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Section 1: 8-K (8-K)

 

 

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

 

FORM 8-K

 

CURRENT REPORT

PURSUANT TO SECTION 13 OR 15(d) OF THE

SECURITIES EXCHANGE ACT OF 1934

 

Date of Report (Date of earliest event reported): August 13, 2018

 

Global Net Lease, Inc.

(Exact Name of Registrant as Specified in Charter)

 

Maryland   001-37390   45-2771978

(State or other jurisdiction

of incorporation)

  (Commission File Number)  

(I.R.S. Employer

Identification No.)

 

405 Park Avenue, 3rd Floor
New York, New York 10022

(Address, including zip code, of Principal Executive Offices)

 

Registrant’s telephone number, including area code: (212) 415-6500

 

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

 

¨Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

 

¨Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

 

¨Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

 

¨Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

 

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

 

Emerging growth company ¨

 

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

 

 

 

   

 

  

Item 1.01Entry into a Material Definitive Agreement.

 

United Kingdom Refinancing

 

On August 13, 2018, certain wholly owned subsidiaries (the “Borrowers”) of Global Net Lease, Inc. (the “Company”), entered into a syndicated investment facility loan agreement (the “Loan Agreement”) with Lloyds Bank plc, as agent (the “Agent”), and also delivered an irrevocable utilization request pursuant to which, on August 16, 2018, the Borrowers borrowed £230.0 million (the “Loan”) secured by all 43 of the Company’s properties in the United Kingdom, which are directly owned by the Borrowers (each, a “Mortgaged Property” and collectively, the “Mortgaged Properties”), as well as the Company’s indirectly owned equity interests in the Borrowers. The Loan is also guaranteed by the Borrowers pursuant to the Loan Agreement.

 

The maturity date of the Loan is August 13, 2023 and it bears interest at a rate of 1.975% + 3-month GBP LIBOR, with the interest rate with respect to 80% of the principal amount to be fixed by a swap agreement, which is expected to be executed later today. The Loan Agreement requires quarterly interest-only payments for the first two years of the Loan followed by scheduled principal amortization of £37.9 million in the final three years of the Loan, with the remaining principal due at maturity.

 

At the closing of the Loan Agreement, £209 million of the net proceeds after costs and fees related to the Loan were used to repay all outstanding indebtedness encumbering 38 of the Mortgaged Properties, including indebtedness under which Agent was as lender. The other five Mortgaged Properties were unencumbered prior to the Loan.

 

The Borrowers may prepay the Loan in whole or in part at any time. Mandatory prepayments (or substitutions or additions to the pool of properties securing the Loan) are also required in connection with dispositions of Mortgaged Properties, curing certain defaults and other customary circumstances. In connection with any prepayment, the lenders under the Loan are entitled to receive a prepayment fee equal to (i) 3.00% of the amount prepaid for prepayments on or prior to August 13, 2019, (i) 2.00% of the amount prepaid for prepayments between August 14, 2019 and August 13, 2020, and (iii) 1.00% of the amount prepaid for prepayments between August 14, 2020 and August 13, 2021. No prepayment fee is payable after August 13, 2021.

 

The Loan Agreement contains customary representations and covenants for a loan agreement of this type, including financial covenants related to maintenance of interest coverage ratios and loan-to-value ratios with respect to the Mortgaged Properties, taken as a whole. Under certain circumstances and subject to conditions, the Company may be required to provide an unsecured corporate guaranty of the Borrowers’ obligations in an amount no greater than £20.0 million to the extent required to maintain compliance with these financial covenants. This guaranty would be pursuant to a form of guaranty agreement attached as an exhibit to the Loan Agreement which requires, among other things, that the Company maintain liquidity necessary to meet the amount obligations guaranteed and maintain compliance with the financial covenants contained in its corporate-level credit facility.

 

The foregoing summary of the material terms of the Loan Agreement does not purport to be complete and is subject to, and qualified in its entirety by reference to, the full text of the Loan Agreement, which is attached as Exhibit 10.1 to this Current Report on Form 8-K and incorporated herein by reference.

 

Item 2.03Creation of a Direct Financial Obligation or an Obligation under an Off-Balance Sheet Arrangement of a Registrant.

 

The information contained under the subheading United Kingdom Refinancing in Item 1.01 of this Current Report on Form 8-K is incorporated herein by reference. 

 

Item 9.01.Financial Statements and Exhibits.

 

(d)Exhibits

 

Exhibit No.   Description
10.1   Investment Facility Agreement, dated as August 13, 2018, among the borrower and guarantor entities thereto and Lloyds Bank PLC.

 

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SIGNATURES

 

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.

 

Date: August 16, 2018 By: /s/ James L. Nelson  
  Name: James L. Nelson  
  Title: Chief Executive Officer and President  

 

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Section 2: EX-10.1 (EXHIBIT 10.1)

 

Exhibit 10.1

 

 

 

EXECUTION VERSION

 

13 August 2018

 

THE ENTITIES LISTED IN Part A OF Schedule 1

as Borrowers

 

and

 

THE ENTITIES LISTED IN PART B OF Schedule 1

 

as Original Guarantors

 

arranged by

 

LLOYDS BANK PLC

 

with

 

LLOYDS BANK PLC

acting as Agent

 

and

 

LLOYDS BANK PLC

acting as Security Agent

 

Up to £230,000,000 investment facility agreement in connection with financing a portfolio of properties in the United Kingdom owned by Subsidiaries of Global Net Lease, Inc.

 

Herbert Smith Freehills LLP

 

 

 

 

TABLE OF CONTENTS

 

Clause Headings Page
     
1. Definitions and Interpretation 1
     
2. The Facilities 31
     
3. Purpose 32
     
4. Conditions of Utilisation 32
     
5. Utilisation 33
     
6. Repayment 34
     
7. Prepayment and Cancellation 34
     
8. Interest 39
     
9. Interest Periods 42
     
10. Changes to the Calculation of Interest 42
     
11. Fees 44
     
12. Tax Gross-Up and Indemnities 44
     
13. Increased Costs 53
     
14. Other Indemnities 54
     
15. Mitigation by the Lenders 56
     
16. Costs and Expenses 56
     
17. Bank Accounts 58
     
18. Guarantee and Indemnity 65
     
19. Representations 69
     
20. Information Undertakings 79
     
21. Financial Covenants 83
     
22. General Undertakings 85
     
23. Property Undertakings 98
     
24. Events of Default 108
     
25. Changes to the Lenders and Hedge Counterparties 112
     
26. Changes to the Transaction Obligors 118
     
27. Role of the Agent, the Security Agent, the Arranger and the reference banks 119
     
28. Application of Proceeds 133
     
29. Conduct of Business by The Finance Parties 134
     
30. Sharing Among the Finance Parties 134
     
31. Payment Mechanics 136
     
32. Set-Off 139
     
33. Notices 139
     
34. Calculations and Certificates 141
     
35. PARTIAL INVALIDITY 141
     
36. Remedies and Waivers 141
     
37. Amendments and Waivers 141

 

 

 

 

38. Confidential Information 145
     
39. Confidentiality of Funding Rates and Reference Bank Quotations 149
     
40. Counterparts 151
     
41. Governing Law 151
     
42. Enforcement 151
     
43. Bankruptcy Code 152
     
Schedule 1 The Original Parties and Properties 153
   
Part A THE BORROWERS 153
   
Part B The Guarantors 155
   
Part C The Original Lenders 157
   
Part D Property Schedule 158
   
Schedule 2 Conditions Precedent 162
   
Part A Conditions precedent to the loan 163
   
Part B Conditions Precedent – Additional Obligors 168
   
Schedule 3 Utilisation Request 169
   
Schedule 4 Amortisation Schedule 170
   
Schedule 5 Form of Transfer Certificate 171
   
Schedule 6 Form of Assignment Agreement 174
   
Schedule 7 Form of Hedge Counterparty Accession Letter 177
   
Schedule 8 Form of Resignation Letter 178
   
Schedule 9 Form of Compliance Certificate 179
   
Schedule 10 Form of Accession Letter 180
   
Schedule 11 Structure Chart 181
   
Schedule 12 Closing Accounts 182
   
Schedule 13 Property Monitoring Report 183
   
Schedule 14 GNL Guarantee 184
   
SIGNATURES 201

 

 

 

 

THIS AGREEMENT is dated 2018 and made between:

 

(1)THE ENTITIES listed in Part A of Schedule 1 (The Original Parties and Properties) as borrowers (the "Borrowers");

 

(2)THE ENTITIES listed in Part B of Schedule 1 (The Original Parties and Properties) as original guarantors (the "Original Guarantors");

 

(3)LLOYDS BANK PLC as mandated lead arranger and bookrunner (the "Arranger");

 

(4)THE FINANCIAL INSTITUTIONS listed in Part C of Schedule 1 (The Original Parties and Properties) as lender (the "Original Lenders");

 

(5)LLOYDS BANK CORPORATE MARKETS PLC as hedge counterparty ("Original Hedge Counterparty");

 

(6)LLOYDS BANK PLC as agent of the other Finance Parties (the "Agent"); and

 

(7)LLOYDS BANK PLC as security trustee for the Secured Parties (the "Security Agent").

 

IT IS AGREED as follows:

 

1.Definitions and Interpretation

 

1.1Definitions

 

In this Agreement:

 

"Acceptable Letter of Credit" means a letter of credit in form and substance satisfactory to the Agent (acting on the instructions of the Majority Lenders acting reasonably and in consultation with the Obligors' Agent), including the Agent being satisfied that:

 

(a)the letter of credit is issued by Société Générale, London Branch or any other bank with a branch located in London, that is acceptable to the Agent and (in the case of Société Générale, London Branch or any other bank) whose rating satisfies paragraphs (a)(i) and (ii) of the definition of Rating Criteria;

 

(b)the letter of credit must not comprise more than one document;

 

(c)payments under the letter of credit must be unconditionally payable on demand;

 

(d)the letter of credit must comply with and be subject to the then applicable uniform customs and practice for documentary credits;

 

(e)the terms of the letter of credit must explicitly state that payment obligations under the letter of credit must not be subject to any claim or set-off which the issuing bank may have or may acquire against any member of the Group or any Finance Party;

 

(f)the letter of credit must be effective from the date of delivery to the Agent for a period expiring no earlier than the Termination Date; and

 

(g)the letter of credit must be governed by English law.

 

"Accession Letter" means a document substantially in the form set out at Schedule 10 (Form of Accession Letter).

 

"Account" means each General Account, each Lux Account, the Deposit Account, the Disposals Account, the Cash Trap and Cure Account or the Rent Account.

 

"Account Charge" means a first ranking pledge granted or to be granted in favour of the Security Agent in respect of a Lux Account.

 

"Acquisition Agreement" means each sale and purchase agreement under which an Obligor purchased its Property or any shares in a Borrower.

 

"Acquisition Documents" means:

 

(a)an Acquisition Agreement;

 

(b)any Transfer Agreement;

 

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(c)any document entered into pursuant to a document referred to in paragraphs (a) or (b) above; and

 

(d)any other document designated as such in writing by both the Agent and an Obligor.

 

"Additional Hedge Counterparty" means a bank or financial institution which becomes a Hedge Counterparty in accordance with Clause 25.8 (Additional Hedge Counterparties).

 

"Additional Obligor" means a company which becomes an Additional Obligor in accordance with Clause 26 (Changes to the Transaction Obligors).

 

"Advance Notice" means an advance notice as defined in section 56 of the Land Registration etc. (Scotland) Act 2012.

 

"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.

 

"Agreement for Lease" means an agreement to grant an Occupational Lease of all or part of a Property.

 

"Allocated Loan Amount" means with respect to a Property, the amount set opposite that Property in the Property Schedule.

 

"Amortisation Requirement" means the requirement that, as at any date, the aggregate of:

 

(a)all Cash Trap Payments standing to the credit of the Cash Trap and Cure Account at that date;

 

(b)all Cash Trap Payments which have been applied in prepayment of the Loans pursuant to Clause 17.6.3(C) (Cash Trap and Cure Account) prior to that date; and

 

(c)all prepayments of the Loans made in accordance with Clause 7.5 (Voluntary prepayment of Loans), including any prepayment pursuant to Clause 21.4.4(E)(Cure rights), prior to that date,

 

is greater than £37,915,000.

 

"Asset Management Agreement" means each agreement in form and substance satisfactory to the Agent appointing an Asset Manager to a Property.

 

"Asset Manager" means any asset manager appointed in accordance with Clause 23.10 (Asset managers).

 

"Asset Manager Duty of Care Agreement" means a duty of care agreement between an Asset Manager, an Obligor, the Agent and the Security Agent in form and substance satisfactory to the Agent.

 

"Assignation of Rent" means an assignation of rent derived from a Property located in Scotland entered into or to be entered into by an Obligor in favour of the Security Agent in an agreed form.

 

"Assignment Agreement" means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor, the relevant assignee and the Agent.

 

"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

 

"Authorised Signatory" means:

 

(a)in the case of any Luxembourg Obligor, an A manager or a B manager; and

 

(b)in the case of any other Obligor, any person authorised under the jurisdiction of incorporation or establishment of that Obligor and that Obligor's constitutional documents, by-laws, articles of association or equivalent documents to enter into the Finance Documents or sign notices, certificates or other documents and board resolutions to be delivered under the Finance Documents.

 

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"Availability Period" means the period from the date of this Agreement to and including the date falling 20 Business Days after the date of this Agreement.

 

"Bail-In Action" means the exercise of any Write-down and Conversion Powers.

 

"Bail-In Legislation" means:

 

(a)in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and

 

(b)in relation to any other state, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation.

 

"Balance Sheet Management Transaction" means:

 

(a)a syndication, loan tranching, bifurcation or any form of distribution of credit exposure (including synthetic or off balance sheet distribution of credit exposure) of the whole or any part of a Facility;

 

(b)a German law mortgage bond issued in accordance with § 32 of the German Banking Act or any other covered bond in respect of which the whole or any part of a Facility related security forms part of the covered assets; and

 

(c)any other transaction intended to have a similar effect.

 

"Break Costs" means:

 

(a)in respect of any period when LIBOR is greater than or equal to zero, the amount (if any) by which:

 

(i)the interest (excluding Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

 

exceeds:

 

(ii)the amount which that Lender 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 Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period; or

 

(b)in respect of any period when LIBOR is less than zero, the sum of:

 

(i)the interest (excluding Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in the Loans or Unpaid Sum to the last day of the current Interest Period in respect of the Loans or Unpaid Sum, had the principal amount received been paid on the last day of that Interest Period; and

 

(ii)the cost to a Lender for placing any part of its participation in the Loans or Unpaid Sum received by it on deposit with a leading bank in the Relevant Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period in respect of the Loans or Unpaid Sum.

 

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York, USA.

 

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"Business Plan" means a business plan of the Obligors in the form most recently submitted to and approved by the Agent, for the period beginning on the date of the Business Plan and ending on the Termination Date, which includes details of the letting and marketing plan for the whole or any part of a Property which is vacant, subject to a Lease Document which terminates or entitles the tenant to terminate that Lease Document within 12 Months of the date of the Business Plan, or any Property which is subject to a Lease Document but not occupied by the relevant tenant together with details of any tenant incentives, plans to split any units forming part of a Property, the letting agent or agents appointed to market the relevant Property or any part thereof, an overview of historic marketing activity to include dates and minutes of meetings with and visits by prospective tenants together with, if requested by the Agent, confirmation by the Valuer of the attainable estimated rental value on a fully let basis for the relevant Property or any part thereof and that any assumptions or projections in the letting plan are in line with such attainable estimated rental values, and details of any proposed material structural alterations to a Property, in each case in a form and substance satisfactory to the Agent, as the same may be amended from time to time with the prior written consent of the Agent (acting reasonably).

 

"Cash Trap and Cure Account" means the account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that Account.

 

"Cash Trap Payment" has the meaning given to that term in Clause 17.6.2 (Cash Trap and Cure Account).

 

"Cash Trap Event" means the occurrence of any of the following:

 

(a)Historical Interest Cover is less than or equal to 325% on any Quarter Date;

 

(b)on any Interest Payment Date, Projected Interest Cover for the three Month period or 12 Month period commencing on that Interest Payment Date is less than or equal to 325%; or

 

(c)the Loan to Value exceeds or is equal to:

 

(i)55% at any time on or prior to the second anniversary of the date of this Agreement; or

 

(ii)50% at any time after the second anniversary of the date of this Agreement,

 

provided that in calculating such financial covenants any amounts standing to the credit of the Cash Trap and Cure Account or any amounts which the Agent is satisfied (acting reasonably) are capable of being drawn or claimed (as the case may be) pursuant to an Acceptable Letter of Credit or the GNL Guarantee shall be ignored .

 

"Closing Accounts" means each of the bank accounts specified in Schedule 12 (Closing Accounts).

 

"Code" means the US Internal Revenue Code of 1986.

 

"Commitment" means a Facility A Commitment or a Facility B Commitment.

 

"Compensation Prepayment Proceeds" means the proceeds of all compensation and/or damages for the compulsory purchase of, or any blight or disturbance affecting, any Property.

 

"Compliance Certificate" means a certificate substantially in the form set out in Schedule 9 (Form of Compliance Certificate).

 

"Confidential Information" means all information relating to any Obligor, the Finance Documents or a Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either:

 

(a)an Obligor or any of its advisers; or

 

(b)another Finance Party, if the information was obtained by that Finance Party directly or indirectly from an Obligor or any of its advisers,

 

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in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:

 

(c)information that:

 

(i)is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 38 (Confidential Information); or

 

(ii)is identified in writing at the time of delivery as non-confidential by an Obligor or any of its advisers; or

 

(iii)is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Obligors and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and

 

(d)any Funding Rate or a Reference Bank Quotation.

 

"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Obligors' Agent and the Agent.

 

"Contaminative Use" means any use of land which is specified as being contaminative by any Environmental Law or regulation or any use of or activity on land which requires an Environmental Permit or which results or would be reasonably likely to result in an Environmental Claim.

 

"Cure Notification" means a notification given pursuant to Clause 21.4.1 or Clause 21.4.2 (Cure rights) and in accordance with Clause 21.4.3 (Cure rights).

 

"Cure Payment" has the meaning given to that term in Clause 17.6.4 (Cash Trap and Cure Account).

 

"Cure Right" has the meaning given to that term in Clause 21.4.4 (Cure rights).

 

"CTA" means the Corporation Tax Act 2009.

 

"Dangerous Substance" means any natural or artificial substance (whether in a solid or liquid form or in the form of a gas or vapour and whether alone or in combination with any such other substance) capable of causing harm to the Environment or damaging the Environment or public health or welfare including any noxious, hazardous, toxic, dangerous, special or controlled waste or other polluting substance or matter.

 

"Debt Purchase Transaction" means, in relation to a person, a transaction where such person:

 

(a)purchases by way of assignment or transfer;

 

(b)enters into any sub-participation in respect of; or

 

(c)enters into any other agreement or arrangement having an economic effect substantially similar to an assignment, transfer or sub-participation in respect of,

 

any Commitment or amount outstanding under this Agreement.

 

"Default" means an Event of Default or any event or circumstance specified in Clause 24 (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.

 

"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Agent.

 

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"Deposit Account" means the account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that account.

 

"Disposals Account" means the account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that account.

 

"Disruption Event" means either or both of:

 

(a)a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with a Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

 

(b)the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

 

(i)from performing its payment obligations under the Finance Documents; or

 

(ii)from communicating with other Parties in accordance with the terms of the Finance Documents,

 

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

 

"Duty of Care Agreement" means:

 

(a)a Managing Agent Duty of Care Agreement; and

 

(b)any Asset Manager Duty of Care Agreement.

 

"EEA Member Country" means any member state of the European Union, Iceland, Liechtenstein and Norway.

 

"Environment" means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:

 

(a)air (including air within natural or man-made structures, whether above or below ground);

 

(b)water (including territorial, coastal and inland waters, water under or within land and water in drains and sewers); and

 

(c)land (including land under water).

 

"Environmental Claim" means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law.

 

"Environmental Law" means any applicable law or regulation which relates to:

 

(a)the pollution or protection of the Environment;

 

(b)environmental conditions in the workplace; or

 

(c)the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including any waste.

 

"Environmental Permit" means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any Obligor conducted on or from any property owned or used by any Obligor.

 

"EPC" means:

 

(a)in respect of a Property located in England or Wales, an energy performance certificate and recommendation report as defined in the Energy Performance of Buildings (Certificate and Inspections) (England and Wales) Regulations 2007; or

 

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(b)in respect of a Property located in Scotland, an energy performance certificate and recommendation report as defined in the Energy Performance of Buildings (Scotland) Regulations 2008 (as amended).

 

"ERISA" means the Employees Retirement and Income Security Act of 1974, as amended from time to time.

 

"Estimated Rental Value" and "ERV" means the estimated rental value of each Property as provided for in the most recent Valuation.

 

"EU Bail-In Legislation Schedule" means the document described as such and published by the Loan Market Association (or any successor person) from time to time.

 

"Event of Default" means any event or circumstance specified as such in Clause 24 (Events of Default).

