German Guarantee Limitations. (a) The right to enforce any guarantee and indemnity created and the joint and several liability assumed hereunder against a Guarantor incorporated in Germany in the legal form of a limited liability company (GmbH) (a "German GmbH Guarantor") shall be limited if and to the extent that such guarantee and indemnity or joint and several liability secures any obligation of an affiliated company (verbundenes Unternehmen) within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case other than any of the German GmbH Guarantor's direct or indirect subsidiaries) and the enforcement of such guarantee and indemnity created or the joint and several liability assumed hereunder would cause: (i) the German GmbH Guarantor's net assets (determined in accordance with the provisions of the German Commercial Code (Handelsgesetzbuch, "HGB") consistently applied by the German GmbH Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss) according to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG (as applicable at the time of enforcement)) (the "Net Assets") to be less than its registered share capital (Stammkapital) (Begründung einer Unterbilanz); or (ii) (if the German GmbH Guarantor's Net Assets are already less than its registered share capital) the German GmbH Guarantor's Net Assets to be further reduced (Vertiefung einer Unterbilanz) (in each case a "Capital Impairment"). (b) For the purposes of the calculation of the German GmbH Guarantor's Net Assets: (i) the amount of any increase of the German GmbH Guarantor's registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the Signing Date that has been effected without the prior written consent of the Facility Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered share capital; (ii) loans provided to the relevant German GmbH Guarantor by a member of the Group shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 of the German Insolvency Act (Insolvenzordnung); and (iii) loans and other liabilities incurred by the German GmbH Guarantor in violation of the provisions of this Agreement or any other Finance Document shall be disregarded. (c) The relevant German GmbH Guarantor shall deliver to the Facility Agent, within ten (10) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor. (d) Following the Facility Agent’s receipt of the Management Determination, upon request by the Facility Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor. (e) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, any and all of its assets shown in the balance sheet with a book value (Buchwert) that is materially lower than the market value of such asset(s) if: (i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and (ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capital. After the expiry of such three month period the relevant German GmbH Guarantor shall, within three (3) Business Days, notify the Facility Agent of the amount of the proceeds from the sale and submit a statement with a new calculation of the amount of the Net Assets taking into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request. (f) The restriction under paragraph (a) above shall not apply: (i) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (c) through (e) above; (ii) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (a) are, due to a change of the applicable laws, the interpretation thereof or otherwise, not required to protect the managing directors of the relevant German GmbH Guarantor or of any of its direct or indirect shareholders from the risk of personal liability; (iii) to a German GmbH Guarantor if and so long it is party to a domination and/or profit and loss pooling agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) (section 291 of the German Stock Corporation Act) as a dominated or profit distributing entity or such German Guarantor has a fully recoverable recourse claim (vollwertiger Gegenleistungs- oder Rückgewähranspruch); or (iv) to the extent that the guarantee and indemnity or assumed joint and several liability secures: (A) any Loans that are on-lent by the relevant Borrower to the relevant German GmbH Guarantor (or any of its Subsidiaries) and have not yet been repaid by that German GmbH Guarantor (or its Subsidiaries); or (B) any outstanding Bank Guarantee which has been issued as security for obligations of the German GmbH Guarantor or any of its subsidiaries.
Appears in 1 contract
Samples: Multicurrency Revolving Credit and Bank Guarantee Facilities (Elster Group SE)
German Guarantee Limitations. (a) The right Each Secured Party agrees not to enforce any guarantee and indemnity created and the joint and several liability assumed hereunder against a German Guarantor incorporated any payment obligation arising out of the guarantee contained in Germany in Section 2.01 (the legal form of a limited liability company (GmbH“Payment Obligation”) (a "German GmbH Guarantor"i) shall be limited if and to the extent that such guarantee and indemnity or joint and several liability Payment Obligation secures any obligation obligations of an affiliated company (verbundenes Unternehmen) of such German Guarantor within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case other than any of the German GmbH Guarantor's direct or indirect subsidiaries’s Subsidiaries) and (ii) if and to the extent the enforcement of such guarantee and indemnity created or the joint and several liability assumed hereunder Payment Obligation would cause:
(i) cause the German Guarantor’s or, in the case of a German GmbH & Co. KG Guarantor's , its general partner’s net assets (determined Reinvermögen), i.e., assets (the calculation of which shall include all items set forth in accordance with the provisions Section 266(2) A., B. and C. of the German Commercial Code (Handelsgesetzbuch)) minus liabilities and liability reserves (the calculation of which shall include all items set forth in Section 266(3) B., "HGB") consistently applied by C. and D. of the German GmbH Guarantor in preparing its unconsolidated balance sheets Commercial Code (Jahresabschluss) according to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG (as applicable at the time of enforcementHandelsgesetzbuch)) (the "Net Assets") to be less than fall below its registered stated share capital (Stammkapital) (Begründung einer Unterbilanz); ) or
(ii) (, if the German GmbH Guarantor's Net Assets such net assets are already less than its registered stated share capital) the German GmbH Guarantor's Net Assets capital (Stammkapital), would cause such amount to be further reduced (Vertiefung einer Unterbilanz) (in each case such event a "“Capital Impairment").
”) and such enforcement would result in a violation of Section 30 of the German Act on Limited Liability Companies (bGesetz betreffend die Gesellschaften mit beschränkter Haftung – “GmbHG”) For provided that for the purposes of calculating the calculation of amount to be enforced (if any) the German GmbH Guarantor's Net Assetsfollowing balance sheet items shall be adjusted as follows:
(i) the amount of any increase of stated share capital (Stammkapital) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor's registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the Signing Date , its general partner that has been effected without the prior written consent of the Facility Administrative Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered stated share capitalcapital (Stammkapital);
(ii) liabilities arising from loans provided to the relevant German GmbH Guarantor by a member the Company or any of the Group its Subsidiaries shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 within the meaning of Section 39(2) of the German Insolvency Act Code (Insolvenzordnung); and
(iii) any loans and other contractual liabilities incurred by the German Guarantor or, in the case of a German GmbH Guarantor & Co. KG Guarantor, its general partner in violation of the provisions of this Agreement or any other Finance Document of the Loan Documents shall be disregarded.
(cb) The relevant German GmbH Guarantor shall deliver to the Facility Agent, within ten Upon delivery of an Enforcement Notice (10as defined below) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) upon request of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(d) Following the Facility Agent’s receipt of the Management Determination, upon request by the Facility Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth as soon as reasonably practicable and in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(e) The relevant German GmbH Guarantor shall any event within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, such notice realize any and all of its assets asset that is shown in the balance sheet with a book value (Buchwert) that is materially significantly lower than the market value of such asset(s) if:
asset, which is not necessary for the German Guarantor’s business (i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and
(ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capitalbetriebsnotwendig). After the expiry of such three month months period the relevant German GmbH Guarantor shall, within three (3) Business Days, shall notify the Facility Administrative Agent of the amount of the proceeds from the sale and submit a an accompanying statement with a new calculation of to the Administrative Agent stating the amount of the Net Assets taking net assets (Reinvermögen) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, its general partner, and the amount by which such net assets (Reinvermögen) exceed its respective registered share capital, each recalculated (as of the date of delivery of an Enforcement Notice) for the purposes of paragraph (a) hereof to take into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request.
(fc) The restriction under limitations set out in paragraph (a) above hereof shall not apply:
(i) if in relation to and to the relevant extent the proceeds of any borrowings under the Credit Agreement have been on-lent, or otherwise passed on, to such German GmbH Guarantor has or any of its Subsidiaries and have not complied with its obligations pursuant to paragraphs (c) through (e) above;been repaid; and
(ii) whento a German Guarantor which is a party to a domination agreement (Beherrschungsvertrag) as dominated entity (beherrschtes Unternehmen) or obliged to transfer its profits pursuant to a profit and loss transfer agreement (Gewinnabführungsvertrag), at provided that in such case the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, Secured Parties shall in any event be entitled to enforce the restrictions under Payment Obligation up to the amount enforceable pursuant to paragraph (a) are, due above but may enforce the Payment Obligation in a higher amount only to the extent that such enforcement would not result in a change personal liability of any officer of the applicable lawsGerman Guarantor or, in the case of a German GmbH & Co. KG Guarantor, its general partner.
