Date: 30th June 1999
Grand Hotel Group Limited
as Borrower
The Lenders
Specified herein as Lenders
Arab Bank plc
as Administrative Agent
Arab Bank plc
as Security Agent and Trustee
Arab Bank plc
as Hedge Provider
Loan Agreement
providing for a secured loan facility in the maximum
of(pound)10,000,000
Contents
No Heading Page
Clauses
1. Definitions and Interpretation 2
1.1 Defined Terms 2
1.2 Construction of Certain Terms 22
1.3 Construction of Certain References 24
1.4 Headings 25
2. The Facility 25
2.1 Amount and Currency 25
2.2 Participation of Lenders 25
2.3 Purpose 25
3. The Lenders 26
3.1 Obligations of Lenders 26
3.2 Interests of Lenders 26
4. Availability and Drawing 27
4.1 Number of Advances 27
4.2 Maximum Amount 27
4.3 Conditions Precedent 27
4.4 Procedure 27
4.5 Transfer of Funds 28
4.6 Cancellation of Unused Facility 29
4.7 No Waiver of Conditions 29
4.8 Authorisations for Disbursements 29
4.9 Failure to Draw 30
5. Interest Periods 30
5.1 Selection by Borrower 31
5.2 Determination of Interest Periods 31
5.3 Deemed Selection 32
6. Interest 33
6.1 Interest Rate 33
6.2 Hedging Arrangements 33
6.3 Payment of Interest 34
6.4 Day Count Fraction 34
6.5 Currency 34
6.6. Mandatory Costs Rate 34
7. Repayment and Prepayment 34
7.1 Repayment 34
7.2 Prepayment 35
7.3 Obligation to Prepay Following Notice 35
7.4 No Premature Repayment 36
7.5 Amounts and Currency of Repayments and Prepayments 36
8. Security 36
8.1 Security 36
8.2 Security Agent as Trustee 37
9. Maintenance of Security 37
9.1 Covenants 37
9.2 Calculations and Further Covenant 38
9.3 Failure to Comply 39
9.4 Valuations 40
9.5 Improvements to the Properties 40
10. Single Currency 44
11. Representations and Warranties 44
11.1 Representations 44
11.2 Lenders' Reliance 50
11.3 Knowledge of Lenders 50
11.4 Repetition 51
12. Undertakings 51
12.1 Specific Undertakings 51
12.2 General 62
13. Changes in Circumstances 63
13.1 Illegality 63
13.2 Increased Costs 64
13.3 Market Disruption 67
13.4 Prepayment 71
13.5 Certificate 71
14. Payments 72
14.1 Procedure 72
14.2 Default Interest 74
14.3 Withholding; Gross-up 75
14.4 Credit Against Tax 76
14.5 Agency Payments 77
14.6 Currency of Account 78
14.7 Appropriation of Payments 78
14.8 Qualifying Lenders 78
14.9 Double Taxation Treaties 79
15. Default 80
15.1 Events of Default 80
15.2 Acceleration 85
16. Expenses, Fees and Commissions 86
16.1 Initial and Continuing Costs 86
16.2 Enforcement Costs 87
16.3 Stamp Duty 87
16.4 Arrangement Fee 88
16.5 Reimbursement by Borrower 88
17. Indemnities 88
17.1 General 88
17.2 Currency Indemnity 90
17.3 Independent Obligations 91
17.4 Double Counting 91
18. The Agents 91
18.1 Appointment 91
18.2 Duties of Administrative Agent 92
18.3 Duties of Security Agent 94
18.4 Performance of Duties 94
18.5 Agents' Discretions 97
18.6 Limitation of Responsibilities 99
18.7 The Agents as a Lender 100
18.8 No Reliance on Agents 100
18.9 Lenders' Indemnity 101
18.10 Change of Agents 102
18.11 Signing of Transfer Certificates 103
18.12 Security Agent as Trustee 104
18.13 Acceptance of Title, Value and Valuation Bases 111
18.14 Rule 146 of the Land Registration Rules 111
18.15 The Borrower and the Agents 111
18.16 Agents of the Lenders 112
18.17 Agents' Knowledge 112
19. Transfer 112
19.1 Agreement Binding on Successors 112
19.2 Borrower's Assignment 113
19.3 Novation 113
19.4 Assignment 115
19.5 Lending Offices 116
19.6 Disclosure of Information 116
19.7 Costs 116
20. Set-Off/Pro-Rata Sharing 117
20.1 Set Off 117
20.2 Pro-Rata Sharing 118
21. Notices 120
21.1 Address 120
21.2 Method and Receipt 120
21.3 Deemed Notice 121
22. Calculations and Evidence of Debt 121
22.1 Accounts 121
22.2 Evidence 121
22.3 Certificates and Determinations 121
23. Severability 122
24. Waivers; Rights Cumulative 122
25. Counterparts 123
26. Governing Law and Jurisdiction 123
26.1 Law 123
26.2 Submission to Jurisdiction 123
26.3 Other Jurisdictions 123
The First Schedule 125
The Lenders and their Commitments 125
The Second Schedule 126
Form of Notice of Drawing 126
The Third Schedule 129
Form of Transfer Certificate 129
The Fourth Schedule 135
Conditions Precedent Documents 135
The Fifth Schedule 141
Calculation of Mandatory Costs Rate 141
THIS AGREEMENT is made the 30th* day of June* 1999
BETWEEN:
(1) GRAND HOTEL GROUP LIMITED a company registered under the laws of England
and Wales under number 3657769 and whose registered office is situate at
Derbyshire House, 737a Wilmslow Road, Didsbury, Manchester M20 6WF*, as
borrower ;
(2) THE LENDERS, the respective names and offices of which are set out in the
First Schedule, as lenders;
(3) ARAB BANK plc, in its capacity as administrative agent for the Lenders
and the Hedge Provider;
(4) ARAB BANK plc, in its capacity as security agent and trustee for the
Secured Parties; and
(5) ARAB BANK plc, in its capacity as Hedge Provider under the Hedging
Arrangements.
WHEREBY IT IS AGREED as follows:
The Lenders have, at the request of the Borrower, agreed to the provision to the
Borrower of a secured loan facility in the maximum amount of (pound)10,000,000
upon the terms and subject to the conditions hereinafter contained and in
particular, but without limitation, Clause 4.2.
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* Inserted in manuscript on executed Agreement
NOW IT IS AGREED as follows:
1. Definitions and Interpretation
1.1 Defined Terms
In this Agreement, the Recitals and the Schedules and Appendices, unless
there is something in the subject or context inconsistent therewith, the
following expressions shall have the following meanings, namely:
"Accounting Statement" means a financial statement in a form
approved by the Administrative Agent for the
purposes of Clause 12.1 (b): such financial
statement, unless the Administrative Agent
otherwise agrees, to be in the form of the
sample statement set out in Appendix 6;
"Acquisition Agreement" means the asset sale agreement dated the same
date as this Agreement between Rank Holidays
Division Limited (1) and the Borrower (2) for
the acquisition by the Borrower of the
Assets, together with all associated
documents;
"Administrative Agent" means Arab Bank plc, in its
capacity as administrative agent for the
Lenders and the Hedge Provider and includes
any successor administrative agent appointed
hereunder;
"Approved Valuer" means such valuer or firm of valuers as may
be appointed by the Administrative Agent from
time to time (in its discretion) and
"Approved Valuation" means a valuation
carried out by an Approved Valuer;
"Agents" means the Administrative Agent and the
Security Agent, and "Agent" means either of
them, as the context requires;
"Assets" means the Properties, the Hotel Business and
the other assets to be acquired by the
Borrower under the Acquisition Agreement and
as specified therein;
"Availability Period" means the period commencing on the date of
this Agreement and ending on the date falling
three months after such date or such later
date as the Lenders
may agree in their absolute discretion at the
request of the Borrower;
"Basis Point" means one hundredth of one per cent. (0.01%);
"Borrower" means Grand Hotel Group Limited, a company
registered under the laws of England and
Wales under number 3657769 whose registered
office is situate at 6 Leylands Park, Colden
Common, Winchester, Hampshire;
"Borrower's Charge" means the legal charge and debenture to be
executed by the Borrower pursuant to Clause
8.1(a);
"Calculation Period" means each period of 12 months ending on a
Reporting Date;
"Certificate of Title" means the certificates of title given to the
Agents and the Lenders (and their successors,
assignees and transferees) in relation to the
Properties by Messrs. Herbert Smith and dated
29 June* 1999;
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* Inserted in manuscript on executed Agreement
"Commitment" in relation to a Lender means, (a) if the
Lender is a Lender on the date of this
Agreement, the amount set out opposite that
Lender's name in the First Schedule and the
amount of any other Lender's Commitment
acquired by that Lender under Clause 19
(Transfer); and (b) if the Lender becomes a
Lender after the date of this Agreement, the
amount of that Lender's Commitment acquired
by it under Clause 19 (Transfer), and "Total
Commitments" means the aggregate for the time
being of all the Commitments of all the
Lenders;
"Completion Date" means the date on which the sale and purchase
of the Assets to the Borrower is actually
completed;
"Corporate Account means an application in the Security Agent's
Application" standard form requesting the opening of one
or more accounts with the Security Agent;
"Drawdown Date" means the date on which the
Facility is drawn by the Borrower hereunder;
"Encumbrance" means any mortgage, charge (whether fixed or
floating), pledge, lien, hypothecation, or
other interest or arrangement of any kind
conferring or having a commercial effect
analogous to conferring security;
"Event of Default" means any of those events specified in Clause
15.1 (Events of Default);
"Facility" means the loan facility made available to the
Borrower pursuant to this Agreement;
"Facility Amount" means at any time the amount calculated in
accordance with Clause 4.2 at such time;
"Hedge Provider" means Arab Bank plc, in its capacity as
counterparty to the Hedging Arrangements with
the Borrower;
"Hedging Arrangements" means the ISDA Agreement and/or each
confirmation, agreement or other document or
matter evidencing or
constituting an interest rate management
arrangement relating to the Loan or part
thereof, all Hedging Arrangements to be in
form and substance acceptable to the Lenders
in their absolute discretion;
"Hedging Arrangements
Charge" means the charge to be executed by the
Borrower pursuant to Clause 8.1(c);
"Hedging Arrangements
Commencement Date" means the date on which the Hedging
Arrangements come into effect;
"Hotel Business" means, as the context requires, the business
of owning and operating hotels at each of the
Properties carried on up to the date of the
Acquisition Agreement by Butlin's Limited
(or an associated company thereof) or the
business of owning and operating hotels at
each of the Properties to be carried on by
the Borrower from the Completion Date;
"Improvement Programme" means the detailed programme and budget for
improvements to the Properties referred to in
Clause 9.5;
"Indebtedness" means, with respect to any person, any
indebtedness or obligation (whether present
or future) created, issued, guaranteed,
incurred or assumed by such person for
payment or repayment of money;
"Inter-Creditor means the agreement between the Borrower,
Agreement" Cygnet Ventures Limited, the Agents, the
Lenders, and the Hedge Provider, referred to
in Clause 8.1(d);
"Interest Costs" in relation to a Calculation Period means the
aggregate of all interest, fees, commissions,
discounts (other than trade discounts) and
other costs, charges and expenses accruing
due from the Borrower during such Calculation
Period under this Agreement (after deducting
all amounts payable by the Hedge Provider
under the Hedging Arrangements but with the
addition of all amounts
(other than the initial premium) payable by
the Borrower to the Hedge Provider under the
Hedging Arrangements in each case after the
application of Section 2(a) (Netting) of the
ISDA Agreement, where applicable);
"Interest Period" means a period by reference to which interest
is to be calculated and payable on the Loan
or any other amount hereunder as selected or
determined pursuant to Clause 5 (Interest
Periods);
"ISDA Agreement" means an agreement in the form of the
International Swaps and Derivatives
Association Master Agreement
(Multicurrency-Cross Border) 1992 Edition a
copy of which is attached as Appendix 5 (or
such other form as may from time to time be
specified by the Hedge Provider) entered into
between the Hedge Provider and the Borrower
for the purposes of effecting interest rate
hedging and/or interest
rate management arrangements in respect of
the interest arising on some or all of the
Loan;
"Key-man Charge" means the assignment to be executed by the
Borrower pursuant to Clause 8.1(b);
"Key-man Policy" means a key-man life assurance policy taken
out by the Borrower on the life of Mr Kevin
Leech in the sum of not less
than(pound)8,500,000 (eight million five
hundred thousand pounds) with such life
assurance company or office and in such form
and on such terms as are acceptable to the
Administrative Agent and where the context
admits includes any replacement life
assurance policy taken out by the Borrower or
renewal thereof;
"Lender" means each of the banks or other financial
institutions specified in the First Schedule
and their respective successors in title,
Transferees and assigns;
"Lending Office" means each branch office of a Lender through
which such Lender is for the time being
acting for the purposes of this Agreement;
"LIBOR" means, in relation to any Interest Period or
other period by reference to which interest
is to be determined, the rate per annum which
appears on display page 3750 on the Telerate
Service (or such other page as may replace
that page on that service or on such other
page and service as the Administrative Agent
may determine to have succeeded such service)
for deposits in Sterling for a period
comparable to such Interest Period or other
period as aforesaid, as at 11:00am on the
Quotation Date for such Interest Period or
other period or, if no such rate is so
displayed, the arithmetic mean (rounded
upwards, if necessary, to the nearest
one-sixteenth of one per cent (1/16%)) of the
respective rates quoted
to the Administrative Agent by each Reference
Bank as the rates at which deposits in
Sterling are offered by prime banks to such
Reference Bank in the London Interbank Market
for a period comparable to such Interest
Period or other period at 11:00am on the
Quotation Date for such Interest Period or
other such period. If any Reference Bank
fails to provide a quotation, then LIBOR
shall be determined by reference to the rates
offered by the quoting Reference Banks
provided that if fewer than two Reference
Banks provide a quotation then LIBOR for such
Interest Period or such other period shall be
determined in accordance with Clause 13.3;
"Loan" means the aggregate principal amount advanced
by the Lenders hereunder or (as the context
requires) the amount thereof for the time
being outstanding hereunder;
"Loan Note" means the (pound)10,400,000 non-interest
bearing loan note to be issued to Butlin's
Limited by the Borrower as required by the
Acquisition Agreement;
"Majority Lenders" means those Lenders the aggregate of whose
Outstandings comprise at least 66 2/3% of the
Loan or, if the Loan has not then been made,
Lenders the aggregate of whose Commitments
represent at least 66 2/3% of the Total
Commitments;
"Mandatory Costs Rate" means the additional interest rate on the
Loan (expressed as a rate per annum) to
compensate the Lenders for the cost of
complying with the Sterling mandatory liquid
costs requirements and for the cost of the
fee payable to the Financial Services
Authority as specified in Clause 6.6
(Mandatory Costs Rate);
"Margin" means 200 Basis Points (2%) per annum;
"Net Operating Profit" means the net operating
profit (calculated as set out in the
Accounting Statement) of the Borrower such
profit being calculated before deduction of
the cost of the Improvement Programme and
before deduction for depreciation;
"Notice of Drawing" means a notice of drawing in respect of the
Facility substantially in the form set out in
the Second Schedule issued by the Borrower
requesting that the Facility be advanced
hereunder;
"Outstandings" means, in relation to a Lender at any time,
the aggregate principal amount of its share
of the Loan at such time and "Total
Outstandings" at any time means the
Outstandings of all the Lenders at such time;
"Participating Member
State" means a member of the European Community
established by the Treaty of Rome of 25 March
1957 (as amended by the Single European Act
1986 and the Maastricht Treaty (signed on 1
February 1992) and as amended from time to
time) which has for the time being adopted
the
single currency in accordance with the
aforesaid treaty;
"Permitted Charge" means a second ranking security interest to
be executed by the Borrower in favour of
Cygnet Ventures Limited such security being
subject to the Inter-Creditor Agreement and
described in the Third Schedule thereto;
"Permitted Encumbrance" means:
(a) any lien or right of set-off arising (in
either case) by operation of law (or by
agreement to the same effect) in the
ordinary course of the Borrower's
business having regard to the custom in
the relevant trade for the settlement of
accounts;
(b) the Permitted Charge; and
(c) any other Encumbrance approved in
writing by the Administrative Agent;
"Potential Event of
Default" means any event or circumstance which, with
the giving of notice and/or lapse of time
and/or upon the Administrative Agent making a
determination under Clause 15.1 (Events of
Default), would constitute an Event of
Default;
"Properties" means the properties briefly known as Ocean
Hotel Saltdean, The Grand Hotel Scarborough,
The Grand Hotel Margate, The Metropole Hotel
Blackpool and the Grand Hotel Llandudno as
more particularly described in the Schedule
to the Borrower's Charge and where the
context admits includes any one or more of
the properties and any part or parts thereof
and "Property" has a corresponding meaning;
"Purchase Price" means the aggregate amount payable by the
Borrower for the purchase of the Assets as
specified in Clause 3.1 of the Acquisition
Agreement exclusive of Value Added Tax and
any other Tax, less the amount payable under
the Acquisition Agreement in respect of any
goodwill;
"Qualifying Lender" means (a) a bank (as defined in Section 840A
of the Income and Corporation Taxes Act 1988)
which is within the charge to corporation tax
as respects interest which would be payable
to it hereunder in accordance with Section
349(3) of the Income and Corporation Taxes
Act 1988 or (b) a bank or financial
institution to which payments of interest may
otherwise be made by the Borrower under the
Security Documents without deduction of
United Kingdom Taxes;
"Quotation Date" means, in relation to any period for which an
interest rate is to be determined hereunder,
the day conclusively determined by the
Administrative Agent to be the day on which
quotations would ordinarily be given by prime
banks in the London Interbank Market for
deposits in Sterling for delivery on the
first day of that period, provided that if
for any such period the
Administrative Agent determines that
quotations would ordinarily be given on more
than one date, the Quotation Date for that
period shall be the last of those dates;
"Reference Banks" means the principal London offices of Arab
Bank plc, The Hongkong and Shanghai Banking
Corporation Limited, Chase Manhattan Bank and
any bank appointed by the Administrative
Agent to replace a Reference Bank with the
consent of the Borrower (not to be
unreasonably withheld or delayed) and
"Reference Bank" has a corresponding meaning;
"Repayment Date" means each of the dates falling 24, 36, 48
and 60 months after the Drawdown Date, the
last of such dates being the "Final Repayment
Date";
"Repayment Instalment" means each instalment for repayment of the
Loan, in each case as provided in Clause 7.1;
"Reporting Date" means 31 January, 30 April,
31 July and 31 October in each year or, where
such date is not a Sunday, the immediately
preceding Sunday;
"Secured Asset" means any asset over which an Encumbrance is,
or is to be, created by or pursuant to any
Security Document;
"Secured Obligations" means all monies which are now or at any time
hereafter may be or become due or owing by
the Borrower to either of the Agents or any
of the Lenders or the Hedge Provider under or
pursuant to any of the Security Documents and
any other liabilities, whether actual or
contingent, now existing or hereafter
incurred by the Borrower to either of the
Agents or any of the Lenders or the Hedge
Provider under or pursuant to any of the
Security Documents (whether in either case
due, owing or incurred by the Borrower alone
or jointly with any other person(s) and in
whatever name, firm or
style and whether as principal or surety);
"Secured Parties" means the Agents and the Lenders and the
Hedge Provider;
"Security Agent" means Arab Bank plc, in its capacity as
security agent and trustee for the Secured
Parties and includes any successor security
agent appointed hereunder;
"Security Documents" means this Agreement, the Borrower's Charge,
the Key-man Charge, the Hedging Arrangements
Charge, the Hedging Arrangements, the
Inter-Creditor Agreement, and any further
agreement or document entered into under or
pursuant to the terms of any Security
Document or otherwise entered into or given
at any time as security for the Secured
Obligations;
"Standby Letter of
Credit" the standby letter of credit issued or to be
issued to Butlin's Limited by Citibank, N.A.
