original Obligor to be exceeded.
1.7
A certificate of an authorised signatory of the Company or other relevant Original Obligor certifying that each copy document relating to it specified in this Part 1 of Schedule 2 is correct, complete and in full force and effect and has not been amended or superseded as at a date no earlier than the date of this Agreement.
2.
Finance Documents
2.1
The Intercreditor Agreement executed by the members of the Group party to that Agreement.
2.2
This Agreement executed by the members of the Group party to this Agreement.
2.3
The Fee Letters executed by the Company.
2.4
The Vehicle Financier Deeds of Priority executed by BMW Financial Services (GB) Limited and Volkswagen Financial Services (UK) Limited and Volkswagen Bank GmbH (trading as Volkswagen Bank United Kingdom Branch) and the other parties to those deeds (incorporating the consent of the relevant vehicle financier to the creation and subsistence of the Transaction Security Documents).
2.5
A consent letter executed by Mercedes-Benz Bank AG UK Branch (“MB”) pursuant to which MB consents to the creation and subsistence of the Transaction Security Documents.
2.6
At least two originals of the following Transaction Security Documents executed by the Original Obligors specified below opposite the relevant Transaction Security Document:-
Name of Original Obligor
Transaction Security Document
All Original Obligors
Debenture
2.7
A copy of all notices required to be sent under the Transaction Security Documents executed by the relevant Obligors duly acknowledged by the addressee.
2.8
A copy of all share certificates, transfers and stock transfer forms or equivalent duly executed by the relevant Obligor in blank in relation to the assets subject to or expressed to be subject to the Transaction Security and other documents of title to be provided under the Transaction Security Documents.
3.
Insurance
3.1
A letter from Cooke & Mason Plc insurance broker dated the date of this Agreement addressed to the Agent, the Arrangers, the Security Agent and the Lenders listing the insurance policies of the Group and confirming that they are on risk and that the insurance for the Group at the date of this Agreement is at a level acceptable to the Majority Lenders and covering appropriate risks for the business carried out by the Group.
3.2
Written evidence that the insurance policy(ies) relating to the Charged Property contain (in form and substance reasonably satisfactory to the Security Agent) an endorsement naming the Security Agent as joint loss payee.
4.
Legal opinions
A legal opinion of Pinsent Masons LLP, legal advisers to the Agent and the Arranger as to English law substantially in the form distributed to the Original Lenders prior to signing this Agreement and addressed to the Agent, the Security Agent and the Original Lenders and capable of being relied upon by the Original Lenders.
5.
Other documents and evidence
5.1
The Group Structure Chart (to include details of Dormant Subsidiaries).
5.2
The Budget.
5.3
A copy, certified by an authorised signatory of the Company to be a true copy, of the Original Financial Statements of each Obligor.
5.4
A certificate signed by an authorised signatory of the Company confirming which companies within the Group are Material Companies and that the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants)) and the aggregate gross assets, the aggregate net assets and aggregate turnover of the Original Guarantors (other than the Parent) (in each case calculated on an unconsolidated basis and excluding all intra-Group items and investments in Subsidiaries of any member of the Group) exceeds 90% of the Consolidated EBITDA (as defined in Clause 23 (Financial Covenants)) and consolidated gross assets, consolidated net assets and consolidated turnover of the Group.
5.5
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Company accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.
5.6
Evidence that the fees, costs and expenses then due from the Company pursuant to Clause 14 (Fees), Clause 14.5 (Interest, commission and fees on Ancillary Facilities), Clause 15.7 (Stamp taxes) and Clause 19 (Costs and expenses) have been paid or will be paid by the first Utilisation Date.
5.7
Utilisation Requests relating to any Utilisations to be made on the Closing Date.
5.8
A deed of release in respect of the general charge dated 16 August 1993 granted by Sytner Limited in favour of BMW Finance (GB) Limited.
5.9
A deed of release in respect of the legal charge dated 28 July 2009 granted by Sytner Cars Limited in favour of Porsche Financial Services Great Britain Limited.
5.10
Companies House Forms MG02 in relation to the following charges:-
5.10.1
General charge dated 30 September 1994 granted by John Fox Limited in favour of Volkswagen Financial Services (UK) Limited;
5.10.2
Debenture dated 19 December 1995 granted by Sytner Holdings Limited in favour of Saab Finance Limited;
5.10.3
Charge over deposit dated 7 March 2002 granted by the Parent in favour the The Royal Bank of Scotland plc (as issuing bank); and
5.10.4
General charge dated 16 August 1993 granted by Sytner Limited in favour of BMW Finance (GB) Limited.
5.10.5
Legal charge dated 28 July 2009 granted by Sytner Cars Limited in favour of Porsche Financial Services Great Britain Limited
PART 2
16
CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR
1.
An Accession Deed executed by the Additional Obligor and the Company.
2.
A copy of the constitutional documents of the Additional Obligor.
3.
A copy of a resolution of the board of directors of the Additional Obligor:-
3.1
approving the terms of, and the transactions contemplated by, the Accession Deed and the Finance Documents and resolving that it execute, deliver and perform the Accession Deed and any other Finance Document to which it is party;
3.2
authorising a specified person or persons to execute the Accession Deed and other Finance Documents on its behalf;
3.3
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including, in relation to an Additional Borrower or any Utilisation Request to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party; and
3.4
authorising the Company to act as its agent in connection with the Finance Documents.
4.
If applicable, a copy of a resolution of the board of directors of the Additional Obligor, establishing the committee referred to in paragraph 3 above.
5.
A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.
6.
A copy of a resolution signed by all the holders of the issued shares of the Additional Guarantor, approving the terms of, and the transactions contemplated by, the Finance Documents to which the Additional Guarantor is a party.
7.
A copy of a resolution of the board of directors of each corporate shareholder of each Additional Guarantor approving the terms of the resolution referred to in paragraph 6 above.
8.
A certificate of the Additional Obligor (signed by a director) confirming that borrowing or guaranteeing or securing, as appropriate, the Total Commitments would not cause any borrowing, guarantee, security or similar limit binding on it to be exceeded.
