Exhibit 4.5
DATED ______________ 2006
(1) PARK PLAZA HOTELS EUROPE HOLDINGS BV
RIVERBANK HOTEL HOLDING BV
VICTORIA LONDON HOTEL HOLDING BV
GRANDIS NETHERLANDS HOLDING BV
AS BORROWERS
(2) XXXXXXX XXXXX INTERNATIONAL
AS ARRANGER
(3) THE FINANCIAL INSTITUTIONS LISTED IN PARTS 1 AND 2 OF
SCHEDULE 1
AS ORIGINAL LENDERS
(4) XXXXXXX XXXXX INTERNATIONAL
AS AGENT
(5) XXXXXXX XXXXX INTERNATIONAL
AS SECURITY AGENT
(6) XXXXXXX XXXXX INTERNATIONAL
AS HEDGE COUNTERPARTY
-AND-
(7) XXXXXXXX XXXX PLAZA OPERATOR LIMITED
SHERLOCK XXXXXX PARK PLAZA LIMITED
RIVERBANK HOTEL OPERATOR LIMITED
AS UK OPERATING COMPANIES
----------
FACILITY AGREEMENT
----------
XXXXXXXXXX XXXXXXX
ONE ST PAUL'S CHURCHYARD
LONDON EC4M 8SH
UNITED KINGDOM
XXX.XXXXXXX.XXX
REFERENCE: 160/712/00-00-00000
TABLE OF CONTENTS
CLAUSE PAGE NO.
------ --------
1 DEFINITIONS AND INTERPRETATION.................................. 3
2 THE FACILITY.................................................... 30
3 USE OF THE FACILITY............................................. 32
4 CONDITIONS OF UTILISATION....................................... 33
5 UTILISATION..................................................... 33
6 REPAYMENT....................................................... 35
7 PREPAYMENT AND CANCELLATION..................................... 36
8 INTEREST........................................................ 40
9 INTEREST PERIODS................................................ 43
10 CHANGES TO THE CALCULATION OF INTEREST.......................... 43
11 FEES............................................................ 45
12 TAX GROSS-UP AND INDEMNITIES.................................... 45
13 INCREASED COST INDEMNITY........................................ 51
14 OTHER INDEMNITIES............................................... 52
15 MITIGATION BY THE LENDERS....................................... 54
16 COSTS AND EXPENSES.............................................. 54
17 REPRESENTATIONS................................................. 55
18 INFORMATION UNDERTAKINGS........................................ 61
19 FINANCIAL COVENANTS............................................. 64
20 GENERAL UNDERTAKINGS............................................ 66
21 BANK ACCOUNTS................................................... 73
22 THE PROPERTY.................................................... 79
23 EVENTS OF DEFAULT............................................... 79
24 SECURITY........................................................ 85
25 CHANGES TO THE LENDERS.......................................... 85
1
26 CHANGES TO THE OBLIGORS......................................... 89
27 ROLE OF THE AGENT AND THE ARRANGER.............................. 89
28 CONDUCT OF BUSINESS BY THE FINANCE PARTIES...................... 98
29 SHARING AMONG THE FINANCE PARTIES............................... 98
30 PAYMENT MECHANICS............................................... 100
31 SET-OFF......................................................... 103
32 NOTICES......................................................... 104
33 CALCULATIONS AND CERTIFICATES................................... 106
34 PARTIAL INVALIDITY.............................................. 107
35 REMEDIES AND WAIVERS............................................ 107
36 AMENDMENTS AND WAIVERS.......................................... 107
37 COUNTERPARTS.................................................... 108
38 GOVERNING LAW................................................... 108
39 ENFORCEMENT..................................................... 108
40 SECURITY DOCUMENTS.............................................. 109
SCHEDULE 1 - The Lenders............................................. 111
SCHEDULE 2 - The Properties.......................................... 112
SCHEDULE 3 - Conditions Precedent.................................... 115
SCHEDULE 4 - Utilisation Request..................................... 122
SCHEDULE 5 - Property covenants...................................... 123
SCHEDULE 6 - Mandatory Cost Formula.................................. 133
SCHEDULE 7 - Form of Transfer Certificate............................ 136
SCHEDULE 8 - Form of Compliance Certificate.......................... 138
SCHEDULE 9 - Form of Management Accounts............................. 139
SCHEDULE 10 - Structure Charts....................................... 140
2
THIS FACILITY AGREEMENT is made on ______________ 2006
BETWEEN
(1) PARK PLAZA HOTELS EUROPE HOLDINGS BV a company incorporated in the
Netherlands with number 00000000
RIVERBANK HOTEL HOLDING BV a company incorporated in the Netherlands with
number 34175864
VICTORIA LONDON HOTEL HOLDING BV a company incorporated in the Netherlands
with number 34175860
GRANDIS NETHERLANDS HOLDING BV a company incorporated in the Netherlands
with number 33288742
(the "BORROWERS" and each a "BORROWER");
(2) XXXXXXX XXXXX INTERNATIONAL (the "ARRANGER");
(3) THE FINANCIAL INSTITUTIONS listed in part 1 and part 2 of Schedule 1 as
Lenders (the "ORIGINAL LENDERS");
(4) XXXXXXX XXXXX INTERNATIONAL as agent of the other Finance Parties (the
"AGENT");
(5) XXXXXXX XXXXX INTERNATIONAL as security trustee (the "SECURITY AGENT");
(6) XXXXXXX XXXXX INTERNATIONAL (the "HEDGE COUNTERPARTY") and
(7) XXXXXXXX XXXX PLAZA OPERATOR LIMITED a company incorporated in England and
Wales with company number 04049387
SHERLOCK XXXXXX PARK PLAZA LIMITED a company incorporated in England and
Wales with company number 00000000
RIVERBANK HOTEL OPERATOR LIMITED a company incorporated in England and
Wales with company number 04974811
(the "UK OPERATING COMPANIES" and each a "UK OPERATING COMPANY")
IT IS AGREED as follows:
1. DEFINITIONS AND INTERPRETATION
1.1 DEFINITIONS
In each Finance Document:
3
"ACCOUNTS" means each of:
(a) the Service Account;
(b) the Receipts Accounts;
(c) the FF&E Accounts;
(d) the UK Operating Accounts;
(e) the European Operating Accounts;
and
(f) the Cash Trap Account;
"ACCOUNT BANKS" means Lloyds TSB Bank plc and ING;
"ADDITIONAL COST RATE" has the meaning given to it in schedule
6 (Mandatory Cost Formula);
"ADDITIONAL EQUITY CONTRIBUTIONS" means any additional funds made
available to the Borrowers by the
Equity Holders by way of subscription
for additional shares or by way of
shareholder loans;
"ADVANCE" means any advance of the whole or part
of the Facility pursuant to the terms
of this Agreement;
"AFFILIATE" means, in relation to any person, a
Subsidiary of that person or a Holding
Company of that person or any other
Subsidiary of that Holding Company;
"APPROVED VALUERS" means Savills or such other reputable
firm of valuers as the Agent may from
time to time appoint;
"AUTHORISATION" means an authorisation, consent,
approval, resolution, licence,
exemption, filing, notarisation or
registration;
"AVAILABILITY PERIOD" means the period from and including the
date of this Agreement to and including
the corresponding date in the following
calendar month;
"BREAK COSTS" means the amount (if any) by which:
(a) the interest which a Lender should
have received for the
4
period from the date of receipt of
all or any part of its
participation in the Loan or
Unpaid Sum to the last day of the
current Interest Period in respect
of the Loan or Unpaid Sum
(excluding Margin from the date of
the relevant payment), had the
principal amount or Unpaid Sum
received been paid on the last day
of that Interest Period;
exceeds:
(b) the amount which that Xxxxxx would
be able to obtain by placing an
amount equal to the principal
amount or Unpaid Sum received by
it on deposit with a leading bank
in the Relevant Interbank Market
for a period starting on the
Business Day following receipt or
recovery and ending on the last
day of the current Interest
Period.
"BUILDING SOCIETY" means a building society authorised
under the Building Societies Act 1986,
or an affiliate of a Building Society
which is a lending body as defined in
the Building Societies (Designation of
Qualifying Bodies) (No. 3) Order 1993
(SI No. 2706), or which is a person
designated under or by an order made
under section 18 of the Building
Societies Act 1986 and in each case
which is entitled to receive interest
received by it under this Agreement
without deduction of tax pursuant to
section 477A(7) Income and Corporation
Taxes Act 1988;
"BUSINESS DAY" means a day (other than a Saturday or
Sunday) on which banks are open for
general business in London and the
Netherlands;
"CASH TRAP ACCOUNT" means the account referred to as such
in clause 21 (Bank Accounts);
"CASH TRAP EVENT" means an event as described in clause
19.2;
"CASH SWEEP" means, on any Payment Date, the balance
standing to the credit of the Service
Account in accordance with clause
21.2.2 after payment of the items
referred to in (a) to (e) inclusive in
that clause;
"CHARGED PROPERTIES" means the properties referred to in
schedule 2 (and more particularly
described in the legal charge referred
to in clause 5.3 of
5
schedule 3) or any of them or any part
of or interest in any of them and
"CHARGED PROPERTY" means any one of
them or any part of or interest in any
of them;
"COMMITMENT" means:
(a) in relation to an Original Lender,
the amount set opposite its name
under the heading "Commitment" in
part 1 or part 2 of schedule 1
(The Original Parties) and the
amount of any other Commitment
transferred to it under this
Agreement; and
(b) in relation to any other Lender,
the amount of any Commitment
transferred to it under this
Agreement,
in each case to the extent not
cancelled, reduced or transferred by it
under this Agreement;
"COMPLIANCE CERTIFICATE" means a certificate substantially in
the form set out in schedule 8 (Form of
Compliance Certificate);
"CONTROL" in the context of a person or persons
achieving or having control over a
company, means any of:
(a) the person or persons acting in
concert having the right to
appoint or remove the board of
directors of that company; or
(b) the person or persons acting in
concert in accordance with whose
direction a majority of the
members of the board of directors
of that company is accustomed to
act from time to time;
'acting in concert' for the purposes of
this definition having the meaning
given to it in the City Code on
Takeovers and Mergers;
"CORRESPONDING OBLIGATION" means any obligation to pay an amount
to the Lenders or any one or more of
them under the Finance Documents,
whether for principal, interest, costs
or otherwise and whether present or
future
(i) under or in connection with
the Finance
6
Documents; or
(ii) in connection with any other
indebtedness as the Lenders
and the Obligors may agree
from time to time;
"CURRENT ACCOUNT" means the account referred to in clause
21 (Bank Accounts);
"DCC" means the Dutch Civil Code
"DEBT SERVICE" means, in relation to any period, the
aggregate of:
(a) interest (excluding PIK Margin
until 8th August 2008) payable
during that period, adjusted as
necessary to take into account the
Hedging Agreements; and
(b) any amortisation payment required
to be made during that period;
"DEFAULT" means an Event of Default or any event
or circumstance specified in clause 23
(Events of Default) which would (with
the expiry of a grace period, the
giving of notice, the making of any
determination under the Finance
Documents or any combination of any of
the foregoing) be an Event of Default;
"DISPOSAL" means any sale, transfer, assignment,
loan, pledge or other disposal (or
agreement to effect any such
transaction) of the whole or any part
of:
(a) the Charged Properties; or
(b) any interest in the Charged
Properties; or
(c) any other asset charged by the
Security Documents;
"DUTCH BANKING ACT" means the Dutch Act on the Supervision
of Credit Institutions 1992 (Wet
toezicht Kredietwezen 1992) (as amended
from time to time);
"EQUITY HOLDERS" means BEA Hotels NV, Suf Holding BV and
Park Plaza Hotels Europe Limited, while
such entities continue to own (directly
or indirectly) some or all of the
issued share capital of the Borrowers;
7
"EUROPEAN OPERATING ACCOUNTS" means the accounts referred to as such
in clause 21 (Bank Accounts);
"EVENT OF DEFAULT" means any event or circumstance
specified as such in clause 23 (Events
of Default);
"EXEMPTION REGULATION" means the Exemption Regulation, dated
26 June 2002, of the Ministry of
Finance of the Netherlands, as
promulgated in connection with the
Dutch Banking Act;
"FACILITY" means the term loan facility made
available under this Agreement as
described in clause 2 (The Facility);
"FACILITY AGREEMENT means this Agreement;
"FACILITY OFFICE" means the office or offices notified by
a Lender to the Agent in writing on or
before the date it becomes a Lender
(or, following that date, by not less
than five Business Days' written
notice) as the office or offices
through which it will perform its
obligations under this Agreement;
"FEE LETTER" means any letter or letters dated on or
about the date of this Agreement
between the Arranger and the Borrowers
(or the Agent and the Borrowers)
setting out any of the fees referred to
in clause 11 (Fees);
"FF&E ACCOUNTS" means the accounts referred to as such
in clause 21 (Bank Accounts);
"FINANCE DOCUMENT" means:
(a) this Agreement;
(b) any Fee Letter;
(c) the Security Documents;
(d) the Hedging Agreements; and
(e) any other document designated as
such by the Agent and the
Borrowers;
8
"FINANCE PARTY" means the Agent, the Arranger, each
Lender, the Hedge Counterparty and the
Security Agent;
"FINANCIAL INDEBTEDNESS" means any indebtedness for or in
respect of:
(a) monies borrowed;
(b) any amount raised by acceptance
under any acceptance credit
facility;
(c) any amount raised pursuant to any
note purchase facility or the
issue of bonds, notes, debentures,
loan stock or any similar
instrument;
(d) the amount of any liability in
respect of any lease or hire
purchase contract which would, in
accordance with GAAP or IFRS, be
treated as a finance or capital
lease;
(e) receivables sold or discounted
(other than any receivables to the
extent they are sold on a
non-recourse basis);
(f) any amount raised under any other
transaction (including any forward
sale or purchase agreement) having
the commercial effect of a
borrowing;
(g) any derivative transaction entered
into in connection with protection
against or benefit from
fluctuation in any rate or price
(and, when calculating the value
of any derivative transaction,
only the marked to market value
shall be taken into account);
(h) any counter-indemnity obligation
in respect of a guarantee,
indemnity, bond, standby or
documentary letter of credit or
any other instrument issued by a
bank or financial institution;
(i) any redeemable preference shares;
and
(j) the amount of any liability in
respect of any guarantee or
indemnity for any of the items
referred to in paragraphs
9
(a) to (i) above;
"GAAP" means generally accepted accounting
principles in the jurisdiction of
incorporation of the relevant entity;
"GROSS OPERATIONAL TURNOVER" means all revenues and income of any
kind derived directly or indirectly
from the operation of the Charged
Properties including:
(i) service charges collected from
guests and not distributed to
employees;
(ii) rental or other payments from
lessees or concessionaries; and
(iii) the proceeds (after deducting
therefrom necessary expenses in
connection with the adjustment or
collection thereof) of use and
occupancy (business interruption)
insurance and the proceeds from a
condemnation of a temporary nature
actually received;
"HEADLEASES" means the headleases identified in the
reports on title referred to in
paragraph 6.1 of schedule 3 (and which
shall include, in relation to the
Riverbank Park Plaza Hotel, those
leases referred to in Annexures 1 and 2
to the relevant report on title) and
"HEADLEASE" means any of them;
"HEDGE COUNTERPARTY" means Xxxxxxx Xxxxx International Bank
in its capacity as counterparty to any
Hedging Agreement;
"HEDGING AGREEMENTS" means any agreements entered into by
the Hedge Counterparty and the
Borrowers the effect of which is or is
intended to be to limit the net amount
of interest payable by the Borrowers on
the whole or any part of the Loan (or
any option which if exercised would
have such effect) and HEDGING AGREEMENT
means any of them;
"HOLDING COMPANY" means, in relation to a company or
corporation, any other company or
corporation in respect of which it is a
subsidiary;
"HOTEL BORROWERS" means each of the Borrowers other than
the Management Borrower;
"IFRS" means international financial reporting
standards which have been
10
adopted by the International Accounting
Standards Board
"INDEBTEDNESS" means any obligation for the payment or
repayment of money, whether as
principal or as surety and whether
present or future, actual or
contingent;
"INITIAL BUDGET" means the budget relating to the
business of the Borrowers produced to
the Agent in accordance with paragraph
3.5 of Schedule 3;
"INITIAL BUSINESS PLAN" means the business plan produced to the
Agent in accordance with paragraph 3.6
of Schedule 3;
"INTEREST PERIOD" means, in relation to the Loan, each
period determined in accordance with
clause 9 (Interest Periods) and, in
relation to an Unpaid Sum, each period
determined in accordance with clause
8.3 (Default Interest);
"JERSEY SUBSIDIARIES" means:
(a) Xxxxxx Hotels Holdings Limited;
(b) Xxxxxx Hotel Limited;
(c) Taravilla Limited ; and
(d) Alora Limited,
all of which are incorporated in
Jersey;
"LENDERS" means the Original Lenders and/or any
New Lender (as defined in clause 25
acquiring all or any of an Original
Lender's Commitment under clause 25
(Changes to the Lenders);
"LIBOR" means, in relation to the Loan:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available
for sterling for the Interest
Period of the Loan) the arithmetic
mean of the rates (rounded upwards
to four decimal places) as
supplied to the Agent at its
request quoted by the Reference
Banks to
11
leading banks in the London
interbank market;
as of the Specified Time on the
Quotation Day for the offering of
deposits in sterling and for a period
comparable to the Interest Period for
the Loan;
"LOAN" means the loan made or to be made under
the Facility, or the aggregate
principal amount outstanding for the
time being of that loan, including PIK
Margin compounded in accordance with
clause 8.2 below;
"LMA" means the Loan Market Association;
"LOAN NOTES" means the loan notes, effective as of 1
January 2003, by:
(i) Park Plaza Hotels Europe BV,
issued to Golden Wall
Investments Ltd, for Euros
151,274,881;
(ii) Park Plaza Hotels Europe BV,
issued to Park Plaza Hotels
Europe Ltd (and subsequently
assigned to Golden Wall
Investments Ltd), for Euros
49,070,000; and
(iii) Park Plaza Hotels Europe BV,
issued to Park Plaza Hotels
Europe Ltd (and subsequently
assigned to Golden Wall
Investments Ltd), for
2,251,921;
"MAJORITY LENDERS" means:
(a) if there is no Loan then
outstanding, a Lender or Lenders
whose Commitments aggregate more
than 66 2/3% of the Total
Commitments (or, if the Total
Commitments have been reduced to
zero, aggregated more than 66 2/3%
of the Total Commitments
immediately prior to the
reduction); or
(b) at any other time, a Lender or
Lenders whose participations in
the Loans then outstanding
aggregate more than 66 2/3% of the
Loan then outstanding;
12
"MANAGEMENT AGREEMENTS" means
(a) in respect of the Sherlock Xxxxxx
Hotel, the hotel management
agreement dated 24 September 2002
between the Management Borrower
(1) and Sherlock Xxxxxx Park Plaza
Limited (2);
(b) in respect of the Victoria Hotel,
the hotel management agreement
dated 24 September 2002 between
the Management Borrower (1) and
Xxxxxxxx Xxxx Plaza Operator
Limited (2);
(c) in respect of the Riverbank Hotel,
the hotel management agreement
dated 1 October 2004 between the
Management Borrower (1) and
Riverbank Hotel Operator Limited
(2);
"MANAGEMENT BORROWER" Park Plaza Hotels Europe Holdings BV;
"MANAGEMENT BORROWER GROUP" means the Management Borrower and its
Subsidiaries other than Silver Walls
Hotels GmbH and Silver Walls Munchen
Hotelbetriebsgesellschaft mbH ;
"MANAGEMENT BORROWER GROUP VALUE" means the value of the Management
Borrower Group as set out in the
valuation produced pursuant to
paragraph 2.5 of Schedule 3 (as may be
updated from time to time);
"MANAGEMENT BORROWER OPERATING INCOME" means the consolidated operating income
of the Management Borrower Group
including all management fees,
franchise fees, service fees, sales and
marketing fees, reservation fees,
incentive fees, reimbursement fees and
other income amounts generated by the
Management Borrower Group (including
for the avoidance of doubt revenue from
hotels operated by it and its
Subsidiaries), less all staff and other
operating costs of an income nature
incurred in the business of the
Management Borrower Group's business
(including head office costs, franchise
fees, sales and marketing costs,
corporate costs and expenses and other
expenditure (of an income nature)
incurred by the Management Borrower
Group in the
13
conduct of its business;
"MANDATORY COST" means the percentage rate per annum
calculated by the Agent in accordance
with schedule 6 (Mandatory Cost
Formula);
"MARGIN" means 3.00% per annum, of which the
first 1.65% per annum is referred to in
this Agreement as "BASIC MARGIN" and
the balance of 1.35% per annum is
referred to in this Agreement as "PIK
MARGIN";
"MARKET VALUE" means the market value of the Charged
Properties on the relevant date
determined by the Approved Valuers from
time to time in accordance with the
latest RICS Appraisal and Valuation
Standards as specified in a report in
writing addressed to the Finance
Parties and copied to the Borrowers;
"MASTER TERRITORIAL LICENCE AGREEMENT" means the master territorial licence
agreement dated 30 September 2002
between Park Global Holdings Inc and
Golden Wall Investments Limited;
"MATERIAL ADVERSE EFFECT" means an event which is likely to have
a material adverse effect on:
(a) the ability of the Borrowers to
comply with their obligations
(taken as a whole) under this
Agreement; or
(b) the ability of the Obligors to
comply with their obligations
(taken as a whole) under any
Security Document;
"MATERIAL CONTRACTS" means
(1) the Management Agreements;
(2) any lease (excluding the UK
Operating Leases) licence or
similar agreement in respect of a
hotel where the rent or licence
fee payable by an Obligor to a
third party landlord exceeds (or
will exceed) 70% of the net
operating income of the hotel
concerned for 5 years or more; and
(3) those agreements described in Part
2 of Schedule 2 and any agreement
to which a Borrower or a
Subsidiary of a
14
Borrower is party which:
(a) involves an aggregate liability
per contract on the part of the
relevant Obligor in excess of
L1,000,000 (in the case of the
Management Borrower, each UK
Operating Company and each
Subsidiary of the Management
Borrower) or L100,000 (in the case
of the Hotel Borrowers), save that
this sub-clause (a) shall not
apply to Permitted Leases and
Permitted Management Agreements;
or
(b) would be likely, if terminated, to
have a Material Adverse Effect; or
(c) is capable of materially affecting
the interests of the Finance
Parties under the Finance
Documents;
"MONTH" means a period starting on one day in a
calendar month and ending on the
numerically corresponding day in the
next calendar month, except that:
(a) (subject to paragraph (c) below)
if the numerically corresponding
day is not a Business Day, that
period shall end on the next
Business Day in that calendar
month in which that period is to
end if there is one, or if there
is not, on the immediately
preceding Business Day;
(b) if there is no numerically
corresponding day in the calendar
month in which that period is to
end, that period shall end on the
last Business Day in that calendar
month;
(c) if an Interest Period begins on
the last Business Day of a
calendar month, that Interest
Period shall end on the last
Business Day in the calendar month
in which that Interest Period is
to end;
"NET OPERATING INCOME" means the Gross Operational Turnover
less the costs and expense of the
operation of the hotel business at the
Charged Properties which shall include
the following:
15
(i) the cost of all food and beverages
and operating supplies sold or
consumed and the total relocation
expenses, salaries, wages,
severance payments and other
compensation of all employees of
the Charged Properties;
(ii) the costs of replacements of or
additions to hotel equipment
(other than expenditure of a
capital nature which is not being
amortised);
(iii) the costs of all other goods and
services provided to the Charged
Properties;
(iv) rent paid (other than by the UK
Operating Companies to the Hotel
Borrowers under the Operating
Leases).