as required by the Acquisition Agreement;
"Subordinated Loan" means the loan facility of up to
(pound)100,000 made available to the Borrower
by Cygnet Ventures Limited and referred to in
the Inter-Creditor Agreement;
"Taxes" means any present or future taxes, levies,
duties or charges, including any interest
thereon and penalties in respect thereof, and
any fees, deductions or withholdings of a
similar nature and "Tax" and "Taxation" shall
be construed accordingly;
"Transfer Certificate" means an instrument executed pursuant to
Clause 19.3;
"Transferee" means a Qualifying Lender to which a Lender
transfers all or part of such Lender's
rights, benefits and obligations under this
Agreement and the other Security Documents
pursuant to Clause 19 (Transfer);
"Valuation Basis" means the Estimated Realisation Price (as
defined in the RICS Appraisal and Valuation
Manual as from time to time
amended by the RICS) or, if the same is
replaced or no longer published, such
reasonably comparable valuation basis as the
Administrative Agent may select;
"Value" means at any time in relation to any real
property (including the Properties) the value
of the interest held therein by the Borrower
on the Valuation Basis at such time,
determined by an Approved Valuer.
1.2 Construction of Certain Terms
Any reference in this Agreement to:
an "account" shall include a sub-account opened by the person with whom
the account is maintained;
a "business day" means a day (other than a Saturday or a Sunday) on which
banks in London are open for business (excluding any day on which such
banks are open solely for the purpose of settling payments in Euro) and
on which the London interbank market is operating;
a "dispute" means any litigation or administrative or arbitration
proceeding before or of any court, tribunal, arbitrator or
governmental or municipal authority, any labour dispute, any dispute with
any governmental or municipal authority and any other dispute of any
kind;
a "month" is a reference to a period starting on one day in a calendar
month and ending on the numerically corresponding day in the next
calendar month (and references to "months" shall be construed
accordingly) save that, where any such period would otherwise end on a
day which is not a business day, it shall end on the next business day
and, where applicable, interest shall continue to accrue accordingly,
unless that day falls in the calendar month succeeding that in which it
would otherwise have ended, in which case it shall end on the preceding
business day provided that, if a period starts on the last business day
in a calendar month or if there is no numerically corresponding day in
the month in which that period ends, that period shall end on the last
business day in that latter month;
a "subsidiary" means (i) a subsidiary as defined in Section 736 of the
Companies Act 1985 (as amended by Section 144 of the Companies Act 1989)
and (ii) unless the context otherwise requires, a subsidiary undertaking
within the meaning of Section 258 of the Companies Act 1985 (as inserted
by Section 21 of the Companies Act 1989);
a time of day shall be to London time; and
the "winding-up" of a person includes the
amalgamation, reconstruction, reorganisation, administration,
dissolution, liquidation, winding-up, merger or consolidation of that
person, and any equivalent or analogous procedure under the law of any
jurisdiction in which the person is incorporated or resident or carries
on a material part of its business or has material assets.
1.3 Construction of Certain References
Unless the context otherwise requires, any reference in this Agreement
to:
a Clause, Appendix or Schedule shall be construed as a reference to a
clause hereof or appendix or schedule hereto;
a sub-clause shall be construed as a reference to a sub-clause of the
Clause in which such reference appears;
a paragraph shall be construed as a paragraph of the sub-clause in which
such reference appears;
this Agreement or any other agreement or document shall be construed as a
reference to this Agreement or, as the case may be, such other agreement
or document as the same may have been, or may from time to time be,
amended, varied, supplemented or novated;
the singular shall include the plural and vice versa;
any statute or regulation shall be construed as a
reference to such statute or regulation as the same may have been, or may
from time to time be, amended or re-enacted;
"Sterling" and the sign "(pound)" means the lawful currency for the time
being of the United Kingdom and
"Euro" means the lawful currency of the Participating Member States;
1.4 Headings
Clause, Schedule and Appendix headings are for ease of reference only.
2. The Facility
2.1 Amount and Currency
Upon and subject to the terms and conditions of this Agreement and in
reliance upon the representations and warranties in Clause 11
(Representations and Warranties) the Lenders agree to make available to
the Borrower a loan facility in an amount not exceeding the Facility
Amount.
2.2 Participation of Lenders
Each Lender will participate in the Facility through its Lending Office
in the proportion borne by its Commitment to the Total Commitments.
2.3 Purpose
The proceeds of the Facility are to be applied by the Borrower in or
towards payment of the amount
of the Purchase Price payable upon the Completion Date, and in the
payment of associated costs and expenses. Neither the Lenders nor the
Agents shall be concerned to ensure that such application takes place.
3. The Lenders
3.1 Obligations of Lenders
Save as provided in this Clause, the obligations of each Lender hereunder
are several; the failure of any Lender to carry out its obligations
hereunder shall not relieve any other Lender, the Agents or the Borrower
from any of its or their respective obligations to the parties hereto and
neither the Agents nor any Lender shall be responsible for the
obligations of any Lender or (as the case may be) any other Lender
hereunder.
3.2 Interests of Lenders
Notwithstanding any other term of this Agreement, the interests of the
Lenders are several and the aggregate amount outstanding at any time
hereunder from the Borrower to any Lender or to either of the Agents for
its own account is a separate and independent debt. Save as expressly
provided herein or in any of the other Security Documents each of the
Agents and every Lender shall each have the right to protect and enforce
its rights arising out of this Agreement and it shall not be necessary
for any Lender or (as the case may be) either Agent to be joined as an
additional party in any proceedings for this purpose.
4. Availability and Drawing
4.1 Number of Advances
Subject to the terms and conditions of this Agreement the Borrower shall
be entitled to draw the whole of the Facility by a single drawing.
4.2 Maximum Amount
The amount of the Facility made available to the Borrower hereunder shall
be the lesser of the following amounts:
(a) the sum of(pound)10,000,000;
(b) 70% of the Purchase Price; and
(c) 70% of the lower of the Approved Valuations of the Properties
referred to in paragraph 7 of the Fourth Schedule.
4.3 Conditions Precedent
The Facility may not be drawn unless the Administrative Agent has
received, in form and substance satisfactory to it, all the documents
listed in the Fourth Schedule.
4.4 Procedure
Subject to:
(a) the conditions set out in Clause 4.3 having been satisfied;
(b) no Event of Default and no Potential Event of Default having
occurred;
(c) the Administrative Agent having received by not later than 10:00am
one business day before the Drawdown Date (or by such later time
as the Administrative Agent after consultation with the Lenders
may agree) a Notice of Drawing (which shall be irrevocable) by
telex or facsimile or letter duly completed and signed on behalf
of the Borrower by a person duly authorised;
(d) the Drawdown Date being the Completion Date;
(e) the Administrative Agent having received irrevocable instructions
addressed to it by the Borrower requesting that the Loan be
disbursed by applying the proceeds in or towards the acquisition
of the Properties and in the payment of associated costs and
expenses approved by the Administrative Agent; and
(f) the Administrative Agent having received all fees costs and
expenses then due and payable to it and/or agreed under Clause 16
(Expenses, Fees and Commission),
the Borrower may, on any business day during the Availability Period,
draw the Facility.
4.5 Transfer of Funds
On the Drawdown Date each Lender shall pay to the Administrative Agent
the amount in Sterling notified by the Administrative Agent to such
Lender as the amount of such Lender's participation in the Facility to be
advanced on
the Drawdown Date. All sums to be advanced by the Lenders shall be
remitted to the Administrative Agent for value on the Drawdown Date to
the account of the Administrative Agent in accordance with Clause 14
(Payments). The Administrative Agent shall pay the sums received by it as
directed by the Borrower in accordance with Clause 4.4(e).
4.6 Cancellation of Unused Facility
Any part of the Facility which is not drawn at the earlier of the expiry
of the Availability Period or the Drawdown Date shall be cancelled and
shall not thereafter be available to the Borrower.
4.7 No Waiver of Conditions
If the Administrative Agent in its discretion allows the Borrower to draw
the Facility notwithstanding that some or all of the conditions specified
in this Clause 4 (Availability and Drawing) have not been satisfied the
Lenders shall not thereby be deemed to have waived any such conditions
and the Borrower covenants with the Administrative Agent and the Lenders
to satisfy such conditions, or to procure that such conditions are
satisfied, upon request from the Administrative Agent within such time
limit as shall have been agreed and, failing agreement, immediately.
4.8 Authorisations for Disbursements
The Borrower hereby irrevocably and
unconditionally instructs and authorises the Lenders and the
Administrative Agent to advance the Facility upon and subject to the
terms hereof by paying the proceeds thereof by disbursement to the
"Payee" named in the Notice of Drawing (less any deductions which the
Administrative Agent is authorised to make) and upon any such
disbursement to any such "Payee" and the deduction of any deductions so
authorised the Borrower agrees that the Lenders shall be deemed (in
proportion to the respective amounts made available by them to the
Administrative Agent) to have made to the Borrower the Loan in the
aggregate of the amount so disbursed and any such deductions which shall
satisfy pro tanto the obligations of the Lenders to lend such amount to
the Borrower hereunder.
4.9 Failure to Draw
If for any reason the Facility is not drawn hereunder after receipt by
the Administrative Agent of a Notice of Drawing pursuant to Clause 4.4,
the Borrower will pay to each Lender (other than a Lender which fails to
make available its portion of the Loan by reason of its own negligence or
default) such amount as such Lender may certify (such certification to be
conclusive in the absence of manifest error) as necessary to compensate
it for any resulting loss or expense on account of funds acquired,
contracted for or utilised in order to fund its participation in the
Loan.
5. Interest Periods
5.1 Selection by Borrower
Subject to the provisions of this Clause 5 (Interest Periods) and Clause
6 (Interest), the Borrower may by notice received by the Administrative
Agent not later than 10:00am on the third business day before the first
day of each Interest Period (other than the first Interest Period, when
the selection will be made in the Notice of Drawing, and subject to
Clause 5.2 below) select the duration of such Interest Period. In the
absence of a selection by the Borrower Clause 5.3 shall apply.
5.2 Determination of Interest Periods
Subject to the provisions of Clause 6 (Interest) each Interest Period in
relation to the Loan shall have a duration of 3, 6, 9 or 12 months, (or
such other period as may be agreed with the Administrative Agent after
consultation with the Lenders), as selected or deemed to have been
selected by the Borrower in accordance with Clause 5.1, but so that:
(a) the first Interest Period applicable to the Loan shall commence on
the Drawdown Date and shall end on the last day of the period
selected by the Borrower pursuant to Clause 5.1 or deemed selected
by the Borrower pursuant to Clause 5.3;
(b) save as otherwise provided in this Agreement, each subsequent
Interest Period shall commence on the expiry of the preceding
Interest Period;
(c) any Interest Period which would otherwise end on a day which is
not a business day, shall be extended to end on the next
succeeding business day unless that day falls in the calendar
month succeeding that in which it would otherwise have ended, in
which case it shall end on the immediately preceding business day;
(d) any Interest Period which would otherwise overrun a Repayment Date
shall be shortened to end on such Repayment Date; and
(e) the right to select the duration of Interest Periods shall
determine on the Hedging Arrangements Commencement Date and from
the Hedging Arrangements Commencement Date Interest Periods shall
(notwithstanding Clause 5.3) be coterminous with the periods by
reference to which payments are to be calculated pursuant to the
Hedging Arrangements.
5.3 Deemed Selection
If the Borrower shall fail to select the duration of an Interest Period
in accordance with Clauses 5.1 and 5.2 then the Borrower shall be deemed,
subject as aforesaid, to have selected a duration of 3 months or such
other period as the Administrative Agent may (after consultation with the
Lenders) specify for such Interest Period.
6. Interest
6.1 Interest Rate
The rate of interest applicable to the Loan during an Interest Period
applicable thereto shall be the rate per annum determined by the
Administrative Agent to be the aggregate of (i) the Margin and (ii) LIBOR
for such Interest Period and (iii) the Mandatory Costs Rate.
6.2 Hedging Arrangements
(a) The Borrower has executed and delivered to the Hedge Provider the
ISDA Agreement.
(b) On the Drawdown Date the Borrower shall enter into such
confirmations pursuant to the ISDA Agreement to take effect from
such date (being the Drawdown Date or the last day of an Interest
Period) as the Hedge Provider may specify.
(c) Without prejudice to the generality of the foregoing the dates on
which payments fall to be made pursuant to the Hedging
Arrangements shall coincide with the dates on which interest is to
be paid on the Loan under this Agreement.
(d) For so long as the Loan remains outstanding the Hedge Provider
shall be entitled to pay to the Security Agent any payments which
the Hedge Provider is required to pay to the Borrower under the
Hedging Arrangements and for the avoidance of doubt, any sums
which
the Borrower is required to pay to the Hedge Provider under the
Hedging Arrangements shall be sums due under and secured by the
Security Documents in accordance with their terms.
6.3 Payment of Interest
The Borrower shall, subject to the provisions of Clause 13 (Changes in
Circumstances), 14 (Payments) and 15 (Default), pay interest accrued on
the Loan calculated in accordance with this Clause 6 on the last day of
each Interest Period.
6.4 Day Count Fraction
Interest relative to each Interest Period shall accrue from day to day on
the basis of a year of 365 days and for the actual number of days
elapsed.
6.5 Currency
All interest on the Loan shall be calculated and paid in Sterling.
6.6. Mandatory Costs Rate
The provisions of the Fifth Schedule shall apply to the calculation of
the Mandatory Costs Rate in respect of the Loan.
7. Repayment and Prepayment
7.1 Repayment
The Borrower shall on each Repayment Date repay a repayment instalment in
respect of the principal amount of the Loan in the amount of
(pound)2,500,000
and on the Final Repayment Date shall repay the remaining outstanding
amount of the Loan by a single payment, together with any other amounts
due, owing or incurred by it pursuant to this Agreement.
7.2 Prepayment
If the Borrower has provided the Administrative Agent with not less than
10 business days' prior written notice of its intention to do so, the
Borrower may prepay without premium or penalty the whole or any part of
the Loan (and, if part, being an integral multiple of (pound)250,000) on
the last day of any Interest Period. On any prepayment the Borrower shall
pay to the Administrative Agent for the account of the Lenders all such
breakage and other costs and expenses as are referred to in Clause 17.1
and as may be applicable. Any amount prepaid shall be applied in or
towards discharge of the Repayment Instalments in inverse order of their
maturity.
7.3 Obligation to Prepay Following Notice
Any notice given by the Borrower under Clause 7.2 shall be irrevocable,
shall specify the date on which the prepayment is to be made and the
amount to be prepaid and shall on that date oblige the Borrower to pay to
the Administrative Agent for the account of the Lenders the amount
therein stated and at the same time to pay all accrued interest and other
amounts (including any due under Clause 17 (Indemnities)) falling due in
respect of such prepayment.
7.4 No Premature Repayment
The Borrower shall not repay or prepay all or any part of the Loan except
at the times and in the manner expressly provided for in this Agreement
and shall not be entitled to re-borrow any amount repaid or prepaid.
7.5 Amounts and Currency of Repayments and Prepayments
Each repayment and prepayment under this Agreement shall be made in
Sterling and the Borrower shall at the same time pay all accrued interest
and other amounts (including any due under Clause 17 (Indemnities))
falling due in respect of such repayment or prepayment.
