Certain Principles. The rights and obligations of (i) the Lenders, the Administrative Agent and Mexican Collateral Agent on the one hand, and (ii) the Borrower and the Guarantors on the other hand, in each case respect of (i) the giving or taking of the Guaranty; (ii) the giving or taking of Collateral; and (iii) all the rights and obligations associated with such giving or taking of the Guaranty and Collateral, shall be subject to and limited by the Agreed Security Principles. The Agreed Security Principles embody the recognition by all parties to the Credit Documentation that there may be certain legal and practical difficulties in obtaining effective security from Holdings and its Subsidiaries in every jurisdiction in which they or the assets relevant to the Transactions are or may in the future be located. In particular: (a) general statutory limitations, financial assistance, capital maintenance, corporate benefit, fraudulent preference, thin capitalization rules, retention of title claims and similar principles may limit the ability of Holdings or a Subsidiary of Holdings to provide the Guaranty or provide Collateral or may require that the relevant Guaranty or Collateral be limited by an amount or otherwise. If any such limit applies, the relevant Guaranty and Collateral provided will be limited to the maximum amount which Holdings or such Subsidiary of Holdings may provide having regard to applicable law (including any jurisprudence) and subject to fiduciary duties of management; provided that the Borrower will use reasonable endeavours to assist in demonstrating that adequate corporate benefit accrues to Holdings, the Borrower and each relevant Subsidiary of Holdings; (b) providing the Guaranty, the granting and the terms of Collateral (including a mortgage over hotel real property (a “Mortgage”)) or the perfection of the Collateral granted will not be required to the extent that the Administrative Agent or Mexican Collateral Agent, as applicable, and the Borrower reasonably determine that the burden and/or cost thereof (including, without limitation, legal fees, registration fees, stamp duty, taxes and any other fees or costs directly associated with such security or guarantee) shall be excessive in relation to the value of the security to be afforded to the Lenders therefrom (it being understood that, based on applicable law as in effect on the Closing Date, (i) Mortgages will not be required in the Dominican Republic or Jamaica, and (ii) Mortgages will in any event not be required under circumstances where the recordation costs, notarial fees or other costs (other than customary legal counsel fees and expenses) associated therewith exceed the lesser of $100,000 and 1% of the acquisition cost of the relevant hotel property); provided that, pursuant to Section 6.11(d) of the Credit Agreement, if, immediately after giving effect to any acquisition that requires the acquired Hotel Real Property to be subject to a Mortgage pursuant to Section 6.11(d) of the Credit Agreement, the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.08 of the Credit Agreement) is greater than 5.00:1.00, the cost-benefit analysis referred to in this Section 1(b)(ii) shall not apply to the granting and/or perfection of a Mortgage pursuant to Section 6.11(d) of the Credit Agreement (which granting and perfection shall be required in any case irrespective of the amount of the recordation costs, notarial fees and/or other costs associated therewith); provided further that nothing in this section 1(b) or Section 6.11(d) of the Credit Agreement shall prevent the Administrative Agent or Mexican Collateral Agent, as applicable, from limiting or revising the requirements applicable to the granting and/or perfection of any Mortgage, as it may deem appropriate (in its sole discretion) in order to reduce the recordation costs, notarial fees and/or other costs associated therewith, including by limiting the amount of Indebtedness secured by such Mortgage; (c) any assets subject to third party arrangements which are permitted by the Credit Documentation which may prevent those assets from being charged will be excluded from any relevant Security Agreement provided that, notwithstanding anything to the contrary contained herein, any person providing a Mortgage will be under the obligation to obtain any landlord consent required to grant such Mortgage when such consent is required by local law to perfect such security interest; (d) a Material Subsidiary will not be required provide the Guaranty or enter into Security Agreements if it is not within the legal capacity of such Subsidiary or if the same would conflict with the fiduciary duties of the directors of such Subsidiary or contravene any legal prohibition or result in personal or criminal liability on the part of any officer or result in any significant risk of legal liability for the directors of such Subsidiary, provided that such Subsidiary shall use reasonable endeavours to overcome any such obstacle; (e) the terms of the Security Agreements should be such that they (i) do not restrict the running of the business of the relevant Subsidiary in the ordinary course to any greater extent than as otherwise permitted by the Credit Agreement, and (ii) in the case of the Associated Personal Property Collateral, do not require the scheduling or reporting of specific personal property assets (without regard to whether local law might require the listing of specific assets in order to perfect or register security); (f) the security will be subject to liens permitted by Credit Agreement and, to the extent possible, first-ranking; provided that, for the avoidance of doubt, any security interest over a bank account shall be subject to any prior security interest in favor of the relevant Account Bank which security is created either by law or the standard terms and conditions of the relevant Account Bank; (g) the perfection of security interests granted will not be required if it would adversely affect on the ability of the relevant Subsidiary to conduct its operations and business in the ordinary course as otherwise permitted by the Credit Agreement; and (h) the maximum guaranteed or secured amount may be limited to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties where the benefit of increasing the guaranteed or secured amount is excessive in relation to the value of the security to be afforded thereto.