"OBLIGORS" means:
(a) the Borrowers; and
(b) the Third Party Security Providers
other than the Equity Holders and
Compass Investments Limited;
"OCCUPATIONAL LEASE" means any occupational lease (other
than the UK Operating Leases) or other
agreement (excluding the Management
Agreement) permitting occupation of a
Charged Property to which a Charged
Property may be subject from time to
time and in respect of which a Borrower
or any Subsidiary of a Borrower is the
immediate landlord or licensor;
"OCCUPATIONAL TENANT" means any person with a right to occupy
a Charged Property pursuant to any
Occupational Lease together with any
predecessor in title of such person
retaining any liability to pay any rent
licence fee or other sum in respect of
that occupation and any surety for any
such person;
"ORIGINAL LOAN AMOUNT" means the amount of the Loan
immediately after the Utilisation Date;
"PARALLEL DEBT" means the Parallel Debt as defined in
clause 2.4;
16
"PARTY" means a party to this Agreement;
"PAYMENT DATE" means 8th February, 8th May, 8th August
and 8th November in each year;
"PERMITTED DISPOSAL" a disposal of a Charged Property
permitted under clause 2.1 of Schedule
5;
"PERMITTED ENCUMBRANCE" means:
(a) any lien arising by operation of
law and in the ordinary course of
business that is discharged within
90 days and relates to assets
other than the Charged Properties;
(b) security created pursuant to the
Finance Documents;
(c) any Security which is to be
irrevocably discharged or released
in full on the date of
Utilisation;
(d) any Security arising out of
retention of title provisions in a
supplier's standard terms of
business for supply of goods
acquired by the Borrowers in the
ordinary course of its business
and securing amounts not more than
30 days overdue;
(e) any Security in respect of an
Account created pursuant to the
general banking conditions
(algemene bankvoorwarden) of an
Account Bank operating in the
Netherlands; and
(f) any other Security granted by the
Borrowers with the prior written
consent of the Agent;
"PERMITTED INDEBTEDNESS" means:
(a) Indebtedness that is expressly
subordinated to all monies due or
payable to the Finance Parties in
a manner approved by the Agent;
(b) the Loan and any interest that has
not been capitalised;
(c) Indebtedness under the Hedging
Agreements;
(d) hedging arrangements entered into
by the Management
17
Borrower Group in accordance with
clause 8.5.5;
(e) (in the case of the Management
Borrower Group and the UK
Operating Companies) trade credit
(including operating leases, hire
purchase commitments, finance
leases and short-term overdraft
facilities with banks) of up to
L5,000,000 in aggregate for the
Management Borrower Group and up
to L5,000,000 in aggregate for all
the UK Operating Companies
together;
(f) fees due to the Management
Borrower under the Management
Agreements;
(g) Indebtedness under any guarantee
arising under a declaration of
joint and several liability used
for the purpose of Article 2:403
of the DCC (and any residual
liability under such declaration
arising pursuant to Article
2:404(2) of the DCC); and
(h) (for the avoidance of doubt) sums
owed under the Operating Leases,
under a Permitted Lease or under
any Permitted Management
Agreement;
"PERMITTED IPO" means a public offering of securities
in the Borrowers, or any Holding
Company owning the Borrowers, which
meets the following criteria:
(a) it is an admission to full listing
on the London Stock Exchange or to
the Alternative Investments Market
of the London Stock Exchange (or a
successor thereof regulated by the
London Stock Exchange; and
(b) the Equity Holders will after such
offering retain (directly or
indirectly) at least 53% of the
voting share capital of each of
the Borrowers or the Holding
Company owning the Borrowers as
the case may be; and
(c) the Equity Holders will upon
completion of such offering hold
shares in the Borrowers or the
Holding Company owning the
Borrowers in proportion to the
value of the
18
contributions made by such Equity
Holders to the net assets of the
Borrowers or the Holding Company
owning the Borrowers as part of
such offering; and;
(d) no one person has Control of the
Borrowers or the Holding Company
of the Borrowers; and
(e) it does not have a Material
Adverse Effect;
"PERMITTED LEASE" means a lease or licence entered into
by a Borrower (or a Subsidiary of a
Borrower) in respect of a hotel, other
than the Charged Properties, where the
rent payable by the Borrower or such
Subsidiary under such lease or licence
during the first three years of the
term of such lease or licence is equal
to or less than 70% of the estimated
net operating income of that hotel for
the same period;
"PERMITTED LOAN NOTE TRANSFER" means an assignment or novation of the
benefit of all or part of the Loan
Notes from the current holder to a new
holder ("New Holder") subject to the
New Holder delivering to the Agent the
following documents:
(a) a duly executed deed of
subordination whereby the rights
of the New Holder under the Loan
Notes are subordinated to the
rights of the Finance Parties
under the Finance Documents, such
deed of subordination to be in the
form delivered to the Agent in
accordance with paragraph 5.7 of
schedule 3 ("New Subordination
Deed");
(b) a certified copy of the minutes of
a meeting of the board of
directors (or other similar
corporate governing body)
approving the terms and the due
execution of the New Subordination
Deed; and
(c) if the New Holder is incorporated
outside England and Wales, a legal
opinion from a firm of lawyers
qualified in the jurisdiction of
incorporation of the New Holder;
"PERMITTED MANAGEMENT AGREEMENTS" means any management agreement entered
into by a Borrower (or a Subsidiary of
a Borrower) in respect of a hotel,
other than the
19
Charged Properties, where either:
(a) such management agreement
does not contain a guarantee
as to the minimum turnover of
such hotel; or
(b) such management agreement
contains a guarantee as to
the minimum turnover of that
hotel, but the level of the
guaranteed minimum turnover
during the first three years
of the term of such
management agreement is equal
to or less than 70% of the
net operating income of that
hotel for the same period;
"PERMITTED OCCUPATION ARRANGEMENTS" means:
(a) any licence (but not conveying any
permanent rights) to occupy a
Charged Property granted to guests
of the hotels run at the Charged
Properties entered into in the
ordinary course of business of the
UK Operating Companies; and
(b) any lease, licence or other
arrangement under which employees
of the Obligors are entitled to
reside at the Charged Properties
entered into in the ordinary
course of business of the UK
Operating Companies;
"PERMITTED RECONSTRUCTION" means a reconstruction of any of the
Borrowers or their Subsidiaries or the
UK Operating Companies, or of the
shareholdings in the Borrowers, to
which the Agent has given its written
consent (which consent may be withheld
if a Finance Party considers such
reconstruction involves a change of
ownership that is not consistent with
such Finance Party's "know your
customer" rules and procedures or is
otherwise unacceptable by reference to
such Finance Party's internal policies
and guidelines on customers, but which
consent shall not otherwise be
unreasonably withheld if (i) the
interests of the Finance Parties will
not be adversely affected thereby and
(ii) the Borrowers comply with the
Agent's reasonable requirements in
connection therewith (including,
without limitation, entering into
security documents, procuring legal
opinions and meeting the Finance
Parties' legal and other costs)), and
shall
20
include a Permitted Loan Note Transfer;
"PMP" means a "professional market party"
within the meaning of the Exemption
Regulation;
"POLICY GUIDELINES" means the Dutch Central Bank's policy
guidelines (issued in relation to the
Exemption Regulation) dated 31 December
2004 (beliedsregel kembegrippen
markttoetreding en handhaving wtk 1992)
(as amended from time to time);
"QUALIFYING DOMESTIC LENDER" means a Lender which has its head
office in the Borrowers' Jurisdiction
or is acting through a Facility Office
qualifying as a permanent establishment
in The Netherlands for Tax purposes of
The Netherlands;
"QUALIFYING LENDER" means a Lender which is beneficially
entitled to interest payable to that
Lender in respect of an advance under a
Finance Document and is:
(a) a Lender:
(i) which is a bank (as defined
for the purpose of section
349 of the Taxes Act) making
an advance under a Finance
Document; or
(ii) in respect of an advance made
under a Finance Document by a
person that was a bank (as
defined for the purpose of
section 349 of the Taxes Act)
at the time that that advance
was made,
and which is within the charge to
United Kingdom corporation tax as
respects any payments of interest
made in respect of that advance;
or
(b) a Lender which is:
(i) a company resident in the
United Kingdom for United
Kingdom tax purposes;
(ii) a partnership each member of
which is a
21
company resident in the
United Kingdom for United
Kingdom tax purposes; or
(iii) a company not so resident in
the United Kingdom which
carries on a trade in the
United Kingdom through a
branch or agency and which
brings into account interest
payable in respect of that
advance in computing its
chargeable profits (within
the meaning given by section
11(2) of the Taxes Act); or
(c) a Treaty Lender; or
(d) a Building Society;
"QUOTATION DAY" means, in relation to any period for
which an interest rate is to be
determined, the first day of that
period unless market practice differs
in the Relevant Interbank Market in
which case the Quotation Day will be
determined by the Agent in accordance
with market practice in the Relevant
Interbank Market (and if quotations
would normally be given by leading
banks in the Relevant Interbank Market
on more than one day, the Quotation Day
will be the last of those days);
"RECEIPTS ACCOUNTS" means the accounts referred to as such
in clause 21 (Bank Accounts);
"REFERENCE BANKS" means prime banks selected by the
Agent;
"RELEVANT INTERBANK MARKET" means the London interbank market;
"RENTS" means the rent due to the Hotel
Borrowers under the Operating Leases
and (if relevant) any Occupational
Leases;
"REPAYMENT DATE" means the fifth anniversary of the
Utilisation Date or, if the Borrowers
have exercised the Term-out Option, the
seventh anniversary of the Utilisation
Date (provided that in each case if
such date is not a Business Day, the
Repayment Date shall be the
22
immediately preceding Business Day);
"RESERVATIONS" means:
(a) due presentation for registration
of each Finance Document creating
registrable Security in accordance
with the Companies Act 1985 and
any similar requirements under
Dutch or German law;
(b) due registration of each Finance
Document creating registrable
Security over any Charged Property
at the Land Registry;
(c) equitable remedies and principles
which may be granted or refused at
the discretion of the court;
(d) limitation of enforcement by laws
relating to bankruptcy,
insolvency, liquidation,
reorganisation, court schemes,
moratoria, administration and
other laws generally affecting
creditors' rights in England,
Germany or the Netherlands;
(e) time barring of claims under
statute;
(f) a court construing Security
expressed to be created by way of
fixed security as being floating
security; and
(g) the possibility that an
undertaking to assume liability
for, or to indemnify a person
against, non-payment of United
Kingdom stamp duty or stamp duty
land tax may be void;
(h) Netherlands courts may,
notwithstanding any provision to
the contrary in any of the Finance
Documents, assume jurisdiction if
a plaintiff:
A. seeks provisional measures in
preliminary relief
proceedings (kort geding) as
provided for in article 254
of the Netherlands Code of
Civil Procedures et seq.;
B. files a request for the levy
of a pre-trial attachment
(conservatoir beslag) as
provided for in article 700
23
Netherlands Code of Civil
Procedures et seq; and
(i) the recognition and the
enforcement of judgments of the
courts of England in the
Netherlands are subject to the
provisions of the Council
Regulation (EC) No 44/2001 of 22
December 2000 on Jurisdiction and
the Recognition and Enforcement of
Judgments in Civil and Commercial
Matters and the Netherlands Code
of Civil Procedures. More
specifically, the Netherlands
courts may deny the recognition
and the enforcement of such
judgment if:
A. no proper service of process
has been given, where it
concerns a default judgment;
B. the recognition and
enforcement of such judgment
would be manifestly
incompatible with the public
policy of the Netherlands;
C. such judgment is
irreconcilable with a
judgment of a Netherlands
Court rendered in a dispute
between the same parties, or
D. such judgment is
irreconcilable with an
earlier judgment rendered in
another Member State of the
European Community or a third
state involving the same
cause of action and between
the same parties, provided
that the earlier judgment
fulfils the conditions
necessary for its recognition
by the Netherlands courts;
"RIVERBANK HOTEL" means the Charged Property listed at
paragraph 3 of schedule 2, part 1;
"SCREEN RATE" means the British Bankers Association
Interest Settlement Rate for sterling
for the relevant amount for the
relevant period, displayed on the
appropriate page of the Telerate
screen. If the agreed page is replaced
or service ceases to be available, the
Agent may specify another page or
service displaying the appropriate rate
after consultation with the Borrowers
and the Lenders;
24
"SECURED OBLIGATIONS" means all obligations at any time due,
owing or incurred by any Obligor under
the Finance Documents, whether present
or future, actual or contingent (and
whether incurred solely or jointly and
whether as principal or surety or in
some other capacity);
"SECURITY" means a mortgage, charge, pledge, lien
or other security interest securing any
obligation of any person or any other
agreement or arrangement having a
similar effect;
"SECURITY DOCUMENTS" means:
(a) the documents referred to in
paragraph 5 of Schedule 3; and
(b) any other document designated as
such by the Borrowers and the
Agent;
and each of them in each case in favour
of the Security Agent in the form
agreed between the parties prior to the
Utilisation Date;
"SELECTION NOTICE" means a notice substantially in the
form set out in part 2 of schedule 4
(Utilisation Request) given in
accordance with clause 9 (Interest
Periods);
"SERVICE ACCOUNT" means the account referred to as such
in clause 21 (Bank Accounts);
"SHERLOCK XXXXXX HOTEL" means the Charged Property listed at
paragraph 2 of schedule 1, part 1;
"SPECIFIED TIME" means 11.00 am;
"SUBSIDIARY" means a subsidiary within the meaning
of section 736 of the Companies Act
1985;
"TAX" means any tax, levy, impost, duty or
other charge or withholding of a
similar nature (including any penalty
or interest payable in connection with
any failure to pay or any delay in
paying any of the same);
"TAXES ACT" means the Income and Corporation Taxes
Act 1988;
25
"TERM-OUT OPTION" means the right of the Borrowers
described in clause 6.5;
"THIRD PARTY SECURITY PROVIDERS" means:
(a) the Equity Holders;
(b) the UK Operating Companies; and
(c) any other Subsidiaries of the
Borrowers that give security for
the Loan;
"TOTAL COMMITMENTS" means the aggregate of the Commitments;
"TRANSFER CERTIFICATE" means a certificate substantially in
the form set out in schedule 7 (Form of
Transfer Certificate) or any other form
agreed between the Agent and the
Borrowers;
"TRANSFER DATE" means, in relation to a transfer, the
later of:
(a) the proposed Transfer Date
specified in the Transfer
Certificate; and
(b) the date on which the Agent
executes the Transfer Certificate;
"UK OPERATING ACCOUNTS" means the accounts referred to as such
in clause 21 (Bank Accounts);
"UK OPERATING LEASES" means:
(a) in respect of the Victoria Hotel,
a lease dated 22 October 2001
between the relevant Hotel
Borrower and the relevant UK
Operating Company;
(b) in respect of the Sherlock Xxxxxx
Hotel, a lease dated 11 October
2004 between the relevant Hotel
Borrower and the relevant UK
Operating Company; and
(c) in respect of the Riverbank Hotel,
a lease dated 20 December 2005
between the relevant Hotel
Borrower and the relevant UK
Operating Company;
26
"UNPAID SUM" means any sum due and payable but
unpaid by an Obligor under the Finance
Documents;
"UTILISATION" means a utilisation of the Facility;
"UTILISATION DATE" means the date of a Utilisation, being
the date on which the Advance is to be
made;
"UTILISATION REQUEST" means a notice substantially in the
form set out in part 1 of schedule 4
(Utilisation Request);
"VAT" means value added tax as provided for
in the Value Added Tax Act 1994 and any
other tax of a similar nature;
"VICTORIA HOTEL" means the Charged Property listed at
paragraph 1 of schedule 2, part 1; and
"VICTORIA HOTEL PUB LEASE" means the 999 year lease dated on or
around the date of this Agreement
between Victoria London Hotel Holding
BV (1) and Victoria Pub Holding BV (2).
"VICTORIA PUB DISTRIBUTION" means any dividend or other
distribution or the repayment of any
shareholder loan made using the
proceeds arising from a sale or a
financing of the Victoria Hotel Pub
Lease or from the sale of the shares in
Victoria Pub Holding BV or dividends or
other distributions made by Victoria
Pub Holding BV;
1.2 CONSTRUCTION
1.2.1 The liquidation, winding-up or dissolution of a company or body
corporate or the appointment of a receiver, manager or administrator
of or in relation to a company or body corporate or any of its assets
shall be construed so as to include any equivalent or analogous
proceedings or, as the case may be, person under the law of the
jurisdiction in which it is incorporated or any jurisdiction in which
it carries on business or has assets or liabilities.
1.2.2 Headings in this Agreement are inserted for convenience only and
shall be ignored in construing this Agreement.
1.2.3 In this Agreement words denoting the singular number only shall
include the plural and vice versa.
27
1.2.4 Any discretion or power which may be exercised or any determination
which may be made hereunder by the Agent may (save as otherwise
provided herein) be exercised or made in its absolute and unfettered
discretion.
1.2.5 References herein to a certified copy means a copy certified as true,
complete and up-to-date by a director or the secretary of the relevant
Obligor.
1.2.6 Where any notice is to be given to the Agent that notice is to be in
writing.
1.2.7 Any obligation on any Obligor to do something shall include an
obligation to procure the same to be done and any obligation not to do
something shall include an obligation not to permit suffer or allow
the same to be done.
1.2.8 A reference to sale proceeds includes any monetary sums received or
receivable in respect of any transfer, assignment, sale, compulsory
acquisition or other transaction and shall include sums received in
respect of the grant, surrender or variation of any letting or
Agreement for Lease.
1.2.9 Each Obligor gives the undertakings expressed to be given by it in
the Finance Documents to each Finance Party and, unless otherwise
provided in this Agreement, the undertakings in this Agreement (but
without prejudice to any undertakings contained in or relating to any
other Finance Documents) will remain in force until all present and
future obligations of the Obligors under the Finance Documents have
been fully and irrevocably paid or discharged and the Total
Commitments reduced to nil.
1.2.10 References in the Finance Documents to the knowledge of any Obligor
shall be deemed to include the actual knowledge of any of the owners
of the Obligors or their shareholders (including the Equity Holders
and their representatives).
1.3 INTERPRETATION
1.3.1 Unless a contrary indication appears, any reference in this Agreement
to:
(a) the "AGENT", the "ARRANGER", any "FINANCE PARTY", any "LENDER",
any "OBLIGOR" or any "PARTY" shall be construed so as to include
its successors in title, permitted assigns and permitted
transferees;
(b) "ASSETS" includes present and future properties, revenues and
rights of every description;
28
(c) a "FINANCE DOCUMENT" or any other agreement, document or
instrument is a reference to that Finance Document or other
agreement, document or instrument as the same may have been, or
may from time to time be, amended, varied, novated or
supplemented;
(d) "INDEBTEDNESS" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of money,
whether present or future, actual or contingent;
(e) a "PERSON" includes any person, firm, company, corporation,
government, state or agency of a state or any association, trust
or partnership (whether or not having separate legal personality)
or two or more of the foregoing;
(f) a "REGULATION" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law) of
any governmental, intergovernmental or supranational body,
agency, department or regulatory, self-regulatory or other
authority or organisation;
(g) a provision of law is a reference to that provision as amended or
re-enacted;
(h) a time of day is a reference to London time; and
(i) any reference to an undertaking, obligation or liability in the
Finance Documents shall be construed as a reference to such
undertaking, obligation or liability as the same may have been,
or may from time to time be, amended, varied, novated or
supplemented.
1.3.2 Section, clause and schedule headings are for ease of reference only.
1.3.3 Unless a contrary indication appears, a term used in any other
Finance Document or in any notice given under or in connection with
any Finance Document has the same meaning in that Finance Document or
notice as in this Agreement.
1.3.4 A Default is "CONTINUING" if it has not been remedied or waived.
1.3.5 Where, for the purposes of calculating compliance with any provisions
of this agreement, any sum referred to in the calculation is expressed
in a currency other than sterling, such sum shall be converted into
sterling by applying the relevant spot rate applicable at the date of
such calculation.
29
1.3.6 Where the expression "SO FAR AS ANY PERSON IS AWARE" (or any similar
expression) is used in this Agreement and unless stated otherwise:
(a) where that person is a company the knowledge of the directors
shall be deemed to be within the knowledge of the company; and
(b) it shall be deemed to include an additional statement that the
person and (where that person is a company) the directors of that
company have made due, proper and careful enquiry.
1.3.7 Covenants, undertakings, representations and warranties and other
obligations given by, or of, more than one Borrower are joint and
several concerning those Borrowers.
1.4 THIRD PARTY RIGHTS
A person who is not a Party has no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this
Agreement unless that person is a receiver, receiver and manager or
administrative receiver appointed under any Finance Document.
1.5 DISPOSITION OF CHARGED PROPERTY
The terms of the other Finance Documents and of any side letters between
the parties to this Agreement in relation to the Finance Documents are
incorporated into each Finance Document to the extent required for any
purported disposition of a Charged Property contained in any Finance
Document to be a valid disposition in accordance with Section 2(1) of the
Law of Property (Miscellaneous Provisions) Act 1989.