9.
A certificate of an authorised signatory of the Additional Obligor certifying that each copy document listed in this Part 2 of Schedule 2 is correct, complete and in full force and effect and has not been amended or superseded as at a date no earlier than the date of the Accession Deed.
10.
If available, the latest audited financial statements of the Additional Obligor.
11.
The following legal opinions, each addressed to the Agent, the Security Agent and the Lenders:-
11.1
A legal opinion of the legal advisers to the Agent in England, as to English law in the form distributed to the Lenders prior to signing the Accession Deed.
11.2
If the Additional Obligor is incorporated in or has its “centre of main interest” or “establishment” (as referred to in Clause 21.27 (Centre of main interests and establishments)) in a jurisdiction other than England and Wales or is executing a Finance Document which is governed by a law other than English law, a legal opinion of the legal advisers to the Agent in the jurisdiction of its incorporation, “centre of main interest” or “establishment” (as applicable) or, as the case may be, the jurisdiction of the governing law of that Finance Document (the “Applicable Jurisdiction”) as to the law of the Applicable Jurisdiction and in the form distributed to the Lenders prior to signing the Accession Deed.
12.
If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the process agent specified in Clause 42.2 (Service of process), if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor.
13.
Any security documents which, subject to the Agreed Security Principles, are required by the Agent to be executed by the proposed Additional Obligor.
14.
Any notices or documents required to be given or executed under the terms of those security documents.
15.
15.1
If the Additional Obligor is incorporated in England and Wales, Scotland or Northern Ireland, evidence that the Additional Obligor has done all that is necessary (including, without limitation, by re-registering as a private company) to comply with sections 677 to 683 of the Companies Act 2006 in order to enable that Additional Obligor to enter into the Finance Documents and perform its obligations under the Finance Documents.
15.2
If the Additional Obligor is not incorporated in England and Wales, Scotland or Northern Ireland, such documentary evidence as legal counsel to the Agent may require, that such Additional Obligor has complied with any law in its jurisdiction relating to financial assistance or analogous process.
16.
A copy of any other authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration or other document, opinion or assurance which the Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Deed or for the validity and enforceability of any Finance Document.
SCHEDULE 3
17
UTILISATION REQUEST
From: To:
[Sytner Group Limited]* [Agent]
Dated:
Dear Sirs
Sytner Group Limited – £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to the Facility Agreement. This is a Utilisation Request. Terms defined in the Facility Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2.
We wish to borrow a Loan on the following terms:-
(a)
Borrower: [ ]
(b)
Proposed Utilisation Date: [ ] (or, if that is not a Business Day, the next Business Day)
(d) (e) (f)
Currency of Loan: Amount: Interest Period:
[ ] [ ] or, if less, the Available Facility [ ]
3.
We confirm that each condition specified in Clause 4.2 (Further conditions precedent) is satisfied on the date of this Utilisation Request.
4.
The proceeds of this Loan should be credited to [account].
5.
This Utilisation Request is irrevocable.
Yours faithfully ........................................ authorised signatory for the Company
*
18
SCHEDULE 4 MANDATORY COST FORMULAE
1.
The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (a) the requirements of the Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its functions) or (b) the requirements of the European Central Bank.
2.
On the first day of each Interest Period (or as soon as possible thereafter) the Agent shall calculate, as a percentage rate, a rate (the “Additional Cost Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Agent as a weighted average of the Lenders’ Additional Cost Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.
3.
The Additional Cost Rate for any Lender lending from a Facility Office in a Participating Member State will be the percentage notified by that Lender to the Agent. This percentage will be certified by that Lender in its notice to the Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Facility Office.
4.
The Additional Cost Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Agent as follows:
(a)
in relation to a sterling Loan:
per cent per annum
(b)
in relation to a Loan in any currency other than sterling:
per cent per annum.
Where:
A is the percentage of Eligible Liabilities (assuming these to be in excess of any stated minimum) which that Lender is from time to time required to maintain as an interest free cash ratio deposit with the Bank of England to comply with cash ratio requirements.
B is the percentage rate of interest (excluding the Margin and the Mandatory Cost and, if the Loan is an Unpaid Sum, the additional rate of interest specified in Clause 11.3.1 payable for the relevant Interest Period on the Loan.
C is the percentage (if any) of Eligible Liabilities which that Lender is required from time to time to maintain as interest bearing Special Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of England to the Agent on interest bearing Special Deposits.
E is designed to compensate Lenders for amounts payable under the Fees Rules and is calculated by the Agent as being the average of the most recent rates of charge supplied by the Base Reference Banks to the Agent pursuant to paragraph 7 below and expressed in pounds per £1,000,000.
5.
For the purposes of this Schedule:-
"Eligible Liabilities” and “Special Deposits”
have the meanings given to them from time to time under or pursuant to the Bank of England Act 1998 or (as may be appropriate) by the Bank of England
"Fees Rules”
means the rules on periodic fees contained in the FSA Supervision Manual or such other law or regulation as may be in force from time to time in respect of the payment of fees for the acceptance of deposits
"Fee Tariffs”
means the fee tariffs specified in the Fees Rules under the activity group A.1 Deposit acceptors (ignoring any minimum fee or zero rated fee required pursuant to the Fees Rules but taking into account any applicable discount rate)
"Tariff Base”
has the meaning given to it in, and will be calculated in accordance with, the Fees Rules
6.
In application of the above formulae, A, B, C and D will be included in the formulae as percentages (i.e. 5 per cent. will be included in the formula as 5 and not as 0.05). A negative result obtained by subtracting D from B shall be taken as zero. The resulting figures shall be rounded to four decimal places.
7.
If requested by the Agent, each Base Reference Bank shall, as soon as practicable after publication by the Financial Services Authority, supply to the Agent, the rate of charge payable by that Base Reference Bank to the Financial Services Authority pursuant to the Fees Rules in respect of the relevant financial year of the Financial Services Authority (calculated for this purpose by that Base Reference Bank as being the average of the Fee Tariffs applicable to that Base Reference Bank for that financial year) and expressed in pounds per £1,000,000 of the Tariff Base of that Base Reference Bank.