8. Security
8.1 Security
As continuing security for the discharge of all the Secured Obligations
the Borrower shall:
(a) execute and deliver to the Security Agent a deed or deeds of
charge and debenture substantially in the form set out in Appendix
1 including a charge by way of legal mortgage over the freehold
and leasehold interests in the Properties and a floating charge
over the undertaking and other property and assets of the
Borrower;
(b) execute and deliver to the Security Agent a security agreement
containing an assignment of all its right title and interest in
the Key-man Policy substantially in the form set
out in Appendix 2;
(c) execute and deliver to the Security Agent a security agreement
containing an assignment of all its right title and interest in
the Hedging Arrangements substantially in the form set out in
Appendix 3; and
(d) execute and deliver and procure the execution and delivery by
Cygnet Ventures Limited to the Security Agent of an inter-creditor
agreement substantially in the form set out in Appendix 4.
8.2 Security Agent as Trustee
The Secured Obligations shall be secured by the interests and rights
granted in favour of the Security Agent as trustee for the Agents and the
Lenders under the Security Documents and such interests and rights shall
be held by the Security Agent upon trust for the benefit of the Secured
Parties in such shares and ranking in such order as shall be from time to
time applicable pursuant to any agreement between the Secured Parties.
9. Maintenance of Security
9.1 Covenants
The Borrower covenants with the Agents and the Lenders:
(a) to ensure that the Net Operating Profit in each and every
Calculation Period ending on
or after 30 July 2000 is at least equal to 125% of the aggregate
of (1) the Interest Costs for such Calculation Period and (ii) (in
respect of each Calculation Period ending on or after 30 July
2001) (pound)2,500,000;
(b) to ensure that the amount of the Loan does not at any time exceed
70% of the Value of the Properties at such time; and
(c) use all reasonable endeavours to procure* that a Key-man Policy is
maintained until all sums due and to become due from the Borrower
under or in connection with the Security Documents have been paid
or repaid in full and without limitation, shall use all reasonable
endeavours to obtain a new Key-man Policy upon substantially the
same terms from a life office acceptable to the Administrative
Agent to take effect on and from the expiry of the term of the
initial Key-man Policy
9.2 Calculations and Further Covenant
For the purposes of Clause 9.1 (a):
(a) the covenant contained in Clause 9.1(a) shall be applied by
reference to the Net Operating Profits specified in the Accounting
Statement to be supplied by the Borrower pursuant to Clause 12.1
(b) for the three monthly period ending on each Reporting Date
(falling on or after 30 July 2000) aggregated
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* Inserted in manuscript on executed Agreement
with the Net Operating Profits specified in the Accounting
Statements for the three immediately preceding Reporting Dates, to
the intent that the covenant in Clause 9.1(a) shall be applied on
the basis of a rolling Calculation Period of twelve months ending
on each Reporting Date (falling on or after 30 July 2000)
(b) the Borrower further covenants with the Agent and the Lenders to
ensure that the Net Operating Profit in each accounting year of
the Borrower (applied by reference to the annual audited financial
statements of the Borrower referred to in Clause 12.1(a)) is at
least equal to 125% of the aggregate of (i) the Interest Costs in
relation to the Calculation Period or Periods (or parts thereof)
falling within and corresponding to each such financial year and
(ii) (in respect of each financial year ending on or after 30 July
2001) (pound)2,500,000;
(c) the Administrative Agent may at any time and from time to time
require the Borrower to supply further information and evidence as
to the calculation of each Accounting Statement.
9.3 Failure to Comply
If at any time the Administrative Agent determines that the provisions of
Clause 9.1 (b) are for the time being not complied with, the Borrower
shall within 10 business days after the Administrative Agent has notified
it of such fact
in writing repay all or part of the Loan (as the Administrative Agent may
specify) such that the provisions of Clause 9.1 (b) are thenceforth
complied with.
9.4 Valuations
An Approved Valuation of the Properties may if required by the
Administrative Agent be carried out at the expense of the Borrower not
more frequently than once every twelve months. The Administrative Agent
shall arrange for such Approved Valuation if required by the Majority
Lenders. The Administrative Agent shall also if requested by the Majority
Lenders arrange for additional Approved Valuations of the Properties to
be carried out. If any such additional Approved Valuation indicates that
on the date it was requested the Borrower was complying with Clause 9.1
(b) the cost thereof shall be borne by the Lenders, and if such
additional Approved Valuation indicates that on such date the Borrower
was not so complying, the cost of such additional Approved Valuation
shall be borne by the Borrower.
9.5 Improvements to the Properties
(a) The Borrower shall within 60 days of the Drawdown Date produce to
the Administrative Agent (in sufficient copies for each of the
Lenders) a detailed programme of and budget for improvements to
the Properties together with plans, specifications, costs,
estimates and a works programme at an anticipated cost
of not less than (pound)1,500,000 (exclusive of all Taxes) and
shall provide all such further information in relation thereto as
the Administrative Agent or the Lenders may reasonably require.
(b) The Borrower shall obtain the written approval of the
Administrative Agent which may be withheld at its absolute
discretion or given subject to any condition or conditions (after
consultation with the Lenders) to the Improvement Programme before
implementing any of the relevant improvements.
(c) Subject to obtaining the written approval referred to in Clause
9.3(b) the Borrower shall forthwith apply for and use all
reasonable endeavours to obtain all planning and other consents
licences and/or certificates which may be required in connection
with the Improvement Programme (and supply copies to the
Administrative Agent) and shall commence and proceed diligently to
complete or procure the completion of the Improvement Programme
and supply evidence satisfactory to the Administrative Agent that
by no later than the expiry of the period of eighteen months from
the Drawdown Date (i) the Borrower has from its own resources
spent not less than(pound)1,500,000 (exclusive of all Taxes) on
the Improvement Programme and (ii) that the Improvement Programme
has been completed in all material respects.
(d) The Borrower will permit the Agents (and all persons authorised by
them) to enter the Properties on reasonable prior notice at any
time in order to inspect the progress of the Improvement
Programme.
(e) None of the Secured Parties shall have any liability in respect of
the Improvement Programme and no inspection or approval by any of
the Secured Parties of the Improvement Programme and works carried
out under it will constitute any warranty or representation as to
the design, fitness or satisfactory completion of the Improvement
Programme.
(f) Before preparing the Improvement Programme the Borrower will
submit to the Administrative Agent for approval the names of the
contractors, architect, structural engineer and any other
professional advisors the Borrower intends to employ in connection
with the Improvement Programme (in each case where the value or
fee for the relevant contract or appointment exceeds
(pound)100,000) and prior to commencing the Improvement Programme
the Borrower will if requested by the Administrative Agent procure
that the construction contractor, architect and any other members
of the professional team shall execute deeds undertaking a duty of
care in favour of the Security Agent in connection with the design
construction and implementation of the Improvement Programme in
the BPFA form or in such other form as the
Administrative Agent may reasonably require.
(g) Immediately on entering into a contract for or in respect of the
execution of the Improvement Programme where the value of the
relevant contract exceeds(pound)100,000 the Borrower will execute
a security assignment of such construction contract and of all
other warranties and contracts relating to the Improvement
Programme as the Administrative Agent may require in favour of the
Security Agent in such a form as the Administrative Agent shall
require and will also use its reasonable endeavours to procure
that the relevant contractor will enter into a step-in agreement
with the Security Agent in such form as the Administrative Agent
shall reasonably require by which the relevant contractor
undertakes not to determine the relevant contract as a result of
the Borrower's failure without first notifying the Security Agent
and to permit the Security Agent or a receiver appointed by the
Security Agent to take over the relevant contract in the event
that the Security Agent should exercise the security rights under
the Borrower's Charge.
(h) If the Borrower shall obtain any performance bond or other
security for the performance by the construction contractor of the
terms of the construction contract then it will assign the benefit
of such bond to the Security Agent by way of security.
10. Single Currency
Each of the parties to this Agreement acknowledges that if the United
Kingdom becomes a Participating Member State Sterling will or may be
replaced by the Euro. The other parties to this Agreement agree to amend
the provisions of this Agreement if notified by the Administrative Agent
(after consultation with the Lenders) that any amendments are required to
ensure that this Agreement reflects market practice in the London
Interbank Market at the relevant time following the United Kingdom
becoming a Participating Member State including without limitation any
amendments required in the duration of Interest Periods, the definition
of business day, the day-count fraction, or in any other administrative
provisions of this Agreement.
11. Representations and Warranties
11.1 Representations
The Borrower represents and warrants to the Agents and each of the
Lenders that:
(a) the Borrower is a private limited liability company, duly
incorporated and validly existing under the laws of the England
and Wales and has power to carry on its business as it is now
being conducted and to own property and other assets;
(b) the Borrower has been incorporated specifically to acquire the
Properties and the Hotel Business and to run the Hotel
Business with the assistance of the Facility and the Borrower has
not previously traded or incurred liabilities except in connection
with the acquisition of the Properties and the Hotel Business and
this Facility and in particular (but without prejudice to the
generality of the foregoing) the Borrower has not entered into any
guarantee or borrowed money from any other person or company other
than the Lenders or by the Subordinated Loan or by the issue of
the Loan Note or entered into any transaction having a similar
effect nor has the Borrower created nor is there subsisting any
Encumbrance on or over the whole or any part of the Borrower's
undertaking or assets (including, but without limitation,
revenues), present or future other than in favour of the Security
Agent by the Permitted Charge or liens arising in the ordinary
course of business;
(c) the execution, delivery and performance of this Agreement and the
other Security Documents are within the corporate powers of the
Borrower, have been duly authorised by all necessary corporate and
other action and do not contravene any provision of applicable law
or of the Memorandum and Articles of Association of the Borrower
or any contract or agreement binding on the Borrower;
(d) the obligations and liabilities expressed to be assumed by each of
the Borrower under each of the Security Documents are legal, valid
and binding obligations of the Borrower binding on it in
accordance with their respective terms, and, without prejudice to
the foregoing, the Borrower's Charge, the Key-man Charge, and* the
Hedging Arrangements Charge * create (inter alia) valid first
priority charges over the assets thereby charged and which are not
subject to any prior ranking Encumbrances or, other than Permitted
Encumbrances (excluding for this purpose the Permitted Charge),
Encumbrances ranking pari passu;
(e) all necessary certificates, consents or approvals required for the
use of each of the Properties in the manner presently used for the
Hotel Business have been duly obtained and are in full force and
effect;
(f) there are no pending or, to its knowledge having made due and
proper enquiry, threatened actions or proceedings before any court
or administrative agency against the Borrower other than actions
or proceedings details of which have been disclosed to the
Administrative Agent and which are being disputed in good faith,
nor is the Borrower in breach of or in default under any agreement
to which it is a party or which is binding on it or any of its
assets, to an extent or in a manner which may have a
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* Inserted in manuscript on executed Agreement
* Amended in manuscript on executed Agreement
material adverse effect on the financial condition or operations
of the Borrower or materially impair the Borrower's ability to
perform its obligations under this Agreement or any other Security
Document and there are no pending or, to its knowledge having made
due and proper enquiry, threatened disputes or proceedings arising
out of or in connection with the Properties other than disputes or
proceedings, details of which have been disclosed to the
Administrative Agent and which are being disputed in good faith;
(g) the Borrower has not taken any corporate or other action nor have
any legal proceedings been started or (to the best of its
knowledge and belief) other steps taken or threatened against the
Borrower for its winding-up, dissolution or re-organisation, or
for the appointment of a receiver, trustee, administrator or
similar officer of it or him of any or all of its assets or
revenues;
(h) the whole of the Borrower's issued share capital is legally owned
as follows:-
Name Number of Ordinary Shares
Cygnet Ventures Limited 85
Philip Mason 6
Patricia Mason 4
Stephen Last 2
Rod Rodgers 2
David Marriott 1
(i) save as provided in the Security Documents, the execution of this
Agreement and the other Security Documents and the Borrower's
exercise of its rights and performance of its obligations
hereunder and thereunder will not result in the existence of, nor
oblige the Borrower to create, any Encumbrance over all or any of
its present or future revenues or assets;
(j) all Accounting Statements and financial statements from time to
time delivered to the Agents or the Lenders by the Borrower will
be prepared in accordance with accounting principles generally
accepted in the United Kingdom and consistently applied, and give
a true and fair view of the financial condition of the Borrower
and its subsidiaries (if any) at the date to which they were
prepared and the results of the Borrower's operations during the
financial year ending on such date or, in the case of the
Accounting Statements, a true and fair view of the information
required to be contained therein for the relevant period; since
publication of any such financial statements delivered there has
been no adverse change in the business or financial condition of
the Borrower or any of its subsidiaries (if any) which is material
in the context of the Borrower's ability to perform its
obligations under this Agreement
or the other Security Documents;
(k) the information provided by or on behalf of the Borrower in
connection with the negotiation of the Facility and the
preparation of the Security Documents was true, complete and
accurate in all material respects when supplied, and (to the best
of the Borrower's information and belief) since the date of such
supply there has been no material adverse change in the position
of the Borrower rendering such information misleading;
(l) no Event of Default or Potential Event of Default has occurred and
is continuing;
(m) the Borrower has complied in all material respects with all
Taxation laws in all jurisdictions in which it is subject to
Taxation and has paid all Taxes due and payable by it and no
claims are being asserted against it in respect of Taxes save for
assessments in relation to the ordinary course of its business or
claims contested in good faith and in respect of which adequate
provision has been made and disclosed in the latest accounts of
the Borrower or information in respect of which has been delivered
to the Administrative Agent hereunder; and
(n) the Borrower is not (nor would be with the giving of notice or the
lapse of time or both) in breach of or in default under any
agreement relating to any Indebtedness to which it is a party or
by which it may be bound, where the amount of such Indebtedness is
in excess of (pound)75,000.
11.2 Lenders' Reliance
The Borrower acknowledges that it has made the representations and
warranties referred to in Clause 11.1 with the intention of persuading
the Agents and the Lenders to enter into this Agreement and that the
Agents and the Lenders have entered into this Agreement on the basis of,
and in full reliance on, each of such representations and warranties. The
Borrower warrants to the Agents and the Lenders that each of such
representations and warranties is true and correct in all material
respects as of the date of this Agreement and that none of them omits any
matter, the omission of which makes any of such representations and
warranties misleading in any material respect.
11.3 Knowledge of Lenders
The rights and remedies of the Agents and the Lenders in relation to any
misrepresentation or breach of warranty on the part of the Borrower shall
not be prejudiced by any investigation by or on behalf of the Agent or
the Lenders into the affairs of the Borrower or the Hotel Business, by
the execution or the performance of this Agreement or by any other act or
thing which may be done by, or on behalf of the Agents or the Lenders in
connection with this Agreement and
which might, apart from this Clause, prejudice such rights or remedies.
11.4 Repetition
The representations and warranties made by the Borrower pursuant to
Clause 11.1 and the warranty made by the Borrower pursuant to Clause 11.2
(other than that made in Clause 11.1(b)) shall survive the execution of
this Agreement and the drawing of the Facility hereunder and shall be
deemed to be repeated on the date of the Notice of Drawing, at the
beginning of each Interest Period as if made at and in respect of the
circumstances existing at each such time.