2. THE FACILITY
2.1 THE FACILITY
Subject to the terms of this Agreement, the Lenders agree to make available
the Loan to the Borrowers in an amount equal to the Total Commitments.
2.2 FINANCE PARTIES' RIGHTS AND OBLIGATIONS
2.2.1 The obligations of each Finance Party under the Finance Documents are
several. Failure by a Finance Party to perform its obligations under
the Finance Documents does not affect the obligations of any other
Party under the Finance Documents. No Finance Party is responsible for
the obligations of any other Finance Party under the Finance
Documents.
30
2.2.2 The rights of each Finance Party under or in connection with the
Finance Documents are separate and independent rights and any debt
arising under the Finance Documents to a Finance Party from an Obligor
shall be a separate and independent debt.
2.2.3 A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance Documents.
2.2.4 No Lender is obliged to lend more than its Commitment.
2.3 BORROWERS' OBLIGATIONS
The obligations of the Borrowers under the Finance Document are joint and
several.
2.4 PARALLEL DEBT
2.4.1 Each of the Obligors hereby irrevocably and unconditionally
undertakes to pay to the Security Agent an amount equal to the
aggregate amount payable by such Obligor in respect of its
Corresponding Obligations as they may exist from time to time. The
payment undertaking of each Obligor to the Security Agent under this
clause 2.4.1 is hereinafter to be referred to as a "PARALLEL DEBT".
Each Parallel Debt will be payable in the currency or currencies of
the relevant Corresponding Obligations.
2.4.2 Each Parallel Debt of an Obligor will become due and payable as and
when one or more of the Corresponding Obligations of such Obligor
become due and payable.
2.4.3 Each of the parties to this Agreement hereby acknowledges that:
(a) each Parallel Debt constitutes an undertaking, obligation and
liability of the relevant Obligor to the Security Agent which is
separate and independent from, and without prejudice to, the
Corresponding Obligations; and
(b) Parallel Debt represents the Security Agent's own separate and
independent claim to receive payment of such Parallel Debt from
the relevant Obligor.
2.4.4 For the avoidance of doubt, the parties to this Agreement confirm
that in accordance with clauses 2.4.1 and 2.4.3 the claim of the
Security Agent against an Obligor in respect of a Parallel Debt and
the claims of anyone or more of the Lenders against such Obligor in
respect of the Corresponding Obligations payable by such Obligor to
such Lender(s) do not constitute common property within the meaning of
Article 3:166 of the DCC and that the provisions relating to such
common property shall not apply. If, however, it shall be held that
such claim of the Security Agent and such claims of
31
anyone or more of such Lenders do constitute common property and such
provisions do apply, the parties to this Agreement agree that this
Agreement shall constitute the administration agreement within the
meaning of Article 3:168 of the DCC.
2.4.5 To the extent the Security Agent irrevocably receives any amount in
payment of the Parallel Debt of an Obligor, the Security Agent shall
distribute such amount among the Lenders who are creditors of the
Corresponding Obligations of such Obligor in accordance with clause 29
relating to the distribution of proceeds. Upon irrevocable receipt by
a Lender of any amount so distributed to it ("RECEIVED AMOUNT"), the
Corresponding Obligations of such Obligor to the relevant Lender(s)
shall be reduced by amounts totalling an amount ("DEDUCTIBLE AMOUNT")
equal to the Received Amount in the manner as if the Deductible Amount
were received as a payment of the Corresponding Obligations on the
date of receipt by Lender of the Received Amount.
2.4.6 The Security Agent is hereby appointed by the parties hereto as
security agent with regard to the Security Documents. The parties
hereto acknowledge that the Security Agent acts in its own name and
not as agent or representative of the Lenders or any of them.
2.5 PROFESSIONAL MARKET PARTY REPRESENTATION
Each Original Lender represents and warrants to each Borrower on the date
hereof that it is a PMP.
3. USE OF THE FACILITY
3.1 PURPOSE
The Borrowers shall apply all amounts borrowed under the Facility towards
(1) the refinance of indebtedness of the Hotel Borrowers in relation to the
Charged Properties (including loans owed to shareholders and/or the payment
of a dividend or other distribution to the Equity Holders) and (2) paying
third party fees, costs and expenses incurred by the Borrowers or their
shareholders in connection with the foregoing (including legal fees,
financing fees, valuation fees, registration fees, notarial fees, hedging
costs and applicable taxes thereon).
3.2 LAWFULNESS
No part of the Facility may be used for any purpose which would result in
the provision of unlawful financial assistance or for any other unlawful
purpose.
32
3.3 MONITORING
No Finance Party is bound to monitor or verify the application of any
amount borrowed pursuant to this Agreement.
3.4 NUMBER OF ADVANCES
There shall be no more than one Advance to the Borrowers pursuant to the
terms of this Agreement, although the Finance Parties acknowledge that such
Advance may be divided between the Borrowers (without prejudice to their
joint and several liability).
4. CONDITIONS OF UTILISATION
4.1 INITIAL CONDITIONS PRECEDENT
The Borrowers may not utilise the Facility unless the Agent has received
all of the documents and other evidence listed in part 1 of schedule 3
(Conditions Precedent) in form and substance satisfactory to the Agent. The
Agent shall notify the Borrowers and the Lenders promptly upon being so
satisfied.
4.2 GENERAL CONDITIONS PRECEDENT
The Lenders will only be obliged to comply with clause 5.4 (Lenders'
participation) if on the date of the Utilisation Request and on the
proposed Utilisation Date:
4.2.1 no Default is continuing or would result from the proposed Loan;
4.2.2 the representations and warranties set out in clause 17
(Representations) to be made by each Obligor are true in all material
respects; and
4.2.3 no Commitment of any Lender has been cancelled.
5. UTILISATION
5.1 DELIVERY OF THE UTILISATION REQUEST
The Borrowers may utilise the Facility by delivery to the Agent of a single
duly completed Utilisation Request during the Availability Period not less
than five and not more than 10 Business Days before the proposed
Utilisation Date.
33
5.2 COMPLETION OF THE UTILISATION REQUEST
5.2.1 The Utilisation Request is irrevocable and will not be regarded as
having been duly completed unless:
(a) the proposed Utilisation Date is a Business Day within the
Availability Period;
(b) the amount of the Utilisation complies with clause 5.3 (Amount);
(c) the proposed Interest Period complies with clause 9 (Interest
Periods); and
(d) sufficient proof that the signatory of such Utilisation Request
is duly authorised to issue such request on behalf of the
Borrower.
5.3 AMOUNT
5.3.1 The available amount to be drawn down under the Advance shall be
limited to the lower of the sum specified by the Borrowers in writing
to the Agent in the Utilisation Request and the sum available pursuant
to the following sub-clause.
5.3.2 The sum available referred to in the preceding sub-clause shall be
the lower of:
(a) the maximum amount as shall ensure that as at the date of
drawdown the Loan would not exceed 85% of the aggregate of (a)
the Market Value of the Properties and (b) the Management
Borrower Group Value; and
(b) the maximum amount as shall ensure that following the making of
the Advance the Loan does not exceed the Total Commitments.
5.4 LENDERS' PARTICIPATION
5.4.1 If the conditions set out in this Agreement have been met, each
Lender shall make its participation in the Loan available by the
Utilisation Date through its Facility Office.
5.4.2 The amount of each Lender's participation in the Loan will be equal
to the proportion borne by its Commitment to the aggregate Commitments
of all Lenders immediately prior to making the Advance.
5.4.3 The Agent shall notify each Lender of the amount of the Advance and
the amount of its participation in that Advance by the Specified Time.
34
5.5 CANCELLATION OF UNDRAWN FACILITY
Any part of the Facility which shall not have been utilised by the close of
business on the earlier of the last Business Day of the Availability Period
and the day after the Utilisation Date shall at that time be automatically
cancelled.
6. REPAYMENT
6.1 REPAYMENT OF LOAN
Subject to clause 23 (Events of Default) and without prejudice to clause
6.3 (Amortisation), the Borrowers shall repay the Loan together with all
accrued interest and outstanding amounts owing and/or due to the Finance
Parties and the Hedge Counterparty in full on the Repayment Date.
6.2 REBORROWING
The Borrowers may not reborrow any part of the Facility which is repaid.
6.3 AMORTISATION
Starting on the first Payment Date falling after the first anniversary of
the Utilisation Date and on each Payment Date thereafter, the Borrowers
shall make quarterly repayments of principal equal to or greater than
0.375% of the Original Loan Amount, provided that:
(i) the payments made on any of the first four Payment Dates may
be less than 0.375% of the Original Loan Amount if the total
of the payments made on the first four Payment Dates is
equal to or greater than 1.5% of the Original Loan Amount;
(ii) after the first four Payment Dates a quarterly payment of
less than 0.375% of the Original Loan Amount shall not be a
breach of this clause if such payment when combined with the
three preceding quarterly payments is equal to or greater
than 1.5% of the Original Loan Amount;
(iii) the Borrowers shall notify the Agent at least five Business
Days before each Payment Date of the amortisation payment it
wishes to pay (and failing such notification the Borrowers
shall be deemed to have elected to make a payment of 0.375%
of the Original Loan Amount); and
(iv) the amortisation in any year preceding the date falling 30
months from the the date upon which the Advance is made
shall not exceed 2% unless the Agent agrees otherwise in
writing.
35
6.4 DISPOSAL OF CHARGED PROPERTIES
Notwithstanding clause 6.1 (Repayment of Loan), on any Disposal of a
Charged Property, the Net Sale Proceeds shall be applied in or towards the
following items (and, if the Net Sale Proceeds are insufficient to pay all
those items, in the following order):
(a) first, to pay any costs, fees or expenses arising under any
Finance Documents due but unpaid;
(b) secondly, amounts due (if any) under any Hedging Agreement;
(c) thirdly, to repay interest due but unpaid under this Agreement
(excluding PIK Margin);
(d) fourthly, to pay any unpaid PIK Margin (notwithstanding that it
may have been capitalised pursuant to clause 8.2 below);
(e) fifthly, to repay principal in respect of the Loan;
(f) sixthly, in payment of any other sums due but unpaid under the
Finance Documents (including for the avoidance of doubt sums due
under a Fee Letter);
(g) seventhly, as specified by the Borrowers.
6.5 TERM-OUT OPTION
The Borrowers may by notice to be received by the Agent at least 10
Business Days (and not more than one month) before the fifth anniversary of
the Utilisation Date request that the Repayment Date be extended so that it
falls on the seventh anniversary of the Utilisation Date. The request shall
be approved by the Agent on behalf of the Finance Parties if the Loan
(together with any accrued and unpaid PIK Margin not already aggregated to
the Loan and any other sums due but not paid hereunder) does not exceed 85%
of the aggregate Market Value of the Charged Properties at the date on
which the Borrowers serve notice under this clause 6.5.
7. PREPAYMENT AND CANCELLATION
7.1 ILLEGALITY
If it becomes unlawful in any applicable jurisdiction for a Lender to
perform any of its obligations as contemplated by this Agreement or to fund
or maintain its participation in the Loan:
36
7.1.1 that Lender shall promptly notify the Agent upon becoming aware of
that event;
7.1.2 upon the Agent notifying the Borrowers, the Commitment of that Lender
will be immediately cancelled; and
7.1.3 the Borrowers shall repay that Xxxxxx's participation in the Advance
made on the last day of the Interest Period for that Advance occurring
after the Agent has notified the Borrowers or, if earlier, the date
specified by the Lender in the notice delivered to the Agent (being no
earlier than the last day of any applicable grace period permitted by
law).
7.2 CHANGE OF CONTROL
If
(a) a change of Control of an Obligor occurs other than as a result
of (i) a transfer of shares in the Management Borrower from one
Equity Holder to another, (ii) a transfer of the share capital of
the Obligors to a new entity as part of carrying out a Permitted
IPO or (iii) a Permitted Reconstruction; or
(b) Xxxxx Xxxxxx (either personally or through any trust of which he
is the main beneficiary) ceases to own (directly or indirectly) a
majority of the voting share capital of the Management Borrower
(unless as a result of a transfer of shares in the Management
Borrower from one Equity Holder to another) or ceases to be
directly involved in the management of the Management Borrower
(in circumstances where no successor has assumed ownership
(directly or indirectly) or no replacement has been appointed in
either case with the consent of the Agent (which consent shall
not be unreasonably withheld or delayed)); or
(c) other than as a result of a Permitted IPO any one other than the
Equity Holders owns (directly or indirectly) any of the voting
share capital of the Obligors; or
(d) Xxxxx Xxxxxx ceases to be involved in the day to day management
of the Management Borrower Group without the prior written
consent of the Agent (which consent shall not be unreasonably
withheld or delayed), save that if Xxxxx Xxxxxx dies, retires,
resigns or otherwise ceases to be involved in the day to day
management of the Management Borrower group, the Borrower shall
not be in breach of this provision if within a reasonable period
(not being less than 6 months) a suitable replacement is
appointed in place of Xxxxx Xxxxxx with the
37
prior written consent of the Agent (which consent shall not be
unreasonably withheld or delayed):
7.2.1 the Borrowers shall promptly notify the Agent upon becoming aware of
that event;
7.2.2 the Borrowers shall procure the Obligors comply with the requirements
of the Lenders in respect of anti money laundering; and
7.2.3 if the Majority Lenders so require, the Agent shall, by not less than
30 Business Days notice to the Borrowers, cancel the Facility and
declare all of the Loan, together with accrued interest, and all other
amounts accrued under the Finance Documents immediately due and
payable, whereupon the Facility will be cancelled and all such
outstanding amounts will become immediately due and payable.
7.3 PREPAYMENT OF THE LOAN
7.3.1 No prepayment of the Loan may be made unless any accrued PIK Margin
has been paid.
7.3.2 No prepayment of the Loan is permitted prior to the date falling 30
Months after the Utilisation Date (other than as a result of a
Permitted Disposal or through the operation of clause 7.1 (Illegality)
or as otherwise expressly permitted or required under this Agreement)
if the effect of such prepayment would be to reduce the amount of the
Loan below the aggregate of the Original Loan Amount less any
amortisation payments made under clause 6.3 above. If a prepayment is
made prior to the date falling 30 Months after the Utilisation Date as
a result of a Permitted Disposal or as otherwise expressly permitted
or required under this Agreement (other than through the operation of
clause 7.1 (Illegality)), the Borrowers shall contemporaneously with
such prepayment pay to the Agent on behalf of the Finance Parties a
fee equal to the Margin of 3.00% per annum that would have been earned
on the amount prepaid from the date of prepayment to the date falling
30 Months after the Utilisation Date, such amount to be discounted to
its present value applying a discount rate equal to LIBOR for the
remainder of the period. Such fee shall be in addition to any other
fees and costs hereunder, including those referred to in clause 10.4
(Break Costs) below. For the avoidance of doubt, (i) nothing in this
clause 7.3.2 shall constitute permission for any Borrower to make a
prepayment for any reason other than a Permitted Disposal and (ii) no
amortisation payment under clause 6.3 or repayment under clause
21.2.2(f) shall be subject to any prepayment fee under this clause.
38
7.3.3 Subject to clause 7.3.1 above, at any time on or after the date
falling 30 Months after the Utilisation Date the Borrowers may by
notice to be received by the Agent six Business Days before the date
of proposed prepayment (or such shorter period as the Majority Lenders
may agree) prepay the Loan (but if in part in a minimum of L1,000,000)
provided that no Event of Default would occur if the proposed
pre-payment were made. The Borrowers must pay any fees then due and
any sums due pursuant to clause 10.4 (Break Costs) at the same time
the prepayment is made.
7.4 RIGHT OF REPAYMENT AND CANCELLATION IN RELATION TO A SINGLE LENDER
7.4.1 If:
(a) any sum payable to any Lender by an Obligor is required to be
increased under clause 12.2.3 (Tax gross-up); or
(b) any Lender claims indemnification from the Borrowers under clause
12.3 (Tax indemnity) or clause 13.1 (Increased Costs);
the Borrowers may, whilst the circumstance giving rise to the
requirement or indemnification continues, give the Agent notice of
cancellation of the Commitment of that Lender and its intention to
procure the repayment of that Xxxxxx's participation in the Loan.
7.4.2 On receipt of a valid notice referred to in clause 7.4.1 above, the
Commitment of that Lender shall immediately be reduced to zero.
7.4.3 On the last day of each Interest Period which ends after the
Borrowers have given valid notice under clause 7.4.1 above (or, if
earlier, the date specified by the Borrowers in that notice), the
Borrowers shall repay that Xxxxxx's participation in the Loan.
7.5 RESTRICTIONS
7.5.1 Any notice of cancellation or prepayment given by the Borrowers under
this clause 7 (Prepayment and cancellation) shall be irrevocable and,
unless a contrary indication appears in this Agreement, shall specify
the date or dates upon which the relevant cancellation or prepayment
is to be made and the amount of that cancellation or prepayment.
7.5.2 Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid and any fees payable under this
Agreement together with any Break Costs.
39
7.5.3 The Borrowers may not reborrow any part of the Facility which is
prepaid.
7.5.4 The Borrowers shall not repay or prepay all or any part of the Loan
or cancel all or any part of the Commitments except at the times and
in the manner expressly provided for in this Agreement.
7.5.5 No amount of the Total Commitments cancelled under this Agreement may
be subsequently reinstated.
7.5.6 If the Agent receives a notice under this clause 7 (Prepayment and
cancellation) it shall promptly forward a copy of that notice to
either the Borrowers or the affected Lender, as appropriate.
8. INTEREST
8.1 CALCULATION OF INTEREST
The rate of interest on the Loan for each Interest Period is the percentage
rate per annum which is the aggregate of the applicable:
8.1.1 Basic Margin;
8.1.2 PIK Margin;
8.1.3 LIBOR; and
8.1.4 Mandatory Cost, if any.
8.2 PAYMENT OF INTEREST
The Borrowers shall pay accrued interest on the Loan on each Payment Date,
save that such part of the interest as constitutes PIK Margin shall,
subject to the terms of this Agreement and only until 8th August 2008 be
added to the Loan on such Payment Date and the Loan treated as having
increased accordingly (including, for the avoidance of doubt, for the
purposes of calculating interest). For the avoidance of doubt the parties
acknowledge that nothing in this clause shall prevent PIK Margin which
accrued prior to 8th August 2008 being added to the Loan. The Borrowers may
on any Payment Date pay (i) any accrued and unpaid PIK Margin which has
accrued since the last Payment Date and (ii) any capitalised PIK Margin
(and any payment so made shall not constitute a prepayment for the purposes
of clause 7).
40
8.3 DEFAULT INTEREST
8.3.1 If an Obligor fails to pay any amount payable by it under a Finance
Document on its due date, interest shall accrue on the overdue amount
from the due date up to the date of actual payment (both before and
after judgment) at a rate which, subject to clause 8.3.2 below, is two
per cent (2%) higher than the rate which would have been payable if
the overdue amount had, during the period of non-payment, constituted
an Advance of the overdue amount for successive Interest Periods, each
of a duration selected by the Agent (acting reasonably). Any interest
accruing under this clause 8.3 (Default interest) shall be immediately
payable by the Obligor on demand by the Agent.
8.3.2 If any overdue amount consists of all or part of the Loan which
became due on a day which was not the last day of an Interest Period:
(a) the first Interest Period for that overdue amount shall have a
duration equal to the unexpired portion of the current Interest
Period relating to the Loan; and
(b) the rate of interest applying to the overdue amount during that
first Interest Period shall be two (2) per cent higher than the
rate which would have applied if the overdue amount had not
become due.
8.3.3 Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest Period
applicable to that overdue amount but will remain immediately due and
payable.
8.4 NOTIFICATION OF RATES OF INTEREST
The Agent shall promptly notify the Lenders and the Borrowers of the
determination of a rate of interest under this Agreement.
8.5 HEDGING AGREEMENT
8.5.1 On or before the Utilisation Date the Borrowers shall (unless agreed
otherwise by the Agent) enter into, and shall thereafter maintain, the
Hedging Agreements.
8.5.2 The Hedging Agreements referred to in clause 8.5.1 shall be (unless
agreed otherwise by the Agent):
(a) with the Hedge Counterparty;
41
(b) in aggregate for the notional principal amount of between 95% and
105% of the Loan from time to time (with a right on the part of
the Borrowers to reduce, transfer or novate the notional
principal amount should it exceed the Loan);
(c) for the period from the Utilisation Date to the Repayment Date;
(d) on the terms of the International Swaps and Derivatives
Association 1992 ISDA Master Agreement (Multicurrency Cross
Border) under which:
(a) "second method" and "market quotation" shall be
specified as the payment method applicable; and
(b) the governing law shall be English law.
8.5.3 The Hedging Agreements referred to in this clause shall (if required
by the Agent) be assigned to or otherwise secured in favour of, and in
a manner acceptable to, the Agent.
8.5.4 The Borrowers covenants that for so long as any sums are outstanding
under this Agreement and/or the Commitments are not reduced to zero it
will not terminate or close out any Hedging Agreement except:
(a) as permitted by clause 8.5.2(b) above;
(b) if it becomes illegal for it to continue to comply with its
obligations under that Hedging Agreement;
(c) if all monies, present and future, actual or contingent, pursuant
to the Finance Documents have unconditionally and irrevocably
been paid and discharged in full; or
(d) with the consent of the Agent and the other parties to the
relevant Hedging Agreement.
8.5.5 The Borrowers shall not enter into any hedging or currency management
arrangements, options or other derivative transactions other than the
Hedging Agreements without the prior written consent of the Agent,
save that the Management Borrower may enter into such arrangements or
transactions with a mark to market exposure not exceeding L5,000,000
without needing such consent.
42
9. INTEREST PERIODS
9.1 COMMENCEMENT
The first Interest Period shall commence on the Utilisation Date and end on
8 May 2006.
9.2 TERMINATION
9.2.1 If any Interest Period would end on a day which is not a Business
Day, such Interest Period shall be extended to the next Business Day
unless that would extend that Interest Period into the next following
calendar month, in which event that Interest Period shall be shortened
so as to end on the immediately preceding Business Day.
9.2.2 The last Interest Period relating to the Advance shall end on the
Repayment Date.
9.3 DURATION
Each Interest Period (other than the first) shall start on the preceding
Payment Date and end on the next Payment Date.