8.
Each Lender shall supply any information required by the Agent for the purpose of calculating its Additional Cost Rate. In particular, but without limitation, each Lender shall supply the following information on or prior to the date on which it becomes a Lender:
(a)
the jurisdiction of its Facility Office; and
(b)
any other information that the Agent may reasonably require for such purpose.
Each Lender shall promptly notify the Agent of any change to the information provided by it pursuant to this paragraph.
9.
The percentages of each Lender for the purpose of A and C above and the rates of charge of each Base Reference Bank for the purpose of E above shall be determined by the Agent based upon the information supplied to it pursuant to paragraphs 7 and 8 above and on the assumption that, unless a Lender notifies the Agent to the contrary, each Lender’s obligations in relation to cash ratio deposits and Special Deposits are the same as those of a typical bank from its jurisdiction of incorporation with a Facility Office in the same jurisdiction as its Facility Office.
10.
The Agent shall have no liability to any person if such determination results in an Additional Cost Rate which over or under compensates any Lender and shall be entitled to assume that the information provided by any Lender or Base Reference Bank pursuant to paragraphs 3, 7 and 8 above is true and correct in all respects.
11.
The Agent shall distribute the additional amounts received as a result of the Mandatory Cost to the Lenders on the basis of the Additional Cost Rate for each Lender based on the information provided by each Lender and each Base Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12.
Any determination by the Agent pursuant to this Schedule in relation to a formula, the Mandatory Cost, an Additional Cost Rate or any amount payable to a Lender shall, in the absence of manifest error, be conclusive and binding on all Parties.
13.
The Agent may from time to time, after consultation with the Company and the Lenders, determine and notify to all Parties any amendments which are required to be made to this Schedule in order to comply with any change in law, regulation or any requirements from time to time imposed by the Bank of England, the Financial Services Authority or the European Central Bank (or, in any case, any other authority which replaces all or any of its functions) and any such determination shall, in the absence of manifest error, be conclusive and binding on all Parties.
SCHEDULE 5
19
FORM OF TRANSFER CERTIFICATE
To: From: Dated:
[ ] as Agent and [ ] as Security Agent [The Existing Lender] (the “Existing Lender”) and [The New Lender] (the “New Lender”)
Sytner Group Limited – £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to the Facility Agreement. This agreement (the “Agreement”) shall take effect as a Transfer Certificate for the purpose of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
2.
We refer to Clause 26.5 (Procedure for transfer) of the Facility Agreement:-
2.1
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender’s Commitment, rights and obligations referred to in the Schedule in accordance with Clause 26.5 (Procedure for transfer).
2.2
The proposed Transfer Date is [ ].
2.3
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 34.2 (Addresses) are set out in the Schedule.
3.
The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in Clause 26.4.3.
4.
The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:-
4.1
[a Qualifying Lender falling within paragraph (a)(i) [or paragraph (b)] of the definition of Qualifying Lender;]
4.2
[a Treaty Lender;]
4.3
[not a Qualifying Lender].
5.
[The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:-
5.1
a company resident in the United Kingdom for United Kingdom tax purposes;
5.2
a partnership each member of which is:- 5.2.1
a company so resident in the United Kingdom; or
5.2.2
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
5.2.3
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]
6.
[The New Lender confirms (for the benefit of the Agent and without liability to any Obligor) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [ ]), and is tax resident in [ ] so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax and notifies the Company that:-
6.1
each Borrower which is a Party as a Borrower as at the Transfer Date must, to the extent that the New Lender becomes a Lender under the Facility which is made available to that Borrower pursuant to Clause 2.1 (The Facility) of the Facility Agreement, make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date: and
6.2
each Additional Borrower which becomes an Additional Borrower after the Transfer Date must, to the extent that the New Lender is a Lender under a Facility which is made available to that Additional Borrower pursuant to Clause 2.1 (The Facility) of the Facility Agreement, make an application to HM Revenue & Customs under form DTTP2 within 30 days of becoming an Additional Borrower.
[6/7].The New Lender confirms that it [is]/[is not]* a Sponsor Affiliate.
[7/8].We refer to clause 20.3 (Assignment and transfer of Secured Liabilities) of the Intercreditor Agreement and confirm that the New
Lender has executed a Deed of Accession (as defined in the Intercreditor Agreement).
[8/9]. [9/10]. [10/11]. Note:
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. This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. This Agreement has been entered into on the date stated at the beginning of this Agreement. The execution of this Transfer Certificate may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
* Delete as applicable.
20
THE SCHEDULE Commitment/rights and obligations to be transferred [insert relevant details] [Facility Office address, fax number and attention details for notices and account details for payments,]
[Existing Lender]
[New Lender]
By:
By:
This Agreement is accepted as a Transfer Certificate for the purposes of the Facility Agreement by the Agent and the Transfer Date is confirmed as [ ].
[Agent]
By:
SCHEDULE 6
21
FORM OF ASSIGNMENT AGREEMENT
To: From: Dated:
[ ] as Agent and [ ], [ ] as Security Agent, [ ] as Company, for and on behalf of each Obligor [theExisting Lender] (the “Existing Lender”) and [theNew Lender] (the “New Lender”)
Sytner Group Limited — £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to the Facility Agreement. This is an Assignment Agreement. This agreement (the "Agreement”) shall take effect as an Assignment Agreement for the purpose of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
2.
We refer to Clause 26.6 (Procedure for assignment) of the Facility Agreement:-
2.1
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Facility Agreement, the other Finance Documents and in respect of the Transaction Security which correspond to that portion of the Existing Lender’s Commitments and participations in Utilisations under the Facility Agreement as specified in the Schedule.
2.2
The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitments and participations in Utilisations under the Facility Agreement specified in the Schedule.
2.3
The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph 2.2 above.
3.
The proposed Transfer Date is [ ].
4.