12. Undertakings
12.1 Specific Undertakings
The Borrower undertakes with the Agents and each of the Lenders that from
and after the date hereof and until all sums due and to become due from
the Borrower under or in connection with the Security Documents have been
paid or repaid in full the Borrower shall:-
(a) as soon as the same become available, but in any event within 180
days after the end of each of its financial years, deliver to the
Administrative Agent sufficient copies for each of the Lenders of
the financial statements relating to the Borrower and its
subsidiaries (if any) for such financial year (including its
balance sheet and profit and loss account) prepared and audited in
accordance with generally accepted accounting practice in the
United Kingdom, consistently applied, approved by the Borrower's
Board of Directors and certified by a duly authorised officer of
the Borrower as giving a true and fair view of the financial
condition of the Borrower and its subsidiaries (if any) as at the
end of the period to which those financial statements relate and
of the results of its and their operations during such period;
(b) deliver to the Administrative Agent sufficient copies for each of
the Lenders as soon as the same become available but in any event
within 30 days after each Reporting Date, financial statements and
management accounts of the Borrower signed by a director or
directors of the Borrower for the period of three months ending on
such Reporting Date, such statements and accounts to be in the
form of the Accounting Statement and prepared in accordance with
generally accepted accounting practice in the United Kingdom and
shall (without limitation) certify the Net Operating Profit for
each such period, and if the Administrative Agent so requests the
Borrower will procure that such statements and accounts shall be
certified by the Borrower's auditors as giving a true and fair
view of the information contained therein by not later than 60
days after the relevant Reporting Date;
(c) deliver to the Administrative Agent (in sufficient copies for each
of the Lenders if the Administrative Agent so requests) promptly
upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which are current, or to
its knowledge having made due and proper enquiry threatened or
pending in relation to the Borrower and which if adversely
determined would or is likely to give rise to a liability on the
part of the Borrower in excess of (pound)75,000;
(d) from time to time at the request of the Administrative Agent,
furnish the Administrative Agent with such information about the
Properties, the Hotel Business, or the financial condition of the
Borrower, as the Administrative Agent may reasonably require;
(e) obtain, comply with the terms of and do all that is necessary to
maintain in full force and effect all authorisations, approvals,
licences, certificates and consents required in or by all
applicable laws and regulations to enable the Borrower and the
Shareholders lawfully to enter into and perform their respective
obligations under the Security Documents, and to authorise the use
of the Properties in the manner in which the Properties are from
time to time used;
(f) promptly upon becoming aware of the same inform the Administrative
Agent of the
occurrence of any Potential Event of Default or Event of Default
and on the date hereof, on each day on which it delivers financial
statements to the Administrative Agent under Clauses 12.1(a) or
(b) and also upon receipt of a written request to that effect from
the Administrative Agent confirm that no such event has occurred;
(g) promptly notify the Administrative Agent of:
(i) any Encumbrance of which the Borrower becomes aware
attaching to the assets or revenues of the Borrower (other
than an Encumbrance created in favour of the Agents
pursuant to the Security Documents or a Permitted
Encumbrance); and
(ii) any occurrence (including without limitation any third
party claim or liability) of which the Borrower becomes
aware which would be likely to affect the ability of the
Borrower to perform its obligations under any of the
Security Documents;
(h) not without the prior written consent of the Administrative Agent,
which may be withheld at its absolute discretion or given subject
to any condition or conditions (after consultation with the
Lenders);
(i) grant or authorise the grant of any lease, tenancy or
licence of all or any
part of the Properties (save for any licences granted to
hotel guests in the course of the Borrower's business as
hoteliers and any other licence for a period (including any
period or periods for which the licensee may have a right
of renewal) not exceeding 12 months and in each such case
so long as no tenancy or other proprietary interest or
security of tenure is created thereby);
(ii) grant, enter into, or authorise any agreement for the
operation of all or any part of the Hotel Business or the
Properties as a franchise or on a franchise basis or with
any person or persons to operate or manage all or any part
of the Hotel Business or the Properties (including without
limitation any reservations service agreement) or for the
Hotel Business to be operated under any flag or as part of
a group including hotels other than the Properties;
provided that (1) in the event that any such written consent is
given by the Administrative Agent, the Borrower will promptly at
its cost, supply such documents and other information relating
thereto as the Administrative Agent may reasonably require; (2)
without limitation to its discretion to decline to give any such
consent or to impose further conditions to the giving of any
consent) the Administrative Agent may, upon giving any consent in
relation to any matter falling within paragraph (ii) above require
an undertaking from the relevant person or person with the
Security Agent not to determine the relevant agreement without
first giving notice to the Security Agent and agreeing to continue
such agreement with or for the benefit of the Secured Parties, and
from the Borrower to perform its obligations under and to use all
reasonable endeavours to enforce the terms of such agreement and
to maintain such agreement in force, and to notify the
Administrative Agent of any notice received under such agreement
(including without limitation) any report or communication in
respect of any shortfall or decline in operational standards and
(3) the Administrative Agent hereby consents to the Borrower
entering into the Butlin's Licence, the RLMS Services Agreement,
the Butlin's Services Agreement and the LSA Services Agreement (as
those terms are defined in the Acquisition Agreement);
(i) from and after the Completion Date:-
(i) obtain, comply with the terms of and do all things
necessary to maintain in full force and effect all
authorisations, approvals, certificates, licences and
consents required in or by all applicable rules and
regulations for the use of the Properties for the purpose
of
the Hotel Business;
(ii) insure the Properties at all times in their full
reinstatement values in accordance with the terms of the
Borrower's Charge and subject thereto against such risks as
the Administrative Agent shall reasonably require and
pending any such requirement against such risks as a
prudent owner of the Properties would reasonably be
expected to cover which insurance shall include full cover
against risks of terrorism (to the extent available on
reasonably commercial terms) to the satisfaction of the
Administrative Agent and to procure that the Security Agent
is nominated as loss payee under such policy (or, if the
Security Agent shall so direct, that such insurance is
effected in the joint names of the Borrower and the
Security Agent); and
(iii) effect and maintain such insurance in respect of the Hotel
Business as a reasonably prudent operator of a business
comparable with the Hotel Business may effect or as the
Administrative Agent may from time to time require
including (but not limited to) third party liability and
business interruption insurance in such amount as the
Administrative Agent shall reasonably require and to
procure that
the Security Agent is nominated as loss payee under such
policy (or, if the Security Agent shall so direct, that
such insurance is effected in the joint names of the
Borrower and the Security Agent).
(j) not without the prior written consent of the Lenders:-
(i) save in favour of the Security Agent in accordance with the
Security Documents, create or permit to be created or to
subsist any Encumbrance on or over the whole or any part of
the Borrower's undertaking or assets (including, but
without limitation, revenues), present or future other than
Permitted Encumbrances; or
(ii) except in accordance with the Security Documents, borrow or
raise any money or incur credit or give any guarantees,
indemnities or other assurances against financial loss,
other than by the issue of the Loan Note or by the
Subordinated Loan;
(k) not exercise or omit to exercise any right or discretion in
relation to the Properties or the Hotel Business in such a way as
may adversely affect the value thereof or the interest of the
Lenders and the Security Agent therein and, without limitation,
not to exercise any right to break or determine any
lease under which any of the Properties is held prior to the
expiry of the full contractual term thereof without the prior
written consent of the Lenders;
(l) not without the prior written consent of the Administrative Agent
(after consultation with the Lenders) or save pursuant to the
Improvement Programme to construct any new buildings or structure
on the Properties or alter or remove the existing structures or
buildings or any part or parts thereof or any fixtures therein;
(m) deliver to the Administrative Agent (in sufficient copies for each
of the Lenders) copies of all documents despatched by the Borrower
to its shareholders (or any class of them) or its creditors
generally (or any class of its creditors) at the same time that
they are despatched;
(n) permit each of the Agents and any person (being an accountant,
auditor, solicitor, valuer or other professional adviser of such
Agent) authorised by either of such Agents to have, at all
reasonable times during normal business hours and on reasonable
notice, access to the Properties and the accounting books and
records of the Borrower;
(o) pay and discharge all Taxes prior to the date on which the same
become overdue unless, and only to the extent that, such Taxes
shall be contested in good faith by appropriate
proceedings, pending determination of which payment may lawfully
be withheld;
(p) promptly and in any event within any applicable period provided
for the same in any applicable statute, law or regulation deliver
all necessary forms and documents required to be delivered to or
registered with any governmental, statutory or other body or
agency in connection with the Security Documents and any of the
transactions contemplated thereunder;
(q) not without the prior written consent of the Administrative Agent
sell, transfer, lease, lend or otherwise dispose of any of its
undertaking and assets from time to time owned by it with a value
in excess of (pound)75,000;
(r) not, without the prior written consent of the Administrative Agent
(after consultation with the Lenders), make any change in the
Hotel Business which would result in a substantial change in such
business (including, without limitation, the name under which any
of the Properties is operated as a hotel), nor carry on any other
business which is substantial in relation to the Hotel Business as
at present conducted;
(s) not, without the prior written consent of the Administrative Agent
(after consultation with the Lenders), merge or consolidate with
any other person or enter into any joint venture
or partnership agreement;
(t) not, without the prior written consent of the Administrative Agent
(after consultation with the Lenders), incorporate any company as
its subsidiary or acquire any shares or securities issued by any
company;
(u) not, without the prior written consent of the Administrative Agent
(after consultation with the Lenders), make any redemption of any
of its shares, purchase any of its shares or otherwise reduce its
issued share capital from time to time, nor declare or pay any
dividend or other distribution on its shares nor to make any
repayment or partial repayment of the stock constituted by or
under the Loan Note prior to 23 June 2002 nor make or agree to the
conversion of such stock nor consent to the transfer of such stock
other than as permitted by the Loan Note nor* agree to any
variation of the terms of the Loan Note ;
(v) take all steps available to the Borrower which are reasonably
required by the Administrative Agent so as to enable interest
payable hereunder to be made without deduction of Tax;
(w) procure the delivery by no later than 30 September 1999 to the
Administrative Agent from a suitably qualified professional person
- --------
* Amended in manuscript on executed Agreement
or firm acceptable to the Administrative Agent of a certificate
addressed to the Administrative Agent and the Lenders confirming
that all computer and other systems used in connection with the
Hotel Business and/or the Properties are Millennium compliant; and
(x) comply in all respects with its obligations under the Acquisition
Agreement and will (subject always to the terms of the Acquisition
Agreement Charge) enforce or procure enforcement of the
Acquisition Agreement and its rights under the Acquisition
Agreement in accordance with its terms and will not amend or vary
the same in any material respect or grant any waiver of time or
indulgence under the Acquisition Agreement and will so far as is
within its power of procurement proceed to completion of the
Acquisition Agreement in accordance with its terms.
12.2 General
The Borrower hereby agrees that at any time and from time to time upon
the written request of the Administrative Agent and/or the Security Agent
the Borrower will promptly and duly execute, deliver and do any and all
such further acts, instruments, documents, matters and things as either
of the Agents may reasonably require for the purpose of obtaining the
full benefit or intended benefit of this Agreement and the other Security
Documents and of the rights, title,
interest and powers granted or intended to be granted herein and therein.
13. Changes in Circumstances
13.1 Illegality
If for any reason it becomes unlawful or prohibited by law or regulatory
requirement or any judgment, order or direction of any court, tribunal or
authority binding upon a Lender for any Lender to make or maintain its
participation in the Loan or to give effect to any of its obligations
owed to the Borrower as contemplated by this Agreement or to fund in the
London Interbank Market the whole or any part of its participation in the
Loan, such Lender shall inform the Administrative Agent and the
Administrative Agent shall thereupon give notice to the Borrower to that
effect and thereupon the Borrower shall prepay such Lender's
participation in the Loan on the latest date as may be required by the
relevant law or regulatory requirement in accordance with and subject to
the provisions of Clause 13.4. Without prejudice to the obligations of
the Borrower to so prepay, the Administrative Agent, the Lender so
affected and the Borrower shall negotiate in good faith during the period
of 30 days next succeeding the giving of such notice with a view to
agreeing an alternative basis mutually acceptable to such Borrower and
the Lender for such Lender to make or maintain its participation in the
Loan.
13.2 Increased Costs
If by reason of the introduction of or any change in any applicable law,
treaty, regulation or regulatory requirement or any change in the
interpretation or application of any of the foregoing by any judicial,
governmental or other competent body or authority or if by reason of
compliance by any Lender or either of the Agents with any applicable
directive, request or requirement (whether or not having the force of law
but with which banks normally comply) of any central bank (including, but
not limited to, the European Central Bank) or governmental, fiscal or
other authority (including, but not limited to, a directive, request or
requirement relating to any Lender's allocation of capital for the
purpose of its business):-
(a) the cost to any Lender of making, funding or maintaining its
participation in the Loan (including, without prejudice to the
generality of the foregoing increased costs as a result of changes
or modifications in any applicable reserve requirements or capital
adequacy requirements or supervisory fees) or of otherwise giving
effect to this Agreement or any of the arrangements contemplated
hereby is increased; and/or
(b) any sum received or receivable by any Lender or either of the
Agents under or in connection with this Agreement or any of the
other Security Documents or the effective return to any Lender or
either of the Agents
under or in connection with this Agreement or any of the other
Security Documents is reduced; and/or
(c) any Lender or either of the Agents makes any payment or forgoes
any interest or other return on or calculated by reference to the
amount of any sum received or receivable by it under or in
connection with this Agreement or any of the other Security
Documents; and/or
(d) any Lender suffers a reduction in the rate of return on its
overall capital in respect of this Agreement below a level which
might reasonably have been expected at the date hereof and which
it would otherwise have been able to achieve; and/or
(e) any Lender or either of the Agents is subject to liability to Tax
in connection with its Commitment or share of Outstandings (if
any) or any part thereof or in connection with any of the Security
Documents,
in any such case by or in an amount (in this Clause referred to as the
"Relevant Amount") which such Lender or such Agent deems material, then
and in any such case:
(i) the claimant (being such Lender or, as the case may be,
such Agent wishing to make a claim under this Clause) shall
promptly notify the Borrower in writing (in the case of
such Lender, through the
Administrative Agent) of the happening of such event;
(ii) the Borrower shall pay from time to time to the
Administrative Agent for the account of the claimant, on
demand made to it, such amounts as the claimant may specify
to be necessary to compensate the claimant for the Relevant
Amount; and
(iii) in the case of a demand made by a Lender, the Borrower
shall be at liberty at any time after the receipt of such
notice, so long as the circumstances giving rise to such
Relevant Amount continue, on giving not less than five
business days' irrevocable notice to the Administrative
Agent and such Lender, to prepay all (but not part only) of
such Lender's participation in the Loan in accordance with
and subject to the provisions of Clause 13.4,
and the right to make any such demand as is referred to in Clause
13.2(ii) shall survive the repayment or prepayment of the Loan.
Provided that the Borrower shall have no obligation to make payment
pursuant to Clause 13.2(ii) where any increased cost:
(a) is compensated for by the payment of the Mandatory Costs Rate;
(b) is compensated for by the operation of Clause 14.3 (Withholding)
or would have been compensated for by the operation of such clause
but for a Lender ceasing to be a Qualifying Lender;
(c) which represents Tax on, or any change in the rate of Tax on, the
overall net income, profits or gains of a Lender (or the overall
net income of a division or branch of the Lender) imposed in the
jurisdiction in which its principal office or Lending Office for
the time being is situate or in which it is resident for Tax
purposes or is carrying on business and by virtue thereof is
subject to Tax in that jurisdiction; or
(d) is attributable to a Lender incurring, after the date of this
Agreement, a commitment to lend (or lending pursuant to any such
commitment) in breach of any regulation of any central bank or
other fiscal, monetary or other authority having jurisdiction over
that Lender.
13.3 Market Disruption
(a) Notwithstanding anything to the contrary contained in this
Agreement, if:-
(i) the Administrative Agent receives notice from a Lender (an
"Affected Lender") at any time that the relevant LIBOR
calculated as provided in this Agreement would not or does
not accurately reflect
the cost to it of funding its participation in the Loan
during the Interest Period in question or that by reason of
circumstances generally affecting the London Interbank
Market it is impracticable for the Affected Lender to fund
or continue to fund its portion of the Loan during such
period; or
(ii) in respect of any Interest Period in respect of which
interest is to be determined by reference to the rates
quoted by the Reference Banks no Reference Bank or only one
Reference Bank furnishes a quotation to the Administrative
Agent for the purpose of determining LIBOR on the
applicable Quotation Date; or
(iii) the Administrative Agent determines that at 11:00am on the
applicable Quotation Date in respect of any such Interest
Period as is referred to in Clause 13.3(a)(ii) none or one
only of the Reference Banks was being offered deposits in
Sterling in the London Interbank Market for the Interest
Period in question,
the Administrative Agent shall give notice to the Borrower and to
the Lenders stating the circumstances which have caused the notice
to be given. The Loan shall (subject to the other terms and
conditions of this Agreement) nonetheless be made on the requested
Drawdown
Date if it has not already been made. The Administrative Agent (on
behalf of and after consultation with the Lenders or, as the case
may be, the Affected Lender) and the Borrower shall negotiate in
good faith during the period (hereinafter called the "negotiation
period") of 30 days next succeeding the giving of such notice to
the Borrower with a view to agreeing an alternative basis
acceptable to the Borrower and the Lenders or, as the case may be,
the Affected Lender for funding or continuing to fund the Loan to
the Borrower whether with the currency of the Loan or with some
other currency or otherwise and/or for determining the interest
rates and/or Interest Periods from time to time applicable to the
Loan.
(b) If the Administrative Agent and the Borrower are unable during the
negotiation period to agree upon an alternative basis as aforesaid
acceptable to the Borrower and the Lenders or, as the case may be,
the Affected Lender, the Interest Period or Interest Periods
applicable to the Loan (or affected part thereof) following such
notification shall each be deemed to be or have been of a duration
of one month (or such other period as the Administrative Agent may
consider appropriate) and the Administrative Agent shall set out
the Interest Period or Interest Periods and the rate or rates of
interest applicable in respect of such Interest Period or Interest
Periods, which rate or rates
shall represent the cost as determined by each Lender or, as the
case may be, the Affected Lender (and notified to the
Administrative Agent) of funding its participation(s) in the Loan
from whatever source or sources it shall think fit during the
Interest Period or Interest Periods in question plus a rate of
interest per annum equal to the Margin and the Mandatory Costs
Rate. The foregoing procedure shall be repeated as often as may be
necessary and interest accruing under this Clause 13.3 shall
accrue from day to day and shall be payable by the Borrower on the
last day of each Interest Period so set.
(c) Once the circumstances which have caused this Clause 13.3 to be
implemented have ceased to exist, the other provisions of this
Agreement regarding the calculation and payment of interest in
respect of the Loan shall operate with effect from the end of the
current Interest Period set by paragraph (b) of this Clause 13.3.
(d) The Borrower shall be at liberty at any time after the setting of
an interest rate or interest rates by the Administrative Agent as
aforesaid (but only so long as the circumstances which have caused
this Clause 13.3 to be implemented continue to exist) on giving
not less than five business days' irrevocable prior written notice
to the Administrative Agent and the Lenders or as the case may be
an Affected Lender to repay to the Administrative Agent for the
account of the Lenders or as
the case may be an Affected Lender all (but not part only) of the
Loan or the affected part thereof to which such interest rate or
interest rates apply in accordance with and subject to the
provisions of Clause 13.4.
13.4 Prepayment
Where any Lender's participation in the Loan is prepaid by the Borrower
pursuant to any of the provisions of this Clause 13 the Borrower shall
simultaneously with such prepayment pay to the Administrative Agent for
the account of such Lender accrued interest on any sum prepaid and all
other sums payable by the Borrower to or for the account of such Lender
pursuant to this Agreement together with such amount as may be specified
by such Lender to be necessary to compensate it for any loss (including,
without limitation loss of profit) incurred by it for the remainder (if
any) of the then current Interest Period(s) as a consequence of such
prepayment together also with any amounts which may be payable under
Clause 17 but no other premium or penalty and the amount of the Loan
shall be reduced accordingly.
13.5 Certificate
The certificate of the Administrative Agent or, as the case may be, any
Lender as to any of the matters referred to in this Clause (accompanied
by reasonable documentation and details in respect of any relevant
calculations) shall, save for any manifest error, be conclusive and
binding on the Borrower.