 

"Excluded Recovery Proceeds" means any proceeds of a Recovery Claim which a Borrower notifies the Agent are, or are to be, applied:

 

(a)to satisfy (or reimburse an Obligor which has discharged) any liability, charge or claim upon an Obligor by a person which is not an Obligor or an Affiliate of an Obligor; or

 

(b)in the replacement, reinstatement and/or repair of assets of an Obligor which have been lost, destroyed or damaged,

 

in each case as a result of the events or circumstances giving rise to that Recovery Claim, if those proceeds are so applied as soon as reasonably practicable after receipt (but in any event not later than 90 days, or such longer period as the Majority Lenders may agree, after receipt).

 

"Facility" means Facility A or Facility B.

 

"Facility A" means the term loan facility made available under this Agreement as described in Clause 2.1.1 (The Facilities).

 

"Facility A Commitment" means:

 

(a)in relation to an Original Lender, the amount set opposite its name under the heading "Facility A Commitment" in Part C of Schedule 1 (The Original Parties and Properties) and the amount of any other Facility A Commitment transferred to it under this Agreement; and

 

(b)in relation to any other Lender, the amount of any Facility A Commitment transferred to it under this Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

"Facility A Lender" means a Lender with a Facility A Commitment.

 

"Facility A Loan" means a loan made or to be made under Facility A or the principal amount outstanding for the time being of that loan.

 

"Facility B" means the term loan facility made available under this Agreement as described in Clause 2.1.1 (The Facilities).

 

"Facility B Commitment" means:

 

(a)in relation to an Original Lender, the amount set opposite its name under the heading "Facility B Commitment" in Part C of Schedule 1 (The Original Parties and Properties) and the amount of any other Facility B Commitment transferred to it under this Agreement; and

 

(b)in relation to any other Lender, the amount of any Facility B Commitment transferred to it under this Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

"Facility B Lender" means a Lender with a Facility B Commitment.

 

  7

 

 

"Facility B Loan" means a loan made or to be made under Facility B or the principal amount outstanding for the time being of that loan.

 

"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.

 

"Factored ALA" means in respect of a Property being disposed of or a Property owned by a Borrower being disposed of in accordance with this Agreement:

 

(a)if at the time of the disposal:

 

(i)Loan to Value is less than or equal to 45%;

 

(ii)Historical Interest Cover on the most recent Quarter Date was greater than 400%; and

 

(iii)on the most recent Interest Payment Date, Projected Interest Cover for each of the three Month period and 12 Month period commencing on such Interest Payment Date was greater than 400%,

 

an amount equal to the Relevant Percentage of the Allocated Loan Amount for the Property; or

 

(b)in any other case, the greater of:

 

(i)an amount equal to the Relevant Percentage of the Allocated Loan Amount for that Property; and

 

(ii)the aggregate of net disposal proceeds received and to be received by a Transaction Obligor as a result of the relevant disposal.

 

"FATCA" means:

 

(a)sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

 

(b)any treaty, law, regulation or other official guidance of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law, regulation or other official guidance referred to in paragraph (a) above; or

 

(c)any agreement pursuant to the implementation of any treaty, law regulation, or other official guidance referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction.

 

"FATCA Application Date" means:

 

(a)in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

 

(b)in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2019; or

 

(c)in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2019,

 

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

 

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.

 

"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.

 

  8

 

 

"FATCA FFI" means a foreign financial institution as defined in section 1471(d)(4) of the Code which, if any Finance Party is not a FATCA Exempt Party, could be required to make a FATCA Deduction.

 

"Fee Letter" means any letter or letters between any of the Arranger, the Agent, the Security Agent and an Obligor setting out any of the fees referred to in Clause 11 (Fees).

 

"Finance Document" means:

 

(a)this Agreement;

 

(b)any Security Document;

 

(c)any Hedging Agreement;

 

(d)the Subordination Agreement;

 

(e)any Fee Letter;

 

(f)each Subordinated Creditor's Security Agreement;

 

(g)each Duty of Care Agreement;

 

(h)any GNL Guarantee;

 

(i)any Transfer Certificate;

 

(j)any Hedge Counterparty Accession Letter;

 

(k)any Assignment Agreement;

 

(l)any Resignation Letter;

 

(m)the Utilisation Request;

 

(n)any Accession Letter; or

 

(o)any other document designated as such by the Agent and an Obligor.

 

"Finance Party" means the Agent, the Security Agent, the Arranger, a Hedge Counterparty or a Lender.

 

"Financial Indebtedness" means any indebtedness for or in respect of:

 

(a)moneys borrowed;

 

(b)any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

 

(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, be treated as a balance sheet liability;

 

(e)receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis with the prior written consent of the Agent);

 

(f)any amount raised under any other transaction (including any forward sale or purchase agreement) of a type not referred to in any other paragraph of this definition 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 (or, if any actual amount is due as a result of the termination or close-out of that derivative transaction, that amount) 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; and

 

(i)the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (h) above.

 

  9

 

 

"First Shareholder" means ARC Global II (UK) Holdings S.à r.l., a company organised and existing as a private limited liability company (société à responsabilité limitée) under the laws of the Grand Duchy of Luxembourg, having its registered office at 46, boulevard Grande Duchesse Charlotte, L-1330 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Register of Commerce and Companies under number B197949.

 

"First Holdco" means ARC Global II (Midco) S.à r.l., a company organised and existing as a private limited liability company (société à responsabilité limitée) under the laws of the Grand Duchy of Luxembourg, having its registered office at 46, boulevard Grande Duchesse Charlotte, L-1330 Luxembourg, Grand Duchy of Luxembourg, registered with the Luxembourg Register of Commerce and Companies under number B201048.

 

"Floating Charge" means the bond and floating charge entered into or to be entered into by each of HC Glasgow S.à r.l., ARC Global II NCR S.à r.l. and ARC SLKRFCP001, LLC in favour of the Security Agent in the agreed form.

 

"Full Sweep Disposal" means a disposal of a Property or shares in a Borrower in accordance with this Agreement at any time when any of the following conditions are satisfied:

 

(a)Loan to Value is greater than 45%;

 

(b)Historical Interest Cover on the most recent Quarter Date is less than or equal to 400%; or

 

(c)on the most recent Interest Payment Date, Projected Interest Cover for each of the three Month period and 12 Month period commencing on such Interest Payment Date was less than or equal to 400%.

 

"Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to Clause 10.4.1(B) (Cost of funds).

 

"Funds Flow Statement" means the funds flow statement setting out the sources and uses of funds in relation to refinancing the existing Financial Indebtedness secured against the Properties and paying fees, costs and expenses incurred under the Finance Documents to the extent approved in writing by the Agent, as supplied as a condition precedent under this Agreement on or before the Utilisation Date.

 

"GAAP" means generally accepted accounting principles in the US (including IFRS).

 

"General Account" means each account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that Account.

 

"GNL Default" means:

 

(a)a breach of any term of the GNL Guarantee by the Ultimate Owner which has not been remedied or waived in writing by the Security Agent within 10 Business Days;

 

(b)a change of control (as defined in Clause 7.2.2(A)(3) (Change of control)) occurs or the Ultimate Owner ceases to be listed on the New York Stock Exchange, the National Association of Securities Dealers Automated Quotations exchange, the London Stock Exchange or any other publicly recognised stock exchange approved by the Majority Lenders (acting reasonably);

 

(c)an Event of Default is continuing pursuant to Clause 24.5 (Cross default), Clause 24.6 (Insolvency), Clause 24.7 (Insolvency proceedings) or Clause 24.8 (Creditors' process) in respect of the Ultimate Owner; or

 

(d)an Event of Default occurs under and as defined in the RCF (as defined in the GNL Guarantee).

 

"GNL Ineligibility Event" means:

 

(a)a GNL Default; or

 

  10

 

 

(b)the Ultimate Owner has notified the Agent or the Security Agent of an event of the type referred to in clause 6.2 or 6.3 (Financial statements, certificates and information) of the GNL Guarantee and the Agent has notified the Obligors' Agent that in the opinion of the Majority Lenders (acting reasonably) that such event adversely affects the credit support or covenant protection provided by the GNL Guarantee.

 

"GNL Guarantee" means a guarantee from the Ultimate Owner in favour of the Security Agent in the form set out in Schedule 14 (GNL Guarantee).

 

"Group" means each Transaction Obligor and the Ultimate Owner.

 

"Headlease" means a lease under which a Borrower holds title to a Property.

 

"Hedge Counterparty" means the Original Hedge Counterparty or any Additional Hedge Counterparty.

 

"Hedge Counterparty Accession Letter" means a document substantially in the form set out in Schedule 7 (Form of Hedge Counterparty Accession Letter).

 

"Hedging Agreement" means any master agreement, confirmation, transaction, schedule or other agreement in agreed form entered into or to be entered into by a Borrower with the Hedge Counterparty for the purpose of hedging interest payable under this Agreement.

 

"Hedging Prepayment Proceeds" means any amount payable to any Borrower as a result of termination or closing out under a Hedging Agreement.

 

"Historical Interest Cover" means, as at any date, passing rental as a percentage of finance costs at that date. For the purposes of this definition:

 

(a)"calculation period" means a period of 12 months or, if less, the period from the Utilisation Date to the date as at which the relevant calculation is made;

 

(b)"finance costs" means the aggregate amount of interest and periodic agency and trustee fees paid to the Finance Parties under this Agreement during any calculation period in respect of which passing rental has been calculated;

 

(c)"passing rental" means, as at any date, the passing Net Rental Income that was received on a regular quarterly basis by the Obligors under the Lease Documents during the calculation period ending on that date;

 

(d)in calculating finance costs:

 

(i)any amount payable or receivable by a Borrower during the relevant calculation period under any Hedging Agreements will be taken into account; and

 

(ii)any Cure Payments standing to the credit of the Cash Trap and Cure Account (other than amounts representing Prepayment Amounts and payments made to cure breaches of Clause 21.3 (Loan to Value)) on the last day of that calculation period and any amounts which the Agent is satisfied are capable of being drawn pursuant to any Acceptable Letter of Credit (less the relevant Prepayment Amounts which would be payable if such drawings were applied in prepayment of the Loans) which is unconditionally held by the Security Agent on the last day of the relevant calculation period will be deemed to have been applied in prepayment of the Loans at the start of that calculation period;

 

(e)in calculating passing rental:

 

(i)Net Rental Income will be ignored:

 

(A)if paid by a tenant that is an Obligor or affiliated or related to an Obligor; and

 

(B)if not paid under a binding Lease Document where the obligation to pay rent is unconditional;

 

  11

 

 

(ii)Net Rental Income will be reduced by the amount of any Non Deductible Interest Tax and by the amount of any deduction or withholding for or on account of Tax from that Net Rental Income; and

 

(iii)Net Rental Income will be reduced by the amounts (together with any related VAT):

 

(A)of ground rent, rates and insurance premia;

 

(B)in respect of costs and expenses incurred in complying with applicable laws and regulations relating to any Property;

 

(C)in respect of management, maintenance, repair or similar fees, costs and expenses in relation to any Property; and

 

(D)in respect of the provision of services relating to any Property,

 

to the extent that any of those items are not funded by any tenant, by way of Tenant Contributions or otherwise, under the Lease Documents (including as a result of any lettable space in any Property being vacant); and

 

(f)the Obligors' Agent shall calculate Historical Interest Cover pursuant to Clause 20.2 (Compliance Certificate) or at the request of the Agent. However if:

 

(i)the Obligors' Agent does not provide a calculation pursuant to Clause 20.2 (Compliance Certificate) or when requested by the Agent (as applicable); or

 

(ii)the Agent disagrees with the calculation provided;

 

then the Agent may calculate Historical Interest Cover in accordance with Clause 20.2.3 (Compliance Certificate) and that calculation of the Agent shall (in the absence of manifest error) prevail over any calculation of the Obligors' Agent.

 

"Holdco" means each of First Holdco and Second Holdco.

 

"Holdco Security Agreement" means a Security over the shares of each Shareholder and a Security over a Holdco's Subordinated Debt entered into or to be entered into by a Holdco in favour of the Security Agent in an agreed form including, for the First Holdco, a Luxembourg law share pledge and intercompany loan pledge agreement over the shares issued by the First Shareholder and any receivables owed by the First Shareholder to their shareholder, in each case in an agreed form.

 

"Holding Company" means, in relation to a person, any other person in respect of which it is a Subsidiary.

 

"IFRS" means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.

 

"Incoming Property" means a property which becomes a Property for the purposes of this Agreement in accordance with Clause 22.5 (Substitution).

 

"Initial Properties" means all the land and buildings described in the Property Schedule as at the date of this Agreement.

 

"Initial Valuation" means:

 

(a)in respect of the Initial Properties, the valuation of such Properties prepared by the Valuer and supplied to the Agent as a condition precedent under this Agreement on or before the Utilisation Date; or

 

(b)in respect of an Incoming Property, the valuation of such Incoming Property prepared by the Valuer and provided pursuant to Clause 22.5.4(F)(1) (Substitution).

 

"Insurance Prepayment Proceeds" means any proceeds of Insurances required to be paid into the Deposit Account in accordance with Clause 23.11.10 (Insurances).

 

"Insurances" means any contract of insurance required under Clause 23.11 (Insurances).

 

  12

 

 

"Intellectual Property" means:

 

(a)any patents, trademarks, service marks, designs, business names, copyrights, database rights, design rights, domain names, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests (which may now or in the future subsist), whether registered or unregistered; and

 

(b)the benefit of all applications and rights to use such assets of each Obligor (which may now or in the future subsist).

 

"Interest Payment Date" means 25 January, 25 April, 25 July and 25 October in each year, the Termination Date, with the first Interest Payment Date being 25 January 2019. If, however, any such day is not a Business Day, the Interest Payment Date will instead be the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

"Interest Period" means, in relation to a 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 8.4 (Default interest).

 

"Interpolated Screen Rate" means, in relation to any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:

 

(a)the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and

 

(b)the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,

 

each as of 11.00am on the Quotation Day for the currency of that Loan.

 

"ITA" means the Income Tax Act 2007.

 

"Lease Document" means:

 

(a)an Agreement for Lease;

 

(b)an Occupational Lease; or

 

(c)any other document designated as such by the Agent and an Obligor.

 

"Lease Prepayment Proceeds" means any premium or other amount paid to an Obligor in respect of any agreement to amend, supplement, extend, waive, surrender or release a Lease Document.

 

"Legal Reservations" means:

 

(a)the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

 

(b)the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;

 

(c)the limitation of the enforcement of the terms of leases of real property by laws of general application to those leases;

 

(d)similar principles, rights and remedies under the laws of any Relevant Jurisdiction; and

 

(e)any other matters which are set out as qualifications or reservations as to matters of law of general application in any legal opinions supplied to the Agent as a condition precedent under this Agreement on or before the Utilisation Date.

 

"Lender" means:

 

(a)any Original Lender; and

 

  13

 

 

(b)any other person which has become a Lender in accordance with Clause 25 (Changes to the Lenders and Hedge Counterparties),

 

which in each case has not ceased to be a Party in accordance with the terms of this Agreement.

 

"LIBOR" means, in relation to any Loan:

 

(a)the applicable Screen Rate as of 11.00am on the Quotation Day for that Loan for sterling and for a period equal in length to the Interest Period of that Loan; or

 

(b)as otherwise determined pursuant to Clause 10.1 (Unavailability of Screen Rate),

 

and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

 

"Limitation Acts" means the Limitation Act 1980, the Foreign Limitation Periods Act 1984 and the Prescription and Limitation (Scotland) Act 1973.

 

"LMA" means the Loan Market Association.

 

"Loan" means a loan made or to be made under this Agreement or the principal amount outstanding for the time being of that loan.

 

"Loan to Cost" means, at any time, the ratio (expressed as a percentage) that the Loans and any other amounts outstanding under the Finance Documents, bear to the aggregate amount of costs incurred in respect of the original acquisition of the Properties.

 

"Loan to Value" means, at any time, the aggregate of the Loans and any other amounts outstanding under the Finance Documents, less:

 

(a)provided a GNL Ineligibility Event is not continuing, the amount that can be claimed in respect of the Guaranteed Obligations (as defined in the GNL Guarantee) up to a maximum of £20,000,000 less the relevant Prepayment Amounts which would be payable if the proceeds of such claim were applied in prepayment of the Loans;

 

(b)so much of the amount standing to the credit of the Disposals Account or the Deposit Account as is unconditionally required to be applied in prepayment of the Loans;

 

(c)any Cure Payments (other than amounts representing Prepayment Amounts) standing to the credit of the Cash Trap and Cure Account; and

 

(d)the amount which the Agent is satisfied is capable of being drawn pursuant to an Acceptable Letter of Credit (less the relevant Prepayment Amounts which would be payable if such drawings were applied in prepayment of the Loans) which is unconditionally held by the Security Agent,

 

as a percentage of the aggregate Market Value of the Properties (determined in accordance with the most recent Valuation of the Properties at that time).

 

"Lux Account" means each account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that Account.

 

"Luxembourg" means the Grand Duchy of Luxembourg.

 

"Luxembourg Obligor" means any Obligor whose registered office or place of central administration is located in Luxembourg.

 

"Majority Lenders" means:

 

(a)if there is no Loan outstanding, a Lender or Lenders whose Commitments aggregate more than 662/3% of the Total Commitments or, if the Total Commitments have been reduced to zero, aggregated more than 662/3% 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 662/3% of the Loans then outstanding.

 

  14

 

 

"Management Company" means each of

 

(a)Central Park Management (2002) Limited, a company registered in England and Wales with company number 04410233; and

 

(b)Kembrey Park Management Limited, a company registered in England and Wales with company number 05877049.

 

"Managing Agent" means CBRE Limited or any other managing agent appointed in respect of a Property in accordance with Clause 23.9 (Managing Agents).

 

"Managing Agent Agreement" means each agreement (in form and substance satisfactory to the Agent) appointing a Managing Agent to manage a Property.

 

"Managing Agent Duty of Care Agreement" means in relation to the Properties an agreement made between an Obligor, any Managing Agent, the Agent and the Security Agent in form and substance satisfactory to the Agent.

 

"Margin" means 1.975% per annum.

 

"Market Value" has the meaning given to that term in the then current Statement of Asset Valuation Practice and Guidance Notes prepared by the Assets Valuation Standards Committee of the Royal Institution of Chartered Surveyors.

 

"Material Adverse Effect" means a material adverse effect on:

 

(a)the business, assets or condition of the Transaction Obligors (taken as a whole);

 

(b)the ownership, condition or use of the Properties (taken as a whole); or

 

(c)the ability of the Transaction Obligors (taken as a whole) to perform any of their obligations under the Finance Documents; or

 

(d)the validity or enforceability of, or the effectiveness or ranking of any Security granted or purported to be granted pursuant to any of, the Finance Documents; or

 

(e)the rights or remedies of any Finance Party under any of 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; and

 

(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.

 

The above rules will only apply to the last Month of any period.

 

"Moorclose Road Freehold" has the meaning given to it in Clause 22.29.1 (Condition subsequent – Freehold title at Salterbeck)

 

"Net Rental Income" means Rental Income other than Tenant Contributions.

 

"New Lender" has the meaning given to that term in Clause 25 (Changes to the Lenders and Hedge Counterparties).

 

"Non-Consenting Lender" means any Lender (other than an Original Lender or an Affiliate of an Original Lender) which:

 

(a)has not agreed to an amendment, waiver or consent referred to in Clause 37.2 (All Lender matters) which has otherwise been agreed by the Majority Lenders; or

 

(b)a Lender which has failed to respond to a request for an amendment, waiver or consent which has been delivered to it in accordance with this Agreement within 30 days of such delivery.

 

  15

 

 

"Non-Deductible Interest Tax" means, if Tax is payable by an Obligor as computed for tax purposes not recognising in full any deduction for interest payable in respect of Financial Indebtedness, an amount equal to the aggregate amount of such Tax that was paid, or is expended to be payable in the relevant period.

 

"Obligor" means each Original Obligor and each Additional Obligor.

 

"Obligors' Agent" means the Second Shareholder.

 

"Occupational Lease" means any lease or licence or other right of occupation or right to receive rent to which a Property may at any time be subject and includes any guarantee of a tenant's obligations under the same.

 

"Original Financial Statements" means in relation to the Borrowers, their unaudited annual financial statements for the financial year ended 2017.

 

"Original Jurisdiction" means, in relation to any Obligor, the jurisdiction under whose laws that Obligor is incorporated or formed as at the date of this Agreement.

 

"Original Obligor" means each Borrower and each Original Guarantor.

 

"Outgoing Property" means:

 

(a)a Property disposed of; or

 

(b)a Property owned by a Borrower the shares of which are disposed of,

 

(in each case) in accordance with Clause 22.4.3 (Disposals).

 

"Party" means a party to this Agreement.

 

"Permitted Contract" means any agreement (other than a Transaction Document) entered into on arms' length terms with unrelated third parties which is required for the day to day management and operation of a Borrower's business entered into in the ordinary course of its business which has been conducted in accordance with this Agreement and provided that the aggregate liability (whether present or future, actual or contingent) of the Obligors under all such agreements is not greater than £500,000 per annum .