10. CHANGES TO THE CALCULATION OF INTEREST
10.1 ABSENCE OF QUOTATIONS
Subject to clause 10.2 (Market Disruption), if LIBOR is to be determined by
reference to the Reference Banks but a Reference Bank does not supply a
quotation by the Specified Time on the Quotation Day, the applicable LIBOR
shall be determined on the basis of the quotations of the remaining
Reference Banks.
10.2 MARKET DISRUPTION
10.2.1 If a Market Disruption Event occurs in relation to the Loan for any
Interest Period, then the rate of interest on each Lender's share of
the Loan for the Interest Period shall be the rate per annum which is
the sum of:
(a) the Margin;
(b) the rate notified to the Agent by that Xxxxxx as soon as
practicable and in any event before interest is due to be paid in
respect of that Interest Period, to be that which expresses as a
percentage rate per annum the cost to that Lender of funding its
participation in the Loan from whatever source it may reasonably
select; and
43
(c) the Mandatory Cost, if any, applicable to that Xxxxxx's
participation in the Loan.
10.2.2 In this Agreement "MARKET DISRUPTION EVENT" means:
(a) at or about noon on the Quotation Day for the relevant Interest
Period the Screen Rate is not available and none or only one of
the Reference Bank supplies a rate to the Agent to determine
LIBOR for sterling for the relevant Interest Period; or
(b) before close of business in London on the Quotation Day for the
relevant Interest Period, the Agent receives notifications from a
Lender or Lenders whose Commitments in aggregate are equal to or
exceed 50% of the Loan that the cost to it or them of obtaining
matching deposits in the Relevant Interbank Market would be in
excess of LIBOR.
10.3 ALTERNATIVE BASIS OF INTEREST OR FUNDING
10.3.1 If a Market Disruption Event occurs and the Agent or the Borrowers
so require, the Agent and the Borrowers shall enter into negotiations
(for a period of not more than thirty days) with a view to agreeing a
substitute basis for determining the rate of interest.
10.3.2 Any alternative basis agreed pursuant to clause 10.3.1 above shall,
with the prior consent of all the Lenders and the Borrowers, be
binding on all Parties.
10.3.3 If the Agent and the Borrowers are unable to agree on an alternative
basis pursuant to clause 10.3.1 the Borrowers may prepay the Loan and
in these circumstances no prepayment fee shall be payable save for
Break Costs.
10.4 BREAK COSTS
10.4.1 The Borrowers shall, within three Business Days of demand by a
Finance Party, pay to that Finance Party its Break Costs attributable
to all or any part of a Loan or Unpaid Sum being paid on a day other
than the last day of an Interest Period for that Loan or Unpaid Sum.
10.4.2 Each Lender shall, as soon as reasonably practicable after a demand
by the Agent, provide a certificate confirming the amount of its Break
Costs for any Interest Period in which they accrue and setting out in
reasonable detail the calculation of those Break Costs.
44
11. FEES
11.1 ARRANGEMENT FEE
The Borrowers shall pay to the Arranger an arrangement fee in the amount
and at the times agreed in a Fee Letter.
11.2 EXIT FEE
The Borrowers shall pay to the Arranger an exit fee in the amount and at
the times agreed in a Fee Letter.
12. TAX GROSS-UP AND INDEMNITIES
12.1 DEFINITIONS
In this Agreement:
"PROTECTED PARTY" means a Finance Party which is or will be subject to any
liability, or required to make any payment, for or on
account of Tax in relation to a sum received or
receivable (or any sum deemed for the purposes of Tax to
be received or receivable) under a Finance Document;
"TAX CONFIRMATION" means a confirmation by a Lender that the person
beneficially entitled to interest payable to that Lender
in respect of an advance under a Finance Document is
either:
(a) a company resident in the United Kingdom, or a
partnership each member of which is a company
resident in the United Kingdom, for United Kingdom
tax purposes; or
(b) a company not so resident in the United Kingdom
which carries on a trade in the United Kingdom
through a branch or agency and that interest payable
in respect of that advance falls to be brought into
account in computing the chargeable profits of that
company for the purposes of section 11(2) of the
Taxes Act;
"TAX CREDIT" means a credit against, relief or remission for, or
repayment of any
45
Tax;
"TAX DEDUCTION" means a deduction or withholding for or on account of Tax
from a payment under a Finance Document;
"TAX PAYMENT" means an increased payment made by an Obligor to a
Finance Party under clause 12.2 (Tax gross-up) or a
payment under clause 12.3 (Tax indemnity);
"TREATY LENDER" means a Lender which:
(a) is treated as a resident of a Treaty State for the
purposes of the Treaty and under the terms of the
Treaty is entitled to receive payment of that
interest (subject to the completion of any necessary
procedural formalities) without any deduction or
withholding on account of Tax; and
(b) does not carry on a business in the United Kingdom
through a permanent establishment with which that
Xxxxxx's participation in the Loan is effectively
connected.
"TREATY STATE" means a jurisdiction having a double taxation agreement
(a "TREATY") with the United Kingdom which makes
provision for full exemption from tax imposed by the
United Kingdom on interest.
"UK NON-BANK LENDER" means:
(a) where a Lender becomes a Party on the day on which
this Agreement is entered into, a Lender listed in
Schedule 1 (The Lenders); and
(b) where a Lender becomes a Party to this Agreement
after the day on which this Agreement is entered
into, a Lender which gives a Tax Confirmation in the
Transfer Certificate which it executes on becoming a
Party to this Agreement.
46
Unless a contrary indication appears, in this clause 12 (Tax Gross-up and
Indemnities) a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making the
determination.
12.2 TAX GROSS-UP
12.2.1 The Borrowers shall make all payments to be made by them without any
Tax Deduction, unless a Tax Deduction is required by law.
12.2.2 The Borrowers shall promptly upon becoming aware that a Tax
Deduction must be made (or that there is any change in the rate or the
basis of a Tax Deduction) notify the Agent accordingly. Similarly, a
Lender shall promptly notify the Agent on becoming so aware in respect
of a payment payable to that Lender. If the Agent receives such
notification from a Lender it shall promptly notify the Borrowers.
12.2.3 If a Tax Deduction is required by law to be made by a Borrower, the
amount of the payment due from the Borrowers shall be increased to an
amount which (after making any Tax Deduction) leaves an amount equal
to the payment which would have been due if no Tax Deduction had been
required.
12.2.4 The Borrowers are not required to make an increased payment to a
Lender under clause 12.2.3 above for a Tax Deduction in respect of tax
imposed by the United Kingdom from a payment of interest on a Loan, if
on the date on which the payment falls due:
(a) the payment could have been made to the relevant Lender without a
Tax Deduction if it was a Qualifying Lender, but on that date
that Lender is not or has ceased to be a Qualifying Lender other
than as a result of any change after the date it became a Lender
under this Agreement in (or in the interpretation,
administration, or application of) any law or Treaty, or any
published practice or concession of any relevant taxing
authority; or
(b)
(i) the relevant Lender is a UK Non-Bank Lender, or would have
been a UK Non-Bank Lender were it not for any change after
the date it became a Lender under this Agreement in (or in
the interpretation, administration, or application of) any
law or Treaty, or any published practice or concession of
any relevant taxing authority; and
47
(ii) the Board of the Inland Revenue has given (and not revoked)
a direction under section 349C of the Taxes Act (as that
provision has effect on the date on which the relevant
Lender became a party to this Agreement) which relates to
that payment and that Obligor has notified that UK Non-Bank
Lender of the precise terms of that notice; or
(c) the relevant Lender is a Treaty Lender and the Borrowers are able
to demonstrate, on the balance of probabilities, that the payment
could have been made to the Lender without the Tax Deduction had
that Lender complied with its obligations under clause 12.2.7
below.
12.2.5 If any of the Borrowers is required to make a Tax Deduction, that
Borrower shall make that Tax Deduction and any payment required in
connection with that Tax Deduction within the time allowed and in the
minimum amount required by law.
12.2.6 Within 30 days of making either a Tax Deduction or any payment
required in connection with that Tax Deduction, the Borrower making
that Tax Deduction shall deliver to the Agent for the Finance Party
entitled to the payment evidence reasonably satisfactory to that
Finance Party that the Tax Deduction has been made or (as applicable)
any appropriate payment paid to the relevant taxing authority.
12.2.7 Each Lender shall use its reasonable endeavours to complete as soon
as practicable any procedural formalities (including, without
limitation, applying for gross payment) which it is able to complete
which are necessary for the Borrowers to be able to make a payment to
such Lender without a Tax Deduction (or with a reduced rate of Tax
Deduction). Each Lender and the Borrowers shall co-operate by using
their reasonable endeavours to complete any procedural formalities
necessary for the Borrower to obtain authorisation to make payments to
or for the account of that Lender without Tax Deduction (or with a
reduced rate of Tax Deduction). If required, the Borrowers shall
provide evidence (as referred to in the Centre for Non-Residents DT
Guidance Note No.1 07/02) to the Lenders to support the proposition
that such payment is to be considered UK-source and that that Xxxxxxxx
has formed an intention of deducting and accounting for tax
accordingly.
12.2.8 A UK Non-Bank Lender which becomes a Party on the day on which this
Agreement is entered into gives a Tax Confirmation to the Borrowers by
entering into this Agreement.
48
12.2.9 A UK Non-Bank Lender shall promptly notify the Borrowers and the
Agent if there is any change in the position from that set out in the
Tax Confirmation.
12.2.10 Each Lender:
(a) which is a Party on the date of this Agreement confirms that it
is a Qualifying Lender, and
(b) which becomes a Party after the date of this Agreement shall
state in its Transfer Certificate (or other document by which the
relevant transfer or assignment is effected) whether it is a
Qualifying Lender or not,
and each Lender shall promptly notify the Borrower and the Agent if it
becomes aware of any change in its position.
12.3 TAX INDEMNITY
12.3.1 The Borrowers shall pay to a Protected Party an amount equal to the
loss, liability or cost which that Protected Party determines in good
faith will be or has been (directly or indirectly) suffered for or on
account of Tax by that Protected Party in respect of a Finance
Document.
12.3.2 When the Borrowers are required to pay an amount pursuant to clause
12.3.1 above, the Borrowers shall make such payment, in the case of a
loss, liability or cost which:
(a) has been suffered by a Protected Party, within three Business
Days of demand by the Agent together with a copy of a certificate
confirming that the loss, liability or cost has been suffered and
the amount thereof;
(b) will be suffered by a Protected Party, no later than five
Business Days prior to the day which the Protected Party
reasonably expects to suffer such loss, liability or cost, such
day to be notified to the Borrowers by the Agent together with a
copy of a certificate confirming the amount of such loss,
liability or cost, or within three Business Days of such
notification by the Agent, if later.
12.3.3 Clause 12.3.1 above shall not apply:
(a) with respect to any Tax assessed on a Finance Party:
(i) under the law of the jurisdiction in which that Finance
Party is incorporated or, if different, the jurisdiction (or
jurisdictions) in which that Finance Party is treated as
resident for tax purposes; or
49
(ii) under the law of the jurisdiction in which that Finance
Party's Facility Office is located in respect of amounts
received or receivable in that jurisdiction;
if that Tax is imposed on or calculated by reference to the net
income received or receivable (but not any sum deemed to be
received or receivable) by that Finance Party; or
(b) to the extent a loss, liability or cost:
(i) is compensated for by an increased payment under clause 12.2
(Tax gross-up); or
(ii) would have been compensated for by an increased payment
under clause 12.2 (Tax gross-up) but was not so compensated
solely because one of the exclusions in clause 12.2.4 (Tax
gross-up) applied.
(c) A Protected Party making, or intending to make a claim under
clause 12.3.1 above shall promptly notify the Agent of the event
which will give, or has given, rise to the claim, following which
the Agent shall notify the Borrowers.
(d) A Protected Party shall, on receiving a payment from a Borrower
under this clause 12.3 (Tax indemnity), notify the Agent.
12.4 TAX CREDIT
If a Borrower makes a Tax Payment and the relevant Finance Party determines
in good faith that:
12.4.1 a Tax Credit is attributable either to an increased payment of which
that Tax Credit forms part or to that Tax Payment; and
12.4.2 that Finance Party has obtained, utilised and retained that Tax
Credit;
the Finance Party shall pay an amount to the Borrowers which that Finance
Party determines will leave it (after that payment) in the same after-tax
position as it would have been in had the Tax Payment not been required to
be made by the Obligor.
12.5 STAMP TAXES
The Borrowers shall pay and, within three Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that
Finance Party incurs in relation to all stamp duty, registration and other
similar Tax payable in respect of any Finance Document.
50
12.6 VALUE ADDED TAX
12.6.1 All consideration expressed to be payable under a Finance Document
by any Party to a Finance Party shall be deemed to be exclusive of any
VAT. If VAT is chargeable on any supply made by any Finance Party to
any Party in connection with a Finance Document, that Party shall pay
to the Finance Party (in addition to and at the same time as paying
the consideration) an amount equal to the amount of the VAT.
12.6.2 Where a Finance Document requires any Party to reimburse a Finance
Party for any costs or expenses, that Party shall also at the same
time pay and indemnify the Finance Party against all VAT incurred by
the Finance Party in respect of the costs or expenses to the extent
that the Finance Party reasonably determines that it is not entitled
to credit or repayment of the VAT.
13. INCREASED COST INDEMNITY
13.1 INCREASED COSTS
13.1.1 Subject to clause 13.3 (Exceptions), the Borrowers shall, within
three Business Days of a demand by the Agent, pay for the account of a
Finance Party the amount of any Increased Costs incurred by that
Finance Party or any of its Affiliates as a result of
(i) the introduction of or any change in (or in the interpretation,
administration or application of) any law or regulation where
such introduction or change occurs after the later of the date of
this Agreement and the date on which such Finance Party became a
Lender or
(ii) compliance with any law or regulation made after the later of the
date of this Agreement and the date on which such Finance Party
became a Lender.
13.1.2 In this Agreement "INCREASED COSTS" means:
(a) a reduction in the rate of return from the Facility or on a
Finance Party's (or its Affiliate's) overall capital;
(b) an additional or increased cost; or
(c) a reduction of any amount due and payable under any Finance
Document;
which is incurred or suffered by a Finance Party or any of its
Affiliates to the extent that it is attributable to that Finance Party
having entered into its Commitment or funding or performing its
obligations under any Finance Document.
51
13.2 INCREASED COST CLAIMS
13.2.1 A Finance Party intending to make a claim pursuant to clause 13.1
(Increased Costs) shall notify the Agent of the event giving rise to
the claim, following which the Agent shall promptly notify the
Borrowers.
13.2.2 Each Finance Party shall, as soon as practicable after a demand by
the Agent, provide a certificate confirming the amount of its
Increased Costs and setting out the calculation thereof in reasonable
detail.
13.3 EXCEPTIONS
13.3.1 Clause 13.1 (Increased Costs) does not apply to the extent any
Increased Cost is:
(a) attributable to a Tax Deduction required by law to be made by an
Obligor;
(b) compensated for by clause 12.3 (Tax indemnity) (or would have
been compensated for under clause 12.3 (Tax indemnity) but was
not so compensated solely because one of the exclusions in clause
12.3.3 (Tax indemnity) applied);
(c) compensated for by the payment of the Mandatory Cost; or
(d) attributable to the wilful breach by the relevant Finance Party
or its Affiliates of any law or regulation.
13.3.2 In this clause 13.3 (Exceptions), a reference to a "Tax Deduction"
has the same meaning given to the term in clause 12 (Tax Gross-up and
Indemnities).
14. OTHER INDEMNITIES
14.1 CURRENCY INDEMNITY
14.1.1 If any sum due or received from an Obligor under the Finance
Documents (a "SUM"), or any order, judgment or award given or made in
relation to a Sum, has to be converted from the currency (the "FIRST
CURRENCY") in which that Sum is payable into another currency (the
"SECOND CURRENCY") for the purpose of:
(a) making or filing a claim or proof against that Obligor;
(b) obtaining or enforcing an order, judgment or award in relation to
any litigation or arbitration proceedings;
52
the Borrowers shall procure that that Obligor shall as an independent
obligation, within three Business Days of demand, indemnify each
Finance Party to whom that Sum is due against any cost, loss or
liability arising out of or as a result of the conversion including
any discrepancy between (A) the rate of exchange used to convert that
Sum from the First Currency into the Second Currency and (B) the rate
or rates of exchange available to that person at the time of its
receipt of that Sum.
14.1.2 The Borrowers on behalf of themselves and the other Obligors waive
any right they may have in any jurisdiction to pay any amount under
the Finance Documents in a currency or currency unit other than that
in which it is expressed to be payable.
14.2 OTHER INDEMNITIES
The Borrowers shall, within three Business Days of demand, indemnify each
Finance Party against any cost, loss or liability incurred by that Finance
Party as a result of:
14.2.1 the occurrence of any Event of Default;
14.2.2 a failure by an Obligor to pay any amount due under a Finance
Document on its due date, including without limitation, any cost, loss
or liability arising as a result of clause 29 (Sharing among the
Finance Parties);
14.2.3 funding, or making arrangements to fund, its participation in the
Loan requested in the Utilisation Request but not made by reason of
the operation of any one or more of the provisions of this Agreement
(other than by reason of default or negligence by that Lender alone);
or
14.2.4 the Loan (or part of the Loan) not being prepaid in accordance with
a notice of prepayment given by the Borrowers.
14.3 INDEMNITY TO THE AGENT
The Borrowers shall promptly indemnify the Agent against any cost, loss or
liability properly incurred by the Agent (acting reasonably) as a result
of:
14.3.1 investigating any event which it reasonably believes is a Default;
or
14.3.2 acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately
authorised.
53
15. MITIGATION BY THE LENDERS
15.1 MITIGATION
15.1.1 Each Finance Party shall, in consultation with the Borrowers, take
all reasonable steps to mitigate any circumstances which arise and
which would result in any amount becoming payable under or pursuant
to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause
12 (Tax Gross-up and Indemnities), clause 13 (Increased Costs) or
paragraph 3 of schedule 6 (Mandatory Cost Formula) including (but not
limited to) transferring its rights and obligations under the Finance
Documents to another Affiliate or Facility Office.
15.1.2 Clause 15.1.1 above does not in any way limit the obligations of any
Obligor under the Finance Documents.
15.2 LIMITATION OF LIABILITY
15.2.1 The Borrowers shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of
steps taken by it under this clause 15 (Mitigation by the Lenders).
15.2.2 A Finance Party is not obliged to take any steps under this clause
15 (Mitigation by the Lenders) if, in the opinion of that Finance
Party (acting reasonably), to do so might be prejudicial to it.
16. COSTS AND EXPENSES
16.1 TRANSACTION EXPENSES
The Borrowers shall promptly on demand pay the Agent and the Arranger the
amount of all costs and expenses (including legal fees) reasonably incurred
by any of them in connection with the negotiation, preparation, printing
and execution of:
16.1.1 this Agreement and any other documents referred to in this
Agreement; and
16.1.2 any other Finance Documents executed after the date of this
Agreement;
including (for the avoidance of doubt) legal, accounting and valuation
fees, structural, mechanical, electrical and environmental survey fees and
other fees incurred in relation to due diligence enquiries and in verifying
satisfaction of the conditions precedent to the Utilisation, including (for
the avoidance of doubt) fees incurred by the Agent and the Arranger in
relation to negotiations with the Xxxxxxxxxx Group and all or some of the
Borrowers for a loan facility
54
which were terminated before the date of this Agreement. If the Agent
and/or the Arranger so require, the fees referred to in this clause 16.1
will be settled direct by the Borrowers by way of payment direct to the
relevant person charging such fees.
16.2 AMENDMENT COSTS
If (a) an Obligor requests an amendment, waiver or consent or (b) an
amendment is required pursuant to clause 30.9 (Change of currency), the
Borrowers shall, within three Business Days of demand, reimburse the Agent
for the amount of all costs and expenses (including legal fees) reasonably
incurred by the Agent in responding to, evaluating, negotiating or
complying with that request or requirement.
16.3 ENFORCEMENT COSTS
The Borrowers shall, within three Business Days of demand, pay to each
Finance Party the amount of all costs and expenses (including legal fees)
properly incurred by that Finance Party in connection with the enforcement
of, or the preservation of any rights under any Finance Document.
17. REPRESENTATIONS
Each of the Hotel Borrowers makes the representations and warranties set
out in this clause 17 (Representations) to each Finance Party, in respect
of each of themselves (save for clause 17.28) and (save for clauses 17.2,
17.12.1, 17.13, 17.14, 17.22, 17.23, 17.25, 17.26, 17.27 and 17.28) each
Obligor.
The Management Borrower makes the representations and warranties set out in
this clause 17 (Representations) (save for clauses 17.2, 17.12.1, 17.13,
17.14, 17.22, 17.23 and 17.25) to each Finance Party.
17.1 STATUS
17.1.1 It is a corporation, duly incorporated and validly existing under
the law of its jurisdiction of incorporation.
17.1.2 It has the power to own its assets and carry on its business as it
is being conducted.
17.2 CENTRE OF MAIN INTERESTS
17.2.1 Its centre of main interests for the purposes of Council Regulation
(EC) No 1346/2000 is in the United Kingdom or the Netherlands or (in
the case of the UK Operating Companies, the United Kingdom.
55
17.2.2 It does not have an establishment for the purposes of Council
Regulation (EC) No 1346/2000 in any other jurisdiction.
17.3 BINDING OBLIGATIONS
Subject to the Reservations, the obligations expressed to be assumed by it
in each Finance Document are legal, valid, binding and enforceable
obligations.
17.4 NON-CONFLICT WITH OTHER OBLIGATIONS
The entry into and performance by it of, and the transactions contemplated
by, the Finance Documents do not and will not conflict with:
17.4.1 any law or regulation applicable to it;
17.4.2 its constitutional documents; or
17.4.3 any agreement or instrument binding upon it or any of its assets.
17.5 POWER AND AUTHORITY
It has the power to enter into, perform and deliver, and has taken all
necessary action to authorise its entry into, performance and delivery of,
the Finance Documents to which it is a party and the transactions
contemplated by those Finance Documents.
17.6 VALIDITY AND ADMISSIBILITY IN EVIDENCE
All Authorisations required:
17.6.1 to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents to which it is a party;
and
17.6.2 to make the Finance Documents to which it is a party admissible in
evidence in its jurisdiction of incorporation;
have been obtained or effected and are in full force and effect.
