German Guarantors. (i) 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: (A) 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 (B) (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”). (ii) For the purposes of the calculation of the German GmbH Guarantor’s Net Assets: (A) the amount of any increase of the German GmbH Guarantor’s registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the date upon which it became a Guarantor hereunder that has been effected without the prior written consent of the Administrative Agent (acting on behalf of the Lenders) shall be deducted from the registered share capital; (B) loans provided to the relevant German GmbH Guarantor by a Loan Party 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); (C) loans and other liabilities incurred by the German GmbH Guarantor in violation of the provisions of this Agreement or any other Loan Document shall be disregarded; and (D) any amounts not available for distribution according to section 268 subsection (8) of the German Commercial Code (Handelsgesetzbuch), if any, shall be added to the amount of the registered share capital of the relevant German GmbH Guarantor. (iii) The relevant German GmbH Guarantor shall deliver to the Administrative Agent, within ten (10) Business Days after receipt from the Administrative Agent of a notice stating that the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Management Determination”). The relevant German GmbH Guarantor shall fulfill its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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. (iv) Following the Administrative Agent’s receipt of the Management Determination, upon reasonable request by the Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Auditor’s Determination”). Such balance sheet and Auditor’s Determination shall be prepared in accordance with GAAP consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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. (v) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Administrative Agent realize, 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: (A) 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 (B) 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 ten (10) Business Days, notify the Administrative 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 Administrative Agent’s reasonable request, be confirmed by such German GmbH Guarantor’s auditor within a period of twenty (20) Business Days following the request. (vi) The restriction under parargraph (i) above shall not apply: (A) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (iii) through (v); (B) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (i) above 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; (C) 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”), and if and to the extent the enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder would not lead to a violation of sec. 30 et sequ. GmbHG; or (D) to the extent that the guarantee and indemnity or assumed joint and several liability secures 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). (vii) This §7.1(g) shall apply mutatis mutandis if the Guaranty is granted by a Guarantor incorporated as a limited liability partnership (KG) in relation to each general partner (Komplementär) incorporated as a limited liability company (GmbH) or if the Guarantee is granted by a Guarantor incorporated as a partnership (oHG) in relation to each partner incorporated as a limited liability company (GmbH).
Appears in 2 contracts
Samples: Senior Secured Syndicated Facility Agreement (Genesee & Wyoming Inc), Senior Secured Syndicated Facility Agreement (Genesee & Wyoming Inc)
German Guarantors. (iA) The right Each of the Lenders, by its acceptance of the benefits hereof, agree (and will instruct the Administrative Agent accordingly) not 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 this Guaranty if and to the extent that such guarantee and indemnity this Guaranty shall be enforced for debt owed by a direct or joint and several liability secures any obligation of an affiliated indirect holding 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 Guarantor or by a direct or indirect subsidiaries) subsidiary of such holding company and the enforcement application of such guarantee and indemnity created or proceeds towards the joint and several liability assumed hereunder Obligations would cause:
lead to the situation that, if a Guarantor is organized as a GmbH & Co. KG. (Aa “German Guarantor”) under the German GmbH Guarantor’s net assets (determined in accordance with the provisions laws of the German Commercial Code Federal Republic of Germany, the Net Assets of its general partner would fall below the registered share capital (HandelsgesetzbuchStammkapital) of the general partner or, HGB) consistently applied by if the German GmbH Guarantor Net Assets of the general partner are already below the registered share capital of the general partner, such amount would be further reduced, and thereby violate the capital maintenance requirement as set out in preparing its unconsolidated balance sheets (Jahresabschluss) according to § 42 German Limited Liability Company Act Sections 30 et. seq. GmbHG (Gesetz betreffend die Gesellschaften mit beschränkter beschraenkter Haftung, GmbHG), §§ 242, 264 HGB and .