(d) The limitations set out in paragraph (a) hereof only apply if and to the extent that:
(i) within ten (10) Business Days following the notification by any Secured Party of its intention to enforce the Payment Obligation (the “Enforcement Notice”), the interpretation thereof or otherwise, not required to protect the managing directors director(s) on behalf of the relevant German Guarantor or, in the case of a German GmbH Guarantor or & Co. KG Guarantor, its general partner has/have confirmed in writing to the Administrative Agent to what extent the Payment Obligation cannot be enforced as it would cause a Capital Impairment within the meaning of any of its direct or indirect shareholders from paragraph (a) above (taking into account the risk of personal liability;
adjustments set out in paragraph (a)(i) to (iii) above) and such confirmation is supported by evidence reasonably satisfactory to the Administrative Agent (the “Management Determination”) and the Administrative Agent (acting on behalf of the relevant Secured Party) has not contested this; or
(ii) within twenty (20) Business Days from the date the Administrative Agent has contested the Management Determination, the Administrative Agent receives a determination by the German Guarantor’s auditors of the amount that could have been enforced on the date the Enforcement Notice without causing a Capital Impairment within the meaning of paragraph (a) above (the “Auditor’s Determination”). The amount determined in the Auditor’s Determination shall (except for manifest error) be binding for the Loan Parties and the Secured Parties. The costs of the Auditor’s Determination shall be borne by the relevant German Guarantor.
(e) If the Administrative Agent disagrees with the Auditor’s Determination, the Secured Parties shall be entitled to enforce the Payment Obligation up to the amount which is undisputed between themselves and the German Guarantor. In relation to the amount which is disputed, the Secured Parties shall be entitled to further pursue their claims (if any) and the German Guarantor shall be entitled to prove that this amount is necessary for maintaining its or, in the case of a German GmbH & Co. KG Guarantor, its general partner’s stated share capital (Stammkapital) without violation of Section 30 GmbHG (calculated as of the date that the Enforcement Notice was given).
(f) If the Payment Obligation was enforced without limitation because the Management Determination and/or the Auditor’s Determination (as the case may be) was not delivered within the relevant time or for any other reason, the Secured Parties shall promptly upon demand by the relevant German Guarantor repay to such German Guarantor any amount which is necessary pursuant to Section 30 GmbHG to maintain the stated share capital (Stammkapital) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, its general partner, calculated as of the date that the Enforcement Notice was given provided the relevant Secured Party has received a corresponding amount by the relevant German Guarantor as a consequence of enforcement of the relevant Payment Obligation.
(g) Furthermore, each Secured Party agrees not to enforce against a German Guarantor any Payment Obligation if and so long it is party to a domination and/or profit and loss pooling agreement the extent (Beherrschungs- und/oder Gewinnabführungsvertragi) such Payment Obligation secures obligations of an affiliated company (section 291 verbundenes Unternehmen) of such German Guarantor within the meaning of Section 15 of the German Stock Corporation ActAct (Aktiengesetz) (other than any of the relevant German Guarantor’s subsidiaries) and (ii) such enforcement would result in the illiquidity of the German Guarantor (Zahlungsunfähigkeit) in the meaning of Section 17 subsection 2 German Insolvency Code (Insolvenzordnung) and (iii) such enforcement would provoke the liability of the managing director(s) of the German Guarantor under Section 64 sentence 3 GmbHG, provided that for the purposes of calculating illiquidity in the meaning of this paragraph
(i) any liabilities of the relevant German Guarantor to the Company or any of its Subsidiaries shall be disregarded if and to the extent these liabilities were – with respect to the ordinary course of business – created or not realized in abusive interference with the relevant German Guarantor’s liquidity, particularly in order to avoid the enforcement by the German Guarantor, or if the due date of the respective liabilities deviates from the due dates usually agreed between the parties with respect to their ordinary course of business, and
(ii) any outstanding claims - including any rights of recourse - of the relevant German Guarantor against the Company or any of its Subsidiaries that would not be considered under Section 17 subsection 2 German Insolvency Code particularly due to lacking maturity, deferral or enforceability (Durchsetzbarkeit) shall be considered as a dominated or profit distributing entity or disposable liquidity of such German Guarantor has (frei verfügbare Liquidität), if and to the extent these claims were – with respect to the ordinary course of business – created or not realized in abusive interference with the relevant German Guarantor’s liquidity, particularly in order to avoid the enforcement by a fully recoverable recourse claim Secured Party, or if the due date or the contractual enforceability of the respective claims deviates from the usual agreements between the parties with respect to their ordinary course of business, and
(vollwertiger Gegenleistungs- oder Rückgewähranspruchiii) any payments effected by the relevant German Guarantor to the Company or any of its Subsidiaries that were beyond the ordinary course of business (gewöhnlicher Geschäftsverlauf) shall be regarded as disposable liquidity of the relevant German Guarantor (frei verfügbare Liquidität).
(h) The limitation set out in Clause (g) shall only apply if and to the extent that:
(i) within ten (10) Business Days after the receipt of the Enforcement Notice by the relevant German Guarantor, the managing director(s) on behalf of such German Guarantor has/have confirmed in writing to the respective Secured Party:
(1) the extent to which the Security secures obligations of an affiliated company (verbundenes Unternehmen) of the relevant German Guarantor within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (other than any of the relevant German Guarantor’s subsidiaries); and to what extent the Security cannot be enforced as this would result in the illiquidity of the relevant German Guarantor and the liability of the directors within the meaning of Clause (g) and such confirmation is supported by evidence reasonably satisfactory to the Secured Party; and
(2) such confirmation is supported by evidence by means of unaudited liquidity statements (Liquiditätsbilanz) in which the current cash and cash equivalents (together “Cash”) and the cash available within the next three weeks are opposed to the liabilities which will become due within the next three weeks and a liquidity schedule (Liquiditätsplan) showing the liquidity of the relevant German Guarantor for the preceding 12 months and the expected liquidity during the subsequent two months (the liquidity statements and the liquidity schedule jointly the “Management Evaluation”) and the Secured Party has not contested this; and
(3) that all reasonable measures within ordinary course of business have been taken or will promptly be taken – including the realisation of assets of the relevant German Guarantor – in order to increase the liquidity of the German Guarantor and this confirmation is supported by reasonable evidence, or
(ivii) within twenty (20) Business Days from the date on which a Secured Party has contested the Management Evaluation made in accordance with this Clause (h) (i) (the “Auditing Period”), the Secured Party receives liquidity statements with an auditor’s confirmation of the amount that could have been enforced on the date of the Enforcement Notice without causing illiquidity within the meaning of Clause (g) (the “Auditor’s Evaluation”). For the avoidance of doubt, in case the Management Evaluation is contested, the Secured Party shall not enforce the payment obligations created hereunder (Versprechen, zeitweilig nicht zu vollstrecken) prior to the expiry of the Auditing Period. The costs of the Auditor’s Evaluation shall be borne by the relevant German Guarantor.
(i) If a Secured Party disagrees with the Auditor’s Evaluation, the Secured Party shall be entitled to enforce the Security up to the amount which is undisputed between itself and the relevant German Guarantor. In relation to the amount which is disputed, and if and to the extent that the guarantee factual basis for the Management Evaluation and indemnity or assumed joint and several liability secures:
(A) any Loans that are on-lent by the relevant Borrower Auditor’s Evaluation particularly with regard to the liquidity of the relevant German GmbH Guarantor has changed after the point in time to which the Auditor’s Evaluation relates, the Secured Party shall be entitled to further pursue its claims (if any) and the relevant German Guarantor shall be entitled to prove that this amount is necessary for avoiding illiquidity in the meaning of Section 17 subsection 2 German Insolvency Code (Insolvenzordnung) (calculated in accordance with Clause (g)). The Auditor’s Evaluation does not prevent the Secured Party from initiating court proceedings if it holds that the prerequisites of an abusive interference as set forth in Section (g) (i) and (ii) are met.