Appears in 2 contracts
Samples: Credit Agreement (Playa Hotels & Resorts N.V.), Credit Agreement (Playa Hotels & Resorts N.V.)
Certain Principles. The Company and the Lenders have agreed and acknowledged that their rights and obligations of (i) under the Lenders, the Administrative Agent and Mexican Collateral Agent on the one hand, and (ii) the Borrower and the Guarantors on the other hand, Loan Documents in each case respect of (i) the giving or taking of the Guarantyguarantees; (ii) the giving or taking of Collateral; and (iii) all the rights and obligations associated with such giving or taking of the Guaranty guarantees and Collateral, shall be subject to and limited by the Agreed Security Principles. The Agreed Security Principles embody the recognition by all parties to the Credit Documentation that there may be certain legal and practical difficulties in obtaining effective security from Holdings and its Subsidiaries all Loan Parties in every jurisdiction in which they or the assets relevant to the Transactions Loan Parties are or may in the future be located. In particular:
(a) general statutory limitations, financial assistance, capital maintenance, corporate benefit, fraudulent preference, thin capitalization rules, retention of title claims and similar principles may limit the ability of Holdings or a Subsidiary of Holdings Loan Party to provide the Guaranty a guarantee or provide Collateral or may require that the relevant Guaranty guarantee or Collateral be limited by an amount or otherwise. If any such limit applies, the relevant Guaranty guarantees and Collateral provided will be limited to the maximum amount which Holdings or such Subsidiary of Holdings Loan Party may provide having regard to applicable law (including any jurisprudence) and subject to fiduciary duties of management; provided that the Borrower Company will use reasonable endeavours to assist in demonstrating that adequate corporate benefit accrues to Holdings, the Borrower Company and each relevant Subsidiary of HoldingsLoan Party;
(b) providing the Guarantygiving of a guarantee, the granting and the terms of Collateral (including a mortgage over hotel real property (a “Mortgage”)) or the perfection of the Collateral granted will not be required to the extent that the Administrative Agent or Mexican Collateral Agent, as applicable, and the Borrower reasonably determine that the burden and/or cost thereof (including, without limitation, it would incur any legal fees, registration fees, stamp duty, taxes and any other fees or costs directly associated with such security or guarantee) shall be guarantee which are excessive in relation to the value of the security to be afforded to thereto the Lenders therefrom (it being understood that, based on applicable law as in effect on the Closing Date, (i) Mortgages will not be required in the Dominican Republic or Jamaica, and (ii) Mortgages will in any event not be required under circumstances where the recordation costs, notarial fees or other costs (other than customary legal counsel fees and expenses) associated therewith exceed the lesser of $100,000 and 1% of the acquisition cost of the relevant hotel property); provided that, pursuant to Section 6.11(d) of the Credit Agreement, if, immediately after giving effect to any acquisition that requires the acquired Hotel Real Property to be subject to a Mortgage pursuant to Section 6.11(d) of the Credit Agreement, the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.08 of the Credit Agreement) is greater than 5.00:1.00, the cost-benefit analysis referred to in this Section 1(b)(ii) shall not apply to the granting and/or perfection of a Mortgage pursuant to Section 6.11(d) of the Credit Agreement (which granting and perfection shall be required in any case irrespective of the amount of the recordation costs, notarial fees and/or other costs associated therewith); provided further that nothing in this section 1(b) or Section 6.11(d) of the Credit Agreement shall prevent the Administrative Agent or Mexican Collateral Agent, as applicable, from limiting or revising the requirements applicable to the granting and/or perfection of any Mortgage, as it may deem appropriate (in its sole discretion) in order to reduce the recordation costs, notarial fees and/or other costs associated therewith, including by limiting the amount of Indebtedness secured by such MortgageLenders;
(c) where there is material incremental cost involved in creating security over all assets owned by a Loan Party in a particular category (e.g. real estate) the principle stated at paragraph (b) above shall apply and, subject to the Agreed Security Principles, only the material assets in that category (e.g. material real estate) shall be subject to security;
(d) in certain jurisdictions it may be impossible to grant guarantees or create security over certain categories of assets in which event such guarantees will not be granted and security will not be taken over such assets;
(e) any assets subject to third party arrangements which are permitted by the Credit Documentation Loan Documents which may prevent those assets from being charged will be excluded from any relevant Security Agreement security document provided that, notwithstanding anything to if the contrary contained herein, any person providing a Mortgage will be under relevant asset is material and the obligation to obtain any landlord consent required to grant relevant Loan Party determines that such Mortgage when such consent is required by local law to perfect such security interest;