 

"Permitted Payment" means:

 

(a)a payment by an Obligor to another Obligor solely for the purpose of paying amounts due and payable under the Finance Documents; or

 

(b)a payment by an Obligor to a Subordinated Creditor out of moneys standing to the credit of the General Account provided that no Default and no Cash Trap Event is continuing at the time of the payment nor will a Default nor a Cash Trap Event result from the payment.

 

"Perfection Requirements" means the making or the procuring of filings, stampings, registrations, notarisations, endorsements, translations and/or notifications of any Finance Document (and/or any Security created under it) necessary for the validity, enforceability (as against any Obligor or any relevant third party) and/or perfection of that Finance Document.

 

"Planning Laws" means:

 

(a)in respect of a Property located in England or Wales, the Town and Country Planning Act 1990, the Planning (Listed Buildings and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990, the Planning (Consequential Provisions) Act 1990, the Planning and Compensation Act 1991, the Planning and Compulsory Purchase Act 2004, the Planning Act 2008, the Localism Act 2011; and

 

(b)in respect of a Property located in Scotland, the Town and Country Planning (Scotland) Act 1997, the Planning (Listed Buildings and Conservation Areas) (Scotland) Act 1997, the Planning (Hazardous Substances) (Scotland) Act 1997, the Planning (Consequential Provisions) (Scotland) Act 1997, the National Parks (Scotland) Act 2000 and the Planning, etc. (Scotland) Act 2006, the Local Government (Scotland) Act 1973, the Roads (Scotland) Act 1984,

 

  16

 

 

and, in any case, any other enactment for the time being in force relating to the use, development and enjoyment of land and buildings.

 

"Prepayment Amount" means, in respect of a Relevant Cure Amount, the Agent's estimate (acting reasonably) of the aggregate of such amounts which would be due and payable under Clause 7.8.2 (Restrictions) if that Relevant Cure Amount were applied in prepayment of the Loans.

 

"Projected Interest Cover" means, as at any date passing rental as a percentage of finance costs at that date. For the purposes of this definition:

 

(a)"calculation period" means a period of 3 Months or 12 Months or, if less, the period from the date as at which the relevant calculation is made to the Termination Date;

 

(b)"finance costs" means the aggregate amount of interest and periodic agency and trustee fees payable to the Finance Parties under the Finance Documents during any calculation period in respect of which passing rental has been calculated;

 

(c)"passing rental" means, as at any date, the passing Net Rental Income That will be received on a regular periodical basis by the Borrowers under the Lease Documents during each the calculation period commencing on that date;

 

(d)in calculating finance costs:

 

(i)any amount payable or receivable by a Borrower during the relevant calculation period under any Hedging Agreements will be taken into account; and

 

(ii)any Cure Payments standing to the credit of the Cash Trap and Cure Account (other than amounts representing Prepayment Amounts and payments made to cure breaches of Clause 21.3 (Loan to Value)) on the first day of that calculation period and any amounts which the Agent is satisfied are capable of being drawn pursuant to any Acceptable Letter of Credit (less the relevant Prepayment Amounts which would be payable if such drawings were applied in prepayment of the Loans) which is unconditionally held by the Security Agent on the first day of that calculation period will be deemed to have been applied in prepayment of the Loans at the start of that calculation period;

 

(e)in calculating three month passing rental and twelve month passing rental:

 

(i)a break clause under any Lease Document will be deemed to be exercised at the earliest date available to the relevant tenant in accordance with the terms of the relevant Lease Document;

 

(ii)Net Rental Income for the whole of the relevant period will be ignored:

 

(A)if payable by a tenant that is an Obligor or affiliated or related to an Obligor;

 

(B)if not paid under a binding Lease Document where the obligation to pay rent is unconditional; or

 

(C)if payable by a tenant that is the subject of any corporate action, legal proceeding or other procedure or step described in Clause 24.7.1 (Insolvency proceedings);

 

(iii)potential Net Rental Income increases as a result of rent reviews will be ignored until unconditionally ascertained;

 

  17

 

 

(iv)Net Rental Income for the whole of the relevant period payable by a tenant that is more than one month in arrears on any of its rental payments will be ignored;

 

(v)Net Rental Income will be reduced by the amount of any Non Deductible Interest Tax and by the amount of any deduction or withholding for or on account of Tax from that Net Rental Income;

 

(vi)Net Rental Income for the whole of the relevant period will be reduced by the amounts (together with any related VAT) payable during the whole of the relevant period:

 

(A)of ground rent and other sums payable under Headleases, rates and insurance premia;

 

(B)in respect of costs and expenses incurred in complying with applicable laws and regulations relating to any Property;

 

(C)in respect of management, maintenance, repair or similar fees, costs and expenses in relation to any Property; and

 

(D)in respect of the provision of services relating to any Property,

 

to the extent that any of those items are not funded by the tenants, by way of Tenant Contributions or otherwise, under the Lease Documents provided that if any tenant is obliged to fund such items but the Net Rental Income of that tenant is excluded from the calculation of passing rental as a result of the operation of any provisions of this Agreement, Net Rental Income shall be reduced by such amounts; and

 

(f)in calculating finance costs, LIBOR shall be calculated assuming a 12 Month interest period beginning on the first day of the relevant calculation period; and

 

(g)for any calculation period commencing on or after the fourth Interest Payment Date prior to the Termination Date:

 

(i)LIBOR shall be deemed to be calculated assuming a 12 Month interest period beginning on the first day of the relevant calculation period; and

 

(ii)it shall be assumed that interest and fees continue to be payable under the Finance Documents up to and including the last day of that calculation period; and

 

(h)the Obligors' Agent shall calculate Projected Interest Cover pursuant to Clause 20.2 (Compliance Certificate) or at the request of the Agent. However if:

 

(i)the Obligors' Agent does not provide a calculation pursuant to Clause 20.2 (Compliance Certificate) or when requested by the Agent (as applicable); or

 

(ii)the Agent disagrees with the calculation provided;

 

then the Agent may calculate Projected Interest Cover in accordance with Clause 20.2.3 (Compliance Certificate) and that calculation of the Agent shall (in the absence of manifest error) prevail over any calculation of the Obligors' Agent.

 

"Property" means each property listed in the Property Schedule as more particularly described in a Security Document and, where the context so requires, includes the buildings on the Property.

 

"Property Protection Loan" means a loan made by a Lender to a Borrower to finance:

 

(a)the payment of rent or any other amount, or any cost or expense, under or in connection with a Headlease;

 

(b)the payment of any premium for insurance, or any cost or expense required to keep any insurance in force, in accordance with this Agreement; or

 

  18

 

 

(c)the payment of any amount which, in the opinion of the Lender concerned, is required to preserve or protect any Security Asset,

 

in circumstances where an Obligor is obliged under a Finance Document but has failed to pay the relevant amount prior to the expiry of any applicable notice procedures and grace periods.

 

"Property Report" means, in respect of any Property, any certificate of or report on title (including any Certificate of Title in the form of the City of London Law Society (Seventh Edition 2012) Wrapper or a Property Standardisation Group Certificate of Title (Based on the CLLS Certificate of Title format (Seventh Edition 2016 update) in Scotland) and any other environmental report, insurance report or any other report or survey relating to any Property supplied to and approved by the Agent under this Agreement.

 

"Property Schedule" means Part D of Schedule 1 (The Original Parties and Properties) subject to any updates or amendments as may be specified, or approved, by the Agent.

 

"Qualifying Lender" has the meaning given to it in Clause 12 (Tax Gross-Up and Indemnities).

 

"Quarter Date" means 31 March, 30 June, 30 September and 31 December in each year,

 

"Quotation Day" in relation to any period for which an interest rate is to be determined, means:

 

(a)in relation to an interest rate to be determined in respect of a Loan B, the date falling 2 Business Days prior to the first day of that period; and

 

(b)in any other case, the first day of that period unless market practice differs in the Relevant Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Market (and if quotations would normally be given on more than one day, the Quotation Day will be the last of those days).

 

"Rating Agency" means:

 

(a)Moody's Investor Services, Inc. ("Moody's"), Standard & Poor's Rating Services ("S&P") or Fitch Ratings Limited ("Fitch") (or, in each case its successor rating business); and

 

(b)any other rating agency or other person engaged by any Finance Party to provide a rating of any debt instrument to be issued in connection with any Balance Sheet Management Transaction.

 

"Rating Criteria" means:

 

(a)in relation to a bank (other than Lloyds Bank plc) at which an Account or a Managing Agent's account is held or a bank which is the provider of a letter of credit:

 

(i)at least two ratings of at least F-2 by Fitch, P-2 by Moody's or A-2 by S&P (or, in each case, its successor rating business) in respect of its short term instruments; and

 

(ii)at least two ratings of at least BBB+ by Fitch, Baa1 by Moody's or BBB+ by S&P (or, in each case, its successor rating business) in respect of its long term instruments in each case with a stable outlook or better; and

 

(b)in relation to any insurance company or underwriter, at least two ratings of at least BBB+ by Fitch, Baa1 by Moody's or BBB+ by S&P (or, in each case, its successor rating business) with, in each case, a stable outlook or better; and

 

(c)in relation to a Hedge Counterparty (other than the Original Hedge Counterparty):

 

(i)at least two ratings of at least A-2 by S&P, P-2 by Moody's and F2 by Fitch (or, in each case, its successor rating business) in respect of its short term instruments; and

 

  19

 

 

(ii)at least two ratings of at least A- by S&P, A3 by Moody's and A- by Fitch (or its successor rating business) in respect of its long term instruments with a stable outlook or better,

 

and in each case where such long or short term instruments are unsecured debt instruments which are neither subordinated nor guaranteed.

 

"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Security Assets.

 

"Recovery Prepayment Proceeds" means the proceeds of a claim (a "Recovery Claim") against:

 

(a)the vendor of the shares in any Borrower or any Property or any of its Affiliates (or any employee, officer or adviser); or

 

(b)the provider of any Property Report or the provider of any other due diligence report (in its capacity as provider of the same) in connection with the acquisition, development, financing or refinancing of the shares in any Borrower or any Property,

 

except for Excluded Recovery Proceeds, and after deducting:

 

(i)any reasonable expenses incurred by an Obligor to a person who is not an Obligor or an Affiliate of an Obligor; and

 

(ii)any Tax incurred and required to be paid by an Obligor (as reasonably determined by that Obligor on the basis of existing rates and taking into account any available credit, deduction or allowance),

 

in each case in relation to that Recovery Claim.

 

"Reference Bank Quotation" means any quotation of a rate supplied to the Agent by a Reference Bank.

 

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks:

 

(a)(other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in sterling for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

 

(b)if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator.

 

"Reference Banks" means the principal London offices of Lloyds Bank plc or such other entities as may be appointed by the Agent in consultation with the Obligors' Agent.

 

"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.

 

"Release Amount" means, in respect of the disposal of a Property or the shares in a Borrower, the aggregate of:

 

(a)the applicable Factored ALA for that Property or, in the case of the disposal of a Borrower's shares, each Property owned by the Borrower whose shares are to be disposed; and

 

  20

 

 

(b)an amount calculated by the Agent in consultation with each Lender (and, in connection with the Hedging Agreements only, in consultation with the Hedge Counterparty) that will become due and payable under the Hedging Agreements and to provide for prepayment fees and any other amount that is or will become due and payable in accordance with Clause 7.8.2 (Restrictions) as a result of the application of the amount referred to in paragraph (a) above in prepayment of the Loans, less any amounts which have been funded from equity contributions or Subordinated Debt made available directly to an Obligor in accordance with the Finance Documents and deposited in the Disposals Account after the Obligors have given written notice to the Agent that such amounts will be so deposited for the purpose of paying the costs referred to in this paragraph (b) in connection with the relevant disposal.

 

"Relevant Cure Amount" means, at any time, an amount equal to the Agent's estimate of the amount the Loans would need to be reduced to ensure:

 

(a)in the case of a cure of Clause 21.1 (Historical Interest Cover) and Clause 21.2 (Projected Interest Cover), Historical Interest Cover and Projected Interest Cover are each at least 325%; and

 

(b)in the case of a cure of Clause 21.3 (Loan to Value), Loan to Value is not greater than 55%.

 

"Relevant Jurisdiction" means, in relation to an Obligor:

 

(a)its Original Jurisdiction;

 

(b)any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;

 

(c)any jurisdiction where it conducts its business; and

 

(d)the jurisdiction whose laws govern the perfection of any of the Security Documents entered into by it.

 

"Relevant Legal Matters" means matters of law set out in any legal opinion delivered to the Agent under Clause 4.1 (Initial conditions precedent).

 

"Relevant Percentage" means on any day on which a Release Amount is required to be determined for the purposes of this Agreement:

 

(a)if on that day WAULT is equal to or greater than 7 years, 120%; or

 

(b)if on that day WAULT at that time is less than 7 years, 130%.

 

"Relevant Market" means the London interbank market.

 

"Rent Account" means the account designated as such under Clause 17.1 (Designation of Accounts) and includes any replacement of that Account.

 

"Rental Income" means the aggregate of all amounts paid or payable to or for the account of any Obligor in connection with the letting, licence or grant of other rights of use or occupation of any part of a Property, including each of the following amounts:

 

(a)rent, licence fees and equivalent amounts paid or payable;

 

(b)any sum received from any deposit held as security for performance of a tenant's obligations;

 

(c)a sum equal to any apportionment of rent allowed in favour of any Obligor;

 

(d)any other moneys paid or payable in respect of occupation and/or usage of that Property and any fixture and fitting on that Property including any fixture or fitting on that Property for display or advertisement, on licence or otherwise;

 

(e)any sum paid or payable under any policy of insurance in respect of loss of rent or interest on rent;

 

(f)any sum paid or payable, or the value of any consideration given, for the grant, surrender, renunciation, amendment, supplement, waiver, extension or release of any Lease Document;

 

(g)any sum paid or payable in respect of a breach of covenant, undertaking or dilapidations under any Lease Document;

 

  21

 

 

(h)any sum paid or payable by or distribution received or receivable from any guarantor of any occupational tenant under any Lease Document;

 

(i)any Tenant Contributions; and

 

(j)any interest paid or payable on, and any damages, compensation or settlement paid or payable in respect of, any sum referred to above less any related fees and expenses incurred (which have not been reimbursed by another person) by any Obligor.

 

"Repayment Instalment" means each scheduled instalment for the repayment of the Loans under Clause 6.2 (Repayment Instalments).

 

"Repeating Representations" means each of the representations set out in Clause ‎19.1 (Status) to Clause ‎19.6 (Governing law and enforcement) and Clause ‎19.10 (VAT) to Clause ‎19.35 (ERISA) other than Clause 19.19 (Environmental Matters).

 

"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

"Resignation Letter" means a letter substantially in the form set out in Schedule 8 (Form of Resignation Letter).

 

"Restricted Affiliate" means each Obligor and its respective Affiliates, any trust of which an Obligor or any of its Affiliates is a trustee, any partnership of which an Obligor or any of its Affiliates is a partner and any trust, fund or other entity which is managed by, or is under the control of, an Obligor or any of its Affiliates and any person with whom any Obligor or its respective Affiliates is or are acting in concert (as defined in Clause 7.2 (Change of Control)).         

 

"Resolution Authority" means any body which has authority to exercise any Write-down and Conversion Powers.

 

"Sanctioned Person" means a person that is listed on, or owned or controlled by, or acting on behalf of, a person listed on any Sanctions List, or who is otherwise the target of Sanctions.

 

"Sanctions" means any laws or regulations relating to economic or financial sanctions or trade embargoes or related restrictive measures imposed, administered or enforced from time to time by a Sanctions Authority.

 

"Sanctions Authority" means (i) the United Nations Security Council, (ii) the United States government, (iii) the European Union, (iv) the United Kingdom government, (v) the respective governmental institutions and agencies of any of the foregoing, including the Office of Foreign Assets Control of the US Department of Treasury ("OFAC"), the United States Department of State and Department of Commerce, and Her Majesty’s Treasury, and (vi) any other governmental institution or agency with responsibility for imposing, administering or enforcing Sanctions with jurisdiction over any Finance Party or any member of the Group (together, "Sanctions Authorities").

 

"Sanctions List" means the Specially Designated Nationals and Blocked Persons list maintained by OFAC, the Denied Persons List maintained by the US Department of Commerce, the Consolidated List of Financial Sanctions Targets maintained by Her Majesty’s Treasury, or any other list issued or maintained by any Sanctions Authorities of persons subject to Sanctions (including investment or related restrictions), each as amended, supplemented or substituted from time to time.

 

"Screen Rate" means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for sterling for the relevant period, displayed (before any correction, recalculation or republication by the administrator) on page LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Obligors' Agent.

 

  22

 

 

"Second Holdco" means ARC Global Holdco, LLC.

 

"Second Shareholder" means ARC HPDFS Holdco, LLC.

 

"Secured Liabilities" means all present and future obligations and liabilities (whether actual or contingent and whether owed jointly or severally or in any other capacity whatsoever) of each Transaction Obligor to any Secured Party under each Finance Document.

 

"Secured Party" means a Finance Party, a Receiver or any Delegate.

 

"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 Agreement" means a Security over the assets of an Obligor entered into or to be entered into by that Obligor in favour of the Security Agent in an agreed form.

 

"Security Asset" means all of the assets of the Transaction Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.

 

"Security Document" means:

 

(a)a Security Agreement, a Shareholder's Security Agreement, a Holdco Security Agreement, a Subordinated Creditor's Security Agreement, an Account Charge, a Standard Security, the Floating Charge or an Assignation of Rent;

 

(b)any other document evidencing or creating Security over any asset to secure any obligation of any Obligor to a Secured Party under the Finance Documents; or

 

(c)any other document designated as such by the Security Agent and an Obligor.

 

"Security Property" means:

 

(a)the Transaction Security expressed to be granted in favour of the Security Agent as trustee for the Secured Parties and all proceeds of that Transaction Security;

 

(b)all obligations expressed to be undertaken by a Transaction Obligor to pay amounts in respect of the Secured Liabilities to the Security Agent as trustee for the Secured Parties and secured by the Transaction Security together with all representations and warranties expressed to be given by a Transaction Obligor or any other person in favour of the Security Agent as trustee for the Secured Parties; and

 

(c)any other amounts or property, whether rights, entitlements, choses in action or otherwise, actual or contingent, which the Security Agent is required by the terms of the Finance Documents to hold as trustee on trust for the Secured Parties.

 

"Shareholder" means each of the First Shareholder and the Second Shareholder.

 

"Shareholder's Security Agreement" means a Security over the shares of each Obligor and a Security over a Shareholder's Subordinated Debt entered into or to be entered into by a Shareholder in favour of the Security Agent in an agreed form including, for the Luxembourg Obligors, any Luxembourg law pledge agreement over the shares issued by such Luxembourg Obligors or any receivables owed by such Luxembourg Obligors to their shareholder, in each case in an agreed form.

 

"Standard Security" means a standard security over a Property located in Scotland entered into or to be entered into by an Obligor in favour of the Security Agent in an agreed form.

 

"Structure Chart" means the structure chart certified by an Authorised Signatory of the Obligors' Agent showing the ownership of each Obligor up to the Ultimate Owner as at the Utilisation Date together with the other matters required by Clause 19.23 (Ownership) and substantially in the form set out in Schedule 11 (Structure Chart).

 

  23

 

 

"Subordinated Creditor" means:

 

(a)an Obligor;

 

(b)First Holdco;

 

(c)Second Holdco; and

 

(d)any other person who becomes a Subordinated Creditor in accordance with this Agreement.

 

"Subordinated Creditor's Security Agreement" means a Security over Subordinated Debt entered into or to be entered into by a Subordinated Creditor in favour of the Security Agent in an agreed form including any Luxembourg law receivables pledge agreement entered into by any Subordinated Creditor in the agreed form.

 

"Subordinated Debt", in relation to a Subordinated Creditor, has the meaning given to it in the Subordination Agreement entered into by that Subordinated Creditor.

 

"Subordination Agreement" means a subordination agreement entered into or to be entered into by a Subordinated Creditor, an Obligor and the Security Agent in an agreed form.

 

"Subsidiary" means in relation to any partnership, company, corporation, unit trust or an unincorporated corporation (in this definition, an "entity"), an entity:

 

(a)which is controlled, directly or indirectly, by the first mentioned entity;

 

(b)more than half of the issued shares of which is beneficially owned, directly or indirectly by the first mentioned entity; or

 

(c)which is a Subsidiary of another Subsidiary of the first mentioned entity,

 

and for this purpose, an entity shall be treated as being controlled by another if that other entity is able to direct its affairs and/or to control the composition of its board of directors or equivalent body.

 

"Substitution" means the replacement of an Outgoing Property with an Incoming Property in accordance with Clause 22.5 (Substitution).

 

"Substitution Request" has the meaning given to that term in Clause 22.5.1 (Substitution).

 

"Tax" means any tax, levy, impost, duty, deduction, withholding, assessments, fees or other charges 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). For the avoidance of doubt, 'tax' includes the community infrastructure levy under the Planning Act 2008 and related legislation.

