EXHIBIT 1.1
CLIFFORD LIMITED LIABILITY PARTNERSHIP
CHANCE
CONFORMED COPY
SECURED FACILITY AGREEMENT
dated 20 July 2006
for
ORIENT-EXPRESS HOTELS LTD.
arranged by
BARCLAYS CAPITAL
with
BARCLAYS BANK PLC
acting as Agent
and
BARCLAYS BANK PLC
acting as Security Trustee
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MULTICURRENCY REVOLVING FACILITY AGREEMENT
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CONTENTS
Clause Page
1. Definitions and Interpretation..........................................1
2. The Facility...........................................................17
3. Purpose................................................................17
4. Conditions Of Utilisation..............................................17
5. Utilisation............................................................19
6. Optional Currencies....................................................20
7. Repayment..............................................................21
8. Prepayment And Cancellation............................................21
9. Interest...............................................................26
10. Interest Periods.......................................................27
11. Changes To The Calculation Of Interest.................................27
12. Fees...................................................................28
13. Tax Gross Up And Indemnities...........................................29
14. Increased Costs........................................................34
15. Other Indemnities......................................................35
16. Mitigation By The Lenders..............................................36
17. Costs And Expenses.....................................................37
18. Guarantee And Indemnity................................................38
19. Representations........................................................41
20. Information Undertakings...............................................45
21. Financial Covenants....................................................49
22. General Undertakings...................................................51
23. Events of Default......................................................61
24. Changes to the Lenders.................................................65
25. Changes to the Obligors................................................68
26. Role of the Agent and the Arranger.....................................70
27. Role of Security Trustee...............................................75
28. Conduct of Business by the Finance Parties.............................83
29. Sharing among the Finance Parties......................................84
30. Payment mechanics......................................................86
31. Set-off................................................................88
32. Application of Proceeds................................................88
33. Notices................................................................89
34. Calculations and Certificates..........................................91
35. Partial Invalidity.....................................................92
36. Remedies and Waivers...................................................92
37. Amendments and Waivers.................................................92
38. Counterparts...........................................................93
39. Governing law..........................................................94
40. Enforcement............................................................94
SCHEDULE 1 THE ORIGINAL PARTIES...............................................95
Part I The Original Obligors....................................95
Part II The Original Lenders.....................................96
SCHEDULE 2 CONDITIONS PRECEDENT...............................................97
Part I Conditions precedent to initial Utilisation..............97
Part II Conditions Precedent required to be delivered by an
Additional Obligor...................................103
SCHEDULE 3 REQUESTS..........................................................105
SCHEDULE 4 MANDATORY COST FORMULAE...........................................106
SCHEDULE 5 FORM OF TRANSFER CERTIFICATE......................................109
SCHEDULE 6 FORM OF ACCESSION LETTER..........................................111
SCHEDULE 7 FORM OF COMPLIANCE CERTIFICATE....................................112
SCHEDULE 8 TIMETABLES........................................................113
SCHEDULE 9 ALLOCATED DEBT AMOUNT.............................................114
SCHEDULE 10 SECURITY DOCUMENTS...............................................115
SCHEDULE 11 MINIMUM INSURANCE REQUIREMENTS FOR THE COMPANY...................116
SIGNATURES .................................................................117
THIS AGREEMENT is dated 20 July 2006 and made between:
(1) ORIENT-EXPRESS HOTELS LTD., a private limited company incorporated in
Bermuda with registered number EC13215 (the "Company");
(2) SOCIETE DE LA CITE SA, a company incorporated in France with registered
number B57 1850536 57B5 3 ("HDC");
(3) THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 (The
Original Parties) as original borrowers (together with the Company the
"Original Borrowers");
(4) THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 (The
Original Parties) as original guarantors (together with the Company the
"Original Guarantors");
(5) BARCLAYS CAPITAL (the investment banking division of Barclays Bank PLC) as
mandated lead arranger (the "Arranger");
(6) THE FINANCIAL INSTITUTIONS listed in Part II and Part III of Schedule 1
(The Original Parties) as lenders and arrangers (the "Original Lenders");
(7) BARCLAYS BANK PLC as agent of the other Finance Parties (the "Agent"); and
(8) BARCLAYS BANK PLC as security trustee for the Secured Parties (the
"Security Trustee").
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"Accession Letter" means a document substantially in the form set out in
Schedule 6 (Form of Accession Letter).
"Additional Borrower" means a company which becomes an Additional Borrower
in accordance with Clause 25 (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 25 (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.
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"Agent's Spot Rate of Exchange" means the Agent's spot rate of exchange for
the purchase of the relevant currency with the Base Currency in the London
foreign exchange market at or about 11:00 a.m. on a particular day.
"Allocated Debt Amount" means in respect of a Hotel or an Italian Hotel,
the amount in euro set out opposite that Hotel or Italian Hotel in the
column headed "Allocated Debt Amount" in Schedule 9 (Allocated Debt
Amount).
"Authorisation" means an authorisation, consent, approval, resolution,
licence, exemption, filing, notarisation or registration.
"Availability Period" means the period from and including the date of this
Agreement to and including the Final Maturity Date.
"Available Commitment" means a Lender's Commitment minus:
(a) the Base Currency Amount of its participation in any outstanding
Loans; and
(b) in relation to any proposed Utilisation, the Base Currency Amount of
its participation in any Loans that are due to be made on or before
the proposed Utilisation Date,
other than that Lender's participation in any Loans that are due to be
repaid or prepaid on or before the proposed Utilisation Date.
"Available Facility" means the aggregate for the time being of each
Lender's Available Commitment.
"Base Currency" means euro.
"Base Currency Amount" means, in relation to a Loan, the amount specified
in the Utilisation Request delivered by a Borrower for that Loan (or, if
the amount requested is not denominated in the Base Currency, that amount
converted into the Base Currency at the Agent's Spot Rate of Exchange on
the date which is three Business Days before the Utilisation Date or, if
later, on the date the Agent receives the Utilisation Request) adjusted to
reflect any repayment or prepayment of the Loan.
"Borrower" means an Original Borrower or an Additional Borrower unless it
has ceased to be a Borrower in accordance with Clause 25 (Changes to the
Obligors).
"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
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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.
"Business Day" means a day (other than a Saturday or Sunday) on which banks
are open for general business in London, Turin and:
(a) (in relation to any date for payment or purchase of a currency other
than euro) the principal financial centre of the country of that
currency; or
(b) (in relation to any date for payment or purchase of euro) any TARGET
Day.
"Business Plan" means the business plan prepared by the Company in
accordance with Clause 20.4 (Business Plan).
"Charged Property" means all the assets of the Obligors which from time to
time are, or are expressed to be, the subject of the Transaction Security.
"Commitment" means:
(a) in relation to an Original Lender, the amount in the Base Currency set
opposite its name under the heading "Commitment" in Part II or Part
III of Schedule 1 (The Original Parties) and the amount of any other
Commitment transferred to it under this Agreement; and
(b) in relation to any other Lender, the amount in the Base Currency of
any Commitment transferred to it under this Agreement,
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 7 (Form of Compliance Certificate).
"Credit Support Agreement" means a credit support agreement made on or
about the date of this Agreement, between, amongst others, the Italian
Lender and the Credit Support Providers (as that term is defined in the
Italian Facility Agreement).
"Default" means an Event of Default or any event or circumstance specified
in Clause 23 (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.
"Delegate" means any delegate, agent, attorney or co-trustee appointed by
the Security Trustee.
"Environmental Claim" means any claim, proceeding or investigation by any
person in respect of any Environmental Law.
"Environmental Law" means any applicable law in any jurisdiction in which
any Obligor conducts business which relates to the pollution or protection
of the environment or harm to or the protection of human health or the
health of animals or plants.
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"Environmental Permits" means any permit, licence, consent, approval 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 Obligor conducted on or from the properties owned or used
by the relevant Obligor.
"EURIBOR" means, in relation to any Loan in euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of that Loan)
the arithmetic mean of the rates (rounded upwards to four decimal
places) as supplied to the Agent at its request quoted by the
Reference Banks to leading banks in the European interbank market,
as of the Specified Time on the Quotation Day for the offering of deposits
in euro for a period comparable to the Interest Period of the relevant
Loan.
"European Group" means Luxembourg Holdco and each of its Subsidiaries from
time to time other than its Excluded Subsidiaries.
"Event of Default" means any event or circumstance specified as such in
Clause 23 (Events of Default).
"Excluded Subsidiaries" means each of:
(a) Bora Bora Lagoon Resort SA;
(b) Venice Simplon-Orient-Express Limited;
(c) Mount Nelson Hotel Limited;
(d) Orient-Express Hungary Kft;
(e) Collection Venice Simplon-Orient-Express Limited;
(f) VSOE Servizi Srl; and
(g) Phoenix Argente SAS - St Martin,
and their respective Subsidiaries from time to time, to the extent that
they have not become an Additional Borrower or an Additional Guarantor.
"Existing Facilities" means:
(a) the Euro 135,000,000 term and multi-currency revolving facility
between, among others, Barclays Capital as arranger and the Company as
borrower dated 30 June 2003;
(b) the Euro 14,700,000 and (pound)9,000,000 multi-currency term facility
between, among others, Barclays Bank PLC as arranger and the Company
as borrower dated 19 February 2002;
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(c) the Euro 30,000,000 facility provided by Oversea-Chinese Banking
Corporation Limited to Hoteis in respect of Reid's Palace;
(d) the French Franc 36,400,000 facility provided by Deutsche
Hypothekenbank AG to HDC; and
(e) the Euro 17,913,248 facility provided by Banco Espirito Santo to Lapa
in respect of Lapa Palace.
"Facility" means the revolving loan facility made available under this
Agreement as described in Clause 2 (The Facility).
"Facility Office" means the office or offices notified by a 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.
"Fee Letter" means any letter or letters dated on or about the date of this
Agreement between the Arranger and/or the Agent and/or the Security Trustee
and the Company setting out any of the fees referred to in Clause 12
(Fees).
"FF&E" means furniture, fixtures, equipment, interior and exterior signs as
well as other improvements and personal property used in the operation of
the Hotels.
"Final Maturity Date" means the date falling two days before the fifth
anniversary of this Agreement or, if such date is not a Business Day, the
immediately preceding Business Day.
"Finance Document" means this Agreement, the Security Documents, any Fee
Letter, the Subordination Deed, any Accession Letter, and any other
document designated as such by the Agent and the Company.
"Finance Party" means the Agent, the Arranger, the Security Trustee or a
Lender.
"Financial Indebtedness" means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility
or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue
of bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase
contract which would, in accordance with GAAP, be treated as a finance
or capital lease;
(e) receivables sold or discounted (other than any receivables to the
extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any forward
sale or purchase agreement) having the commercial effect of a
borrowing;
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(g) any derivative transaction entered into in connection with protection
against or benefit from fluctuation in any rate or price (and, when
calculating the value of any derivative transaction, only the marked
to market value shall be taken into account);
(h) any counter-indemnity obligation in respect of a guarantee, indemnity,
bond, standby or documentary letter of credit or any other instrument
issued by a bank or financial institution;
(i) any amount raised by the issue of redeemable shares or quotas;
(j) any amount of any liability under an advance or deferred purchase
agreement if one of the primary reasons behind the entry into this
agreement is to raise finance; and
(k) (without double counting) the amount of any liability in respect of
any guarantee or indemnity for any of the items referred to in
paragraphs (a) to (j) above.
"GAAP" means generally accepted accounting principles in the jurisdiction
of incorporation of the relevant entity.
"Group" means the Company and its Subsidiaries for the time being.
"Group Structure Chart" means the group structure chart showing:
(a) all members of the European Group, including current name and company
registration number, its jurisdiction of incorporation and/or
establishment and a list of shareholders and quotaholders;
(b) any person in which any member of the European Group holds shares in
its issued share capital or equivalent ownership interest of such
person; and
(c) all members of the Group.
"Guarantor" means an Original Guarantor or an Additional Guarantor, unless
it has ceased to be a Guarantor in accordance with Clause 25 (Changes to
the Obligors)
"Holding Company" means, in relation to a company or corporation, any other
company or corporation in respect of which it is a Subsidiary.
"Hoteis" means Reid's Hoteis Lda, a company registered in the Commercial
Registry Office of Lisbon, Portugal, under number 5272.
"Hotel" means, subject to Clause 22.22 (Hotel Substitutions) each of:
(a) Reid's Palace, Madeira;
(b) Lapa Palace, Portugal (excluding the plots of land registered in the
Land Registry of Lisbon with register numbers 133 and 134, and
registered in the Tax Department under Articles 1279 and 1321));
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(c) Hotel de la Cite, France; and
(d) Le Manoir aux Quat' Saisons, England,
but a hotel shall cease to be a Hotel if the Hotel or the Obligor that owns
the Hotel, (directly or indirectly) has been sold and, save for Hotel de la
Cite, the Hotel has ceased to be subject to any Transaction Security.
"Hotel Disposal" means the sale of a Hotel or Italian Hotel or the direct
or indirect sale of the person or legal entity that owns a Hotel or an
Italian Hotel.
"Information Memorandum" means the document in the form approved by the
Company concerning the Obligors which, at the Company's request and on its
behalf, was prepared in relation to this transaction and distributed by the
Arranger to selected financial institutions before the date of this
Agreement.
"Initial Valuation" means the initial valuation of each Hotel and reports
prepared by the Valuer which can be relied upon by the Lenders and
delivered pursuant to Clause 4.1 (Conditions Precedent).
"Insurance Policy" means any policy of insurance or assurance in which the
Obligors may at any time have an interest entered into in accordance with
Clause 22.7 (Insurance).
"Intellectual Property" means any patents, trade marks, service marks,
designs, business names, copyrights, design rights, moral rights,
inventions, confidential information, knowhow and other intellectual
property rights and interests, whether registered or unregistered, and the
benefit of all applications and rights to use a Hotel and such other assets
of each Obligor.
"Interest Period" means, in relation to a Loan, each period determined in
accordance with Clause 10 (Interest Periods) and, in relation to an Unpaid
Sum, each period determined in accordance with Clause 9.3 (Default
interest).
"Italian Default" means a "Default" under, and as defined in, the Italian
Facility Agreement.
"Italian Event of Default" means an "Event of Default" under, and as
defined in the Italian Facility Agreement.
"Italian Facility Agreement" means the term facility agreement dated on or
about the date of this Agreement between, amongst others, the Italian
Lender as lender and the Company.
"Italian Finance Documents" means the Credit Support Agreement and the
"Finance Documents" as that term is defined in the Italian Facility
Agreement.
"Italian Hotels" means each of the hotels subject to the Italian Facility
Agreement, being at the date of this Agreement, Hotel Cipriani, Italy,
Villa San Michele, Italy, Hotel Splendido, Italy and Hotel Caruso, Italy.
7
"Italian Lender" means Banca Nazionale del Lavoro S.p.A.
"Italian Loans" means each loan made under the Italian Facility Agreement.
"Italian Security Documents" means the "Security Documents" as that term is
defined in the Italian Facility Agreement.
"Lapa" means Hotelapa Investimento Hoteleiro, S.A. a company registered in
the Commercial Registry of Lisbon, Portugal, under number 65864.
"Lapa Palace" means the Hotel known as Lapa Palace, located at Rua do Pau
de Bandeira, 4, Lisbon, Portugal registered in the Land Registry of Lisbon
with register number 132 and registered in the Tax Department under Article
598 and for the avoidance of doubt, excluding the land registered in the
Land Registry of Lisbon with register numbers 133 and 134, and registered
in the Tax Department under Articles 1279 and 1321.
"Legal Opinions" means the legal opinions delivered to the Agent pursuant
to Clause 4.1 (Conditions Precedent).
"Le Manoir" means the Hotel known as Le Manoir aux Quat' Saisons,
Oxfordshire, England.
"Lender" means:
(a) any Original Lender; and
(b) any bank, financial institution, trust, fund or other entity which has
become a Party in accordance with Clause 24 (Changes to the Lenders),
which in each case has not ceased to be a Party in accordance with the
terms of this Agreement.
"LIBOR" means, in relation to any Loan:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the currency or Interest Period of
that Loan) the arithmetic mean of the rates (rounded upwards to four
decimal places) as supplied to the Agent at its request quoted by the
Reference Banks to leading banks in the London interbank market,
as of the Specified Time on the Quotation Day for the offering of deposits
in the currency of that Loan and for a period comparable to the Interest
Period for that Loan.
"LMA" means the Loan Market Association.
"Loan" means a loan made or to be made under the Facility or the principal
amount outstanding for the time being of that loan.
"Luxembourg Holdco" means Orient-Express Luxembourg Holdings Sarl, a
company registered in Luxembourg as a SARL ("societe a responsibilite
limitee") with the
8
company registration number B95.988 having its registered office at 1, rue
des Glacis, L-1628 Luxembourg, and a share capital of EUR12,500.
"Lux GAAP" means generally accepted accounting principles in Luxembourg and
the overall conventions, rules, and procedures that define accepted
accounting practice in Luxembourg.
"Majority Lenders" means:
(a) if there are no Loans then outstanding, a Lender or Lenders whose
Commitments aggregate more than 66(2)/3% of the Total Commitments (or,
if the Total Commitments have been reduced to zero, aggregated more
than 66(2)/3% of the Total Commitments immediately prior to the
reduction); or
(b) at any other time, a Lender or Lenders whose participations in the
Loans then outstanding aggregate more than 66(2)/3% of all the Loans
then outstanding.
"Manager" means Orient-Express Hotels UK Limited, a company incorporated in
England and Wales with company number 016808767 or Venice
Simplon-Orient-Express Limited, a company incorporated in England and Wales
with company number 1551659 or another entity approved by the Agent.
"Mandatory Cost" means the percentage rate per annum calculated by the
Agent in accordance with Schedule 4 (Mandatory Cost Formulae).
"Margin" means 0.90 per cent. per annum.
"Material Adverse Effect" means a material adverse effect on:
(a) the business operations, property, condition (financial or otherwise)
or prospects of the European Group taken as a whole;
(b) the ability of an Obligor to perform its obligations under the Finance
Documents and (if applicable) the Italian Finance Documents; or
(c) the validity or enforceability of the Finance Documents or the Italian
Finance Documents or the rights or remedies of any Finance Party under
the Finance Documents or of the Italian Lender under the Italian
Finance Documents respectively.
"Month" means a period starting on one day in a calendar month and ending
on the numerically corresponding day in the next calendar month, except
that:
(a) (subject to paragraph (c) below) if the numerically corresponding day
is not a Business Day, that period shall end on the next Business Day
in that calendar month in which that period is to end if there is one,
or if there is not, on the immediately preceding Business Day;
(b) if there is no numerically corresponding day in the calendar month in
which that period is to end, that period shall end on the last
Business Day in that calendar month; and
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(c) if an Interest Period begins on the last Business Day of a calendar
month, that Interest Period shall end on the last Business Day in the
calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period.
"Net Disposal Proceeds" has the meaning given to it in Clause 22.4(c)
(Disposals).
"Obligors" means a Borrower, a Guarantor or HDC.
"Optional Currency" means a currency (other than the Base Currency) which
complies with the conditions set out in Clause 4.3 (Conditions relating to
Optional Currencies).
"Original Financial Statements" means:
(a) the audited consolidated financial statements of the Company for the
financial year ending December 2005;
(b) the unaudited financial statements of Lux Holdco for each of the
financial year ending December 2004 and the financial year ending
December 2005 prepared in accordance with Lux GAAP; and
(c) in relation to each Original Obligor other than the Company, its
financial statements (comprising a balance sheet and profit and loss
account) for its financial year ended December 2005 prepared in
accordance with US GAAP together with confirmation from Deloitte,
following completion of an agreed procedure, that each of these
financial statements are accurately extracted from the audited
consolidated financial statements of the Company for the financial
year ended December 2005."
which were delivered to the Agent pursuant to Clause 4.1 (Conditions
precedent).
"Original Obligor" means HDC, an Original Borrower or an Original
Guarantor.
"Participating Member State" means any member state of the European
Communities that adopts or has adopted the euro as its lawful currency in
accordance with legislation of the European Community relating to Economic
and Monetary Union.
"Party" means a party to this Agreement.
"Permitted Payment" means a payment to any person provided that when such
payment is made no Event of Default or Italian Event of Default is
continuing or would result from the making of such payment.
"Portofino Car Park" means the car park located in Portofino, Italy, owned
by Orient-Express Hotels Italia Srl and subject to leasing arrangements
with Banca Nazionale del Lavoro S.p.A.
"Qualifying Lender" has the meaning given to it in Clause 13 (Tax Gross Up
and Indemnities).
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"Quotation Day" means, in relation to any period for which an interest rate
is to be determined:
(a) (if the currency is domestic sterling) the first day of that period;
(b) (if the currency is euro) two TARGET Days before the first day of that
period; or
(c) (for any other currency) two Business Days before the first day of
that period,
unless market practice differs in the Relevant Interbank Market for a
currency, in which case the Quotation Day for that currency will be
determined by the Agent in accordance with market practice in the Relevant
Interbank Market (and if quotations would normally be given by leading
banks in the Relevant Interbank Market on more than one day, the Quotation
Day will be the last of those days).
"Real Property" means:
(a) any freehold, leasehold or immovable property (including the freehold
and leasehold property specified in the Security Documents); and
(b) any buildings, fixtures, fittings, fixed plant or machinery from time
to time situated on or forming part of that freehold or leasehold
property.