(B) Section 19(A) shall only apply if:
(i) the management of the German Guarantor has confirmed to the Administrative Agent in accordance with §§ 30, 31 GmbHG (as applicable at writing the time amount of enforcement)the Net Assets calculated pursuant to Section 19(F) (the “Net AssetsDetermination”) within ten Business Days following receipt of a demand of payment under this Guaranty, and the Determination provides for sufficient evidence in form of a pro forma balance sheet and the latest available management accounts of the German Guarantor and the Administrative Agent has not disputed the Determination; or
(ii) the Administrative Agent has disputed the Determination, but the Determination has been confirmed by an international accounting firm with sufficient reputation, chosen by the German Guarantor with the consent of the Administrative Agent, and notified to the Administrative Agent within 30 days following its disputing of the Determination (whereby the assessment by the accounting firm shall be less than its registered share capital binding, unless it shows manifest errors), provided that if the Administrative Agent has not consented to the assessment by the accounting firm because of a manifest error, the German Guarantor has to pay such amount that is undisputed between the German Guarantor and the Administrative Agent; in respect of the amount that is disputed, the rights of the Lenders shall remain unaffected.
(StammkapitalC) Section 19(A) shall not apply:
(Begründung einer Unterbilanzi) if the Determination has not been provided in accordance with Section 19(B); or
(Bii) (if and to the extent the German GmbH Guarantor’s Net Assets are already less than its registered share capital) Guarantor can not demonstrate that the loans made under the Credit Agreement have not been made available to the German GmbH Guarantor’s Net Assets Guarantor or any of its subsidiaries and the letters of credit issued under the Credit Agreement have not been issued for the benefit of a creditor of the German Guarantor or any of its subsidiaries and have not been repaid at the time of the enforcement; or
(iii) if a domination or profit transfer agreement is in place between the German Guarantor as dominated company and the company for whose liabilities this Guaranty was granted or between the German Guarantor and the shareholder of the company for whose liabilities this Guaranty was granted unless and to the extent the statutory loss compensation claim of the German Guarantor resulting from the domination or profit transfer agreement is not fully recoverable; or
(iv) if and to the extent that the compensation claim that the German Guarantor receives or would receive due to the enforcement would be further reduced (Vertiefung einer Unterbilanz) (in each case a “Capital Impairment”)recoverable.
(iiD) This Section does not restrict the Lenders in their right to pursue the enforcement of this Guaranty at a later point in time and to retain the enforcement proceeds if it has initially decided not to enforce this Guaranty or to enforce this Guaranty only partly.
(E) For the purposes avoidance of doubt, nothing in this Section shall prejudice the rights of the calculation Lenders to continue enforcing this Guaranty (subject to this Section 19), or the exercise of the other rights pursuant to this Agreement, by the Lenders.
(F) The Net Assets (Nettoreinvermoegen) shall be calculated in accordance with applicable law, the relevant German GmbH Guarantor’s Net Assetsaccounting principles and the principles developed by court decisions for Section 30 GmbHG provided that:
(Ai) the amount of any increase of the German GmbH Guarantor’s registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the date upon which it became a Guarantor hereunder hereof that has been effected without the prior written consent of the Administrative Agent (acting on behalf of the Lenders) shall be deducted from the registered stated share capital;
(Bii) loans provided to the relevant such German GmbH Guarantor by a Loan Party the Company or any of its subsidiaries shall be disregarded disregarded, if such loans are subordinated contractually or by statute and rank in accordance with section a subordination clause pursuant to Section 39 paragraph 1 Nr. 5 or paragraph 2 of the (2) German Insolvency Act (Insolvenzordnung)) has been agreed or if the loans qualify as shareholder loans within the meaning of Section 39 (1) No. 5 German Insolvency Act;
(Ciii) loans and other liabilities financial indebtedness that has been incurred by the German GmbH Guarantor in violation of any of the provisions of this Agreement or any other a Loan Document shall be disregarded;
(iv) the German Guarantor has to account for those assets that are accounted for with a book value that is not marginally lower than their market value at market value, or if the market value of an asset cannot be assessed, the German Guarantor has to sell that asset without undue delay (as the case may be, also by way of sale-and-lease-back) if it is not necessary for the Assignor’s business (nicht betriebsnotwendig) and the sale is legally permitted and required for the preservation of the stated share capital which is protected by Section 30 GmbHG; and
(Dv) any for the avoidance of doubt, amounts which may not available for distribution according be distributed pursuant to section 268 subsection (8) mandatory law may shall be deducted from the assets of the German Commercial Code (Handelsgesetzbuch), if any, shall be added to the amount of the registered share capital of the relevant German GmbH Guarantor.
(iii) The relevant German GmbH Guarantor shall deliver to the Administrative Agent, within ten (10) Business Days after receipt from the Administrative Agent of a notice stating that the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Management Determination”). The relevant German GmbH Guarantor shall fulfill its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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.