17.7 DEDUCTION OF TAX
It is not required under the law of its jurisdiction of incorporation or
elsewhere to make any deduction for or on account of Tax from any payment
it may make to a Finance Party which is a Qualifying Lender under any
Finance Document entered into on or before the Utilisation Date.
56
17.8 NO DEFAULT
17.8.1 No Event of Default is continuing or might reasonably be expected to
be likely to result from the making of the Utilisation.
17.8.2 No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on it
or to which its assets are subject which might reasonably be expected
to be likely to have a Material Adverse Effect.
17.9 ENCUMBRANCES AND INDEBTEDNESS
17.9.1 No charges or other encumbrances in the nature of Security exist on
the assets of the Borrowers other than any Permitted Encumbrances.
17.9.2 The Borrowers have not incurred or permitted to subsist any
Financial Indebtedness other than Permitted Indebtedness.
17.10 NO UNDISCLOSED FACTS AND BASIS OF FINANCIAL INFORMATION
17.10.1 All information disclosed in writing by any Obligor contained in
the information folders disclosed to X X Xxxxxx by Xxxxxx Xxxxxxxx
Xxxxxxx or on the Obligors' behalf by one of its other confirmed
professional advisers to the Agent, its solicitors or to the Approved
Valuers was true in all material respects at the date (if any)
ascribed thereto, no written information provided by it or on its
behalf by one of its confirmed professional advisers was misleading in
any material respect or omitted any matter failure to disclose which
would result in any such information being misleading in any material
respect in the context of the Finance Documents and to the best of its
knowledge and belief, having made due enquiries, nothing has occurred
since the date such information was so provided which renders the
information contained in it untrue or misleading in any material
respect and which if disclosed would reasonably be expected to
materially and adversely affect the decision of the Finance Parties to
provide the Facility to the Borrowers or the terms on which the
Facility might be provided.
17.10.2 All financial statements delivered by an Obligor pursuant to clause
4.1 (Initial conditions precedent) and clause 18.1 (Financial
statements):
(a) fairly represented the financial condition of that Xxxxxxx as at
the date when such financial statements were drawn up;
(b) were drawn up in compliance with clauses 18.3.2 and 18.3.3.
57
17.10.3 There has been no material adverse change in the business or
financial condition of the Borrowers (taken as a whole) since the date
of the financial statements delivered pursuant to clause 4.1 (Initial
conditions precedent).
17.11 REGISTRATIONS AND LICENCES
It holds and/or is in compliance in all material respects with all material
registrations, licences, permits, consents or other authorisations and all
applicable laws and regulations necessary for the conduct of its business
as it is currently carried on (including those relevant to the running of
hotel businesses at the Charged Properties) save that in the case of the
Management Borrower this clause shall only apply to the extent that (a) the
Management Borrower is aware of such breach after reasonable enquiry and
(b) such breach would have a Material Adverse Effect.
17.12 TITLE TO ASSETS
Save as disclosed in the reports on title referred to in paragraph 6.1 of
Schedule 3 (Conditions Precedent) the Hotel Borrowers have a good and
marketable title to each of the Charged Properties.
17.13 DANGEROUS SUBSTANCES
To the best of its knowledge, information or belief no dangerous substance
has been used, disposed of, generated, stored, dumped, released, deposited,
buried or emitted at, on, from or under any Charged Property or any
premises thereon.
17.14 HEADLEASES
Each party to the Headleases has complied in all material respects with its
obligations thereunder and the Hotel Borrowers are not aware of any
circumstances that exist which will or may breach any Headlease.
17.15 REGISTRATIONS
It is not necessary or advisable that any Finance Document (save for
presentation pursuant to section 395 of the Companies Act 1985 or the
Slavenburg interpretation thereof or registration at the Land Registry) be
filed, registered, recorded or enrolled with any court, public office or
other authority in any jurisdiction or that any stamp, documentary,
registration or similar tax or duty be paid on or in relation to any
Finance Document.
58
17.16 PARI PASSU RANKING
Its payment obligations under the Finance Documents rank at least pari
passu with the claims of all its other unsecured and unsubordinated
creditors, except for obligations mandatorily preferred by law applying to
companies generally.
17.17 NO PROCEEDINGS PENDING OR THREATENED
No litigation, arbitration or administrative proceedings of or before any
court, arbitral body or agency which, if adversely determined, might
reasonably be expected to have a Material Adverse Effect have (to the best
of its knowledge and belief) been started or threatened against its assets
or undertaking.
17.18 NO IMMUNITY
Neither it nor any of its assets is entitled to immunity on the grounds of
sovereignty or otherwise from any legal action or proceeding (which shall
include, without limitation, suit, attachment prior to judgment, execution
or other enforcement).
17.19 NO WITHHOLDING TAX
No Tax is imposed on or by virtue of the execution or delivery by it of any
such Finance Document or any document or instrument to be executed or
delivered under those Finance Documents except stamp duty (if any) payable
in respect of any charge or pledge taken over shares as part of the
Security Documents.
17.20 SECURITY
Subject to the Reservations and to registration at the Land Registry each
Security Document to which it is a party creates the Security it purports
to create over the assets referred to in such document and that Security is
not:
17.20.1 subject to any prior or pari passu Security; and
17.20.2 liable to avoidance on liquidation, bankruptcy, composition or any
similar insolvency proceedings other than:
(a) in accordance with usual provisions relating to "suspect
periods"; or
(b) if not registered within the applicable time periods.
59
17.21 TAX RESIDENCE
It is not resident for Tax purposes (whether by reason of its place of
management and control or any other reason) in any jurisdiction other than
its jurisdiction of incorporation.
17.22 VAT
Each of the UK Operating Companies is registered for value added tax in all
appropriate jurisdictions and prior to the Utilisation Date each of the
Hotel Borrowers and their respective Subsidiaries has or will have (where
relevant) elected to waive exemption under paragraph 2(1) of schedule 10 to
the Value Added Tax Act 1994 in respect of the Charged Property.
17.23 NO AGENCY
The Borrowers are acting as principal and for their own account in relation
to the Finance Documents and are not acting as agent or trustee or in any
other capacity on behalf of any third party.
17.24 SUBSIDIARIES
The Borrowers have only the Subsidiaries shown in Schedule 2.
17.25 FABRIC OF PROPERTY
To the best of the Borrower's knowledge, having made due enquiries, the
Properties have no material structural defects and do not require material
structure repair which would materially affect the value of the Properties
as a whole.
17.26 DUTCH BANKING ACT
The Borrowers act in compliance in all material respects with the Dutch
Banking Act and any regulations issued pursuant thereto (including, but not
limited to, the Policy Guidelines and Exemption Regulation).
17.27 DUTCH TAX STATUS
Neither a notice under Section 36 of the Tax Collection Act
(Invorderingswet 1990) nor under Section 16d of the Social Insurance
Coordination Act (Coodinatiewet Sociale Verzekeringen) has been given by or
on behalf of the Borrowers.
17.28 PENSIONS
The Management Borrower does not have any defined benefit schemes under
Dutch GAAP.
60
17.29 CORPORATE STRUCTURE
17.29.1 Subject to any Permitted Reconstruction and/or a Permitted IPO the
Hotel Borrowers are owned, and have Subsidiaries, as set out in Part 1
of Schedule 10.
17.29.2 Subject to any Permitted Reconstruction and/or a Permitted IPO
and/or a transfer of shares in the Management Borrower permitted by
clause 7.2(b) the Management Borrower is owned, and has Subsidiaries,
as set out in Part 2 of Schedule 10.
17.30 REPETITION
The warranties and representations in this clause 17 (other than in
sub-clauses 17.7, 17.10.1, 17.15 and 17.24) are deemed to be made by each
Borrower (save as otherwise stated) by reference to the facts and
circumstances then existing on the date of this Agreement, the Utilisation
Request, the Utilisation Date and the first day of each Interest Period.
18. INFORMATION UNDERTAKINGS
The undertakings in this clause 18 (Information undertakings) remain in
force from the date of this Agreement for so long as any amount is
outstanding under the Finance Documents or any Commitment is in force.
18.1 FINANCIAL STATEMENTS
The Borrowers shall ensure that each Obligor shall supply to the Agent in
sufficient copies for all the Lenders as soon as the same become available,
but in any event within 120 days after the end of each of its financial
years its audited financial statements for that financial year.
18.2 COMPLIANCE CERTIFICATE
18.2.1 The Borrowers shall supply to the Agent, on each Payment Date, a
Compliance Certificate setting out (in reasonable detail) computations
as to compliance with clause 19 (Financial covenants) as at the date
as at which those financial statements were drawn up.
18.2.2 Each Compliance Certificate shall be signed by a director of the
Borrowers.
18.3 REQUIREMENTS AS TO FINANCIAL STATEMENTS
18.3.1 Each set of financial statements delivered pursuant to clause 4.1
(Initial conditions precedent) or clause 18.1 (Financial statements)
shall be certified by a director of the
61
relevant company as fairly representing its financial condition as at
the date as at which those financial statements were drawn up.
18.3.2 The Borrowers shall procure that each set of financial statements
delivered pursuant to 4.1 (Initial conditions precedent) or clause
18.1 (Financial statements) is prepared using GAAP or IFRS.
18.3.3 The Borrowers shall procure that each set of financial statements of
an Obligor delivered pursuant to 4.1 (Initial conditions precedent) or
clause 18.1 (Financial statements) is prepared using GAAP or IFRS,
accounting practices and financial reference periods consistent with
those approved by the Agent for that Obligor unless, in relation to
any set of financial statements, it notifies the Agent that there has
been a change in GAAP or IFRS, the accounting practices or reference
periods and its auditors (or, if appropriate, the auditors of the
Obligor) deliver to the Agent:
(a) a description of any change necessary for those financial
statements to reflect the GAAP or IFRS accounting practices and
reference periods upon which that Xxxxxxx's financial statements
were previously prepared; and
(b) sufficient information, in form and substance as may be
reasonably required by the Agent, to enable the Lenders to
determine whether clause 19 (Financial Covenants) has been
complied with and make an accurate comparison between the
financial position indicated in those financial statements and
that Xxxxxxx's financial statements previously delivered.
Any reference in this Agreement to those financial statements shall be
construed as a reference to those financial statements as adjusted to
reflect the basis upon which prior financial statements were prepared.
18.4 TAX INFORMATION
The Borrowers shall supply to the Agent:
18.4.1 upon request by the Agent (and to the extent not already supplied as
part of other information provided pursuant to this Agreement),
details of Tax projected to be payable by the Borrowers during the
year following the Agent's request;
18.4.2 computations showing the Tax payable by the Borrowers as soon as the
same become available but in any event within 13 months after the end
of its financial year;
62
18.4.3 promptly upon receiving the same, copies of any demands issued to
any Borrower by a relevant tax authority in the jurisdiction of tax
residence of such Borrower or in the United Kingdom; and
18.4.4 promptly upon becoming aware of the same, full details of any
investigation being made into the tax affairs of any Obligor where the
outcome of such investigation may have a Material Adverse Effect.
18.5 BUDGETS AND PLANS
18.5.1 The Borrowers will no later than the end of each of their financial
years submit to the Agent (in sufficient copies for all the Lenders,
if the Agent so requests) a copy of their draft capital and operating
budget (or such other budget as is appropriate for the business in
which they or their Subsidiaries are engaged) for the following
financial year for approval by the Agent (acting reasonably in the
context of the Facility). Such budget shall show consolidated
aggregated figures for the Borrowers and the UK Operating Companies as
well as individual breakdowns of those figures between each Borrower
and each UK Operating Company. The Agent will advise the Borrowers as
soon as reasonably practicable whether such budget is approved.
18.5.2 In the event that the budget is not approved the Agent and the
Borrowers will consult each other and use reasonable endeavours to
agree a revised budget.
18.5.3 If during the financial year to which such budget relates any
expenditure is incurred which deviates by more than 10% from the
amount in respect of such expenditure which is provided for in the
budget the Borrowers will promptly notify the Agent and will, if
required by the Agent, provide an explanation for such deviation.
18.5.4 The Borrowers will within one month of the end of each financial
quarter provide the Agent with quarterly updates showing actual
expenditure against budgeted expenditure.
18.5.5 At the same time as submitting budgets to the Agent in accordance
with clause 18.5.1 above the Borrowers will produce a financial plan
for the three years following the budget period.
18.6 MANAGEMENT ACCOUNTS
The Borrowers shall procure that no more than ten Business Days before each
Payment Date there are provided to the Agent (in sufficient copies for all
the Lenders, if the Agent so requests) management accounts for each of the
UK Operating Companies and the Hotel Borrowers and
63
consolidated management accounts for the Management Borrower Group. Such
accounts shall include the information described in the pro forma
management accounts shown in Schedule 9 and shall be done on both a
separate basis per Charged Property and on a combined basis.
18.7 INFORMATION: MISCELLANEOUS
The Borrowers shall ensure that each Obligor shall supply to the Agent (in
sufficient copies for all the Lenders, if the Agent so requests):
18.7.1 all documents dispatched by that Obligor to its shareholders (or any
class of them) or its creditors generally at the same time as they are
dispatched; and
18.7.2 promptly upon becoming aware of them, the details of any litigation,
arbitration or administrative proceedings which are current,
threatened or pending against that Obligor, and which if adversely
determined, might reasonably be expected to have a Material Adverse
Effect; and
18.7.3 promptly, such further information regarding the financial
condition, business and operations of that Obligor as any Finance
Party (through the Agent) may reasonably request.
18.8 NOTIFICATION OF DEFAULT
18.8.1 The Borrowers shall notify the Agent of any Default (and the steps,
if any, being taken to remedy it) promptly upon becoming aware of its
occurrence.
18.8.2 Promptly upon a request by the Agent, the Borrowers shall supply to
the Agent a certificate signed by a director or senior officer on its
behalf certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being taken
to remedy it).
19. FINANCIAL COVENANTS
19.1 DEBT SERVICE TEST
19.1.1 The Borrowers undertake that with effect from the Utilisation Date
the ratio of the aggregate of Net Operating Income and Management
Borrower Operating Income to Debt Service shall be no less than 1.05
on any two consecutive Payment Dates.
19.1.2 Subject to clause 19.1.3 below the ratio referred to in clause
19.1.1 will be tested quarterly on each Payment Date by reference to:
64
(a) Net Operating Income and Management Borrower Operating Income for
the four financial quarters ending before the Payment Date; and
(b) Debt Service for the three months preceding the Payment Date,
multiplied by four.
19.1.3 For the first full financial year following the date of this
Agreement, the ratio referred to in clause 19.1.1 will be tested
quarterly on each Payment Date after and including 8th August 2006 by
reference to:
(a) Net Operating Income and Management Borrower Operating Income for
each completed financial quarter since the date of this
Agreement; and
(b) Debt Service for the three months following the Payment Date,
multiplied by the number of completed financial quarters referred
to in (a).
19.1.4 Breach of clauses 19.1.1 to 19.1.3 shall not be an Event of Default
if:
(a) the ratio is greater than 0.95; and
(b) the Borrowers procure that sufficient funds are placed into the
Service Account on or before the relevant Payment Date to ensure
that the ratio (when measured to include such contribution as Net
Operating Income) is at least 1.05;
provided that the Borrowers may only make such contributions on three
occasions (and no more than two of those may be consecutive) during
the five years following the Utilisation Date and not at all
thereafter.
19.2 CASH TRAP
19.2.1 In the event that the ratio of Net Operating Income and Management
Borrower Operating Income to Debt Service as calculated under clause
19.1 is below 1.40 on two consecutive Payment Dates, then a Cash Trap
Event will be deemed to have occurred and shall be deemed to be
continuing until such time as two consecutive Payment Dates have
passed on which the calculation under clause 19.1 demonstrates that
Net Operating Income to Debt Service exceeds 1.40.
19.2.2 For the first two Payment Dates after the date of this Agreement a
Cash Trap Event will be deemed to have occurred unless and until
management accounts have been produced pursuant to clause 18.6 which
demonstrate that the ratio of Net Operating Income and Management
Borrower Operating Income to Debt Service as calculated under clause
19.1 is below 1.40 on those two Payment Dates.
65
20. GENERAL UNDERTAKINGS
The undertakings in this clause 20 (General Undertakings) remain in force
from the date of this Agreement for so long as any amount is outstanding
under the Finance Documents or any Commitment is in force.
20.1 AUTHORISATIONS
Each Borrower shall promptly:
20.1.1 obtain, comply with in all material respects and do all that is
necessary to maintain in full force and effect; and
20.1.2 supply certified copies to the Agent upon demand of;
any Authorisation required under any law or regulation of its jurisdiction
of incorporation to enable it to perform in all material respects its
obligations (i) under the Finance Documents and (ii) to ensure the
legality, validity, enforceability or admissibility in evidence in its
jurisdiction of incorporation of any Finance Document and (iii) under the
Material Contracts.
20.2 COMPLIANCE WITH LAWS
Each Borrower shall comply in all material respects with all laws which
pertain to its business in the jurisdiction in which it is established or
in which it carries on its business.
20.3 NEGATIVE PLEDGE
20.3.1 The Borrowers shall not create or permit to subsist any Security
over any of their assets, save for Permitted Encumbrances.
20.3.2 Save for Permitted Encumbrances, the Borrowers shall not:
(a) sell, transfer or otherwise dispose of any of their assets on
terms whereby they are or may be leased to or re-acquired by the
Borrowers;
(b) sell, transfer or otherwise dispose of any of their receivables
on recourse terms;
(c) enter into any arrangement under which money or the benefit of a
bank or other account may be applied, set-off or made subject to
a combination of accounts other than set-off arising by law or by
the terms of a bank mandate; or
(d) enter into any other preferential arrangement having a similar
effect;
66
in circumstances where the arrangement or transaction is entered into
primarily as a method of raising Financial Indebtedness or of
financing the acquisition of an asset.
20.4 INDEBTEDNESS
The Borrowers shall not incur or permit to subsist any Financial
Indebtedness other than Permitted Indebtedness and for the avoidance of
doubt shall not enter into any derivatives transactions other than in the
proper and prudent management of (a) their obligations in respect of
interest on the Loan and (b) risks of fluctuation in value of the
currencies in which the business of the Borrowers (and any Subsidiaries) is
conducted except for any hedging arrangement entered into in accordance
with clause 8.5.5.
20.5 DISPOSALS
Subject to clause 2 of schedule 5, the Hotel Borrowers and the UK Operating
Companies shall not) whether by a single transaction or a series of
transactions (whether related or not) and whether voluntary or involuntary,
make any Disposal without the prior written consent of the Agent, save that
this clause shall not apply to disposals of assets (other than the Charged
Properties) in the ordinary course of business and on arms' length terms
where the consideration received in relation to the proposed Disposal does
not exceed L250,000 or the disposal of assets which have come to the end of
their useful economic life. The Management Borrower shall not make any
Disposals which have a Material Adverse Effect without the prior written
consent of the Agent but shall otherwise be free to make Disposals.
20.6 MERGER AND FORMATION OF JOINT ARRANGEMENTS
The Borrowers shall not enter into any amalgamation, demerger, merger or
corporate reconstruction other than a Permitted Reconstruction, a Permitted
IPO or a transfer of the share capital of an Obligor from one Equity Holder
to another.
20.7 CHANGE OF BUSINESS
The Hotel Borrowers shall only carry on the business of ownership and
management of the Charged Properties and shall procure that no material
change is made to its business as a whole from that carried on at the date
of this Agreement (or as described in the Initial Business Plan) without
the consent of the Agent and the Management Borrower Group shall not give
up its core businesses of hotel management, franchising or similar
arrangements,.
67
20.8 MAKING OF LOANS
The Borrowers shall not make any loans, grant any credit or give any
guarantee to or for the benefit of any person except
(a) in the ordinary and usual course of its operations; or
(b) with the written consent of the Agent, acting reasonably in the
context of the Facility; or
(c) any guarantee arising under a declaration of joint and several
liability used for the purpose of Article 2:403 of the DCC (and
any residual liability under such declaration arising pursuant to
Article 2:404(2) of the DCC);
(d) to another Obligor.
20.9 ARM'S-LENGTH TRANSACTION
The Hotel Borrowers shall not enter into any transaction with any person
other than on arm's-length commercial terms in the ordinary course of its
business.
20.10 ACQUISITION
The Hotel Borrowers shall not, except with the prior written consent of the
Agent, make any acquisition or form any partnership, joint venture or
Subsidiary (other than those existing at the date of this Agreement).
20.11 DECLARING OF DIVIDENDS
The Borrowers shall not (except for any Victoria Pub Distribution):
20.11.1 make, pay or declare any dividend;
20.11.2 pay any interest on any unpaid dividend;
20.11.3 make any other distribution, fee, charge or payment in relation to
its share capital;
20.11.4 make any payment in respect of the Loan Notes (save for (i) any
repayment of Loan Notes and/or payment of dividends made on the
Utilisation Date as contemplated by clause 3.1 and (ii) any repayment
of Loan Notes representing a payment of head office expenses incurred
in the running of the business (which are materially in line with
budget expectations) due from the relevant Obligor to the Loan Note
holder)
68
(whether in cash or in kind) in each case without the prior written consent
of the Agent unless (a) no Default or Cash Trap Event has occurred and (b)
any arrears of interest by way of PIK Margin have been paid to the Lenders,
in which case the Borrowers shall be free to make any such distribution.
20.12 CHARGED PROPERTY
The Hotel Borrowers shall comply or procure compliance with the covenants
and obligations set out in schedule 5 (Charged Property covenants).
20.13 CENTRE OF MAIN INTERESTS / HEAD OFFICE
20.13.1 The Borrowers shall not permit their place of principal management
and their centre of main interests for the purposes of Council
Regulation (EC) No 1346/2000 to be in any jurisdiction other than in
The Netherlands or the UK (or, in the case of the Management
Borrowers, the Netherlands, the UK or Germany).
20.13.2 The Borrowers shall not permit to exist an establishment for the
purposes of Council Regulation (EC) No 1346/2000 in any other
jurisdiction.
20.13.3 None of the Borrowers shall change the jurisdiction of their head
office without the prior written consent of the Agent.