"Receiver" means a receiver or receiver and manager or administrative
receiver of the whole or any part of the Charged Property.
"Reference Banks" means, in relation to LIBOR, EURIBOR and Mandatory Costs
the principal London offices of Barclays Bank PLC, Banca Nazionale Del
Lavoro S.p.A. and The Royal Bank of Scotland plc.
"Reids" means Island Hotel (Madeira) Limited, a company registered in
England and Wales with registration number 00328212.
"Reid's Palace" means the hotel known as Reid's Hotel, located at Estrada
Monumental, 139, Sao Martinho, Funchal, Madeira, Portugal.
"Relevant Interbank Market" means in relation to euro, the European
interbank market, in relation to sterling the Paris interbank market and,
in relation to any other currency, the London interbank market.
"Relevant Jurisdiction" means:
(a) the jurisdiction of incorporation of each Obligor and each member of
the European Group; and
(b) the jurisdiction where any asset subject to or intended to be subject
to the Transaction Security is situated;
(c) the jurisdiction whose laws govern the perfection of any of the
Security Documents; and
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(d) the jurisdiction where any Obligor or member of the European Group is
conducting its business.
"Repeating Representations" means each of the representations set out in
Clauses 19.1 (Status) to 19.6 (Governing law and enforcement), Clause
19.9(a) (No default), Clause 19.12 (Pari passu ranking), Clause 19.13 (No
proceedings pending or threatened), Clause 19.17 (Security), Clause 19.18
(Ranking) to Clause 19.22 (Intellectual Property), Clause 19.24 (Ownership
of Obligors) and Clause 19.25 (Centre of main interests and
establishments).
"Report on Title" means each report on title or supplementary report on
title or equivalent documents in the jurisdiction concerned prepared by the
Company's legal counsel addressed to the Finance Parties and relating to a
Hotel, delivered pursuant to Clause 4.1 (Conditions precedent).
"Residual Outstandings" means the amount of the outstanding payment
commitments payable by an Obligor in connection with the Retained Security
being, in respect of:
(i) Hotel Splendido Mare, (euro)7,269,354;
(ii) Hotel Vittoria, (euro)1,809,074; and
(iii) Portofino Car Park, (euro)700,000.
"Retained Security" means the Security existing as at the date of this
Agreement granted by:
(i) Hotel Splendido Srl in favour of Locafit S.p.A. with respect to Hotel
Splendido Mare;
(ii) Orient-Express Hotels Italia Srl in favour of Locafit S.p.A. with
respect to the Hotel Vittoria; and
(iii) Orient-Express Hotels Italia Srl in favour of Banca Nazionale del
Lavoro S.p.A. with respect to the Portofino Car Park.
"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;
(b) the aggregate amount of which is equal to or less than the maturing
Loan;
(c) in the same currency as the maturing Loan (unless it arose as a result
of the operation of Clause 6.2 (Unavailability of a currency)); and
(d) made or to be made to the same Borrower for the purpose of refinancing
a maturing Loan.
"Screen Rate" means:
(a) in relation to LIBOR, the British Bankers' Association Interest
Settlement Rate for the relevant currency and period; and
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(b) in relation to EURIBOR, the percentage rate per annum determined by
the Banking Federation of the European Union for the relevant period,
displayed on the appropriate page of the Telerate 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 Obligations" means all obligations at any time due, owing or
incurred by any Obligor to the Finance Parties under the Finance Documents,
whether present or future, actual or contingent (and whether incurred
solely or jointly and whether as principal or surety or in some other
capacity).
"Secured Parties" means the Security Trustee, any Receiver or Delegate, the
Arranger, the Agent, and each Lender from time to time party to this
Agreement.
"Security" means a mortgage, charge, pledge, lien, privilegio speciale or
other security interest securing any obligation of any person or any other
agreement or arrangement having a similar effect.
"Security Documents" means each of the documents listed as being a Security
Document in Schedule 10 (Security Documents) and each other document
purporting to create Security in favour of the Security Trustee.
"Specified Time" means a time determined in accordance with Schedule 8
(Timetables).
"Subordination Deed" means the subordination deed entered into by, amongst
others, the Company, each Obligor to the Agent in form and substance
satisfactory to the Agent.
"Subsidiary" means in relation to any company or corporation, a company or
corporation:
(a) which is controlled, directly or indirectly, by the first mentioned
company or corporation;
(b) more than half the issued share capital or quotas of which is
beneficially owned, directly or indirectly by the first mentioned
company or corporation; or
(c) which is a Subsidiary of another Subsidiary of the first mentioned
company or corporation,
and for this purpose, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to
direct its affairs and/or to control the composition of its board of
directors or equivalent body.
"TARGET" means Trans-European Automated Real-time Gross Settlement Express
Transfer payment system.
"TARGET Day" means any day on which TARGET is open for the settlement of
payments in euro.
13
"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).
"Taxes Act" means the Income and Corporation Taxes Act 1988.
"Total Commitments" means the aggregate of the Commitments being at the
date of this Agreement, (euro)60,000,000.
"Transaction Security" means the Security created or expressed to be
created in favour of the Security Trustee pursuant to the Security
Documents.
"Transfer Certificate" means a certificate substantially in one of the
forms set out in Schedule 5 (Form of Transfer Certificates) or any other
form agreed between the Agent and the Company.
"Transfer Date" means, in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer Certificate; and
(b) the date on which the Agent executes the Transfer Certificate.
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under
the Finance Documents.
"US GAAP" means generally accepted accounting principles in the United
States of America and the overall conventions, rules, and procedures that
define accepted accounting practice in the United States of America.
"Utilisation" means a utilisation of a Facility.
"Utilisation Date" means the date of a Utilisation, being the date on which
the relevant Loan is to be made.
"Utilisation Request" means a notice substantially in the form set out in
Schedule 3 (Requests).
"Valuation" means the Initial Valuation or any valuation prepared by the
Valuer in accordance with this Agreement.
"Valuer" means CB Richard Ellis or such other valuer appointed by the
Agent.
"VAT" means value added tax as provided for in the Value Added Tax Act 1994
and any other tax of a similar nature.
1.2 Construction
(a) Unless a contrary indication appears any reference in this Agreement
to:
(i) the "Agent", the "Arranger", the "Security Trustee", any "Finance
Party", any "Secured Party", any "Lender", any "Obligor" or any
"Party" shall be construed so as to include its successors in
title, permitted assigns and permitted transferees and, in the
case of the Security
14
Trustee, any person for the time being appointed as security
trustee or trustees in accordance with this Agreement;
(ii) "assets" includes present and future properties, revenues and
rights of every description;
(iii) "Barclays Capital" is a reference to Barclays Capital, the
investment banking division of Barclays Bank PLC;
(iv) a "Finance Document" or any other agreement or instrument is a
reference to that Finance Document or other agreement or
instrument as amended or novated;
(v) "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;
(vi) a "person" includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal personality)
of two or more of the foregoing;
(vii) a "regulation" includes any regulation, rule, official
directive, request or guideline (whether or not having the force
of law) of any governmental, intergovernmental or supranational
body, agency, department or regulatory, self-regulatory or other
authority or organisation;
(viii) a provision of law is a reference to that provision as amended
or re-enacted; and
(ix) a time of day is a reference to London time.
(b) Section, Clause and Schedule headings are for ease of reference only.
(c) 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.
(d) 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.
1.3 Currency Symbols and Definitions
"$" and "dollars" denote lawful currency of the United States of America,
"(pound)" and "sterling" denotes lawful currency of the United Kingdom and
"EUR" "(euro)" and "euro" means the single currency unit of the
Participating Member States.
1.4 Third party rights
(a) Unless expressly provided to the contrary in a Finance Document a
person who is not a Party has no right under the Contracts (Rights of
Third Parties) Act
15
1999 (the "Third Parties Act") to enforce or to enjoy the benefit of
any term of this Agreement.
(b) Notwithstanding any term of any Finance Document, the consent of any
person who is not a Party is not required to rescind or vary this
Agreement at any time.
16
SECTION 2
THE FACILITY
2. THE FACILITY
2.1 The Facility
Subject to the terms of this Agreement, the Lenders make available to
the Borrowers a multicurrency revolving loan facility in an aggregate
amount equal to the Total Commitments.
2.2 Finance Parties' rights and obligations
(a) 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.
(b) 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.
(c) A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents.
3. PURPOSE
3.1 Purpose
Each Borrower shall apply all amounts borrowed by it under the Facility
towards the general corporate purposes of the Group.
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
No Borrower may deliver a Utilisation Request unless the Agent has received
all of the documents and other evidence listed in Part I 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
(a) 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:
(i) in the case of a Rollover Loan, no Event of Default or Italian
Event of Default is continuing or would result from the proposed
Loan and, in the
17
case of any other Loan, no Default or Italian Default is
continuing or would result from the proposed Loan; and
(ii) the Repeating Representations to be made by each Obligor are true
in all material respects.
(b) The Lenders will only be obliged to comply with Clause 30.9 (Change of
currency) if, on the first day of an Interest Period, no Default or
Italian Default is continuing or would result from the change of
currency and the Repeating Representations to be made by each Obligor
are true in all material respects.
4.3 Conditions relating to Optional Currencies
(a) A currency will constitute an Optional Currency in relation to a Loan
if:
(i) it is readily available in the amount required and freely
convertible into the Base Currency in the Relevant Interbank
Market on the Quotation Day and the Utilisation Date for that
Loan; and
(ii) it is sterling or dollars or has been approved by the Agent
(acting on the instructions of all the Lenders) on or prior to
receipt by the Agent of the relevant Utilisation Request for that
Loan.
(b) If the Agent has received a written request from the Company for a
currency to be approved under paragraph (a)(ii) above, the Agent will
confirm to the Company by the Specified Time:
(i) whether or not the Lenders have granted their approval; and
(ii) if approval has been granted, the minimum amount for any
subsequent Utilisation in that currency.
4.4 Maximum number of Loans
(a) A Borrower may not deliver a Utilisation Request if as a result of the
proposed Utilisation:
(i) more than eight Loans would be outstanding; or
(ii) Loans in more than four different currencies would be
outstanding.
(b) A Borrower may not request that a Loan be divided if, as a result
of the proposed division, more than eight Loans would be
outstanding.
(c) Any Loan made by a single Lender under Clause 6.2 (Unavailability
of a currency) shall not be taken into account in this Clause
4.4.
18
SECTION 3
UTILISATION
5. UTILISATION
5.1 Delivery of a Utilisation Request
A Borrower may utilise the Facility by delivery to the Agent of a duly
completed Utilisation Request not later than the Specified Time but in
relation to the first Utilisation, not later than 9:30 a.m. two Business
Days prior to the proposed first Utilisation Date.
5.2 Completion of a Utilisation Request
(a) Each Utilisation Request is irrevocable and will not be regarded as
having been duly completed unless:
(i) the proposed Utilisation Date is a Business Day within the
Availability Period;
(ii) the currency and amount of the Utilisation comply with Clause 5.3
(Currency and amount); and
(iii) the proposed Interest Period complies with Clause 10 (Interest
Periods).
(b) Only one Loan may be requested in each Utilisation Request.
5.3 Currency and amount
(a) The currency specified in a Utilisation Request must be the Base
Currency or an Optional Currency.
(b) The amount of the proposed Loan must be:
(i) when aggregated with the Loans and Italian Loans outstanding on
the date that the proposed Loan will be made, not more than 70%
of the aggregate gross market value of the Hotels (excluding
Hotel de la Cite) and Italian Hotels as detailed in the Valuation
last delivered to the Agent; and
(ii) when aggregated with the Loans outstanding on the date that the
proposed Loan will be made, not more than 70% of the aggregate
gross market value of the Hotels (excluding Hotel de la Cite) as
detailed in the Valuations last delivered to the Agent; and
(iii) if
(A) the currency selected is the Base Currency, a minimum of
(euro)10,000,000 or, if less, the relevant Available
Facility, or
(B) if the currency selected is sterling or dollars, a minimum
of (pound)5,000,000 or $10,000,000 or, if less, the relevant
Available Facility, or
(C) if the currency selected is an Optional Currency other than
sterling or dollars, the minimum amount specified by the
Agent pursuant to
19
paragraph (b) (ii) of Clause 4.3 (Conditions relating to
Optional Currencies) or, if less, the Available Facility;
and
(iv) in any event such that its Base Currency Amount is less than or
equal to the Available Facility.
(c) No Finance Party is bound to verify compliance with Clause 5.3(b)(i)
and Clause 5.3(b)(ii).
5.4 Lenders' participation
(a) If the conditions set out in this Agreement have been met, each Lender
shall make its participation in each Loan available by the Utilisation
Date through its Facility Office.
(b) 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.
(c) The Agent shall determine the Base Currency Amount of each Loan which
is to be made in an Optional Currency and shall notify each Lender of
the amount, currency and the Base Currency Amount of each Loan and the
amount of its participation in that Loan, in each case by the
Specified Time.
6. OPTIONAL CURRENCIES
6.1 Selection of currency
A Borrower (or the Company on behalf of a Borrower) shall select the
currency of a Loan (in the case of an initial Utilisation) in a Utilisation
Request.
6.2 Unavailability of a currency
If before the Specified Time on any Quotation Day:
(a) a Lender notifies the Agent that the Optional Currency requested is
not readily available to it in the amount required; or
(b) a Lender notifies the Agent that compliance with its obligation to
participate in a Loan in the proposed Optional Currency would
contravene a law or regulation applicable to it,
the Agent will give notice to the relevant Borrower to that effect by the
Specified Time on that day. In this event, any Lender that gives notice
pursuant to this Clause 6.2 will be required to participate in the Loan in
the Base Currency (in an amount equal to that Lender's proportion of the
Base Currency Amount or, in respect of a Rollover Loan, an amount equal to
that Lender's proportion of the Base Currency Amount of the Rollover Loan
that is due to be made) and its participation will be treated as a separate
Loan denominated in the Base Currency during that Interest Period.
20
SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
7. REPAYMENT
Each Borrower which has drawn a Loan shall repay that Loan on the last day
of its Interest Period.
8. PREPAYMENT AND CANCELLATION
8.1 Illegality
If, at any time, it is or will become unlawful in any applicable
jurisdiction for a Lender to perform any of its obligations as contemplated
by this Agreement or to fund or maintain its participation in any Loan:
(a) that Lender shall promptly notify the Agent upon becoming aware of
that event;
(b) upon the Agent notifying the Company, the Commitment of that Lender
will be immediately cancelled; and
(c) each Borrower shall repay that Lender's participation in the Loans
made to that Borrower on the last day of the Interest Period for each
Loan occurring after the Agent has notified the Company or, if
earlier, the date specified by the Lender in the notice delivered to
the Agent.
8.2 Change of control
(a) If there is a change of control of the Company after the date of this
Agreement:
(i) the Company shall promptly notify the Agent upon becoming aware
of that event;
(ii) a Lender shall not be obliged to fund a Utilisation (except for a
Rollover Loan); and
(iii) the Company and the Agent shall enter negotiations to determine
on what terms, the Facility shall continue following a change of
control of the Company after the date of the Agreement. If no
agreement is reached after 30 days following the change of
control of the Company, the Agent shall, by not less than three
days' notice to the Company, cancel the Total Commitments and
declare all outstanding Utilisations, together with accrued
interest and all other amounts accrued under the Finance
Documents immediately due and payable, whereupon the Total
Commitments will be cancelled and all such outstanding amounts
will become immediately due and payable.
21
(b) For the purpose of paragraph (a) above "control" means:
(i) the power (whether by way of ownership of shares, quotas, proxy,
contract, agency or otherwise) to:
(A) cast, or control the casting of, more than one-half of the
maximum number of votes that might be cast at a general
meeting of the 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 which the directors or other
equivalent officers of the Company are obliged to comply
with; or
(ii) the holding of more than one-half of the issued share capital or
quotas of the Company (excluding any part of that issued share
capital or quotas that carries no right to participate beyond a
specified amount in a distribution of either profits or capital).
8.3 Voluntary cancellation
The Company may, if it gives the Agent not less than five Business Days'
(or such shorter period as the Majority Lenders may agree) prior notice,
cancel the whole or any part (but, if in part, being an amount that reduces
the Base Currency Amount of the Loan by a minimum amount of
(euro)10,000,000 or equivalent) of the Available Facility. Any cancellation
under this Clause 8.3 shall reduce the Commitments of the Lenders rateably
under that Facility.
8.4 Mandatory cancellation
Commitments shall be cancelled in accordance with Clause 8.9 (Application
of Prepayments).
8.5 Voluntary prepayment of Loans
A Borrower to which a Loan has been made may, if it gives the Agent not
less than five Business Days' (or such shorter period as the Majority
Lenders may agree) prior notice, prepay the whole or any part of any Loan
(but, if in part, being an amount that reduces the Base Currency Amount of
the Loan by a minimum amount of (euro)10,000,000 or equivalent).
8.6 Mandatory Prepayment on a Hotel Disposal
(a) On completion of a Hotel Disposal in relation to a Hotel the relevant
Borrower shall prepay and cancel the Loans in the following amounts
(subject to Clause 8.9 (Application of Prepayment)):
22
---------------------------------------- ---------------------------------
Description of Disposal Amount to be applied in
prepayment of a Loan
---------------------------------------- ---------------------------------
The first Hotel Disposal to occur after 100% of the Allocated Debt Amount
the date of this Agreement. of the Hotel the subject of the
Hotel Disposal.
---------------------------------------- ---------------------------------
The second Hotel Disposal to occur 115% of the Allocated Debt Amount
after the date of this Agreement. of the Hotel the subject of the
Hotel Disposal.
---------------------------------------- ---------------------------------
The third Hotel Disposal to occur after 120% of the Allocated Debt Amount
the date of this Agreement. of the Hotel the subject of the
Hotel Disposal.
---------------------------------------- ---------------------------------
The fourth or any subsequent Hotel 125% of the Allocated Debt Amount
Disposal to occur after the date of of the Hotel the subject of the
this Agreement. Hotel Disposal.
---------------------------------------- ---------------------------------
(b) For the avoidance of doubt, reference in the above table to a Hotel
Disposal is to a disposal of a Hotel or an Italian Hotel.
(c) Where a Hotel Disposal takes the form of the direct or indirect sale
of an Obligor that owns a Hotel, the Hotel owned by that Obligor shall
for the purposes of clause 8.6(a) above be deemed the subject of the
Hotel Disposal.
(d) If completion of two or more Hotel Disposals takes place on the same
day, the sale of the Hotel with the lowest Allocated Debt Amount shall
be deemed to have been completed first, the sale of the Hotel with the
next lowest Allocated Debt Amount shall be deemed to have completed
next, and so on.
(e) If completion of a Hotel Disposal does not take place on the last day
of an Interest Period, the proceeds of that Hotel Disposal shall be
paid to an account specified by the Agent on which the Agent shall
have sole signing rights and all amounts credited to that account
shall be applied by the Agent to prepay the Loans on the last day of
the Interest Period in which that Hotel Disposal was made.
(f) On completion of a Hotel Disposal in relation to an Italian Hotel, the
Borrowers shall prepay and cancel the Loans (in accordance with Clause
8.9 (Application of Prepayments)) in the amount by which the Allocated
Debt Amount for that Italian Hotel exceeds the amount of the Italian
Loans that fall to be prepaid as a result of that Hotel Disposal
pursuant to Clause 7.7 (Mandatory Prepayment on a Hotel Disposal) of
the Italian Facility Agreement.
8.7 Mandatory Prepayment - Insurance Proceeds
If an Event of Default or Italian Event of Default is continuing and in
accordance with Clause 22.7(c) (Insurance), the Agent may by notice to the
Company require the Borrowers to prepay the Loans in an aggregate amount
(subject to Clause 8.9
23
(Application of Prepayments)) equal to the proceeds of any Insurances
Policies paid to, or for the account of, any Obligor or otherwise in
respect of any Hotel.
8.8 Right of repayment and cancellation in relation to a single Lender
(a) If:
(i) any sum payable to any Lender by an Obligor is required to be
increased under paragraph (c) of Clause 13.2 (Tax gross-up); or
(ii) any Lender claims indemnification from the Company under Clause
13.3 (Tax indemnity) or Clause 14.1 (Increased costs); or
(iii) any Lender notifies the Agent of its Additional Cost Rate under
paragraph 3 of Schedule 4 (Mandatory Cost Formulae),
the Company may, whilst (in the case of paragraphs (i) and (ii) above)
the circumstance giving rise to the requirement or indemnification
continues or (in the case of paragraph (iii) above) that Additional
Cost Rate is greater than zero, 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 Loans.
(b) On receipt of a notice referred to in paragraph (a) above, the
Commitment of that Lender shall immediately be reduced to zero.
(c) On the last day of each Interest Period which ends after the Company
has given notice under paragraph (a) above (or, if earlier, the date
specified by the Company in that notice), each Borrower to which a
Loan is outstanding shall repay that Lender's participation in that
Loan.
8.9 Application of Prepayments
(a) Subject to paragraph (c) below, amounts to be prepaid pursuant to
Clause 8.6 (Mandatory Prepayment on a Hotel Disposal) or 8.7
(Mandatory Prepayment - Insurance Proceeds) shall be applied as
follows:
(i) first, in prepayment of any Loans owed by a Borrower that is the
owner of the Hotel, or the Hotel owning company, that is the
subject of the relevant Hotel Disposal or in relation to which
the proceeds of Relevant Insurances have been paid; and
(ii) secondly, in prepayment of the remaining Loans (as selected by
the Company or, failing selection, as selected by the Agent).