(iv) Following the Administrative Agent’s receipt of the Management Determination, upon reasonable request by the Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Auditor’s Determination”). Such balance sheet and Auditor’s Determination shall be prepared in accordance with GAAP consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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.
(v) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Administrative Agent realize, 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:
(A) 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
(B) 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 ten (10) Business Days, notify the Administrative 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 Administrative Agent’s reasonable request, be confirmed by such German GmbH Guarantor’s auditor within a period of twenty (20) Business Days following the request.
(vi) The restriction under parargraph (i) above shall not apply:
(A) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (iii) through (v);
(B) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (i) above 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;
(C) 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”), and if and to the extent the enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder would not lead to a violation of sec. 30 et sequ. GmbHG; or
(D) to the extent that the guarantee and indemnity or assumed joint and several liability secures 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).
(vii) This §7.1(g) shall apply mutatis mutandis if the Guaranty is granted by a Guarantor incorporated as a limited liability partnership (KG) in relation to each general partner (Komplementär) incorporated as a limited liability company (GmbH) or if the Guarantee is granted by a Guarantor incorporated as a partnership (oHG) in relation to each partner incorporated as a limited liability company (GmbH).
Appears in 1 contract
Samples: Amendment and Restatement Agreement (Heidrick & Struggles International Inc)
German Guarantors. (i) The right to enforce any guarantee and indemnity created and To the joint and several liability assumed hereunder against extent that a Guarantee is granted by a Guarantor incorporated in Germany in the legal form of as a limited liability company (GmbH) (a “"German GmbH Guarantor”") and secures debt other than debt of such German Guarantor itself or any of its Subsidiaries, the following shall be limited if apply:
(i) Each German Guarantor guarantees the payment of all and any amounts, which correspond to funds that have been received pursuant to the issuance of Notes under the Indenture and have been on-lent to, or otherwise passed on to, the relevant German Guarantor or any of its Subsidiaries, to the extent that any such guarantee and indemnity or joint and several liability secures amount is still outstanding at the time the relevant demand is made against such German Guarantor.
(ii) Each German Guarantor further guarantees the payment of any obligation of an affiliated company (verbundenes Unternehmen) within the meaning of Section 15 amount in excess of the amounts payable by the relevant German Stock Corporation Act Guarantor pursuant to paragraph (Aktiengesetzb)(i) (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 above, its relevant liability assumed hereunder would causeis however limited as follows:
(A) The Trustee and holders of Notes shall not be entitled to enforce the Guarantee in an amount exceeding the amounts payable under paragraph (b)(i) above to the extent that the further enforcement of the Guarantee exceeding the amounts payable under paragraph (b)(i) above has the effect of:
(1) reducing the German GmbH Guarantor’s 's net assets (Nettovermögen) (the "Net Assets") to an amount less than its stated share capital (Stammkapital); or
(2) (if the Net Assets are already an amount less than the stated share capital) causing such amount to be further reduced, and thereby affect the assets required for the obligatory preservation of its stated share capital according to §§ 30, 31 German GmbH-Act (GmbH-Gesetz) (the "GmbH-Act").
(B) The value of the Net Assets shall be determined in accordance with the provisions of the German Commercial Code (Handelsgesetzbuch, HGB) GAAP consistently applied by the German GmbH Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss) Jahresabschluss according to § 42 German Limited Liability Company Act (Gesetz betreffend die Gesellschaften mit beschränkter Haftung, GmbHG)GmbH-Act, §§ 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
(B) (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”).
(ii) For the purposes of the calculation of the German GmbH Guarantor’s Net AssetsCommercial Code (HGB)) in the previous years, save that:
(A1) the amount of any increase of the German GmbH Guarantor’s registered stated share capital out (Stammkapital) of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) the German Guarantor registered after the date upon which it became a Guarantor hereunder that has been effected hereof without the prior written consent of the Administrative Agent (acting on behalf of the Lenders) Trustee shall be deducted from the registered relevant stated share capital;
(B2) loans provided to the relevant German GmbH Guarantor by a Loan Party the Company or any of its Subsidiaries after the date hereof shall be disregarded if such loans are subordinated, or are considered 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);pursuant to § 32a GmbH-Act; and
(C3) loans and other liabilities incurred by the German GmbH Guarantor in violation of the provisions of this Agreement or any other Loan Document the Indenture after the date hereof shall be disregarded; and.