20.14 CONSTITUTION
No Obligor shall make any change to its constitutional documents including
without limitation its memorandum and articles of association and no
Obligor shall make any change to its constitutional documents, share
capital and/or change its name without the prior written consent of the
Agent (save that such consent shall not be required if the change in
question does not materially and adversely affect the interests of the
Lenders under the Finance Documents).
20.15 MATERIAL CONTRACTS
20.15.1 The Borrowers shall not (and shall procure that the UK Operating
Companies shall not) enter into any new Material Contracts, nor
materially waive, amend, vary or release any obligations of any party
to Material Contracts or by any act or omission disentitle itself from
being able to enforce completion of the Material Contracts without in
each case obtaining the prior written consent of the Agent, provided
that such consent shall not be unreasonably withheld or delayed and
further provided that the Management Borrower shall be free to enter
into territorial licence agreements and franchise
69
agreements in accordance with the Master Territorial Licence Agreement
if these do not adversely affect the business of the hotels carried on
at the Charged Properties.
20.15.2 The Borrowers shall take all steps reasonably available (including
proceedings) to enforce the performance of all the material
obligations of each counterparty at the time(s) when those obligations
are required to be performed under the Material Contracts and in any
event upon written demand by the Agent.
20.15.3 The Borrowers shall notify the Agent in writing promptly upon
becoming aware of any material breach either by the Borrowers or any
counterparty of the terms of any Material Contract if such breach
might reasonably be expected to have a Material Adverse Effect.
20.16 CAPITAL EXPENDITURE
The Borrowers shall not (and shall procure that the UK Operating Companies
shall not) without the consent of the Agent enter into any commitment in
respect of capital expenditure if it is materially in excess of what has
been provided for in an annual capital and operating budget approved by the
Agent (and for these purposes "materially" shall mean more than 10% in
aggregate), provided that this clause shall not affect the Management
Borrower unless the commitment in question would be reasonably likely to
have a Material Adverse Effect.
20.17 CONDITION PRECEDENT DOCUMENTS
Subject to the proviso to clause 20.15.1, the Borrowers shall not without
the consent of the Agent vary, waive, terminate or amend any document
supplied in satisfaction of the conditions contained in schedule 3
(Conditions Precedent).
20.18 MONEY LAUNDERING REQUIREMENTS
The Borrowers shall comply with such requirements and supply such
information as the Agent may require so as to procure compliance by the
Finance Parties and the Obligors with all applicable anti-money laundering
legislation and regulations.
20.19 TAX UNDERTAKINGS
20.19.1 The Hotel Borrowers shall not:
(a) carry on any trade or business other than the ownership and
management of the Charged Properties owned as at the date of this
Agreement (in the case of the
70
Hotel Borrowers) and the management of leased and /or franchised
hotels (in the case of the Management Borrower);
(b) surrender any tax losses available to them.
20.19.2 The Borrowers shall claim all capital allowances and utilise all
tax losses available to them to the extent required to shelter any
taxable profit before capital allowances and utilising tax losses in a
given period.
20.19.3 The Borrowers shall ensure that their Dutch income tax returns for
the fiscal years 2004 and 2005 are filed by the earlier of (i) the
dates required under Dutch tax law and (ii) 30th September 2006, and
in any event they shall procure that such returns are based on final
and annual accounts approved by relevant shareholders' meetings.
20.20 LOAN CAPITALISATION
As soon as reasonably practicable after the date of this agreement and in
any event within six months the Borrowers shall enter into a loan
capitalisation or other structure approved by the Agent (acting reasonably)
which ensures that the debt: equity ratio of the Borrowers should be
reduced to below the level provided by the Dutch tax authorities for
interest deductibility (3:1 as at the date of this agreement) and shall
provide evidence to the Agent of such loan capitalisation or other
structure. The Obligors shall not be in breach of any Finance Document, nor
require any further consents under the Finance Documents, in taking such
steps.
20.21 FRANCHISE AGREEMENTS, BRANDING AGREEMENTS AND SUB-LICENCE AGREEMENT
The Hotel Borrowers and the UK Operating Companies shall not enter into a
franchise agreement, branding agreement or sub-licence agreement in each
case affecting the Charged Properties, nor make any material change to an
existing franchise agreement, branding agreement or sub-licence agreement,
without the prior written consent of the Agent, which consent shall not be
unreasonably withheld, and the Borrowers shall in any event notify the
Agent in advance of any new franchise agreements or branding agreements (or
any changes to existing agreements). In any event, none of the Borrowers
shall enter into any agreement or make any changes to existing agreements
where to do so would be in breach of the Master Territorial Licence
Agreement.
Notwithstanding the foregoing, the Management Borrower shall be free to
enter into and amend territorial licence agreements and franchise
agreements in accordance with the Master Territorial Licence Agreement if
to do so would (a) not be in breach of the Master Territorial Licence
71
Agreement and (b) not adversely affect the business of the hotels carried
on at the Charged Properties.
20.22 MANAGEMENT AGREEMENTS
20.22.1 The Hotel Borrowers and the UK Operating Companies shall not agree
to any amendment of the Management Agreements or the appointment of a
new manager of any of the Charged Properties without the prior written
consent of the Agent, which consent shall not be unreasonably withheld
if (a) the Agent, acting reasonably, considers such amendment is
unlikely to have a material effect upon the ability of the Obligors to
meet their obligations under the Finance Documents or (b) such
amendment or appointment is required to ensure compliance with the
Park Plaza franchise system or other requirements of Park Global
Holdings Inc (as owner of the Park Plaza franchise system).
20.22.2 The Borrowers shall promptly notify the Agent upon becoming aware
of any material breach of the Management Agreements.
20.23 KEY MAN LIFE ASSURANCE
The Borrowers shall procure that there is maintained key man life assurance
in respect of Xxxxx Xxxxxx in an amount of at least L5,000,000 unless such
life assurance cannot be purchased for a monthly premium of less than
L4,000, in which case within 45 days of the date of the relevant
notification from the insurer the Borrowers will nominate a person who
would be a successor to Xxxxx Xxxxxx who is approved by the Agent (such
approval not to be unreasonably withheld or delayed)
20.24 LOAN NOTES
The Borrowers shall not permit any amendment to the Loan Notes such that
the obligations thereunder are increased in any material respect without
the prior written consent of the Agent.
The Obligors shall be free to enter into any documents required to complete
a Permitted Loan Note Transfer and at the request and cost of the Obligors,
the Agent shall release any party which has transferred or novated its
interest in the Loan Notes as a result of a Permitted Loan Note Transfer
from its obligations to the Agent in respect of such Loan Notes under the
deed of subordination entered into by it in accordance with this agreement.
72
20.25 FINANCING OF WORKS AT THE RIVERBANK HOTEL
In the event that the Hotel Borrowers decide to extend the Riverbank Hotel
then (without limiting any other provision of this Agreement) the Hotel
Borrowers shall allow the Lenders the right of first offer to finance such
extension works. Such right shall not impose any commitment on the Lenders
to make any finance available or on the Hotel Borrowers to borrow from the
Lenders and nothing herein shall be construed as permitting the Hotel
Borrowers to incur indebtedness in respect of the financing of such works
with a party other than the Lenders,
20.26 MANAGEMENT FEES
Within twelve months of the date of this Agreement the Borrowers will
procure that the Management Agreements (and, where relevant, those other
management agreements to which the Management Borrower is a party) are
amended to the extent required to ensure that the cashflow figures assumed
for the purposes of the financial due diligence report referred to in
Schedule 3 paragraph 2.5 are consistent with the payment obligations set
out in such agreements. Such amendments, if consistent with the foregoing,
shall not require the consent of the Agent.
21. BANK ACCOUNTS
21.1 DESIGNATION OF ACCOUNTS
The Borrowers shall procure that the following accounts are opened and
maintained at the Account Banks:
21.1.1 a deposit account in the name of all the Borrowers, designated
Service Account;
21.1.2 current accounts in the name of each Hotel Borrower, designated
Receipts Accounts;
21.1.3 deposit accounts in the name of each Hotel Borrower or UK Operating
Company in respect of each Charged Property, designated FF&E Accounts;
21.1.4 current accounts in the name of each of the UK Operating Companies,
designated UK Operating Accounts;
21.1.5 current accounts in the name of each member of the Management
Borrower Group, designated European Operating Accounts for the
purposes of this agreement but which the Agent confirms may be
differently designated at the relevant Account Bank; and
21.1.6 a deposit account in the name of all the Borrowers, designated Cash
Trap Account.
73
The Agent (or someone appointed by the Agent for this purpose) shall be a
signatory to the Service Account and the Cash Trap Account and may at any
time after an Event of Default which is continuing require the Borrowers to
procure that it is made signatory to the Receipts Accounts, the FF&E
Accounts, the UK Operating Accounts and/or the European Operating Accounts.
The Borrowers shall also procure that copies of all statements relating to
the Accounts are sent to the Agent at the same time as to the relevant
account holders.
21.2 THE SERVICE ACCOUNT
21.2.1 Payments into the Service Account
(a) The Borrowers shall ensure that during the Business Day preceding
each Payment Date all funds standing to the credit of the
Receipts Accounts are transferred to the Service Account.
(b) Five Business Days prior to each Payment Date the Agent shall
notify the Borrowers of the amounts required to be transferred to
the Service Account representing items (a) to (f) in clause
21.2.2 below (together, the "REQUIRED TRANSFER AMOUNT")
(c) Promptly thereafter (and no more than three Business Days before
each Payment Date) the Borrowers shall ensure that there is
credited to the Service Account an amount equal to the aggregate
of:
(i) Net Operating Income for the previous financial quarter of
each UK Operating Company (other than Rent attributable to
the same financial quarter that has already been credited to
the Receipts Account), by way of transfer from the relevant
UK Operating Accounts; and
(ii) if a Cash Trap Event is continuing, the Management Borrower
Operating Income or, if no Cash Trap Event is continuing, an
amount which, when aggregated with the Net Operating Income
for the previous financial quarter, would be sufficient to
make the Required Transfer Amount.
The Finance Parties confirm that if no Default is continuing the
payments in respect due to be made from the European Operating
Accounts may be made by shareholders of the Hotel Borrowers and
only if such credit is not made shall the Management Borrower be
required to procure transfers of the relevant amounts from the
European Operating Accounts.
74
(d) The Borrowers shall ensure any amounts recoverable under any
Hedging Agreement to which it is a party are promptly paid into
the Service Account.
(e) The Borrowers shall procure that all Additional Equity
Contributions are paid into the Service Account unless the Agent
has agreed otherwise in writing.
21.2.2 Payments from the Service Account
On each Payment Date monies in the Service Account shall be applied by
the Agent (and the Borrowers irrevocably authorise such application)
in payment:
(a) first in or towards payment of any costs, fees or expenses
arising under any Finance Documents due but unpaid;
(b) secondly in or towards payment of any sums then due under any
Hedging Agreement;
(c) thirdly in or towards payment of any interest (other than by way
of PIK Margin) and fees then due under any Finance Document
(including for the avoidance of doubt sums then due under a Fee
Letter);
(d) fourthly in or towards payment of the rent payable to the
Landlord pursuant to the Headleases if not already paid;
(e) fifthly in the amounts required under clause 6.3;
(f) sixthly:
(i) if no Default or Cash Trap Event has occurred which is
continuing on such Payment Date, 75% of the balance
remaining of the aggregate of the Net Operating Income and
the Management Borrower Operating Income for the previous
financial quarter after payment of all amounts due under
paragraphs (a) to (e) above shall be applied firstly in
paying unpaid PIK Margin and thereafter in prepayment of the
Loan and the remaining balance shall (subject to any payment
of accrued but unpaid PIK Margin that the Borrowers request
the Agent to make) be transferred to such account as the
Borrowers may request; or
(ii) if a Default has occurred and is continuing at such Payment
Date an amount equal to the entire balance remaining of the
aggregate of the Net Operating Income and the Management
Borrower Operating Income for
75
the previous financial quarter after payment of all amounts
due under paragraphs (a) to (e) above shall be applied by
way of payment first of all outstanding PIK Margin and then
in prepayment of the Loan; or
(iii) if a Cash Trap Event has occurred and is continuing at such
Payment Date the 25% balance remaining of the aggregate of
the Net Operating Income and the Management Borrower
Operating Income for the previous financial quarter after
application of all amounts due under paragraphs (a) to
(f)(i) above shall be credited to the Cash Trap Account
where it shall either remain until the Cash Trap Event is no
longer continuing (whereupon the monies so credited to the
Cash Trap Account may be remitted to an account selected by
the Borrowers) or (at the election of the Borrowers) be
applied by way of payment of first all outstanding PIK
Margin and then in prepayment of the Loan.
21.2.3 Restriction on withdrawals
(a) The Agent may at any time withdraw from the Service Account such
amounts as are necessary to pay all amounts due and payable to
the Agent in accordance with this Agreement.
(b) The Agent may delegate its powers to make withdrawals under this
clause to any administrative receiver, receiver and/or manager
appointed under the powers contained in the Security Documents.
(c) The Borrowers hereby gives their irrecoverable authority to the
Agent to effect the withdrawals, payments and transfers referred
to in this clause.
(d) No withdrawals other than those referred to in clause 21.2.1 may
be made without the consent of the Agent.
21.3 THE RECEIPTS ACCOUNTS
21.3.1 Payments into the Receipts Accounts
(a) Each Hotel Borrower shall procure that all Rent, together with
all other Net Operating Income due to it from the UK Operating
Companies, is credited to the Receipts Account for the relevant
Hotel Borrower.
(b) In the event that the Hotel Borrowers receive or recover any
amount in respect of a Charged Property otherwise than by credit
to the relevant account in accordance
76
with the terms of this Agreement the Hotel Borrowers shall pay it
into the Receipts Account immediately after receipt or recovery
and the Hotel Borrowers shall in the meantime hold it subject to
the security created by the Security Documents.
21.3.2 Payments from the Receipts Accounts
On the Business Day preceding each Payment Date all funds standing to
the credit of the Receipts Accounts shall be transferred to the
Service Account in accordance with clause 21.2.1(a) above.
21.3.3 Restriction on withdrawals
(a) The Agent may at any time withdraw from the Receipts Accounts
such amounts as are necessary to pay all amounts due and payable
to the Agent in accordance with this Agreement.
(b) The Agent may delegate its powers to make withdrawals under this
clause to any administrative receiver, receiver and/or manager
appointed under the powers contained in the Security Documents.
(c) The Borrowers hereby gives its irrecoverable authority to the
Agent to effect the withdrawals, payments and transfers referred
to in this clause.
(d) No withdrawals other than those referred to in clause 21.3.2 may
be made without the consent of the Agent.
21.4 THE FF&E ACCOUNTS
21.4.1 Payments in
The UK Operating Companies will ensure that there is deposited into
the FF&E Account each year an amount equal to or greater than 3% of
the latest Gross Operational Turnover relating to the Charged
Properties, save that this percentage shall in the case of the
Riverbank Hotel be 1% throughout 2006 and 2% throughout 2007.
21.4.2 Payments out
(a) For so long as no Event of Default is continuing the UK Operating
Companies shall be entitled to withdraw any sums from the FF&E
Account to meet costs referred to in an approved annual budget
without the prior consent of the Agent.
77
(b) If an Event of Default is continuing the UK Operating Companies
may not withdraw any sums from the FF&E Account without the prior
consent of the Agent. The Agent may at its discretion while any
Event of Default is continuing apply any sums paid into the FF&E
Account towards any amounts due under the Finance Documents.
21.5 THE UK OPERATING ACCOUNTS
21.5.1 Payments in
(a) The Hotel Borrowers shall procure that all income arising from
the business of the UK Operating Companies is promptly paid into
the UK Operating Accounts.
(b) The Hotel Borrowers shall procure that in the event that the UK
Operating Companies receive or recover any amount in respect of a
Charged Property otherwise than by credit to the relevant account
in accordance with the terms of this agreement the UK Operating
Companies shall pay it into the relevant Operating Account
immediately after receipt or recovery.
21.5.2 Payments out
(a) On the Business Day preceding each Payment Date the Borrowers
shall procure that the UK Operating Companies transfer from each
UK Operating Account to the Receipts Account an amount equal to
the Net Operating Income of each UK Operating Company (by way of
transfer from the relevant UK Operating Accounts) for the
previous financial quarter which the Borrowers may treat as
payment of Rent then due.
(b) Subject to clause 21.5.2(a) above, the UK Operating Companies
may, for so long as no Event of Default is continuing, make
payments into and withdrawals from the UK Operating Accounts
without restriction.
21.6 THE EUROPEAN OPERATING ACCOUNTS
21.6.1 The Management Borrower shall procure that all income arising from
the business of the Management Borrower Group is promptly paid into
the relevant European Operating Account.
21.6.2 In the event that the credit to the Service Account referred to in
clause 21.2.1(b) above is not made, the Agent may require the transfer
from the European Operating Accounts of the amount which has not been
paid.
78
21.6.3 Subject to clause 21.6.2 above, members of the Management Borrower
Group may, for so long as no Event of Default is continuing, make
payments into and withdrawals from the European Operating Accounts
without restriction.
21.7 THE CASH TRAP ACCOUNT
Credits to and withdrawals from the Cash Trap Account shall be made in
accordance with clause 21.2.2(f)(ii) and (iii) above.
21.8 APPLICATION OF ACCOUNTS
On the Repayment Date or upon any part of the Loan becoming immediately due
and payable, the sums outstanding to the credit of each Account may be
applied by the Agent (and it is irrevocably authorised to do so by each
Borrower) in or towards payment of the Secured Obligations in accordance
with the provisions of the Finance Documents.
21.9 NO LIABILITY
The Agent shall not be responsible to the Borrowers for any non-payment of
any liability of the Borrowers which could have been paid out of moneys
standing to the credit of any Account.
21.10 BANKING BUSINESS
21.10.1 Save for Permitted Indebtedness the Borrowers shall ensure that
none of its accounts with the Account Banks is overdrawn at any time.
21.10.2 The Borrowers shall not maintain any other bank account other than
the Accounts.
22. THE PROPERTY
22.1 REVALUATIONS
22.1.1 The Agent may requisition up to date Market Value valuations of the
Charged Property by any professional valuer it may choose at its own
cost at any time.
22.1.2 The Borrowers shall supply the Agent with copies of all valuations
commissioned by it or on its behalf whilst any Commitment is in force
or any amount is outstanding under the Finance Documents.
23. EVENTS OF DEFAULT
Each of the events or circumstances set out in clause 23 (Events of
Default) is an Event of Default.
79
23.1 NON-PAYMENT
An Obligor does not pay on the due date any amount payable pursuant to a
Finance Document at the place at and in the currency in which it is
expressed to be payable unless:
23.1.1 its failure to pay is caused by administrative or technical error;
and
23.1.2 payment is made within three Business Days of its due date.
23.2 IRREMEDIABLE BREACH
23.2.1 There is a breach of the requirement in clause 19.1 (Financial
Covenants) concerning the ratio of Net Operating Income to Debt
Service, subject to the procedure for remedy provided in clause
19.1.4.
23.2.2 Any breach of clause 3.1 (Purpose), clause 17.16 (Pari passu
ranking), clause 20.3 (Negative pledge), clause 21 (Bank Accounts) or
clause 20.5 (Disposals) occurs.
23.3 OTHER OBLIGATIONS
23.3.1 Any party (other than a Finance Party) does not comply with any
provision of the Finance Documents (other than those referred to in
clause 23.1 (Non-payment) and clause 23.2 (Irremediable breach)).
23.3.2 No Event of Default under clause 23.3.1 above will occur if the
failure to comply is capable of remedy, is remedied promptly and in
any event is remedied within fifteen Business Days of the Agent giving
notice to the Borrowers or the Borrowers becoming aware of the failure
to comply, whichever is the earlier.
23.4 MISREPRESENTATION
Any representation or statement made or deemed to be made by an Obligor in
the Finance Documents or any other document delivered by or on behalf of
any Obligor pursuant to any Finance Document is or proves to have been
incorrect or misleading in any material respect when made or deemed to be
made.
23.5 CROSS DEFAULT
23.5.1 Any Financial Indebtedness of any Obligor is not paid when due nor
within any originally applicable grace period; or
80
23.5.2 Any Financial Indebtedness of any Obligor is declared to be or
otherwise becomes due and payable prior to its specified maturity as a
result of an event of default (however described); or
23.5.3 Any commitment for any Financial Indebtedness of any Obligor is
cancelled or suspended by a creditor of that Obligor as a result of an
event of default (however described); or
23.5.4 Any creditor of any Obligor becomes entitled to declare any
Financial Indebtedness of that Obligor due and payable prior to its
specified maturity as a result of an event of default (however
described)
provided that in each case the Financial Indebtedness in question involves
an aggregate liability in excess of L500,000 (in the case of the Management
Borrower), L250,000 (in the case of the UK Operating Companies and the
Subsidiaries of the Management Borrower) or L50,000 (in the case of the
Hotel Borrowers);
23.6 INSOLVENCY
23.6.1 Any Obligor is unable or admits inability to pay its debts as they
fall due, suspends making payments on any of its debts or, by reason
of actual or anticipated financial difficulties, commences
negotiations with one or more of its creditors with a view to
rescheduling any of its indebtedness.
23.6.2 A moratorium is declared in respect of any indebtedness of any
Obligor.
23.6.3 An Obligor is deemed to be unable to pay its debts within the
meaning of section 123(1)(a) (but as if reference therein to L750 was
to L10,000), (b), (e) or (2) of the Insolvency Act 1986.
23.7 INSOLVENCY PROCEEDINGS
Any corporate action, legal proceedings or other procedure or step is taken
(ignoring any which are frivolous or vexatious and which are discharged
within seven Business Days) including, without limitation, a meeting of
shareholders, directors or other officers and the filing of documents with
a court or any register in relation to:
23.7.1 the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration or reorganisation (by way of
voluntary arrangement, scheme of arrangement or otherwise) of any
Obligor (other than a solvent liquidation or
81
reorganisation to which the Lenders have given their consent or where
any petition for winding up is withdrawn, dismissed or discharged
within 7 days;
23.7.2 a composition, assignment or arrangement with any creditor of any
Obligor;
23.7.3 the appointment of a liquidator (save in the case of a solvent
liquidation to which the Lenders have given their consent), receiver,
administrator, administrative receiver, compulsory manager or other
similar officer in respect of any Obligor or any of its assets; or
23.7.4 enforcement of any Security over any assets of any Obligor (provided
that the sum secured is in excess of L500,000 (in the case of the
Management Borrower), L250,000 (in the case of the UK Operating
Companies and the Subsidiaries of the Management Borrower) or L50,000
(in the case of the Hotel Borrowers);
or any analogous procedure or step is taken in any jurisdiction (save that
this clause shall not apply to a solvent liquidation or winding up of the
Jersey Subsidiaries).