If the amount available to be prepaid pursuant to 8.9(a)(i) or
8.9(a)(ii) above exceeds the amount outstanding under the Loans, the
provisions of Clause 7.9 (Application of Prepayments) of the Italian
Facility Agreement shall apply regarding any prepayment of the Italian
Loans.
(b) Subject to paragraph (c) below, the Commitments shall be cancelled by
the aggregate amount by which any Loan is prepaid pursuant to
paragraph (a) above.
24
(c) The Borrower may elect that amounts prepaid pursuant to Clause 8.6
(Mandatory Prepayment on a Hotel Disposal) are applied in prepayment
of any Italians Loans outstanding provided that:
(i) no Event of Default or Italian Event of Default would arise as a
result of such prepayment; and
(ii) the Company delivers to the Agent a Compliance Certificate
confirming that the financial covenants set out in Clause 21.2
(Financial condition) shall continue to be met for the twelve
months immediately following the prepayment.
8.10 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this
Clause 8 shall be irrevocable and, unless a contrary indication
appears in this Agreement, shall specify the date or dates upon which
the relevant cancellation or prepayment is to be made and the amount
of that cancellation or prepayment.
(b) 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.
(c) Unless a contrary indication appears in this Agreement, any part of
the Facility which is prepaid may be reborrowed in accordance with the
terms of this Agreement.
(d) The Borrowers shall not repay or prepay all or any part of the Loans
or cancel all or any part of the Commitments except at the times and
in the manner expressly provided for in this Agreement.
(e) No amount of the Total Commitments cancelled under this Agreement may
be subsequently reinstated.
(f) If the Agent receives a notice under this Clause 8 it shall promptly
forward a copy of that notice to either the Company or the affected
Lender, as appropriate.
25
SECTION 5
COSTS OF UTILISATION
9. INTEREST
9.1 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:
(a) Margin;
(b) LIBOR or, in relation to any Loan in euro, EURIBOR; and
(c) Mandatory Cost, if any.
9.2 Payment of interest
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 three Months, on the dates falling at three Monthly
intervals after the first day of the Interest Period).
9.3 Default interest
(a) 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 paragraph (b) below, is
one 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 9.3 shall be immediately
payable by the Obligor on demand by the Agent.
(b) 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:
(i) 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
(ii) the rate of interest applying to the overdue amount during that
first Interest Period shall be one per cent. higher than the rate
which would have applied if the overdue amount had not become
due.
(c) 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.
9.4 Notification of rates of interest
The Agent shall promptly notify the Lenders and the relevant Borrower of
the determination of a rate of interest under this Agreement.
26
10. INTEREST PERIODS
10.1 Selection of Interest Periods
(a) 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.
(b) Subject to this Clause 10, a Borrower (or the Company) may select an
Interest Period of one, two or three Months or any other period agreed
between the Company and the Agent (acting on the instructions of all
the Lenders).
(c) An Interest Period for a Loan shall not extend beyond the Final
Maturity Date.
(d) Each Interest Period for a Loan shall start on the Utilisation Date.
(e) A Loan has one Interest Period only.
10.2 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).
11. CHANGES TO THE CALCULATION OF INTEREST
11.1 Absence of quotations
Subject to Clause 11.2 (Market disruption), if LIBOR or, if applicable,
EURIBOR is to be determined by reference to the Reference Banks but a
Reference Bank does not supply a quotation by the Specified Time on the
Quotation Day, the applicable LIBOR or EURIBOR shall be determined on the
basis of the quotations of the remaining Reference Banks.
11.2 Market disruption
(a) 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:
(i) the Margin;
(ii) the rate notified to the Agent by that Lender as soon as
practicable and in any event before 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
(iii) the Mandatory Cost, if any, applicable to that Lender's
participation in the Loan.
(b) In this Agreement "Market Disruption Event" means:
(i) 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 Reference Banks supplies a rate to the Agent to determine
LIBOR or, if applicable, EURIBOR for the relevant currency and
Interest Period; or
27
(ii) 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 obtaining matching
deposits in the Relevant Interbank Market would be in excess of
LIBOR or, if applicable, EURIBOR.
11.3 Alternative basis of interest or funding
(a) 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.
(b) Any alternative basis agreed pursuant to paragraph (a) above shall,
with the prior consent of all the Lenders and the Company, be binding
on all Parties.
11.4 Break Costs
(a) Each Borrower shall, within five 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.
(b) 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.
12. FEES
12.1 Commitment fee
(a) The Borrowers shall pay to the Agent (for the account of each Lender)
a fee in the Base Currency computed at the rate of 0.30 per cent. per
annum on that Lender's Available Commitment for the Availability
Period.
(b) The accrued commitment fee is payable on the last day of each
successive period of three Months which ends during the relevant
Availability Period, on the last day of the Availability Period and,
if cancelled in full, on the cancelled amount of the relevant Lender's
Commitment at the time the cancellation is effective.
12.2 Arrangement fee
The Obligors shall pay to the Arranger an arrangement fee in the amount and
at the times agreed in a Fee Letter.
12.3 Agency fee
The Obligors shall pay to the Agent (for its own account) an agency fee in
the amount and at the times agreed between the Agent and the Obligors in a
Fee Letter.
12.4 Security fee
The Obligors shall pay to the Security Trustee (for its own account) a
security fee in the amount and at the times agreed between the Security
Trustee and the Obligors in a Fee Letter.
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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
13. TAX GROSS UP AND INDEMNITIES
13.1 Definitions
(a) 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:
(i) a Lender (other than a Lender within sub-paragraph (ii) below)
which is beneficially entitled to interest payable to that Lender
in respect of an advance under a Finance Document and is:
(A) a Lender:
(1) which is a bank (as defined for the purpose of section
349 of the Taxes Act) making an advance under a Finance
Document; or
(2) in respect of an advance made under a Finance Document
by a person that was a bank (as defined for the purpose
of section 349 of the Taxes Act) 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; or
(B) a Lender which is:
(1) a company resident in the United Kingdom for United
Kingdom Tax purposes;
(2) a partnership each member of which is:
(a) a company so resident in the United Kingdom; or
(b) 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 (for the purposes of section 11(2) of
the Taxes Act) the whole of any share of
interest payable in respect of that advance
that falls to it by reason of sections 114 and
115 of the Taxes Act;
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(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 (for the purposes of
section 11(2) of the Taxes Act) of that company; or
(C) a Treaty Lender; or
(ii) a building society as defined for the purposes of section 477A of
the Taxes Act.
"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:
(i) a company resident in the United Kingdom for United Kingdom Tax
purposes;
(ii) a partnership each member of which is:
(A) a company so resident in the United Kingdom; or
(B) 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 (for the purposes of section 11(2) of the
Taxes Act ) the whole of any share of interest payable in
respect of that advance that falls to it by reason of
sections 114 and 115 of the Taxes Act; or
(iii) 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 (for the purposes of
section 11(2) of the Taxes Act) 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 13.2 (Tax gross-up) or a
payment under Clause 13.3 (Tax indemnity).
"Treaty Lender" means a Lender which:
(i) is treated as a resident of a Treaty State for the purposes of
the relevant Treaty; and
30
(ii) 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.
(b) Unless a contrary indication appears, in this Clause 13 a reference to
"determines" or "determined" means a determination made in the
absolute discretion of the person making the determination.
13.2 Tax gross-up
(a) Each Obligor shall make all payments to be made by it without any Tax
Deduction, unless a Tax Deduction is required by law.
(b) 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.
(c) 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.
(d) An Obligor is not required to make an increased payment to a Lender
under paragraph (c) above for a Tax Deduction in respect of Tax
imposed by the United Kingdom from a payment of interest on a Loan, if
on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a
Tax Deduction if it was 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 concession of any relevant taxing
authority; or
(ii)
(A) the relevant Lender is a Qualifying Lender solely under
sub-paragraph (i)(B) of the definition of Qualifying Lender;
(B) the Board of the Inland Revenue has given (and not revoked)
a direction (a "Direction") under section 349C of the Taxes
Act (as that provision has effect on the date on which the
relevant Lender became a Party) which relates to that
payment and that Lender has received from that Obligor or
the Company a certified copy of that Direction; and
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(C) the payment could have been made to the Lender without any
Tax Deduction in the absence of that Direction; or
(iii) the relevant Lender is a Qualifying Lender solely under
sub-paragraph (i)(B) of the definition of Qualifying Lender and
it has not, other than by reason of any change after the date of
this Agreement in (or in the interpretation, administration, or
application of) any law, or any published practice or concession
of any relevant taxing authority, given a Tax Confirmation to the
Company; or
(iv) 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 paragraph (g) below.
(e) 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.
(f) 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 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.
(g) 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.
13.3 Tax indemnity
(a) 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.
(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on a Finance Party:
(A) 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
(B) 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,
32
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
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause 13.2
(Tax gross-up); or
(B) would have been compensated for by an increased payment
under Clause 13.2 (Tax gross-up) but was not so compensated
solely because one of the exclusions in paragraph (d) of
Clause 13.2 (Tax gross-up) applied.
(c) A Protected Party making, or intending to make a claim under paragraph
(a) 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.
(d) A Protected Party shall, on receiving a payment from an Obligor under
this Clause 13.3, notify the Agent.
13.4 Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines
that:
(a) a Tax Credit is attributable either to an increased payment of which
that Tax Payment forms part, or to that Tax Payment; and
(b) 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.
13.5 Stamp taxes
The Company shall pay and, within ten Business Days of demand, indemnify
each Finance Party against any cost, loss or liability that Finance Party
incurs in relation to all stamp duty, registration and other similar Taxes
payable in respect of, or in order to register or enforce any Finance
Document.
13.6 Value added tax
(a) All amounts set out, or expressed to be payable under a Finance
Document by any Party to a Finance Party which (in whole or in part)
constitute the consideration for VAT purposes shall be deemed to be
exclusive of any VAT which is chargeable on such supply, and
accordingly, subject to paragraph (c) below, if VAT is 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 the consideration) an amount equal to
the amount of the VAT (and such Finance Party shall promptly provide
an appropriate VAT invoice to such Party).
33
(b) If VAT is 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 (the "Relevant 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 Relevant Party an amount
equal to any credit or repayment from the relevant tax authority which
it reasonably determines relates to the VAT chargeable on that supply.
(c) Where a Finance Document requires any Party to reimburse a Finance
Party for any costs or expenses, that Party shall also at the same
time pay and indemnify the Finance Party against all VAT incurred by
the Finance Party in respect of the costs or expenses to the extent
that the Finance Party reasonably determines that neither it nor any
other member of any group of which it is a member for VAT purposes is
entitled to credit or repayment from the relevant tax authority in
respect of the VAT.
14. INCREASED COSTS
14.1 Increased costs
(a) Subject to Clause 14.3 (Exceptions) the Company shall, within ten
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.
(b) In this Agreement "Increased Costs" means:
(i) a reduction in the rate of return from the Facility or on a
Finance Party's (or its Affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) 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 funding or performing its
obligations under any Finance Document.
14.2 Increased cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 14.1
(Increased costs) shall notify the Agent of the event giving rise to
the claim, following which the Agent shall promptly notify the
Company.
(b) Each Finance Party shall, as soon as practicable after a demand by the
Agent, provide a certificate confirming the amount of its Increased
Costs.
34
14.3 Exceptions
(a) Clause 14.1 (Increased costs) does not apply to the extent any
Increased Cost is:
(i) attributable to a Tax Deduction required by law to be made by an
Obligor;
(ii) compensated for by Clause 13.3 (Tax indemnity) (or would have
been compensated for under Clause 13.3 (Tax indemnity) but was
not so compensated solely because any of the exclusions in
paragraph (b) of Clause 13.3 (Tax indemnity) applied);
(iii) compensated for by the payment of the Mandatory Cost; or
(iv) attributable to the wilful breach by the relevant Finance Party
or its Affiliates of any law or regulation.
(b) In this Clause 14.3, a reference to a "Tax Deduction" has the same
meaning given to the term in Clause 13.1 (Definitions).
15. OTHER INDEMNITIES
15.1 Currency indemnity
(a) 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:
(i) making or filing a claim or proof against that Obligor;
(ii) obtaining or enforcing an order, judgment or award in relation to
any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within ten Business
Days of demand, indemnify each Finance 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.
(b) 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.
15.2 Other indemnities
The Company shall (or shall procure that an Obligor will), within ten
Business Days of demand, indemnify each Finance Party against any cost,
loss or liability incurred by that Finance Party as a result of:
(a) Investigating any event which it reasonably believes is a Default;
(b) the occurrence of any Event of Default;
35
(c) 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 29 (Sharing among the Finance
Parties);
(d) funding, or making arrangements to fund, its participation in a Loan
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
(e) a Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment given by a Borrower or the Company.
15.3 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:
(a) investigating any event which it reasonably believes is a Default; or
(b) entering into or performing any foreign exchange contract for the
purposes of paragraph (b) of Clause 30.9 (Change of Currency); or
(c) acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately
authorised.
15.4 Indemnity to the Security Trustee
(a) Each Obligor shall promptly indemnify the Security Trustee and every
Receiver and Delegate against any cost, loss or liability incurred by
any of them as a result of:
(i) the taking, holding, protection or enforcement of the Transaction
Security;
(ii) the exercise of any of the rights, powers, discretions and
remedies vested in the Security Trustee and each Receiver and
Delegate by the Finance Documents or by law; and
(iii) any default by any Obligor in the performance of any of the
obligations expressed to be assumed by it in the Finance
Documents.
(b) The Security Trustee 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 15.4 and shall have a lien on the Transaction Security
and the proceeds of the enforcement of the Transaction Security for
all moneys payable to it.
16. MITIGATION BY THE LENDERS
16.1 Mitigation
(a) 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 13 (Tax
gross-up and indemnities), Clause 14
36
(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.
(b) Paragraph (a) above does not in any way limit the obligations of any
Obligor under the Finance Documents.
16.2 Limitation of liability
(a) The Company shall 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 16.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 16.1
(Mitigation) if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.
17. COSTS AND EXPENSES
17.1 Transaction expenses
The Borrowers shall promptly on demand pay the Agent, the Arranger and the
Security Trustee the amount of all costs and expenses (including, but not
limited to legal fees) reasonably incurred by any of them or by anyone
acting under powers of attorney granted by any of the Agent, the Arranger
or the Security Trustee, in connection with the negotiation, preparation,
printing, execution, syndication and perfection of:
(a) this Agreement and any other documents referred to in this Agreement
and the Transaction Security; and
(b) any other Finance Documents executed after the date of this Agreement.
17.2 Amendment costs
If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to Clause 30.9 (Change of currency), the
Borrowers shall, within ten Business Days of demand, reimburse each of the
Agent and the Security Trustee for the amount of all costs and expenses
(including but not limited to legal fees) reasonably incurred by the Agent
and the Security Trustee (and in the case of the Security Trustee, by any
Receiver or Delegate) in responding to, evaluating, negotiating or
complying with that request or requirement.
17.3 Security Trustee's ongoing costs
(a) In the event of:
(i) the occurrence of a Default; or
(ii) the Security Trustee considering it necessary or expedient; or
(iii) being requested by an Obligor or the Majority Lenders to
undertake duties which the Security Trustee and the Company agree
to be of an exceptional nature and/or outside the scope of the
normal duties of the Security Trustee under the Finance
Documents, the Company shall pay to the Security Trustee any
additional remuneration that:
37
(A) is set out in the Fee Letter relating to the security fee
detailed in Clause 12.4 (Security fee); or
(B) as may be agreed between them.
(b) If the Security Trustee and the Company fail to agree upon the nature
of the duties upon any additional remuneration under is payable under
Clause 17.3 (a)(iii), that dispute shall be determined by an
investment bank (acting as an expert and not as an arbitrator)
selected by the Security Trustee and approved by the Company, or
failing approval, nominated (on the application of the Security
Trustee) 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.
17.4 Enforcement and preservation costs
The Borrowers shall, within ten Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including, but not
limited to, legal and notarial fees) 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 Trustee as a consequence of taking or holding the
Transaction Security or enforcing these rights.
SECTION 7
GUARANTEE
18. GUARANTEE AND INDEMNITY
18.1 Guarantee and indemnity
Each Guarantor irrevocably and unconditionally jointly and severally:
(a) guarantees to each Finance Party punctual performance by each Borrower
of all that Borrower's obligations under the Finance Documents;
(b) undertakes with each Finance Party that whenever a Borrower 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
(c) indemnifies each Finance Party immediately on demand against any cost,
loss or liability suffered by that Finance Party if any obligation
guaranteed by it is or becomes unenforceable, invalid or illegal. The
amount of the cost, loss or liability shall be equal to the amount
which that Finance Party would otherwise have been entitled to
recover. The validity of the guarantee provided in respect of one or
more guaranteed obligation shall not affect the guarantee as a whole,
the guarantee being in such case deemed as provided for the remainder
of the guaranteed obligations.
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18.2 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.
18.3 Reinstatement
If any payment by an Obligor or any discharge given by a Finance Party
(whether in respect of the obligations of any Obligor or any security for
those obligations or otherwise) is avoided or reduced as a result of
insolvency or any similar event:
(a) the liability of each Obligor shall continue as if the payment,
discharge, avoidance or reduction had not occurred; and
(b) each Finance Party shall be entitled to recover the value or amount of
that security or payment from each Obligor, as if the payment,
discharge, avoidance or reduction had not occurred.
18.4 Waiver of defences
The obligations of each Guarantor under this Clause 18 will not be affected
by an act, omission, matter or thing which, but for this Clause, would
reduce, release or prejudice any of its obligations under this Clause 18
(without limitation and whether or not known to it or any Finance Party)
including:
(a) any time, waiver or consent granted to, or composition with, any
Obligor or other person;
(b) 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 European Group;
(c) 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;
(d) 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;
(e) any amendment (however fundamental) or replacement of a Finance
Document or any other document or security;
(f) any unenforceability, illegality or invalidity of any obligation of
any person under any Finance Document or any other document or
security; or
(g) any insolvency or similar proceedings.
18.5 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
39
18. This waiver applies irrespective of any law or any provision of a
Finance Document to the contrary.
18.6 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:
(a) 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
(b) hold in an interest-bearing suspense account any moneys received from
any Guarantor or on account of any Guarantor's liability under this
Clause 18.
18.7 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:
(a) to be indemnified by an Obligor;
(b) to claim any contribution from any other guarantor of any Obligor's
obligations under the Finance Documents; and/or
(c) 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.
18.8 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.
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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
19. REPRESENTATIONS
Each Obligor makes the representations and warranties set out in this
Clause 19 to each Finance Party on the date of this Agreement.
19.1 Status
(a) It is a corporation, duly incorporated and validly existing under the
law of its jurisdiction of incorporation.
(b) It and each of its Subsidiaries (which are not Excluded Subsidiaries)
has the power to own its assets and carry on its business as it is
being conducted.
19.2 Binding obligations
The obligations expressed to be assumed by it in each Finance Document and
each Italian Finance Document to which it is a party, are, subject to any
general principles of law as at the date of this Agreement limiting its
obligations which are specifically referred to in any legal opinion
delivered pursuant to Clause 4 (Conditions of Utilisation) or Clause 25
(Changes to the Obligors), legal, valid, binding and enforceable
obligations.
19.3 Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated
by, the Finance Documents and the Italian Finance Documents to which it is
a party, do not and will not conflict with:
(a) any law or regulation applicable to it;
(b) its or any of its Subsidiaries' (which are not Excluded Subsidiaries)
constitutional documents; or
(c) any agreement or instrument binding upon it or any of its Subsidiaries
(which are not Excluded Subsidiaries) or any of its or any of its
Subsidiaries (which are not Excluded Subsidiaries) assets.
19.4 Power and authority
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 and the Italian Finance Documents to which it is a
party and the transactions contemplated by those Finance Documents and the
Italian Finance Documents.
19.5 Validity and admissibility in evidence
All Authorisations required or desirable:
(a) to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents and the Italian Finance
Documents to which it is a party; and
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(b) to make the Finance Documents and the Italian Finance Documents to
which it is a party admissible in evidence in each Relevant
Jurisdiction,
have been obtained or effected and are in full force and effect.
19.6 Governing law and enforcement
(a) The choice of governing law of each of the Finance Documents and the
Italian Finance Documents to which it is a party, will be recognised
and enforced in each Relevant Jurisdiction.
(b) Any judgment obtained in England in relation to a Finance Document and
an Italian Finance Documents to which it is a party, will be
recognised and enforced in each Relevant Jurisdiction.
19.7 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 Qualifying Lender.
19.8 No filing or stamp taxes
Under the law of each Relevant Jurisdiction it is not necessary that the
Finance Documents or the Italian Finance Documents be filed, recorded or
enrolled with any court or other authority in that jurisdiction or that any
stamp, registration or similar tax be paid on or in relation to the Finance
Documents or the Italian Finance Documents or the transactions contemplated
by the Finance Documents or the Italian Finance Documents, other than:
(a) registration under s.395 Companies Act 1985;
(b) payment of Portuguese stamp duty in respect of the guarantees and
security provided by Lapa and Hoteis under the Finance Documents under
the Portuguese Stamp Duty Code, enacted by Law nr. 150/99 of September
11, 1999, as amended;
(c) registration under s55 of Bermuda's Companies Act 1981, as amended;
and
(d) payment of Imposta Sostitutiva on the Italian Facility Agreement and
as regulated by Article 15 of Presidential Decree No. 601 of 29
September 1973.