14. Payments
14.1 Procedure
(a) All sums to be advanced by the Lenders to the Borrower shall be
paid by the Lenders to the account of the Administrative Agent
specified by the Administrative Agent to the Lenders for that
purpose and shall be paid by the Administrative Agent to the
Borrower to such account or accounts as the Borrower may notify to
the Administrative Agent for that purpose.
(b) All repayments and prepayments under Clause 7 (Repayment and
Prepayment), payments of interest to be made under Clauses 6
(Interest), 13 (Changes in Circumstances) or this Clause 14 and
payments under Clauses 16 (Expenses, Fees and Commissions) and 17
(Indemnities) and other payments to the Lenders by the Borrower
hereunder shall be made by the Borrower to the Administrative
Agent for the account of the Lenders in Sterling in cleared funds
on the date due for payment to such account as the Administrative
Agent may notify to the Borrower for this purpose. The
Administrative Agent shall forthwith distribute such payments to
the Lenders in accordance with their respective
entitlements hereunder.
(c) If any sum becomes due for payment hereunder on a day which is not
a business day, such payment shall be made on the next succeeding
business day and interest shall be increased accordingly unless
such next succeeding business day falls in another calendar month
in which event such payment shall be made on the immediately
preceding business day.
(d) (i) Unless the Administrative Agent shall have been notified by
a Lender not later than one business day prior to the
Drawdown Date that such Lender will not make available its
portion of the Facility the Administrative Agent may assume
that such Lender has made its portion available to the
Administrative Agent. If the Administrative Agent makes an
amount available to the Borrower which has not (but should
have) been made available to the Administrative Agent by a
Lender, the Administrative Agent shall be entitled to
recover the relevant amount from such Lender on demand, or
failing this, the Borrower shall on request made by the
Administrative Agent to the Borrower refund such amount,
together with interest thereon at the rate determined by
the Administrative Agent (save in the case of manifest
error) to be equal to the cost to the Administrative Agent
of
funding such amount for the period until receipt by the
Administrative Agent thereof.
(ii) If the Administrative Agent makes an amount available to a
Lender which has not (but should have) been made available
to the Administrative Agent by the Borrower, such Lender
shall on request refund such amount to the Administrative
Agent together with interest thereon at the rate determined
by the Administrative Agent to be equal to the cost to the
Administrative Agent of making available such amount for
the period until receipt by the Administrative Agent
thereof.
14.2 Default Interest
In any event of non-payment by the Borrower of any sum due from it on the
date upon which the same is due and payable pursuant to this Agreement
the Borrower shall pay interest on demand made on the Borrower on such
sum from and including the date of such non-payment to the date of actual
payment (as well after as before judgment) at the rate per annum
determined by the Administrative Agent from time to time to be the
aggregate of (i) the Margin, (ii) 2% per annum, (iii) LIBOR for such
consecutive periods as the Administrative Agent may determine (provided
that for the first two business days following default the rate of
interest applicable shall be overnight LIBOR), and (iv) the Mandatory
Costs
Rate in respect of such unpaid sum.
14.3 Withholding; Gross-up
All payments to be made by the Borrower under this Agreement, whether in
respect of principal, interest, fees or otherwise, shall (save insofar as
required by law to the contrary) be paid in full without set-off or
counterclaim and free and clear of and without any deduction or
withholding or payment for or on account of any Taxes that may be imposed
in the United Kingdom or any other jurisdiction from which payment may be
made by the Borrower under this Agreement. If the Borrower shall be
required by law to effect any deduction or withholding or payment as
aforesaid from or in connection with any payment made under this
Agreement for the account of any Lender or, as the case may be, for the
account of or for either Agent's own account (the person for whose
account the payment is made being herein referred to as the "Payee")
then:
(a) the Borrower shall promptly notify the Administrative Agent upon
becoming aware of the relevant requirements to deduct any such
deduction or withholding or payment;
(b) the Borrower shall ensure that such deduction or withholding or
payment does not exceed the minimum legal liability therefor,
shall remit the amount of such Tax to the appropriate Taxation
authority and shall forthwith pay to the Administrative Agent for
the account of the Payee such additional
amount as will result in the immediate receipt by the Payee of the
full amount which would otherwise have been receivable hereunder
had no such deduction or withholding or payment been made; and
(c) the Borrower shall not later than 50 days after each deduction or
withholding or payment of any Taxes forward to the Administrative
Agent documentary evidence reasonably required by the Payee in
respect of the payment of any Taxes which the Administrative Agent
shall forward to the Payee upon receipt by the Administrative
Agent.
14.4 Credit Against Tax
If the Borrower makes a payment pursuant to Clause 14.3 or Clause 14.5 to
or for account of any Lender and such Lender (or in the case of Clause
14.5 the relevant Agent) determines (which determination shall be in its
sole discretion but exercised in good faith) that it has received or been
granted a credit against or relief or remission for, or repayment of, any
tax paid or payable by it in respect of or calculated with reference to
the deduction or withholding giving rise to such payments, such Lender
(or in the case of Clause 14.5 the relevant Agent) shall, to the extent
that it can do so without prejudice to the retention of the amount of
such credit, relief, remission or repayment, pay to the Borrower such
amount as such Lender (or in the case of Clause 14.5 the relevant Agent)
shall
have determined (which determination shall be in its sole discretion but
exercised in good faith) to be attributable to such deduction or
withholding and which will leave such person (after such payment) in no
better or worse position than it would have been in if the Borrower had
not been required to make such deduction or withholding. Nothing herein
contained shall interfere with the right of a Lender or either Agent to
arrange its tax affairs in whatever manner it thinks fit nor oblige any
Lender or either Agent to disclose any information relating to its tax
affairs or any computations in respect thereof or in respect of payments
under this Agreement.
14.5 Agency Payments
If either Agent is obliged by law or any regulatory action or decision to
make any deduction or withholding from any payment to any of the Lenders
(an "agency payment") which represents an amount or amounts received by
such Agent from the Borrower under the Security Documents, the Borrower
shall pay directly to the relative Lender such sum (an "agency
compensating sum") as will, after taking into account any deduction or
withholding which the Borrower is obliged to make from the agency
compensating sum, enable such Lender to receive, on the due date for
payment of the agency payment, an amount equal to the agency payment
which such Lender would have received in the absence of any obligation to
make any deduction or withholding.
14.6 Currency of Account
Sterling shall be the currency of account and payment of each and every
sum due from the Borrower under the Security Documents except that any
payment by the Borrower in respect of any cost, loss, expense, liability,
duties or taxes referred to in Clauses 16 (Expenses, Fees and
Commissions) and/or 17 (Indemnities) shall be made in the currency in
which the same were incurred by the relevant Secured Party.
14.7 Appropriation of Payments
If the Administrative Agent receives a payment insufficient to discharge
all the amounts then due and payable by the Borrower under this
Agreement, the Administrative Agent shall have an absolute and unfettered
right to appropriate any payments received from the Borrower, or amounts
recovered under the Security Documents to such indebtedness of the
Borrower hereunder (and whether to principal, interest or any other sums
payable hereunder) as the Administrative Agent may determine, to the
exclusion of any right on the part of the Borrower to make an
appropriation in respect of such payments.
14.8 Qualifying Lenders
Each Lender confirms as at the date hereof, or, in the case of a Lender
which is a Transferee, successor in title or assign, on the date of the
relevant transfer, assignment or succession, that it is a Qualifying
Lender. If otherwise than as a result of the introduction of, change in,
or
change in the interpretation or application of, any law or regulation or
any published practice or published concession of a relevant taxing
authority occurring after the date of this Agreement or the date upon
which any rights under this Agreement were assigned or transferred to
that Lender as Transferee or assignee or the date upon which it succeeded
to such rights as successor in title, a Lender is not or ceases to be a
Qualifying Lender the Borrower shall not be required to pay to such
Lender under this Clause 14 any amount in respect of Taxes in excess of
the amount it would have been obliged to pay if that Lender had been or
had not ceased to be a Qualifying Lender.
14.9 Double Taxation Treaties
If a Lender is resident in a country with which the United Kingdom has an
appropriate double taxation treaty under which that Lender would be
entitled to receive principal, interest and fees under this Agreement
from the Borrower without withholding of United Kingdom income tax then
(unless such Lender is able to receive such principal interest and fees
without such withholding other than by virtue of such double tax action
treaty) that Lender shall apply to the appropriate authorities for such
exemption and shall deliver to the Inland Revenue such United Kingdom
Inland Revenue forms as may be required for that Lender to claim such
exemption from United Kingdom withholding tax and the Borrower shall not
be required to pay to that Lender under this Clause 14 any amount in
respect of Taxes in
excess of the amount it would have been obliged to pay if such
application had been made and such Inland Revenue forms had been so
delivered.
15. Default
15.1 Events of Default
Each of the following events (whether or not arising as a result of
events or circumstances beyond the control of the Borrower) shall
constitute an Event of Default, namely if:
(a) the Borrower shall fail to pay any principal, interest, fees or
any other sum payable pursuant to this Agreement or any other
Security Document on the date upon which the same is due and
payable and at the place at and in the currency in which it is
expressed to be payable pursuant to this Agreement unless the
failure is due solely to technical or administrative reasons
beyond its control and the relevant amount is duly paid within 2
business days after the due date; or
(b) the Borrower shall commit any breach (other than as referred to in
Clause 15.1(a)) of or default in the due performance or observance
of any of its obligations or undertakings contained in this
Agreement or the other Security Documents and such breach, if
capable of remedy, is not remedied within 20 business days after
the Borrower becomes aware of it; or
(c) any representation or warranty or statement
made or deemed to be made or repeated by the Borrower in
connection with the negotiation of this Agreement or in any
Security Document or in any notice, certificate or statement of
fact referred to in or delivered under any of the Security
Documents is or shall prove to be untrue or incorrect in any
material respect or misleading when made or deemed or to be made
or repeated hereunder; or
(d) any of the Security Documents is not or ceases to be in full force
and effect or the validity or enforceability of any of the terms
of any of the Security Documents shall be contested by the
Borrower or any other party thereto (other than any of the Secured
Parties), or at any time any act, condition or thing required to
be done, fulfilled or performed in order (i) to enable the
Borrower lawfully to enter into, or exercise its rights under and
perform the obligations expressed to be assumed by it in each
Security Document, or (ii) to ensure that the obligations
expressed to be assumed by the Borrower in each Security Document
are legal, valid and enforceable, is not done fulfilled or
performed when due; or
(e) any Indebtedness of the Borrower (including, but without
limitation, the Loan Note or the Subordinated Loan) in excess of
(pound)10,000 in aggregate or (in the case of trade supplies in
the ordinary course of business) in excess of (pound)100,000 in
aggregate:-
(i) is declared to be or otherwise becomes due and payable
prior to its specified maturity by reason of an event of
default or default; or
(ii) is not paid when due or within any applicable grace period,
or any creditor or creditors of the Borrower become(s) entitled to
declare any such Indebtedness due and payable prior to its
specified maturity, and in any such case such declaration is not
challenged by the commencement of bona fide legal proceedings; or
(f) any Encumbrance securing Indebtedness over any asset of the
Borrower (including, without limitation, the Permitted Charge)
becomes enforceable or a creditor or encumbrancer attaches or
takes possession of, or a distress, execution, sequestration or
other process is levied or enforced upon or sued out against, any
of the undertaking and assets of the Borrower; or
(g) the Borrower:
(i) is, or is deemed for the purposes of any law to be, unable
or admits its inability to pay its debts as they fall due;
or
(ii) suspends making payments on all or any class of its debts
or announces an
intention to do so, or a moratorium is declared in respect
of any of its Indebtedness; or
(iii) commences negotiations with one or more of its creditors
with a view to the general readjustment or rescheduling of
all or part of its Indebtedness which it would otherwise
not be able to pay as it falls due; or
(iv) proposes or enters into any composition or other
arrangement for the benefit of its creditors generally or
any class of creditors; or
(h) the Borrower takes any action (including petition, proposal or
convening a meeting) or any legal proceedings are started or other
steps are taken for:-
(i) the Borrower to be adjudicated or found insolvent; or
(ii) the winding-up or dissolution of the Borrower (other than
in connection with a solvent reconstruction, the terms of
which have been previously approved in writing by the
Majority Lenders); or
(iii) the appointment of a trustee, receiver, administrative
receiver, administrator or similar officer of the Borrower
or the whole or any part of its undertaking and assets; or
(i) any adjudication, order or, as the case may be, appointment is
made under or in relation to any of the proceedings referred to in
Clause 15.1(h); or
(j) any event occurs or proceeding is taken with respect to the
Borrower in any jurisdiction to which it is subject which has an
effect equivalent or similar to any of the events mentioned in
Clauses 15.1(g) or (h); or
(k) the Borrower suspends or ceases, or threatens to suspend or cease,
to carry on the whole or a substantial part of its business or
sells or otherwise disposes of the whole or any substantial part
of its business, undertaking or assets, or threatens to do any of
the same without the prior written consent of the Lenders; or
(l) the Borrower fails to perform any of its obligations (being
obligations which the Administrative Agent determines in its
discretion to be material) under any other agreement between the
Borrower and an Agent, or any of the Lenders, as the case may be;
or
(m) any of the holdings of, or the beneficial ownership of any of, the
issued share capital of the Borrower changes without the previous
written consent of the Majority Lenders; or
(n) any change shall occur in the business or financial condition of
the Borrower from that disclosed to the Lenders which, in the
reasonable opinion of the Majority Lenders, constitutes an adverse
change material to the ability of the Borrower to perform its
obligations under any of the Security Documents; or
(o) all or any part of the Properties is compulsorily purchased or the
applicable local authority makes an order for the compulsory
purchase of the same; or
(p) any destruction of or damage to the Properties occurs which in the
opinion of the Majority Lenders is material and where such damage
or the cost of reinstatement is not fully covered by insurance
effected pursuant to Clause 12.1; or
(q) it is or becomes unlawful for the Borrower to perform any of its
obligations or purported obligations under the Security Documents;
or
(r) any event occurs or proceeding is taken with respect to the
Borrower in any jurisdiction to which it is subject which has an
effect equivalent or similar to any of the events mentioned in
Clauses 15.1(a) to (f), (h) or (k) to (o).
15.2 Acceleration
At any time after the happening of an Event of Default the Administrative
Agent may and shall if so requested by the Majority Lenders by notice in
writing to the Borrower:
(a) declare that the Loan and all interest thereon and all other sums
payable by the Borrower pursuant to this Agreement and any other
Security Document have become immediately due and payable
whereupon the same shall become immediately due and payable by the
Borrower; and/or
(b) declare that the Facility shall be cancelled forthwith, whereupon
the same shall be so cancelled.
16. Expenses, Fees and Commissions
16.1 Initial and Continuing Costs
The Borrower shall pay to the Administrative Agent on demand made on the
Borrower all expenses (including, but not limited to the expense of
Approved Valuations as provided by Clause 9.4 (though only for additional
Approved Valuations in accordance with Clause 9.4) and the Approved
Valuations and other surveys and reports referred to in the Fourth
Schedule and all other survey report valuation and legal fees and all
fees of the internal specialists of the Administrative Agent) (and all
Value Added Tax and similar Taxes thereon, if any) properly and
reasonably incurred or (in the case of its internal specialists)
notionally and reasonably incurred by the Administrative Agent and the
Lenders in connection with the negotiation, preparation, execution and
printing of this Agreement and the other Security Documents and the
arrangement of the Facility, the Hedging Arrangements (but so
that for the avoidance of doubt the premium payable in respect of the
Hedging Arrangements shall be paid to and retained by the Hedge Provider)
and any amendment, extension or consent or any other matter not of a
routine administrative nature arising out of or in connection with any
Security Document.
16.2 Enforcement Costs
The Borrower shall pay to the Administrative Agent on demand made on the
Borrower all expenses certified by either of the Agents or by any Lender
through the Administrative Agent as having been incurred by it (including
the fees payable or notionally payable to any internal specialists of the
Administrative Agent at their normal charging rate) in protecting or
preserving any of the rights of the Agents or such Lender against or
relating to the Borrower or in enforcing any of such rights or in suing
for or recovering any sum due to the Agents or such Lender hereunder from
the Borrower or in investigating any Potential Event of Default.
16.3 Stamp Duty
The Borrower shall pay on demand made on the Borrower all stamp,
documentary and other like duties and taxes, if any, to which this
Agreement and any other Security Document may be subject or give rise
(including, without limitation, any such duties and taxes as are payable
on or in connection with the acquisition of the Properties and the Hotel
Business or the enforcement of this
Agreement) and shall indemnify the Administrative Agent on behalf of the
Lenders against any and all liabilities with respect to or resulting from
any delay or omission on the part of the Borrower to pay any such duties
or taxes. Demand under this Clause 16.3 shall be made by the
Administrative Agent on the Borrower.
16.4 Arrangement Fee
The Borrower shall pay to the Administrative Agent in Sterling
immediately on the Drawdown Date an arrangement fee of one per cent (1%)
of the Facility Amount. Such fee shall be paid to the Administrative
Agent for the account of the Lenders listed in the First Schedule and
shall be divided between them in such proportions as they shall have
agreed.
16.5 Reimbursement by Borrower
If the Borrower fails to perform any of its obligations under this Clause
16 (Expenses, Fees and Commissions), the Borrower shall forthwith
reimburse the Administrative Agent for any payment made by it under this
Clause.