(j) No reduction of the amount enforceable under this guarantee in accordance with the above limitations will prejudice the rights of the Secured Parties to continue enforcing the guarantee (subject always to the operation of the limitation set out above at the time of such enforcement) until full satisfaction of the guaranteed claims. For the avoidance of doubt, nothing in this Section 2.04 shall affect the right of the Secured Parties (or any of its Subsidiariesthem) and have not yet been repaid by that German GmbH Guarantor (or its Subsidiaries); or
(B) any outstanding Bank Guarantee which has been issued as security for obligations to accelerate the Loans pursuant to Section 9 of the German GmbH Guarantor Credit Agreement or to enforce the security granted under any of its subsidiariesCollateral Document.
Appears in 1 contract
Samples: Guarantee and Collateral Agreement (Harman International Industries Inc /De/)
German Guarantee Limitations. Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Section 10.1) or any other Loan Document:
(a) The right Each Credit Party agrees not to enforce any guarantee and indemnity created and the joint and several liability assumed hereunder against a Guarantor Borrower incorporated in Germany in the legal form of as a limited liability company (GmbHGesellschaft mit beschränkter Haftung) or as a limited partnership with a limited liability company as sole general partner (GmbH & Co. KG) (a "“German GmbH Guarantor"Borrower”) shall be limited any payment obligation arising out of the guarantee contained in Section 10.01 (the “Payment Obligation”) (i) if and to the extent that such guarantee and indemnity or joint and several liability Payment Obligation secures any obligation obligations of an affiliated company (verbundenes verbundene Unternehmen) of such German Borrower within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case other than any of the German GmbH Guarantor's direct or indirect Borrower’s subsidiaries), and (ii) if and to the extent the enforcement of such guarantee and indemnity created or Payment Obligation would cause (as of the joint and several liability assumed hereunder would cause:
date of delivery of an Enforcement Notice (ias defined below)) the German Borrower’s or, in the case of a German Borrower in the form of a GmbH Guarantor's & Co. KG, its general partner’s net assets (determined Nettoreinvermögen) calculated in accordance with applicable law, the applicable provisions of the German Commercial Code (Handelsgesetzbuch, "HGB") consistently applied by the German GmbH Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss) according Borrower and the principles developed by court decisions for Section 30 GmbHG to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG (as applicable at the time of enforcement)) (the "Net Assets") to be less than fall below its registered share capital (Stammkapital) (Begründung einer Unterbilanz); ) or
(ii) (, if the German GmbH Guarantor's Net Assets such net assets are already less than its registered share capital) the German GmbH Guarantor's Net Assets capital (Stammkapital), would cause such amount to be further reduced (Vertiefung einer Unterbilanz) (in each case such event a "“Capital Impairment"”) and such enforcement would result in a violation of Section 30 of the German Act on Limited Liability Companies (Gesetz betreffend die Gesellschaften mit beschränkter Haftung — “GmbHG”).
, and/or (biii) For if and to the extent that such enforcement would result (as of the date of delivery of an Enforcement Notice) in a violation of Section 268(8) of the German Commercial Code (Handelsgesetzbuch) provided that for the purposes of calculating the calculation of amount to be enforced (if any) the German GmbH Guarantor's Net Assetsfollowing balance sheet items shall be adjusted as follows:
(i) the amount of any increase of the German GmbH Guarantor's registered share capital (Stammkapital) effected out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after of the Signing Date German Borrower or, in the case of a German Borrower in the form of a GmbH & Co. KG, its general partner that has been effected without the prior written consent of the Facility Administrative Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered share capitalcapital (Stammkapital);
(ii) liabilities arising from loans provided to the relevant German GmbH Guarantor Borrower by a member the Company or any of the Group its Subsidiaries shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 within the meaning of Section 39(2) of the German Insolvency Act Code (Insolvenzordnung) or qualify as shareholder loans within the meaning of Section 39(1) No. 5 of the German Insolvency Code (Insolvenzordnung); and;
(iii) any loans and other contractual liabilities incurred by the German GmbH Guarantor Borrower in violation of the provisions of this Agreement or any other Finance Document of the Loan Documents shall be disregarded; and
(iv) the net assets (Nettoreinvermögen) shall take into account the costs of the Auditor’s Determination and Auditor’s Evaluation (each as defined below), either as a reduction of assets or an increase of liabilities.
(cb) The relevant If the German GmbH Guarantor shall deliver Borrower intends to demonstrate that the enforcement of the Payment Obligation would be limited pursuant to the Facility Agentlimitation on enforcement set out above, within ten (10) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(d) Following the Facility Agent’s receipt of the Management Determinationit shall, upon request by of the Facility Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(e) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, as soon as reasonably practicable realize any and all of its assets asset that is shown in the balance sheet with a book value (Buchwert) that is materially significantly lower than the market value of such asset(s) if:
asset, which in its reasonable opinion is not necessary for the German Borrower’s business (i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and
(ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capitalbetriebsnotwendig). After the expiry realization of such three month period assets the relevant German GmbH Guarantor shall, within three (3) Business Days, Borrower shall notify the Facility Administrative Agent of the amount of the proceeds from the sale and submit a an accompanying statement with a new calculation of to the Administrative Agent stating the amount of the Net Assets taking net assets (Nettoreinvermögen) of the German Borrower or, in the case of a German Borrower in the form of a GmbH & Co. KG, its general partner, and the amount by which such net assets (Nettoreinvermögen) exceed its respective registered share capital, each recalculated (as of the date of delivery of an Enforcement Notice and on the basis of the Management Determination or the Auditor’s Determination, respectively) for the purposes of paragraph (a) hereof to take into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request.
(fc) The restriction under limitations set out in paragraph (a) above hereof shall not apply:
(i) if in relation to and to the relevant extent the German GmbH Guarantor has Borrower can demonstrate that the proceeds of any borrowings under the Credit Agreement have not complied with been on-lent, or otherwise passed on, to such German Borrower or any of its obligations pursuant to paragraphs (c) through (e) above;subsidiaries and have not been repaid; and
(ii) when, if at the time of the enforcement of a the guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (a) are, due to a change of the applicable laws, the interpretation thereof or otherwise, not required to protect the managing directors of the relevant German GmbH Guarantor or of any of its direct or indirect shareholders from the risk of personal liability;
(iii) to a German GmbH Guarantor if and so long it is party to granted hereunder a domination and/or agreement (Beherrschungsvertrag) or a profit and loss pooling transfer agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) (section in accordance with Section 291 of the German Stock Corporation ActAct (Aktiengesetz) exists between the German Borrower as a dominated entity (beherrschtes Unternehmen) or profit distributing entity obliged to transfer its profits, respectively, and the obligor (or such obligor’s direct or indirect shareholder) for whose obligations the guarantee hereunder is granted by the German Guarantor has a Borrower, unless the statutory loss compensation claim (Verlustübernahmeanspruch) of such German Borrower pursuant to the domination and/or profit and loss transfer agreement is not fully recoverable recourse (nicht werthaltig) (provided that in case the statutory loss compensation claim (vollwertiger Gegenleistungs- oder RückgewähranspruchVerlustübernahmeanspruch) is only recoverable in part (teilweise werthaltig); or
, the guarantee granted hereunder may be enforced without giving regard to the limitations provided for in paragraph (iva) to the extent that such statutory loss compensation claim (Verlustübernahmeanspruch) is recoverable(werthaltig)); and
(iii) if and to extent the German Borrower holds on the date of enforcement of the of the guarantee and granted hereunder a fully recoverable indemnity or assumed joint claim for refund (“vollwertiger Gegenleistungs- oder Rückgewähranspruch”) within the meaning of Section 30 (1) sentence 2 of the GmbHG against its shareholder.