On the Transfer Date the New Lender becomes:-
4.1
Party to the relevant Finance Documents (other than the Intercreditor Agreement) as a Lender; and
4.2
Party to the Intercreditor Agreement as a Senior Lender.
5.
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause 34.2 (Addresses) are set out in the Schedule.
6.
The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in Clause 26.4.3.
7.
The New Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:-
7.1
[a Qualifying Lender falling within paragraph (a)(i) [or paragraph (b)] of the definition of Qualifying Lender;]
7.2
[a Treaty Lender;]
7.3
[not a Qualifying Lender].
8.
[The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:-
8.1
a company resident in the United Kingdom for United Kingdom tax purposes; or
8.2
a partnership each member of which is:- 8.2.1
a company so resident in the United Kingdom; or
8.2.2
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
8.3
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]
9.
[The New Lender confirms (for the benefit of the Agent and without liability to any Obligor) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [ ] and is tax resident in [ ]), so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax and notifies the Company that:-
9.1
each Borrower which is a Party as a Borrower as at the Transfer Date must, to the extent that the New Lender becomes a Lender under a Facility which is made available to that Borrower pursuant to Clause 2.1 (The Facility) of the Facility Agreement, make an application to HM Revenue & Customs under form DTTP2 within 30 days of the Transfer Date; and
9.2
each Additional Borrower which becomes an Additional Borrower after the Transfer Date must, to the extent that the New Lender is a Lender under a Facility which is made available to that Additional Borrower pursuant to Clause 2.1 (The Facility) of the Facility Agreement, make an application to HM Revenue & Customs under form DTTP2 within 30 days of becoming an Additional Borrower.
The New Lender confirms that it [is]/[is not]* a Sponsor Affiliate. We refer to clause 20.3 (Assignment and transfer of Secured Liabilities) of the Intercreditor Agreement and confirm that the New Lender has executed a Deed of Accession (as defined in the Intercreditor Agreement). This Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 26.7 (Copy of Transfer Certificate or Assignment Agreement to Company) to the Company (on behalf of each Obligor) of the assignment referred to in this Agreement. 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. This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law. This Agreement has been entered into on the date stated at the beginning of this Agreement. The execution of this Assignment Agreement may not transfer a proportionate share of the Existing Lender’s interest in the Transaction Security in all jurisdictions. It is the responsibility of the New Lender to ascertain whether any other documents or other formalities are required to perfect a transfer of such a share in the Existing Lender’s Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
* Delete as applicable.
22
THE SCHEDULE Commitment/rights and obligations to be transferred by assignment, release and accession [insert relevant details] [Facility office address, fax number and attention details for notices and account details for payments]
[Existing Lender] By:
[New Lender] By:
This Agreement is accepted as an Assignment Agreement for the purposes of the Facility Agreement by the Agent and the Transfer Date is confirmed as [ ].
Signature of this Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to in this Agreement, which notice the Agent receives on behalf of each Finance Party.
[Agent]
By:
SCHEDULE 7
23
FORM OF ACCESSION DEED
To: From:
[ ] as Agent and [ ] as Security Agent for itself and each of the other parties to the Intercreditor Agreement referred to below [Subsidiary] and [Company]
Dated:
Dear Sirs
Sytner Group Limited — £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to the Facility Agreement. This deed (the “Accession Deed”) shall take effect as an Accession Deed for the purposes of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in paragraphs 1-3 of this Accession Deed unless given a different meaning in this Accession Deed.
2.
[Subsidiary] agrees to become an Additional [Borrower]/[Guarantor] and to be bound by the terms of the Facility Agreement and the other Finance Documents (other than the Intercreditor Agreement) as an Additional [Borrower]/[Guarantor] pursuant to Clause [28.2 (Additional Borrowers)]/[Clause 28.4 (Additional Guarantors)] of the Facility Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction] and is a limited liability company and registered number [ ].
3.
[Subsidiary’s] administrative details for the purposes of the Facility Agreement and the Intercreditor Agreement are as follows:-
Address:
Fax No.:
Attention:
4.
[Subsidiary] (for the purposes of this paragraph 4, the “Acceding Debtor”) intends to [incur liabilities under the following documents]/[give a guarantee, indemnity or other assurance against loss in respect of liabilities under the following documents]:-
[Insert details (date, parties and description) of relevant documents]
the “Relevant Documents”.
IT IS AGREEDas follows:-
(a)
Terms defined in the Intercreditor Agreement shall, unless otherwise defined in this Accession Deed, bear the same meaning when used in this paragraph 4.
(b)
The Acceding Debtor and the Security Agent agree that the Security Agent shall hold:-
(i)
[any Security in respect of liabilities created or expressed to be created pursuant to the Relevant Documents;
(ii)
all proceeds of that Security; and]
(iii)
all obligations expressed to be undertaken by the Acceding Debtor to pay amounts in respect of the liabilities to the Security Agent as trustee for the Syndicated Finance Parties (in the Relevant Documents or otherwise) and secured by the Transaction Security created in favour of the Security Agent together with all representations and warranties expressed to be given by the Acceding Debtor (in the Relevant Documents or otherwise) in favour of the Security Agent as trustee for the Syndicated Finance Parties,
on trust for the Syndicated Finance Parties on the terms and conditions contained in the Intercreditor Agreement.
(c)
The Acceding Debtor confirms that it intends to be party to the Intercreditor Agreement as an Obligor, undertakes to perform all the obligations expressed to be assumed by an Obligor under the Intercreditor Agreement, agrees that it shall be bound by all the provisions of the Intercreditor Agreement as if it had been an original party to the Intercreditor Agreement and confirms that it has executed a Deed of Accession (as defined in the Intercreditor Agreement).
(d)
[In consideration of the Acceding Debtor being accepted as an Intra-Group Lender for the purposes of the Intercreditor Agreement, the Acceding Debtor also confirms that it intends to be party to the Intercreditor Agreement as an Intra-Group Lender, undertakes to perform all the obligations expressed in the Intercreditor Agreement to be assumed by an Intra-Group Lender, agrees that it shall be bound by all the provisions of the Intercreditor Agreement, as if it had been an original party to the Intercreditor Agreement and confirms that it has executed a Deed of Accession (as defined in the Intercreditor Agreement).]