 

"Tenant Contributions" means any amount paid or payable to an Obligor by any tenant under a Lease Document or any other occupier of a Property, by way of:

 

(a)contribution to:

 

(i)ground rent;

 

(ii)insurance premia;

 

(iii)the cost of an insurance valuation;

 

(iv)a service or other charge in respect of an Obligor's costs in connection with any management, repair, maintenance or similar obligation or in providing services to a tenant of, or with respect to, a Property; or

 

(v)a reserve or sinking fund; or

 

(b)VAT.

 

"Termination Date" means the fifth anniversary of the date of this Agreement.

 

"Total Facility A Commitments" means the aggregate of the Facility A Commitments, being £100,000,000 as at the date of this Agreement.

 

  24

 

 

"Total Facility B Commitments" means the aggregate of the Facility B Commitments, being £130,000,000 as at the date of this Agreement.

 

"Total Commitments" means the aggregate of the Total Facility A Commitments and the Total Facility B Commitments, being £230,000,000 as at the date of this Agreement.

 

"Transaction Document" means:

 

(a)a Finance Document;

 

(b)a Lease Document;

 

(c)a Headlease;

 

(d)a Managing Agent Agreement;

 

(e)any Asset Management Agreement;

 

(f)an Acquisition Document;

 

(g)any Acceptable Letter of Credit;

 

(h)any document evidencing or under which Subordinated Debt is made available; or

 

(i)any other document designated as such by the Agent and the Borrowers.

 

"Transaction Obligor" means:

 

(a)an Obligor;

 

(b)a Subordinated Creditor; and

 

(c)at any time whilst the GNL Guarantee is in effect, the Ultimate Owner.

 

"Transaction Security" means the Security created or evidenced or expressed to be created or evidenced under the Security Documents.

 

"Transfer Agreement" means each deed of transfer under which the legal and beneficial title in the relevant Property was transferred to the relevant Borrower.

 

"Transfer Certificate" means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Obligors' Agent.

 

"Transfer Date" means, in relation to an assignment or a transfer, the later of:

 

(a)the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

 

(b)the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.

 

"Transferee" means any person with which a Finance Party enters into, or may enter into, any arrangement in respect of a Balance Sheet Management Transaction.

 

"Ultimate Owner" means Global Net Lease, Inc., a Maryland corporation.

 

"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.

 

"Unresponsive Agent" has the meaning given in Clause 27.14 (Replacement of Unresponsive Agent).

 

"US" means the United States of America.

 

"US Tax Obligor" means:

 

(a)an Obligor which is resident for tax purposes in the US; or

 

(b)an Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes.

 

"Utilisation" means a utilisation of a Facility.

 

  25

 

 

"Utilisation Date" means the date of the Utilisations, being the date on which the Loans are to be made.

 

"Utilisation Request" means a notice substantially in the form set out in Schedule 3 (Utilisation Request).

 

"Vacant Possession Value" means the vacant possession value of the Properties shown by the most recent Valuation.

 

"Valuation" means the Initial Valuation or any other valuation prepared:

 

(a)on a desktop or full basis; and

 

(b)of a Property or the Properties,

 

in each case, as the context requires by the Valuer, supplied at the request of the Agent, addressed to the Finance Parties on a full reliance basis and including the following:

 

(a)the Market Value;

 

(b)the reinstatement value of the Properties;

 

(c)estimates of the Estimated Rental Values and the stabilised value of the Properties based on the Business Plan being implemented;

 

(d)the Vacant Possession Value of the Properties;

 

(e)the mortgage lending value of the Properties (BelWertV) for the purposes of any Balance Sheet Management Transaction;

 

(f)a commentary on any pertinent environmental matters affecting the Properties; and

 

(g)such other requirements as the Finance Parties may require (acting reasonably),

 

and, in the case of a Valuation prepared on a full basis, reflecting the outcome of any due diligence carried out from time to time, including the findings of any Property Report, any other report delivered as a condition precedent under this Agreement and any subsequent report delivered pursuant to the terms of this Agreement or any other report made available to the Valuer for the purposes of that Valuation.

 

"Valuer" means C&W (U.K.) LLP or any other surveyor or valuer appointed by the Agent.

 

"VAT" means:

 

(a)any tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and

 

(b)any other tax of a similar nature, whether imposed in a member state of the European Union in substitution for, or levied in addition to, such tax referred to in paragraph (a) above, or imposed elsewhere.

 

"VAT Group" means any group of companies for VAT purposes, including (in relation to the United Kingdom) any group of companies for the purposes of sections 43 to 43D of the Value Added Tax Act 1994 and the Value Added Tax (Groups: Eligibility) Order 2004.

 

"WAULT" means, at any time, the aggregate of the weighted average lengths of the unexpired lease terms under all Occupational Leases as at that time. The weighted average length of the unexpired lease term under such Occupational Leases shall be determined by the Agent (acting reasonably) applying the following formula:

 

A/B

 

Where:

 

A =the aggregate of the passing rental for the 12 Month period beginning on that date (as determined in accordance with paragraph (e) of the definition of "Projected Interest Cover") payable under each Occupational Lease in each case multiplied by the current unexpired term under that Occupational Lease (where the expiry of such lease is assumed to be the earlier of (a) the expiry date; and (b) if the Occupational Lease contains a break option exercisable by the tenant, the date of the first such break option)

 

  26

 

 

B =the sum of all passing rental for the relevant 12 Month period payable in respect of all such Occupational Leases.

 

"Write-down and Conversion Powers" means:

 

(a)in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule; and

 

(b)in relation to any other applicable Bail-In Legislation:

 

(i)any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and

 

(ii)any similar or analogous powers under that Bail-In Legislation.

 

1.2Construction

 

1.2.1Unless a contrary indication appears, a reference in this Agreement to:

 

(A)the "Agent", the "Arranger", any "Finance Party", any "Lender", any "Borrower", any "Obligor", any "Party", any "Secured Party", the "Security Agent", any "Transaction Obligor", any "Hedge Counterparty" or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents and, in the case of the Security Agent, any person for the time being appointed as Security Agent or Security Agents in accordance with the Finance Documents;

 

(B)a document in "agreed form" is a document which is previously agreed in writing by or on behalf of the Borrowers and the Agent or, if not so agreed, is in the form specified by the Agent;

 

(C)"assets" includes present and future properties, revenues and rights of every description;

 

(D)"disposal" includes a sale, transfer, disposition, assignment, grant, assignation, lease, licence, declaration of trust or other disposal, whether voluntary or involuntary, any other arrangement which has the same economic effect, and "dispose" will be construed accordingly;

 

(E)"net disposal proceeds" means the gross proceeds of any disposal less an amount agreed by the Agent and an Obligor as the costs and expenses associated with that disposal;

 

(F)a "Finance Document" or "Transaction Document" or any other agreement or instrument is a reference to that Finance Document or Transaction Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

 

  27

 

 

(G)"guarantee" means (other than in Clause 18 (Guarantee and Indemnity)) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;

 

(H)"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;

 

(I)a "person" includes any individual, firm, company, corporation, government, intergovernmental or supranational body, department, state or agency of a state, regulatory, self-regulatory or other authority or organisation or any association, trust, joint venture, consortium or partnership or other entity (whether or not having separate legal personality);

 

(J)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 of any regulatory, self-regulatory or other authority or organisation;

 

(K)a provision of law is a reference to that provision as amended or re-enacted;

 

(L)a Clause or a Schedule is a reference to a clause of or a schedule to this Agreement;

 

(M)a time of day is a reference to London time;

 

(N)“judgment” shall be deemed to include a decree in Scotland;

 

(O)“set-off” includes rights of retention, claims of compensation and rights to balance accounts on insolvency;

 

(P)the word "including" is without limitation and "include" shall be construed accordingly;

 

(Q)"repay" (or any derivative form thereof) shall, subject to any contrary indication, be construed to include "prepay" (or, as the case may be, the corresponding derivative form thereof);

 

(R)a person, at any time when the grant of an interest in, right over or licence to occupy a Property would, if made by that person, be treated pursuant to paragraph 40, schedule 10 of the Value Added Tax Act 1994 as having been made by any other person, includes (where appropriate for VAT purposes) a reference to such other person, and "the grant of an interest in right over or licence to occupy" is to be construed in accordance with paragraph 40 of that schedule; and

 

(S)an option to tax exercised or to be exercised by a person pursuant to part 1 of schedule 10 to the Value Added Tax Act 1994 includes a reference to an option exercised or to be made pursuant to that part by a relevant associate of that person, and "relevant associate" is to be construed in accordance with paragraph 3 of that schedule.

 

1.2.2Where a provision of a Finance Document provides that a Finance Party must act reasonably and/or without delay in considering a request for consent from an Obligor, the requirement to act reasonably and/or without delay shall not apply after an Event of Default which is continuing.

 

1.2.3The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

 

1.2.4Section, Clause and Schedule headings are for ease of reference only.

 

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1.2.5Unless a contrary indication appears, a term used in any other Finance Document or in any notice or certificate given under or in connection with any Finance Document has the same meaning in that Finance Document or notice or certificate as in this Agreement.

 

1.2.6A Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been waived.

 

1.2.7In any provision of this Agreement where any Finance Party is required to "consult" with any Obligor before making any decision, such Finance Party's obligation to consult will be treated as being discharged if it follows the following procedure:

 

(A)the consultation period will start upon the relevant Finance Party's notice (giving reasonable detail of the relevant matter in writing to the Obligors' Agent and will last for the period (the "Consultation Period") required by the relevant provision and if no period is specified the Consultation Period shall be seven Business Days;

 

(B)during the Consultation Period the Obligors' Agent may submit comments and/or suggestions in writing to the relevant Finance Party relating to the relevant decision for consideration by that Finance Party; and

 

(C)the relevant Finance Party will not take the relevant decision prior to the expiry of the Consultation Period and in taking the decision will take account of any comments or suggestions submitted to it by the Obligors' Agent during the Consultation Period but shall not be bound by them.

 

1.2.8Where a provision of a Finance Document provides that a Finance Party must consult an Obligor, the obligation to consult shall not apply after an Event of Default which is continuing.

 

1.2.9If a moratorium occurs in respect of an Obligor, the ending of that moratorium will not remedy any Event of Default caused by the moratorium and, notwithstanding any other term of the Finance Documents, that Event of Default will continue to be outstanding unless and until it is expressly waived by the Agent (acting on the instructions of the Majority Lenders)

 

1.2.10Any reference in a Finance Document to the Agent or the Security Agent providing approval or consent or making a request, or to an item or a person being acceptable or satisfactory to, to the satisfaction of, or approved by the Agent or the Security Agent, are to be construed, unless otherwise specified, as references to the Agent or the Security Agent (as applicable) taking such action or refraining from acting on the instructions of the Majority Lenders, and reference in the Finance Documents to:

 

(A)the Agent or the Security Agent acting reasonably;

 

(B)a matter being in the reasonable opinion of the Agent or the Security Agent;

 

(C)the Agent's or the Security Agent’s approval or consent not being unreasonably withheld or delayed; or

 

(D)any document, report, confirmation or evidence being required to be reasonably satisfactory to the Agent or the Security Agent,

 

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shall be construed, unless otherwise specified in the relevant Finance Document, as the Agent or the Security Agent (as applicable) acting on the instructions of the Majority Lenders (and each Lender shall act reasonably in circumstances where the Agent or the Security Agent (as applicable) would otherwise be required to act reasonably if this Clause 1.2.10 did not apply, and for this purpose any action taken or instruction given by any Lender (or any action taken or discretion exercised by the Agent or Security Agent) in order to enhance the prospects of successfully implementing a Balance Sheet Management Transaction shall for the purposes of the Finance Documents be deemed to be reasonable). Where the Agent or the Security Agent is obliged to consult under the terms of the Finance Documents, unless otherwise specified each Lender shall instruct the Agent or the Security Agent (as applicable) to consult in accordance with the terms of the relevant Finance Document and the Agent or the Security Agent (as applicable) shall carry out that consultation in accordance with the instructions it receives from the Lenders. The Agent or the Security Agent (as applicable) shall be under no obligation to determine the reasonableness or otherwise of such circumstances or whether in giving any instruction the Lenders or the Majority Lenders (as applicable) are acting in a reasonable manner.

 

1.2.11Without prejudice to Clause 1.2.10 above and without limitation to any other powers or discretions of any Finance Party or to the generality of any powers or discretions of any Finance Party under the Finance Documents or otherwise, any reference in a Finance Document to any Finance Party providing approval or consent or exercising any discretion, or to an item or a person being acceptable or satisfactory to, to the satisfaction of, or approved by, any Finance Party shall be construed as expressly permitting such Finance Party to exercise such power or discretion in a manner solely for the purpose of enhancing, and in order to enhance, the prospects of successfully achieving a Balance Sheet Management Transaction and without regard to any other consideration.

 

1.3Luxembourg terms

 

In this Agreement, where it relates to a Luxembourg entity, a reference to:

 

1.3.1a moratorium of any indebtedness, winding-up, administration or dissolution includes, without limitation, bankruptcy "faillite", insolvency, voluntary or judicial liquidation "liquidation volontaire ou judiciaire", composition with creditors "concordat préventif de faillite", moratorium or reprieve from payment "sursis de pajement", controlled management "gestion contrôlée", general settlement with creditors, reorganisation or similar laws affecting the rights of creditors generally;

 

1.3.2a receiver, administrative receiver, administrator or the like includes, without limitation, a "juge délégué", "commissaire", "juge-commissaire", "liquidateur" or "curateur";

 

1.3.3a security interest includes any "hypothèque", "nantissement", "gage", "privilège", "sûreté réelle", "droit de retention" and any type of real security "sûreté réelle" or agreement or arrangement having a similar effect and any transfer of title by way of security;

 

1.3.4a person being unable to pay its debts includes that person being in a state of cessation of payments "cessation de paiements";

 

1.3.5by-laws or constitutional documents includes its up-to-date (restated) articles of association (statuts coordonnés); and

 

1.3.6a director includes a "gérant" or an "administrateur".

 

1.4Scottish terms

 

Without prejudice to the generality of any provision of this Agreement, in this Agreement where it relates to a Property situated in Scotland, the following provisions shall apply:

 

1.4.1covenants shall be deemed to include references to obligations burdens or undertakings;

 

1.4.2easements shall be deemed to include reference to servitudes or rights of way;

 

1.4.3"Land Registry" shall be deemed to be a reference to the General Register of Sasines and/or the Land Register of Scotland (as applicable); and

 

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1.4.4"mortgagee" shall be deemed to include, without limitation, a heritable creditor and a security holder.

 

1.5Currency symbols and definitions

 

"£", "GBP" and "sterling" denote the lawful currency of the United Kingdom.

 

1.6Third party rights

 

1.6.1Unless expressly provided to the contrary in a Finance Document a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.

 

1.6.2Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

1.6.3Any Receiver, Delegate or any person described in Clause 27.11.2 (Exclusion of liability) may, subject to this Clause 1.6 and the Third Parties Act, rely on any Clause of this Agreement which expressly confers rights on it.

 

1.7Obligations joint and several

 

The obligations of the Obligors under this Agreement are joint and several.

 

2.The Facilities

 

2.1The Facilities

 

Subject to the terms of this Agreement:

 

2.1.1the Facility A Lenders make available to the Borrowers a sterling term loan facility in an aggregate amount equal to the Total Facility A Commitments; and

 

2.1.2the Facility B Lenders make available to the Borrowers a sterling term loan facility in an aggregate amount equal to the Total Facility B Commitments.

 

2.2Property Protection Loans

 

2.2.1A Lender may, with the consent of the Majority Lenders, make a Property Protection Loan whether requested by an Obligor or not.

 

2.2.2Each Property Protection Loan shall:

 

(A)be repayable on demand made by the relevant Lender with the consent Agent (acting on the instructions of the Majority Lenders) and in any event shall be repayable on the Termination Date; and

 

(B)bear interest in accordance with Clause 8.4 (Default interest) as if it were an overdue amount.

 

2.3Finance Parties' rights and obligations

 

2.3.1The 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.

 

2.3.2The 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 is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with Clause 2.3.3 below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party's participation in a Facility or its role under a Finance Document (including any such amount payable to the Agent on its behalf) is a debt owing to that Finance Party by that Obligor.

 

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2.3.3A Finance Party may not, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

 

2.4Obligors' Agent

 

2.4.1Each Obligor by its execution of this Agreement irrevocably appoints the Obligors' Agent to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:

 

(A)the Obligors' Agent on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and

 

(B)each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Obligors' Agent,

 

and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.

 

2.4.2Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors' Agent or given to the Obligors' Agent under any Finance Document on behalf of a Obligor or in connection with any Finance Document (whether or not known to any Obligor) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Obligors' Agent and any Obligor, those of the Obligors' Agent shall prevail.

 

3.Purpose

 

3.1Purpose

 

Each Borrower shall apply all amounts borrowed by it under a Facility towards:

 

3.1.1refinancing all existing Financial Indebtedness secured against and in relation to its Property;

 

3.1.2payment of any fees, costs and expenses incurred by any Obligor; and

 

3.1.3any general working capital and general corporate purposes,

 

in each case, as set out in the Funds Flow Statement.

 

3.2Monitoring

 

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

4.Conditions of Utilisation

 

4.1Initial conditions precedent

 

4.1.1The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) in relation to a Utilisation if on or before the Utilisation Date all of the documents and other evidence listed in Part A of Schedule 2 (Conditions Precedent) in form and substance satisfactory to the Agent or to the extent it has not received the same, it has waived receipt of the same with the consent of the Lenders. The Agent shall notify the Obligors' Agent and the Lenders promptly upon being so satisfied.

 

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4.1.2Other than to the extent that the Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in Clause 4.1.1 above, the Lenders authorise (but do not require) the Agent to give that notification. The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

 

4.1.3The Agent may refuse to accept the Utilisation Request if the Agent believes that the notification described in Clause 4.1.1 above will not be capable of being given on or before the Utilisation Date.

 

4.2Further conditions precedent

 

The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) if:

 

4.2.1on the date of the Utilisation Request and on the proposed Utilisation Date:

 

(A)no Default is continuing or would result from the proposed Loans; and

 

(B)each of the representations in Clause 19 (Representations) to be made by each Obligor on those dates are true in all respects; and

 

4.2.2in the case of the making of the Loans, immediately following the making of the Loans:

 

(A)Projected Interest Cover for each of the 3 Month period and 12 Month period commencing on the proposed Utilisation Date will be at least 460%;

 

(B)Loan to Value will not be greater than 51%; and

 

(C)Loan to Cost will not be greater than 50%.

 

5.Utilisation

 

5.1Delivery of the Utilisation Request

 

The Borrowers may utilise the Facilities by the Obligors' Agent delivering a duly completed Utilisation Request on their behalf to the Agent by not later than 11am on the date falling three Business Days prior to the proposed Utilisation Date.

 

5.2Completion of a Utilisation Request

 

5.2.1The Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:

 

(A)each Borrower is borrowing a Facility A Loan and a Facility B Loan in the proportions that the Total Facility A Commitments and the Total Facility B Commitments each bear to the Total Commitments;

 

(B)it specifies the purpose of each Loan to be used;

 

(C)the proposed Utilisation Date is a Business Day within the Availability Period; and

 

(D)the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount).

 

5.2.2Each Borrower may only draw one Facility A Loan and one Facility B Loan, and each such Loan must have the same Utilisation Date. The Obligors' Agent shall request the respective Loans on behalf of each Borrower and each such request shall be made in the same Utilisation Request.

 

5.2.3Only one Utilisation Request may be delivered to the Agent.

 

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5.3Currency and amount

 

5.3.1The currency specified in the Utilisation Request must be sterling.

 

5.3.2The aggregate amount of the Facility A Loans shall not exceed the Total Facility A Commitments.

 

5.3.3The aggregate amount of the Facility B Loans shall not exceed the Total Facility B Commitments.

 

5.4Lenders' participation

 

5.4.1If the conditions set out in this Agreement have been met:

 

(A)each Facility A Lender shall make each Facility A Loan available by the Utilisation Date through its Facility Office; and

 

(B)each Facility B Lender shall make each Facility B Loan available by the Utilisation Date through its Facility Office.

 

5.4.2The amount of each Lender's participation in a Loan will be equal to the proportion borne by its relevant Commitment to the Total Commitments immediately prior to making each Loan.

 

5.4.3The Agent shall promptly notify each Lender of the amount of each Loan and the amount of its participation in that Loan.

 

5.5Cancellation of Commitment

 

The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.

 

6.Repayment

 

6.1Repayment of the Loans on the Termination Date

 

The Borrowers shall repay the Loans and all other amounts outstanding under the Finance Documents in full on the Termination Date.

 

6.2Repayment Instalments

 

The Borrowers shall repay the Loans on each Interest Payment Date specified in the table at Schedule 4 (Amortisation Schedule) by the amount set opposite that date under the heading "Repayment Instalment".

 

6.3Reborrowing

 

No Borrower may reborrow any part of a Facility which is repaid.