(d) The limitations set out in paragraph (a) hereof only apply if and several liability securesto the extent that:
(Ai) within ten (10) Business Days following the notification by any Loans Credit Party of its intention to enforce the Payment Obligation (the “Enforcement Notice”), the managing director(s) on behalf of the relevant German Borrower has/have confirmed in writing to the Administrative Agent to what extent the Payment Obligation cannot be enforced as it would cause a Capital Impairment (as of the date of delivery of an Enforcement Notice) within the meaning of paragraph (a) above (taking into account the adjustments set out in paragraph (a)(i) to (iv) above) (the “Management Determination”) and the Administrative Agent (acting on behalf of the relevant Credit Party) has not contested this; or
(ii) within twenty (20) Business Days from the date the Administrative Agent has contested the Management Determination, the Administrative Agent receives a determination by the German Borrower’s auditors of the amount that are on-lent could have been enforced without causing a Capital Impairment (as of the date of delivery of an Enforcement Notice) within the meaning of paragraph (a) above (the “Auditor’s Determination”). The amount determined in the Auditor’s Determination shall (except for manifest error) be binding for the Credit Parties. The costs of the Auditor’s Determination shall be borne by the relevant German Borrower.
(e) If the Administrative Agent disagrees with the Auditor’s Determination, the Credit Parties shall be entitled to enforce the Payment Obligation up to the amount which is undisputed between themselves and the German Borrower. In relation to the amount which is disputed, the Credit Parties shall be entitled to further pursue their claims (if any) and the German Borrower shall be entitled to prove that this amount is necessary for maintaining its or, in the case of a German Borrower in the form of a GmbH & Co. KG, its general partner’s registered share capital (Stammkapital) without violation of Section 30 GmbHG (calculated as of the date that the Enforcement Notice was given).
(f) If the Payment Obligation was enforced without limitation because the Management Determination and/or the Auditor’s Determination (as the case may be) was not delivered within the relevant time or for any other reason, the Credit Parties shall promptly upon demand by the relevant German Borrower repay to such German Borrower any amount which is necessary pursuant to Section 30 GmbHG to maintain the registered share capital (Stammkapital) of the German Borrower or, in the case of a German Borrower in the form of a GmbH Guarantor & Co. KG, its general partner, calculated as of the date that the Enforcement Notice was given provided the relevant Credit Party has received a corresponding amount by the relevant German Borrower as a consequence of enforcement of the relevant Payment Obligation.
(g) No reduction of the amount enforceable under this guarantee in accordance with the above limitations will prejudice the rights of the Credit Parties to continue enforcing the guarantee (subject always to the operation of the limitation set out above at the time of such enforcement) until full satisfaction of the guaranteed claims. For the avoidance of doubt, nothing in this Section 10.02 shall affect the right of the Credit Parties (or any of its Subsidiariesthem) and have not yet been repaid by that German GmbH Guarantor (to accelerate the Loans pursuant to Article VII of this Agreement or its Subsidiaries); or
(B) to enforce the security granted under any outstanding Bank Guarantee which has been issued as security for obligations of the German GmbH Guarantor or any of its subsidiaries.Collateral Document. [Signature Pages Follow]
Appears in 1 contract
Samples: Credit Agreement (Belden Inc.)
German Guarantee Limitations. (ai) The right Each Secured Party agrees not to enforce any guarantee and indemnity created and the joint and several liability assumed hereunder against a German Guarantor incorporated any payment obligation arising out of the guarantee contained in Germany in Section 2.01 (the legal form of a limited liability company (GmbH“Payment Obligation”) (a "German GmbH Guarantor"i) shall be limited if and to the extent that such guarantee and indemnity or joint and several liability Payment Obligation secures any obligation obligations of an affiliated company (verbundenes Unternehmen) of such German Guarantor within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case other than any of the German GmbH Guarantor's direct or indirect subsidiariesSubsidiaries) and (ii) if and to the extent the enforcement of such guarantee and indemnity created or the joint and several liability assumed hereunder Payment Obligation would cause:
(i) cause the German Guarantor's or, in the case of a German GmbH & Co. KG Guarantor, its general partner's net assets (determined Reinvermögen), i.e., assets (the calculation of which shall include all items set forth in accordance with the provisions Section 266(2) A., B. and C. of the German Commercial Code (Handelsgesetzbuch)) minus liabilities and liability reserves (the calculation of which shall include all items set forth in Section 266(3) B., "HGB") consistently applied by C. and D. of the German GmbH Guarantor in preparing its unconsolidated balance sheets Commercial Code (Jahresabschluss) according to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG (as applicable at the time of enforcementHandelsgesetzbuch)) (the "Net Assets") to be less than fall below its registered stated share capital (Stammkapital) (Begründung einer Unterbilanz); ) or
(ii) (, if the German GmbH Guarantor's Net Assets such net assets are already less than its registered stated share capital) the German GmbH Guarantor's Net Assets capital (Stammkapital), would cause such amount to be further reduced (Vertiefung einer Unterbilanz) (in each case such event a "“Capital Impairment").
”) and such enforcement would result in a violation of Section 30 of the German Act on Limited Liability Companies (bGesetz betreffend die Gesellschaften mit beschränkter Haftung – “GmbHG”) For provided that for the purposes of calculating the calculation of amount to be enforced (if any) the German GmbH Guarantor's Net Assetsfollowing balance sheet items shall be adjusted as follows:
(i) the amount of any increase of stated share capital (Stammkapital) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor's registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the Signing Date , its general partner that has been effected without the prior written consent of the Facility Administrative Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered stated share capitalcapital (Stammkapital);
(ii) liabilities arising from loans provided to the relevant German GmbH Guarantor by a member the Company or any of the Group its Subsidiaries shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 within the meaning of Section 39(2) of the German Insolvency Act Code (Insolvenzordnung); and
(iii) any loans and other contractual liabilities incurred by the German Guarantor or, in the case of a German GmbH Guarantor & Co. KG Guarantor, its general partner in violation of the provisions of this Agreement or any other Finance Document of the Loan Documents shall be disregarded.
(c) The relevant German GmbH Guarantor shall deliver to the Facility Agent, within ten (10) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(d) Following the Facility Agent’s receipt of the Management Determination, upon request by the Facility Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(e) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, any and all of its assets shown in the balance sheet with a book value (Buchwert) that is materially lower than the market value of such asset(s) if:
(i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and
(ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capital. After the expiry of such three month period the relevant German GmbH Guarantor shall, within three (3) Business Days, notify the Facility Agent of the amount of the proceeds from the sale and submit a statement with a new calculation of the amount of the Net Assets taking into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request.
(f) The restriction under paragraph (a) above shall not apply:
(i) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (c) through (e) above;
(ii) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (a) are, due to a change of the applicable laws, the interpretation thereof or otherwise, not required to protect the managing directors of the relevant German GmbH Guarantor or of any of its direct or indirect shareholders from the risk of personal liability;
(iii) to a German GmbH Guarantor if and so long it is party to a domination and/or profit and loss pooling agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) (section 291 of the German Stock Corporation Act) as a dominated or profit distributing entity or such German Guarantor has a fully recoverable recourse claim (vollwertiger Gegenleistungs- oder Rückgewähranspruch); or
(iv) to the extent that the guarantee and indemnity or assumed joint and several liability secures:
(A) any Loans that are on-lent by the relevant Borrower to the relevant German GmbH Guarantor (or any of its Subsidiaries) and have not yet been repaid by that German GmbH Guarantor (or its Subsidiaries); or
(B) any outstanding Bank Guarantee which has been issued as security for obligations of the German GmbH Guarantor or any of its subsidiaries.