19.9 No default
(a) No Event of Default or Italian Event of Default is continuing or might
reasonably be expected to result from the making of any Utilisation.
(b) No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on it
or any of its Subsidiaries (which are not Excluded Subsidiaries) or to
which its or its Subsidiaries' (which are not Excluded Subsidiaries)
assets are subject, and in each case which might have a Material
Adverse Effect.
19.10 No misleading information
(a) Any factual information provided by the Company or any member of the
European Group for the purposes of the Information Memorandum was true
and
42
accurate in all material respects as at the date it was provided or as
at the date (if any) at which it is stated.
(b) The financial projections contained in the Information Memorandum were
prepared on the basis of recent historical information and on the
basis of reasonable assumptions.
(c) Nothing has occurred or been omitted from the Information Memorandum
and no information has been given or withheld that results in the
information contained in the Information Memorandum being untrue or
misleading in any material respect as at the first Utilisation Date.
(d) All written information (other than the Information Memorandum)
supplied by the Company or any member of the European Group is true,
complete and accurate in all material respects as at the date it was
given and is not misleading in any respect.
19.11 Financial statements
(a) Its Original Financial Statements were prepared in accordance with US
GAAP or, in the case of the unaudited financial statements of
Luxembourg Holdco, Lux GAAP, consistently applied.
(b) In relation to its Original Financial Statements prepared under US
GAAP, those Original Financial Statements present fairly in all
material respects its financial condition and where applicable, the
financial condition of its subsidiaries.
(c) In relation to its Original Financial Statements prepared under Lux
GAAP, present fairly in all material respects its financial condition
and where applicable, the financial condition of its subsidiaries.
(d) There has been no material adverse change in its business or financial
condition (or the business or consolidated financial condition of the
Group, in the case of the Company) since the date on which the
Original Financial Statements were prepared.
19.12 Pari passu ranking
Its payment obligations under the Finance Documents and the Italian
Facility Agreement rank at least pari passu with the claims of all its
other unsecured and unsubordinated creditors, except for obligations
mandatorily preferred by law applying to companies generally.
19.13 No proceedings pending or threatened
No litigation, arbitration or administrative proceedings of or before any
court, arbitral body or agency which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect have (to the best
of its knowledge and belief) been started or threatened against it or any
of its Subsidiaries.
19.14 Environmental compliance
Each member of the Group has performed and observed in all material
respects all Environmental Law, Environmental Permits and all other
material covenants, conditions,
43
restrictions or agreements directly or indirectly concerned with any
contamination, pollution or waste or the release or discharge of any toxic
or hazardous substance in connection with any Real Property which is or was
at any time owned, leased or occupied by any member of the Group or on
which any member of the Group has conducted any activity where failure to
do so might reasonably be expected to have a Material Adverse Effect.
19.15 Environmental Claims
No Environmental Claim has been commenced or (to the best of its knowledge
and belief) is threatened against any member of the Group where that claim
would be reasonably likely, if determined against that member of the Group
to have a Material Adverse Effect.
19.16 Taxation
(a) It has duly and punctually paid and discharged all Taxes imposed upon
it or its assets within the time period allowed without incurring
penalties (save to the extent that (i) payment is being contested in
good faith, (ii) it has maintained adequate reserves for those Taxes
and (iii) payment can be lawfully withheld).
(b) It is not materially overdue in the filing of any Tax returns.
(c) No claims are being or are reasonably likely to be asserted against it
with respect to Taxes.
19.17 Security
(a) No Security exists over all or any of the present or future assets of
any member of the European Group other than any Security permitted
under Clause 22.3 (Negative Pledge).
(b) No Security exists over all or any of the Company's assets expressed
to be the subject of any Security under a Finance Document.
19.18 Ranking
Subject to the reservations contained in the Legal Opinions, the
Transaction Security has or will have first ranking priority and it is not
subject to any prior ranking or pari passu ranking Security.
19.19 Transaction Security
Each Security Document to which it is a party validly creates the Security
which is expressed to be created by that Security Document and evidences
the Security it is expressed to evidence.
19.20 Title To Assets
(a) It is the absolute sole legal and beneficial owner of, and has good
and marketable title to, each of its assets which are expressed to be
the subject of any Security created or expressed to be created under
the Security Documents;
(b) It has good, valid and marketable title to, or valid leases or
licences of, and all appropriate and necessary Authorisations to use
the assets, including its Hotels, necessary to carry on its business
as presently conducted.
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19.21 Shares
The shares and quotas which are subject to the Transaction Security are
fully paid and not subject to any option to purchase or similar rights
other than as disclosed in the Original Financial Statements of the
Company. The constitutional documents of companies whose shares or quotas
are subject to the Transaction Security do not and could not restrict or
inhibit any transfer of those shares or quotas on creation or on
enforcement of the Transaction Security.
19.22 Intellectual Property
It is not aware of any adverse circumstance relating to validity,
subsistence or use of any of its Intellectual Property.
19.23 Group Structure
The Group Structure Chart delivered to the Agent pursuant to Part I of
Schedule 2 (Conditions Precedent) is true, complete and accurate as at the
first Utilisation Date.
19.24 Ownership of the Obligors
(a) Each Obligor (other than the Company) is directly or indirectly, a
wholly-owned Subsidiary of the Company.
(b) Hotel Splendido Srl owns 98.08 per cent. of the shares in the issued
share capital of HDC.
19.25 Centre of main interests and establishments
It has its "centre of main interests" (as that term is used in Article 3(1)
of The Council of the European Union Regulation No. 1346/2000 on Insolvency
Proceedings (the "Regulation")) in its jurisdiction of incorporation.
19.26 Repetition
The Repeating Representations are deemed to be made by each Obligor (by
reference to the facts and circumstances then existing) on:
(a) the date of each Utilisation Request and the first day of each
Interest Period; and
(b) in the case of an Additional Obligor, the day on which the company
becomes (or it is proposed that the company becomes) an Additional
Obligor.
20. INFORMATION UNDERTAKINGS
The undertakings in this Clause 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.
20.1 Financial statements
The Company shall supply to the Agent in sufficient copies for all the
Lenders:
(a) as soon as the same become available, but in any event within 120 days
after the end of each of its financial years:
(i) its audited consolidated financial statements for that financial
year; and
45
(ii) the financial statements of each Obligor (other than the Company)
for that financial year prepared in accordance with US GAAP
together with confirmation from Deloitte, following completion of
an agreed procedure, that each of these financial statements are
accurately extracted from the audited consolidated financial
statements of the Company for the corresponding financial year.
(b) as soon as the same become available, but in any event within 45 days
after the end of each quarter of its financial years:
(i) its consolidated financial statements for that financial quarter;
and
(ii) the financial statements of each Obligor (save for the Company)
for that financial quarter;
(c) as soon as the same become available, but in any event within 45 days
after the end of each quarter, management accounts of each Obligor for
that period in such a form as to disclose with accuracy the financial
position of the relevant Obligor which shall include the following
information in respect of each such period:
(i) a profit and loss statement and balance sheet;
(ii) details of income, occupancy levels, average room rates and
Revpar achieved for each Hotel and Italian Hotel;
(iii) details of capital expenditure at each Hotel and Italian Hotel;
(iv) a cashflow statement;
(v) a comparison, where appropriate, of all such information with the
estimates, forecasts and projections in the then current Business
Plan; and
(vi) such other information as the Agent may, upon giving reasonable
prior notice, reasonably require.
20.2 Compliance Certificate
(a) The Company shall supply to the Agent within 60 days of each Quarter
Day (as defined in Clause 21.1 (Financial Definitions) and, with each
set of financial statements delivered pursuant to paragraph (a)(i) of
Clause 20.1 (Financial statements), a Compliance Certificate setting
out (in reasonable detail) computations as to compliance with Clause
21 (Financial Covenants) as at the date as at which those financial
statements were drawn up.
(b) Each Compliance Certificate shall be signed by two directors or senior
officers of the Company one of which being the chief financial officer
of the Company.
20.3 Requirements as to financial statements
(a) Each set of financial statements delivered by the Company pursuant to
Clause 20.1 (Financial statements) shall be certified by a
director/officer of the relevant
46
company as fairly presenting its financial condition in all material
respects as at the date as at which those financial statements were
drawn up.
(b) The Company shall procure that each set of financial statements of an
Obligor delivered pursuant to Clause 20.1 (Financial statements) is
prepared using US GAAP, and accounting practices and financial
reference periods consistent with those applied in the preparation of
the Original Financial Statements unless, in relation to any set of
financial statements, it notifies the Agent that there has been a
change in US GAAP, or the accounting practices or reference periods
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 US GAAP, accounting practices and reference
periods 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 21 (Financial Covenants) has been
complied with and make an accurate comparison between the
financial position indicated in those financial statements and
that Obligor's Original Financial Statements.
(c) Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the basis upon which the Original Financial Statements were
prepared.
20.4 Business Plan
The Company shall supply to the Agent, prior to the start of each operating
year, a business plan in a form approved by the Agent and which shall
include the following information:
(a) a projected profit and loss statement and balance sheet for each
Obligor;
(b) annual budgets including details of projected income, occupancy
levels, average room rates and Revpar (the revenue per available room)
to be achieved for each Hotel and details of projected capital
expenditure for each Hotel;
(c) a projected cashflow statement for each Obligor;
(d) projected calculations in relation to the financial undertakings set
out in Clause 21.2 (Financial undertakings) for the next year;
(e) such other information as the Agent may reasonably require.
20.5 Information: miscellaneous
The Company shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests):
(a) all documents of a non-routine nature dispatched by an Obligor (other
than the Company) to its shareholders (or any class of them) or its
creditors generally at the same time as they are dispatched;
47
(b) 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
might, if adversely determined, have a Material Adverse Effect; and
(c) promptly, such further information regarding the financial condition,
business and operations of any member of the Group as any Finance
Party (through the Agent) may reasonably require.
20.6 Notification of default
(a) 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).
(b) Promptly upon a request by the Agent, 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).
20.7 "Know your customer" checks
(a) If:
(i) 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;
(ii) any change in the status or shareholders or quotaholders of an
Obligor after the date of this Agreement; or
(iii) a proposed assignment or transfer by a Lender of any of its
rights and 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 paragraph (iii)
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 paragraph (iii) above, on behalf of any prospective new
Lender) in order for the Agent, such Lender or, in the case of the
event described in paragraph (iii) 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.
(b) 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
48
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.
(c) 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 25 (Changes to the
Obligors).
(d) Following the giving of any notice pursuant to paragraph (c) 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 the results of 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.
21. FINANCIAL COVENANTS
21.1 Financial definitions
In this Clause 21:
"Consolidated EBITDA" means, for a Relevant Period, Consolidated Profits
before Interest and Tax before any amount attributable to the amortisation
of intangible assets and depreciation of tangible assets.
"Consolidated Net Finance Charges" means, in respect of any Relevant
Period, the aggregate amount of the interest (including the interest
element of leasing and hire purchase payments and capitalised interest),
commission, fees, discounts and other finance payments payable by any
member of the Group or the European Group (as applicable) after deducting
any interest receivable by any member of the Group or the European Group
(as applicable) on any deposit or bank account which is unencumbered
(excluding encumbrances created by the Finance Documents).
"Consolidated Profits before Interest and Tax" means, in respect of any
Relevant Period, the consolidated net income of the Group or the European
Group (as applicable) arising from the operation of the Hotels and the
Italian Hotels before:
(a) any provision on account of taxation;
(b) any interest, commission, discounts or other fees incurred or payable,
received or receivable by any member of the Group or the European
Group (as applicable) in respect of Indebtedness for Borrowed Money;
and
49
(c) any items treated as exceptional or extraordinary items.
"Consolidated Tangible Net Worth" means at any time the aggregate of the
amounts paid up or credited as paid upon the issued ordinary share capital
or quotas of the Company and the aggregate amount of the reserves of the
Group,
including:
(d) any amount credited to the share or quota premium account;
(e) any capital redemption reserve fund; and
(f) any balance standing to the credit of the consolidated profit and loss
account of the Group which shall for the avoidance of doubt, provide
details of any amount set aside for taxation, deferred taxation or bad
debts;
but deducting:
(a) any debit balance on the consolidated profit and loss account of the
Group;
(b) (to the extent included) any amount shown in respect of goodwill
(including goodwill arising only on consolidation) or other intangible
assets of the Group;
(c) any amount in respect of interests of non-Group members in Group
subsidiaries;
(d) (to the extent included) any amounts arising from an upward
revaluation of assets made at any time after the date of the Original
Financial Statements; and
(e) any amount in respect of any dividend or distribution declared,
recommended or made by any member of the Group to the extent payable
to a person who is not a member of the Group and to the extent such
distribution is not provided for in the most recent financial
statements,
and so that no amount shall be included or excluded more than once.
"Indebtedness for Borrowed Money" means Financial Indebtedness save for any
indebtedness for or in respect of paragraphs (g) and (h) of the definition
of "Financial Indebtedness".
"Quarter day" means the end of each financial quarter of the Company.
"Relevant Period" means each period of twelve months ending on the last day
of the Company's financial year and each period of twelve months ending on
a Quarter Day.
21.2 Financial condition
The Company undertakes to ensure that:
(a) Net Worth
Consolidated Tangible Net Worth shall not at any time be less than
US$450,000,000.
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(b) Loans to Hotel Value
the ratio of (x) the aggregate amount of the Loans and the Italian
Loans outstanding to (y) the aggregate gross open market value of the
Hotels (excluding Hotel de la Cite) which are the subject of the
Security Documents and the Italian Hotels which are the subject of the
Italian Security Documents as detailed in the Valuation most recently
delivered to the Agent or the Italian Lender, shall not at any time
exceed 0.70:1;
(c) Interest Cover Ratio - European Group
the ratio of Consolidated EBITDA for the European Group to
Consolidated Net Finance Charges for the European Group shall for each
Relevant Period be equal to or greater than 2:1; and
(d) Interest Cover Ratio - Group
the ratio of Consolidated EBITDA for the Group to Consolidated Net
Finance Charges for the Group shall for each Relevant Period be equal
to or greater than 1.50:1.
21.3 Financial testing
The financial covenants set out in Clause 21.2 (Financial condition) shall
be tested by reference to each of the financial statements and/or each
Compliance Certificate delivered pursuant to Clause 20.2 (Compliance
Certificate).
22. GENERAL 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.
22.1 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 the Relevant Jurisdictions to enable it to
perform its obligations under the Finance Documents and the Italian Finance
Documents and to ensure the legality, validity, enforceability or
admissibility in evidence in each Relevant Jurisdiction of any Finance
Document and any Italian Finance Document.
22.2 Compliance with laws
Each Obligor shall comply in all respects with all laws to which it may be
subject, if failure so to comply would materially impair its ability to
perform its obligations under the Finance Documents and the Italian Finance
Documents.
22.3 Negative pledge
(a) No Obligor (other than the Company) shall create or permit to subsist
any Security over any of its assets.
(b) The Company shall not create or permit to subsist any Security over
any of its assets expressed to be the subject of any Security under a
Finance Document.
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(c) No Obligor (other than the Company) shall:
(i) 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;
(ii) sell, transfer or otherwise dispose of any of its receivables on
recourse terms;
(iii) 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
(iv) 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.
(d) Paragraphs (a) and (c) above do not apply to:
(i) any netting or set-off arrangement entered into by any member of
the European Group in the ordinary course of its banking
arrangements for the purpose of netting debit and credit
balances;
(ii) any lien arising by operation of law and in the ordinary course
of trading;
(iii) the Transaction Security; or
(iv) any Security (including the Retained Security) granted to secure
Financial Indebtedness permitted under Clause 22.15(b)(v)
provided that:
(A) the assets subject to that Security or Retained Security are
not included in any Valuation of any Hotel and are not
subject to the Transaction Security; and
(B) the aggregate Financial Indebtedness secured by that
Security and Retained Security does not exceed
(euro)10,000,000.
The amount of the Residual Outstandings only shall be taken into
account in calculating the Financial Indebtedness secured by the
Retained Security.
22.4 Disposals
(a) (i) No Obligor (other than the Company) shall 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 (including any Hotel).
(ii) The Company shall procure that no member of the European Group
enters 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 Italian Hotel
or the business calculated there from.
52
(b) The Company shall not enter into a single transaction or a series of
transactions (whether or not related) and whether voluntary or
involuntary to sell, lease, transfer or otherwise dispose of any asset
expressed to be the subject of any Security under a Finance Document.
(c) Paragraph (a) above does not apply to any sale, lease, transfer or
other disposal:
(i) of an asset (not being a Hotel, Italian Hotel or Shares or quotas
in any Obligor) made by an Obligor in the ordinary course of
trading as a hotel owner;
(ii) of an asset (not being a Hotel, Italian Hotel or Shares or quotas
in any Obligor) in exchange for other assets comparable or
superior as to type, value and quality or of other assets not
required for the operating of the Hotels;
(iii) of an asset (not being a Hotel, Italian Hotel or Shares or
quotas in any Obligor) being sold, leased, transferred or
otherwise disposed of in the ordinary course of trading where the
higher of the arm's length market value or consideration
receivable (when aggregated with the higher of the market value
or consideration receivable for any other sale, lease, transfer
or other disposal by the European Group, other than any permitted
under paragraphs (i) and (ii) above) does not exceed
(euro)500,000 (or its equivalent in another currency or
currencies) in any financial year;
(iv) any Hotel Disposal (other than a Hotel Disposal relating to an
Italian Hotel) which has the prior written consent of the Agent
acting on the instructions of the Majority Lenders, such consent
not to be unreasonably withheld if no Event of Default is
continuing and each of the following conditions is satisfied:
(A) the Hotel Disposal is for market value and on arm's length
terms and the consideration is payable in full at completion
of the Hotel Disposal;
(B) the Borrower gives not less than five Business Days' notice
in writing to the Agent of the proposed Hotel Disposal; and
(C) the proceeds of the Hotel Disposal (including any amount of
debt that the purchaser has agreed to prepay), after
deducting the reasonable costs incurred in relation to the
Hotel Disposal (the "Net Disposal Proceeds") will be
sufficient to pay:
(1) the amount of the Loan that falls to be prepaid
pursuant to Clause 8.6 (Mandatory prepayment on a Hotel
Disposal) and all related Break Costs and interest;
(2) all Tax that is or may become payable by any member of
the Group as a result of the Hotel Disposal; and
53
(D) the Net Disposal Proceeds of the Hotel Disposal will be
applied in accordance with Clause 8.6 (Mandatory prepayment
on a Hotel Disposal) on completion of the Hotel Disposal;
(E) any prepayment and/or cancellation of the Italian Facility
required by Clause 8.9 (Application of Prepayments) will be
made;
(F) the Company delivers to the Agent a Compliance Certificate
confirming that the financial covenants set out in Clause
21.2 (Financial condition) shall continue to be met for the
twelve months immediately following the Hotel Disposal;
(G) the Obligor making the disposal delivers to the Agent a
solvency certificate signed by two officers of that Obligor;
(v) any Hotel Disposal of an Italian Hotel which has the prior
written consent of all the Lenders;
(vi) the grant of leases, licences or concessions of retail units at a
Hotel (excluding any restaurants or casinos) on arms length terms
in the ordinary course of trading; and
(vii) of any Shares or quotas in any Excluded Subsidiary provided that
the Agent is satisfied that the proceeds of such disposal will be
sufficient to pay all Tax that is or may become payable by any
member of the Group as a result of the disposal;
(viii) of any shares held by Hotel Splendido Srl in HDC to Luxembourg
Holdco provided that the Agent is satisfied that:
(A) any Tax that is or may become payable by any member of the
Group as a result of the transfer will be paid;
(B) Security is granted at the cost of the Company to the
Security Trustee (in substantially the same form as the
existing Security granted to the Security Trustee) over the
shares in HDC transferred to Luxembourg Holdco; and
(C) the Agent receives a legal opinion and any other
Authorisation document or assurance which the Agent
considers to be necessary or desirable in connection with
the transfer and the new Security; or
(ix) any disposal effected pursuant to a Security Document.
22.5 Merger
No Obligor shall (and the Company shall ensure that no other member of the
European Group will) enter into any amalgamation, demerger, merger or
corporate reconstruction.
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22.6 Change of Business
(a) The Company shall procure that no change is made to the general nature
of the business of the Company or the European Group from that carried
on at the date of this Agreement.
(b) No Obligor shall change (or permit to be changed) the name or branding
of any Hotel or Italian Hotel.
22.7 Insurance
(a) Unless the Security Trustee otherwise agrees in writing, the Company
shall (and shall procure that the relevant Obligors shall):
(i) insure and keep insured, with financially sound and reputable
insurers, all the assets and business in a manner and on the
basis as shall be no less than the insurances described in
Schedule 11 (Minimum Insurance Requirements for the Company) and
such other insurances as a prudent owner of a hotel would
ordinarily maintain;
(ii) punctually pay any premium, commission and any other amounts
necessary for effecting and maintaining in force each Insurance
Policy;
(iii) promptly notify the relevant insurer of any claim by an Obligor
under any policy written by that insurer and diligently pursue
that claim;
(iv) comply with all warranties under, and the terms of, each
Insurance Policy;
(v) not do or omit to do, or permit to be done or not done, anything
which might prejudice an Obligor's right to claim or recover
under any Insurance Policy; and
(vi) not rescind, terminate, cancel or cause an adverse material
change to any Insurance Policy;
provided always that if at any time and for any reason any insurance
required to be maintained under this Agreement shall not be in full
force and effect, the Security Trustee shall then, or at any time
while the same is continuing, be entitled (but not obliged) on its own
behalf to procure such insurance at the expense of each Obligor and to
take all such steps as it may consider expedient or necessary to
ensure that any insurance required under this Agreement is effected.