 

7.Prepayment and Cancellation

 

7.1Illegality

 

If, in any applicable jurisdiction, it becomes unlawful for any Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:

 

7.1.1that Lender shall promptly notify the Agent upon becoming aware of that event;

 

7.1.2upon the Agent notifying the Borrowers, the Commitments of that Lender will be immediately cancelled; and

 

7.1.3the Borrowers shall repay that Lender's participation in the Loans made to it on the last day of the Interest Period for each Loan occurring after the Agent has notified the Borrowers or, if earlier, the date specified by the Lender (if any) in the notice delivered to the Agent under Clause 7.1.1 above (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitments shall be cancelled in the amount of the participation repaid.

 

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7.2Change of control

 

7.2.1If a change of control occurs:

 

(A)the Obligors' Agent shall promptly notify the Agent upon any Obligor becoming aware of that event;

 

(B)a Lender shall not be obliged to fund a Utilisation; and

 

(C)if a Lender so requires and notifies the Agent, the Agent shall, by notice to the Obligors' Agent, cancel the Commitment of that Lender and declare the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitments of that Lender will be cancelled and all such outstanding Loans and amounts will become immediately due and payable.

 

7.2.2For the purpose of Clause 7.2.1 above:

 

(A)"change of control" means:

 

(1)any Holdco ceases to be legally and beneficially wholly-owned and controlled (directly or indirectly through wholly-owned Subsidiaries) by Global Net Lease Operating Partnership, LP;

 

(2)Global Net Lease Operating Partnership, LP ceases to be legally and beneficially wholly-owned and controlled (directly or indirectly through wholly-owned Subsidiaries) by the Ultimate Owner; or

 

(3)any person or group of persons acting in concert gains direct or indirect control of the Ultimate Owner,

 

(B)"control" means:

 

(1)the power (whether by way of ownership of shares, proxy, contract, agency or otherwise, and whether directly or indirectly) to:

 

(a)cast, or control the casting of, more than one half of the maximum number of votes that might be cast at a general meeting of that entity;

 

(b)appoint or remove all, or the majority, of the directors or other equivalent officers of that entity; or

 

(c)give directions with respect to the operating and financial policies of that entity with which the directors or other equivalent officers of that entity are obliged to comply; or

 

(2)the holding (directly or indirectly) beneficially of more than one half of the issued share capital of that entity (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital); and

 

(C)"acting in concert" means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in that entity by any of them, directly or indirectly, to obtain or consolidate control of that entity.

 

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7.2.3The Obligors' Agent shall promptly notify the Agent if any person (directly or indirectly) holds or controls more than 10% of the total ownership interests in the Ultimate Owner. If as a result of any person so holding or controlling more than 10% of the total ownership interests in the Ultimate Owner a Lender is unable to comply with its “know your customer” or similar identification procedures as that Lender reasonably considers necessary under applicable law or regulation:

 

(A)that Lender shall not be obliged to fund a Utilisation; and

 

(B)if that Lender so requires and notifies the Agent the Agent shall, by notice to the Obligors' Agent, cancel the Commitment of that Lender and declare the participation of that Lender in all outstanding Loans, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon the Commitments of that Lender will be cancelled and all such outstanding Loans and amounts will become immediately due and payable.

 

7.3Mandatory prepayment

 

The Borrowers must apply the following amounts in prepayment of the Loans, and payment of prepayment fees and other amounts referred to in Clause 7.8.2 (Restrictions) at the time, amounts and in the order of application contemplated by Clause 7.4 (Application of mandatory prepayments):

 

7.3.1the net disposal proceeds referred to in Clauses 17.5.3 (Disposals Account);

 

7.3.2the proceeds required to be applied in prepayment of the Loans under Clause 17.6.3(C) (Cash Trap and Cure Account);

 

7.3.3the proceeds required to be applied in prepayment of the Loans under Clause 17.6.5(B) (Cash Trap and Cure Account);

 

7.3.4the amount of Lease Prepayment Proceeds;

 

7.3.5subject to Clause 23.11.11 (Insurances), the amount of Insurance Prepayment Proceeds;

 

7.3.6the amount of Compensation Prepayment Proceeds;

 

7.3.7the amount of Hedging Prepayment Proceeds; and

 

7.3.8the amount of Recovery Prepayment Proceeds.

 

7.4Application of mandatory prepayments

 

7.4.1The net disposal proceeds referred to in Clause 7.3.1 (Mandatory prepayment) shall be applied on the date provided for in accordance with Clauses 17.5.3 or 17.5.5 (Disposals Account) by an aggregate amount equal to the applicable Release Amount as follows:

 

(A)in or towards:

 

(1)first, prepayment of the Loans pro rata made to the relevant Borrower;

 

(2)secondly, prepayment of the other Loans pro rata; and

 

(B)following such prepayments, in or towards payment of all amounts that are or will become due and payable under Clause 7.8.2 (Restrictions) as a result of those prepayments.

 

7.4.2An amount referred to in Clauses 7.3.2 or 7.3.3 (Mandatory prepayment) shall be applied on the date provided for in accordance with Clauses 17.6.3(C) or 17.6.5(B) (Cash Trap and Cure Account) (as applicable) pro rata as follows:

 

(A)in or towards prepayment of the Loans pro rata; and

 

(B)following such prepayments, in or towards payment of all amounts that are or will become due and payable under Clause 7.8.2 (Restrictions) as a result of those prepayments.

 

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7.4.3An amount referred to in Clauses 7.3.4 to 7.3.8 (Mandatory prepayment) shall be applied on the date provided for in accordance with Clause 17.4.3 (Deposit Account) as follows:

 

(A)in or towards,

 

(1)first, prepayment of the Loans pro rata made to the relevant Borrower; and

 

(2)secondly, prepayment of the other Loans pro rata; and

 

(B)following such prepayments, in or towards payment of all amounts that are or will become due and payable under Clause 7.8.2 (Restrictions) as a result of those prepayments.

 

7.4.4For the purposes of Clauses 7.4.1(A) and 7.4.3(A) above, the relevant Borrower is:

 

(A)insofar as the relevant amount to be applied in prepayment is derived from or relates to a Borrower or the assets of or shares in a Borrower, that Borrower; and

 

(B)otherwise, such Borrower or Borrowers as the Majority Lenders elect (having first consulted with the Obligors' Agent).

 

7.5Voluntary prepayment of Loans

 

7.5.1A Borrower may, if it gives the Agent not less than ten Business Days' (or such shorter period as the Majority Lenders may agree) prior written notice (which may be revoked up to a maximum of 5 Business Days prior to the proposed date of prepayment), prepay the whole or any part of any Loan (but, if in part, being an amount that reduces the amount of the Loans by a minimum amount of £1,000,000 and in integral multiples of £1,000,000).

 

7.5.2Any prepayment by a Borrower pursuant to Clause 7.5.1 above shall be applied in prepayment of that Borrower's Loans pro rata.

 

7.6Right of repayment and cancellation in relation to a single Lender

 

7.6.1If:

 

(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 Obligors under Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased costs),

 

the Obligors' Agent may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Loans.

 

7.6.2On receipt of a notice of cancellation referred to in Clause 7.6.1 above, the Commitment of that Lender shall immediately be reduced to zero.

 

7.6.3On the last day of each Interest Period which ends after a Borrower has given notice of cancellation under Clause 7.6.1 above (or, if earlier, the date specified by the relevant Borrower in that notice), the relevant Borrower shall repay that Lender's participation in the Loans.

 

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7.7Right of replacement of a Non-Consenting Lender

 

7.7.1By no later than 30 days after the date a Lender has become a Non-Consenting Lender, the Obligors may, on ten Business Days' prior notice to the Agent, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer all of its rights and obligations under this Agreement to a Lender or other reputable bank or financial institution selected by the Obligors' Agent and approved by the Majority Lenders and in accordance with Clause 25.1 (Assignments and transfers by the Lenders) for a purchase price in cash payable at the time of the transfer equal to the outstanding principal amount of such Lender's participation in the outstanding Loans and all accrued interest and other amounts payable to such Lender.

 

7.7.2The replacement of a Lender pursuant to Clause 7.7.1 above shall be subject to the following conditions:

 

(A)the Obligors shall have no right to replace the Agent or the Security Agent;

 

(B)no Finance Party shall have any obligation to find a replacement Lender;

 

(C)in no event shall a Lender replaced pursuant to Clause 7.7.1 above be required to pay or surrender any of the fees received by that Lender pursuant to the Finance Documents;

 

(D)a Lender shall only be obliged transfer its rights and obligations pursuant to Clause 7.7.1 above once it and the Agent are satisfied they have complied with all necessary "know you customer" or other similar checks under applicable laws and regulations in relation to that transfer;

 

(E)where the Lender is also a Hedge Counterparty, any Hedging Agreements (excluding any fully funded interest rate caps or captions) in place with that Hedge Counterparty must be closed out and all amounts payable to the Hedge Counterparty paid to it no later than the time of the relevant transfer pursuant to Clause 7.7.1 above and the Borrower must procure that replacement Hedging Agreements are entered into in compliance with Clause 8.3 (Hedging); and

 

(F)other than in respect of a Lender that is being replaced pursuant to this Clause 7.7 because they are a Non-Consenting Lender within the meaning paragraph (b) of that definition only, the Borrowers shall pay to the Lender being replaced no later than the time of the relevant transfer pursuant to Clause 7.7.1 above, a fee in the amount it would have received pursuant to Clause 11.4 (Prepayment fees) had its participation in the Loans been prepaid at that time.

 

7.8Restrictions

 

7.8.1Any notice of cancellation or prepayment given by any Party under this Clause 7, unless a contrary indication appears in this Agreement shall be irrevocable and 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.

 

7.8.2Any prepayment or cancellation under this Agreement shall be made together with accrued interest (including Margin) on the amount prepaid together with any Break Costs payable pursuant to Clause 10.5 (Break Costs), any amounts that have or will become payable to a Hedge Counterparty under any Hedging Agreement and any prepayment and cancellation fees payable under this Agreement, without premium or penalty.

 

7.8.3The Borrowers may not reborrow any part of a Facility which is prepaid.

 

7.8.4The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

 

7.8.5No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

 

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7.8.6If all or part of any Lender's participation in a Loan is repaid or prepaid, an amount of that Lender's Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment.

 

7.8.7Any partial repayment of the Loans:

 

(A)from the proceeds of a Full Sweep Disposal will be applied against the Repayment Instalments in inverse order of maturity to the extent the aggregate net disposal proceeds received by a Transaction Obligor as a result of the relevant disposal and applied in repayment of the Loans exceed the Relevant Percentage of the Allocated Loan Amount for that Property or Properties (as the case may be); and

 

(B)pursuant to Clause 7.5 (Voluntary prepayment of the Loans) or Clause 17.6.3(C) (Cash Trap and Cure Account) will be applied against the Repayment Instalments in inverse order of maturity.

 

No other repayment or prepayment of the Loans shall reduce any amount payable under Clause 6.2 (Repayment Instalments)

 

7.8.8Any prepayment of a Loan (other than a prepayment to a single Lender pursuant to Clause 7.1 (Illegality), Clause 7.2 (Change of control) or Clause 7.6 (Right of repayment and cancellation in relation to a single Lender)) shall be applied pro rata to each Lender's participation in that Loan.

 

8.Interest

 

8.1Calculation of interest

 

The rate of interest on each Loan for each Interest Period is the aggregate of:

 

8.1.1the Margin; and

 

8.1.2the applicable LIBOR.

 

8.2Payment of interest

 

The Borrowers shall pay accrued interest on the Loans on each Interest Payment Date.

 

8.3Hedging

 

8.3.1On or before the Utilisation Date, the Borrowers shall enter into and shall thereafter maintain Hedging Agreements which are interest rate swaps or interest rate caps in accordance with this Clause 8.3. An Obligor may not otherwise enter into any Hedging Agreement.

 

8.3.2(A)         The aggregate notional amount of the transactions in respect of the Hedging Agreements shall be at least 75% of the Total Commitments and shall amortise on the same dates and in an amount equal to 75% of the Repayment Instalment set out in Schedule 4 (Amortisation Schedule).

 

(B)Each Hedging Agreement shall:

 

(1)be with a Hedge Counterparty;

 

(2)be for a term ending on the Termination Date;

 

(3)have settlement dates coinciding with the Interest Payment Dates; and

 

(4)be based on an ISDA Master Agreement and otherwise in form and substance satisfactory to the Agent (acting reasonably).

 

(C)The rights of the Borrowers under the Hedging Agreements shall be charged or assigned by way of security under a Security Agreement.

 

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8.3.3(A) The parties to each Hedging Agreement must comply with the terms of that Hedging Agreement.

 

(B)Neither the Hedge Counterparty nor a Borrower may amend, supplement, extend or waive the terms of any Hedging Agreement without the consent of the Agent.

 

(C)Paragraph (B) above shall not apply to an amendment, supplement, extension or waiver that is administrative and mechanical in nature and does not give rise to a conflict with any provision of this Agreement.

 

8.3.4(A)         If, at any time, the aggregate notional amount of the transactions under the Hedging Agreements exceeds or, as a result of a prepayment, will exceed 100% of the aggregate amount of the Total Commitments then, or which will be, outstanding, the Borrowers must promptly notify the Agent and must, at the request of the Agent, reduce the aggregate notional amount of those transactions by an amount and in a manner satisfactory to the Agent so that it no longer exceeds or will not exceed 100% of the Total Commitments.

 

(B)Any reductions in the aggregate notional amount of the transactions in respect of the Hedging Agreements in accordance with paragraph (A) above will be apportioned as between those transactions pro rata.

 

(C)Paragraph (A) above shall not apply to any transactions in respect of any Hedging Agreement under which a Borrower has no actual or contingent indebtedness.

 

(D)The Agent must make a request under paragraph (A) above if so required by the Hedge Counterparty.

 

8.3.5Without prejudice to a Borrower's obligations under Clause 8.3.1 above, neither the Hedge Counterparty nor any Borrower may terminate or close out any transactions in respect of any Hedging Agreement (in whole or in part) except:

 

(A)in accordance with Clause 8.3.4 above;

 

(B)if an "Illegality", a "Tax Event", "Force Majeure Event" or "Tax Event Upon Merger" (as those terms are defined in the applicable ISDA Master Agreement) has occurred;

 

(C)in the case of a termination or closing out by the Hedge Counterparty only, if a Borrower has failed to pay on the due date any amount payable to the Hedge Counterparty under the Hedging Agreement and such failure is not remedied within 10 Business Days;

 

(D)if the Loans and other amounts outstanding under the Finance Documents (other than the Hedging Agreements) have been unconditionally and irrevocably paid and discharged in full;

 

(E)in the case of termination or closing out by the Hedge Counterparty, if the Agent serves notice under Clause 24.19.1(B) (Acceleration) or, having served notice under Clause 24.19.1(C) (Acceleration), makes a demand;

 

(F)in the case of termination or closing out by a Hedge Counterparty which is a Lender or an Affiliate of a Lender only, if the Borrower has repaid that Lender pursuant to Clause 7.1 (Illegality) or Clause 7.6 (Right of repayment and cancellation in relation to a single Lender);

 

(G)in the case of termination or closing out by the Hedge Counterparty, an Event of Default occurs under Clauses 24.6 (Insolvency), 24.7 (Insolvency proceedings) or 24.8 (Creditors' process); or

 

(H)in the case of any other termination or closing out by a Borrower where the Borrower is entitled to do so under the terms of the relevant Hedging Agreement, provided that the Borrower enters into replacement Hedging Agreements in accordance with Clause 8.3.2 above with Additional Hedge Counterparties which accede to this Agreement in accordance with Clause 25.8 (Additional Hedge Counterparties).

 

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(I)in the case of any other termination or closing out by the Hedge Counterparty, with the consent of the Agent.

 

8.3.6If the Hedge Counterparty or a Borrower terminates or closes out a transaction in respect of a Hedging Agreement (in whole or in part) in accordance with Clauses 8.3.5(B), 8.3.5(C) or (in the case of the Hedge Counterparty only) 8.3.5(E) above, it shall promptly notify the Agent of that termination or close out.

 

8.3.7If the Hedge Counterparty is entitled to terminate or close out any transaction in respect of any Hedging Agreement in accordance with Clause 8.3.5(E) above, such Hedge Counterparty shall promptly terminate or close out such transaction following a request to do so by the Security Agent.

 

8.3.8The Hedge Counterparty may only suspend making payments under a transaction in respect of a Hedging Agreement if a Borrower is in breach of its payment obligations under any transaction in respect of that Hedging Agreement.

 

8.3.9If at any time a Hedge Counterparty (other than the Original Hedge Counterparty) fails to satisfy the relevant Rating Criteria, the Borrower will notify the Agent and procure that, within 30 days of that ratings downgrade, a person that does satisfy the Rating Criteria accedes to this Agreement as a new Hedge Counterparty in accordance with Clause 25.8 (Additional Hedge Counterparties). Immediately upon the accession of the new Hedge Counterparty, the Borrower will procure that the Hedge Counterparty whose rating was downgraded will, and that Hedge Counterparty shall, novate its rights and obligations under each of the Hedging Agreements to which it is a party to the new Hedge Counterparty and the Borrowers hereby consents to that novation.

 

8.3.10(A)         The Hedge Counterparty consents to, and acknowledges notices of, the charging or assigning by way of security by each Borrower pursuant to the relevant Security Documents of its rights under the Hedging Agreements to which it is party in favour of the Security Agent.

 

(B)Any such charging or assigning by way of security is without prejudice to, and after giving effect to, the operation of any payment or close-out netting in respect of any amounts owing under any Hedging Agreement.

 

(C)The Security Agent shall not be liable for the performance of any Borrower's obligations under a Hedging Agreement.

 

8.4Default interest

 

8.4.1If 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 8.4.3 below, is two per cent. per annum higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably) bearing an interest rate per annum which is the aggregate of:

 

(A)the Margin; and

 

(B)the applicable LIBOR.

 

8.4.2Any interest accruing under this Clause 8.4 shall be immediately payable by the relevant Obligor on demand by the Agent.

 

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8.4.3If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

 

(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 that Loan; and

 

(B)the rate of interest applying to the overdue amount during that first Interest Period shall be two per cent. per annum higher than the rate which would have applied if the overdue amount had not become due.

 

8.4.4Default 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.

 

8.5Notification of rates of interest

 

8.5.1The Agent shall promptly notify the relevant Lenders and the Borrowers of the determination of a rate of interest under this Agreement.

 

8.5.2The Agent shall promptly notify the Borrowers of each Funding Rate relating to a Loan.

 

9.Interest Periods

 

9.1Length of Interest Periods

 

Each Interest Period for a Loan shall start on its Utilisation Date or (if already made) on the last day of its preceding Interest Period and end on the next Interest Payment Date.

 

9.2Non-Business Days

 

If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

9.3Shortening Interest Periods

 

If an Interest Period would otherwise overrun the Termination Date it shall be shortened so that it ends on the Termination Date;

 

10.Changes to the Calculation of Interest

 

10.1Unavailability of Screen Rate

 

10.1.1Interpolated Screen Rate: If no Screen Rate is available for LIBOR for the Interest Period of a Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan.

 

10.1.2Reference Bank Rate: If no Screen Rate is available for LIBOR for:

 

(A)sterling; or

 

(B)the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate,

 

the applicable LIBOR shall be the Reference Bank Rate as of noon on the Quotation Day and for a period equal in length to the Interest Period of that Loan.

 

10.1.3Cost of funds: If Clause 10.1.2 above applies but no Reference Bank Rate is available for sterling or the relevant Interest Period, there shall be no LIBOR for that Loan and Clause 10.4 (Cost of funds) shall apply to that Loan for that Interest Period.

 

10.2Calculation of Reference Bank Rate

 

10.2.1Subject Clause 10.2.2 below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by noon on the Quotation Day, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.

 

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10.2.2If at or about noon on the Quotation Day, none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

 

10.3Market disruption

 

If before close of business in London on the Quotation Day for the relevant Interest Period of a Loan, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 35% of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 10.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period.

 

10.4Cost of funds

 

10.4.1If this Clause 10.4 applies, the rate of interest on the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

(A)the Margin; and

 

(B)the rate notified to the Agent by that Lender 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 the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select.

 

10.4.2If this Clause 10.4 applies, a Lender (the "Relevant Lender") may elect that the rate applicable to its participation in the Loan for the purposes of Clause 10.4.1(B) above is:

 

(A)such rate as it may specify pursuant to Clause 10.4.1(B) above;

 

(B)the same as the rate specified to the Agent by another Lender for the purposes of Clause 10.4.1(B) above as being, expressed as a percentage rate per annum, that Lender's cost of funding its participation in that Loan; or

 

(C)determined on the basis of a Replacement Benchmark (as that term is defined in Clause 37.4 (Replacement of Screen Rate) but read as if references in that definition to the Majority Lenders and the Obligors' Agent were solely to that Relevant Lender.

 

10.4.3If this Clause 10.4 applies and the Agent or the Borrowers so require, the Agent and the Borrowers shall enter into negotiations (for a period of not more than 30 days) with a view to agreeing a substitute basis for determining the rate of interest.

 

10.4.4Any alternative basis agreed pursuant to Clause 10.4.3 above shall, with the prior consent of all the Lenders and the Borrowers, be binding on all Parties.