Appears in 1 contract
Samples: Guarantee and Collateral Agreement (Harman International Industries Inc /De/)
German Guarantee Limitations. Notwithstanding anything to the contrary contained in this Agreement (including, without limitation, Section 10.1) or any other Loan Document:
(a) The right Each Credit Party agrees not to enforce any guarantee and indemnity created and the joint and several liability assumed hereunder against a Guarantor Borrower incorporated in Germany in the legal form of as a limited liability company (GmbHGesellschaft mit beschränkter Haftung) or as a limited partnership with a limited liability company as sole general partner (GmbH & Co. KG) (a "“German GmbH Guarantor"Borrower”) shall be limited any payment obligation arising out of the guarantee contained in Section 10.01 (the “Payment Obligation”) (i) if and to the extent that such guarantee and indemnity or joint and several liability Payment Obligation secures any obligation obligations of an affiliated company (verbundenes verbundene Unternehmen) of such German Borrower within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case other than any of the German GmbH Guarantor's direct or indirect Borrower’s subsidiaries), and (ii) if and to the extent the enforcement of such guarantee and indemnity created or Payment Obligation would cause (as of the joint and several liability assumed hereunder would cause:
date of delivery of an Enforcement Notice (ias defined below)) the German Borrower’s or, in the case of a German Borrower in the form of a GmbH Guarantor's & Co. KG, its general partner’s net assets (determined Nettoreinvermögen) calculated in accordance with applicable law, the applicable provisions of the German Commercial Code (Handelsgesetzbuch, "HGB") consistently applied by the German GmbH Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss) according Borrower and the principles developed by court decisions for Section 30 GmbHG to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG (as applicable at the time of enforcement)) (the "Net Assets") to be less than fall below its registered share capital (Stammkapital) (Begründung einer Unterbilanz); ) or
(ii) (, if the German GmbH Guarantor's Net Assets such net assets are already less than its registered share capital) the German GmbH Guarantor's Net Assets capital (Stammkapital), would cause such amount to be further reduced (Vertiefung einer Unterbilanz) (in each case such event a "“Capital Impairment"”) and such enforcement would result in a violation of Section 30 of the German Act on Limited Liability Companies (Gesetz betreffend die Gesellschaften mit beschränkter Haftung – “GmbHG”).
, and/or (biii) For if and to the extent that such enforcement would result (as of the date of delivery of an Enforcement Notice) in a violation of Section 268(8) of the German Commercial Code (Handelsgesetzbuch) provided that for the purposes of calculating the calculation of amount to be enforced (if any) the German GmbH Guarantor's Net Assetsfollowing balance sheet items shall be adjusted as follows:
(i) the amount of any increase of the German GmbH Guarantor's registered share capital (Stammkapital) effected out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after of the Signing Date German Borrower or, in the case of a German Borrower in the form of a GmbH & Co. KG, its general partner that has been effected without the prior written consent of the Facility Administrative Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered share capitalcapital (Stammkapital);
(ii) liabilities arising from loans provided to the relevant German GmbH Guarantor Borrower by a member the Company or any of the Group its Subsidiaries shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 within the meaning of Section 39(2) of the German Insolvency Act Code (Insolvenzordnung) or qualify as shareholder loans within the meaning of Section 39(1) No. 5 of the German Insolvency Code (Insolvenzordnung); and;
(iii) any loans and other contractual liabilities incurred by the German GmbH Guarantor Borrower in violation of the provisions of this Agreement or any other Finance Document of the Loan Documents shall be disregarded; and
(iv) the net assets (Nettoreinvermögen) shall take into account the costs of the Auditor’s Determination and Auditor’s Evaluation (each as defined below), either as a reduction of assets or an increase of liabilities.
(cb) The relevant If the German GmbH Guarantor shall deliver Borrower intends to demonstrate that the enforcement of the Payment Obligation would be limited pursuant to the Facility Agentlimitation on enforcement set out above, within ten (10) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(d) Following the Facility Agent’s receipt of the Management Determinationit shall, upon request by of the Facility Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(e) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, as soon as reasonably practicable realize any and all of its assets asset that is shown in the balance sheet with a book value (Buchwert) that is materially significantly lower than the market value of such asset(s) if:
asset, which in its reasonable opinion is not necessary for the German Borrower’s business (i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and
(ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capitalbetriebsnotwendig). After the expiry realization of such three month period assets the relevant German GmbH Guarantor shall, within three (3) Business Days, Borrower shall notify the Facility Administrative Agent of the amount of the proceeds from the sale and submit a an accompanying statement with a new calculation of to the Administrative Agent stating the amount of the Net Assets taking net assets (Nettoreinvermögen) of the German Borrower or, in the case of a German Borrower in the form of a GmbH & Co. KG, its general partner, and the amount by which such net assets (Nettoreinvermögen) exceed its respective registered share capital, each recalculated (as of the date of delivery of an Enforcement Notice and on the basis of the Management Determination or the Auditor’s Determination, respectively) for the purposes of paragraph (a) hereof to take into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request.
(fc) The restriction under limitations set out in paragraph (a) above hereof shall not apply:
(i) if in relation to and to the relevant extent the German GmbH Guarantor has Borrower can demonstrate that the proceeds of any borrowings under the Credit Agreement have not complied with been on-lent, or otherwise passed on, to such German Borrower or any of its obligations pursuant to paragraphs (c) through (e) above;subsidiaries and have not been repaid; and
(ii) when, if at the time of the enforcement of a the guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (a) are, due to a change of the applicable laws, the interpretation thereof or otherwise, not required to protect the managing directors of the relevant German GmbH Guarantor or of any of its direct or indirect shareholders from the risk of personal liability;
(iii) to a German GmbH Guarantor if and so long it is party to granted hereunder a domination and/or agreement (Beherrschungsvertrag) or a profit and loss pooling transfer agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) (section in accordance with Section 291 of the German Stock Corporation ActAct (Aktiengesetz) exists between the German Borrower as a dominated entity (beherrschtes Unternehmen) or profit distributing entity obliged to transfer its profits, respectively, and the obligor (or such obligor’s direct or indirect shareholder) for whose obligations the guarantee hereunder is granted by the German Guarantor has a Borrower, unless the statutory loss compensation claim (Verlustübernahmeanspruch) of such German Borrower pursuant to the domination and/or profit and loss transfer agreement is not fully recoverable recourse (nicht werthaltig) (provided that in case the statutory loss compensation claim (vollwertiger Gegenleistungs- oder RückgewähranspruchVerlustübernahmeanspruch) is only recoverable in part (teilweise werthaltig); or
, the guarantee granted hereunder may be enforced without giving regard to the limitations provided for in paragraph (iva) to the extent that such statutory loss compensation claim (Verlustübernahmeanspruch) is recoverable(werthaltig)); and
(iii) if and to extent the German Borrower holds on the date of enforcement of the of the guarantee and granted hereunder a fully recoverable indemnity or assumed joint claim for refund (“vollwertiger Gegenleistungs- oder Rückgewähranspruch”) within the meaning of Section 30 (1) sentence 2 of the GmbHG against its shareholder.
(d) The limitations set out in paragraph (a) hereof only apply if and several liability securesto the extent that:
(Ai) within ten (10) Business Days following the notification by any Loans Credit Party of its intention to enforce the Payment Obligation (the “Enforcement Notice”), the managing director(s) on behalf of the relevant German Borrower has/have confirmed in writing to the Administrative Agent to what extent the Payment Obligation cannot be enforced as it would cause a Capital Impairment (as of the date of delivery of an Enforcement Notice) within the meaning of paragraph (a) above (taking into account the adjustments set out in paragraph (a)(i) to (iv) above) (the “Management Determination”) and the Administrative Agent (acting on behalf of the relevant Credit Party) has not contested this; or
(ii) within twenty (20) Business Days from the date the Administrative Agent has contested the Management Determination, the Administrative Agent receives a determination by the German Borrower’s auditors of the amount that are on-lent could have been enforced without causing a Capital Impairment (as of the date of delivery of an Enforcement Notice) within the meaning of paragraph (a) above (the “Auditor’s Determination”). The amount determined in the Auditor’s Determination shall (except for manifest error) be binding for the Credit Parties. The costs of the Auditor’s Determination shall be borne by the relevant German Borrower.
(e) If the Administrative Agent disagrees with the Auditor’s Determination, the Credit Parties shall be entitled to enforce the Payment Obligation up to the amount which is undisputed between themselves and the German Borrower. In relation to the amount which is disputed, the Credit Parties shall be entitled to further pursue their claims (if any) and the German Borrower shall be entitled to prove that this amount is necessary for maintaining its or, in the case of a German Borrower in the form of a GmbH & Co. KG, its general partner’s registered share capital (Stammkapital) without violation of Section 30 GmbHG (calculated as of the date that the Enforcement Notice was given).