[4]/[5] This Accession Deed and any non-contractual obligations arising out of or in connection with it are governed by English law.
THIS ACCESSION DEEDhas been signed on behalf of the Security Agent (for the purposes of paragraph 4 above only), signed on behalf of the Company and executed as a deed by [Subsidiary] and is delivered on the date stated above.
[Subsidiary]
[EXECUTED AS A DEED By: [Subsidiary])
)
Director Director/Secretary
24
OR
[EXECUTED AS A DEED By: [Subsidiary]
Signature of Director
Name of Director
in the presence of
Signature of witness
Name of witness
Address of witness
Occupation of witness]
The Company
[Company]
By:
The Security Agent
[Full Name of Current Security Agent]
By:
Date:
SCHEDULE 8
25
FORM OF RESIGNATION LETTER
To: From: Dated:
[ ] as Agent [resigning Obligor] and [Company]
Dear Sirs
Sytner Group Limited — £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to the Facility Agreement. This is a Resignation Letter. Terms defined in the Facility Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2.
Pursuant to [Clause 28.3 (Resignation of a Borrower)]/[Clause 28.5 (Resignation of a Guarantor)], we request that [resigning Obligor] be released from its obligations as a [Borrower]/[Guarantor] under the Facility Agreement and the Finance Documents (other than the Intercreditor Agreement).
3.
We confirm that:-
3.1 3.2 3.3
no Default is continuing or would result from the acceptance of this request; and *[[this request is given in relation to a Third Party Disposal of [resigning Obligor]; [ ]***
4.
This Resignation Letter and any non-contractual obligations arising out of or in connection with it are governed by English law.
[Company]
[resigning Obligor]
By:
By:
NOTES:
*
Insert where resignation only permitted in case of a Third Party Disposal.
**
Amend as appropriate, e.g. to reflect agreed procedure for payment of proceeds into a specified account.
***
Insert any other conditions required by the Facility Agreement.
SCHEDULE 9
26
FORM OF COMPLIANCE CERTIFICATE
To: From: Dated:
[ ] as Agent [Company]
Dear Sirs
Sytner Group Limited — £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to the Facility Agreement. This is a Compliance Certificate. Terms defined in the Facility Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.
2.
We confirm that:-
[Insert details of covenants to be certified].
[We confirm that the ratio of Consolidated Net Borrowings to Consolidated EBITDA is [ ]:1 and that, therefore, the Margin should be [ ]%.]
3.
[We confirm that no Default is continuing.]**
4.
We confirm that the aggregate of the earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants))and the aggregate gross assets, aggregate net assets and aggregate turnover of the Guarantors (other than the Parent) (calculated on an unconsolidated basis and excluding all intra-group items and investments in Subsidiaries of any member of the Group) exceeds 90% of the Consolidated EBITDA, (as defined in Clause 23 (Financial Covenants)) and the consolidated gross assets, consolidated net assets and consolidated turnover of the Group.
5.
The Parent confirms that the aggregate of earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants)) of the German Group and the aggregate gross assets, the aggregate net assets and aggregate turnover of the members of the German Group (in each case calculated on an unconsolidated basis and excluding all intra-group items and investment in Subsidiaries of any member of the German Group) does not exceed 10 per cent of the consolidated earnings before interest, tax, depreciation and amortisation (calculated on the same basis as Consolidated EBITDA, as defined in Clause 23 (Financial Covenants) but on the basis that references in the definition of Consolidated EBITDA and related definitions to “Group” shall be to the UAG Group) of the UAG Group and the consolidated gross assets, consolidated net assets and consolidated turnover of the UAG Group
Signed
......................
..........................
Director
Director
Of
of
[Company]
[Company]
Signed
......................
..........................
Director
Director
Of
of
[Parent]
[Parent]
[insert applicable certification language]**
.......................... for and on behalf of [name of Auditors of the Company]***
*If this statement cannot be made, the certificate should identify any Default that is continuing and the steps, if any, being taken to remedy it.
** To be agreed with the Company’s Auditors and the Lenders (only to apply when a Default has occurred and is continuing as per Clause 22.2.3).*** Only applicable if the Compliance Certificate accompanies the audited financial statements and is to be signed by the Auditors. To be agreed with the Company’s auditor’s prior to signing the Agreement.
27
SCHEDULE 10 TIMETABLE
Delivery of a duly completed Utilisation Request (Clause 5.1 (Delivery of a Utilisation Request))
U-1 9.30am
Agent notifies the Lenders of the Loan in accordance with Clause 5.4 (Lenders’ participation)
U-1 noon
LIBOR is fixed
Quotation Day as of 11:00 a.m.
“U”= “U — X”=
date of utilisation. X Business Days prior to date of utilisation.
SCHEDULE 11 AGREED SECURITY PRINCIPLES
1.
Considerations
In determining what Security will be provided in support of the Facility (and any related hedging arrangements in respect of the types of liabilities and/or risks which the are required to be hedged from time to time) the following matters will be taken into account. Security shall not be created or perfected to the extent that it would:-
1.1
result in any breach of corporate benefit, financial assistance, fraudulent preference or thin capitalisation laws or regulations (or analogous restrictions) of any applicable jurisdiction;
1.2
result in a significant risk to the officers of the relevant grantor of Security of contravention of their fiduciary duties and/or of civil or criminal liability; or
1.3
result in costs that, in the opinion of the Agent, are disproportionate to the benefit obtained by the beneficiaries of that Security.
For the avoidance of doubt, in these Agreed Security Principles, “cost” includes, but is not limited to, income tax cost, registration taxes payable on the creation or enforcement or for the continuance of any Security, stamp duties, out-of-pocket expenses, and other fees and expenses directly incurred by the relevant grantor of Security or any of its direct or indirect owners, subsidiaries or Affiliates.
2.