17. Indemnities
17.1 General
Subject to Clause 17.4 the Borrower shall upon demand and without
prejudice to any other rights which either Agent or any Lender may have
under any Security Document indemnify and keep indemnified each Agent,
each Lender and the Hedge
Provider against any funding or other cost, loss, expense or liability
(including, without limitation, any losses, costs or expenses sustained
or incurred in liquidating deposits taken to fund or maintain the Loan,
or sustained or incurred in connection with the cancellation,
termination, reduction or rearrangement of the Hedging Arrangements)
which it may sustain or incur as a result of:-
(a) the Facility not being made available to the Borrower by reason of
non-fulfilment of any of the conditions in Clause 4 (Availability
and Drawing) (other than by reason of the negligence or default of
the Agent or Lender otherwise entitled to such indemnity), or the
Borrower purporting to revoke a Notice of Drawing; or
(b) the occurrence or continuance of any Event of Default or Potential
Event of Default and/or the declaration of the Loan to be
immediately due and payable; or
(c) any party or any Agent on its behalf (whether by reason of
mandatory prepayment or otherwise) receiving or recovering all or
any part of the Loan or overdue sum otherwise than on the last day
of an Interest Period relating to the Loan or overdue sum and/or
otherwise than on the relevant Repayment Date; or
(d) the Borrower making a payment other than in accordance with Clause
14 (Payments) unless
the Administrative Agent has given its prior written consent to
such payment in a specified manner,
17.2 Currency Indemnity
(a) If, for any reason, any payment due from the Borrower under or in
connection with any Security Document is made or is satisfied in a
currency (the "Other Currency") other than the currency in which
the relevant payment under this Agreement is due (the "Contractual
Currency"), then to the extent that the payment (when converted
into the Contractual Currency at the rate of exchange on the date
of payment or, in the case of the liquidation or insolvency of the
Borrower, at the rate of exchange on the latest date permitted by
applicable law for the determination of liabilities in such
liquidation or insolvency) actually received by the party entitled
thereto falls short of the amount expressed to be due under the
terms of this Agreement or, as the case may be, such other
Security Document, the Borrower shall, as a separate and
independent obligation, indemnify the party entitled thereto and
hold such party harmless against the amount of such shortfall.
(b) If on any occasion the Contractual Currency so purchased exceeds
the amount payable hereunder in the Contractual Currency to the
party entitled thereto then, subject to the Borrower having no
further obligation, actual
or contingent, to such party under this Agreement, such party
shall refund to the Borrower the excess amount of the Contractual
Currency so purchased.
(c) For the purpose of this Clause "rate of exchange" means the rate
at which the party entitled thereto is able on the relevant date
to purchase the Contractual Currency with the Other Currency and
shall take into account any premium and other costs of exchange.
17.3 Independent Obligations
The above indemnities shall constitute separate and independent
obligations of the Borrower from the other respective obligations under
this Agreement, shall give rise to a separate and independent cause of
action against the Borrower and shall apply irrespective of any
indulgence granted by the Lenders or by the Agents from time to time.
17.4 Double Counting
None of the Agents or the Lenders shall be entitled to make any recovery
by way of indemnity if and to the extent that they would thereby recover
more than once in respect of the same loss.
18. The Agents
18.1 Appointment
Each Lender and the Hedge Provider irrevocably appoints the
Administrative Agent to act as its
agent for the purpose of this Agreement and the Security Agent to act as
its agent and trustee for the purpose of the Security Documents and
irrevocably authorises each of them to take such action and exercise such
rights, powers and discretions as are specifically delegated to it by
this Agreement or the other Security Documents and such other action,
rights, powers and discretions as are reasonably incidental thereto.
However, no Agent may begin any legal action or proceeding in the name of
a Lender or the Hedge Provider without its consent. The relationship
between the Administrative Agent and the Lenders is of agent and
principal only. The Administrative Agent shall not be a trustee for any
Lender or the Hedge Provider, nor an agent or trustee for the Borrower or
any other party thereto, under or in relation to any Security Document.
The Security Agent shall not be an agent or trustee for the Borrower or
any other party thereto other than the Secured Parties under or in
relation to any Security Document.
18.2 Duties of Administrative Agent
The Administrative Agent shall:
(a) promptly send to each Lender details of each communication
received by it from the Borrower under this Agreement (except that
details of any communication relating to a particular Lender shall
be sent to that Lender only), details of any Transfer Certificate
executed by any other Lender and provide such other information
relating to
the Facility as any Lender may reasonably request;
(b) promptly send to each Lender a copy of any legal opinion delivered
under this Agreement and of any document or information received
by it under Clause 4 (Availability and Drawing);
(c) subject to the other provisions of this Clause 18 (The Agents),
act in accordance with any instructions from the Majority Lenders
or, if so instructed by the Majority Lenders, refrain from
exercising a right, power or discretion vested in it under this
Agreement, provided however that except with the prior written
consent of all the Lenders, the Administrative Agent shall not be
entitled to (i) extend the due date or reduce the amount of any
payment of principal, interest or other amount payable under this
Agreement, (ii) change the currency in which any amount is payable
under this Agreement, (iii) increase any Lender's Commitment, (iv)
extend the Availability Period, (v) amend the definition of
"Majority Lenders" in Clause 1.1, (vi) amend the provisions of
Clauses 9.1, 9.2, 9.3, 9.4, 9.5, or 15.2 (vii) change the
Valuation Basis or (viii) amend this Clause 18.2; and
(d) have only those duties, obligations and responsibilities of a
solely mechanical and administrative nature, expressly specified
in this Agreement.
18.3 Duties of Security Agent
The Security Agent shall:
(a) subject to the other provisions of this Clause 18 (The Agents),
act in accordance with any instructions from the Majority Lenders
or, if so instructed by the Majority Lenders, refrain from
exercising a right, power or discretion vested in it under this
Agreement or the other Security Documents, provided however that
except with the prior written consent of all the Lenders, the
Security Agent shall not be entitled to (i) extend the due date or
reduce the amount of any payment of principal, interest or other
amount payable under the Security Documents, (ii) change the
currency in which any amount is due or payable under the Security
Documents, or (iii) amend the definition of "Majority Lenders" for
the purposes of the Security Documents;
(b) notify the Lenders as soon as reasonably practicable if it has
actual knowledge or express notice of the occurrence of an Event
of Default or Potential Event of Default; and
(c) have only those duties, obligations and responsibilities expressly
specified in the Security Documents.
18.4 Performance of Duties
Each Agent:
(a) may perform any of its duties, obligations and responsibilities
under the Security Documents by or through its personnel or
agents;
(b) may refrain from exercising any right, power or discretion vested
in it under the Security Documents until it has received
instructions from the Majority Lenders or (subject to the
Inter-Creditor Agreement) the Hedge Provider (provided that
instructions have been requested) as to whether (and, if it is to
be, the way in which) it is to be exercised and shall in all cases
be fully protected when acting, or (if so instructed) refraining
from acting, in accordance with instructions from the Majority
Lenders or (as the case may be) the Hedge Provider;
(c) may treat (i) the Lender which makes available any share of the
Loan as the person entitled to repayment of that share unless all
or part of it has been assigned or transferred (and the
Administrative Agent has received notice of that assignment or
transfer) in accordance with Clause 19 (Transfer); and (ii) the
office(s) notified by a Lender to the Administrative Agent for
this purpose before the signing of this Agreement (or, as the case
may be, in the relevant Transfer Certificate or notice of
assignment) as its Lending Office(s) unless the Administrative
Agent has received from that Lender a notice of change of Lending
Office in accordance with Clause 19 (Transfer). Each Agent may act
on any such assignment and/or notice until it is superseded by a
further assignment and/or notice;
(d) shall not be required to do anything which would or might in its
reasonable opinion be contrary to any law or directive or
otherwise render it liable to any person which is not a party to
the Security Documents and may do anything which is in its
reasonable opinion necessary to comply with any law or directive;
(e) shall not be required to make any enquiry as to default by the
Borrower (unless specifically so instructed by the Majority
Lenders) in the performance or observance of any of the provisions
of the Security Documents or as to the existence of any Event of
Default or Potential Event of Default unless that Agent acquires
actual knowledge to the contrary or has been notified in writing
thereof by a Lender;
(f) may refrain from taking any step (or further step) to protect or
enforce the rights of any person under the Security Documents
until it has been indemnified (or received confirmation that it
will be so indemnified) and/or secured to its satisfaction against
any and all actions, charges, costs, losses, expenses or
liabilities (including legal, accountants' and other professional
fees)
which would or might be brought, made or preferred against or
suffered, sustained or incurred by it as a result; and
(g) shall notify the Lenders and (if appropriate) seek instructions of
the Lenders in relation to any material communication from the
Borrower and, in particular, shall seek the consent of the Lenders
if the Borrower requests the Administrative Agent to consent to
the grant of any matter referred to in Clause 12.1 (h) or to
structural alterations to the Properties or to capital expenditure
in excess of (pound)100,000 (other than in relation to the
Improvement Programme in respect of which Clause 9.5 shall apply)
and the Lenders shall not unreasonably withhold or delay the
giving of such instructions.
18.5 Agents' Discretions
Each Agent may:
(a) assume that any representation made by the Borrower or any other
party thereto in connection with the Security Documents is true;
(b) assume that no Event of Default has occurred and that the Borrower
is not in breach of or default under the Security Documents;
(c) assume that any right, power, authority or discretion vested in
this Agreement upon the Majority Lenders or any other person has
not been exercised;
(d) rely on any communication, certificate, legal opinion or other
document reasonably believed by it to be genuine;
(e) rely as to any matter of fact which might reasonably be expected
to be within the knowledge of any person, on a written statement
by that person and on any communication or document believed by it
to be genuine;
(f) obtain and pay for the advice or services of any lawyers,
accountants, surveyors or other experts in relation to the
negotiation, preparation, execution and enforcement of the
Security Documents as may to it seem necessary or desirable and
rely on any such advice;
(g) retain for its own benefit and without liability to account any
fee or other sum receivable by it in connection with its agency
and subject always to Clause 20 (Set Off/Pro-Rata Sharing) for its
account; and
(h) subject to the interests of the Lenders not being thereby
prejudiced accept deposits from, lend money to, provide any
advisory or other services or engage in any kind of banking or
other business with, any party to any Security Document or related
company of any party (and, in each case, may do so without
liability to account to any Lender).
18.6 Limitation of Responsibilities
No Agent nor any of their respective personnel or agents shall be:
(a) responsible for the adequacy, accuracy, completeness or
reasonableness of any representation, warranty, statement,
projection, assumption or information provided by the Borrower to
any Lender, or contained in any Security Document or any notice or
other document delivered under or in connection with any Security
Document including, but without limitation, any financial
statement delivered by the Borrower or on its behalf under Clauses
12.1(a) or (b) or otherwise and any Approved Valuation or other
valuation, survey or report relating to the Properties and/or the
Hotel Business;
(b) responsible for the execution, delivery, validity, legality,
adequacy, enforceability or admissibility in evidence of any
Security Document or any such notice or other document or for the
satisfaction or failure by the Borrower to satisfy any condition
precedent to the utilisation of the Facility; or
(c) responsible for the collectability of amounts payable under any
Security Documents;
(d) responsible for the accuracy of any statements (whether written or
oral) made in or in connection with any Security Documents; or
(e) liable for anything done or not done by it or any of them under or
in connection with any Security Document save in the case of its
or their own gross negligence or wilful misconduct (but so that
this Clause 18.6(e) shall not be construed to impose any liability
in respect of any matter for which liability is under any other
provision of this Clause excluded).
18.7 The Agents as a Lender
Each Agent shall have the same rights and powers with respect to its
Commitments and Outstandings (if any) as any other Lender and may
exercise those rights and powers as if it were not also acting as an
Agent.
18.8 No Reliance on Agents
Without affecting the responsibility of the Borrower for information
supplied by it or on its behalf in connection with any Security Document,
each Lender and the Hedge Provider confirms that it has itself been, and
will at all times continue to be, solely responsible for making its own
independent investigation and appraisal of the business, financial
condition, prospects, creditworthiness, status and affairs of the
Borrower or any other person and has not relied, and will not at any time
rely, on any Agent or other Lender:
(a) to provide it with any information relating to the business,
financial condition, prospects, creditworthiness, status or
affairs of the Borrower or any other person, whether coming into
its possession before or after the drawing of the Facility
(except, in the case of the Administrative Agent, as stated in
Clause 18.2 or as provided otherwise in this Agreement); or
(b) to check or enquire into the adequacy, accuracy, completeness or
reasonableness of any representation, warranty, Approved Valuation
or other valuation survey, report, statement, projection,
assumption or information at any time provided by or on behalf of
the Borrower or any other person under or in connection with any
Security Document (whether or not that information has been or is
at any time circulated to it by any Agent including, but without
limitation, any financial statement delivered by the Borrower or
on its behalf under Clauses 12.1 (a) or (b) or otherwise and any
such representation, warranty, valuation, statement projection,
assumption as information relating to the Hotel Business); or
(c) to assess or keep under review the business, financial condition,
prospects, creditworthiness, status or affairs of the Borrower or
any other person nor the value or adequacy of the Properties.
18.9 Lenders' Indemnity
To the extent that the Borrower does not do so on
demand or is not obliged to do so, each Lender shall on demand indemnify
each Agent in the proportion borne by its Outstandings to all the
Outstandings at the relevant time (or, if there are then no Outstandings,
in the proportion borne by its Commitments to the Total Commitments)
against any cost, expense or liability mentioned in Clause 16 (Expenses,
Fees and Commissions) or sustained or incurred by that Agent in complying
with any instructions from the Majority Lenders or otherwise sustained or
incurred by it (in its capacity as an Agent) in connection with its
duties, obligations and responsibilities under the Security Documents
except routine administrative costs and expenses of that Agent or to the
extent that they are sustained or incurred as a result of the gross
negligence or wilful misconduct of that Agent or any of its personnel or
agents.
18.10 Change of Agents
Notwithstanding the irrevocable appointments in Clause 18.1, an Agent may
resign at any time if it gives at least 30 days' notice in writing to the
Borrower and the Lenders and an Agent may at any time be removed by the
Majority Lenders giving not less than 30 days' notice to the Agent.
However, no resignation or removal shall be effective until the successor
has been appointed and accepted its appointment in accordance with this
Clause 18.10. The Majority Lenders may appoint a successor to the
resigning or removed Agent but, if the successor has not been so
appointed and accepted its appointment
within 15 days after the date of the notice of resignation or, as the
case may be, removal, the resigning Agent and the Majority Lenders may
appoint a successor Agent. Any appointment of a successor must be in
writing, signed by the person(s) appointing that successor and delivered
to that successor. Any acceptance of such appointment must be in writing,
signed by the person appointed and delivered to the person(s) appointing
that successor. The other parties to this Agreement shall be promptly
informed of the acceptance by a successor Agent. Upon the successor
accepting its appointment, the resigning or, as the case may be, the
removed Agent shall be automatically discharged from any further
obligation under the Security Documents and its successor and each of the
other parties to the Security Documents shall have the same rights and
obligations among themselves as they would have had if the successor had
been the original Agent party to this Agreement and the other Security
Documents. The resigning or, as the case may be, the removed Agent shall
provide its successor with (or with copies of) such records as its
successor requires to carry out its duties under the Security Documents.
18.11 Signing of Transfer Certificates
The Borrower, the Security Agent and each Lender (except for the Lender
and the Transferee seeking the relevant assignment and/or novation)
irrevocably authorises the Administrative Agent to sign each Transfer
Certificate on their behalf.
18.12 Security Agent as Trustee
Notwithstanding that the Security Agent is entitled to remuneration, the
Security Agent shall have all the rights, powers, privileges and
immunities which gratuitous trustees have or may have in England and by
way of supplement to the Trustee Act 1925 it is expressly declared as
follows (provided nevertheless that nothing in any of the following
provisions of this Clause 18.12 shall exempt the Security Agent from or
indemnify it against any liability for breach of trust in any case in
which the Security Agent has failed to show the degree of diligence and
care required of it having regard to the provisions of this Agreement and
the Security Documents or in the case of gross negligence or wilful
misconduct of the Security Agent):-
(a) As between the Lenders and the Security Agent in relation to any
of the provisions of any Security Document, or any agreement,
matter or thing relating to the Borrower or any Secured Asset, the
Security Agent may act on the opinion or advice of or any
information obtained from any lawyer, accountant, architect,
engineer, surveyor, broker, consultant, valuer, appraiser or other
expert, whether obtained by the Security Agent or a Lender, and
shall not be responsible for any loss occasioned by so acting
provided the Security Agent acts in good faith.
(b) Any opinion, advice or information referred
to in paragraph (a) may be sent or obtained by letter, telex
message, facsimile transmission, cablegram, telephone or any other
means. The Security Agent shall not be liable for acting on any
opinion, advice or information purporting to be so conveyed
although the same shall contain some error or shall not be
authentic.
(c) The Security Agent may accept as sufficient evidence a certificate
signed by any person believed by it (after due enquiry) to be a
director or other responsible officer of any person as to any fact
or matter upon which the Security Agent may require to be
satisfied. The Security Agent shall be in no way responsible for
any loss that may be occasioned by acting on any such certificate.
(d) The Security Agent shall not be liable for any failure, omission,
or defect in perfecting any of the security given or created by or
pursuant to the Security Documents including without prejudice to
the generality of the foregoing (i) failure to obtain any licence,
consent certificate or other authority for the execution,
delivery, validity, legality, adequacy, performance,
enforceability or admissibility in evidence of any Security
Document, (ii) failure to register the same in accordance with the
provisions of any of the documents of title of the Borrower to any
of the Secured Assets and/or of any Security Document and (iii)
failure to effect or procure registration of or otherwise protect
any of the security given or created by or pursuant to the
Security Documents by registering under the Land Registration Act
1925 or any other applicable registration laws in any relevant
jurisdiction by any notice, caution, filing, registration or other
entry prescribed by or pursuant to the provisions of the said
laws.