(f) If the Payment Obligation was enforced without limitation because the Management Determination and/or the Auditor’s Determination (as the case may be) was not delivered within the relevant time or for any other reason, the Credit Parties shall promptly upon demand by the relevant German Borrower repay to such German Borrower any amount which is necessary pursuant to Section 30 GmbHG to maintain the registered share capital (Stammkapital) of the German Borrower or, in the case of a German Borrower in the form of a GmbH Guarantor & Co. KG, its general partner, calculated as of the date that the Enforcement Notice was given provided the relevant Credit Party has received a corresponding amount by the relevant German Borrower as a consequence of enforcement of the relevant Payment Obligation.
(g) No reduction of the amount enforceable under this guarantee in accordance with the above limitations will prejudice the rights of the Credit Parties to continue enforcing the guarantee (subject always to the operation of the limitation set out above at the time of such enforcement) until full satisfaction of the guaranteed claims. For the avoidance of doubt, nothing in this Section 10.02 shall affect the right of the Credit Parties (or any of its Subsidiariesthem) and have not yet been repaid by that German GmbH Guarantor to accelerate the Loans pursuant to Article VII of this Agreement or to enforce the security granted under any Collateral Document. LENDER COMMITMENT COMMITMENT JPMORGAN CHASE BANK, N.A. $ 52,500,000 CAD0 JPMORGAN CHASE BANK, N.A., TORONTO BRANCH $ 0 CAD34,000,000 DEUTSCHE BANK AG NEW YORK BRANCH $ 42,500,000 CAD0 XXXXX FARGO BANK, NATIONAL ASSOCIATION $ 42,500,000 CAD25,000,000 U.S. BANK NATIONAL ASSOCIATION $ 42,500,000 CAD0 U.S. BANK NA CANADA BRANCH $ 0 CAD25,000,000 CITIBANK, N.A. $ 35,000,000 CAD0 CITIBANK, N.A., CANADIAN BRANCH $ 0 CAD18,000,000 PNC BANK, NATIONAL ASSOCIATION $ 35,000,000 CAD0 PNC BANK CANADA BRANCH $ 0 CAD18,000,000 RBS CITIZENS, NATIONAL ASSOCIATION $ 35,000,000 CAD18,000,000 KEYBANK NATIONAL ASSOCIATION $ 25,000,000 CAD18,000,000 COMERICA BANK $ 25,000,000 CAD10,000,000 FIFTH THIRD BANK $ 25,000,000 CAD0 FIFTH THIRD BANK, CANADIAN BRANCH $ 0 CAD18,000,000 THE NORTHERN TRUST COMPANY $ 25,000,000 CAD5,000,000 HSBC BANK USA, NATIONAL ASSOCIATION $ 15,000,000 CAD18,000,000 XXXXXXX SACHS BANK USA $ 0 CAD25,000,000 BANK OF MONTREAL $ 0 CAD18,000,000
1. The Mandatory Cost is an addition to the interest rate to compensate Lenders for the cost of compliance with (or its Subsidiaries); or
(Ba) any outstanding Bank Guarantee which has been issued as security for obligations the requirements of the German GmbH Guarantor Bank of England and/or the Financial Services Authority (or, in either case, any other authority which replaces all or any of its subsidiariesfunctions) or (b) the requirements of the European Central Bank.
2. On the first day of each Interest Period (or as soon as possible thereafter) the Administrative Agent shall calculate, as a percentage rate, a rate (the “Associated Costs Rate”) for each Lender, in accordance with the paragraphs set out below. The Mandatory Cost will be calculated by the Administrative Agent as a weighted average of the Lenders’ Associated Costs Rates (weighted in proportion to the percentage participation of each Lender in the relevant Loan) and will be expressed as a percentage rate per annum.
3. The Associated Costs Rate for any Lender lending from a Facility Office in a Participating Member State will be the percentage notified by that Lender to the Administrative Agent. This percentage will be certified by that Lender in its notice to the Administrative Agent to be its reasonable determination of the cost (expressed as a percentage of that Lender’s participation in all Loans made from that Facility Office) of complying with the minimum reserve requirements of the European Central Bank in respect of loans made from that Facility Office.
4. The Associated Costs Rate for any Lender lending from a Facility Office in the United Kingdom will be calculated by the Administrative Agent as follows:
(a) in relation to a Loan in Pounds Sterling: per cent. per annum
(b) in relation to a Loan in any currency other than Pounds Sterling: per cent. per annum. Where:
Appears in 1 contract
Samples: Credit Agreement (Belden Inc.)
German Guarantee Limitations. (a) The right Each Credit Party agrees not to enforce any guarantee and indemnity created and the joint and several liability assumed hereunder against a German Guarantor incorporated any payment obligation arising out of the guarantee contained in Germany in Section 2.01 (the legal form of a limited liability company (GmbH“Payment Obligation”) (a "German GmbH Guarantor") shall be limited if and to the extent that (i) such guarantee and indemnity or joint and several liability Payment Obligation secures any obligation obligations of an affiliated company (verbundenes Unternehmen) of such German Guarantor within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case other than any of the German GmbH Guarantor's direct or indirect subsidiaries’s Subsidiaries) and (ii) the enforcement of such guarantee and indemnity created or the joint and several liability assumed hereunder Payment Obligation would cause:
(i) cause the German Guarantor’s or, in the case of a German GmbH & Co. KG Guarantor's , its general partner’s net assets (determined Reinvermögen), i.e., assets (the calculation of which shall include all items set forth in accordance with the provisions Section 266(2) A., B. and C. of the German Commercial Code (Handelsgesetzbuch)) minus liabilities and liability reserves (the calculation of which shall include all items set forth in Section 266(3) B., "HGB") consistently applied by C. and D. of the German GmbH Guarantor in preparing its unconsolidated balance sheets Commercial Code (Jahresabschluss) according to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, "GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG (as applicable at the time of enforcementHandelsgesetzbuch)) (the "Net Assets") to be less than fall below its registered stated share capital (Stammkapital) (Begründung einer Unterbilanz); ) or
(ii) (, if the German GmbH Guarantor's Net Assets such net assets are already less than its registered stated share capital) the German GmbH Guarantor's Net Assets capital (Stammkapital), would cause such amount to be further reduced (Vertiefung einer Unterbilanz) (in each case such event a "“Capital Impairment").
”) and such enforcement would result in a violation of Section 30 of the German Act on Limited Liability Companies (bGesetz betreffend die Gesellschaften mit beschränkter Haftung – “GmbHG”) For provided that for the purposes of calculating the calculation of amount to be enforced (if any) the German GmbH Guarantor's Net Assetsfollowing balance sheet items shall be adjusted as follows:
(i) the amount of any increase of stated share capital (Stammkapital) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor's registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the Signing Date , its general partner that has been effected without the prior written consent of the Facility Administrative Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered stated share capitalcapital (Stammkapital);
(ii) liabilities arising from loans provided to the relevant German GmbH Guarantor by a member the Company or any of the Group its Subsidiaries shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 within the meaning of Section 39(2) of the German Insolvency Act Code (Insolvenzordnung); and
(iii) any loans and other contractual liabilities incurred by the German Guarantor or, in the case of a German GmbH Guarantor & Co. KG Guarantor, its general partner in violation of the provisions of this Agreement or any other Finance Document of the Loan Documents shall be disregarded.
(cb) The relevant German GmbH Guarantor shall deliver to the Facility Agent, within ten Upon delivery of an Enforcement Notice (10as defined below) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) upon request of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(d) Following the Facility Agent’s receipt of the Management Determination, upon request by the Facility Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth as soon as reasonably practicable and in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(e) The relevant German GmbH Guarantor shall any event within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, such notice realize any and all of its assets asset that is shown in the balance sheet with a book value (Buchwert) that is materially significantly lower than the market value of such asset(s) if:
asset, which is not necessary for the German Guarantor’s business (i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and
(ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capitalbetriebsnotwendig). After the expiry of such three month months period the relevant German GmbH Guarantor shall, within three (3) Business Days, shall notify the Facility Administrative Agent of the amount of the proceeds from the sale and submit a an accompanying statement with a new calculation of to the Administrative Agent stating the amount of the Net Assets taking net assets (Reinvermögen) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, its general partner, and the amount by which such net assets (Reinvermögen) exceed its respective registered share capital, each recalculated (as of the date of delivery of an Enforcement Notice) for the purposes of paragraph (a) hereof to take into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request.