Obligations to be Secured
2.1
Subject to 1 (Considerations) and to paragraph 2.2 below, the obligations to be secured are the Secured Obligations (as defined below). The Security is to be granted in favour of the Security Agent on behalf of each Secured Party.
For ease of reference, the following definitions should, to the extent legally possible, be incorporated into each Transaction Security Document:-
"Secured Obligations” means all present and future obligations at any time due, owing or incurred by any member of the Group and by each Obligor to any Secured Party under the Finance Documents, both actual and contingent and whether incurred solely or jointly and as principal or surety or in any other capacity.
"Secured Parties” means the Security Agent, any Receiver or Delegate and each of the Agent, the Arrangers and the other Finance Parties from time to time but, in the case of each Agent, Arranger or other Finance Party, only if it is a party to the Intercreditor Agreement or (in the case of an Agent or any other Finance Party) has acceded to the Intercreditor Agreement, in the appropriate capacity, pursuant to clause 20.3 (Assignment and transfer of Secured Liabilities) of the Intercreditor Agreement.
2.2
The secured obligations will be limited:-
2.2.1
to avoid any breach of corporate benefit, financial assistance, fraudulent preference, thin capitalisation rules or the laws or regulations (or analogous restrictions) of any applicable jurisdiction; and
2.2.2
to avoid any risk to officers of the relevant member of the Group that is granting Transaction Security of contravention of their fiduciary duties and/or civil or criminal or personal liability.
3.
General
Where appropriate, defined terms in the Transaction Security Documents should mirror those in this Agreement.
The parties to this Agreement agree to negotiate the form of each Transaction Security Document in good faith and will ensure that all documentation required to be entered into as a condition precedent to first drawdown under this Agreement (or immediately thereafter) is in a finally agreed form as soon as reasonably practicable after the date of this Agreement. The form of guarantee is set out in Clause 20 (Guarantee and Indemnity) of this Agreement and, with respect to any Additional Guarantor, is subject to any limitations set out in the Accession Deed applicable to such Additional Guarantor.
The Security shall, to the extent possible under local law, be enforceable on the occurrence of an Event of Default which has resulted in the Agent exercising any of its rights under Clauses 25.18.1, 25.18.2, 25.18.4 or 25.18.6 of this Agreement or, having exercised its rights under Clause 25.18.3 or Clause 25.18.5 of this Agreement or first making demand with respect to some or all of the utilisations or amounts outstanding under the Ancillary Facilities.
4.
Undertakings/Representations and Warranties
Any representations, warranties or undertakings which are required to be included in any Transaction Security Document shall reflect (to the extent to which the subject matter of such representation, warranty and undertaking is the same as the corresponding representation, warranty and undertaking in this Agreement) the commercial deal set out in this Agreement (save to the extent that Secured Parties’ local counsel deem it necessary to include any further provisions (or deviate from those contained in this Agreement) in order to protect or preserve the Security granted to the Secured Parties).
SCHEDULE 12
28
FORM OF INCREASE CONFIRMATION
To: From: Dated:
[ ] as Agent, [ ] as Security Agent and [ ] as Parent, for and on behalf of each Obligor [theIncrease Lender] (the “Increase Lender”) [ ]
We refer to the Facilities Agreement and to the Intercreditor Agreement (as defined in the Facilities Agreement). This agreement (the “Agreement”) shall take effect as an Increase Confirmation for the purpose of the Facilities Agreement. Terms defined in the Facilities Agreement have the same meaning in this Agreement unless given a different meaning in this Agreement.
6.
We refer to Clause 2.2 (Increase) of the Facilities Agreement.
7.
The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the “Relevant Commitment”) as if it was an Original Lender under the Facilities Agreement.
8.
The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment is to take effect (the “Increase Date”) is [ ].
9.
On the Increase Date, the Increase Lender becomes:-
9.1
party to the relevant Finance Documents (other than the Intercreditor Agreement) as a Lender; and
9.2
party to the Intercreditor Agreement as a Senior Lender.
10.
The Facility Office and address, fax number and attention details for notices to the Increase Lender for the purposes of Clause 34.2 (Addresses) are set out in the Schedule.
11.
The Increase Lender expressly acknowledges the limitations on the Lenders’ obligations referred to in Clause 2.2.6.
12.
The Increase Lender confirms, for the benefit of the Agent and without liability to any Obligor, that it is:-
12.1 12.2 12.3
[a Qualifying Lender (other than a Treaty Lender);] [a Treaty Lender;] [not a Qualifying Lender].0
13.
The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:-
13.1
a company resident in the United Kingdom for United Kingdom tax purposes; or
13.2
a partnership each member of which is:- 13.2.1
a company so resident in the United Kingdom; or
13.2.2
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
13.2.3
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]1
14.
[The New Lender confirms (for the benefit of the Agent and without liability to any Obligor) that it is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme (reference number [ ]) and is tax resident in [ ]2, so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax and notifies the Parent that:-
14.1
each Borrower which is a Party as a Borrower as at the Transfer Date must, to the extent that the New Lender becomes a Lender under a Facility which is made available to that Borrower pursuant to Clause 2.1 (The Facilities) of the Facilities Agreement, make an application to HM Revenue & Customs under form DTTP-2 within 30 days of the Transfer Date; and
14.2
each Additional Borrower which becomes an Additional Borrower after the Transfer Date must, to the extent that the New Lender is a Lender under a Facility which is made available to that Additional Borrower pursuant to Clause 2.1 (The Facilities) of the Facilities Agreement, make an application to HM Revenue & Customs under form DTTP2 within 30 days of becoming an Additional Borrower.]3
The Increase Lender confirms that it is not a Sponsor Affiliate. [The Increase Lender confirms that it [is]/[is not]* a Non-Acceptable L/C Lender.]** We refer to clause 20.3 (Assignment and transfer of Secured Liabilities) of the Intercreditor Agreement and confirm that the Increase Lender has executed a Deed of Accession (as defined in the Intercreditor Agreement). 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. This Agreement rand any non-contractual obligations arising out of or in connection with it] [is/are]4 governed by English law. This Agreement has been entered into on the date stated at the beginning of this Agreement.