 

10.5Break Costs

 

10.5.1The Borrowers shall, within seven 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 by the Obligors on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

 

10.5.2Each 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.

 

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11.Fees

 

11.1Arrangement fee

 

The Obligors shall pay to the Arranger (for its own account) a fee in respect of the arrangement of Facility in the amount and at the times agreed in a Fee Letter.

 

11.2Agency fee

 

The Obligors shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

 

11.3Security agency fee

 

The Obligors shall pay to the Security Agent (for its own account) a security agency fee in the amount and at the times agreed in a Fee Letter.

 

11.4Prepayment fee

 

11.4.1The Obligors must pay to the Agent for the account of each Lender a prepayment fee on the date of:

 

(A)prepayment of all or any part of a Loan; and

 

(B)on the date of cancellation of any part of the Total Commitments,

 

except no such fee shall be payable as a result of a prepayment or cancellation which occurs pursuant to Clause 7.1 (Illegality) or Clause 7.6 (Right of repayment and cancellation in relation to a single Lender).

 

11.4.2The amount of each prepayment fee is:

 

(A)if the prepayment or cancellation occurs on or before the first anniversary of the date of this Agreement, 3.00% of the amount prepaid;

 

(B)if the prepayment or cancellation occurs after the first anniversary of the date of this Agreement but on or before the second anniversary of the date of this Agreement, 2.00% of the amount prepaid;

 

(C)if the prepayment or cancellation occurs after the second anniversary of the date of this Agreement but on or before the third anniversary of the date of this Agreement, 1.00% of the amount prepaid; and

 

(D)if the prepayment or cancellation occurs after the third anniversary of the date of this Agreement, nil.

 

12.Tax Gross-Up and Indemnities

 

12.1Definitions

 

12.1.1In this Agreement:

 

"Borrower DTTP Filing" means an HM Revenue & Customs Form DTTP2 duly completed and filed by the Borrowers, which:

 

(A)where it relates to a Treaty Lender that is an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated opposite that Lender's name in Part C of Schedule 1 (The Original Parties and ), and is filed with HM Revenue & Customs within 30 days of the date of this Agreement; or

 

(B)where it relates to a Treaty Lender that is a New Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the relevant Transfer Certificate or Assignment Agreement, and is filed with HM Revenue & Customs within 30 days of that Transfer Date.

 

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"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.

 

"Qualifying Lender" means:

 

(A)a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:

 

(1)a Lender:

 

(a)which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or

 

(b)in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or

 

(2)a Lender which is:

 

(a)a company resident in the United Kingdom for United Kingdom tax purposes;

 

(b)a partnership each member of which is:

 

(i)a company resident in the United Kingdom for United Kingdom tax purposes; or

 

(ii)a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA;

 

(c)a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing its chargeable profits (within the meaning of section 19 of the CTA); or

 

(3)a Treaty Lender; or

 

(B)a Lender which is a building society (as defined for the purpose of section 880 of the ITA) making an advance 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 for United Kingdom tax purposes;

 

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(B)a partnership each member of which is:

 

(1)a company resident in the United Kingdom for United Kingdom tax purposes; or

 

(2)a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

 

(C)a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing its chargeable profits (within the meaning of section 19 of the CTA).

 

"Tax Credit" means a credit against, relief or remission for, or repayment of any Tax.

 

"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

 

"Tax Payment" means either the increase in a 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

 

(B)does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loans is effectively connected; and

 

(C)fulfils any other conditions which must be fulfilled under the Treaty by residents of that Treaty State for such residents to obtain full exemption from taxation on interest imposed by the United Kingdom on interest payable to them in respect of an advance under a Finance Document, subject to the completion of procedural formalities.

 

"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 where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a Tax Confirmation in the Assignment Agreement or Transfer Certificate which it executes on becoming a Party.

 

12.1.2Unless a contrary indication appears, in this Clause 12 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

 

12.1.3This Clause 12 shall not apply to any Hedging Agreement.

 

12.2Tax gross-up

 

12.2.1Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

 

12.2.2Each Obligor shall promptly upon becoming aware that it must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall 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 notify that Obligor.

 

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12.2.3If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor 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.

 

12.2.4A payment shall not be increased under Clause 12.2.3 above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, 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 the Lender had been 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 published concession of any relevant taxing authority; or

 

(B)the relevant Lender is a Qualifying Lender solely by virtue of paragraph 12.1.1(A)(2) of the definition of Qualifying Lender; and:

 

(1)an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA which relates to the payment and that Lender has received from the Obligor making the payment a certified copy of that Direction; and

 

(2)the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

 

(C)the relevant Lender is a Qualifying Lender solely by virtue of paragraph 12.1.1(A)(2) of the definition of Qualifying Lender and:

 

(1)the relevant Lender has not given a Tax Confirmation to the relevant Obligor; and

 

(2)the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Borrowers, on the basis that the Tax Confirmation would have enabled the Borrowers to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or

 

(D)the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate 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.

 

12.2.5If an Obligor is required to make a Tax Deduction, that Obligor 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.

 

12.2.6Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, each Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other 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(A)         Subject to paragraph (B) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.

 

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(B)(1) A Treaty Lender which becomes a Party on the day on which this Agreement is entered into that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Part C of Schedule 1 (The Original Parties and ); and

 

(2)a New Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the Transfer Certificate or Assignment Agreement which it executes,

 

and, having done so, that Lender shall be under no obligation pursuant to paragraph (A) above.

 

12.2.8If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with Clause 12.2.7(B) above and:

 

(A)the relevant Borrower making a payment to that Lender has not made a Borrower DTTP Filing in respect of that Lender; or

 

(B)the relevant Borrower making a payment to that Lender has made a Borrower DTTP Filing in respect of that Lender but:

 

(1)that Borrower DTTP Filing has been rejected by HM Revenue & Customs; or

 

(2)HM Revenue & Customs has not given the relevant Borrower authority to make payments to that Lender without a Tax Deduction within 60 days of the date of the Borrowers DTTP Filing; or

 

(C)the relevant Borrower has received authority from HM Revenue & Customs to make payments to such Lender without a deduction for tax as a result of a Borrower DTTP Filing, but as a result of:

 

(1)a withdrawal or expiry of that authority; or

 

(2)a withdrawal or cessation of the DTTP passport scheme due to any change in law or change in practice of HM Revenue & Customs,

 

it is no longer possible for that Borrower to make payments to the Lender without Tax Deduction by virtue of that authority,

 

and, in each case, the relevant Borrower has notified that Lender in writing, that Lender and the Borrowers shall co-operate in completing any additional procedural formalities necessary for that Borrower to obtain authorisation to make that payment without a Tax Deduction.

 

12.2.9If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with Clause 12.2.7(B) above, no Borrower shall make a Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender's Commitment or its participation in any Loan unless the Lender otherwise agrees.

 

12.2.10Each Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of that Borrower DTTP Filing to the Agent for delivery to the relevant Lender.

 

12.2.11Nothing in this Clause 12.2 shall require a Treaty Lender to:

 

(A)register under the HMRC DT Treaty Passport scheme;

 

(B)apply the HMRC DT Treaty Passport scheme to any Loan if it has so registered; or

 

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(C)file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with Clause 12.2.7(B)(1) above and an Obligor making that payment has not complied with its obligations under Clause 12.2.8 above.

 

12.2.12A 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.

 

12.2.13A 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.

 

12.3Tax indemnity

 

12.3.1The Borrowers shall (within seven Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines 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.

 

12.3.2Clause 12.3.1 above shall not apply:

 

(A)with respect to any Tax assessed on a Finance Party:

 

(1)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

 

(2)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:

 

(1)is compensated for by an increased payment under Clause 12.2 (Tax gross-up);

 

(2)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; or

 

(3)relates to a FATCA Deduction required to be made by a Party.

 

12.3.3A 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.

 

12.3.4A Protected Party shall, on receiving a payment from an Obligor under this Clause 12.3, notify the Agent.

 

12.4Tax Credit

 

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

 

12.4.1a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and

 

12.4.2that Finance Party has obtained and utilised that Tax Credit,

 

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the Finance Party shall pay an amount to that Obligor 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 that Obligor.

 

12.5Lender Status Confirmation

 

Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate or Assignment Agreement which it executes on becoming a Party, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in:

 

12.5.1not a Qualifying Lender;

 

12.5.2a Qualifying Lender (other than a Treaty Lender); or

 

12.5.3a Treaty Lender.

 

If a New Lender fails to indicate its status in accordance with this Clause 12.5 then such New Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender until such time as it notifies the Agent which category applies (and the Agent, upon receipt of such notification, shall inform the Borrowers). For the avoidance of doubt, a Transfer Certificate or Assignment Agreement shall not be invalidated by any failure of a Lender to comply with this Clause 12.5.

 

12.6Stamp taxes

 

The Borrowers shall pay and, within seven Business Days of demand, indemnify each Secured Party against any cost, loss or liability that Secured Party incurs in relation to all stamp duty, land and buildings transaction tax, registration and other similar Taxes payable in respect of any Finance Document unless, in the case of registration, such registration is due to a voluntary registration of any Finance Document by a Secured Party which is not required or desirable to maintain, preserve, establish, perfect or enforce any right, title or interest of a Secured Party under any Finance Document and such registration is not requested by the Borrowers.

 

12.7VAT

 

12.7.1All amounts expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to Clause 12.7.2 below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of that VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

 

12.7.2If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

 

(A)(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (A) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT payable on that supply; and

 

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(B)(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.

 

12.7.3Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.

 

12.7.4Any reference in this Clause 12.7 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994).

 

12.7.5In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.

 

12.8FATCA Information

 

12.8.1Subject to Clause 12.8.3 below, each Party shall, within 10 Business Days of a reasonable request by another Party:

 

(A)confirm to that other Party whether it is:

 

(1)a FATCA Exempt Party; or

 

(2)not a FATCA Exempt Party;

 

(B)supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

 

(C)supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.

 

12.8.2If a Party confirms to another Party pursuant to Clause 12.8.1(A) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

 

12.8.3Clause 12.8.1 above shall not oblige any Finance Party to do anything, and Clause 12.8.1(C) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

 

(A)any law or regulation;

 

(B)any fiduciary duty; or

 

(C)any duty of confidentiality.

 

12.8.4If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with Clause 12.8.1(A) or (B) above (including, for the avoidance of doubt, where Clause 12.8.3 above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

 

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12.8.5If an Obligor is a US Tax Obligor or the Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within 10 Business Days of:

 

(A)where the relevant Obligor is a US Tax Obligor and the relevant Lender is an Original Lender, the date of this Agreement;

 

(B)where the relevant Obligor is a US Tax Obligor on a Transfer Date and the relevant Lender is a New Lender, the relevant Transfer Date;

 

(C)the date a new US Tax Obligor accedes as an Obligor; or

 

(D)where the relevant Obligor is not a US Tax Obligor, the date of a request from the Agent,

 

supply to the Agent:

 

(1)a withholding certificate on Form W-8, Form W-9 or any other relevant form; or

 

(2)any withholding statement or other document, authorisation or waiver as the Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.

 

12.8.6The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.8.5 above to the relevant Obligor.

 

12.8.7If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 12.8.5 above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such updated withholding certificate, withholding statement, document, authorisation or waiver to the Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Agent). The Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Obligor.

 

12.8.8The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 12.8.5 or 12.8.7 above without further verification. The Agent shall not be liable for any action taken by it under or in connection with Clauses 12.8.5, 12.8.6 or 12.8.7 above.

 

12.9FATCA Deduction

 

12.9.1Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

 

12.9.2Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, shall notify the Borrowers and the Agent and the Agent shall notify the other Finance Parties.

 

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13.Increased Costs

 

13.1Increased costs

 

13.1.1Subject to Clause 13.3 (Exceptions) the Obligors shall, within seven 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:

 

(A)the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation;

 

(B)compliance with any law or regulation made after the date of this Agreement; or

 

(C)the implementation or application of or compliance with Basel III or CRD IV or any other law or regulation which implements Basel III or CRD IV (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates) made after the date of this Agreement, provided that, in the case of this Clause 13.1.1(C), such Increased Costs result only from a Finance Party’s minimum compliance with the mandatory provisions of Basel III.

 

13.1.2In this Agreement:

 

"Basel III" means:

 

(a)the agreements on capital requirements, a leverage ratio and liquidity standards contained in "Basel III: A global regulatory framework for more resilient banks and banking systems", "Basel III: International framework for liquidity risk measurement, standards and monitoring" and "Guidance for national authorities operating the countercyclical capital buffer" published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated;

 

(b)the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

(c)any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III"; and

 

"CRD IV" means:

 

(i)Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and

 

(ii)Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.

 

"Increased Costs" means:

 

(a)a reduction in the rate of return from a 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.

 

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13.2Increased cost claims

 

13.2.1A 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 Obligors' Agent.

 

13.2.2Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

 

13.2.3A claim made by a Finance Party for Increased Costs must be accompanied by confirmation from the relevant Finance Party to the Obligors' Agent that where that Finance Party has comparable borrowers it is claiming such costs from comparable borrowers where the facilities extended to such borrowers include a right to claim such costs.

 

13.3Exceptions

 

13.3.1Clause 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)attributable to a FATCA Deduction required to be made by a Party;

 

(C)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 any of the exclusions in Clause 12.3.2 (Tax indemnity) applied);

 

(D)attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation; or

 

(E)attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

 

13.3.2Clause 13.1 (Increased costs) does not apply to the extent the Increased Cost is incurred by a Hedge Counterparty in its capacity as such.

 

13.3.3In this Clause 13.3, a reference to a "Tax Deduction" has the same meaning given to the term in Clause 12.1 (Definitions).

 

14.Other Indemnities

 

14.1Currency indemnity

 

14.1.1If any sum due 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; or

 

(B)obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Secured 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 (i) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

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14.1.2Each Obligor waives any right it 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.

 

14.1.3This Clause 14.1 does not apply to any sum due under a Hedging Agreement.

 

14.2Other indemnities

 

Each Obligor, within seven Business Days of demand, indemnify each Secured Party against any cost, loss or liability incurred by that Secured Party as a result of:

 

14.2.1the occurrence of any Event of Default;

 

14.2.2a failure by an Obligor to pay any amount due under a Finance Document on its due date, including any cost, loss or liability arising as a result of Clause 30 (Sharing Among the Finance Parties);

 

14.2.3funding, or making arrangements to fund, its participation in a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement including where the Agent has not given the notification referred to in Clause 4.1.1 (Initial conditions precedent) (but in any case other than by reason of default or negligence by that Secured Party alone); or

 

14.2.4a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by an Obligor (including where such notice has been revoked).

 

14.3Indemnity to the Agent

 

Each Obligor shall within seven Business Days of demand, indemnify the Agent against:

 

14.3.1any cost, expense (including legal fees) loss or liability incurred by the Agent (acting reasonably) as a result of:

 

(A)investigating any event which it reasonably believes is a Default; or

 

(B)acting or relying on any notice, request or instruction from or on behalf of a Transaction Obligor which it reasonably believes to be genuine, correct and appropriately authorised; or

 

(C)instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and

 

14.3.2any cost, loss or liability (including for negligence or any other category of liability whatsoever) incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 31.10 (Disruption to Payment Systems etc.) notwithstanding the Agent's negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Agent in acting as Agent under the Finance Documents.

 

14.4Indemnity to the Security Agent

 

14.4.1Each Obligor shall, within seven Business Days of demand, jointly and severally indemnify the Security Agent and every Receiver and Delegate against any cost, expense (including legal fees), loss or liability incurred by any of them as a result of:

 

(A)any failure by any Obligor to comply with its obligations under Clause 16 (Costs and Expenses);

 

(B)acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;

 

(C)the taking, holding, protection or enforcement of the Transaction Security;

 

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(D)the exercise of any of the rights, powers, discretions, authorities and remedies vested in the Security Agent and each Receiver and Delegate by the Finance Documents or by law;

 

(E)any default by any Transaction Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents;

 

(F)instructing lawyers, accountants, tax advisers, insurance advisers, surveyors or other professional advisers or experts as permitted under this Agreement; or

 

(G)acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Security Property (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).

 

14.4.2The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Security Assets in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 14.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all moneys payable to it.

 

15.Mitigation by the Lenders

 

15.1Mitigation

 

15.1.1Each Finance Party shall, in consultation with the Obligors' Agent, take all reasonable steps to mitigate any circumstances which arise and which would result in a Facility ceasing to be available or 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) or Clause 13 (Increased Costs) including transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

15.1.2Clause 15.1.1 above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

15.2Limitation of liability

 

15.2.1The Borrowers shall, within seven Business Days of demand, indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 15.1 (Mitigation).

 

15.2.2A Finance Party is not obliged to take any steps under Clause 15.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

 

16.Costs and Expenses

 

16.1Transaction expenses

 

The Borrowers shall, within seven Business Days of demand, pay each of the Agent, the Arranger and the Security Agent the amount of all costs and expenses (including legal fees (in the case of paragraph (a) below, as agreed, and in the case of paragraph (b) below, as are reasonable) incurred by any of them (and, in the case of the Security Agent, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution and perfection of:

 

16.1.1this Agreement and any other documents referred to in this Agreement or in a Security Document; and

 

16.1.2any other Finance Documents executed after the date of this Agreement.

 

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16.2Amendment costs

 

If:

 

16.2.1any Obligor requests an amendment, waiver or consent; or

 

16.2.2an amendment is required pursuant to Clause 22.5 (Substitution) or Clause 31.9 (Change of currency),

 

the Borrowers shall, within seven Business Days of demand, reimburse each of the Agent and the Security Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent or the Security Agent (and, in the case of the Security Agent, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.

 

16.3Valuations

 

16.3.1The Agent may request a Valuation:

 

(A)at any time on or after the first anniversary of the date of this Agreement after consulting with the Obligors' Agent; and

 

(B)at any time if a Default is continuing.

 

16.3.2The Agent shall request a Valuation at any time upon request by an Obligor.

 

16.3.3The Borrowers shall promptly on demand pay to the Agent the costs of:

 

(A)an Initial Valuation;

 

(B)a Valuation of each Property (performed on a desktop basis) obtained by the Agent on an annual basis on or prior to the second anniversary of the date of this Agreement;

 

(C)a Valuation of each Property obtained by the Agent on an annual basis after the second anniversary of the date of this Agreement;

 

(D)a Valuation obtained by the Agent in connection with the compulsory purchase of all or part of any Property;

 

(E)a Valuation obtained pursuant to Clause 16.3.2 above; and

 

(F)a Valuation of any or all of the Properties obtained by the Agent at any time when the Agent reasonably believes a Default is continuing or is likely to occur as a result of obtaining that Valuation provided that the Borrowers shall not be required to pay the costs of the Agent in respect of such Valuation if no Default is continuing and such Valuation does not disclose that a Default is continuing.

 

16.3.4The Borrowers must supply to the Agent a copy of any valuation of any Property an Obligor obtains, promptly upon obtaining it.

 

16.3.5Any Valuation not referred to in Clause 16.3.3 above will be at the cost of the Lenders

 

16.3.6If the Agent requests a Valuation in accordance with Clause 16.3.1(A) above, the Agent will provide contact details of the relevant Valuer to the Obligors' Agent.

 

16.4Enforcement and preservation costs

 

The Obligors shall, within seven Business Days of demand, pay to each Secured Party the amount of all costs and expenses (including legal fees) incurred by that Secured Party in connection with the enforcement (or attempted enforcement) of, or the preservation (or attempted preservation) of any rights under, any Finance Document or the Transaction Security and with any proceedings instituted by or against that Secured Party as a consequence of it entering into a Finance Document, taking or holding the Transaction Security, or enforcing those rights and, following the occurrence of any Default, any special servicing, liquidation or work-out fees, and any other costs, fees and expenses, payable to any Finance Party or any of their professional advisers.

 

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17.Bank Accounts

 

17.1Designation of Accounts

 

17.1.1ARC ALSFDUK001, LLC must maintain the following bank accounts in its name:

 

(A)a rent account designated the "Rent Account";

 

(B)a deposit account designated the "Deposit Account";

 

(C)a deposit account designated the "Disposals Account";

 

(D)a deposit account designated the "Cash Trap and Cure Account"; and

 

(E)a current account designated the "General Account".

 

17.1.2Each Borrower may maintain a current account in its name designated its "General Account".

 

17.1.3HC Glasgow S.à r.l. may maintain a Euro denominated account in its name designated its "Lux Account".

 

17.1.4ARC Global II (UK) Holdings Sarl may maintain a Euro denominated account in its name designated its "Lux Account".

 

17.1.5Subject to Clause 22.27 (Condition subsequent – Closing Accounts), no Obligor may, without the prior consent of the Agent, maintain any other bank account.

 

17.2Account bank

 

17.2.1As at the date of this Agreement, each Account must be held at Lloyds Bank plc except for each Lux Account which shall be held with Société Générale Bank & Trust.

 

17.2.2An Account must be replaced with an account at the same or another bank or financial institution at any time if the Agent so requires or the relevant Obligor so requests and the Agent consents (such consent not to be unreasonably withheld or delayed), provided that such other bank or financial institution shall meet the relevant Rating Criteria or shall otherwise be approved in writing by the Agent (acting reasonably).