(d) a Material Subsidiary endeavours will not be required provide the Guaranty or enter into Security Agreements if it is not within the legal capacity of such Subsidiary or if the same would conflict jeopardise commercial relationships with the fiduciary duties of the directors of such Subsidiary or contravene any legal prohibition or result in personal or criminal liability on the part of any officer or result in any significant risk of legal liability for the directors of such Subsidiarythird parties, provided that such Subsidiary shall use reasonable endeavours to overcome any such obstacle;
(e) the terms of the Security Agreements should be such that they (i) do not restrict the running of the business of the relevant Subsidiary in the ordinary course to any greater extent than as otherwise permitted by the Credit Agreement, and (ii) in the case of the Associated Personal Property Collateral, do not require the scheduling or reporting of specific personal property assets (without regard to whether local law might require the listing of specific assets in order to perfect or register security);
(f) the security Loan Party will be subject to liens permitted by Credit Agreement and, to the extent possible, first-ranking; provided that, for the avoidance of doubt, any security interest over a bank account shall be subject to any prior security interest in favor of the relevant Account Bank which security is created either by law or the standard terms and conditions of the relevant Account Bank;
(g) the perfection of security interests granted will not be required if it would adversely affect on the ability of the relevant Subsidiary to conduct its operations and business in the ordinary course as otherwise permitted by the Credit Agreement; and
(h) the maximum guaranteed or secured amount may be limited to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties where the benefit of increasing the guaranteed or secured amount is excessive in relation to the value of the security to be afforded thereto.use commercially reasonable efforts to:
Appears in 2 contracts
Samples: Credit Agreement (Edwards Group LTD), Credit Agreement (Edwards Group LTD)
Certain Principles. The rights and obligations of (i) the Lenders, the Administrative Agent and Mexican Collateral Agent on the one hand, and (ii) the Borrower and the Guarantors on the other hand, in each case respect of (i) the giving or taking of the Guaranty; (ii) the giving or taking of Collateral; and (iii) all the rights and obligations associated with such giving or taking of the Guaranty and Collateral, shall be subject to and limited by the Agreed Security Principles. The Agreed Security Principles embody the recognition by all parties to the Credit Documentation that there may be certain legal and practical difficulties in obtaining effective or commercially reasonable guarantees and security from Holdings UK Newco and its Subsidiaries in every jurisdiction all members of the Group in which they or it has been agreed that guarantees and security will be granted by UK Newco (for the assets relevant to the Transactions are or may in the future avoidance of doubt, UK Newco is not and will not be locateda Guarantor) and those members. In particular:
(a) general legal and statutory limitations, regulatory restrictions, financial assistance, capital maintenance, corporate benefit, equity subordination, detrimental transactions and management insolvency liability rules, fraudulent preference, limitations of the granting of guarantee by holding companies, “interest stripping”, “earnings stripping”, “controlled foreign corporation”, transfer pricing or “thin capitalization capitalisation” rules, tax restrictions, exchange control restrictions, capital maintenance rules and “liquidity impairment” rules, retention of title claims and similar principles may prohibit, limit or otherwise restrict the ability of Holdings or a Subsidiary member of Holdings the Group to provide the Guaranty a guarantee or provide Collateral security or may require that the relevant Guaranty guarantee or Collateral security be limited by an amount or otherwise. If any such limit applies, the The Company and/or relevant Guaranty and Collateral provided will be limited to the maximum amount which Holdings or such Subsidiary of Holdings may provide having regard to applicable law (including any jurisprudence) and subject to fiduciary duties of management; provided that the Borrower security and/or guarantee provider will use reasonable endeavours to assist in demonstrating that adequate corporate benefit accrues to Holdingseach guarantor of guarantees and security. If any such limit applies, the Borrower guarantees and each security provided (or the enforceability thereof) will be subject to customary limitation language and limited to the maximum amount which the relevant Subsidiary member of Holdingsthe Group may provide having regard to applicable law (including any jurisprudence) and the rules and principles outlined above and subject to fiduciary and applicable legal duties of management;
(b) providing certain supervisory board, works council, regulator or regulatory board (or equivalent), or another external body’s or person’s consent, approval or advice may be required to enable a member of the GuarantyGroup to provide a guarantee or security. Such guarantee and/or security shall not be required unless such consent has been received provided that reasonable endeavours have been used by the relevant member of the Group to obtain the relevant consent or advice to the extent permissible by law, regulation and custom and such consent has no material adverse impact on relationships with third parties;