(C) The limitation set out in paragraph (b)(ii)(A) above shall not apply if the relevant German Guarantor has filed for insolvency or temporary or insolvency proceedings have been commenced.
(D) any amounts not available for distribution according to section 268 subsection (8) If the enforcement of the German Commercial Code Guarantee in an amount exceeding any amount to be paid under paragraph (Handelsgesetzbuch), if any, shall be added b)(i) above has led to the amount one of the registered share capital of effects referred to in paragraph (b)(ii)(A) above, then the relevant German GmbH Guarantor.
(iii) The relevant German GmbH Guarantor shall deliver to the Administrative Agent, within ten (10) Business Days after receipt from the Administrative Agent of a notice stating that the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Management Determination”). The relevant German GmbH Guarantor shall fulfill its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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.
(iv) Following the Administrative Agent’s receipt of the Management Determination, upon reasonable request by the Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Auditor’s Determination”). Such balance sheet and Auditor’s Determination shall be prepared in accordance with GAAP consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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.
(v) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Administrative Agent realize, to the extent legally permitted, realise at market value any and all of its assets that are shown in the its balance sheet with a book value (Buchwert) that is materially significantly lower than the their market value of if such asset(s) if:
assets are not necessary for the relevant German Guarantor's business (A) nicht betriebsnotwendig), to the extent that any asset is essential for its business, such realisation necessary to satisfy the amounts requested under this paragraph (b)(ii).
(E) The limitation set out in paragraph (b)(ii)(A) above 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
(B) as a result right of the enforcement Trustee or holders of the guarantee and indemnity or assumed joint and several liability, its Net Assets would be reduced below the Notes to claim again any outstanding amount of its registered share capital. After the expiry of such three month period the relevant German GmbH Guarantor shall, within ten (10) Business Days, notify the Administrative Agent of the amount of the proceeds from the sale and submit at a statement with a new calculation of the amount of the Net Assets taking into account such proceeds. Such calculation shall, upon the Administrative Agent’s reasonable request, be confirmed by such German GmbH Guarantor’s auditor within a period of twenty (20) Business Days following the request.
(vi) The restriction under parargraph (i) above shall not apply:
(A) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (iii) through (v);
(B) when, at the later point in time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (i) above 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;
(C) 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”), and if and to the extent that paragraph (b)(ii)(A) above would allow this at that later point. Notwithstanding the enforcement foregoing the Trustee and the holders of a guarantee and indemnity created or joint and several liability assumed hereunder would not lead Notes waive their rights to a violation of sec. 30 et sequ. GmbHG; or
(D) enforce the Guarantee to the extent that and as long as such enforcement would be in violation of the guarantee and indemnity or assumed joint and several liability secures any Loans prohibition of an intervention threatening the existence of 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 SubsidiariesVerstoß gegen das Verbot des existenzvernichtenden Eingriffs).
(vii) This §7.1(g) shall apply mutatis mutandis if the Guaranty is granted by a Guarantor incorporated as a limited liability partnership (KG) in relation to each general partner (Komplementär) incorporated as a limited liability company (GmbH) or if the Guarantee is granted by a Guarantor incorporated as a partnership (oHG) in relation to each partner incorporated as a limited liability company (GmbH).
Appears in 1 contract
German Guarantors. (iA) The right Each of the Lenders, by its acceptance of the benefits hereof, agree (and will instruct the Administrative Agent accordingly) not 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 this Guaranty if and to the extent that such guarantee and indemnity this Guaranty shall be enforced for debt owed by a direct or joint and several liability secures any obligation of an affiliated indirect holding company (verbundenes Unternehmen) within the meaning of Section 15 of the German Stock Corporation Act (Aktiengesetz) (in each case Guarantor or by a direct or indirect subsidiary of such holding company other than the German Guarantor or any of the German GmbH Guarantor’s its direct or indirect subsidiaries) and the enforcement application of such guarantee and indemnity created proceeds towards the Obligations would lead to the situation that, if a Guarantor is organized as a GmbH or GmbH & Co. KG. (a “German Guarantor”) under the joint and several liability assumed hereunder laws of the Federal Republic of Germany, the Net Assets of that German Guarantor or, in the case of a GmbH & Co. KG, its general partner would cause:
fall below the registered share capital (AStammkapital) the German GmbH Guarantor’s net assets (determined in accordance with the provisions of the German Commercial Code (HandelsgesetzbuchGuarantor or, HGB) consistently applied by in the case of a GmbH & Co. KG, of the general partner or, if the Net Assets of the German Guarantor or, in the case of a GmbH & Co. KG, of the general partner are already below the registered share capital of the German Guarantor or, in preparing its unconsolidated balance sheets (Jahresabschluss) according to § 42 German Limited Liability Company Act the case of a GmbH & Co. KG, of the general partner, such amount would be further reduced, and thereby violate the capital maintenance requirement as set out in Sections 30 et. seq. GmbHG (Gesetz betreffend die Gesellschaften mit beschränkter beschraenkter Haftung, GmbHG), §§ 242, 264 HGB and .