(fc) The restriction under limitations set out in paragraph (a) above hereof shall not apply:
(i) if in relation to and to the relevant extent the proceeds of any borrowings under the Credit Agreement have been on-lent, or otherwise passed on, to such German GmbH Guarantor has or any of its Subsidiaries and have not complied with its obligations pursuant to paragraphs (c) through (e) above;been repaid; and
(ii) whento a German Guarantor which is a party to a domination agreement (Beherrschungsvertrag) as dominated entity (beherrschtes Unternehmen) or obliged to transfer its profits pursuant to a profit and loss transfer agreement (Gewinnabführungsvertrag), at provided that in such case the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, Credit Parties shall in any event be entitled to enforce the restrictions under Payment Obligation up to the amount enforceable pursuant to paragraph (a) are, due above but may enforce the Payment Obligation in a higher amount only to the extent that such enforcement would not result in a change personal liability of any officer of the applicable lawsGerman Guarantor or, in the case of a German GmbH & Co. KG Guarantor, its general partner.
(d) The limitations set out in paragraph (a) hereof only apply if and to the extent that:
(i) within ten (10) Business Days following the notification by any Credit Party of its intention to enforce the Payment Obligation (the “Enforcement Notice”), the interpretation thereof or otherwise, not required to protect the managing directors director(s) on behalf of the relevant German Guarantor or, in the case of a German GmbH Guarantor or & Co. KG Guarantor, its general partner has/have confirmed in writing to the Administrative Agent to what extent the Payment Obligation cannot be enforced as it would cause a Capital Impairment within the meaning of any of its direct or indirect shareholders from paragraph (a) above (taking into account the risk of personal liability;
adjustments set out in paragraph (a)(i) to (iii) above) and such confirmation is supported by evidence reasonably satisfactory to the Administrative Agent (the “Management Determination”) and the Administrative Agent (acting on behalf of the relevant Credit Party) has not contested this; or
(ii) within twenty (20) Business Days from the date the Administrative Agent has contested the Management Determination, the Administrative Agent receives a determination by the German Guarantor’s auditors of the amount that could have been enforced on the date the Enforcement Notice without causing a Capital Impairment within the meaning of paragraph (a) above (the “Auditor’s Determination”). The amount determined in the Auditor’s Determination shall (except for manifest error) be binding for the Loan Parties and the Credit Parties. The costs of the Auditor’s Determination shall be borne by the relevant German Guarantor.
(e) If the Administrative Agent disagrees with the Auditor’s Determination, the Credit Parties shall be entitled to enforce the Payment Obligation up to the amount which is undisputed between themselves and the German Guarantor. In relation to the amount which is disputed, the Credit Parties shall be entitled to further pursue their claims (if any) and the German Guarantor shall be entitled to prove that this amount is necessary for maintaining its or, in the case of a German GmbH & Co. KG Guarantor, its general partner’s stated share capital (Stammkapital) without violation of Section 30 GmbHG (calculated as of the date that the Enforcement Notice was given).
(f) If the Payment Obligation was enforced without limitation because the Management Determination and/or the Auditor’s Determination (as the case may be) was not delivered within the relevant time or for any other reason, the Credit Parties shall promptly upon demand by the relevant German Guarantor repay to such German Guarantor any amount which is necessary pursuant to Section 30 GmbHG to maintain the stated share capital (Stammkapital) of the German Guarantor or, in the case of a German GmbH & Co. KG Guarantor, its general partner, calculated as of the date that the Enforcement Notice was given provided the relevant Credit Party has received a corresponding amount by the relevant German Guarantor as a consequence of enforcement of the relevant Payment Obligation.
(g) Furthermore, each Credit Party agrees not to enforce against a German Guarantor any Payment Obligation if and so long it is party to a domination and/or profit and loss pooling agreement the extent (Beherrschungs- und/oder Gewinnabführungsvertragi) such Payment Obligation secures obligations of an affiliated company (section 291 verbundenes Unternehmen) of such German Guarantor within the meaning of Section 15 of the German Stock Corporation ActAct (Aktiengesetz) (other than any of the relevant German Guarantor’s subsidiaries) and (ii) such enforcement would result in the illiquidity of the German Guarantor (Zahlungsunfähigkeit) in the meaning of Section 17 subsection 2 German Insolvency Code (Insolvenzordnung) and (iii) such enforcement would provoke the liability of the managing director(s) of the German Guarantor under Section 64 sentence 3 GmbHG, provided that for the purposes of calculating illiquidity in the meaning of this paragraph
(i) any liabilities of the relevant German Guarantor to the Company or any of its Subsidiaries shall be disregarded if and to the extent these liabilities were – with respect to the ordinary course of business – created or not realized in abusive interference with the relevant German Guarantor’s liquidity, particularly in order to avoid the enforcement by the German Guarantor, or if the due date of the respective liabilities deviates from the due dates usually agreed between the parties with respect to their ordinary course of business, and
(ii) any outstanding claims – including any rights of recourse – of the relevant German Guarantor against the Company or any of its Subsidiaries that would not be considered under Section 17 subsection 2 German Insolvency Code particularly due to lacking maturity, deferral or enforceability (Durchsetzbarkeit) shall be considered as a dominated or profit distributing entity or disposable liquidity of such German Guarantor has (frei verfügbare Liquidität), if and to the extent these claims were – with respect to the ordinary course of business – created or not realized in abusive interference with the relevant German Guarantor’s liquidity, particularly in order to avoid the enforcement by a fully recoverable recourse claim Credit Party, or if the due date or the contractual enforceability of the respective claims deviates from the usual agreements between the parties with respect to their ordinary course of business, and
(vollwertiger Gegenleistungs- oder Rückgewähranspruchiii) any payments effected by the relevant German Guarantor to the Company or any of its Subsidiaries that were beyond the ordinary course of business (gewöhnlicher Geschäftsverlauf) shall be regarded as disposable liquidity of the relevant German Guarantor (frei verfügbare Liquidität).
(h) The limitation set out in Clause (g) shall only apply if and to the extent that:
(i) within ten (10) Business Days after the receipt of the Enforcement Notice by the relevant German Guarantor, the managing director(s) on behalf of such German Guarantor has/have confirmed in writing to the respective Credit Party:
(1) the extent to which the Security secures obligations of an affiliated company (verbundenes Unternehmen) of the relevant German Guarantor within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (other than any of the relevant German Guarantor’s subsidiaries); and to what extent the Security cannot be enforced as this would result in the illiquidity of the relevant German Guarantor and the liability of the directors within the meaning of Clause (g) and such confirmation is supported by evidence reasonably satisfactory to the Credit Party; and
(2) such confirmation is supported by evidence by means of unaudited liquidity statements (Liquiditätsbilanz) in which the current cash and cash equivalents (together “Cash”) and the cash available within the next three weeks are opposed to the liabilities which will become due within the next three weeks and a liquidity schedule (Liquiditätsplan) showing the liquidity of the relevant German Guarantor for the preceding 12 months and the expected liquidity during the subsequent two months (the liquidity statements and the liquidity schedule jointly the “Management Evaluation”) and the Credit Party has not contested this; and
(3) that all reasonable measures within ordinary course of business have been taken or will promptly be taken – including the realisation of assets of the relevant German Guarantor – in order to increase the liquidity of the German Guarantor and this confirmation is supported by reasonable evidence, or
(ivii) within twenty (20) Business Days from the date on which a Credit Party has contested the Management Evaluation made in accordance with this Clause (h) (i) (the “Auditing Period”), the Credit Party receives liquidity statements with an auditor’s confirmation of the amount that could have been enforced on the date of the Enforcement Notice without causing illiquidity within the meaning of Clause (g) (the “Auditor’s Evaluation”). For the avoidance of doubt, in case the Management Evaluation is contested, the Credit Party shall not enforce the payment obligations created hereunder (Versprechen, zeitweilig nicht zu vollstrecken) prior to the expiry of the Auditing Period. The costs of the Auditor’s Evaluation shall be borne by the relevant German Guarantor.