(b) Each Insurance Policy shall be on arm's length market terms and
conditions acceptable to the Security Trustee, and each Obligor
undertakes that no change will be made to an Obligor's insurance
program, which will result in cover less than specified with Schedule
11 (Minimum Insurance Requirements for the Company), without
consultation and agreement in writing with the Security Trustee.
55
(c) On every Insurance Policy other than those applying in respect of
legal liability of whatsoever kind on the part of the Company for
injury, loss or damage occasioned to any party:
(i) the interest of the Security Trustee shall be noted;
(ii) funds in settlement of all claims in excess of $1,000,000 (or
equivalent) shall be paid to the Security Trustee, except to the
extent that such amounts are to be paid in reimbursement of
amounts expended in repair or replacement of the damage or costs
insured in maintaining the business or are payable directly to
third parties in payment for work completed in course of such
repair or replacement;
(iii) if an Event of Default or Italian Event of Default is continuing
the Security Trustee may by notice to the Company, require the
relevant Obligor to settle a claim of insurance on the basis that
the proceeds will not be applied in repair or replacement of the
damage or costs incurred and any such proceeds of insurance paid
to the Obligors shall be applied by the relevant Obligors in
repayment of the Loans in accordance with Clause 8.7 (Mandatory
Prepayments - Insurance Proceeds).
(d) No Insurance Policy shall be cancelled or suspended by the Company or
the insurer for any reason (including failure to renew the policy or
to pay the premium or any other amount) unless the Security Trustee
and, in the case of expiration or if cancellation or suspension is
initiated by the insurer, the Company receive at least thirty (30)
days notice (but seven (7) days or such lesser period as the Security
Trustee may agree in respect of cancellation, suspension or
termination in the event of war and kindred peril) prior to the
effective date of termination, cancellation or suspension of that
Insurance Policy.
(e) The Security Trustee may remit the proceeds of any insurance paid to
it to the relevant Obligor to repair or replace the relevant damaged
assets or if an Event of Default or Italian Event of Default is
continuing apply the proceeds towards the repayment of all or any part
of the Loans in accordance with Clause 8.7 (Mandatory Prepayments -
Insurance Proceeds).
(f) Each Obligor shall use any insurance proceeds it receives (whether
from the Security Trustee or directly from the insurers) for loss of
or damage to any asset solely to replace or repair that asset unless
that Obligor is required to apply the proceeds of the claim in
repayment of the Loans in accordance with Clause 8.7 (Mandatory
Prepayments - Insurance Proceeds).
(g) Unless the Security Trustee agrees otherwise in writing, the Company
shall provide to the Security Trustee the following:
(i) as soon as possible after its occurrence, notice of any event of
loss or damage which entitles an Obligor to claim for an
aggregate amount
56
exceeding $1,000,000 (or equivalent) under any one or more
Insurance Policies;
(ii) notice of any new activities in relation to the Obligors or
Hotels which require insurances beyond those indicated in
Schedule 11 (Minimum Insurance Requirements for the Company);
(iii) within 30 days of insurance program renewal, certification that
the insurance program remains in place, as per Schedule 11
(Minimum Insurance Requirements for the Company); and
(iv) any other information or documents on each Insurance Policy as
the Security Trustee may reasonably request from time to time.
22.8 Environmental Compliance
Each Obligor shall (and the Company shall ensure that each member of the
European Group will) comply in all material respects with all Environmental
Law and obtain and maintain any Environmental Permits and take all
reasonable steps in anticipation of known or expected future changes to or
obligations under the same where failure to do so might reasonably be
expected to have a Material Adverse Effect.
22.9 Environmental Claims
The Company shall inform the Agent in writing as soon as reasonably
practicable upon becoming aware of the same:
(a) if any Environmental Claim has been commenced or (to the best of the
Company's knowledge and belief) is threatened against any member of
the Group; or
(b) of any facts or circumstances which will or are reasonably likely to
result in any Environmental Claim being commenced or threatened
against any member of the Group,
where the claim would be reasonably likely, if determined against that
member of the Group, to have a Material Adverse Effect.
22.10 Taxation
Each Obligor shall (and the Company shall ensure that each member of the
Group will) duly and punctually pay and discharge all Taxes imposed upon it
or its assets within the time period allowed without incurring penalties
(expect to the extent that (a) such payment is being contested in good
faith, (b) adequate reserves are being maintained for those Taxes and (c)
where such payment can be lawfully withheld).
22.11 Acquisitions
(a) No Obligor (other than the Company) shall acquire any company,
business, assets or undertaking without the consent of the Agent.
(b) Paragraph (a) above does not apply:
(i) to the acquisition of any company, business, assets or
undertaking, if the amount of the acquisition cost, when
aggregated with the aggregate
57
acquisition cost of any other companies, business, assets or
undertakings acquired by any Obligor (other than the Company)
during that financial year is equal to or less than
(euro)250,000;
(ii) to the acquisition by a member of the European Group of any
company, business, assets or undertakings from another member of
the Group if the disposal of such company, business, assets of
undertakings is permitted under Clause 22.4 (Disposals);and
(iii) the acquisition by Hotel Splendido Srl of any shares issued in
HDC and if Hotel Splendido Srl has transferred all of its shares
in HDC to Luxembourg Holdco in accordance with Clause 22.4
(Disposals), the acquisition by Luxembourg Holdco of any shares
in HDC which may be issued by HDC from time to time.
22.12 Loans and Guarantees
(a) No member of the European Group shall make any loans, grant any credit
or give any guarantee or indemnity to or for the benefit of any other
person or otherwise voluntarily assume any liability, whether actual
or contingent, in respect of any obligation of any person.
(b) Paragraph (a) above does not apply:
(i) to the making of any loans, granting of any credit or giving of
any guarantee or indemnity made by one member of the European
Group to (or in respect of the obligations of) another member of
the European Group in the ordinary course of business; or
(ii) to a loan, granting of any credit or giving of any guarantee or
indemnity made by a member of the European Group to another
member of the Group provided that when such loan, granting of
credit or giving of guarantee or indemnity is made no Event of
Default is continuing or would result from the making of such
loan, granting of credit or giving of guarantee or indemnity; or
(iii) where the loan or granting of credit or giving of guarantee or
indemnity is applied to pay a Secured Obligation.
22.13 Subordination of Loans
(a) No member of the European Group shall pay any Financial Indebtedness
arising under a loan permitted by Clause 22.12 (Loans and Guarantees).
(b) Paragraph (a) above does not apply:
(i) to the payment of any Financial Indebtedness made by one member
of the European Group to another member of the European Group in
the ordinary course of business;
(ii) to a Permitted Payment; or
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(iii) where the payment of the Financial Indebtedness is applied in
payment of a Secured Obligation.
22.14 Dividends
(a) No Obligor (other than the Company) shall pay, make or declare any
dividend or other distribution to any of its members.
(b) Paragraph (a) above does not apply:
(i) to a Permitted Payment; or
(ii) where the dividend or other distribution is made by an Obligor
which is not Luxembourg Holdco and is applied in payment of a
Secured Obligation.
22.15 Indebtedness
(a) Each Obligor shall ensure that no member of the European Group shall
incur, create or permit to subsist or have outstanding any Financial
Indebtedness or enter into any agreement or arrangement whereby it is
entitled to incur, create or permit to subsist any Financial
Indebtedness.
(b) Paragraph (a) above does not apply to any Financial Indebtedness:
(i) arising under or permitted by the Finance Documents;
(ii) any Financial Indebtedness between the Obligors if such Financial
Indebtedness has been incurred on arm's length terms and is
subordinated to the claims of the Finance Parties on terms
acceptable to the Agent;
(iii) arising under the Italian Facility Agreement;
(iv) arising as result of any netting or set-off arrangement entered
into by any member of the European Group in the ordinary course
of its banking arrangements for the purpose of netting debit and
credit balances;
(v) any secured Financial Indebtedness not exceeding (euro)10,000,000
in aggregate across the European Group;
(vi) any other unsecured Financial Indebtedness not exceeding
(euro)30,000,000 in aggregate across the European Group.
(c) The Obligors (other than the Company) shall not enter into any hire
agreement, credit sale agreement, hire purchase agreement, conditional
sale agreement or instalment sale and purchase agreement which is not
a finance lease if this would cause the aggregate of the payments to
be made by the Obligors (other than the Company) in respect of such
agreements to exceed, in any financial year of the Company, an amount
greater than (euro)1,000,000.
22.16 Maintenance of Hotels
(a) Each Obligor shall keep the Hotels (including all FF&E) in good and
substantial repair and condition.
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(b) Without prejudice to paragraph (a), the Company shall procure that not
less than 3% of the gross revenues of each Hotel is applied or
reserved towards the renewal and replacement of FF&E at that Hotel.
22.17 Ranking Obligations
Each Obligor shall ensure that its obligations under the Finance Documents
rank at least pari passu with the claims of all of its other unsecured and
unsubordinated creditors, except for obligations mandatorily preferred by
law applying to companies generally.
22.18 Accounting Date
No Obligor shall, without the consent of the Majority Lenders, change its
accounting date.
22.19 Delivery of Declarations
Each Obligor shall within any relevant time period laid down in any
statute, law or regulation make all necessary declarations and deliver all
necessary forms and documents required to be delivered to, filed with or
registered with any governmental, statutory or other body or agency by it
in connection with the Finance Documents and any of the transactions
contemplated under the Finance Documents.
22.20 Valuations
(a) The Company shall ensure that the Valuer prepares and delivers to the
Finance Parties a Valuation of each Hotel on the date falling 36
months after the date of this Agreement. The cost of each such
Valuation will be borne by the Company.
(b) The Agent may, at any other time, request the Valuer promptly to
prepare and deliver to the Agent a Valuation of any Hotel as the Agent
may direct and the cost of any such Valuation will be borne by the
Agent unless:
(i) a Default is continuing;
(ii) the Agent believes that it is reasonably likely that a Default
will occur; or
(iii) such Valuation, structural survey or environmental report
discloses that an Event of Default is continuing,
in which case the cost of any such Valuation, structural survey or
environmental report will be borne by the Company.
22.21 Access
Upon reasonable notice being given by the Agent to the Company, each
Obligor shall permit the Agent and any person (being an accountant,
creditor, solicitor, valuer or other professional adviser of the Agent)
authorised by the Agent to have, at all reasonable times during normal
business hours, access to the property, premises and accounting books and
records of any Obligor and to such accounting books and records of the
Manager.
22.22 Hotel Substitutions
The Company may request the Agent (acting on the instructions of all
Lenders) to permit:
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(a) the release of a Hotel, and the owner of that Hotel, from the
Transaction Security; and/or
(b) the addition of a further hotel as a Hotel.
The consent of all Lenders shall be required to any such release or
addition, and any such release or addition shall be subject to such
conditions as the Agent (acting on the instructions of all Lenders) shall
reasonably require.
22.23 Arm's length terms
Each Obligor shall ensure that all transactions conducted by a member of
the European Group are on arm's length terms.
22.24 Hotel Authorisations
Each Obligor shall promptly obtain, comply with and do all that is
necessary to maintain in full force and effect any Licences and
Authorisations required under any law or regulation of the Relevant
Jurisdiction to enable it to use each of its assets and Hotels and to carry
out its business conducted at its Hotel at the date of this Agreement.
23. EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 23 is an Event
of Default.
23.1 Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a
Finance Document at the place and in the currency in which it is expressed
to be payable unless:
(a) its failure to pay is caused by administrative or technical error; and
(b) payment is made within three Business Days of its due date.
23.2 Financial covenants, indebtedness and security
Any requirement of Clause 21 (Financial covenants) is not satisfied or any
Obligor does not comply with any provision of Clause 22.3 (Negative Pledge)
to Clause 22.7 (Insurance), Clause 22.11 (Acquisitions), Clause 22.12
(Loans and guarantees) to Clause 22.15 (Indebtedness) and Clause 22.17
(Ranking Obligations).
23.3 Other obligations
An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 23.1 (Non-payment) and Clause 23.2
(Financial covenants, Indebtedness and security)) and such failure, if
capable of remedy is not remedied within 20 Business Days after the earlier
of the Agent giving notice to the Company or the Company becoming aware of
the failure to comply.
23.4 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 in any material respect when made or
deemed to be made.
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23.5 Cross default
(a) Any Financial Indebtedness of any member of the European Group is not
paid when due nor within any originally applicable grace period.
(b) Any Financial Indebtedness of any member of the European 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).
(c) Any commitment for any Financial Indebtedness of any member of the
European Group is cancelled or suspended by a creditor of any member
of the European Group as a result of an event of default (however
described).
(d) Any creditor of any member of the European Group becomes entitled to
declare any Financial Indebtedness of any member of the European Group
due and payable prior to its specified maturity as a result of an
event of default (however described).
(e) In relation to any Financial Indebtedness which is not incurred under
or in connection with the Italian Facility Agreement, no Event of
Default will occur under this Clause 23.5 if the aggregate amount of
such Financial Indebtedness or commitment for such Financial
Indebtedness falling within paragraphs (a) to (d) above is less than
(euro)12,500,000 (or its equivalent in any other currency or
currencies).
23.6 Insolvency
(a) The Company or a member of the European Group is unable or admits
inability to pay its debts as they fall due, suspends 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 or has lost its
creditworthiness.
(b) The Company or any member of the European Group which conducts
business in France is in a state of cessation des paiements, or any
member of the European Group becomes insolvent for the purpose of any
insolvency law.
(c) The value of the assets of the Company or the European Group is less
than its liabilities (taking into account contingent and prospective
liabilities).
(d) A moratorium is declared in respect of any indebtedness of any member
of the European Group or the Company.
23.7 Insolvency proceedings
Any corporate action, legal proceedings, petition or other procedure or
step is taken in relation to:
(a) the filing of insolvency proceedings, suspension of payments, a
moratorium of any indebtedness, winding-up, dissolution,
administration, reorganisation (by way of voluntary arrangement,
scheme of arrangement or otherwise) or similar proceedings commenced
against the Company or any member of the European Group other than a
solvent liquidation or reorganisation of any member of the
62
European Group which is not an Obligor including, in relation to
Luxembourg Holdco, a "faillite", a "concordant preventif de faillite",
a "gestion controlee", a "liquidation judiciaire" or a "dissolution";
(b) a composition, compromise, assignment or arrangement with any creditor
of the Company or any member of the European Group;
(c) the appointment of a liquidator (other than in respect of a solvent
liquidation of a member of the European Group which is not an
Obligor), receiver, administrative receiver, administrator, compulsory
manager or other similar officer in respect of the Company or any
member of the European Group (including, in relation to Luxembourg
Holdco, a "commissaire a la gestion controlee", a "liquidateur" or a
"liquidateur judiciaire", and "administrateur judiciaire", a
"curateur") or any of its assets;
(d) enforcement of any Security over any assets of any member of the
European Group;
(e) the Company or any member of the European Group commences proceedings
for conciliation in accordance with articles L.611-4 to L.611-15 of
the French Code de Commerce; or
(f) a judgement for sauvegarde, redressement judiciaire, cession totale de
l'entreprise or liquidation judiciaire is entered in relation to the
Company or any member of the European Group under articles L.620-1 to
L.670-8 of the French Code de Commerce,
or any analogous procedure or step is taken in any jurisdiction.
23.8 Creditors' process
Any expropriation, attachment, sequestration, distress or execution affects
any asset or assets of a member of the European Group or any asset of the
Company the subject of the Transaction Security or, if that asset is
considered by the Majority Lenders not to be material in the context of the
assets of the European Group, such expropriation, attachment,
sequestration, distress or execution is not discharged fully within 30
days.
23.9 Unlawfulness
It is or becomes unlawful for an Obligor to perform any of its obligations
under the Finance Documents or any Transaction Security created or
expressed to be created or evidenced by the Security Documents ceases to be
effective.
23.10 Repudiation
An Obligor repudiates a Finance Document or any of the Transaction Security
or evidences an intention to repudiate a Finance Document or any of the
Transaction Security.
23.11 Transaction Security
(a) Any Obligor fails to perform or comply with any of the obligations
assumed by it in the Security Documents.
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(b) At any time any of the Transaction Security is or becomes unlawful or
is not, or ceases to be legal, valid, binding or enforceable or
otherwise ceases to be effective.
(c) At any time, any of the Transaction Security fails to have first
ranking priority or is subject to any prior ranking or pari passu
ranking Security.
23.12 Ownership of the Obligors
Any Obligor ceases to be directly or indirectly a wholly-owned subsidiary
of the Company other than by reason of a Hotel Disposal permitted by this
Agreement.
23.13 Compulsory Purchase
Any part or interest of an Obligor in a Hotel is compulsorily purchased or
is otherwise nationalised or otherwise expropriated which, in the opinion
of the Majority Lenders, shall have a Material Adverse Effect.
23.14 Material Damage
Any part of a Hotel is destroyed or damaged which in the opinion of the
Majority Lenders, shall have a Material Adverse Effect.
23.15 Material adverse change
Any event or circumstance occurs which the Majority Lenders reasonably
believe might have a Material Adverse Effect.
23.16 Business
Any Obligor ceases, or threatens to cease, to carry out the business
carried out by it as on the date of this Agreement, other than by reason of
a Hotel Disposal.
23.17 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:
(a) cancel the Total Commitments whereupon they shall immediately be
cancelled;
(b) declare that all or part of the Loans, together with accrued interest,
and all other amounts accrued or outstanding under the Finance
Documents be immediately due and payable, whereupon they shall become
immediately due and payable; and/or
(c) declare that all or part of the Loans be payable on demand, whereupon
they shall immediately become payable on demand by the Agent on the
instructions of the Majority Lenders; and/or
(d) exercise, or direct the Security Trustee to exercise, any or all of
its rights, remedies and powers under any of the Finance Documents.
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SECTION 9
CHANGES TO PARTIES
24. CHANGES TO THE LENDERS
24.1 Assignments and transfers by the Lenders
Subject to this Clause 24, a Lender (the "Existing Lender") may:
(a) assign any of its rights; or
(b) transfer by novation any of its rights and obligations,
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"), provided that any Existing Lender which is party
to the Credit Support Agreement shall also transfer or assign at the same
time, in accordance with the Credit Support Agreement, an amount of its
Credit Support Commitments under (and as defined in) the Credit Support
Agreement, equal to the proportion that the Commitments to be transferred
or assigned by such Existing Lender bears to the aggregate Commitments of
that Existing Lender immediately before the transfer or assignment.
24.2 Conditions of assignment or transfer
(a) The consent of the Company is required for an assignment or transfer
by an Existing Lender, unless the assignment or transfer is to another
Lender or an Affiliate of a Lender or an Event of Default is
continuing.
(b) The consent of the Company to an assignment or transfer must not be
unreasonably withheld or delayed. The Company will be deemed to have
given its consent five Business Days after the Existing Lender has
requested it unless consent is expressly refused by the Company within
that time.
(c) The consent of the Company to an assignment or transfer must not be
withheld solely because the assignment or transfer may result in an
increase to the Mandatory Cost.
(d) An assignment will only be effective on:
(i) receipt by the Agent 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; and
(ii) 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.
(e) A transfer will only be effective if the procedure set out in Clause
24.5 (Procedure for transfer) is complied with.
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(f) If:
(i) a Lender assigns or transfers any of its rights or obligations
under the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing at the date that 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 13 (Tax gross-up and
indemnities) or Clause 14 (Increased costs),
then the New Lender or Lender acting through its new Facility Office
is only entitled to receive payment under those Clauses 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.
(g) It is expressly agreed that the transfer referred to in Clause 24.1(b)
will be made under English Law and shall not, in any way, entail or be
construed as novation under French Law.
24.3 Assignment or transfer fee
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 (euro)2,000.
24.4 Limitation of responsibility of Existing Lenders
(a) Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New
Lender for:
(i) the legality, validity, effectiveness, adequacy or enforceability
of the Finance Documents, the Transaction Security or any other
documents;
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor of its obligations
under the Finance Documents or any other documents; or
(iv) 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.
(b) Each New Lender confirms to the Existing Lender and the other Finance
Parties that it:
(i) 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 in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst
any amount
66
is or may be outstanding under the Finance Documents or any
Commitment is in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause 24; or
(ii) 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 Finance Documents or otherwise.
24.5 Procedure for transfer
(a) Subject to the conditions set out in Clause 0 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph (c) 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 paragraph (b) 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.
(b) 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
other similar checks under all applicable laws and regulations in
relation to the transfer to such New Lender.
(c) On the Transfer Date:
(i) 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 shall be cancelled
(being the "Discharged Rights and Obligations");
(ii) 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 and the New Lender have assumed and/or
acquired the same in place of that Obligor and the Existing
Lender;
(iii) the Agent, the Arranger, the Security Trustee, the New Lender
and other Lenders 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
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Security Trustee and the Existing Lender shall each be released
from further obligations to each other under the Finance
Documents; and
(iv) the New Lender shall become a Party as a "Lender".