(e) Subject to Clause 4 (Availability and Drawing) hereof the Security
Agent may accept without enquiry, requisition, objection or
investigation such title (if any) as the Borrower may have to any
Secured Asset (or any part thereof) and shall not be liable for
any failure or omission to ascertain or investigate the title of
the Borrower or other person to any asset now or at any time
hereafter subject or purporting to be subject to any Encumbrance
created by or pursuant to the Security Documents.
(f) The Security Agent and every receiver, delegate, sub-delegate,
attorney, agent or other person validly appointed under the
Security Documents may indemnify itself or himself out of the
Secured Assets (or any proceeds thereof) against all actions,
charges, claims, costs, damages, demands, expenses, liability,
loss or proceedings which may be brought, made or preferred
against or suffered, incurred or sustained by it or him, acting
reasonably in relation to,
in connection with or arising out of the entry into any Security
Document, the taking or holding of any of the security given or
created by or pursuant to the Security Documents and/or in the
execution of any power, trust, authority or discretion vested in
any of them by any Security Documents and/or in respect of any
other matter or thing done or omitted to be done pursuant to any
Security Documents and/or acting as Security Agent.
(g) The Security Agent may place any or all title deeds and other
documents certifying, representing or constituting the title to
any of the Secured Assets and for the time being in its hands in
any safe deposit, safe or receptacle selected by the Security
Agent or with any banker or banking company or company whose
business includes undertaking the safe custody of documents or any
solicitor or firm of solicitors and may pay all reasonable sums
required to be paid on account of or in respect of any deposit of
such documents. The Security Agent may in its absolute discretion
make any such arrangements as are appropriate as chargee of the
Secured Assets for allowing the Borrower or its solicitors or
auditors or other advisers access to or possession of any such
title deeds and other documents when necessary or convenient.
(h) The Security Agent shall not be bound to give notice to any person
of the execution of any
Security Document or the occurrence of any Event of Default
(however described) under any Security Document (or any event or
circumstance which with the giving of notice and/or the passing of
time and/or the fulfilment of any other requirement would become
such an event of default) or whether any event has occurred as a
result of which the security constituted by any Security Document
may become enforceable and, (subject also to paragraph 18.4(e))
until it shall have actual knowledge or express notice to the
contrary, the Security Agent shall be entitled to assume that no
such event has happened and that the Borrower is observing and
performing all the obligations on its part contained in the
relevant Security Document.
(i) The Security Agent may perform any of its duties, obligations and
responsibilities under any Security Document by or through any of
its officers and personnel and/or may employ and pay an agent to
transact or concur in transacting any business and to do or concur
in doing any acts required to be done by the Security Agent
(including the receipt and payment of money). Any agent who is a
lawyer, accountant, architect, auctioneer, engineer, surveyor,
broker, consultant, valuer, appraiser or other person engaged in
any profession or business shall be entitled to be paid all
reasonable and usual professional and other charges for business
transacted and acts done by him or any partner or employee of his
in connection with any Security Document.
(j) The Security Agent may whenever it thinks fit delegate by power of
attorney or otherwise to any person or persons or fluctuating body
of persons (whether being a joint trustee or not) all or any of
the trusts, powers, authorities and discretions vested in the
Security Agent by any Security Document. Any such delegation may
be made upon such terms and conditions (including power to
sub-delegate) and subject to such regulations as the Security
Agent may in the interests of the Secured Parties think fit but
such terms, conditions and regulations shall not be inconsistent
with any of the provisions of any Security Document. Any
delegation by the Security Agent pursuant to this paragraph
18.12(j) shall not in any way relieve the Security Agent from any
liability or obligation under any Security Document. The Security
Agent shall as soon as reasonably practicable give notice to any
party to a Security Document of any such delegation (or any
renewal, extension or termination thereof) under that Security
Document or this Agreement. Any Lender may require such delegation
of authority to be revoked or withdrawn without giving reasons
therefor to the Security Agent.
(k) Neither the Security Agent nor any director
or officer of a corporation acting as Security Agent shall by
reason of its or his fiduciary position be in any way precluded
from entering into or being interested in any contract or
financial or other transaction or arrangement with the Borrower or
any person associated with the Borrower including (without
prejudice to the generality of this provision) any contract,
transaction or arrangement of a banking, insurance or property
advisory nature or any contract, transaction or arrangement in
relation to the making of loans or the provision of financial
facilities to, or the purchase, placing or underwriting of or
subscribing or procuring subscriptions for or otherwise acquiring,
holding or dealing with any property, notes, stocks, shares,
debenture stock, debentures, bonds or other securities of, the
Borrower, or any person associated as aforesaid or from accepting
or holding the trusteeship of any other trust deed constituting or
securing any other securities issued by the Borrower, or any such
person so associated or any other office or profit under the
Borrower or any such person so associated and shall be entitled to
retain and shall not be in any way liable to account to any person
for any profit made or share of brokerage or commission or
remuneration or other benefit received thereby or in connection
therewith.
(l) Any investment may, at the discretion of the Security Agent, be
made or retained in the
names of nominees.
18.13 Acceptance of Title, Value and Valuation Bases
The Agents may accept without investigation, requisition or objection
such title as any person may have to the undertakings, property and
assets which are subject to the Security Documents and shall not be bound
or concerned to examine or enquire into any defect or failure in the
title of any person nor liable to any other Secured Party or any other
person for any failure on the part of either Agent to give notice to any
third party of the Security Documents to which it is party or otherwise
perfect or register the security thereby created.
18.14 Rule 146 of the Land Registration Rules
Each of the Lenders and the Hedge Provider hereby confirms and agrees
that it does not wish to be registered in accordance with Rule 146 of the
Land Registration Rules 1925 as the joint proprietor of any mortgage or
charge created pursuant to any Security Document and accordingly
authorises the Security Agent to hold such mortgage or charge in its sole
name as agent and trustee for the Secured Parties and hereby requests HM
Land Registry to register the Security Agent as the agent and trustee of
any such mortgage or charge.
18.15 The Borrower and the Agents
The Borrower shall be entitled to rely on any direction, instruction,
certificate, document or
other communication made by either Agent and shall not be required to
enquire whether it is made with the authority of the Lenders, and
performance of any obligation arising under this Agreement or the
Security Documents in reliance on any such shall be deemed to be proper
performance of the obligation in question.
18.16 Agents of the Lenders
Save as expressly provided in the Security Documents, the Agents are
appointed hereunder and thereunder solely as the agents of the Lenders
and the Hedge Provider, and the foregoing provisions of this Clause 18
(The Agents) apply solely to the Agents in their capacity as agents for
the Lenders.
18.17 Agents' Knowledge
Information obtained by either Agent in any capacity other than in its
capacity as Agent and or through any department other than the department
having specific responsibility for the administration of the Loan and the
Security Documents shall not be imputed to such Agent.
19. Transfer
19.1 Agreement Binding on Successors
This Agreement and the other Security Documents shall benefit and bind
the parties, any Transferee in respect of which a Transfer Certificate
becomes effective in accordance with Clause 19.3, their permitted
assignees and their
respective successors as if they were named as parties and executed this
Agreement. Any reference in any Security Document to any party shall be
construed accordingly.
19.2 Borrower's Assignment
The Borrower may not assign or transfer all or any part of its rights or
obligations under any Security Document.
19.3 Novation
Any Lender may at any time (after consultation with the Administrative
Agent and, through the Administrative Agent, the Borrower) novate all or
part of its Commitments and/or assign all or part of its Outstandings and
its rights and benefits under the Security Documents to any Qualifying
Lender without the consent of any party. Any such novation and/or
assignment shall (subject to Clause 19.4 in the case of an assignment
only) be made by delivering to the Administrative Agent a duly completed
and executed Transfer Certificate substantially in the form of the Third
Schedule. On receipt of such a Transfer Certificate, the Administrative
Agent shall countersign it for and on behalf of itself and the other
parties to this Agreement and subject to the terms of that Transfer
Certificate:
(a) by virtue of such Transfer Certificate, the relevant Lender shall
assign to the Transferee its rights to receive repayment or
prepayment in accordance with `this Agreement of the Outstandings
summarised in that
Transfer Certificate and all its rights and benefits under the
Security Documents in respect thereof (such rights and benefits,
and the corresponding obligations of the Borrower to make such
repayment or prepayment and obligations of any other party in
respect thereof under the Security Documents, being herein
referred to as the "Assigned Rights" and the "Corresponding
Obligations" respectively);
(b) to the extent that in such Transfer Certificate the relevant
Lender seeks to assign its Outstandings and/or novate its
Commitments, the Borrower under the Security Documents and that
Lender shall each be released from further obligations to each
other and their respective rights against each other shall be
cancelled, except that the Assigned Rights shall be assigned
pursuant to paragraph (a) above rather than released or cancelled
pursuant to this paragraph (b) (such rights and obligations, other
than the Assigned Rights and the Corresponding Obligations, being
referred to as "Discharged Rights and Obligations");
(c) the Borrower and the relevant Transferee shall each assume
obligations towards each other and/or acquire rights against each
other corresponding to the Discharged Rights and Obligations but
which differ from the Discharged Rights and Obligations only
insofar as the Borrower and that Transferee
have assumed and/or acquired the same in place of the Borrower and
that Lender; and
(d) the Transferee and the other parties to this Agreement (other than
the Borrower) shall acquire (by assignment, in the case of
Assigned Rights) the same rights and assume (by virtue of the
assignment of Assigned Rights in the case of Corresponding
Obligations) the same obligations between themselves as they would
have acquired and assumed had that Transferee been an original
party to this Agreement as a Lender with the rights and/or
obligations acquired or assumed by it as aforesaid (and, to that
extent, the original Lender and those other parties shall each be
released from further obligations to each other).
19.4 Assignment
Any Lender may (after consultation with the Administrative Agent and,
through the Administrative Agent, the Borrower) at any time assign all or
part of its Outstandings to any Qualifying Lender without the consent of
any party. Upon notice of any assignment being received by the
Administrative Agent, the assignee shall acquire the same rights in
respect of the Outstandings assigned to it as it would have had if it had
been an original party to this Agreement in respect of those
Outstandings. If and to the extent that all or part of a Lender's rights
are assigned in accordance with any of the provisions of this Clause, the
assignee shall,
upon notice of the assignment being received by the Administrative Agent,
become entitled to a corresponding share of all rights of the assignor
under the Security Documents (including the benefit of such assignor's
rights in each Security Document) and this Clause (and the relevant
Transfer Certificate or assignment).
19.5 Lending Offices
The initial Lending Office(s) of each Lender has/have been notified by
that Lender to the Administrative Agent. Any Lender may at any time
change any of its Lending Office(s) in relation to all or a specified
part of any of its Commitments and/or Outstandings by notifying the
Administrative Agent and the Borrower of the fax number, telex number and
address of its new Lending Office(s).
19.6 Disclosure of Information
Each of the Lenders and the Agents may disclose such information
regarding the Borrower or the Shareholders and the Security Documents as
it may think fit to any other party hereto and to any actual or potential
Transferee, assignee participant or sub-participant or any other person
with whom such Lender or Agent may enter into or be considering entering
into contractual relations in relation to this Agreement or the other
Security Documents.
19.7 Costs
For the avoidance of doubt the costs of any
Lender effecting any assignment or transfer of any of its rights and
interests hereunder shall not be borne by the Borrower.
20. Set-Off/Pro-Rata Sharing
20.1 Set Off
The Borrower authorises each of the Agents and the Lenders to apply
(without prior notice) any credit balance (whether or not then due) to
which the Borrower is at any time beneficially entitled on any account
at, any sum held to its order by and/or any liability or obligation
(whether or not matured) of, any office of such Agent or such Lender in
or towards satisfaction of any sum then due and payable by it to such
Agent or such Lender under the Security Documents and unpaid and, for
that purpose, to convert one currency into another (provided that nothing
in this Clause 20.1 shall be effective to create a charge). No party
shall be obliged to exercise any of its rights under this Clause 20.1,
which shall be without prejudice and in addition to any right of set-off,
combination of accounts, lien or other right (including the benefit of
the Security Documents) to which it is at any time otherwise entitled
(whether by operation of law, contract or otherwise). Each Lender shall
notify the Administrative Agent and the Borrower forthwith upon the
exercise or purported exercise of any right of set-off giving full
details in relation thereto and the Administrative Agent shall inform the
other Lenders forthwith.
20.2 Pro-Rata Sharing
If at any time the proportion received or recovered (whether by direct
payment, by exercise of any right of set-off, combination of accounts or
lien, or otherwise) by any Lender in respect of the total sum which has
become due to it from the Borrower under the Security Documents before
that time exceeds the proportion received or recovered by the Lender(s)
receiving or recovering the smallest proportion (if any), then:
(a) such Lender shall promptly notify the Administrative Agent and
within 2 business days after receiving a request from the
Administrative Agent, that Lender shall pay to the Administrative
Agent an amount equal to the excess and the Administrative Agent
shall notify the Borrower of the receipt of such amount;
(b) the Administrative Agent shall promptly distribute that payment as
if it were made by the Borrower; and
(c) as between the Borrower and the Lenders, that excess amount shall
be treated as having been paid to the Lenders to which (and in the
proportions in which) it is distributed under (b) above, rather
than as having been paid to that Lender.
Within 2 business days after any Lender receives or recovers any such sum
otherwise than by
payment through the Administrative Agent, that Lender shall notify the
Administrative Agent of the amount and currency so received or recovered,
how it was received or recovered and whether it represents principal,
interest or other sums. If all or part of any amount so received or
recovered by that Lender (the "Relevant Lender") required thereafter to
be repaid to the Borrower has to be refunded by it (with or without
interest), each Lender to whom any part of that amount has been
distributed shall repay to the Administrative Agent for the account of
the Relevant Lender (within 2 business days after receiving a request
from the Administrative Agent on behalf of the Relevant Lender) its
proportionate share of the amount to be repaid to the Borrower and of any
interest required to be paid by the Relevant Lender on that amount in
respect of all or any part of the period from the date of the relevant
distribution to the date of that payment to the Relevant Lender.
Any amount received or recovered by a Lender under a novation,
assignment, sub-participation or the like shall be ignored for the
purpose of this Clause 20.2. Furthermore, a Lender shall not be obliged
to share any amount which it has (i) alone received on its own account
under Clause 13 (Changes in Circumstances) or (ii) received or recovered
as a result of taking legal proceedings with any other Lender which had
an opportunity to participate in those legal proceedings but did not do
so and did not take separate legal proceedings.
21. Notices
21.1 Address
Unless otherwise notified by the relevant party, any notice or other
communication hereunder shall be given, if to the Administrative Agent or
to the Security Agent at PO Box 138, 15 Moorgate, London EC2R 6LP marked
for the attention of the Credit Department, if to the Borrower at 6
Leylands Park, Nobbs Crook, Colden Common, Winchester, Hampshire SO21
1TH, marked for the attention of Philip Mason (and copied to Richard
Saleh & Co., Derbyshire House, 737a Wilmslow Road, Didsbury, Manchester,
marked for the attention of Richard Saleh), and if to any Lender
hereunder to the Lending Office of that Lender.
21.2 Method and Receipt
Any notice or other communication to be given or made pursuant to this
Agreement may be given or made by letter delivered personally or by
registered first class prepaid letter (airmail if overseas), facsimile
transmission, telegram or cable and shall, save as specified below, be
effective, in the case of a facsimile upon sending or, in the case of any
other communication, when actually received, provided that if any
communication would become effective under the foregoing provisions of
this Clause on a day which is not a working day, or outside normal
working hours on a day which is a working day, at the place of receipt,
it shall become effective at the next opening of business in such place.
21.3 Deemed Notice
Any notice or other communication given or made to either Agent by the
Borrower shall be deemed to have been given or made to each of the
Lenders.
22. Calculations and Evidence of Debt
22.1 Accounts
The Administrative Agent shall maintain in its books a control account or
accounts in which shall be recorded (i) the amount of any principal,
interest or other sums due or to become due from the Borrower to the
Lenders hereunder and (ii) the amount of any sum received or recovered by
the Administrative Agent for the account of the Lenders hereunder.
22.2 Evidence
In any legal action or proceeding arising out of or in connection with
this Agreement, the entries made in the accounts maintained pursuant to
Clause 22.1 shall, in the absence of manifest error, be prima facie
evidence of the existence and amounts of the obligations of the Borrower
therein recorded.
22.3 Certificates and Determinations
A certificate of the Administrative Agent as to (i) the amount by which a
sum payable to it hereunder is to be increased under Clauses 13 (Changes
in Circumstances) or 14 (Payments) or (ii) the amount for the time being
required to
indemnify any Lender against any such cost or liability as is mentioned
in Clauses 13 (Changes in Circumstances) or 14 (Payments) or as to any
other calculation (whether as to interest, currency exchange rates or
otherwise) to be made by the Administrative Agent hereunder shall, in the
absence of manifest error, be prima facie evidence in any legal action or
proceeding arising out of or in connection with this Agreement.
23. Severability
Any provision in this Agreement which is prohibited or unenforceable in
any jurisdiction shall, as to such jurisdiction, be ineffective to the
extent of such prohibition or unenforceability without invalidating the
remaining provisions hereof or affecting the validity or enforceability
of such provision in any other jurisdiction.
24. Waivers; Rights Cumulative
No delay or omission of the Agents or any Lender in exercising any right,
power or privilege hereunder or otherwise available to it at law shall
impair such right, power or privilege or be construed as a waiver of such
right, power or privilege nor shall any single or partial exercise of any
such right, power or privilege preclude any further exercise thereof or
the exercise of any other right, power or privilege. The rights and
remedies herein provided are cumulative and not exclusive of any rights
or
remedies provided by law.