(B) Section 19(A) shall only apply if:
(i) the management of the German Guarantor has confirmed to the Administrative Agent in accordance with §§ 30, 31 GmbHG (as applicable at writing the time amount of enforcement)the Net Assets calculated pursuant to Section 19(F) (the “Net AssetsDetermination”) within ten Business Days following receipt of a demand of payment under this Guaranty, and the Determination provides for sufficient evidence in form of a pro forma balance sheet and the latest available management accounts of the German Guarantor and the Administrative Agent has not disputed the Determination; or
(ii) the Administrative Agent has disputed the Determination, but the Determination has been confirmed by an international accounting firm with sufficient reputation, chosen by the German Guarantor with the consent of the Administrative Agent, and notified to the Administrative Agent within 30 days following its disputing of the Determination (whereby the assessment by the accounting firm shall be less than its registered share capital binding, unless it shows manifest errors), provided that if the Administrative Agent has not consented to the assessment by the accounting firm because of a manifest error, the German Guarantor has to pay such amount that is undisputed between the German Guarantor and the Administrative Agent; in respect of the amount that is disputed, the rights of the Lenders shall remain unaffected.
(StammkapitalC) Section 19(A) shall not apply:
(Begründung einer Unterbilanzi) if the Determination has not been provided in accordance with Section 19(B); or
(Bii) (if and to the extent the German GmbH Guarantor’s Net Assets are already less than its registered share capital) Guarantor cannot demonstrate that the loans made under the Credit Agreement have not been made available to the German GmbH Guarantor’s Net Assets Guarantor or any of its subsidiaries and the letters of credit issued under the Credit Agreement have not been issued for the benefit of a creditor of the German Guarantor or any of its subsidiaries and have not been repaid at the time of the enforcement; or
(iii) if a domination or profit transfer agreement is in place between the German Guarantor as dominated company and the company for whose liabilities this Guaranty was granted or between the German Guarantor and the shareholder of the company for whose liabilities this Guaranty was granted unless and to the extent the statutory loss compensation claim of the German Guarantor resulting from the domination or profit transfer agreement is not fully recoverable; or
(iv) if and to the extent that the compensation claim that the German Guarantor receives or would receive due to the enforcement would be further reduced (Vertiefung einer Unterbilanz) (in each case a “Capital Impairment”)recoverable.
(iiD) This Section does not restrict the Lenders in their right to pursue the enforcement of this Guaranty at a later point in time and to retain the enforcement proceeds if it has initially decided not to enforce this Guaranty or to enforce this Guaranty only partly.
(E) For the purposes avoidance of doubt, nothing in this Section shall prejudice the rights of the calculation Lenders to continue enforcing this Guaranty (subject to this Section 19), or the exercise of the other rights pursuant to this Agreement, by the Lenders.
(F) The Net Assets (Nettoreinvermoegen) shall be calculated in accordance with applicable law, the relevant German GmbH Guarantor’s Net Assetsaccounting principles and the principles developed by court decisions for Section 30 GmbHG provided that:
(Ai) the amount of any increase of the German GmbH Guarantor’s registered share capital out of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) after the date upon which it became a Guarantor hereunder hereof that has been effected without the prior written consent of the Administrative Agent (acting on behalf of the Lenders) shall be deducted from the registered stated share capital;
(Bii) loans provided to such German Guarantor (or in the relevant German case of a GmbH Guarantor & Co. KG, its general partner) by a Loan Party the Company or any of its subsidiaries shall be disregarded disregarded, if such loans are subordinated contractually or by statute and rank in accordance with section a subordination clause pursuant to Section 39 paragraph 1 Nr. 5 or paragraph 2 of the (2) German Insolvency Act (Insolvenzordnung)) has been agreed or if the loans qualify as shareholder loans within the meaning of Section 39 (1) No. 5 German Insolvency Act;
(Ciii) loans and other liabilities financial indebtedness that has been incurred by the German GmbH Guarantor in violation of any of the provisions of this Agreement or any other a Loan Document shall be disregarded; and
(Div) any amounts not available for distribution according to section 268 subsection (8) of the German Commercial Code (Handelsgesetzbuch), if any, shall be added Guarantor has to the amount of the registered share capital of the relevant German GmbH Guarantor.