 

17.2.3The replacement of an Account only becomes effective when the relevant bank agrees with the Agent and the relevant Obligor, in a manner satisfactory to the Agent, to fulfil the role of the bank holding that Account and acknowledges that such Account shall be the subject of the Transaction Security.

 

17.2.4If any bank or financial institution at which an Account is held (other than any bank or financial institution at which an Account is held as at the date of this Agreement) ceases to meet the relevant Rating Criteria, the Agent may request in writing that any Account held with such bank or financial institution is transferred to a new bank or financial institution that meets the relevant Rating Criteria (a "Replacement Bank"). As soon as practicable after receipt of such request (but in any event within 30 days of such receipt) the relevant Obligor shall, unless Clause 17.2.5 below applies, transfer (and shall do all other things reasonably necessary to effect such transfer) that Account to a Replacement Bank (and shall provide account details as may be reasonably required by the Agent). The Security Agent shall provide assistance as is required for such transfer in respect of any Account on which it has sole signing rights.

 

17.2.5If a bank or financial institution with which an Account is held ceases to meet the relevant Rating Criteria and following receipt of a request from the Agent to transfer any Account to a Replacement Bank in accordance with Clause 17.2.4 above it is not possible to find a Replacement Bank, the Agent and the relevant Obligor will consult with each other (for a period of no more than five Business Days and both acting reasonably) with a view to agreeing a substitute bank or financial institution that may be used to hold the Accounts. At the end of that period of consultation, the Agent shall specify which alternative bank or financial institution may be used.

 

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17.2.6Each Obligor shall do all such things as the Agent reasonably requests in order to facilitate any change of bank (including the execution of bank mandate forms, transfer of balances, issue of revised payment instructions relating to any tenant or guarantor under any Occupational Lease, the delivery of relevant corporate authorisations and legal opinions and the grant and/or perfection of Transaction Security over any new accounts).

 

17.3Rent Account

 

17.3.1The Security Agent has sole signing rights in relation to the Rent Account.

 

17.3.2Each Obligor must ensure that:

 

(A)all Rental Income; and

 

(B)any amounts payable by it under any Hedging Agreements are,

 

paid into the Rent Account.

 

17.3.3Clause 17.3.2 above shall not apply to Hedging Prepayment Proceeds or Lease Prepayment Proceeds.

 

17.3.4An Obligor may satisfy its obligations under Clause 17.3.2 above by ensuring that:

 

(A)a Managing Agent promptly collects all Rental Income and at least 2 Business Days before each Interest Payment Date pays all Net Rental Income received by it into the Rent Account; and

 

(B)pending payment into the Rent Account, the Managing Agent holds that Net Rental Income in a trust account in the name of the Managing Agent, into which only amounts representing Rental Income are paid, with a bank approved by the Agent.

 

17.3.5If any payment of any amount referred to in Clause 17.3.2 above is paid into an Account other than the Rent Account, that payment must be paid immediately into the Rent Account.

 

17.3.6On any day on which an amount is due under a Headlease, the Security Agent may, and is irrevocably authorised by each Obligor to:

 

(A)withdraw from the Rent Account an amount necessary to meet that due amount; and

 

(B)apply that amount in payment of that due amount.

 

17.3.7Except as provided in Clause 31.5 (Partial payments) and Clause 17.3.8 below, on each Interest Payment Date, the Security Agent must withdraw from, and apply amounts standing to the credit of, the Rent Account, in the following order:

 

(A)first, in or towards payment pro rata of any unpaid amounts owing to the Agent, the Arranger or the Security Agent under the Finance Documents;

 

(B)secondly, in or towards payment pro rata to the Agent for the relevant Lenders of any accrued interest on any Property Protection Loans due but unpaid under this Agreement;

 

(C)thirdly, in or towards payment pro rata to the Agent for the relevant Lenders of any principal of any Property Protection Loans due but unpaid under this Agreement;

 

(D)fourthly, in or towards payment to the Agent for the Lenders of any accrued interest and fees due but unpaid under this Agreement;

 

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(E)fifthly, in or towards payment pro rata:

 

(1)to the Agent for the Lenders of any accrued interest and fees due but unpaid under this Agreement; and

 

(2)to the Hedge Counterparty of any periodical payments (not being payments as a result of termination or closing out) due but unpaid under the Hedging Agreements;

 

(F)sixthly, in or towards payment pro rata

 

(1)to the Agent for the Lenders of any principal due but unpaid under this Agreement; and

 

(2)to the Hedge Counterparty of any payments as a result of termination or closing out due but unpaid under the Hedging Agreements;

 

(G)seventhly, if a Cash Trap Event has occurred and is continuing, payment of any surplus into the Cash Trap and Cure Account; and

 

(H)eighthly, payment of any surplus into ARC ALSFDUK001, LLC 's General Account.

 

17.3.8The Security Agent is obliged to make a withdrawal from the Rent Account in accordance with Clause 17.3.6 above only if:

 

(A)no Default is continuing; and

 

(B)the Repeating Representations are correct and will be correct immediately after the withdrawal.

 

17.3.9The Security Agent shall, if so directed by the Majority Lenders and the Hedge Counterparty, vary the order of payments set out in Clauses 17.3.7(D) to 17.3.7(F) or any sub-paragraph therein.

 

17.4Deposit Account

 

17.4.1The Security Agent has sole signing rights in relation to the Deposit Account.

 

17.4.2(A)         The Obligors must ensure that all Lease Prepayment Proceeds are promptly upon receipt paid into the Deposit Account.

 

(B)Subject to Clause 23.11.10(A) (Insurances), the Obligors must ensure that all Insurance Prepayment Proceeds are promptly upon receipt paid into the Deposit Account.

 

(C)The Obligors must ensure that all Compensation Prepayment Proceeds are promptly upon receipt paid into the Deposit Account.

 

(D)The Obligors must ensure that all Recovery Prepayment Proceeds are promptly upon receipt paid into the Deposit Account.

 

(E)The Obligors must ensure that all Hedging Prepayment Proceeds are promptly upon receipt paid into the Deposit Account.

 

17.4.3Except as provided in Clause 31.5 (Partial payments) and Clause 17.4.4 below, at the request of the Obligors' Agent if it gives the Security Agent not less than five Business Days' written notice, the Security Agent must withdraw from, and apply amounts standing to the credit of, the Deposit Account in accordance with Clause 7.3 (Mandatory prepayment) on the Interest Payment Date falling immediately after receipt by the Security Agent of that notice.

 

17.4.4The Security Agent is obliged to make a withdrawal from the Deposit Account in accordance with Clause 17.4.3 above only if:

 

(A)no Default is continuing; and

 

(B)the Repeating Representations are correct and will be correct immediately after the withdrawal.

 

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17.5Disposals Account

 

17.5.1The Security Agent has sole signing rights in relation to the Disposals Account.

 

17.5.2The Obligors must ensure that all net disposal proceeds derived from the disposal or proposed disposal of a Property or the shares in a Borrower are, unless immediately applied in accordance with Clause 7.3.1 (Mandatory prepayment), paid into the Disposals Account in accordance with Clause 22.4.4 (Disposals).

 

17.5.3Except as provided in Clause 31.5 (Partial payments) and subject to Clause 17.5.7 below, at the request of the Obligors' Agent if it gives the Security Agent not less than five Business Days' written notice, the Security Agent must withdraw from, and apply amounts standing to the credit of, the Disposals Account in accordance with Clause 7.3.1 (Mandatory prepayment) on the Interest Payment Date falling immediately after receipt by the Security Agent of that notice.

 

17.5.4Except as provided in Clause 31.5 (Partial payments) and subject to Clause 17.5.7 below, the Security Agent shall withdraw from, and apply net disposal proceeds standing to the credit of the Disposals Account which have been designated as relating to an Outgoing Property in accordance with Clause 22.5 (Substitution) in accordance with Clause 22.5.5 (Substitution) and, if applicable, Clause 22.5.6 (Substitution).

 

17.5.5Subject to 17.5.7 below, any net disposal proceeds which have not been designated as relating to an Outgoing Property in accordance with Clause 22.5 (Substitution) and remain standing to the credit of the Disposals Account after all withdrawals contemplated by Clause 17.5.3 above have been made shall:

 

(A)if no Cash Trap Event is continuing, be transferred by the Security Agent to a General Account; or

 

(B)otherwise, be transferred by the Security Agent to the Cash Trap and Cure Account.

 

17.5.6If an Event of Default is continuing, the Security Agent may elect to immediately withdraw from, and apply any amounts standing to the credit of the Disposals Account, in prepayment of the Loans and all other amounts outstanding under the Finance Documents.

 

17.5.7The Security Agent shall only be obliged to withdraw an amount in accordance with Clause 17.5.3 above where:

 

(A)no Default is continuing or would result from such withdrawal; and

 

(B)the Repeating Representations are correct and will be correct immediately after the withdrawal.

 

17.6Cash Trap and Cure Account

 

17.6.1The Security Agent has sole signing rights in relation to the Cash Trap and Cure Account.

 

17.6.2The Security Agent shall pay amounts into the Cash Trap and Cure Account in accordance with Clause 17.3.7(G) (Rent Account) (each such payment being a "Cash Trap Payment").

 

17.6.3Except as provided in Clause 31.5 (Partial payments) and Clause 17.6.8 below:

 

(A)if, on each of the two consecutive Interest Payment Dates immediately following the occurrence of a Cash Trap Event, no Cash Trap Event is continuing, the Obligors' Agent may in writing request that the Security Agent withdraws, and following any such written request the Security Agent shall promptly and in any event within 5 Business Days of receipt of such written request withdraw any Cash Trap Payment remaining standing to the credit of the Cash Trap and Cure Account and transfer all such amounts to a General Account provided no Cash Trap Event is continuing and will not occur following such withdrawal and the Amortisation Requirement is met and will remain met following such withdrawal;

 

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(B)if a GNL Guarantee is in full force and effect and a GNL Ineligibility Event is not continuing, the Obligors' Agent may in writing request that the Security Agent withdraws, and following any such written request the Security Agent shall promptly and in any event within 5 Business Days of receipt of such written request withdraw any Cash Trap Payment remaining standing to the credit of the Cash Trap and Cure Account up to an aggregate amount equal to the amount that can be claimed in respect of the Guaranteed Obligations (as defined in the GNL Guarantee) less the relevant Prepayment Amounts which would be payable if the proceeds of such claim were applied in prepayment of the Loans and transfer all such amounts to a General Account provided no Cash Trap Event is continuing and will not occur following such withdrawal;

 

(C)if, following the payment of a Cash Trap Payment into the Cash Trap and Cure Account, a Cash Trap Event is continuing on at least two consecutive Interest Payment Dates, the Security Agent may, and must if so requested by the Majority Lenders, on or at any time following the Interest Payment Date on which the Cash Trap Event is continuing withdraw any Cash Trap Payment standing to the credit of the Cash Trap Account and apply the proceeds of such withdrawals and claims, on behalf of the Obligors, in prepayment of the Loans in accordance with Clause 7.3.2 (Mandatory prepayment) but may only do so on an Interest Payment Date; and

 

(D)the Security Agent must, if so requested by the Obligors' Agent, withdraw any Cash Trap Payment standing to the credit of the Cash Trap Account and apply the proceeds of such withdrawals, on behalf of the Obligors, in prepayment of the Loans in accordance with Clause 7.5 (Voluntary prepayment of Loans).

 

17.6.4The Obligors may pay amounts into the Cash Trap and Cure Account in accordance with Clause 21.4 (Cure rights) (each such payment being a "Cure Payment").

 

17.6.5Except as provided in Clause 31.5 (Partial payments) and Clause 17.6.8 below:

 

(A)if, on each of the two consecutive Interest Payment Dates immediately following the payment of a Cure Payment into the Cash Trap and Cure Account, the Obligors are in compliance with the requirements of Clause 21 (Financial Covenants) without taking into account any amount standing to the credit of the Cash Trap and Cure Account or any amounts which can be drawn or claimed (as the case may be) pursuant to an Acceptable Letter of Credit and the GNL Guarantee, the Obligors' Agent may request that the Security Agent withdraws and/or returns to an Obligor, and following any such request the Security Agent shall promptly and in any event within 5 Business Days of receipt of such written request:

 

(1)instruct the relevant account bank to withdraw all amounts standing to the credit of the Cash Trap and Cure Account representing Cure Payments and transfer all such amounts to the General Account; and

 

(2)return to an Obligor each Acceptable Letter of Credit unconditionally held by the Security Agent; or

 

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(B)if, following the payment of a Cure Payment into the Cash Trap and Cure Account, the Obligors are not in compliance with the requirements of Clause 21 (Financial Covenants) on either of the two consecutive Interest Payment Dates immediately following that payment without taking into account any amount standing to the credit of the Cash Trap and Cure Account or any amounts which can be drawn or claimed (as the case may be) pursuant to an Acceptable Letter of Credit and the GNL Guarantee, the Security Agent may, and must if so requested by the Majority Lenders, on or at any time following the Interest Payment Date on which the Obligors are not in compliance with the requirements of Clause 21 (Financial Covenants):

 

(1)instruct the relevant account bank to withdraw all amounts standing to the credit of the Cash Trap and Cure Account; and

 

(2)call upon all amounts which may be drawn or claimed (as the case may be) pursuant to each Acceptable Letter of Credit and the GNL Guarantee,

 

and, in each case, apply the proceeds of all such withdrawals, calls and claims on behalf of the Obligors in prepayment of the Loans in accordance with Clause 7.3 (Mandatory prepayment).

 

17.6.6The Obligors' Agent may request the Agent accept an Acceptable Letter of Credit with a face value equal to the amount of any or all Cure Payments standing to the credit of the Cash Trap and Cure Account at that time (such amount being the "Substitute Amount"). If the Agent gives written confirmation to the Obligors' Agent that it agrees to such a request then within 5 Business Days of the Agent being satisfied such an Acceptable Letter of Credit has been unconditionally and irrevocably delivered to the Security Agent, the Security Agent shall withdraw an amount equal to the lesser of:

 

(A)the balance of all Cure Payments standing to the credit of the Cash Trap and Cure Account; and

 

(B)the Substitute Amount,

 

and transfer such amount to the General Account.

 

17.6.7The Obligors' Agent may at any time elect that all or part of any amounts standing to the credit of the Cash Trap and Cure Account are applied in prepayment of the Loans in accordance with Clause 7.5 (Voluntary prepayment of Loans).

 

17.6.8The Security Agent is obliged to make a withdrawal from the Cash Trap and Cure Account or retain, call or claim upon (as the case may be) an Acceptable Letter of Credit or the GNL Guarantee in accordance with Clauses 17.6.3 or 17.6.5 above only if:

 

(A)no Default is continuing; and

 

(B)the Repeating Representations are correct and will be correct immediately after the withdrawal.

 

17.7General Accounts and Lux Accounts

 

17.7.1Except as provided in Clause 17.7.5 below, each Obligor shall have signing rights in relation to its General Account and its Lux Account.

 

17.7.2Each Obligor must ensure that all Tenant Contributions received or receivable by it, unless held in a trust account in the name of the Managing Agent, are paid into either the Rent Account or its General Account.

 

17.7.3Each Obligor must ensure that any other amount received or receivable by it, other than any amount specifically required under this Agreement to be paid into any other Account, is paid into either into ARC ALSFDUK001, LLC 's General Account or its General Account.

 

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17.7.4Except as provided in Clause 17.7.5 below and subject to:

 

(A)any restriction in any Subordination Agreement; and

 

(B)the requirement that amounts paid into a General Account or a Lux Account for a particular purpose must be used for that purpose,

 

an Obligor may withdraw any amount from its General Account or its Lux Account for any purpose.

 

17.7.5At any time when a Default is continuing or the Repeating Representations are not correct, the Security Agent may:

 

(A)operate each General Account and each Lux Account;

 

(B)notify an Obligor that its rights to operate its General Account and its Lux Account are suspended, such notice to take effect in accordance with its terms; and

 

(C)withdraw from, and apply amounts standing to the credit of, any General Account and any Lux Account in or towards any purpose for which moneys in any Account may be applied.

 

17.8Miscellaneous Accounts provisions

 

17.8.1The Obligors must ensure that no Account goes into overdraft.

 

17.8.2Any amount received or recovered by an Obligor otherwise than by credit to an Account must be held subject to the security created by the Finance Documents and immediately be paid to the relevant Account or to the Agent in the same funds as received or recovered.

 

17.8.3If any payment is made into an Account in relation to which the Security Agent has sole signing rights which should have been paid into another Account, then, unless a Default is continuing, the Security Agent must, at the request of the Obligors' Agent and on receipt of evidence satisfactory to the Security Agent that the payment should have been made to that other Account, pay that amount to that other Account.

 

17.8.4The moneys standing to the credit of an Account and any amount which may be called upon pursuant to an Acceptable Letter of Credit may be withdrawn or called upon (as applicable) and applied by the Security Agent in payment of any amount due but unpaid to a Finance Party under the Finance Documents.

 

17.8.5No Finance Party is responsible or liable to any Obligor for:

 

(A)any non-payment of any liability of an Obligor which could be paid out of moneys standing to the credit of an Account; or

 

(B)any withdrawal wrongly made, if made in good faith.

 

17.8.6The Borrowers must, within five Business Days of any request by the Agent, supply the Agent with the following information in relation to any payment received in an Account:

 

(A)the date of payment or receipt;

 

(B)the payer; and

 

(C)the purpose of the payment or receipt.

 

17.8.7If monies will be paid into an Account by any Obligor who is not the account holder, the Parties acknowledge that corresponding intra-group balances will arise between each such Obligor and the relevant account holder.

 

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18.Guarantee and Indemnity

 

18.1Guarantee and indemnity

 

Each Obligor irrevocably and unconditionally jointly and severally:

 

18.1.1guarantees to each Finance Party punctual performance by each Obligor of all that Obligor's obligations under the Finance Documents;

 

18.1.2undertakes with each Finance Party that whenever another Obligor does not pay any amount when due or expressed to be due under or in connection with any Finance Document, that Obligor shall immediately on demand pay that amount as if it was the principal obligor; and

 

18.1.3agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by an Obligor under this indemnity will not exceed the amount it would have had to pay under this Clause 18 if the amount claimed had been recoverable on the basis of a guarantee.

 

18.2Continuing guarantee

 

The guarantee under this Clause 18 is continuing and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

 

18.3Reinstatement

 

If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Obligor under this Clause 18 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

 

18.4Waiver of defences

 

The obligations of each Obligor under this Clause 18 will not be affected by (and the intention of each Obligor is that its obligation shall continue in full force and effect notwithstanding) an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 18 (without limitation and whether or not known to it or any Finance Party) including:

 

18.4.1any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

18.4.2the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

 

18.4.3the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

 

18.4.4any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

 

18.4.5any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;

 

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18.4.6any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

 

18.4.7any insolvency or similar proceedings.

 

18.5Guarantor Intent

 

18.5.1Without prejudice to the generality of Clause 18.4 (Waiver of defences), each Obligor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: acquisitions of any nature; increasing working capital; enabling distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

 

18.5.2The guarantee under this Clause 18 is an independent guarantee and shall not be construed as a suretyship (cautionnement). In this respect, any Obligor incorporated in Luxembourg hereby fully waives any rights it may have under the laws of Luxembourg to claim the benefit of the bénéfice de division (under article 2026 of the Luxembourg Civil Code) and the bénéfice de discussion (under article 2021 of the Luxembourg Civil Code).

 

18.6Immediate recourse

 

Each Obligor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Obligor under this Clause 18. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

 

18.7Appropriations

 

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

 

18.7.1refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Obligor shall be entitled to the benefit of the same; and

 

18.7.2hold in a suspense account (which, to the extent available to the relevant Finance Party, shall be interest bearing) any moneys received from any Obligor or on account of any Obligor's liability under this Clause 18.

 

18.8Deferral of Obligors' rights

 

18.8.1Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Obligor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 18:

 

(A)to be indemnified by an Obligor;

 

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(B)to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;

 

(C)to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;

 

(D)to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Obligor has given a guarantee, undertaking or indemnity under Clause 18.1 (Guarantee and indemnity); and/or

 

(E)to exercise any right of set-off against any Obligor or to exercise or claim any right of set-off or counterclaim against any other Obligor or any other person liable or claim or prove in competition with the Finance Parties in the bankruptcy, administration, liquidation or any other analogous procedure of any other Obligor or any other person liable or have the benefit of, or share in, any payment from or composition with, any other Obligor or any other person liable or any other Security now or hereafter held by the Finance Parties in respect of the obligations of any Obligor under the Finance Documents or for the obligations or liabilities of any other person liable but so that, if so directed by the Agent, it will prove for the whole or any part of its claim in the liquidation, administration, bankruptcy or any other analogous procedure of any other Obligor on terms that the benefit of such proof and of all of the money received by it in respect thereof shall be held on trust for the Finance Parties and applied in or towards discharge of the obligations of the Obligors under the Finance Documents in such manner as the Agent shall deem appropriate.

 

18.8.2If an Obligor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 31 (Payment mechanics).