(c) the giving of a guarantee, the granting and the terms of Collateral (including a mortgage over hotel real property (a “Mortgage”)) security or the perfection of the Collateral security granted will not be required to the extent that the Administrative Agent or Mexican Collateral Agentit would, as applicablereasonably determined by the Company, and the Borrower reasonably determine that the burden and/or cost thereof (including, without limitation, incur any legal fees, registration fees, notarisation and registration fees, stamp duty, taxes (including any corporate tax applicable to any guarantee fee that may due under applicable transfer pricing regulations) and any other fees or costs directly associated with such security or guarantee) shall be excessive guarantee or limit the deductibility of interest expenses in relation amounts which are disproportionate to the value of benefit obtained by the Finance Parties;
(d) where there is material incremental cost involved in creating security over all assets owned by an Obligor in a particular category the principle stated at paragraph (c) above shall apply and, subject to be afforded to these Agreed Security Principles, only the Lenders therefrom (it being understood that, based on applicable law as material assets in effect on the Closing Date, (i) Mortgages will not be required in the Dominican Republic or Jamaica, and (ii) Mortgages will in any event not be required under circumstances where the recordation costs, notarial fees or other costs (other than customary legal counsel fees and expenses) associated therewith exceed the lesser of $100,000 and 1% of the acquisition cost of the relevant hotel property); provided that, pursuant to Section 6.11(d) of the Credit Agreement, if, immediately after giving effect to any acquisition that requires the acquired Hotel Real Property to category shall be subject to a Mortgage pursuant to Section 6.11(d) of the Credit Agreement, the Consolidated Total Net Leverage Ratio (determined on a Pro Forma Basis in accordance with Section 1.08 of the Credit Agreement) is greater than 5.00:1.00, the cost-benefit analysis referred to in this Section 1(b)(ii) shall not apply to the granting and/or perfection of a Mortgage pursuant to Section 6.11(d) of the Credit Agreement (which granting and perfection shall be required in any case irrespective of the amount of the recordation costs, notarial fees and/or other costs associated therewith); provided further that nothing in this section 1(b) or Section 6.11(d) of the Credit Agreement shall prevent the Administrative Agent or Mexican Collateral Agent, as applicable, from limiting or revising the requirements applicable to the granting and/or perfection of any Mortgage, as it may deem appropriate (in its sole discretion) in order to reduce the recordation costs, notarial fees and/or other costs associated therewith, including by limiting the amount of Indebtedness secured by such Mortgagesecurity;
(ce) any assets subject to a legal requirement (including any requirement to obtain consent from customers pursuant to applicable data protection laws or regulations), contract, lease, licence, instrument, regulatory constraint (including any agreement with any government or regulatory body) or other third party arrangements which are permitted by the Credit Documentation (including shareholder agreements, joint venture agreements and cash pool arrangements relating to bank accounts) which may prevent those assets from being charged or assigned (or assets which, if charged or assigned, would give a third party the right to terminate or otherwise amend any rights, benefits and/or obligations of the Group in respect of those assets) will be excluded from any relevant Security Agreement security document and any requirement to give security or guarantee provided that, notwithstanding anything if the relevant asset is material and the Company determines (acting reasonably) that such endeavours will not jeopardise commercial relationships with third parties, the relevant member of the Group will use reasonable endeavours to obtain any necessary consent or waiver within forty five (45) days, provided further that if the contrary contained hereinrelevant member of the Group has not been able to obtain such consent or waver, any person providing a Mortgage will be under the its obligation to obtain any landlord consent required to grant such Mortgage when such consent is required by local law to perfect such security interestor waiver will cease on the expiry of that forty five (45) day period;
(df) a Material Subsidiary members of the Group will not be required provide the Guaranty to give guarantees or enter into Transaction Security Agreements Documents if (i) it is not within the legal capacity of such Subsidiary the relevant members of the Group to do so (ii) it results in the security document being null and void, or if the same (iii) it would conflict with the fiduciary and legal duties of the directors of such Subsidiary their directors, officers or employees, contravene any legal prohibition or regulatory prohibition, or regulatory condition or result in a risk of personal civil or criminal liability on the part of any director, officer or result in any significant risk of legal liability for employee. The Security Agent or the directors of such Subsidiaryother secured parties, provided that such Subsidiary shall use reasonable endeavours to overcome any such obstacle;