(iii) The relevant German GmbH Guarantor shall deliver to the Administrative Agent, within ten (10) Business Days after receipt from the Administrative Agent of a notice stating account for those assets that the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Management Determination”). The relevant German GmbH Guarantor shall fulfill its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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.
(iv) Following the Administrative Agent’s receipt of the Management Determination, upon reasonable request by the Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Administrative 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Auditor’s Determination”). Such balance sheet and Auditor’s Determination shall be prepared in accordance with GAAP consistently applied. The relevant German GmbH Guarantor shall fulfil its obligations under the guarantee and indemnity or assumed joint and several liability and the Administrative 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.
(v) The relevant German GmbH Guarantor shall within three (3) months after its receipt of a written request by the Administrative Agent realize, to the extent legally permitted, any and all of its assets shown in the balance sheet are accounted for with a book value (Buchwert) that is materially not marginally lower than their market value at market value, or if the market value of such asset(s) if:
(A) to the extent that any an asset is essential for its business, such realisation does cannot 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
(B) 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 ten (10) Business Days, notify the Administrative 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 Administrative Agent’s reasonable request, be confirmed by such German GmbH Guarantor’s auditor within a period of twenty (20) Business Days following the request.
(vi) The restriction under parargraph (i) above shall not apply:
(A) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (iii) through (v);
(B) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunderassessed, the restrictions under paragraph (i) above 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;
(C) 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 to sell that asset without undue delay (“vollwertiger Gegenleistungs- oder Rückgewähranspruch”)as the case may be, and also by way of sale-and-lease-back) if and to it is not necessary for the extent the enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder would not lead to a violation of sec. 30 et sequ. GmbHG; or
Assignor’s business (D) to the extent that the guarantee and indemnity or assumed joint and several liability secures any Loans that are on-lent by the relevant Borrower to the relevant German GmbH Guarantor (or any of its Subsidiariesnicht betriebsnotwendig) and have not yet been repaid the sale is legally permitted and required for the preservation of the stated share capital which is protected by that German GmbH Guarantor (or its Subsidiaries)Section 30 GmbHG.
(vii) This §7.1(g) shall apply mutatis mutandis if the Guaranty is granted by a Guarantor incorporated as a limited liability partnership (KG) in relation to each general partner (Komplementär) incorporated as a limited liability company (GmbH) or if the Guarantee is granted by a Guarantor incorporated as a partnership (oHG) in relation to each partner incorporated as a limited liability company (GmbH).
Appears in 1 contract
Samples: Credit Agreement (Heidrick & Struggles International Inc)
German Guarantors. (i) 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 To the extent that such the guarantee created under this Clause 20 (Guarantee and indemnity or joint Indemnity) (the “Guarantee”) is granted by a German Guarantor and several liability secures any obligation of an affiliated company (verbundenes Unternehmen) within the meaning of Section 15 Guarantee 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 causeGuarantor guarantees amounts:
(A) which are owed by direct or indirect shareholders of the German GmbH Guarantor or Subsidiaries of such shareholders (with the exception of Subsidiaries which are also Subsidiaries of the German Guarantor); and provided that
(B) such amounts do not correspond to funds that have been borrowed under this Agreement and have been on-lent to, or otherwise been passed on to, the relevant German Guarantor or any of its Subsidiaries, the Guarantee of the German Guarantor shall be subject to certain limitations as set out in paragraph (ii). In relation to any other amounts guaranteed, the Guarantee of the German Guarantor remains unlimited.