Note: The execution of this Increase Confirmation may not be sufficient for the Increase Lender to obtain the benefit of the Transaction Security in all jurisdictions. It is the responsibility of the Increase Lender to ascertain whether any other documents or other formalities are required to obtain the benefit of the Transaction Security in any jurisdiction and, if so, to arrange for execution of those documents and completion of those formalities.
0
Delete as applicable — each Increase Lender is required to confirm which of these three categories it falls within.
1
Include only if New Lender is a UK Non-Bank Lender ie falls within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 15.1 (Definitions).
2
Insert jurisdiction of residence
3
This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Facilities Agreement.
* Delete as applicable.
** Include only if the increase involves the assumption of a Revolving Facility Commitment.
4
This Clause should follow the approach adopted as regards non-contractual obligations in Clause 41 (Governing Law). This should be done (and this footnote deleted) before the Facility Agreement is signed.
29
THE SCHEDULE RELEVANT COMMITMENT/RIGHTS AND OBLIGATIONS TO BE ASSUMED BY THE INCREASE LENDER [insert relevant details] [Facility office address, fax number and attention details for notices and account details for payments]
[Increase Lender]
By:
This Agreement is accepted as an Increase Confirmation for the purposes of the Facilities Agreement by the Agent and the Increase Date is confirmed as [ ].
Agent
By:
Security Agent
By:
NOTE:
30
SCHEDULE 13 FORMS OF NOTIFIABLE DEBT PURCHASE TRANSACTION NOTICE PART 1 FORM OF NOTICE ON ENTERING INTO NOTIFIABLE DEBT PURCHASE TRANSACTION
To: From: Dated:
[ ] as Agent [The Lender] [ ]
Sytner Group Limited — £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to Clause 27.2.2 of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this notice unless given a different meaning in this notice.
2.
We have entered into a Notifiable Debt Purchase Transaction.
3.
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below.
Commitment
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates
[Lender]
By:
PART 2
31
FORM OF NOTICE ON TERMINATION OF NOTIFIABLE DEBT PURCHASE TRANSACTION/NOTIFIABLE DEBT PURCHASE TRANSACTION CEASING TO BE WITH SPONSOR AFFILIATE
To: From: Dated:
[ ] as Agent [The Lender] [ ]
Sytner Group Limited — £100,000,000 Facility Agreement dated [ ] 2011 (the “Facility Agreement”)
1.
We refer to Clause 27.2.3 of the Facility Agreement. Terms defined in the Facility Agreement have the same meaning in this notice unless given a different meaning in this notice.
2.
A Notifiable Debt Purchase Transaction which we entered into and which we notified you of in a notice dated [ ] has (terminated]/[ceased to be with a Sponsor Affiliate].*
3.
The Notifiable Debt Purchase Transaction referred to in paragraph 2 above relates to the amount of our Commitment(s) as set out below.
Commitment
Amount of our Commitment to which Notifiable Debt Purchase Transaction relates
[Lender]
By:
SCHEDULE 14
* Delete as applicable.
32
FRANCHISES
SYTNER BMW/MINI Nottingham
GUY SALMON LANDROVER Sheffield
SYTNER BMW/MINI Leicester
GUY SALMON LANDROVER Coventry
SYTNER BMW/MINI Sheffield
GUY SALMON LANDROVER Stratford
SYTNER BMW/MINI Solihull
GUY SALMON LANDROVER Knutsford
SYTNER BMW/MINI Coventry
GUY SALMON LANDROVER Wakefield
SYTNER BMW/MINI City
GUY SALMON LANDROVER Stockport
SYTNER BMW/MINI High Wycombe
TOLLBAR VOLVO Warwick
SYTNER BMW/MINI Chigwell
AUDI Leeds
SYTNER BMW/MINI Harold Wood
AUDI Wakefield
SYTNER BMW/MINI Sunningdale
AUDI Bradford
SYTNER ROLLS ROYCE Sunningdale
AUDI Harrogate
MERCEDES-BENZ OF Bristol
AUDI Slough
MERCEDES-BENZ OF WSM
AUDI Reading
MERCEDES-BENZ OF Newbury
AUDI West London
MERCEDES-BENZ OF Swindon
AUDI Victoria
MERCEDES-BENZ OF Bath
LEXUS Leicester
MERCEDES-BENZ OF Gloucester
LEXUS Birmingham
MERCEDES-BENZ OF Milton Keynes
LEXUS Bristol
MERCEDES-BENZ OF Northampton
LEXUS Cardiff
MERCEDES-BENZ OF Bedford
LEXUS Milton Keynes
Kings KINGS CHRYSLER-JEEP Manchester
TOYOTA WORLD Birmingham
KINGS CHRYSLER-JEEP Gloucester
TOYOTA WORLD Tamworth
KINGS CHRYSLER-JEEP Swindon
TOYOTA WORLD Bristol Central
GUY SALMON JAGUAR Thames Ditton
TOYOTA WORLD Bristol North
GUY SALMON JAGUAR Ascot
TOYOTA WORLD Cardiff
GUY SALMON JAGUAR Gatwick
TOYOTA WORLD Newport
GUY SALMON JAGUAR Maidstone
TOYOTA WORLD Bridgend
GUY SALMON LANDROVER Thames Ditton
GRAYPAUL FERRARI/MASERATI Nottingham
GUY SALMON LANDROVER Ascot
GRAYPAUL FERRARI/MASERATI Edinburgh
GUY SALMON LANDROVER Gatwick
PORSCHE CENTRE Mid-Sussex
GUY SALMON LANDROVER Maidstone
PORSCHE CENTRE Silverstone
GUY SALMON LANDROVER Portsmouth
PORSCHE CENTRE Edinburgh
HONDA Redhill
PORSCHE CENTRE Glasgow
GUY SALMON JAGUAR Coventry
BENTLEY Manchester