24.6 Copy of Transfer Certificate to Company
The Agent shall, as soon as reasonably practicable after it has executed a
Transfer Certificate, send to the Company acting for itself and as agent
for the Obligors a copy of that Transfer Certificate.
24.7 Disclosure of information
Any Lender may disclose to any of its Affiliates and any other person:
(a) to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
(b) with (or through) whom that Lender enters into (or may potentially
enter into) any sub-participation in relation to, or any other
transaction under which payments are to be made by reference to, this
Agreement or any Obligor; or
(c) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,
any information about any Obligor, the Group and the Finance Documents as
that Lender shall consider appropriate.
25. CHANGES TO THE OBLIGORS
25.1 Assignment and transfers by Obligors
No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
25.2 Additional Borrowers
(a) Subject to compliance with the provisions of paragraphs (c) and (d) of
Clause 20.7 ("know your customer" checks), the Company may request
that any of its wholly owned Subsidiaries (that is not incorporated
in, or resident for Tax purposes in, Portugal or Italy) becomes an
Additional Borrower. That Subsidiary shall become an Additional
Borrower if:
(i) all the Lenders approve the addition of that Subsidiary;
(ii) the Company delivers to the Agent a duly completed and executed
Accession Letter;
(iii) the Company confirms that no Default is continuing or would
occur as a result of that Subsidiary becoming an Additional
Borrower; and
(iv) the Agent has received all of the documents and other evidence
listed in Part II of Schedule 2 (Conditions Precedent) in
relation to that Additional Borrower, each in form and substance
satisfactory to the Agent.
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(b) The Agent shall notify the Company and the Lenders promptly upon being
satisfied that it has received (in form and substance satisfactory to
it) all the documents and other evidence listed in Part II of Schedule
2 (Conditions Precedent).
25.3 Additional Guarantors
(a) Subject to compliance with the provisions of Clause 20.7 ("know your
customer" checks), the Company may request that any of its wholly
owned Subsidiaries become an Additional Guarantor. That Subsidiary
shall become an Additional Guarantor if:
(i) the Company delivers to the Agent a duly completed and executed
Accession Letter; and
(ii) the Agent has received all of the documents and other evidence
listed in Part II of Schedule 2 (Conditions Precedent) in
relation to that Additional Guarantor, each in form and substance
satisfactory to the Agent.
(b) The Agent shall notify the Company and the Lenders promptly upon being
satisfied that it has received (in form and substance satisfactory to
it) all the documents and other evidence listed in Part II of Schedule
2 (Conditions Precedent).
25.4 Repetition of Representations
Delivery of an Accession Letter constitutes confirmation by the relevant
Subsidiary that the Repeating Representations 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.
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SECTION 10
THE FINANCE PARTIES
26. ROLE OF THE AGENT AND THE ARRANGER
26.1 Appointment of the Agent
(a) Each other Finance Party (other than the Security Trustee) appoints
the Agent to act as its agent under and in connection with the Finance
Documents.
(b) Each other Finance Party 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.
26.2 Duties of the Agent
(a) 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.
(b) 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.
(c) 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.
(d) 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 Trustee) under this Agreement it
shall promptly notify the other Finance Parties.
(e) The Agent's duties under the Finance Documents are solely mechanical
and administrative in nature.
26.3 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.
26.4 No fiduciary duties
(a) Nothing in this Agreement constitutes the Agent or the Arranger as a
trustee or fiduciary of any other person.
(b) Neither the Agent nor the Arranger 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.
26.5 Business with the Group
The Agent and the Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any member
of the Group.
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26.6 Rights and discretions of the Agent
(a) The Agent may rely on:
(i) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
(ii) 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.
(b) The Agent may assume (unless it has received notice to the contrary in
its capacity as agent for the Lenders) that:
(i) no Default has occurred (unless it has actual knowledge of a
Default arising under Clause 23.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any Party or
the Majority Lenders has not been exercised; and
(iii) 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.
(c) The Agent may engage, pay for and rely on the advice or services of
any lawyers, accountants, surveyors or other experts.
(d) The Agent may act in relation to the Finance Documents through its
personnel and agents.
(e) The Agent may disclose to any other Party any information it
reasonably believes it has received as agent under this Agreement.
(f) Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor 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.
26.7 Majority Lenders' instructions
(a) 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.
(b) 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 Trustee.
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(c) 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.
(d) 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.
(e) 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.
26.8 Responsibility for documentation
Neither the Agent, nor the Arranger:
(a) is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, the
Arranger, an Obligor or any other person given in or in connection
with any Finance Document or the Information Memorandum or the
transactions contemplated in the Finance Documents; or
(b) 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.
26.9 Exclusion of liability
(a) Without limiting paragraph (b) below, the Agent will not be liable 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.
(b) No Party (other than the Agent) may take any proceedings against any
officer, employee or agent of the Agent in respect of any claim it
might have against the Agent 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 may rely on
this Clause subject to Clause 1.4 (Third Party Rights) and the
provisions of the Third Parties Act.
(c) 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.
(d) 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
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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.
26.10 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 incurred by the Agent (otherwise than by reason of the Agent's
gross negligence or wilful misconduct) in acting as Agent under the Finance
Documents (unless the Agent has been reimbursed by an Obligor pursuant to a
Finance Document).
26.11 Resignation of the Agent
(a) 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
other Finance Parties and the Company.
(b) Alternatively the Agent may resign by giving notice to the other
Finance Parties and the Company, in which case the Majority Lenders
(after consultation with the Company) may appoint a successor Agent.
(c) If the Majority Lenders have not appointed a successor Agent in
accordance with paragraph (b) above within 30 days after notice of
resignation was given, the Agent (after consultation with the Company)
may appoint a successor Agent (acting through an office in the United
Kingdom).
(d) 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.
(e) The Agent's resignation notice shall only take effect upon the
appointment of a successor.
(f) 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 26.
Its 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.
(g) After consultation with the Company, the Majority Lenders may, by
notice to the Agent, require it to resign in accordance with paragraph
(b) above. In this event, the Agent shall resign in accordance with
paragraph (b) above.
26.12 Confidentiality
(a) In acting as agent for the Finance Parties the Agent shall be regarded
as acting through its agency division, or as appropriate, trustee
division which shall be treated as a separate entity from any other of
its divisions or departments.
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(b) 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.
26.13 Relationship with the Lenders
(a) The Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and acting through its Facility Office 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.
(b) 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).
(c) Each Secured Party shall supply the Agent with any information that
the Trustee may reasonably specify (through the Agent) as being
necessary or desirable to enable the Security Trustee to perform its
functions as security trustee. Each Lender shall deal with the
Security Trustee exclusively through the Agent and shall not deal
directly with the Security Trustee.
26.14 Credit appraisal by the Secured Parties
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Secured Party confirms to the Agent and the Arranger 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:
(a) the financial condition, status and nature of each member of the
Group;
(b) 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;
(c) 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;
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Agent, the
Security Trustee, 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
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(e) 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.
26.15 Reference Banks
If a Reference Bank (or, if a 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 Reference Bank.
26.16 Agent's Management Time
Any amount payable to the Agent under Clause 15.3 (Indemnity to the Agent),
Clause 17 (Costs and expenses) and Clause 26.10 (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 12 (Fees).
26.17 Deduction from amounts payable by the Agent
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.
26.18 Reference and Engagement Letters
Each Finance Party confirms each of the Arranger and the Agent has
authority to accept on its behalf the terms of any reliance letter or
engagement letters relating to any reports or letters provided by
accountants in connection with the Finance Documents or the transactions
contemplated in the Finance Documents (including any net asset letter in
connection with the financial assistance procedures) and to bind it in
respect of those 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.
27. ROLE OF SECURITY TRUSTEE
27.1 Trust
The Security Trustee declares that (to the extent permitted by the
applicable law) it shall execute and hold the Transaction Security on trust
for the Secured Parties on the terms contained in this Agreement. Each of
the parties to this Agreement agrees that the Security Trustee shall have
only those duties, obligations and responsibilities expressly specified in
this Agreement or in the Security Documents (and no others shall be
implied).
27.2 Parallel Debt (Covenant to pay the Security Trustee)
(a) Notwithstanding any other provision of this Agreement, each Obligor
hereby irrevocably and unconditionally undertakes to pay to the
Security Trustee, as creditor in its own right and not as
representative of the other Finance Parties, sums equal to and in the
currency of each amount payable by such Obligor to
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each of the Finance Parties under each of the Finance Documents as and
when that amount falls due for payment under the relevant Finance
Document or would have fallen due but for any discharge resulting from
failure of another Finance Party to take appropriate steps, in
insolvency proceedings affecting that Obligor, to preserve its
entitlement to be paid that amount.
(b) The Security Trustee shall have its own independent right to demand
payment of the amounts payable by each Obligor under this Clause 27.2
(Parallel Debt (Covenant to pay the Security Trustee)), irrespective
of any discharge of such Obligor's obligation to pay those amounts to
the other Finance Parties resulting from failure by them to take
appropriate steps, in insolvency proceedings affecting that Obligor,
to preserve their entitlement to be paid those amounts.
(c) Any amount due and payable by an Obligor to the Security Trustee under
this Clause 27.2 (Parallel Debt (Covenant to pay the Security
Trustee)) shall be decreased to the extent that the other Finance
Parties have received (and are able to retain) payment in full of the
corresponding amount under the other provisions of the Finance
Documents and any amount due and payable by an Obligor to the other
Finance Parties under those provisions shall be decreased to the
extent that the Trustee has received (and is able to retain) payment
in full of the corresponding amount under this Clause 27.2 (Parallel
Debt (Covenant to pay the Security Trustee)).
27.3 No Independent Power
The Secured Parties shall not have any independent power to enforce, or
have recourse to, any of the Transaction Security or to exercise any rights
or powers arising under the Security Documents except through the Security
Trustee.
27.4 Security Trustee's Instructions
The Security Trustee shall:
(a) unless a contrary indication appears in a Finance Document, act in
accordance with any instructions given to it by the Agent
countersigned by the Italian Lender acting in accordance with the
Credit Support Agreement and shall be entitled to assume that (i) any
instructions received by it from the Agent are duly given by or on
behalf of the Majority Lenders or, as the case may be, the Lenders in
accordance with the terms of the Finance Documents and (ii) unless it
has received actual notice of revocation that any instructions or
directions given by the Agent have not been revoked;
(b) be entitled to request instructions, or clarification of any
direction, from the Agent as to whether, and in what manner, it should
exercise or refrain from exercising any rights, powers and discretions
and the Security Trustee may refrain from acting unless and until
those instructions or clarification are received by it; and
(c) be entitled to, carry out all dealings with the Lenders through the
Agent and may give to the Agent any notice or other communication
required to be given by the Security Trustee to the Lenders.
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27.5 Security Trustee's Actions
Subject to the provisions of this Clause 27:
(a) the Security Trustee may, in the absence of any instructions to the
contrary, take such action in the exercise of any of its powers and
duties under the Finance Documents which in its absolute discretion it
considers to be for the protection and benefit of all the Secured
Parties; and
(b) at any time after receipt by the Security Trustee of notice from the
Agent countersigned by the Italian Lender directing the Security
Trustee to exercise all or any of its rights, remedies, powers or
discretions under any of the Finance Documents, the Security Trustee
may, and shall if so directed by the Agent, take any action as in its
sole discretion it thinks fit to enforce the Transaction Security.
27.6 Security Trustee's Discretions
The Security Trustee may assume (unless it has received actual notice to
the contrary in its capacity as trustee for the Secured Parties) that:
(a) no Default has occurred and no Obligor is in breach of or default
under its obligations under any of the Finance Documents; and
any right, power, authority or discretion vested in any person has not
been exercised;
(b) (if it receives any instructions or directions from the Agent
countersigned by the Italian Lender to take any action in relation to
the Transaction Security), assume that all applicable conditions under
the Finance Documents for taking that action have been satisfied;
(c) engage, pay for and rely on the advice or services of any lawyers,
accountants, surveyors or other experts (whether obtained by the
Trustee or by any other Secured Party), whose advice or services may
at any time seem necessary, expedient or desirable;
(d) rely upon any communication or document believed by it to be genuine
and, as to any matters of fact which might reasonably be expected to
be within the knowledge of a Secured Party or an Obligor, upon a
certificate signed by or on behalf of that person; and
(e) refrain from acting in accordance with the instructions of the Agent
or Lenders (including bringing any legal action or proceeding arising
out of or in connection with the Finance Documents) until it has
received any indemnification and/or security that it may in its
absolute discretion require (whether by way of payment in advance or
otherwise) for all costs, losses and liabilities which it may incur in
bringing such action or proceedings.
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27.7 Security Trustee's Obligations
The Security Trustee shall promptly inform the Agent of:
(a) the contents of any notice or document received by it in its capacity
as Trustee from any Obligor under any Finance Document; and
(b) the occurrence of any Default or any default by an Obligor in the due
performance of or compliance with its obligations under any Finance
Document of which the Security Trustee has received notice from any
other party to this Agreement.
27.8 Excluded Obligations
Notwithstanding anything to the contrary expressed or implied in the
Finance Documents, the Security Trustee shall not:
(a) be bound to enquire as to (i) whether or not any Default has occurred
or (ii) the performance, default or any breach by an Obligor of its
obligations under any of the Finance Documents;
(b) be bound to account to any other Party for any sum or the profit
element of any sum received by it for its own account;
(c) be bound to disclose to any other person (including but not limited to
any Secured Party) (i) any confidential information or (ii) any other
information if disclosure would, or might in its reasonable opinion,
constitute a breach of any law or be a breach of fiduciary duty;
(d) be under any obligations other than those which are specifically
provided for in the Finance Documents; or
(e) have or be deemed to have any duty, obligation or responsibility to,
or relationship of trust or agency with, any Obligor.
27.9 Exclusion of Security Trustee's liability
The Security Trustee shall not accept responsibility or be liable for:
(a) the adequacy and/or completeness of any information (whether oral or
written) supplied by the Security Trustee or any other person in or in
connection with any Finance Document or the Information Memorandum or
the transactions contemplated in the Finance Documents;
(b) 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;
(c) any losses to any person or any liability arising as a result of
taking or refraining from taking any action in relation to any of the
Finance Documents or the Transaction Security or otherwise, whether in
accordance with an instruction from the Agent countersigned by the
Italian Lender or otherwise, unless directly caused by its gross
negligence or wilful misconduct;
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(d) the exercise of, or the failure to exercise, any judgement, discretion
or power given to it by or in connection with any of the Finance
Documents, the Transaction Security or any other agreement,
arrangement or document entered into, made or executed in anticipation
of or in connection with the Finance Documents or the Transaction
Security; or
(e) any shortfall which arises on the enforcement of the Transaction
Security.
27.10 No proceedings
No Party (other than the Security Trustee) may take any proceedings against
any officer, employee or agent of the Security Trustee in respect of any
claim it might have against the Security Trustee or in respect of any act
or omission of any kind by that officer, employee or agent in relation to
any Finance Document or any Transaction Security and any officer, employee
or agent of the Security Trustee may rely on this Clause subject to Clause
1.4 (Third Party rights) and the provision of the Third Parties Act.
27.11 Own responsibility
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Secured Party confirms to the Security Trustee that it has been, and
will continue to be, solely responsible for making its own independent
appraisal and investigation on all risks arising under or in connection
with any Finance Document including but not limited to:
(a) the financial condition, status and nature of each member of the
Group;
(b) the legality, validity, effectiveness, adequacy and enforceability of
any Finance Document and the Transaction Security and any other
agreement, arrangements or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document or
the Transaction Security;
(c) 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; and
(d) 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.
27.12 No responsibility to perfect Transaction Security
The Security Trustee shall not be liable for any failure to:
(a) require the deposit with it of any deed or document certifying,
representing or constituting the title of any Obligor to any of the
Charged Property;
(b) obtain any licence, consent or other authority for the execution,
delivery, legality, validity, enforceability or admissibility in
evidence of any of the Finance Documents or the Transaction Security;
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(c) register, file or record or otherwise protect any of the Transaction
Security (or the priority of any of the Transaction Security) under
any applicable laws in any jurisdiction or to give notice to any
person of the execution of any of the Finance Documents or of the
Transaction Security;
(d) take, or to require any of the Obligors to take, any steps to perfect
its title to any of the Charged Property or to render the Transaction
Security effective or to secure the creation of any ancillary Security
under the laws of any jurisdiction; or
(e) require any further assurances in relation to any of the Security
Documents.
27.13 Insurance by Security Trustee
(a) The Security Trustee shall not be under any obligation to insure any
of the Charged Property, to require any other person to maintain any
insurance or to verify any obligation to arrange or maintain insurance
contained in the Finance Documents. The Security Trustee shall not be
responsible for any loss which may be suffered by any person as a
result of the lack of or inadequacy of any such insurance.
(b) Where the Security Trustee is named on any insurance policy as an
insured party, it shall not be responsible for any loss which may be
suffered by reason of, directly or indirectly, its failure to notify
the insurers of any material fact relating to the risk assumed by the
insurers or any other information of any kind, unless any Secured
Party has requested it to do so in writing and the Security Trustee
has failed to do so within fourteen days after receipt of that
request.
27.14 Custodians and Nominees
The Security Trustee may appoint and pay any person to act as a custodian
or nominee on any terms in relation to any assets of the trust as the
Security Trustee may determine, including for the purpose of depositing
with a custodian this Agreement or any document relating to the trust
created under this Agreement and the Security Trustee shall not be
responsible for any loss, liability, expense, demand, cost, claim or
proceedings incurred by reason of the misconduct, omission or default on
the part of any person appointed by it under this Agreement or be bound to
supervise the proceedings or acts of any person.
27.15 Acceptance of Title
The Security Trustee shall be entitled to accept without enquiry, and shall
not be obliged to investigate, the right and title as each of the Obligors
may have to any of the Charged Property and shall not be liable for or
bound to require any Obligor to remedy any defect in its right or title.
27.16 Refrain from Illegality
The Security Trustee may refrain from doing anything which in its opinion
will or may be contrary to any relevant law, directive or regulation of any
jurisdiction which would or might otherwise render it liable to any person,
and the Security Trustee may do anything which is, in its opinion,
necessary to comply with any law, directive or regulation.
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27.17 Business with the Obligors
The Security Trustee may accept deposits from, lend money to, and generally
engage in any kind of banking or other business with any of the Obligors.
27.18 Releases
Upon a disposal of any of the Charged Property:
(a) pursuant to the enforcement of the Transaction Security by a Receiver
or the Security Trustee; or
(b) if that disposal is permitted under the Finance Documents,
the Security Trustee shall (at the cost of the Obligors) release that
property from the Transaction Security or the Transaction Security given by
that Obligor and is authorised to execute, without the need for any further
authority from the Secured Parties, any release of the Transaction Security
or other claim over that asset or Obligor and to issue any certificates of
non-crystallisation of floating charges that may be required or desirable.
27.19 Winding up of Trust
If the Security Trustee, with the approval of the Majority Lenders,
determines that (a) all of the Secured Obligations and all other
obligations secured by any of the Security Documents have been fully and
finally discharged and (b) none of the Secured Parties is under any
commitment, obligation or liability (actual or contingent) to make advances
or provide other financial accommodation to any Obligor pursuant to the
Finance Documents, the trusts set out in this Agreement shall be wound up
and the Security Trustee shall release, without recourse or warranty, all
of the Transaction Security and the rights of the Trustee under each of the
Security Documents.
27.20 Perpetuity Period
The perpetuity period under the rule against perpetuities, if applicable to
this Agreement, shall be the period of eighty years from the date of this
Agreement.
27.21 Powers Supplemental
The rights, powers and discretions conferred upon the Security Trustee by
this Agreement shall be supplemental to the Trustee Acts 1925 and 2000 and
in addition to any which may be vested in the Security Trustee by general
law or otherwise.
27.22 Security Trustee division separate
(a) In acting as trustee for the Secured Parties, the Security Trustee
shall be regarded as acting through its agency or trustee division
which shall be treated as a separate entity from any other of its
divisions or departments.
(b) If information is received by another division or department of the
Security Trustee, it may be treated as confidential to that division
or department and the Security Trustee shall not be deemed to have
notice of it.
27.23 Lenders' indemnity to the Security Trustee
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
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their reduction to zero) indemnify the Security Trustee, within three
Business Days of demand, against any cost, loss or liability incurred by
the Security Trustee (otherwise than by reason of the Security Trustee's
gross negligence or wilful misconduct) in acting as Security Trustee under
the Finance Documents (unless the Security Trustee has been reimbursed by
an Obligor pursuant to a Finance Document).
27.24 Disapplication
Section 1 of the Trustee Act 2000 shall not apply to the duties of the
Security Trustee in relation to the trusts constituted by this Agreement.
Where there are any inconsistencies between the Trustee Acts 1925 and 2000
and the provisions of this Agreement, the provisions of this Agreement
shall, to the extent allowed by law, prevail and, in the case of any
inconsistency with the Trustee Act 2000, the provisions of this Agreement
shall constitute a restriction or exclusion for the purposes of that Act.
27.25 Resignation of Security Trustee
(a) Subject to Clause 27.25(h) below, the Security Trustee may resign and
appoint one of its Affiliates as successor by giving notice to the
Company and to the Agent on behalf of the Lenders .