23.8 CREDITORS' PROCESS
Any expropriation, attachment, sequestration, distress or execution affects
any asset or assets of any Obligor or a judgement is awarded against any
Obligor in a sum exceeding L500,000 and is not discharged within 7 days.
23.9 OWNERSHIP OF THE OBLIGORS AND CONTROL OF THE EQUITY HOLDERS
23.9.1 The Borrowers cease to be wholly owned, directly or indirectly, by
the Equity Holders (other than as a result of a Permitted
Reconstruction, a Permitted IPO or a transfer of the share capital of
an Obligor from one Equity Holder to another).
23.9.2 There occurs a change in Control of the beneficial owners or the
Holding Companies of the Equity Holders provided that a change of
Control of an existing publicly listed company shall not be an Event
of Default under this clause.
23.10 UNLAWFULNESS
It is or becomes unlawful for any Obligor to perform any of its obligations
under the Finance Documents.
82
23.11 REPUDIATION
Any party other than a Finance Party repudiates a Finance Document or
evidences an intention to repudiate a Finance Document.
23.12 MATERIAL ADVERSE CHANGE
Any event occurs which has a Material Adverse Effect.
23.13 HEADLEASES
The person entitled to the reversion expectant on the termination of any
Headlease takes steps to forfeit or terminate that Headlease for any reason
and there is a material risk of such steps resulting in forfeiture or
termination.
23.14 TERMINATION OF MANAGEMENT AGREEMENTS
Any Management Agreement is terminated and new management arrangements
reasonably satisfactory to the Finance Parties are not agreed within 30
days.
23.15 INSUFFICIENT CASH SWEEP
On any four consecutive Payment Dates falling after 8 May 2008 the amount
of the Cash Sweep available on those dates is less than the amount of the
PIK Margin accruing during the Interests Periods ending on those Payment
Dates.
23.16 BREACH OF MASTER TERRITORIAL LICENCE AGREEMENT
23.16.1 There occurs a breach of the Master Territorial Licence Agreement
which might reasonably be expected to have a Material Adverse Effect.
23.16.2 Notice is served by Park Global Inc. on any member of the
Management Borrower Group alleging breach of the Master Territorial
Licence Agreement which (1) the Agent's Delaware lawyers advise is a
breach of the Master Territorial Licence Agreement including, where
applicable, a breach constituting an Event of Default under clause 16
of the Master Territorial Licence Agreement; and (2) such alleged
breach is not cured during such period as the Agent's Delaware lawyers
advise the Agent is reasonable under Delaware law for the remedying of
the relevant alleged breach.
83
23.17 ENVIRONMENTAL
At any time after the date of this Agreement:
23.17.1 there is a risk of material liability to any Finance Party under
Environmental Law or because it has taken security (direct or third
party) for the Loan; or
23.17.2 the value of any Charged Property is reasonably likely to be
diminished in any material way because of Environmental Law so as to
have a Material Adverse Effect.
23.18 COMPULSORY PURCHASE
All or any substantial part of any Charged Property is compulsorily
purchased or the applicable local authority makes an order for the
compulsory purchase of the same, save where the Agent has given consent to
such compulsory purchase in accordance with paragraph 10 of Schedule 5.
23.19 MAJOR DAMAGE
All or a material part of a Charged Property is destroyed or materially
damaged where:
23.19.1 the proceeds of any insurance claim (if any) will be insufficient
to make good the destruction or damage; or
23.19.2 repair or restoration is likely to take longer than three years to
be substantially completed; or
23.19.3 the Gross Operating Income attributable to that Charged Property is
likely to be materially adversely affected, taking into account
amounts receivable under any business interruption insurance policy
and, in any case, the damage will, in consequence, have a Material Adverse
Effect.
23.20 CESSATION OF BUSINESS
Any Obligor suspends or ceases or takes any step to suspend or cease to
carry on its business, if at the relevant time the business of such Obligor
represents at least 5% of the consolidated earnings before interest, taxes,
depreciation and amortisation of the Borrowers and their Subsidiaries as
shown by the latest management accounts of the Borrowers provided to the
Agent.
84
23.21 ACCELERATION
On and at any time after the occurrence of an Event of Default which is
continuing the Agent may, and shall if so directed by the Majority Lenders,
by notice to the Borrowers:
23.21.1 cancel the Total Commitments whereupon they shall immediately be
cancelled; and/or
23.21.2 declare that all or part of the Loan, together with accrued
interest, and all other amounts accrued or outstanding under the
Finance Documents be immediately due and payable, whereupon it shall
become immediately due and payable; and/or
23.21.3 declare that all or part of the Loan be payable on demand,
whereupon it shall immediately become payable on demand by the Agent
on the instructions of the Majority Lenders; and/or
23.21.4 apply the interest rate payable pursuant to clause 8.3 (Default
Interest); and/or
23.21.5 declare all or any of the Security Documents to have become
enforceable; and/or
23.21.6 waive the Event of Default.
24. SECURITY
The obligations of the Borrowers to the Finance Parties under the Finance
Documents shall be secured by:
24.1 all existing security held by the Agent for the Borrowers' liabilities;
24.2 the Security Documents;
24.3 all future security which the Agent may from time to time hold for the
Borrowers' liabilities.
25. CHANGES TO THE LENDERS
25.1 ASSIGNMENTS AND TRANSFERS BY THE LENDERS
Subject to this clause 25 (Changes to the Lenders), a Lender (the "EXISTING
LENDER") may:
25.1.1 assign any of its rights; or
25.1.2 transfer by novation any of its rights and obligations;
85
to another bank or financial institution or to a trust, fund or other
entity which is regularly engaged in or established for the purpose of
making, purchasing or investing in loans, securities or other financial
assets (the "NEW LENDER"), provided that such Lender is a PMP.
25.2 CONDITIONS OF ASSIGNMENT OR TRANSFER
25.2.1 The consent of the Borrowers is not required for an assignment or
transfer by a Lender save in the case of an assignment or transfer to
an entity which is not a bank or financial institution or an affiliate
of a Lender where the prior written consent of the Borrowers (which
shall not be unreasonably withheld or delayed) shall be required
unless clause 25.2.3 applies.
25.2.2 A Lender wishing to assign or transfer any of its rights to a bank
or financial institution will consult with the Borrowers for no longer
than ten Business Days (which for the avoidance of doubt shall not
give the Borrowers any veto rights) unless clause 25.2.3 applies.
25.2.3 No Lender shall be under an obligation to obtain the Borrowers'
consent pursuant to clause 25.2.1 or to consult pursuant to clause
25.2.2 in relation to a proposed assignment or transfer where the
Lender remains a party to this Agreement as a Lender
25.2.4 An assignment will only be effective on receipt by the Agent of
written confirmation from the New Lender (in form and substance
satisfactory to the Agent) that the New Lender will assume the same
obligations to the other Finance Parties as it would have been under
if it was an Original Lender.
25.2.5 A transfer will only be effective if the procedure set out in clause
25.5 (Procedure for transfer) is complied with.
25.2.6 If:
(a) a Lender assigns or transfers any of its rights or obligations
under the Finance Documents or changes its Facility Office; and
(b) as a result of circumstances existing at the date the assignment,
transfer or change occurs, an Obligor would be obliged to make a
payment to the New Lender or Lender acting through its new
Facility Office under clause 12 (Tax Gross-up and Indemnities) or
clause 13 (Increased Costs);
then the New Lender or Lender acting through its new Facility Office
is only entitled to receive payment under those clauses to the same
extent as the Existing Lender or
86
Lender acting through its previous Facility Office would have been if
the assignment, transfer or change had not occurred.
25.3 PMP REPRESENTATION BY NEW LENDER
If on the date on which a New Lender becomes a party to this Agreement it
is necessary under Dutch law for such New Lender to be a PMP to avoid that
sections 6 and 82 of the Dutch Banking Act are or become applicable to the
Borrowers, such New Lender represents and warrants to each Borrower on the
date on which it becomes a party to this Agreement as a Lender that it is a
PMP.
25.4 LIMITATION OF RESPONSIBILITY OF EXISTING LENDERS
25.4.1 Unless expressly agreed to the contrary, an Existing Lender makes no
representation or warranty and assumes no responsibility to a New
Lender for:
(a) the legality, validity, effectiveness, adequacy or enforceability
of the Finance Documents or any other documents;
(b) the financial condition of any Obligor;
(c) the performance and observance by any Obligor of its obligations
under the Finance Documents or any other documents; or
(d) the accuracy of any statements (whether written or oral) made in
or in connection with any Finance Document or any other document;
and any representations or warranties implied by law are excluded.
25.4.2 Each New Lender confirms to the Existing Lender and the other
Finance Parties that it:
(a) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in connection
with its participation in this Agreement and has not relied
exclusively on any information provided to it by the Existing
Lender in connection with any Finance Document; and
(b) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities whilst
any amount is or may be outstanding under the Finance Documents
or any Commitment is in force.
25.4.3 Nothing in any Finance Document obliges an Existing Lender to:
87
(a) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this clause 25 (Changes
to the Lenders); or
(b) support any losses directly or indirectly incurred by the New
Lender by reason of the non-performance by any Obligor of its
obligations under the Finance Documents or otherwise.
25.5 PROCEDURE FOR TRANSFER
25.5.1 Subject to the conditions set out in clause 25.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph (b) below when the Agent executes an otherwise duly
completed Transfer Certificate delivered to it by the Existing Lender
and the New Lender. The Agent shall, as soon as reasonably practicable
after receipt by it of a duly completed Transfer Certificate appearing
on its face to comply with the terms of this Agreement and delivered
in accordance with the terms of this Agreement, execute that Transfer
Certificate.
25.5.2 On the Transfer Date:
(a) to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation its rights and obligations
under the Finance Documents each of the Obligors and the Existing
Lender shall be released from further obligations towards one
another under the Finance Documents and their respective rights
against one another shall be cancelled (being the "DISCHARGED
RIGHTS AND OBLIGATIONS");
(b) each of the Obligors and the New Lender shall assume obligations
towards one another and/or acquire rights against one another
which differ from the Discharged Rights and Obligations only
insofar as that Obligor and the New Lender have assumed and/or
acquired the same in place of that Obligor and the Existing
Lender;
(c) the Agent, the Arranger, the New Lender and other Lenders shall
acquire the same rights and assume the same obligations between
themselves as they would have acquired and assumed had the New
Lender been an Original Lender with the rights and/or obligations
acquired or assumed by it as a result of the transfer and to that
extent the Agent, the Arranger and the Existing Lender shall each
be released from further obligations to each other under this
Agreement; and
(d) the New Lender shall become a Party as a "Lender".
88
25.6 DISCLOSURE OF INFORMATION
25.6.1 Any Lender may disclose to any of its Affiliates, professional
advisers, any rating agency, banking authority or other regulatory
authority a copy of any Finance Document and any information which
that Xxxxxx has acquired under or in connection with any Finance
Document.
25.6.2 Any Lender may disclose to any other person:
(a) to (or through) whom that Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
(b) with (or through) whom that Xxxxxx enters into (or may
potentially enter into) any sub-participation in relation to, or
any other transaction under which payments are to be made by
reference to, this Agreement or any Obligor; or
(c) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation;
any information about any Obligor and the Finance Documents as that
Lender shall consider appropriate if, in relation to clauses 25.6.2(a)
and 25.6.2(b) the recipient enters into a confidentiality undertaking
substantially in the recommended form of the LMA.
26. CHANGES TO THE OBLIGORS
ASSIGNMENTS AND TRANSFER BY OBLIGORS
No Obligor may assign any of its rights or transfer any of its rights or
obligations under the Finance Documents.
27. ROLE OF THE AGENT AND THE ARRANGER
27.1 APPOINTMENT OF THE AGENT
27.1.1 Each other Finance Party appoints the Agent to act as its agent
under and in connection with the Finance Documents.
27.1.2 Each other Finance Party authorises the Agent to exercise the
rights, powers, authorities and discretions specifically given to the
Agent under or in connection with the Finance Documents together with
any other incidental rights, powers, authorities and discretions.
89
27.2 DUTIES OF THE AGENT
27.2.1 The Agent's duties under the Finance Documents are solely mechanical
and administrative in nature.
27.2.2 The Agent shall promptly forward to a Party the original or a copy
of any document which is delivered to the Agent for that Party by any
other Party.
27.2.3 Except where a Finance Document specifically provides otherwise, the
Agent is not obliged to review or check the adequacy, accuracy or
completeness of any document it forwards to another Party.
27.2.4 If the Agent receives notice from a Party referring to this
Agreement, describing a Default and stating that the circumstance
described is a Default, it shall promptly notify the Finance Parties.
27.2.5 If the Agent is aware of the non-payment of any principal, interest,
commitment fee or other fee payable to a Finance Party (other than the
Agent or the Arranger) under this Agreement it shall promptly notify
the other Finance Parties.
27.3 ROLE OF THE ARRANGER
Except as specifically provided in the Finance Documents, the Arranger has
no obligations of any kind to any other Party under or in connection with
any Finance Document.
27.4 NO FIDUCIARY DUTIES
27.4.1 Nothing in any Finance Document constitutes the Arranger as a
trustee or fiduciary of any other person.
27.4.2 Neither the Agent nor the Arranger shall be bound to account to any
Lender for any sum or the profit element of any sum received by it for
its own account.
27.5 BUSINESS WITH THE OBLIGORS
The Agent and the Arranger may accept deposits from, lend money to and
generally engage in any kind of banking or other business with any Obligor.
90
27.6 PAYMENTS
Save as expressly provided in this Agreement and for any payments falling
within clause 27.5 above, all payments to the Agent shall be treated as
payments to the Agent on behalf of the Finance Parties.
27.7 RIGHTS AND DISCRETIONS OF THE AGENT
27.7.1 The Agent may rely on:
(a) any representation, notice or document believed by it to be
genuine, correct and appropriately authorised; and
(b) any statement made by a director, authorised signatory or
employee of any person regarding any matters which may reasonably
be assumed to be within his knowledge or within his power to
verify.
27.7.2 The Agent may assume (unless it has received notice to the contrary
in its capacity as agent for the Lenders) that:
(a) no Default has occurred (unless it has actual knowledge of a
Default arising under clause 23.1 (Non-payment));
(b) any right, power, authority or discretion vested in any Party or
the Majority Lenders has not been exercised; and
(c) any notice or request made by the Borrowers (other than the
Utilisation Request) is made on behalf of and with the consent
and knowledge of all the Obligors.
27.7.3 The Agent may engage, pay for and rely on the advice or services of
any lawyers, accountants, surveyors or other experts.
27.7.4 The Agent may act in relation to the Finance Documents through its
personnel and agents.
27.7.5 The Agent may disclose to any other Party any information it
reasonably believes it has received as agent under this Agreement.
27.7.6 Notwithstanding any other provision of any Finance Document to the
contrary, neither the Agent nor the Arranger is obliged to do or omit
to do anything if it would or might in its reasonable opinion
constitute a breach of any law or regulation or a breach of a
fiduciary duty or duty of confidentiality.
91
27.8 MAJORITY LENDERS' INSTRUCTIONS
27.8.1 Unless a contrary indication appears in a Finance Document, the
Agent shall (i) exercise any right, power, authority or discretion
vested in it as Agent in accordance with any instructions given to it
by the Majority Lenders (or, if so instructed by the Majority Lenders,
refrain from exercising any right, power, authority or discretion
vested in it as Agent) and (ii) not be liable for any act (or
omission) if it acts (or refrains from taking any action) in
accordance with an instruction of the Majority Lenders.
27.8.2 Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all the
Finance Parties.
27.8.3 The Agent may refrain from acting in accordance with the
instructions of the Majority Lenders (or, if appropriate, the Lenders)
until it has received such security as it may require for any cost,
loss or liability (together with any associated VAT) which it may
incur in complying with the instructions.
27.8.4 In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Agent may act (or refrain from taking
action) as it considers to be in the best interest of the Lenders.
27.8.5 The Agent is not authorised to act on behalf of a Lender (without
first obtaining that Xxxxxx's consent) in any legal or arbitration
proceedings relating to any Finance Document.
27.9 RESPONSIBILITY FOR DOCUMENTATION
Neither the Agent nor the Arranger:
27.9.1 is responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, the
Arranger, an Obligor or any other person given in or in connection
with any Finance Document; or
27.9.2 is responsible for the legality, validity, effectiveness, adequacy
or enforceability of any Finance Document or any other agreement,
arrangement or document entered into, made or executed in anticipation
of or in connection with any Finance Document.
27.10 EXONERATION
The Agent and the Arranger are not:
92
27.10.1 bound to enquire as to:
(a) whether or not any representation made or deemed to be made by an
Obligor under any Finance Document is true or correct;
(b) the occurrence or otherwise of any Default; or
(c) the performance, or any breach or default, by an Obligor of its
obligations under the Finance Documents;
27.10.2 bound to disclose to any other person any information relating to
any Obligor if:
(a) the person providing such information expressly stated that such
information was confidential; or
(b) such disclosure would or might in its opinion constitute a breach
of any law or be otherwise actionable at the suit of any person;
or
27.10.3 under any obligation except as expressly provided in this
Agreement.
27.11 EXCLUSION OF LIABILITY
27.11.1 Without limiting clause 27.11.2 below, the Agent will not be liable
for any action taken by it under or in connection with any Finance
Document, unless directly caused by its gross negligence or wilful
misconduct.
27.11.2 No Party (other than the Agent) may take any proceedings against
any officer, employee or agent of the Agent in respect of any claim it
might have against the Agent or in respect of any act or omission of
any kind by that officer, employee or agent in relation to any Finance
Document and any officer, employee or agent of the Agent may rely on
this clause.
27.11.3 The Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required under
the Finance Documents to be paid by the Agent if the Agent has taken
all necessary steps as soon as reasonably practicable to comply with
the regulations or operating procedures of any recognised clearing or
settlement system used by the Agent for that purpose.
27.12 XXXXXXX' INDEMNITY TO THE AGENT
27.12.1 Each Lender shall (in proportion to its share of the Total
Commitments or, if the Total Commitments are then zero, to its share
of the Total Commitments immediately prior
93
to their reduction to zero) indemnify the Agent, within three Business
Days of demand, against any cost, loss or liability incurred by the
Agent (otherwise than by reason of the Agent's gross negligence or
wilful misconduct) in acting as Agent under the Finance Documents
(unless the Agent has been reimbursed by an Obligor pursuant to a
Finance Document).
27.12.2 The Borrowers will promptly on demand by the Agent reimburse each
Lender for any payment made by it under clause 27.12.1
27.13 RESIGNATION OF THE AGENT
27.13.1 The Agent may resign and appoint one of its Affiliates acting
through an office in the United Kingdom as successor by giving notice
to the other Finance Parties and the Borrowers.
27.13.2 Alternatively the Agent may resign by giving notice to the other
Finance Parties and the Borrowers, in which case the Majority Lenders
(after consultation with the Borrowers) may appoint a successor Agent.
27.13.3 If the Majority Xxxxxxx have not appointed a successor Agent in
accordance with clause 27.13.2 above within 30 days after notice of
resignation was given, the Agent (after consultation with the
Borrowers) may appoint a successor Agent (acting through an office in
the United Kingdom).
27.13.4 The retiring Agent shall, at its own cost, make available to the
successor Agent such documents and records and provide such assistance
as the successor Agent may reasonably request for the purposes of
performing its functions as Agent under the Finance Documents.
27.13.5 The Agent's resignation notice shall only take effect upon the
appointment of a successor.
27.13.6 Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance
Documents but shall remain entitled to the benefit of this clause 27
(Role of the Agent and the Arranger). Its successor and each of the
other Parties shall have the same rights and obligations amongst
themselves as they would have had if such successor had been an
original Party.
94
27.13.7 After consultation with the Borrowers, the Majority Lenders may, by
notice to the Agent, require it to resign in accordance with clause
27.13.2 above. In this event, the Agent shall resign in accordance
with clause 27.13.2 above.
27.13.8 Notwithstanding the above, the Agent as at the date of this
Agreement confirms that it is its intention that either it or an
Affiliate of it will be Agent (save for supervening illegality) for
the life of the Facility.
27.14 CONFIDENTIALITY
27.14.1 In acting as agent for the Finance Parties, the Agent shall be
regarded as acting through its agency division which shall be treated
as a separate entity from any other of its divisions or departments.
27.14.2 If information is received by another division or department of the
Agent, it may be treated as confidential to that division or
department and the Agent shall not be deemed to have notice of it.
27.15 EXCLUSION OF LIABILITY
27.15.1 Except in the case of negligence or wilful default, the Agent and
the Arranger accept no responsibility for, or any liability (whether
in negligence or otherwise) in respect of:
(a) the adequacy, accuracy and/or completeness of any information
supplied by the Agent or the Arranger, by any Obligor or by any
other person in connection with the Finance Documents or any
other agreement, arrangement or document entered into, made or
executed in anticipation of, pursuant to or in connection with
any Finance Document;
(b) the legality, validity, effectiveness, adequacy or enforceability
of any Finance Document or any other agreement, arrangement or
document entered into, made or executed in anticipation of,
pursuant to or in connection with this Agreement; or
(c) the exercise of, or the failure to exercise, any judgment,
discretion or power given to any of them by or in connection with
any Finance Document or any other agreement, arrangement or
document entered into, made or executed in anticipation of,
pursuant to or in connection with this Agreement.
95
27.15.2 Each party to this Agreement agrees that it will not assert or seek
to assert against any director, officer or employee of the Agent or
the Arranger any claim it might have against any of them in respect of
the matters referred to in clause 27.15.1 above.
27.16 RELATIONSHIP WITH THE LENDERS
27.16.1 The Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and acting through its Facility Office unless it
has received not less than five Business Days prior notice from that
Lender to the contrary in accordance with the terms of this Agreement.
27.16.2 Each Lender shall supply the Agent with any information required by
the Agent in order to calculate the Mandatory Cost in accordance with
schedule 6 (Mandatory Cost Formula).