GUY SALMON JAGUAR Northampton
BENTLEY Birmingham
GUY SALMON JAGUAR Oxford
BENTLEY Edinburgh
AUDI Huddersfield
SAAB Oxford
VW Huddersfield
TOYOTA Solihull
VW Harrogate
MERCEDES-BENZ Newcastle
VW Leeds
MERCEDES-BENZ Sunderland
SEAT Huddersfield
MERCEDES-BENZ Carlisle
AUDI derby
MERCEDES-BENZ Stockton
FERRARI Birmingham
KINGS CHRYSLER JEEP Newcastle
FERRARI Egham
KINGS CHRYSLER JEEP Stockton
GUY SALMON LANDROVER Bristol
SYTNER BMW/MINI Birmingham
AUDI Nottingham
SYTNER BMW/MINI Sutton
AUDI Leicester
SYTNER BMW/MINI Oldbury
BENTLEY Leicester
SYTNER BMW/MINI Cardiff
PORSCHE Leicester
SYTNER BMW/MINI Newport
PORSCHE Solihull
SYTNER BMW/MINI Maidenhead
HONDA Gatwick
SCHEDULE 15
33
EXISTING SECURITY DOCUMENTS
NAME OF OBLIGOR
DESCRIPTION OF DOCUMENT
PERSONS ENTITLED
DATE CHARGE CREATED
Rycroft Vehicles Limited
Debenture
National Westminster Bank plc
20/10/2006
Debenture
National Westminster Bank plc
27/02/2007
Maranello Concessionaires Limited
Debenture
National Westminster Bank plc
13/05/2008
Sytner Limited
Charge supplemental to a mortgage debenture dated 19/01/1976
National Westminster Bank plc
01/03/1988
Debenture
National Westminster Bank plc
19/06/2009
Debenture
BMW Finance (GB) Limited (now known as BMW Financial Services (GB) Limited)
11/11/1988
Sytner Retail Limited
Debenture
National Westminster Bank plc
20/10/2006
Debenture
National Westminster Bank plc
27/02/2007
Debenture
BMW Finance (GB) Limited (now known as BMW Financial Services (GB) Limited)
12/01/1988
John Fox Limited
Debenture
National Westminster Bank plc
21/12/2007
General charge
Volkswagen Financial Services (UK) Limited
30/09/1994
General charge
Volkswagen Bank GmbH (trading as Volkswagen Bank United Kingdom Branch)
19/01/2010
Maranello Sales Limited
Debenture
National Westminster Bank plc
13/05/2008
Cruickshank Motors Limited
Mortgage Debenture
National Westminster Bank plc
12/05/1995
Legal Mortgage
National Westminster Bank plc
30/01/1998
Floating charge over stock
Mercedes-Benz Finance Limited
29/12/1995
Sytner Coventry Limited
Debenture
National Westminster Bank plc
04/01/2006
Deed of Assignment
BMW Finance (GB) Limited (now known as BMW Financial Services (GB) Limited)
22/07/2002
Sytner Holdings Limited
Mortgage Debenture
National Westminster Bank plc
31/08/1999
R Stratton & Co Limited
Debenture
National Westminster Bank plc
17/05/2003
Sytner Cars Limited
Mortgage Debenture
National Westminster Bank plc
31/01/1995
Graypaul Motors Limited
Mortgage Debenture
National Westminster Bank plc
22/09/1995
Goodman Retail Limited
Mortgage Debenture
National Westminster Bank plc
22/12/1995
Goodman TPS Limited
Debenture
National Westminster Bank plc
03/07/2009
Guy Salmon Limited
Mortgage Debenture
National Westminster Bank plc
19/06/1998
Sytner Vehicles Limited
Debenture
National Westminster Bank plc
23/12/2009
Ryland Investments Limited
Debenture
National Westminster Bank plc
27/02/2007
Maranello Holdings Limited
Debenture
National Westminster Bank plc
13/05/2008
William Jacks Limited
Debenture
National Westminster Bank plc
31/07/2006
Mar Parts Limited
Debenture
National Westminster Bank plc
13/05/2008
William Jacks Properties Limited
Debenture
National Westminster Bank plc
31/07/2006
Ryland Group Services Limited
Debenture
National Westminster Bank plc
27/02/2007
Ryland Properties Limited
Debenture
National Westminster Bank plc
27/02/2007
Ryland Group Limited
Debenture
National Westminster Bank plc
27/02/2007
UAG UK Holdings Limited
Debenture
National Westminster Bank plc
07/05/2003
Charge over marketable securities (1 share in PAE GmbH)
Address: Corporate and Insitutional Banking, 5th floor, 2 St Philips Place, Birmingham,
B3 2RB
Fax: 0121 262 7979
Attention: Mark Trainor
BMW FINANCIAL SERVICES (GB) LIMITED
By: /s/ Robert Jordan
By: /s/ M.E. Ferriss
Director Corporate Secretary
Address: Europa House, Bartley Way, Hook, Hampshire
Fax: 01256 749037
Attention: Company Secretary
THE AGENT
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ Mark Trainor
Address: Corporate and Insitutional Banking, 5th floor, 2 St Philips Place, Birmingham,
B3 2RB
Fax: 0121 262 7979
Attention: Mark Trainor
THE SECURITY AGENT
THE ROYAL BANK OF SCOTLAND PLC
By: /s/ Mark Trainor
Address: Corporate and Insitutional Banking, 5th floor, 2 St Philips Place, Birmingham,
B3 2RB
Fax: 0121 262 7979
Attention: Mark Trainor
THE ORIGINAL LENDERS
THE ROYAL BANK OF SCOTLAND PLC AS AGENT FOR NATIONAL WESTMINSTER BANK PLC
By: /s/ Mark Trainor
Address: Corporate and Insitutional Banking, 5th floor, 2 St Philips Place, Birmingham,
B3 2RB
Fax: 0121 262 7979
Attention: Mark Trainor
BMW FINANCIAL SERVICES (GB) LIMITED
By: /s/ Robert Jordan
By: /s/ M.E. Ferriss
Director Corporate Secretary
Address: Europa House, Bartley Way, Hook, Hampshire
Fax: 01256 749037
Attention: Company Secretary
35
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