(ii) To the extent that the demand under the Guarantee against a German Guarantor is made in respect of amounts in relation to which the conditions pursuant to paragraph (i) are fulfilled, the relevant German Guarantor’s liability shall be limited as follows:
(A) Subject to sub-paragraphs (C) and (D) below, the Guarantee shall not be enforceable to the extent that the German Guarantor is able to demonstrate that such enforcement has the effect of:
(1) reducing the German 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)Nettovermögen) (the “Net Assets”) to be an amount less than its registered stated share capital (Stammkapital) (Begründung einer Unterbilanz); or
(B2) (if the German GmbH Guarantor’s its Net Assets are already less lower than its registered stated share capital) the German GmbH Guarantor’s Net Assets causing such amount to be further reduced reduced, and thereby affects its assets which are required for the obligatory preservation of its stated share capital according to §§ 30, 31 German GmbH-Act (Vertiefung einer UnterbilanzGmbH-Gesetz) (in each case a the “Capital ImpairmentGmbH-Act”).
(iiB) For the purposes The value of the calculation of Net Assets shall be determined in accordance with generally accepted accounting principles (Grundsätze ordnungsgemäßer Buchführung) under the German GmbH Guarantor’s Net AssetsCommercial Code (Handelsgesetzbuch) consistently applied by the German Guarantor in preparing its unconsolidated balance sheets (Jahresabschluss according to § 42 GmbH-Act, §§ 242, 264 HGB) in the previous years, save that:
(A1) the amount of any increase of the German GmbH Guarantor’s registered stated share capital out (Stammkapital) of retained earnings (Kapitalerhöhung aus Gesellschaftsmitteln) the German Guarantor registered after the date upon which it became a Guarantor hereunder that has been effected of this Agreement without the prior written consent of the Administrative Agent (acting on behalf of the Lenders) shall be deducted from the registered relevant stated share capital;
(B2) loans provided to the relevant German GmbH Guarantor by a Loan Party member of the Group shall be disregarded if such loans are subordinated, or are considered 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);pursuant to § 32a GmbH-Act; and
(C3) loans and other liabilities incurred by the German GmbH Guarantor in violation of the provisions of this Agreement or any other Loan Document shall be disregarded; and
(D) any amounts not available for distribution according to section 268 subsection (8) of the German Commercial Code (Handelsgesetzbuch), if any, shall be added to the amount of the registered share capital of the relevant German GmbH Guarantor.
(iiiC) The relevant German GmbH Guarantor limitations set out in sub-paragraph (A) above shall deliver only apply if and to the Administrative Agent, extent that the managing director(s) (Geschäftsführer) on behalf of the respective German Guarantor have confirmed in writing to the Agent within ten (10) 10 Business Days after receipt from following the Administrative Agent of a notice stating that the Administrative Agent intends to Agent’s demand payment under the guarantee Guarantee, to what extent the demanded payment fulfils the conditions pursuant to paragraph (i) and indemnity or assumed joint and several liability an up-to-date balance sheet of such German GmbH Guarantor together with a detailed calculation (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s would cause its Net Assets taking into account to fall below its stated share capital (Stammkapital) or, if the adjustments set forth in paragraph Net Assets are already less than the stated share capital (ii) above Stammkapital), would cause such amount to be further reduced (the “Management Determination”). The relevant German GmbH Guarantor shall fulfill its obligations under .
(D) If the guarantee and indemnity or assumed joint and several liability and Agent disagrees with the Administrative Management Determination, the Agent shall nevertheless be entitled to enforce the guarantee Guarantee up to such amount, which is undisputed between itself and indemnity or assumed joint and several liability in an amount which would, the relevant German Guarantor in accordance with the Management Determinationprovisions of sub-paragraph (C) above. In relation to the amount which is disputed, not cause a Capital Impairment of the Agent and such German GmbH Guarantor.
Guarantor shall instruct a firm of auditors of international standing and reputation to determine within 30 calendar days (ivor such longer period as has been agreed between the Company and the Agent) Following from the Administrative Agent’s receipt of date the Agent has contested the Management Determination, upon reasonable request by Determination the Administrative Agent, the relevant German GmbH Guarantor shall deliver to the Administrative Agent within thirty (30) Business Days value 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 (reasonably satisfactory to the Administrative Agent) of the amount of such German GmbH Guarantor’s available Net Assets taking into account the adjustments set forth in paragraph (ii) above (the “Auditor’s Determination”). Such balance sheet If the Agent and the German Guarantor do not agree on the appointment of a joint auditor within 10 Business Days from the date the Agent has disputed the Management Determination, the Agent shall be entitled to appoint auditors of international standing and reputation in its sole discretion. The amount determined as available in the Auditor’s Determination shall be prepared (except for manifest error) binding for all Parties. The costs of the Auditor’s Determination shall be borne by the Company.