(b) Alternatively, but subject to Clause 27.25(h) below, the Security
Trustee may resign by giving notice to the other Parties (or to the
Agent on behalf of the Lenders) in which case the Majority Lenders may
appoint a successor Security Trustee.
(c) If the Majority Lenders have not appointed a successor Security
Trustee in accordance with paragraph (b) above within 30 days after
the notice of resignation was given, the Security Trustee (after
consultation with the Agent) may appoint a successor Security Trustee
subject to Clause 27.25(h) below.
(d) The retiring Security Trustee shall, at its own cost, make available
to the successor Security Trustee such documents and records and
provide such assistance as the successor Security Trustee may
reasonably request for the purposes of performing its functions as
Security Trustee under the Finance Documents.
(e) The Security Trustee's resignation notice shall only take effect upon
(i) the appointment of a successor, (ii) the transfer of all of the
Transaction Security to that successor and (iii) the transfer of the
parallel debt provided for under Clause 27.2 (Parallel Debt (Covenant
to pay the Security Trustee)).
(f) Upon the appointment of a successor, the retiring Security Trustee
shall be discharged from any further obligation in respect of the
Finance Documents but shall remain entitled to the benefit of Clauses
26 (The Role of the Agent and the Arranger) and 27 (Role of Security
Trustee). Its 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.
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(g) The Majority Lenders may, by notice to the Security Trustee, require
it to resign in accordance with paragraph (b) above. In this event,
the Security Trustee shall resign in accordance with paragraph (b)
above.
(h) No appointment of a replacement or successor Security Trustee shall be
effective unless such person being appointed is or will be upon its
appointment, the same entity as the Non-Italian Security Holder (as
defined in the Credit Support Agreement).
27.26 Delegation
(a) The Security Trustee may, at any time, delegate by power of attorney
or otherwise to any person for any period, all or any of the rights,
powers and discretions vested in it by any of the Finance Documents.
(b) The delegation may be made upon any terms and conditions (including
the power to sub-delegate) and subject to any restrictions as the
Security Trustee may think fit in the interests of the Secured Parties
and it shall not be bound to supervise, or be in any way responsible
for any loss incurred by reason of any misconduct or default on the
part of any delegate or sub-delegate.
27.27 Additional Security Trustees
(a) The Security Trustee may at any time appoint (and subsequently remove)
any person to act as a separate trustee or as a co-trustee jointly
with it (i) if it considers that appointment to be in the interests of
the Secured Parties or (ii) for the purposes of conforming to any
legal requirements, restrictions or conditions which the Security
Trustee deems to be relevant or (iii) for obtaining or enforcing any
judgment in any jurisdiction, and the Security Trustee shall give
prior notice to the Borrower and the Agent of that appointment.
(b) Any person so appointed shall have the rights, powers and discretions
(not exceeding those conferred on the Security Trustee by this
Agreement) and the duties and obligations that are conferred or
imposed by the instrument of appointment.
(c) The remuneration that the Security Trustee may pay to any person, and
any costs and expenses incurred by that person in performing its
functions pursuant to that appointment shall, for the purposes of this
Agreement, be treated as costs and expenses incurred by the Security
Trustee.
28. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its affairs
(tax or otherwise) in whatever manner it thinks fit;
(b) 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
(c) oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.
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29. SHARING AMONG THE FINANCE PARTIES
29.1 Payments to Finance Parties
If a Finance Party (a "Recovering Finance Party") receives or recovers any
amount from an Obligor other than in accordance with Clause 30 (Payment
mechanics) or Clause 32 (Application of Proceeds) and applies that amount
to a payment due under the Finance Documents 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 30 (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 30.5
(Partial payments).
29.2 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) in accordance with Clause 30.5 (Partial
payments).
29.3 Recovering Finance Party's rights
(a) On a distribution by the Agent under Clause 29.2 (Redistribution of
payments), the Recovering Finance Party will be subrogated to the
rights of the Finance Parties which have shared in the redistribution.
(b) If and to the extent that the Recovering Finance Party is not able to
rely on its rights under paragraph (a) above, the relevant Obligor
shall be liable to the Recovering Finance Party for a debt equal to
the Sharing Payment which is immediately due and payable.
29.4 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:
(a) each Finance Party which has received a share of the relevant Sharing
Payment pursuant to Clause 29.2 (Redistribution of payments) shall,
upon request of the Agent, pay to the Agent for 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); and
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(b) that Recovering Finance Party's rights of subrogation in respect of
any reimbursement shall be cancelled and the relevant Obligor will be
liable to the reimbursing Finance Party for the amount so reimbursed.
29.5 Exceptions
(a) This Clause 29 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.
(b) 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:
(i) it notified that other Finance Party of the legal or arbitration
proceedings; and
(ii) that 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.
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SECTION 11
ADMINISTRATION
30. PAYMENT MECHANICS
30.1 Payments to the Agent
(a) On each date on which an Obligor or a Lender is required to make a
payment under a Finance 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.
(b) 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.
30.2 Distributions by the Agent
Each payment received by the Agent under the Finance Documents for another
Party shall, subject to Clause 30.3 (Distributions to an Obligor), Clause
30.4 (Clawback) and Clause 26.17 (Deduction from amounts payable by the
Agent) 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).
30.3 Distributions to an Obligor
The Agent may (with the consent of the Obligor or in accordance with Clause
31 (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.
30.4 Clawback
(a) 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.
(b) 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.
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30.5 Partial payments
(a) If the Agent receives a payment that is insufficient to discharge all
the amounts then due and payable by an Obligor under the Finance
Documents, the Agent shall apply that payment towards the obligations
of that Obligor under the Finance Documents in the following order:
(i) first, in or towards payment pro rata of any unpaid fees, costs
and expenses of the Agent and, the Security Trustee (including of
any Receiver or Delegate) and the Arranger under the Finance
Documents (including without limitation sums incurred in
connection with the realisation or enforcement of all or any part
of the Transaction Security);
(ii) secondly, in or towards payment pro rata of any accrued interest,
fee or commission due but unpaid under this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal due but
unpaid under this Agreement; and
(iv) fourthly, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.
(b) The Agent shall, if so directed by the Majority Lenders, vary the
order set out in paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by
an Obligor.
30.6 No 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.
30.7 Business Days
(a) 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).
(b) 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.
30.8 Currency of account
(a) Subject to paragraphs (b) to (e) below, the Base Currency is the
currency of account and payment for any sum due from an Obligor under
any Finance Document.
(b) A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum
shall be made in the currency in which that Loan or Unpaid Sum is
denominated on its due date.
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(c) 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.
(d) Each payment in respect of costs, expenses or Taxes shall be made in
the currency in which the costs, expenses or Taxes are incurred.
(e) Any amount expressed to be payable in a currency other than the Base
Currency shall be paid in that other currency.
30.9 Change of currency
(a) 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:
(i) 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
(ii) 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).
(b) 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.
31. SET-OFF
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.
32. APPLICATION OF PROCEEDS
32.1 Order of Application
Unless otherwise instructed by all of the Lenders, all moneys from time to
time received or recovered by the Security Trustee in connection with the
realisation or enforcement of all or any part of the Transaction Security
shall be held by the Security Trustee on trust and shall be applied in
accordance with the terms of the Credit Support Agreement.
32.2 Investment of Proceeds
Prior to the application of the proceeds of the Transaction Security in
accordance with Clause 32.1 (Order of Application) the Security Trustee
may, at its discretion, hold all or
88
part of those proceeds in an interest bearing suspense or impersonal
account(s) in the name of the Security Trustee or Agent with any financial
institution (including itself) and for so long as the Security Trustee
thinks fit (the interest being credited to the relevant account) pending
the application from time to time of those monies at the Security Trustee's
discretion in accordance with the provisions of this Clause 32.
32.3 Currency Conversion
(a) For the purpose of or pending the discharge of any of the Secured
Obligations the Security Trustee may convert any moneys received or
recovered by the Security Trustee from one currency to another, at the
spot rate at which the Security Trustee is able to purchase the
currency in which the Secured Obligations are due with the amount
received.
(b) The obligations of any Obligor to pay in the due currency shall only
be satisfied to the extent of the amount of the due currency purchased
after deducting the costs of conversion.
32.4 Permitted Deductions
The Security Trustee shall be entitled (a) to set aside by way of reserve
amounts required to meet and (b) to make and pay, any deductions and
withholdings (on account of Tax or otherwise) which it is or may be
required by any applicable law to make from any distribution or payment
made by it under this Agreement, and to pay all Tax which may be assessed
against it in respect of any of the Charged Property, or as a consequence
of performing its duties, or by virtue of its capacity as Trustee under any
of the Finance Documents or otherwise (except in connection with its
remuneration for performing its duties under this Agreement).
32.5 Discharge of Secured Obligations
(a) Any payment to be made in respect of the Secured Obligations by the
Security Trustee may be made to the Agent on behalf of the Lenders and
that payment shall be a good discharge to the extent of that payment,
to the Security Trustee.
(b) The Security Trustee is under no obligation to make payment to the
Agent in the same currency as that in which any Unpaid Sum is
denominated.
32.6 Sums received by Obligors
If any of the Obligors receives any sum, which, pursuant to any of the
Finance Documents, should have been paid to the Security Trustee, that sum
shall promptly be paid to the Security Trustee for application in
accordance with this Clause.
33. NOTICES
33.1 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.
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33.2 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:
(a) in the case of the Company, that identified with its name below;
(b) in the case of each Lender or any other Original Obligor, that
notified in writing to the Agent on or prior to the date on which it
becomes a Party; and
(c) in the case of the Agent and Security Trustee, that identified with
its name below,
or any substitute address or 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.
33.3 Delivery
(a) Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will only be
effective:
(i) if by way of fax, when received in legible form; or
(ii) 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 33.2 (Addresses), if addressed
to that department or officer.
(b) Any communication or document to be made or delivered to the Agent or
to the Security Trustee will be effective only when actually received
by the Agent or the Security Trustee and then only if it is expressly
marked for the attention of the department or officer identified with
the Agent's or the Security Trustee's signature below (or any
substitute department or officer as the Agent shall specify for this
purpose).
(c) All notices from or to an Obligor shall be sent through the Agent.
(d) Any communication or document made or delivered to the Company in
accordance with this Clause will be deemed to have been made or
delivered to each of the Obligors.
(e) All notices to a Lender from the Security Trustee shall be sent
through the Agent.
33.4 Notification of address and fax number
Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to Clause 33.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the other
Parties.
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33.5 Electronic communication
(a) Any communication to be made between the Agent or the Security Trustee
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
Trustee and the relevant Lender:
(i) agree that, unless and until notified to the contrary, this is to
be an accepted form of communication;
(ii) 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
(iii) notify each other of any change to their address or any other
such information supplied by them.
(b) Any electronic communication made between the Agent and a Lender or
the Security Trustee 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 Trustee only if it is addressed
in such a manner as the Agent or Security Trustee shall specify for
this purpose.
33.6 English language
(a) Any notice given under or in connection with any Finance Document must
be in English.
(b) All other documents provided under or in connection with any Finance
Document must be:
(i) in English; or
(ii) 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.
34. CALCULATIONS AND CERTIFICATES
34.1 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 are prima facie evidence of the matters to
which they relate.
34.2 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.
34.3 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
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of 360 days or, in any case where the practice in the Relevant Interbank
Market differs, in accordance with that market practice.
35. 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.
36. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Secured Party or the Arranger, 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.
37. AMENDMENTS AND WAIVERS
37.1 Required consents
(a) Subject to Clause 37.2 (Exceptions) and Clause 27.18 (Releases) any
term of the Finance Documents may be amended or waived only with the
consent of the Majority Lenders and the Obligors and any such
amendment or waiver will be binding on all Parties.
(b) The Agent, or in respect of the Security Documents the Security
Trustee, may effect, on behalf of any Finance Party, any amendment or
waiver permitted by this Clause.
37.2 Exceptions
(a) An amendment or waiver that has the effect of changing or which
relates to:
(i) the definition of "Majority Lenders" in Clause 1.1 (Definitions);
(ii) an extension to the date of payment of any amount under the
Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fees or commission payable;
(iv) an increase in or an extension of any Commitment;
(v) a change to the Borrowers or Guarantors other than in accordance
with Clause 25 (Changes to the Obligors);
(vi) any provision which expressly requires the consent of all the
Lenders;
(vii) Clause 2.2 (Finance Parties' rights and obligations), Clause 24
(Changes to the Lenders) or this Clause 37;
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(viii) the release of Transaction Security or guarantee unless
permitted under the Finance Documents;
(ix) any material change to a Security Document; or
(x) the nature or scope of the Charged Property or the manner in
which the proceeds of enforcement of the Transaction Security are
distributed;
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of
the Agent, the Security Trustee or the Arranger may not be effected
without the consent of the Agent, the Security Trustee or the
Arranger.
38. 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.
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SECTION 12
GOVERNING LAW AND ENFORCEMENT
39. GOVERNING LAW
This Agreement is governed by English law.
40. ENFORCEMENT
40.1 Jurisdiction of English courts
(a) The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including
a dispute regarding the existence, validity or termination of this
Agreement) (a "Dispute").
(b) 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.
(c) This Clause 40.1 is for the benefit of the Finance Parties only. As a
result, no Finance 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 may take concurrent
proceedings in any number of jurisdictions.
40.2 Service of process
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 Orient-Express Services Limited as its agent for
service of process in relation to any proceedings before the English
courts in connection with any Finance Document; 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.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
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SCHEDULE 1
THE ORIGINAL PARTIES
Part I
The Original Obligors
Name of Original Borrower Registration number (or Relevant Jurisdiction
equivalent, if any)
1. Orient-Express Hotels Ltd. EC13215 Bermuda
2. Orient-Express Luxembourg B.95.988 Luxembourg
Holdings Sarl
3. Blanc Restaurants Limited 01728000 England and Wales
Name of Original Guarantor Registration number (or Relevant Jurisdiction
equivalent, if any)
1. Orient-Express Hotels Ltd. EC13215 Bermuda
2. Orient-Express Luxembourg B.95.988 Luxembourg
Holdings Sarl
3. Blanc Restaurants Limited 01728000 England and Wales
4. Island Hotel (Madeira) Limited 00328212 England and Wales
5. Reid's Hoteis Lda 5272 Portugal
6. Hotelapa Investimento 65864 Portugal
Hoteleiro, S.A.
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Part II
The Original Lenders
Name of Original Lender Commitment
Barclays Bank PLC (euro)13,200,000
Allied Irish Banks p.l.c. (euro) 7,800,000
Banca Nazionale Del Lavoro S.p.A, London Branch (euro) 7,800,000
Calyon (euro) 7,800,000
Lloyds TSB Bank plc (euro) 7,800,000
Oversea-Chinese Banking Corporation Limited (euro) 7,800,000
The Royal Bank of Scotland plc (euro) 7,800,000
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SCHEDULE 2
CONDITIONS PRECEDENT
Part I
Conditions precedent to initial Utilisation
1. Original Obligors: Corporate Documents
(a) A copy of the constitutional documents (including a certificate of
good standing, or similar, from the Registrar of Companies, if
applicable) of each Original Obligor.
(b) A copy of a resolution of the board of directors (or of the
shareholders or quotaholders, if applicable) of each Original Obligor:
(i) approving the terms of, and the transactions contemplated by, the
Finance Documents to which it is a party and resolving that it
execute the Finance Documents to which it is a party;
(ii) authorising a specified person or persons to execute the Finance
Documents to which it is a party on its behalf; and
(iii) 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.
(c) A specimen of the signature of each person authorised by the
resolution referred to in paragraph (b) above.
(d) As required by the constitutional documents of each Original Guarantor
and/or as required by the laws of the jurisdiction of incorporation of
that Original Guarantor, a copy of a resolution signed by all the
holders of the issued shares or quotas in each Original Guarantor
(other than the Company and Luxembourg Holdco), approving the terms
of, and the transactions contemplated by, the Finance Documents to
which the Original Guarantor is a party.
(e) A certificate of the Company (signed by a director or officer)
confirming that borrowing or guaranteeing, as appropriate, the Total
Commitments would not cause any borrowing, guaranteeing or similar
limit binding on any Original Obligor to be exceeded.
(f) A certificate of an authorised signatory of the relevant Original
Obligor, certifying that each copy document relating to it specified
in Part I of this Schedule 2 is correct, complete and in full force
and effect as at a date no earlier than the date of this Agreement.
(g) Evidence that all consents and authorisations (including corporate,
regulatory, shareholder and quotaholder consent) required by an
Obligor in connection with the Finance Documents have been obtained.
97
(h) The Group Structure Chart certified by the Company as being true at
the date of this Agreement.
(i) Where a Finance Document is signed by a person on behalf of an
Original Obligor other than a director of that Original Obligor, a
copy of a power of attorney by each Original Obligor:
(i) appointing a specified person or persons to execute the Finance
Documents to which it is a party on its behalf; and
(ii) appointing 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.
2. Finance Documents and Security Documents
Confirmation from the Agent that it has received:
(a) the Finance Documents duly executed by the parties thereto;
(b) all title deeds and/or equivalent local documents relating to each
Hotel; and
(c) an undertaking from the Company's legal counsel to pay all appropriate
registration dues for registering the Security in the appropriate land
register or confirmation from the Company that the Agent may retain
from the proceeds of the first Loan made under this Agreement an
amount equal to the same;
together with all documents required under the Security Documents to be
delivered with them and evidence that the perfection formalities relating
to the Security Documents have been satisfied.
3. The Hotels
In relation to each Hotel located in England and Wales:
(a) The results of Land Registry (or any other relevant property or
commercial registers) searches in favour of the Security Trustee on
the appropriate forms against all of the registered titles comprising
the Hotels and in the case of Le Manoir, not giving less than ten
Business Days' priority beyond the date that Le Manoir became subject
to the terms of the relevant Finance Documents and showing no adverse
entries.
(b) An undertaking from the Company's legal counsel to use reasonable
endeavours to satisfy any requisitions raised by the Land Registry or
any other relevant property or commercial registry, without delay in
connection with the application to register: the Security created in
respect of each Hotel under the Finance Documents (including the
applications to enter on the proprietorship register of Le Manoir the
restriction against dealings and the obligation to make further
advances);
98
(c) Appropriate land registry application forms duly completed (including
Form RX1 and CH2) and accompanied by the necessary stamp duty land tax
certificates, land registry fees (including any related fees) and
funds for applicable stamp duty.
(d) Notice of charge relating to each Hotel signed on behalf of the
relevant Original Obligor including a request to the recipient of the
notice, that it be returned to Clifford Chance LLP as counsel to the
Agent, and if a relevant registration fee is required by the
appropriate recipient then a cheque for such amount is to be provided
within a reasonable time.
(e) All deeds, documents and ancillary papers relating to the Hotels
including counterpart leases, licences and any other deeds or
documents necessary or desirable to assist the Lender to enforce the
Transaction Security.
In relation to each Hotel located in Portugal:
(a) An opinion from the solicitors to the Guarantors registered in
Portugal certifying title and ownership of the Hotels located in
Portugal.
(b) Land Registry and Tax Registry (or any other relevant property or
commercial registers) certificates in respect of all the registered
titles comprising Lapa Palace and Reid's Palace, showing no adverse
entries.
(c) Appropriate provisional mortgage registration filings filed up to the
date hereof in respect of all of the registered titles comprising Lapa
Palace and Reid's Palace in favour of the Security Trustee.
(d) An undertaking from the Company's legal counsel to use reasonable
endeavours to satisfy any requisitions raised by the Land Registry or
any other relevant property or commercial registry, without delay in
connection with the application to register the Security created in
respect of each Hotel under the Finance Documents;
(e) Appropriate Land Registry application forms duly completed in a proper
form to enable the registration of the mortgages over all the
registered titles comprising Lapa Palace and Reid's Palace and
accompanied by the necessary documentation, land registry fees
(including any related fees) and funds for applicable stamp duty.
(f) All deeds, documents and ancillary papers relating to the Hotels
including counterpart leases, licences, and any other deeds or
documents necessary or desirable to assist the Security Trustee to
enforce the Transaction Security.
In relation to each Hotel located in Italy, a report from an Italian notary
appointed by the Lender certifying title and ownership of the Hotels
located in Italy.
99
4. Legal Opinions
(a) A legal opinion of Clifford Chance LLP legal advisers to the Arranger
and the Agent in England, substantially in the form distributed to the
Original Lenders prior to signing this Agreement.
(b) If (i) an Original Obligor is incorporated in a jurisdiction other
than England and Wales, or (ii) any asset which is purported to be
subject to the Transaction Security is located or subject to the laws
of a jurisdiction other than England and Wales, a legal opinion of the
legal advisers to the Arranger and the Agent in the Relevant
Jurisdiction, substantially in the form distributed to the Original
Lenders prior to signing this Agreement.
5. Shares
(a) A copy of the register of members (or equivalent document for any
Relevant Jurisdictions) of each member of the European Group, whose
shares or quotas are subject to or expressed to be subject to the
Transaction Security.
(b) Evidence that the entire issued share capital or quotas of:
(i) Byblos Srl has been transferred to Orient Express Hotels Italia
Srl;
(ii) Blanc Restaurants Limited has been transferred to Luxembourg
Holdco;
(iii) Hotelapa Investimento Hoteleiro S.A. has been transferred to
Luxembourg Holdco;
(iv) Reid's Hoteis Lda has been transferred to Luxembourg Holdco,
and confirmation that all necessary company law requirements in
connection with such transfers have been met.