(i) If a Credit Party disagrees with the Auditor’s Evaluation, the Credit Party shall be entitled to enforce the Security up to the amount which is undisputed between itself and the relevant German Guarantor. In relation to the amount which is disputed, and if and to the extent that the guarantee factual basis for the Management Evaluation and indemnity or assumed joint and several liability secures:
(A) any Loans that are on-lent by the relevant Borrower Auditor’s Evaluation particularly with regard to the liquidity of the relevant German GmbH Guarantor has changed after the point in time to which the Auditor’s Evaluation relates, the Credit Party shall be entitled to further pursue its claims (if any) and the relevant German Guarantor shall be entitled to prove that this amount is necessary for avoiding illiquidity in the meaning of Section 17 subsection 2 German Insolvency Code (Insolvenzordnung) (calculated in accordance with Clause (g)). The Auditor’s Evaluation does not prevent the Credit Party from initiating court proceedings if it holds that the prerequisites of an abusive interference as set forth in Section (g) (i) and (ii) are met.
(j) No reduction of the amount enforceable under this guarantee in accordance with the above limitations will prejudice the rights of the Credit Parties to continue enforcing the guarantee (subject always to the operation of the limitation set out above at the time of such enforcement) until full satisfaction of the guaranteed claims. For the avoidance of doubt, nothing in this Section 2.04 shall affect the right of the Credit Parties (or any of its Subsidiariesthem) and have not yet been repaid by that German GmbH Guarantor (or its Subsidiaries); or
(B) any outstanding Bank Guarantee which has been issued as security for obligations to accelerate the Loans pursuant to Section 9 of the German GmbH Guarantor or any of its subsidiariesCredit Agreement.
Appears in 1 contract
Samples: Guarantee Agreement (Harman International Industries Inc /De/)
German Guarantee Limitations. The enforcement of the guarantee created under this Clause 19 and any indemnity owing under this Agreement by any German Guarantor, shall be subject to the following limitations:
(a) The right to enforce any To the extent that the guarantee and indemnity created and the joint and several liability assumed hereunder against a Guarantor incorporated in Germany in the legal form of a limited liability company (GmbH) (a "German GmbH Guarantor") shall be limited if and under this Clause 19 secures, or to the extent that any indemnity of such guarantee and indemnity German Guarantor would result in a payment of, liabilities of its direct or joint and several liability secures any obligation of indirect shareholder(s) (an "Up-stream Guarantee") or its affiliated company companies (verbundenes Unternehmen) within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (other than Subsidiaries of such German Guarantor) (a "Cross-stream Guarantee") (save for any guarantees or indemnity in respect of funds to the extent they are on-lent, or otherwise passed on, or they replace or refinance funds which were on-lent, or otherwise passed on, in each case other than any to such German Guarantor or its Subsidiaries, and such amount on-lent or otherwise passed on is not returned (if returned, a limitation will only apply to the extent the repayment has been proved by an up-to-date balance sheet)), the Guarantee or such indemnity shall not be enforced at the time of the respective Payment Demand (as defined below) if and only to the extent such German GmbH Guarantor's direct or indirect subsidiaries) and Guarantor demonstrates that the enforcement of such guarantee and indemnity created or would have the joint and several liability assumed hereunder would causeeffect of:
(i) causing its Net Assets to be reduced to an amount less than its stated share capital (Stammkapital); or
(ii) (if its Net Assets are already below its stated share capital) causing such amount to be further reduced, and thereby affecting its assets required for the German GmbH Guarantor's net assets maintenance of its stated share capital (determined in accordance with the provisions Stammkapital) pursuant to Sections 30 and 31 of the German Commercial Code (Handelsgesetzbuch, "HGB") consistently applied by the German GmbH Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss) according to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, ) ("GmbHG"), §§ 242, 264 HGB and in accordance with §§ 30, 31 GmbHG ) (as applicable at the time of enforcement)) (each of the "Net Assets"circumstances set out in subparagraphs (i) to be less than its registered share capital (Stammkapital) (Begründung einer Unterbilanz); or
and (ii) (if the German GmbH Guarantor's Net Assets are already less than its registered share capital) the German GmbH Guarantor's Net Assets to be further reduced (Vertiefung einer Unterbilanz) (in each case above, respectively a "Capital Impairment").
(b) For the purposes of the calculation of the German GmbH Guarantor's Net Assets:
(i) the amount of any increase of the German GmbH Guarantor's registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the Signing Date that has been effected without the prior written consent of the Facility Agent (acting on behalf of the Majority Lenders) shall be deducted from the registered share capital;
(ii) loans provided to the relevant German GmbH Guarantor by a member of the Group shall be disregarded if such loans are subordinated contractually or by statute and rank in accordance with section 39 paragraph 1 Nr. 5 or paragraph 2 of the German Insolvency Act (Insolvenzordnung); and
(iii) loans and other liabilities incurred by the German GmbH Guarantor in violation of the provisions of this Agreement or any other Finance Document shall be disregarded.
(c) The relevant German GmbH Guarantor shall deliver to the Facility Agent, within ten (10) Business Days after receipt from the Facility Agent of a notice stating that the Facility Agent intends to demand payment under the guarantee and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Management Determination"). The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Management Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(d) Following the Facility Agent’s receipt of the Management Determination, upon request by the Facility Agent, the relevant German GmbH Guarantor shall deliver to the Facility Agent within thirty (30) Business Days of request an up-to-date balance sheet of such German GmbH Guarantor drawn up by such German GmbH Guarantor's auditor together with a detailed calculation (satisfactory to the Facility Agent) of the amount of such German GmbH Guarantor's Net Assets taking into account the adjustments set forth in paragraph (b) above (the "Auditor’s Determination"). Such balance sheet and Auditor’s Determination shall be prepared in accordance with the provision of the German Commercial Code (HGB) consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Facility Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(e) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Facility Agent realise, to the extent legally permitted, any and all of its assets shown in the balance sheet with a book value (Buchwert) that is materially lower than the market value of such asset(s) if:
(i) to the extent that any asset is essential for its business, such realisation does not affect its ability to use that asset or the relevant part of its business can be carried on from other sources without use of such asset; and
(ii) as a result of the enforcement of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the amount of its registered share capital. After the expiry of such three month period the relevant German GmbH Guarantor shall, within three (3) Business Days, notify the Facility Agent of the amount of the proceeds from the sale and submit a statement with a new calculation of the amount of the Net Assets taking into account such proceeds. Such calculation shall, upon the Facility Agent’s request, be confirmed by such German GmbH Guarantor's auditor within a period of twenty (20) Business Days following the request.
(f) The restriction under paragraph (a) above shall not apply:
(i) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (c) through (e) above;
(ii) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (a) are, due to a change of the applicable laws, the interpretation thereof or otherwise, not required to protect the managing directors of the relevant German GmbH Guarantor or of any of its direct or indirect shareholders from the risk of personal liability;
(iii) to a German GmbH Guarantor if and so long it is party to a domination and/or profit and loss pooling agreement (Beherrschungs- und/oder Gewinnabführungsvertrag) (section 291 of the German Stock Corporation Act) as a dominated or profit distributing entity or such German Guarantor has a fully recoverable recourse claim (vollwertiger Gegenleistungs- oder Rückgewähranspruch); or
(iv) to the extent that the guarantee and indemnity or assumed joint and several liability secures:
(A) any Loans that are on-lent by the relevant Borrower to the relevant German GmbH Guarantor (or any of its Subsidiaries) and have not yet been repaid by that German GmbH Guarantor (or its Subsidiaries); or
(B) any outstanding Bank Guarantee which has been issued as security for obligations of the German GmbH Guarantor or any of its subsidiaries.
Appears in 1 contract
Samples: Senior Facility Agreement (International Game Technology PLC)