(e) the terms of the Security Agreements should be such that they (i) do not restrict the running of the business of the relevant Subsidiary in the ordinary course to any greater extent than as otherwise permitted by the Credit Agreement, and (ii) in the case of the Associated Personal Property Collateralmay be, do not require the scheduling or reporting of specific personal property assets (without regard to whether local law might require the listing of specific assets in order to perfect or register security);
(f) the security will be subject to liens permitted by Credit Agreement and, to the extent possible, first-ranking; provided that, for the avoidance of doubt, shall discharge any guarantees and release any security interest over a bank account shall be which is or are subject to any prior security interest legal or regulatory prohibition as is referred to in favor this paragraph as soon as reasonably practicable after becoming aware of the relevant Account Bank which security is created either by law or the standard terms and conditions of the relevant Account Banksuch prohibition;
(g) the giving of a guarantee, the granting of security or the perfection of security interests granted will not be required if it would adversely affect on be unduly burdensome or restrict the ability of the relevant Subsidiary member of the Group to conduct its operations and business in the ordinary course or as otherwise permitted by the Credit Agreement; andFinance Documents and any requirement under these Agreed Security Principles to seek the consent of any person or to take or not take any other action shall be subject to this paragraph (g);
(h) it is acknowledged that in certain jurisdictions, it may be impossible, impractical, or disproportionately costly to create guarantees or security over certain categories of assets, in which event guarantees or security will not be taken over such assets;
(i) the security will be first ranking, to the extent possible, subject to any non-consensual liens and other liens mandatorily preferred by any applicable law and permitted under the Finance Documents;
(j) information, such as lists of assets (including, without limitation, receivables), will be provided if, and only to the extent, required by local law to be provided to perfect or register the relevant security interests and when required, unless required to be provided by local law more frequently, will be provided annually or, following an Event of Default which is continuing, at the Security Agent’s reasonable request;
(k) the maximum guaranteed or secured amount may be limited to minimize minimise stamp duty, notarizationnotarisation, registration or other applicable fees, taxes and duties where the benefit of increasing the guaranteed or secured amount is excessive in relation disproportionate to the value level of such fees, taxes and duties (and, in any event, the maximum aggregate amount payable by the Group in respect of fees, costs, expenses, disbursements and VAT relating to the provision of guarantees and security shall be limited to an amount to be agreed between the Security Agent and the Company);
(l) no perfection action will be required in jurisdictions where Obligors are not incorporated but perfection action may be required in respect of the Transaction Share Pledges in the jurisdiction of incorporation of the entity whose shares are being charged;
(m) all security (other than share security, which shall in each case be subject in all respects to paragraph 7 below) shall be afforded theretogoverned by the law of and secure assets located in the jurisdiction of incorporation of the Obligor;
(n) subject to paragraph 4(c) below, the Security Agent will hold one set of security interests for the Secured Obligations (as defined in the Intercreditor Agreement) to the extent reasonably practicable taking into account local law considerations;
(o) no guarantee or security will be required from or over ownership interests in, or over the assets of, (i) any entity incorporated in an Excluded Jurisdiction or (ii) any joint venture or similar arrangement or any company in which a member of the Group owns a minority interest;
(p) security shall not be created to the extent that it would result in a Lender becoming subject to German non-resident tax liability as regards interest payable under a Facility and/or trigger a German withholding tax deduction (including any withholding tax deduction upon issuance of an administrative order by the competent German tax authorities), unless in each case such taxes are for the account of the relevant Lender and are not subject to any indemnification or gross- up obligation by any Obligor;
(q) members of the Group will not be required to give guarantees or enter into security documents if they are not wholly owned by another member or members of the Group and no member of the Group will be required to grant security over shares in any entity which is not wholly-owned by members of the Group; and
(r) no member of the Group that is subject to a license under any law or regulation that would prohibit or materially restrict the granting of security or giving of guarantees shall be required to grant any security or give any guarantees, provided that reasonable endeavours to obtain consent or waivers from any relevant party shall be used by the relevant member of the Group if the relevant member of the Group is an Obligor and if, in the view of the Company (acting reasonably), granting such security or giving such guarantee will have no material adverse impact on relationships with third parties or otherwise force the relevant member of the Group or the Group to incur any material cost.
Appears in 1 contract
Samples: Term Loan Facility Agreement (Amc Entertainment Holdings, Inc.)