27.17 CREDIT APPRAISAL BY THE LENDERS
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Lender confirms to the Agent and the Arranger that it has been, and
will continue to be, solely responsible for making its own independent
appraisal and investigation of all risks arising under or in connection
with any Finance Document including but not limited to:
27.17.1 the financial condition, status and nature of each any Obligor;
27.17.2 the legality, validity, effectiveness, adequacy or enforceability
of any Finance Document and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or
in connection with any Finance Document;
27.17.3 whether that Xxxxxx has recourse, and the nature and extent of that
recourse, against any Party or any of its respective assets under or
in connection with any Finance Document, the transactions contemplated
by the Finance Documents or any other agreement, arrangement or
document entered into, made or executed in anticipation of, under or
in connection with any Finance Document; and
27.17.4 the adequacy, accuracy and/or completeness of the information
provided by the Agent, any Party or by any other person under or in
connection with any Finance Document, the transactions contemplated by
the Finance Documents or any other agreement, arrangement or document
entered into, made or executed in anticipation of, under or in
connection with any Finance Document.
96
27.18 AGENT'S MANAGEMENT TIME
Any amount payable to the Agent under clause 14.3 (Indemnity to the Agent)
and clause 16.2 or 16.3 (Costs and Expenses) shall include the cost of
utilising the Agent's management time or other resources and will be
calculated on the basis of such reasonable daily or hourly rates as the
Agent may notify to the Borrowers and the Lenders, and is in addition to
any fee paid or payable to the Agent under clause 11 (Fees).
27.19 DEDUCTION FROM AMOUNTS PAYABLE BY THE AGENT
If any Party owes an amount to the Agent under the Finance Documents the
Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent would
otherwise be obliged to make under the Finance Documents and apply the
amount deducted in or towards satisfaction of the amount owed. For the
purposes of the Finance Documents that Party shall be regarded as having
received any amount so deducted.
27.20 COMPLIANCE
27.20.1 The Agent may at its own discretion refrain from:
(a) commencing any legal or administrative action, proceeding or
arbitration (whether or not in accordance with the instructions
of the Majority Lenders) until it has received such security as
it may require (whether by way of payment in advance or
otherwise) for all costs, claims, losses, expenses (including
legal fees) and liabilities together with any VAT thereon which
it will or may expend or incur in connection with such action,
proceedings or arbitration; and
(b) doing anything (whether or not in accordance with the
instructions of the Majority Lenders) which might, in its
opinion, constitute a breach of any law or regulation or be
otherwise actionable at the suit of any person, and may do
anything which, in its opinion, is necessary or desirable to
comply with any law or regulation of any jurisdiction.
27.20.2 Without limiting clause 27.20.1, the Agent need not disclose any
information relating to any Obligor or any of its affiliates if the
disclosure might, in the opinion of the Agent, constitute a breach of
any law or regulation or any duty of secrecy or confidentiality or be
otherwise actionable at the suit of any person.
97
27.21 SYNDICATE MEETINGS
27.21.1 The Agent may at any time in its own discretion convene a meeting
of the Lenders.
27.21.2 If authorised by the Majority Lenders, the Agent will at any time
convene a meeting of the Lenders.
27.21.3 Whenever the Agent is to convene any such meeting it will promptly
give notice in writing to the Lenders of the day, time and place
thereof and the nature of the business to be transacted thereat.
27.21.4 All meetingsc of Lenders will be held in London unless otherwise
agreed by all Lenders.
28. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
28.1 interfere with the right of any Finance Party to arrange its affairs (tax
or otherwise) in whatever manner it thinks fit;
28.2 oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it or the extent, order and manner of
any claim; or
28.3 oblige any Finance Party to disclose any information relating to its
affairs (tax or otherwise) or any computations in respect of Tax.
29. SHARING AMONG THE FINANCE PARTIES
29.1 PAYMENTS TO FINANCE PARTIES
If a Finance Party (a Recovering Finance Party) receives or recovers any
amount from an Obligor other than in accordance with clause 30 (Payment
Mechanics) and applies that amount to a payment due under the Finance
Documents then:
29.1.1 the Recovering Finance Party shall, within three Business Days,
notify details of the receipt or recovery, to the Agent;
29.1.2 the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Finance Party would have been paid
had the receipt or recovery been received or made by the Agent and
distributed in accordance with clause 30 (Payment
98
Mechanics), without taking account of any Tax which would be imposed
on the Agent in relation to the receipt, recovery or distribution; and
29.1.3 the Recovering Finance Party shall, within three Business Days of
demand by the Agent, pay to the Agent an amount (the "SHARING
PAYMENT") equal to such receipt or recovery less any amount which the
Agent determines may be retained by the Recovering Finance Party as
its share of any payment to be made, in accordance with clause 30.5
(Payment waterfall).
29.2 REDISTRIBUTION OF PAYMENTS
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other than
the Recovering Finance Party) in accordance with clause 30.5 (Payment
waterfall).
29.3 RECOVERING FINANCE PARTY'S RIGHTS
29.3.1 On a distribution by the Agent under clause 29.2 (Redistribution of
payments), the Recovering Finance Party will be subrogated to the
rights of the Finance Parties which have shared in the redistribution.
29.3.2 If and to the extent that the Recovering Finance Party is not able
to rely on its rights under clause 29.3.1 above, the relevant Obligor
shall be liable to the Recovering Finance Party for a debt equal to
the Sharing Payment which is immediately due and payable.
29.4 REVERSAL OF REDISTRIBUTION
If any part of the Sharing Payment received or recovered by a Recovering
Finance Party becomes repayable and is repaid by that Recovering Finance
Party, then:
29.4.1 each Finance Party which has received a share of the relevant
Sharing Payment pursuant to clause 29.2 (Redistribution of payments)
shall, upon request of the Agent, pay to the Agent for account of that
Recovering Finance Party an amount equal to the appropriate part of
its share of the Sharing Payment (together with an amount as is
necessary to reimburse that Recovering Finance Party for its
proportion of any interest on the Sharing Payment which that
Recovering Finance Party is required to pay); and
29.4.2 that Recovering Finance Party's rights of subrogation in respect of
any reimbursement shall be cancelled and the relevant Obligor will be
liable to the reimbursing Finance Party for the amount so reimbursed.
99
29.5 EXCEPTIONS
29.5.1 This clause 29 (Sharing among the Finance Parties) shall not apply
to the extent that the Recovering Finance Party would not, after
making any payment pursuant to this clause, have a valid and
enforceable claim against the relevant Obligor.
29.5.2 A Recovering Finance Party is not obliged to share with any other
Finance Party any amount which the Recovering Finance Party has
received or recovered as a result of taking legal or arbitration
proceedings, if:
(a) it notified that other Finance Party of the legal or arbitration
proceedings; and
(b) that other Finance Party had an opportunity to participate in
those legal or arbitration proceedings but did not do so as soon
as reasonably practicable having received notice and did not take
separate legal or arbitration proceedings.
30. PAYMENT MECHANICS
30.1 PAYMENTS TO THE AGENT
30.1.1 On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document, that Obligor or Lender shall make
the same available to the Agent (unless a contrary indication appears
in a Finance Document and subject in particular to the operation of
clause 21 above) for value on the due date at the time and in such
funds specified by the Agent as being customary at the time for
settlement of transactions in the relevant currency in the place of
payment.
30.1.2 Payment shall be made to such account in the principal financial
centre of the country of that currency with such bank as the Agent
specifies.
30.2 DISTRIBUTIONS BY THE AGENT
Each payment received by the Agent under the Finance Documents for another
Party shall, subject to clause 30.3 (Distributions to an Obligor) and
clause 30.4 (Clawback) be made available by the Agent as soon as
practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account of
its Facility Office), to such account as that Party may notify to the Agent
by not less than five Business Days' notice with a bank in the principal
financial centre of the country of that currency.
100
30.3 DISTRIBUTIONS TO AN OBLIGOR
The Agent may (with the consent of the Obligor or in accordance with clause
31 (Set-off)) apply any amount received by it for that Obligor in or
towards payment (on the date and in the currency and funds of receipt) of
any amount due from that Obligor under the Finance Documents or in or
towards purchase of any amount of any currency to be so applied.
30.4 CLAWBACK
30.4.1 Where a sum is to be paid to the Agent under the Finance Documents
for another Party, the Agent is not obliged to pay that sum to that
other Party (or to enter into or perform any related exchange
contract) until it has been able to establish to its satisfaction that
it has actually received that sum.
30.4.2 If the Agent pays an amount to another Party and it proves to be the
case that the Agent had not actually received that amount, then the
Party to whom that amount (or the proceeds of any related exchange
contract) was paid by the Agent shall on demand refund the same to the
Agent together with interest on that amount from the date of payment
to the date of receipt by the Agent, calculated by the Agent to
reflect its cost of funds.
30.5 PAYMENT WATERFALL
30.5.1 If the Agent receives a payment that is insufficient to discharge
all the amounts then due and payable by an Obligor under the Finance
Documents, the Agent shall apply that payment towards the obligations
of that Obligor under the Finance Documents in the following order:
(a) FIRST, in or towards payment pro rata of any unpaid fees, costs
and expenses of the Agent or the Security Agent under the Finance
Documents;
(b) SECONDLY, in or towards payment to the relevant Hedge
Counterparty any scheduled payments and scheduled fees, costs,
charges and expenses due but unpaid under a Hedging Arrangement
(including any amounts due on a close out of a hedging
transaction thereunder);
(c) THIRDLY, in or towards payment to the Lenders of any accrued
interest (other than PIK Margin) due but unpaid in respect of the
Loan;
(d) FOURTHLY, in or towards payment pro rata to the Lenders of any
accrued and unpaid PIK Margin;
101
(e) FIFTHLY, in or towards payment the Lenders of any principal due
but unpaid in respect of the Loan (including capitalised PIK
Margin to the extent not included within (c) above);
(f) SIXTHLY, in or towards payment pro rata to (1) the Lenders of any
other amount due but unpaid to the Lenders under the Finance
Documents and (2) to the relevant Hedge Counterparty any other
amount due but unpaid under a Hedging Arrangement; and
(g) SEVENTHLY, in or towards payment of any other sum due but unpaid
under the Finance Documents.
30.5.2 The Agent shall, if so directed by all the Lenders vary the order
set out in clauses 30.5.1(b) to 30.5.1(d).
30.5.3 Clauses 30.5.1 and 30.5.2 above will override any appropriation made
by an Obligor.
30.6 NO SET-OFF BY OBLIGORS
All payments to be made by an Obligor under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim (except as expressly provided for in such Finance
Document).
30.7 BUSINESS DAYS
30.7.1 Any payment which is due to be made on a day that is not a Business
Day shall be made on the next Business Day in the same calendar month
(if there is one) or the preceding Business Day (if there is not).
30.7.2 During any extension of the due date for payment of any principal or
Unpaid Sum under this Agreement interest is payable on the principal
or Unpaid Sum at the rate payable on the original due date.
30.8 CURRENCY OF ACCOUNT
30.8.1 Subject to clauses 30.8.2 and 30.8.3 below, sterling is the currency
of account and payment for any sum due from an Obligor under any
Finance Document.
30.8.2 Each payment in respect of costs, expenses or Tax shall be made in
the currency in which the costs, expenses or Tax are incurred.
102
30.8.3 Any amount expressed to be payable in a currency other than sterling
shall be paid in that other currency.
30.9 CHANGE OF CURRENCY
30.9.1 Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank of
any country as the lawful currency of that country, then:
(a) any reference in the Finance Documents to, and any obligations
arising under the Finance Documents in, the currency of that
country shall be translated into, or paid in, the currency or
currency unit of that country designated by the Agent (after
consultation with the Borrowers); and
(b) any translation from one currency or currency unit to another
shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency unit
into the other, rounded up or down by the Agent (acting
reasonably).
30.9.2 If a change in any currency of a country occurs, this Agreement
will, to the extent the Agent (acting reasonably and after
consultation with the Borrowers) specifies to be necessary, be amended
to comply with any generally accepted conventions and market practice
in the Relevant Interbank Market and otherwise to reflect the change
in currency.
31. SET-OFF
A Finance Party may set off any matured obligation due from an Obligor
under the Finance Documents (to the extent beneficially owned by that
Finance Party) against any matured obligation owed by that Finance Party to
that Obligor, regardless of the place of payment, booking branch or
currency of either obligation. If the obligations are in different
currencies, the Finance Party may convert either obligation at a market
rate of exchange in its usual course of business for the purpose of the
set-off.
32. RECOURSE TO MANAGEMENT BORROWER GROUP
The Finance Parties agree that, prior to an Event of Default, they shall
only seek payment of amounts then due and payable under the Finance
Documents from the Management Borrower Group if the aggregate balance of
funds standing to the credit of the Service Account on a Payment Date are
insufficient to meet the amounts determined by the Agent as being due and
103
payable on that Payment Date (including any amounts due to be transferred
to the Cash Trap Account).
33. NOTICES
33.1 COMMUNICATIONS IN WRITING
Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax, letter or telex.
33.2 ADDRESSES
The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection
with the Finance Documents is:
33.2.1 in the case of the Borrowers:
Xxxxx Xxxxxxx
Financial Controller
Xxxxxxxx Xxxx Plaza
000 Xxxxxxxx Xxxxxx Xxxx
Xxxxxx, XX0X 0XX
XX
(fax number: 0000 000 0000)
with a copy to:
Xxxx Xxxxxxxx
Red Sea Group
Xxxxxxxxxxx 0-xx
0000 XX, Xxxxxxxxx
Xxx Xxxxxxxxxxx
(fax number: x00 00 000 0000)
and the Borrowers acknowledge and confirm that (i) communications,
documents or notices served on the on Xxxxxxxx Xxxx Plaza address
above shall be deemed to have been served on all the Borrowers and
(ii) the delivery of such communications, documents or notices will be
determined under clause 33.3 by reference to the Xxxxxxxx Xxxx Plaza
address and not by any copies to other addresses.
33.2.2 in the case of each Lender or any Obligor other than the Borrowers,
that notified in writing to the Agent on or prior to the date on which
it becomes a Party; and
33.2.3 in the case of the Agent:
104
Xxxxxxx Xxxxx International
Petershill
0 Xxxxxx Xxxx
Xxxxxx XX0X 0XX
(fax no: 000 0000 0000, attention: Xxxxxxxx Xxxx);
or any substitute address, fax number or department or officer in England
and Wales as the Party may notify to the Agent (or the Agent may notify to
the other Parties, if a change is made by the Agent) by not less than five
Business Days' notice.
33.3 DELIVERY
33.3.1 Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will only be
effective:
(a) if by way of fax, when received in legible form; or
(b) if by way of letter, when it has been left at the relevant
address or 48 hours after being deposited in the post postage
prepaid in an envelope addressed to it at that address;
and, if a particular department or officer is specified as part of its
address details provided under clause 33.2 (Addresses), if addressed to
that department or officer.
33.3.2 Any communication or document to be made or delivered to the Agent
will be effective only when actually received by the Agent and then
only if it is expressly marked for the attention of the department or
officer identified with the Agent's signature below (or any substitute
department or officer as the Agent shall specify for this purpose).
33.3.3 All notices from or to an Obligor shall be sent through the Agent.
33.3.4 Any communication or document made or delivered to the Borrowers in
accordance with this clause will be deemed to have been made or
delivered to each of the Obligors.
33.4 NOTIFICATION OF ADDRESS AND FAX NUMBER
Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to clause 33.2 (Addresses) or
changing its own address or fax number the Agent shall notify the other
Parties.
105
33.5 ELECTRONIC COMMUNICATION
33.5.1 Any communication to be made between the Agent and a Lender under or
in connection with the Finance Documents may be made by electronic
mail or other electronic means, if the Agent and the relevant Lender:
(a) agree that, unless and until notified to the contrary, this is to
be an accepted form of communication;
(b) notify each other in writing of their electronic mail address
and/or any other information required to enable the sending and
receipt of information by that means; and
(c) notify each other of any change to their address or any other
such information supplied by them.
33.5.2 Any electronic communication made between the Agent and a Lender
will be effective only when actually received in readable form and in
the case of any electronic communication made by a Lender to the Agent
only if it is addressed in such a manner as the Agent shall specify
for this purpose.
33.6 ENGLISH LANGUAGE
33.6.1 Any notice given under or in connection with any Finance Document
must be in English.
33.6.2 All other documents provided under or in connection with any Finance
Document must be:
(a) in English; or
(b) if not in English, accompanied by a certified English translation
and, in this case, the English translation will prevail unless
the document is a constitutional, statutory or other official
document.
34. CALCULATIONS AND CERTIFICATES
34.1 ACCOUNTS
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.
106
34.2 CERTIFICATES AND DETERMINATIONS
Any certification or determination by a Finance Party of a rate or amount
under any Finance Document is, in the absence of manifest error, conclusive
evidence of the matters to which it relates.
34.3 DAY COUNT CONVENTION
Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual number
of days elapsed and a year of 365 days or, in any case where the practice
in the Relevant Interbank Market differs, in accordance with that market
practice.
35. PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of such
provision under the law of any other jurisdiction will in any way be
affected or impaired.
36. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any right
or remedy prevent any further or other exercise or the exercise of any
other right or remedy. The rights and remedies provided in this Agreement
are cumulative and not exclusive of any rights or remedies provided by law.
37. AMENDMENTS AND WAIVERS
37.1 REQUIRED CONSENTS
37.1.1 Subject to clause 37.2 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the
Majority Lenders and the Obligors and any such amendment or waiver
will be binding on all Parties.
37.1.2 The Agent may effect, on behalf of any Finance Party, any amendment
or waiver permitted by this clause.
37.2 EXCEPTIONS
37.2.1 An amendment or waiver that has the effect of changing or which
relates to:
107
(a) the definition of Majority Lenders in clause 1.1 (Definitions);
(b) an extension to the date of payment of any amount under the
Finance Documents;
(c) a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fees or commission payable;
(d) an increase in or an extension of any Commitment;
(e) a change to the Guarantors other than in accordance with clause
26 (Changes to the Obligors);
(f) any provision which expressly requires the consent of all the
Lenders;
(g) clause 2.2 (Finance Parties' rights and obligations), clause 25
(Changes to the Lenders) or this clause 37 (Amendments and
Waivers);
(h) the nature or scope of the security provided pursuant to the
Security Documents;
(i) clause 27.7.1 (Majority Lenders Instructions)
shall not be made without the prior consent of all the Lenders.
37.2.2 An amendment or waiver which relates to the rights or obligations of
the Agent or the Arranger may not be effected without the consent of
the Agent or the Arranger.
38. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were on a
single copy of the Finance Document.
39. GOVERNING LAW
This Agreement is governed by English law.
40. ENFORCEMENT
40.1 JURISDICTION OF ENGLISH COURTS
40.1.1 The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with this Agreement (including
a dispute regarding the existence, validity or termination of this
Agreement) (a "DISPUTE").
108
40.1.2 The Parties agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and accordingly
no Party will argue to the contrary.
40.1.3 This clause 40.1 (Jurisdiction of English courts) is for the benefit
of the Finance Parties only. As a result, no Finance Party shall be
prevented from taking proceedings relating to a Dispute in any other
courts with jurisdiction. To the extent allowed by law, the Finance
Parties may take concurrent proceedings in any number of
jurisdictions.
40.2 SERVICE OF PROCESS
40.2.1 Without prejudice to any other mode of service allowed under any
relevant law, the Borrowers irrevocably appoint Xxxxx Xxxxxxx,
Financial Controller, Xxxxxxxx Xxxx Plaza, 000 Xxxxxxxx Xxxxxx Xxxx,
Xxxxxx, XX0X 0XX, XXxx its agent for the service of process in
relation to any proceedings before the English courts in connection
with any Finance Document.
40.2.2 The Borrowers agree that failure by a process agent to notify the
relevant Borrower of the process will not invalidate the proceedings
concerned.
41. SECURITY DOCUMENTS
Where there is any conflict between the terms of this Agreement and any
Security Document, the terms of this Agreement shall prevail.
42. PERMITTED IPO
If requested to do so by the Borrowers, the Finance Parties shall, at the
cost of the Borrowers, release the share charges or pledges or other
security interests created over the shares in the Obligors in order to
allow a transfer of those shares to a new entity as part of carrying out a
Permitted IPO ("New Equity Holder") provided that the New Equity Holder:
(a) enters into share charges or pledges over the shares in the
relevant Obligors in the form of the documents required under
paragraphs 5.1 and 5.2 of Schedule 3 such that the Agent and the
Finance Parties are in substantially the same position as they
would have been if such transfers had not happened;
(b) delivers to the Agent certified copies of the minutes of a
meeting of the board of directors of the New Equity Holder (or
similar corporate governing body) approving the terms and the due
execution of such share charges or pledges; and
109
(c) if the New Equity Holder is incorporated outside England and
Wales a legal opinion from a firm of lawyers qualified in the
jurisdiction of incorporation of the New Equity Holder.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
110
SIGNATORIES
THE BORROWERS
Signed on behalf of
PARK PLAZA HOTELS EUROPE HOLDINGS BV -----------------------------------
(who shall act as agent for the Borrowers)
Signed on behalf of
RIVERBANK HOTEL HOLDING BV -----------------------------------
Signed on behalf of
VICTORIA LONDON HOTEL HOLDING BV -----------------------------------
Signed on behalf of
GRANDIS NETHERLANDS HOLDING BV -----------------------------------
THE ARRANGER
Signed on behalf of XXXXXXX
XXXXX INTERNATIONAL -----------------------------------
THE ORIGINAL LENDERS
Signed on behalf of XXXXXXX XXXXX
INTERNATIONAL BANK -----------------------------------
THE AGENT
Signed on behalf of
XXXXXXX XXXXX INTERNATIONAL -----------------------------------
Authorised signatory
THE SECURITY AGENT
Signed on behalf of
XXXXXXX XXXXX INTERNATIONAL -----------------------------------
Authorised signatory
142
THE HEDGE COUNTERPARTY
Signed on behalf of XXXXXXX XXXXX
INTERNATIONAL -----------------------------------
Authorised signatory
THE UK OPERATING COMPANIES
Signed on behalf of XXXXXXXX XXXX
PLAZA OPERATOR LIMITED -----------------------------------
Signed on behalf of SHERLOCK XXXXXX
PARK PLAZA LIMITED -----------------------------------
Signed on behalf of RIVERBANK
HOTEL OPERATOR LIMITED -----------------------------------
143