(c) All share certificates, share registries, blank signed pre-stamped
stock transfer forms (if required or convenient in the relevant
jurisdiction) and all notices required by the Security Documents.
6. Insurance
A letter from the Company's insurance broker addressed to the Agent,
Arranger, the Security Trustee and the Lenders confirming that:
(i) the insurance for the European Group at the date of this
Agreement is at the level acceptable to the Majority Lenders for
the business carried out by the European Group;
(ii) the insurance arrangement comply with the requirements of the
Finance Documents; and
(iii) all premiums due and payable by the Obligors in respect of the
insurance arrangements have been paid.
100
7. Financials
(a) A copy of detailed profit projections and cash flows forecasts for the
Hotels for three years from the Utilisation Date, in a format agreed
by the Lenders and/or the Arranger and confirmed as reasonable by the
Valuer.
(b) The Original Financial Statements.
(c) The historic financial statements of the Company and Luxembourg
Holdco, including, for the Company the audited financial statements
for the year ending 31 December 2004.
(d) The Business Plan for the current operating year.
(e) A pro-forma reporting format for the management accounts which are
required to be delivered pursuant to Clause 20.1(c) (Financial
Statements) of the Facility Agreement.
8. Hotel due diligence
(a) The Initial Valuation evidencing a gross aggregate value of the Hotels
and the Italian Hotels of not less than (euro)390,785,500.
(b) A Report on Title for (or any equivalent for any Relevant
Jurisdiction) each Hotel together with confirmation that all licences
and consents required by the Obligors in connection with the business
carried out on the Hotels have been obtained and are in full force and
effect as at the date of this Agreement.
9. Release documents
(a) An effective discharge of all Security (other than the Permitted
Security subsisting at the date of this Agreement) affecting the
Hotels and Obligors (if any) or an undertaking regarding the release
of such Security by the Company's English legal counsel. In the case
of Security created under Portuguese law, release documents issued by
the respective beneficiary in due form for the filing of the
appropriate registrations to cancel all Security and any powers or
attorney created in respect of said Security (to be delivered to the
Security Trustee) and, where no registrations are required, to
appropriate release and cancel all such Security.
(b) A certified copy of the cancellation notice for each of the Existing
Facilities evidencing that the Existing Facilities have been repaid
and cancelled in full.
10. Fees
Evidence that the fees, costs and expenses then due from the Borrower
pursuant to Clause 12 (Fees), Clause 17 (Costs and Expenses) and Clause
13.5 (Stamp Taxes) have been paid or will be paid on the earlier of the
date five Business Days after the date of this Agreement or the first
Utilisation Date.
11. Other
101
(a) Evidence that any process agent referred to in Clause 40.2 (Service of
process) has accepted its appointment.
(b) Confirmation from the Italian Lender that each of the conditions
precedent under the Italian Facility Agreement have either been
satisfied or waived by the Italian Lender.
(c) 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 or enforceability of any Finance Document
or of the Transaction Security.
102
Part II
Conditions Precedent required to be
delivered by an Additional Obligor
1. An Accession Letter, duly 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:
(a) approving the terms of, and the transactions contemplated by, the
Accession Letter and the Finance Documents and resolving that it
execute the Accession Letter and any other Finance Document to which
it is a party;
(b) authorising a specified person or persons to execute the Accession
Letter and other Finance Documents on its behalf;
(c) 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, 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
(d) authorising the Company to act as its agent in connection with the
Finance Documents.
4. A specimen of the signature of each person authorised by the resolution
referred to in paragraph 3 above.
5. A copy of a resolution signed by all the holders of the issued shares or
quotas of the Additional Guarantor, approving the terms of, and the
transactions contemplated by, the Finance Documents to which the Additional
Guarantor is a party.
6. A certificate of the Additional Obligor (signed by a director) confirming
that borrowing or guaranteeing, as appropriate, the Total Commitments would
not cause any borrowing, guaranteeing or similar limit binding on it to be
exceeded.
7. A certificate of an authorised signatory of the Additional Obligor
certifying that each copy document listed in this Part II of Schedule 2 is
correct, complete and in full force and effect as at a date no earlier than
the date of the Accession Letter.
8. If available, the latest audited financial statements of the Additional
Obligor.
9. Each Security Document which the Agent may require to be given by that
Additional Obligor, duly executed by that Additional Obligor and, if
required, the Trustee.
10. Any notices or documents required to be given or executed or made under the
terms of the Security Documents entered into by the Additional Obligor.
11. A copy of any other Authorisation 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 Letter and each Finance
103
Document to which the Additional Obligor is a party or for the validity and
enforceability of any Finance Document or of any Transaction Security
created or intended to be created by the Additional Obligor.
12. A legal opinion of Clifford Chance LLP, legal advisers to the Arranger and
the Agent in England.
13. If the Additional Obligor is incorporated in a jurisdiction other than
England and Wales, a legal opinion of the legal advisers to the Arranger
and the Agent in the jurisdiction in which the Additional Obligor is
incorporated.
14. If the proposed Additional Obligor is incorporated in a jurisdiction other
than England and Wales, evidence that the agent for service of process
specified in Clause 40.2 (Service of process), if not an Obligor, has
accepted its appointment in relation to the proposed Additional Obligor.
15. Either (a) a letter from the Company to the Agent (attaching supporting
advice from the Company's English solicitors) confirming that no Additional
Obligor is prohibited by Section 151 of the Companies Act 1985 from
entering into the Finance Documents and/or (b) evidence that the Additional
Obligors have done all that is necessary (including, without limitation, by
re-registering as a private company) to follow the procedures set out in
Sections 155 to 158 of the Companies Act 1985 in order to enable each
Additional Obligor to enter into the Finance Documents and perform its
obligations under the Finance Documents.
104
SCHEDULE 3
REQUESTS
Utilisation Request
From: [Borrower]
To: Barclays Bank PLC
Dated:
Dear Sirs
Orient-Express Hotels Ltd. - [(euro) ] Facility Agreement
dated [ ] (the "Agreement")
1. We refer to the Agreement. This is an Utilisation Request. Terms defined in
the 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:
Proposed Utilisation Date: [ ](or, if that is not a Business
Day, the next Business Day)
Currency of Loan: [Euro/USD/Sterling]
Amount: [ ] or, if less, the Available
Facility
Interest Period: [1,2, or 3 months]
3. We confirm that each condition specified in Clause 4.2 (Further conditions
precedent) is satisfied on the date of this Utilisation Request.
4. We confirm that the [Initial Valuation/ the last Valuation delivered to
you*] evidences an aggregate value of the Hotels and Italian Hotels of not
less than (euro)390,785,500.
5. We confirm that the proposed Loan, when aggregated with the Loans and the
Italian Loans outstanding on the date that the proposed Loan will be made
is not more than 70 per cent. of the gross market value of the Hotels
(excluding Hotel de la Cite) and Italian Hotels as detailed in the
Valuation delivered to the Agent.
6. The proceeds of this Loan should be credited to [account].
7. This Utilisation Request is irrevocable.
Yours faithfully
........................
authorised signatory for
[name of relevant Borrower]
* delete as appropriate
105
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:
AB + C(B - D) + E x 0.01 per cent. per annum
------------------------
100 - (A + C)
(b) in relation to a Loan in any currency other than sterling:
E x 0.01 per cent. per annum.
--------
300
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 paragraph (a) of Clause 9.3 (Default
interest)) payable for the relevant Interest Period on the Loan.
106
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 Reference Banks to the Agent
pursuant to paragraph 7 below and expressed in pounds per
(pound)1,000,000.
5. For the purposes of this Schedule:
(a) "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;
(b) "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;
(c) "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); and
(d) "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 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 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 Reference Bank as being the average of the Fee Tariffs
applicable to that Reference Bank for that financial year) and expressed in
pounds per (pound)1,000,000 of the Tariff Base of that 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.
107
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 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 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
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.
108
SCHEDULE 5
FORM OF TRANSFER CERTIFICATE
To: Barclays Bank PLC as Agent
From: [The Existing Lender] (the "Existing Lender") and [The New Lender]
(the "New Lender")
Dated:
Orient-Express Hotels Ltd. - [(euro) ] Facility Agreement
dated [ ] (the "Agreement")
1. We refer to the Agreement. This is a Transfer Certificate. Terms defined in
the Agreement have the same meaning in this Transfer Certificate unless
given a different meaning in this Transfer Certificate.
2. We refer to Clause 24.5 (Procedure for transfer):
(a) 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 24.5 (Procedure for transfer).
(b) The proposed Transfer Date is [ ].
(c) The Facility Office and address, fax number and attention details for
notices of the New Lender for the purposes of Clause 33.2 (Addresses)
are set out in the Schedule.
3. The New Lender expressly acknowledges the limitations on the Existing
Lender's obligations set out in paragraph (c) of Clause 24.4 (Limitation of
responsibility of Existing Lenders).
4. [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:
(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
(for the purposes of section 11(2) of the Taxes Act) the whole of
any share of interest payable in respect of that advance that
falls to it by reason of sections 114 and 115 of the Taxes Act;
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
109
account interest payable in respect of that advance in computing the
chargeable profits (for the purposes of section 11(2) of the Taxes
Act) of that company.]
[4/5]. This Transfer Certificate 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 Transfer Certificate.
[5/6]. This Transfer Certificate is governed by English law.
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 Transfer Certificate is accepted by the Agent and the Transfer Date
is confirmed as [ ].
[Agent]
By:
110
SCHEDULE 6
FORM OF ACCESSION LETTER
To: Barclays Bank PLC as Agent
From: [Subsidiary] and Orient-Express Hotels Ltd
Dated:
Dear Sirs
Orient-Express Hotels Ltd. - [(euro) ] Facility Agreement
dated [ ] (the "Agreement")
1. We refer to the Agreement. This is an Accession Letter. Terms defined in
the Agreement have the same meaning in this Accession Letter unless given a
different meaning in this Accession Letter.
2. [Subsidiary] agrees to become an Additional [Borrower]/[Guarantor] and to
be bound by the terms of the Agreement as an Additional
[Borrower]/[Guarantor] pursuant to Clause [25.2 (Additional
Borrowers)]/[Clause 25.3 (Additional Guarantors)] of the Agreement.
[Subsidiary] is a company duly incorporated under the laws of [name of
relevant jurisdiction].
3. [Subsidiary's] administrative details are as follows:
Address:
Fax No:
Attention:
4. This Accession Letter is governed by English law.
[This Guarantor Accession Letter is entered into by a deed.]
Orient-Express Hotels Ltd [Subsidiary]
111
SCHEDULE 7
FORM OF COMPLIANCE CERTIFICATE
To: Barclays Bank PLC as Agent
From: Orient-Express Hotels Ltd
Dated:
Dear Sirs
Orient-Express Hotels Ltd. - [(euro) ] Facility Agreement
dated [ ] (the "Agreement")
1. We refer to the Agreement. This is a Compliance Certificate. Terms defined
in the 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 financial covenants and whether the Borrower is in
compliance with those covenants]
3. [We confirm that no Default is continuing.]*
Signed: .............................. ..............................
Director Director
of of
[Borrower/Guarantor] [Borrower/Guarantor]
- --------------------------------------------------------------------------------
* 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.
112
SCHEDULE 8
TIMETABLES
Loans in euro Loans in domestic Loans in other
sterling currencies
Agent notifies the Company if a currency is - - U-4
approved as an Optional Currency in accordance
with Clause 4.3 (Conditions relating to
Optional Currencies)
Delivery of a duly completed Utilisation U-3 U-1 U-3
Request (Clause 5.1 (Delivery of a
Utilisation Request) 9.30am 9.30am 9.30am
Agent determines (in relation to a U-3 U-1 U-3
Utilisation) the Base Currency Amount of the
Loan, if required under Clause 5.4 (Lenders' Noon Noon Noon
participation)
Agent notifies the Lenders of the Loan in U-3 U-1 U-3
accordance with Clause 5.4 (Lenders'
participation) 3.00pm 3.00pm 3.00pm
Agent receives a notification from a Lender U-3 - U-3
under Clause 6.2 (Unavailability of a currency) 4.30pm 4.30pm
Agent gives notice in accordance with Clause U-2 - U-2
6.2 (Unavailability of a currency) 9.30am 9.30am
Agent determines amount of the Loan in U-2 - U-2
Optional Currency in accordance with Clause
30.9 (Change of currency) 10.00am 10.00am
LIBOR or EURIBOR is fixed Quotation Day as Quotation Day as of Quotation Day as of
of 11.00 a.m. 11:00 a.m. 11:00 a.m.
Brussels time in
respect of EURIBOR
"U" = date of utilisation
"U - X" = X Business Days prior to date of utilisation
113
SCHEDULE 9
ALLOCATED DEBT AMOUNT
--------------------------------------- ---------------------------------
HOTEL ALLOCATED DEBT AMOUNT
--------------------------------------- ---------------------------------
Hotel Cipriani, Italy (euro)76,662,720.00
--------------------------------------- ---------------------------------
Villa San Michele, Italy (euro)30,366,675.00
--------------------------------------- ---------------------------------
Hotel Splendido, Italy (euro)49,402,645.00
--------------------------------------- ---------------------------------
Hotel Caruso, Italy (euro)33,567,960.00
--------------------------------------- ---------------------------------
Reid's Palace, Madeira (euro)29,600,300.00
--------------------------------------- ---------------------------------
Lapa Palace, Portugal (euro)11,258,148.00
--------------------------------------- ---------------------------------
Hotel de la Cite, France (euro) 5,609,006.00
--------------------------------------- ---------------------------------
Le Manoir aux Quat' Saisons, England (euro)13,532,546.00
--------------------------------------- ---------------------------------
114
SCHEDULE 10
SECURITY DOCUMENTS
- -------- ------------------------------ ----------------------- ------------------------------------------------
Company Country Nature of Security
- -------- ------------------------------ ----------------------- ------------------------------------------------
1. Orient-Express Hotels Ltd. Bermuda Luxembourg law pledge over shares in
Orient-Express Luxembourg Holdings Sarl.
- -------- ------------------------------ ----------------------- ------------------------------------------------
2. Orient-Express Luxembourg Luxembourg English law charge over shares in Blanc
Holdings Sarl Restaurants Limited
------------------------------------------------
Italian law pledge over shares in
Orient-Express Hotels Italia Srl
------------------------------------------------
Portuguese law pledge over shares in
Hotelapa Investimento Hoteleiro, S.A.
------------------------------------------------
Portuguese law pledge over quotas in Reids
Hoteis Lda
- -------- ------------------------------ ----------------------- ------------------------------------------------
3. Hotelapa Investimento Portugal Portuguese law mortgage over the Lapa
Hoteleiro, S.A. Palace hotel
------------------------------------------------
Portuguese law asset pledge agreement over
local insurances, stock, moveables
and business related receivables and Portuguese
and Community Trademarks (or other applicable
intellectual property rights)
- -------- ------------------------------ ----------------------- ------------------------------------------------
4. Reids Hoteis Lda Portugal English law charge over shares in Island Hotel
(Madeira) Limited
- -------- ------------------------------ ----------------------- ------------------------------------------------
5. Reids Hotel (Madeira) Limited England Portuguese law pledge over quotas in Reids
Hoteis Lda
- -------- ------------------------------ ----------------------- ------------------------------------------------
6. Island Hotel (Madeira) England (with Portuguese law mortgage over the
Limited Portuguese branch) Reid's Palace Hotel.
- -------- ------------------------------ ------------------------------------------------
English law Debenture
------------------------------------------------
Portuguese law asset pledge agreement over
local insurances, stock, moveables and business
related receivables and Portuguese and
Community Trademarks (or other applicable
intellectual property rights)
- -------- ------------------------------ ----------------------- ------------------------------------------------
7. Blanc Restaurants Limited England English law Debenture
- -------- ------------------------------ ----------------------- ------------------------------------------------
115
SCHEDULE 11
MINIMUM INSURANCE REQUIREMENTS FOR THE COMPANY
1. ASSETS
1.1 All assets the subject of the Transaction Security are insured against
fire, flood, earthquake (where there is an exposure), strike, riot, civil
commotion and all other risks which a prudent owner of a hotel would insure
against. Such cover may be provided in the form of an industrial "All Risk"
insurance policy at the option of the Company
1.2 All assets that are the subject of the Transaction Security are insured at
full replacement value except where such basis of cover is not available or
is prohibited by law.
2. BUSINESS INTERRUPTION
2.1 Business Interruption insurance in respect of 24 months gross revenue for
the Italian Hotels and Le Manoir.
2.2 Business Interruption insurance in respect of 12 months gross revenue for
the Hotels excluding Le Manoir.
3. LIABILITIES
Insurance in respect of legal liability for bodily injury and/or damage to
property of any third party to a minimum limit of US$15,000,000 on per
occurrence, arising out of the businesses carried out at the Hotels.
4. OTHER
All insurances required by and in accordance with local legislation in
respect of the Hotels.
5. GENERAL
Inclusion of all or any of the assets in a programme of property damage and
business interruption insurance or of third party (public and product)
liability applicable specifically to the business of the Company and the
Obligors and providing levels of insurance not less than those specified at
(1), (2) and (3) above, as applicable, shall be deemed to comply with
Clause 22 of this Agreement even if such policies cover assets not the
subject of the Transaction Security.
116
SIGNATURES
STAMP DUTY SET FORTH IN ITEM 10 OF THE STAMP DUTY GENERAL TABLE TO BE ASSESSED
(LIQUIDADO) IN RESPECT OF THE GUARANTEE PROVIDED BY REID'S HOTEIS LDA AND
HOTELAPA INVESTIMENTO HOTELEIRO, S.A. PURSUANT TO THE PROVISIONS OF ARTICLES 5
(D) OF THE PORTUGUESE STAMP DUTY CODE (WHEREBY PORTUGUESE STAMP DUTY SHALL BE
DUE WHEN THIS DOCUMENT IS PRESENTED FOR LEGAL PURPOSES IN THE REPUBLIC OF
PORTUGAL) AND ITEM 10.3 OF THE STAMP DUTY GENERAL TABLE
THE COMPANY
ORIENT-EXPRESS HOTELS LTD.
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
HDC
SOCIETE DE LA CITE SA
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
THE ORIGINAL BORROWERS
ORIENT-EXPRESS HOTELS LTD.
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
117
ORIENT-EXPRESS LUXEMBOURG HOLDINGS SARL
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
BLANC RESTAURANTS LIMITED
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
THE ORIGINAL GUARANTORS
ORIENT-EXPRESS HOTELS LTD.
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
ORIENT-EXPRESS LUXEMBOURG HOLDINGS SARL
By: PAUL WHITE
Address:
Fax:
118
BLANC RESTAURANTS LIMITED
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
ISLAND HOTEL (MADEIRA) LIMITED
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
REID'S HOTEIS LDA
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
HOTELAPA INVESTIMENTO HOTELEIRO SA
By: PAUL WHITE
Address: 20 Upper Ground, London SE1 9PF, England
Fax:
119
THE ARRANGER
BARCLAYS CAPITAL
By: CLIFF BAYLIS
Address: 5 The North Colonnade
Canary Wharf,
London
E14 4BB
Fax: + 44 (0) 20 7773 1572
Attention: Sarah Brooks
THE AGENT
BARCLAYS BANK PLC
By: CLIFF BAYLIS
Address: 5 North Colonnade
London
E14 4BB
Fax: + 44 (0) 20 7773 4893
Attention: Joanne Hollywell / Frank Rogers
THE SECURITY TRUSTEE
BARCLAYS BANK PLC
By: CLIFF BAYLIS
Address: 5 North Colonnade
London
E14 4BB
Fax: + 44 (0) 20 7773 4893
Attention: Joanne Hollywell / Frank Rogers
120
THE ORIGINAL LENDERS
ALLIED IRISH BANKS, P.L.C.
By: STUART MARSHALL
Address: St Helens
1 Undershaft
London
EC3A 8AB
Fax: + 44 (0) 20 7090 7101
Attention: Aisling Cusack, Bill Waite
BANCA NAZIONALE DEL LAVORO S.P.A., LONDON BRANCH
By: LUIGI ARDIZZONE LINA LEE
Address: Fitzwilliam House
10 St, Mary Axe
London
EC3A 8NA
Fax: + 44 (0) 20 7929 7982
Attention: Martin Wiles, Senior Relationship Manager
BARCLAYS BANK PLC
By: CLIFF BAYLIS
Address: 1 Churchill Place
London
E14 5HP
Fax: + 44 (0) 20 7116 7641
Attention: Sandrine Dubuche
121
CALYON
By: MARTIN RUDGE
Address: Broadwalk House
5 Appold Street
London
EC2A 2DA
Fax: + 44 (0) 20 7214 7159/6683
Attention: Arnaud Levacher
Alison Scoot
LLOYDS TSB BANK PLC
By: GRAHAM DODD
Address: 25 Gresham Street
London
EC2V 7HN
Fax: + 44 (0) 20 7661 4942
Attention: Graham Dodd
OVERSEA-CHINESE BANKING CORPORATION LIMITED
By: PATRICK SIM
Address: 8th Floor
Aldermary House
10-15 Queen Street
London
EC4N 1TX
Fax: + 44 (0) 20 7489 1126
Attention: Mr Singh Chadda
122
THE ROYAL BANK OF SCOTLAND PLC
By: MAXINE SANDERS
Address: 135 Bishopsgate
London
EC2M 3UR
Fax: + 44 (0) 20 7085 8710
Attention: Maxine Sanders
123