(E) If, and to the extent that, the Guarantee has been enforced without regard to the limitation set forth in sub-paragraph (A) because (aa) the Management Determination was not delivered within the relevant time frame or (bb) the amount of the available Net Assets pursuant to the Auditor’s Determination is lower than the amount stated in the Management Determination, the Finance Parties and the Hedge Counterparties shall upon written demand of the German Guarantor to the Agent (on behalf of the Finance Parties and the Hedge Counterparties) repay any amount (if and to the extent already paid to the Finance Parties and the Hedge Counterparties) in the case of (aa) above, which is necessary to maintain the German Guarantor’s stated share capital (Stammkapital), and in the case of (bb) above up to and including the amount calculated in the Auditor’s Determination calculated as of the date the demand under the Guarantee was made and in accordance with GAAP consistently appliedsub-paragraphs (A) and (B) above, provided such demand for repayment is made to the Agent within 6 months (Ausschlussfrist) from the date the Guarantee has been enforced. The relevant If pursuant to the Auditor’s Determination the amount of the available Net Assets is higher than set out in the Management Determination the German GmbH Guarantor shall fulfil its obligations under pay such amount to the guarantee and indemnity or assumed joint and several liability Finance Parties and the Administrative Agent shall be entitled to enforce the guarantee and indemnity or assumed joint and several liability in an amount which would, in accordance with Hedge Counterparties within 10 Business Days after receipt of the Auditor’s Determination, not cause a Capital Impairment of such German GmbH Guarantor.
(vF) The relevant German GmbH Guarantor shall within three limitation set out in sub-paragraph (3A) months after its receipt does not affect the right of the Finance Parties and the Hedge Counterparties to claim again any outstanding amount at a written request by the Administrative Agent realize, later point in time if and to the extent legally permittedthat paragraph (A) would allow this at that later point.
(G) If the German Guarantor demonstrates that an enforcement of the Guarantee has, despite the fact that its liability is limited pursuant to sub-paragraph (A) above, the effect of the German Guarantor not being able to pay its debts as they fall due (Verlust der Zahlungsfähigkeit), then the payment obligation of that German Guarantor under this Guarantee shall be limited in such way that the Agent may only enforce the Guarantee up to such amount(s) and at such times (for instance in payment instalments) that the German Guarantor is at all times left with the liquidity necessary to remain able to pay its debts as they fall due (zahlungsfähig).
(H) If the German Guarantor intends to demonstrate that the enforcement of the Guarantee has led to one of the effects referred to in sub-paragraphs (A) or (G) above, then the German Guarantor shall realise at market value any and all of its assets that are shown in the its balance sheet with a book value (Buchwert) that is materially which are (in the opinion of the Agent) significantly lower than the their market value of such asset(s) if:
(A) and to the extent that any asset is essential such assets are not necessary 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
(B) 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 ten (10) Business Days, notify the Administrative 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 Administrative Agent’s reasonable request, be confirmed by such German GmbH Guarantor’s auditor within a period of twenty business (20) Business Days following nicht betriebsnotwendig), to the requestextent necessary to satisfy the amounts demanded under this paragraph.
(vi) The restriction under parargraph (i) above shall not apply:
(A) if the relevant German GmbH Guarantor has not complied with its obligations pursuant to paragraphs (iii) through (v);
(B) when, at the time of enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder, the restrictions under paragraph (i) above 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;
(C) 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”This Clause 20.11(c) (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”), and if and to the extent the enforcement of a guarantee and indemnity created or joint and several liability assumed hereunder would not lead to a violation of sec. 30 et sequ. GmbHG; or
(D) to the extent that the guarantee and indemnity or assumed joint and several liability secures 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).
(vii) This §7.1(gGuarantors) shall apply mutatis mutandis if the Guaranty is granted by a Guarantor incorporated as a limited liability partnership (KG) in relation to each general partner (Komplementär) incorporated as a limited liability company (GmbH) or if the Guarantee is granted by a Guarantor incorporated in Germany as a limited liability partnership (oHGGmbH & Co. KG) in relation to each partner incorporated as a the limited liability company as general partner (GmbH)Komplementär) of such Guarantor.
Appears in 1 contract