25. Counterparts
This Agreement may be executed in any number of counterparts and by the
different parties hereto on separate counterparts, each of which when
executed and delivered to the Security Agent shall constitute an
original, but all the counterparts shall together constitute but one and
the same instrument.
26. Governing Law and Jurisdiction
26.1 Law
This Agreement shall be governed by and construed in accordance with
English law.
26.2 Submission to Jurisdiction
For the exclusive benefit of the Agents and the Lenders, the Borrower
irrevocably agrees that the courts of England are to have jurisdiction to
settle any disputes which may arise out of or in connection with this
Agreement and the other Security Documents and irrevocably submits to the
jurisdiction of such courts and agrees that accordingly any suit, action
or proceeding arising out of or in connection with this Agreement
(together in this Clause referred to as "Proceedings") may be brought in
such courts.
26.3 Other Jurisdictions
Nothing contained in this Clause shall limit the right of the Agents or
any Lender to take
Proceedings against the Borrower in any other court of competent
jurisdiction, nor shall the taking of Proceedings in one or more
jurisdictions preclude the taking of Proceedings in any other competent
jurisdiction, whether concurrently or not.
IN WITNESS whereof the hands of the parties or their duly authorised attorneys
or representatives the day and year first above written.
The First Schedule
The Lenders and their Commitments
Commitments
Arab Bank plc, London Branch (pound)5,000,000
Irish Nationwide Building Society, London Branch (pound)5,000,000
----------
(pound)10,000,000
----------
The Second Schedule
Form of Notice of Drawing
From: [*Borrower]
To: [Administrative Agent] [Date]1999
(pound)[ o ] Loan Agreement dated [ o ] 1999
We refer to the above agreement (the "Loan Agreement") made between ourselves as
Borrower, yourselves as Administrative Agent and Security Agent and Hedge
Provider and the banks and other lending or financial institutions referred to
therein. Terms defined in the Loan Agreement shall have the same meanings when
used herein.
We hereby give you irrevocable notice that pursuant to the Loan Agreement and on
[*date of proposed drawing], we wish to draw [the whole of the Facility]/[the
sum of (pound)[ ]] on the terms and subject to the conditions contained therein.
[*Selection of Interest Period]
We confirm that at the date hereof the representations and warranties set out in
Clause 11 (Representations and Warranties) of the Loan Agreement are correct as
if made with reference to the facts and circumstances now prevailing and that no
Event of Default or Potential Event of Default has occurred.
We hereby authorise you to deduct from this advance:-
(a) the arrangement fee payable pursuant to Clause 16 (Expenses, Fees and
Commission); and
(ii) the fees, costs and expenses incurred in connection with the valuation
and surveying of the security and the preparation of the Security
Documents and all stamp duty and Land Registry fees (including expedition
fees) and other fees pursuant to Clause 16 (Expenses, Fees and
Commission).
We hereby direct that the amount of the Loan shall be remitted [by CHAPS
payment] to the following:-
Payee:
Payee's Bank Details:
Bank:
Branch:
Sort Code:
Account No:
or to such other banks for the credit of such account as the Payee shall direct
and we confirm that a payment in accordance with these instructions shall be
effective as if it were paid to us direct.
..................................................
A duly authorised signatory for and on behalf of
Grand Hotel Group Limited
The Third Schedule
Form of Transfer Certificate
To: [Insert name of Administrative Agent]
[Insert address of Administrative Agent]
Attention: [ ]
[*Borrower]
(pound) [ o ] Loan Agreement
dated [ o ] 1999
1. This Transfer Certificate relates to the above loan agreement (the "Loan
Agreement", which term shall include any amendments or supplements
thereto), and the other Security Documents referred to therein. Terms
defined in the Loan Agreement have the same meaning in this Transfer
Certificate.
In this Transfer Certificate :
"Existing Lender" means [ o ]; and
"Transferee" means [ o ].
2. The Existing Lender (i) confirms that the details in the Schedule to this
Transfer Certificate under the heading "Rights to be Assigned and/or
Obligations to be Novated" accurately summarises the
Outstandings which are to be assigned and/or Commitments which are to be
novated by this Transfer Certificate and (ii) requests the Transferee to
accept and procure the transfer to the Transferee of the portion
specified in the Schedule hereto of, as the case may be, such
Outstandings and/or its Commitment by counter-signing and delivering this
Transfer Certificate to the Administrative Agent at its address for the
service of notices specified in the Loan Agreement.
3. The Transferee hereby requests the Administrative Agent to accept this
Transfer Certificate as being delivered to the Administrative Agent
pursuant to and for the purposes of Clause 19 (Transfer) of the Loan
Agreement so as to take effect in accordance with the terms thereof on
the Transfer Date or on such later date as may be determined in
accordance with the terms thereof.
4. The Transferee:
(a) confirms that it has received a copy of the Loan Agreement
together with such other documents and information as it has
requested in connection with this transaction;
(b) confirms that it has not relied and will not rely on the Existing
Lender to check or enquire on its behalf into the legality,
validity, effectiveness, adequacy or completeness of any such
documents or information;
(c) confirms and agrees that it has not relied and
will not rely on any of the Existing Lender, the Agents, or the
Lenders to assess or keep under review on its behalf the financial
condition, creditworthiness, condition, affairs, status or nature
of the Borrower or any other party to the Security Documents, and
has not relied and will not rely on any of the Existing Lender,
the Agent or the Lenders to ensure that the Borrower or any other
party to the Security Documents are not in breach of or default
under any of the same; and
(d) if not already a Lender, appoints the Agents to act as its agents
as provided in the Loan Agreement and agrees to be bound by the
Loan Agreement (including, but not limited to, Clause 19
(Transfer)).
5. The Transferee undertakes with the Existing Lender and each of the other
parties to the Loan Agreement that it will perform, in accordance with
their terms, all those obligations which, by the terms of the Loan
Agreement, will be assumed by it upon delivery of the executed copy of
this Transfer Certificate to the Administrative Agent.
6. On execution of this Transfer Certificate by the Administrative Agent on
their behalf, the Borrower, the Lenders and the Agents accept the
Transferee as a party to the Loan Agreement in substitution for the
Existing Lender with respect to all those rights and obligations which,
by the terms of the Loan Agreement and other Security Documents, will be
assumed by the Transferee after delivery of the
executed copy of this Transfer Certificate to the Administrative Agent.
7. None of the Existing Lender, the Lenders or the Agents:
(a) makes any representation or warranty or assumes any responsibility
with respect to the legality, validity, effectiveness, adequacy or
enforceability of any of the Loan Agreement and the Security
Documents, or with respect to whether the Borrower or any other
party to the Security Documents has complied with its obligations
thereunder (including, without limitation, under Clause 4
(Availability and Drawing) of the Loan Agreement); or
(b) assumes any responsibility for the financial condition of the
Borrower or any other party to any Security Document or any other
document or for the performance and observance by the Borrower or
any other party to the Security Documents or any other document of
its or their obligations and any and all conditions and
warranties, whether express or implied by law or otherwise, are
hereby excluded.
8. The Existing Lender hereby gives notice that nothing herein or in the
Loan Agreement (or any document relating thereto) shall oblige the
Existing Lender to (i) accept a re-transfer from the Transferee of the
whole or any part of its rights, benefits and/or obligations under the
Loan Agreement transferred pursuant hereto or (ii) support any losses
directly or indirectly sustained
or incurred by the Transferee for any reason whatsoever including,
without limitation, the non-performance by the Borrower or any other
party to the Security Documents (or any document relating thereto) of its
obligations under any such document. The Transferee hereby acknowledges
the absence of any such obligation as is referred to in (i) or (ii)
above.
9. This Transfer Certificate and the rights and obligations of the parties
hereunder shall be governed by and construed in accordance with English
law.
10. The Transferee warrants and represents to the Borrower that it is a
Qualifying Lender as defined in Clause 1.1 of the Loan Agreement.
THE SCHEDULE
1. Existing Lender :
2. Transferee :
3. Transfer Date :
4. Commitment :
Lender's Commitment Portion Transferred
5. Facility:
Amount of Drawdown and
Lender's Participation Repayment Date Portion Transferred
6. Rights to be Assigned and/or Obligation to be Novated :
7. Transferee's Lending Office details :
Address :
Telephone Number :
Telex No. :
Fax No. :
The Fourth Schedule
Conditions Precedent Documents
1. A copy of the Borrower's Certificate of Incorporation, Memorandum and
Articles of Association and other constitutive documents certified by a
duly authorised officer of the Borrower as a true copy and as in force on
the date of this Agreement.
2. A copy, certified a true copy by a duly authorised officer of the
Borrower, of a resolution of the Board of Directors of the Borrower
satisfactory to the Administrative Agent approving the execution,
delivery and performance of this Agreement and the other Security
Documents and of the power of attorney (if any) under which the Security
Documents are to be executed and the terms and conditions hereof and
thereof and authorising a named person or persons or appointing an
attorney to sign on behalf of the Borrower this Agreement and the
Security Documents referred to above and any documents or further
agreements required or to be delivered by the Borrower pursuant hereto
and/or thereto.
3. A specimen signature, authenticated by a duly authorised officer of each
of the Borrower in respect of each of the persons referred to in
paragraph 2 above.
4. This Agreement, the Corporate Account Application, the Borrower's Charge,
the Key-man Charge, the
Hedging Arrangements Charge and any power or powers of attorney under
which they are executed, duly executed by the Borrower and any other
parties thereto (as appropriate), together with signed acknowledgements
of notices of assignment in respect of the Key-man Charge* from the
issuer of the Key-man Policy*.
5. The Inter-Creditor Agreement duly executed by the Borrower and the other
parties thereto.
6. A legal opinion in form and substance satisfactory to the Administrative
Agent from English solicitors to the Agents and the Lenders, as to such
matters as the Administrative Agent may require and a legal opinion in
form and substance satisfactory to the Administrative Agent from Guernsey
Solicitors to the Agents and the Lenders in relation to the
Inter-Creditor Agreement and Cygnet Ventures Limited.
7. Two Approved Valuations of the Properties in form and substance
acceptable to the Administrative Agent addressed to the Lenders.
8. A structural survey of the Properties in form and substance acceptable to
the Administrative Agent from surveyors acceptable to the Administrative
Agent and addressed to the Lenders.
9. The Certificate of Title.
- --------
* Amended in manuscript on executed Agreement
* Amended in manuscript on executed Agreement
10. Evidence satisfactory to the Administrative Agent of the Purchase Price
(including, without limitation, any amount attributed to goodwill).
11. The ISDA Agreement duly executed by the parties thereto and the
confirmation or confirmations or other evidence of the trade comprising
the Hedging Arrangements.
12. Satisfactory evidence of the discharge of Encumbrances over the
Properties (apart from the security constituted by the Security
Documents).
13. Official priority searches in favour of the Security Agent of the
registers of title to the Properties maintained by HM Land Registry which
confirm a period of priority of not less than 21 days after the Drawdown
Date which reveal no entries adverse to the interests of the Borrower and
the Agents and other Secured Parties (save for existing security which is
discharged on or before the Drawdown Date) and such other searches in
respect of the Properties and/or the Hotel Business as the Administrative
Agent may require.
14. Such Land Registry forms as the Administrative Agent may require in
connection with the registration of the Borrower's title to the
Properties and the security created over the Properties by or pursuant to
the terms of the Security Documents, duly completed by or on behalf of
the Borrower, together with a cheque for the payment of all land
registration fees (including
land registration expedition fees if the Administrative Agent so
requires) payable in connection with such registration or an authority to
apply an appropriate part of the Loan in discharge of those fees.
15. Such evidence as the Administrative Agent may require that the Properties
and the Hotel Business are insured in accordance with the terms of this
Agreement and the Borrower's Charge (including, without limitation, cover
against risks of terrorism) and that the interest of the Security Agent
as agent and trustee for the Agents and the Lenders is noted on the
relevant policy or policies of insurance and that such policy nominates
the Security Agent, as agent and trustee for the Agents the Lender, as
loss payee (or, if the Security Agent so requires, that the relevant
policy or policies have been effected in the joint names of the Borrower
and the Security Agent).
16. An audited opening balance sheet of the Borrower in a form agreed between
the Borrower and the Administrative Agent.
17. The Key-man Policy together with such confirmations as the Administrative
Agent may require that the Key-man Policy is and remains in full effect
and that the first premium has been paid.
18. A copy, certified a true copy by a duly authorised officer of the
Borrower of the executed Acquisition Agreement, the Loan Note, the
Permitted Charge, all documentation relating to the Subordinated Loan,
any indemnity guarantee or undertaking given by the Borrower to Mr Kevin
Leech, Cygnet Ventures Limited, Citibank, N.A., Milner Laboratories
Limited, or any other person in any way relating to the Standby Letter of
Credit or any liability thereunder or in respect thereof, and of the
Disclosure Letter, Butlin's Licence, RLMS Services Agreement, Butlin's
Services Agreement and LSA Services Agreement (as those terms are defined
in the Acquisition Agreement).
19. The Administrative Agent being satisfied that the warranties,
representations, undertakings and indemnities from Rank Holidays Division
Limited in the Acquisition Agreement (and associated documents) in favour
of the Borrower are in form and substance satisfactory to it and its
solicitors.
20. Confirmation that all steps required for completion of the Acquisition
Agreement in accordance with its terms (except in so far as the Facility
may be required for this purpose) have been completed.
21. An undertaking from the directors of the Borrower to the Lenders that the
Borrower will not take any action to determine the Lease of the Metropole
Hotel Blackpool dated 26 March 1965 pursuant to the tenant's break clause
contained in the Lease.
22. Evidence that the Borrower has obtained such defective title insurance to
the Properties as the Administrative Agent may require.
23. A copy of any other authorisation or other
document, opinion or assurance which the Administrative Agent considers
to be necessary or desirable in connection with the entry into and
performance of, the transactions contemplated by this Agreement or any of
the other Security Documents, or for the validity or enforceability of
this Agreement and any of the other Security Documents.
The Fifth Schedule
Calculation of Mandatory Costs Rate
The Mandatory Costs Rate is an addition to the interest rate on the Loan to
compensate the Lenders for the cost attributable to the Loan resulting from the
imposition from time to time under or pursuant to the Bank of England Act 1998
(the "Act") and/or by the Bank of England and/or the Financial Services
Authority (the "FSA") (or other United Kingdom governmental authorities or
agencies) of a requirement to place non-interest-bearing or Special Deposits
(whether interest bearing or not) with the Bank of England and/or pay fees to
the FSA calculated by reference to liabilities used to fund the Loan.
The Mandatory Costs Rate will be the rate determined by the Administrative Agent
as being the following :
(a) such amount as expresses the cost to each of the Lenders attributable to
its participation in the Loan resulting from the imposition from time to
time under or pursuant to the Act or by the Bank of England and/or the
FSA (or other United Kingdom governmental authorities or agencies) (or
pursuant to any further or alternative legislation, regulation or
requirements applicable to any Lender including, but not by way of
limitation, any imposed by the European Central Bank after the United
Kingdom has become a Participating Member State) of a requirement to
place non interest-bearing cash ratio deposits or special deposits
(whether interest bearing or not) with the Bank of England and/or pay
fees to the FSA calculated by reference to liabilities
used to fund the participation of each Lender in the Loan or further or
alternative requirements as aforesaid; and
(b) during such period as the United Kingdom shall be a Participating Member
State such amount as expresses the cost to each of the Lenders
attributable to its participation in the Loan resulting from the
imposition by the European Central Bank pursuant to any legislation
regulation or requirement from time to time applicable to any Lender of
any requirement whether or not the same or similar to that referred to in
the preceding paragraph which shall affect the cost to any Lender of
maintaining its participation in the Loan as well as (if applicable) the
amount referred to in the preceding paragraph.
Each Lender shall supply such information and in such detail as the
Administrative Agent may require for the purposes of calculating the above
amounts. If any Lender fails to notify any rate or figures to the Administrative
Agent, the Mandatory Costs Rate shall be determined on the basis of the rate(s)
or figure(s) notified to the Administrative Agent by the remaining Lender(s).
The Mandatory Costs Rate attributable to the Loan or other sum for any period
shall be calculated at or about 11.00 a.m. (London time) on the first day of
such period for the duration of such period.
The determination of the Mandatory Costs Rate in relation to any period shall,
in the absence of manifest error, be conclusive and binding on all parties
hereto.
Signatories
Borrower
GRAND HOTEL GROUP LIMITED
By: Stephen John Last
Philip Mason
Address: 6 Leylands Park
Colden Common
Winchester
Hampshire
Telephone:
Facsimile: 01489 896931
Lenders
ARAB BANK plc
By: Frederick Stonehouse
Address: PO Box 138
15 Moorgate
London EC2R 6LP
Telephone: 0171 315 8500
Facsimile: 0171 600 7620
IRISH NATIONWIDE BUILDING SOCIETY
By: Gary McCollum
Address: 252 Westminster Bridge Road
London SE1 7PD
Telephone:
Facsimile:
Administrative Agent
ARAB BANK plc
By: Frederick Stonehouse
Address: PO Box 138
15 Moorgate
London
EC2R 6LP
Telephone: 0171 315 8500
Facsimile: 0171 600 7620
Security Agent
ARAB BANK plc
By: Frederick Stonehouse
Address: PO Box 138
15 Moorgate
London
EC2R 6LP
Telephone: 0171 315 8500
Telex:
Facsimile: 0171 600 7620
Hedge Provider
ARAB BANK plc
By: Frederick Stonehouse
Address: PO Box 138
15 Moorgate
London
EC2R 6LP
Telephone: 0171 315 8500
Facsimile: 0171 600 7620