 

18.9Agent's authority

 

If any Obligor fails to claim or prove in the liquidation, administration, bankruptcy or any other analogous procedure of any other Obligor promptly upon being directed to do so by the Agent as contemplated by Clause 18.8.1(E) (Deferral of Obligors' rights):

 

18.9.1the Agent may, and is irrevocably authorised on behalf of such Obligor to, file any claims or proofs in such liquidation, administration or bankruptcy or any other analogous procedure on its behalf; and

 

18.9.2the trustee in bankruptcy, liquidator, assignee or other person distributing the assets of any Obligor or their proceeds is directed to pay distributions on the obligations or liabilities of such Obligor direct to the Agent on behalf of the Finance Parties until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full.

 

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18.10Release of Obligor's right of contribution

 

If any Obligor (a "Retiring Obligor") ceases to be an Obligor for the purpose of any sale or other disposal of that Retiring Obligor in accordance with the terms of the Finance Documents or as a result of the enforcement of any Transaction Security then on the date such Retiring Obligor ceases to be an Obligor:

 

18.10.1that Retiring Obligor is released by each other Obligor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Obligor arising by reason of the performance by any other Obligor of its obligations under the Finance Documents or the enforcement of any Transaction Security; and

 

18.10.2each other Obligor waives any rights it may have by reason of the performance of its obligations under the Finance Documents or the enforcement of any Transaction Security to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Obligor.

 

18.11Additional security

 

This guarantee described in this Clause 18 is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

 

18.12Further assurance

 

Each Obligor agrees that it shall promptly, following reasonable written request from the Agent, execute and deliver at its own expense any document (executed as a deed or under hand in such form as the Agent may reasonably request and provided that it is on no more onerous terms than the terms of this Clause 18) and do any act or thing, in each case only so far as is necessary in order to confirm or establish the validity and enforceability of the guarantee and indemnity intended to be created by it under this Clause 18.

 

18.13Limitations for Luxembourg Obligors

 

18.13.1Notwithstanding any other provisions to the contrary in this Agreement, the aggregate liability and exposure of any Luxembourg Obligor for the obligations of any Obligor which is not a direct or indirect subsidiary of such Luxembourg Obligor shall be limited at any time to an aggregate amount not exceeding the higher of:

 

(A)90 per cent. of such Luxembourg Obligor's capitaux propres (as referred to in Annex I to the Grand-Ducal Regulation dated 18 December 2015 setting out the form and content of the presentation of the balance sheet and profit and loss account, enforcing Article 34 of the Luxembourg law of 19 December 2002 on the register of commerce and companies, accounting and companies annual accounts, as amended) determined as at the date on which a demand is made under the guarantee under this Clause 18 or the date on which any Security Document is enforced, increased by the amount of any Intra-Group Liabilities; and

 

(B)90 per cent. of such Luxembourg Obligor's capitaux propres (as calculated as referred to in Annex I to the Grand-Ducal Regulation dated 18 December 2015 setting out the form and content of the presentation of the balance sheet and profit and loss account, enforcing Article 34 of the Luxembourg law of 19 December 2002 on the register of commerce and companies, accounting and companies annual accounts, as amended) determined as at the date of this Agreement, increased by the amount of any Intra-Group Liabilities.

 

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18.13.2For the purposes of this Clause 18.13, "Intra-Group Liabilities" shall mean any amounts owed by the Luxembourg Obligor to any other member of the group of companies to which it belongs and that have not been financed (directly or indirectly) by a borrowing under the Finance Documents.

 

18.13.3The above limitation shall not apply to:

 

(A)any amounts borrowed by a Luxembourg Obligor or any of its direct or indirect subsidiaries under the Finance Documents; and

 

(B)any amounts borrowed under the Finance Documents and on-lent, or otherwise made available, to the Luxembourg Obligor or any of its direct or indirect subsidiaries (in any form whatsoever).

 

19.Representations

 

Each Obligor makes the representations and warranties set out in this Clause 19 to each Finance Party on the date of this Agreement.

 

19.1Status

 

19.1.1In the case of an Obligor whose Original Jurisdiction is Delaware, it is a limited liability company duly formed and validly existing under the law of its Original Jurisdiction.

 

19.1.2In the case of an Obligor whose Original Jurisdiction is not Delaware, it is a limited liability corporation, duly incorporated and validly existing under the law of its Original Jurisdiction.

 

19.1.3It has the power to own its assets and carry on its business as it is being conducted.

 

19.1.4It is a passive non-financial entity for the purposes of FATCA.

 

19.2Binding obligations

 

The obligations expressed to be assumed by it in each Transaction Document to which it is a party are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.

 

19.3Non-conflict with other obligations

 

The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents and the granting of the Transaction Security to which it is a party do not and will not conflict with:

 

19.3.1any law or regulation applicable to it;

 

19.3.2its constitutional documents; or

 

19.3.3from the Utilisation Date, any agreement or instrument binding upon it or any of its assets or constitute a default or termination event (however described) under any such agreement or instrument.

 

19.4Power and authority

 

19.4.1It has the power to enter into, exercise its rights under, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is or will be a party and the transactions contemplated by those Transaction Documents.

 

19.4.2No limit on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.

 

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19.5Validity and admissibility in evidence

 

19.5.1All Authorisations required or desirable:

 

(A)to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and

 

(B)to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,

 

have been obtained or effected and are in full force and effect.

 

19.5.2All Authorisations necessary for the conduct of the business, trade and ordinary activities of the Obligors have been obtained or effected and are in full force and effect.

 

19.6Governing law and enforcement

 

19.6.1Subject to the Legal Reservations, the choice of the governing law specified in each Finance Document will be recognised and enforced in its Relevant Jurisdictions.

 

19.6.2Subject to the Legal Reservations, any judgment obtained in relation to a Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in its Relevant Jurisdictions.

 

19.7Insolvency

 

No:

 

19.7.1corporate action, legal proceeding or other procedure or step described in Clause 24.7.1 (Insolvency proceedings); or

 

19.7.2creditors' process described in Clause 24.8 (Creditors' process),

 

has been taken or, to the knowledge of the Obligors, threatened in relation to any Obligor; and none of the circumstances described in Clause 24.6 (Insolvency) applies to any Obligor.

 

19.8Tax

 

19.8.1It is resident for Tax purposes solely in the jurisdiction of its incorporation and does not have a permanent establishment for Tax purposes through which it carries on a trading activity in any jurisdiction other than its Original Jurisdiction.

 

19.8.2All the Obligors organised as US LLCs are disregarded for US tax purposes and accordingly are not subject to Tax in the US and are not required to withhold or deduct from payments of interest made by them and are not tax resident and do not have a permanent establishment for Tax purposes through which any of them carry on a trading activity in any other jurisdiction.

 

19.8.3All the Obligors entities organised as Luxembourg limited liability entities are tax resident in Luxembourg.

 

19.8.4It has duly and punctually paid and discharged all Taxes imposed upon it or its assets within the time period allowed without incurring interest or penalties (save to the extent that (i) payment is being contested in good faith, (ii) it has maintained adequate reserves for the payment of such Taxes and (iii) payment can be lawfully withheld).

 

19.8.5It is not overdue in the filing of any Tax returns in any material respect.

 

19.8.6No claims are being or so far as any Obligor is aware (having made due enquiry) are reasonably likely to be asserted against it with respect to Taxes such that a liability of, or claim against it of, a material amount is reasonably likely to arise.

 

19.8.7It is not required to make any Tax Deduction (as defined in Clause 12.1 (Definitions)) from any payment it may make under any Finance Document to a Lender which is:

 

(A)a Qualifying Lender:

 

(1)falling within paragraph (A)(1) of the definition of "Qualifying Lender"; or

 

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(2)except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (A)(2) of the definition of "Qualifying Lender"; or

 

(3)falling within paragraph (B) of the definition of Qualifying Lender; or

 

(B)a Treaty Lender and the payment is one specified in a direction given by the Commissioners of Revenue & Customs under Regulation 2 of the Double Taxation Relief (Taxes on Income) (General) Regulations 1970 (SI 1970/488).

 

19.8.8It (and, where a Managing Agent is appointed pursuant to Clause 23.9 (Managing Agents), that Managing Agent) is entitled to receive all Rental Income free from any deduction or withholding for on account of any Tax (whether pursuant to section 971 of ITA or otherwise).

 

19.8.9Except for ARC NRSLDUK001, LLC, ARC BKSCOUK001, LLC, and ARC BBWYKUK001, LLC, it has exercised its option to charge VAT in respect of supplies made in relation to each Property and has received confirmation from HM Revenue & Customs in writing that such option is acknowledged.

 

19.8.10Except ARC NRSLDUK001, LLC, ARC BKSCOUK001, LLC, and ARC BBWYKUK001, LLC, it has, prior to the date of the transfer to it of any Property notified the vendor of that Property that paragraph (2B) of Article 5 of the Value Added Tax (Special Provisions) Order 1995 does not apply to it.

 

19.8.11None of the transactions entered into by any Obligor when it acquired its interest in a Property or an Obligor constituted "notifiable arrangements" within the definition set out in section 306(1) Finance Act 2004 which are of a description prescribed in Statutory Instrument 2005/1868 (The Stamp Duty Land Tax Avoidance Schemes (Prescribed Description of Arrangements) Regulations 2005).

 

19.8.12It holds its Property as an investment for United Kingdom Tax purposes.

 

19.9No filing or stamp taxes

 

19.9.1Under the laws of its Relevant Jurisdiction it is not necessary that the Finance Documents be registered, filed, recorded, notarised or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except registration:

 

(A)of the Security Agreement at the Land Registry or Land Charges Registry in England and Wales and the Standard Securities at the Land Register of Scotland payment of associated fees;

 

(B)of Finance Documents which have the form of public deeds (actes publics) which are subject to mandatory registration in Luxembourg, or in case registration is required if the Finance Documents (i) are appended to a deed which is mandatorily subject to registration or (ii) are lodged with the notary for his records (déposé au rang des minutes d'un notaire). or in case of registration on a voluntary basis or if such registration is required pursuant to a contractual obligation in the Finance Documents; and

 

(C)a Uniform Commercial Code financing statement in relation to the Security Agreement, the Shareholder’s Security Agreement granted by the Second Shareholder and the Holdco Security Agreement granted by Second Holdco, each filed with the Secretary of State of Delaware;

 

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in each case which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Security Document.

 

19.9.2Any disclosure required to be made by it to any relevant taxing authority in relation to stamp duty land tax or land and buildings transaction tax payable on any transactions contemplated by or being financed by the Transaction Documents has been made.

 

19.10VAT

 

19.10.1Except for ARC NRSLDUK001, LLC, ARC BKSCOUK001, LLC, and ARC BBWYKUK001, LLC, it is registered for United Kingdom VAT.

 

19.10.2It is not a member of a VAT Group other than a VAT Group made up solely of Obligors.

 

19.11No default

 

19.11.1No Event of Default and, as at the date of this Agreement and each Utilisation Date, no Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, or the performance of, or any transaction contemplated by, any Transaction Document.

 

19.11.2No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or a termination event (however described) under any other agreement or instrument which is binding on it or to which any of its assets are subject which has or is reasonably likely to have a Material Adverse Effect.

 

19.12Information

 

19.12.1All information (not including, for the avoidance of doubt, any Relevant Legal Matters) supplied by it or on its behalf to any Finance Party in connection with the Transaction Documents was true and accurate in all material respects as at the date it was provided or as at any date at which it was stated to be given.

 

19.12.2Any financial projections contained in the Business Plan and any other information referred to in Clause 19.12.1 above have been prepared as at their date on the basis of then recent historical information and on the basis of reasonable assumptions.

 

19.12.3It has not omitted to supply any information which, if disclosed, would make the information referred to in Clause 19.12.1 above untrue or misleading in any respect.

 

19.12.4As at the Utilisation Date, nothing has occurred since the date of the information referred to in Clause 19.12.1 above which, if disclosed, would make that information untrue or misleading in any material respect.

 

19.13Financial statements

 

19.13.1Its Original Financial Statements were prepared in accordance with GAAP consistently applied.

 

19.13.2Its Original Financial Statements give a true and fair view of its financial condition as at the date as at which they were prepared.

 

19.13.3There has been no material adverse change in its business or financial condition since the date as at which the Original Financial Statements were prepared.

 

19.13.4Its most recent financial statements delivered pursuant to Clause 20.1 (Financial statements):

 

(A)have been prepared in accordance with GAAP; and

 

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(B)give a true and fair view of (if audited) or fairly represent (if unaudited) its financial condition as at the end of the relevant financial year and operations during the relevant financial year.

 

19.13.5So far as each Obligor is aware (having made due and careful enquiry), since the date of the most recent financial statements delivered pursuant to Clause 20.1 (Financial statements) there has been no material adverse change in its business, assets or financial condition.

 

19.14Pari 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.

 

19.15No proceedings pending or threatened

 

19.15.1No litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened.

 

19.15.2No judgment or order of a court, arbitral tribunal or other tribunal or any order or sanction of any governmental or other regulatory body which is reasonably likely to have a Material Adverse Effect has (to the best of its knowledge and belief (having made due and careful enquiry)) been made against it.

 

19.16Valuation

 

19.16.1All information (not including, for the avoidance of doubt, any Relevant Legal Matters) supplied by it or on its behalf to the Valuer for the purposes of each Valuation was true and accurate in all material respects as at its date or (if appropriate) as at the date (if any) at which it is stated to be given.

 

19.16.2Any financial projections contained in the information referred to in Clause 19.16.1 above have been prepared as at their date, on the basis of recent historical information and on the basis of reasonable assumptions.

 

19.16.3It has not omitted to supply any information to the Valuer which, if disclosed, would adversely affect the Valuation in any material respect.

 

19.16.4So far as the Obligors are aware (having made due and careful enquiry), as at the Utilisation Date, nothing material has occurred since the date the information referred to in Clause 19.16.1 above was supplied which, if it had occurred prior to an Initial Valuation, would have adversely affected that Initial Valuation in any material respect (in the reasonably of the Agent).

 

19.17Title to Property

 

19.17.1The relevant Obligor listed in the Property Schedule is:

 

(A)the legal and beneficial owner of each Property listed opposite its name in the Property Schedule and situated in England;

 

(B)the heritable proprietor of each Property listed opposite its name in the Property Schedule and situated in Scotland (free from any trust interest or overriding interest in favour of a third party); and

 

(C)has good, valid and marketable title to each Property listed opposite its name in the Property Schedule,

 

in each case free from Security (other than those created by or pursuant to the Security Documents or which shall be irrevocably and unconditionally released on the Utilisation Date) and restrictions and covenants or title conditions (other than those set out in the Property Report in relation to that Property).

 

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19.17.2No Obligor has sold, transferred or otherwise disposed of the benefit of or agreed to sell, transfer or otherwise dispose of the benefit of any of its rights, title and interest in and to any assets over which Security is, or is expressed to be, created under the Security Documents (other than as expressly permitted under this Agreement).

 

19.17.3Except as disclosed in the Property Report relating to a Property:

 

(A)no breach of any law, regulation, covenant or title condition is outstanding which adversely affects or might reasonably be expected to adversely affect the value, saleability or use of that Property in a material respect;

 

(B)to the best of each Obligor's knowledge, there is no covenant, agreement, stipulation, reservation, restriction, condition, interest, right, easement, wayleave or other matter whatsoever adversely affecting that Property or the income or revenue derived, or capable of being derived, from that Property;

 

(C)to the best of the Obligors’ knowledge nothing has arisen or has been created or is outstanding which would be an overriding interest (including a right or restriction not requiring registration at a Land Registry to make it real), or an unregistered interest which overrides first registration or a registered disposition, over that Property;

 

(D)all facilities necessary for the enjoyment and use of that Property (including those necessary for the carrying on of its business at that Property) are enjoyed by that Property;

 

(E)none of the facilities referred to in paragraph (A) above are enjoyed on terms:

 

(1)entitling any person to terminate or curtail its use of that Property; or

 

(2)which conflict with or restrict its use of that Property;

 

(F)there is not nor is there contemplated any application to the Lands Tribunal of Scotland to vary or discharge any real burdens or servitudes affecting any Property located in Scotland;

 

(G)the relevant Obligor has not received any notice of any adverse claim by any person in respect of the ownership of that Property or any interest in it which might reasonably be expected to be determined in favour of that person, nor has any acknowledgement been given to any such person in respect of that Property;

 

(H)that Property is held by the relevant Borrower free from any lease or licence (other than those entered into in accordance with this Agreement); and

 

(I)to the best of the knowledge of each Obligor, there is no material breach of, or material non-compliance with, the terms of any Headlease or Lease Document.

 

19.17.4The Properties are not:

 

(A)registered; or

 

(B)subject to any pending application for registration,

 

as a freehold estate in commonhold land under Part 1 of the Commonhold and Leasehold Reform Act 2002.

 

19.17.5From the Utilisation Date, the Properties are insured under insurance policies which are in full force and effect in the manner and to the extent required by the Finance Documents.

 

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19.17.6From the Utilisation Date, all premiums due under each insurance policy under which a Property is insured have been paid in full, no notice of any payment default in relation to any such insurance policy has been received by any Obligor and no claim has been made and is outstanding or (to the best of its knowledge and belief) is to be made against any such insurance policy.

 

19.17.7All deeds and documents necessary to show good, valid and marketable title to the interests of a Borrower in a Property will from the Utilisation Date be:

 

(A)in possession of the Security Agent;

 

(B)held to the order of the Security Agent; or

 

(C)held to the order of the Agent by a firm of solicitors approved by the Security Agent for that purpose.

 

19.17.8In relation to any Property situated in Scotland, no notice, application or invitation to make representations has been received in terms of the Land Reform (Scotland) Act 2003.

 

19.18Information for Property Reports

 

19.18.1The information (not including, for the avoidance of doubt any Relevant Legal Matters) supplied by it or on its behalf to the lawyers who prepared any Property Report for the purpose of that Property Report was true and accurate as at the date of the Property Report or (if appropriate) as at the date (if any) at which it is stated to be given.

 

19.18.2The information referred to in Clause 19.18.1 above was at the date it was expressed to be given complete and did not omit any information which, if disclosed would make that information untrue or misleading in any material respect.

 

19.18.3As at the Utilisation Date, nothing has occurred since the date of any information referred to in Clause 19.18.1 above which, if disclosed, would make that information untrue or misleading in any material respect.

 

19.19Environmental Matters

 

19.19.1To the best of its knowledge and belief, having made due and proper enquiry, no Contaminative Use has been or is being carried on at or within the immediate vicinity of the relevant Property.

 

19.19.2To the best of its knowledge and belief, having made due and proper enquiry, no Dangerous Substance has been used, generated, stored, transported, treated, dumped, released, deposited, buried, emitted or disposed of at, on, from or under the relevant Property in circumstances where this might result in any Environmental Claim on the relevant Borrower or any occupier of that Property.

 

19.19.3It has no notice of any Environmental Claim or of any circumstances which might result in any Environmental Claim being made against it, any occupier of the relevant Property or otherwise in relation to that Property.

 

19.19.4It is and has been in full compliance with all applicable Environmental Laws and there are, to the best of its knowledge and belief after all due enquiry, no circumstances that may prevent or interfere with such full compliance in the future.

 

19.19.5It is and has been in compliance with the terms of all Environmental Permits necessary for the ownership and operation of the Properties and its activities on the Properties as presently owned and operated and as presently proposed to be owned and operated.

 

19.19.6So far as it is aware, having made all reasonable enquiries, the past and present occupiers of each Property have been and are in full compliance with all applicable Environmental Laws and the terms and conditions of all Environmental Permits necessary for their activities and operations now and as proposed and it is not aware, having made all reasonable enquiries, of any circumstance which might prevent or interfere with such compliance in the future.

 

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19.20No other business

 

19.20.1No Obligor has traded or carried on any business since the date of its incorporation or formation except for:

 

(A)in the case of the Shareholders, the ownership of the Borrowers; and

 

(B)in the case of each Borrower, the ownership and management of its interests in the Properties and any Management Company.

 

19.20.2On and from the Utilisation Date:

 

(A)no Shareholder has any Subsidiaries other than those shown in the Structure Chart; and

 

(B)no Borrower has any Subsidiaries other than a Management Company.

 

19.20.3No Obligor nor any Management Company has:

 

(A)or has had, any employees; or

 

(B)any obligation in respect of any retirement benefit or occupational pension scheme.

 

19.21Centre of main interests and establishments

 

For the purposes of Regulation (EU) 2015/848 of the European Parliament and of the Council of 20 May 2015 on insolvency proceedings (recast) (the "Recast Insolvency Regulation") and The Cross-Border Insolvency Regulations 2006, its centre of main interest (as that term is used in Article 3(1) of the Recast Insolvency Regulation) is situated in England and Wales or its Original Jurisdiction and it has no "establishment" (as that term is used in Article 2(10) of the Recast Insolvency Regulation) in any other jurisdiction.

 

19.22Ranking of Security

 

Subject to the Legal Reservations and the Perfection Requirements, the security conferred by each Security Document constitutes a valid and effective first priority security interest of the type described, over the assets referred to, in that Security Document and those assets are not subject to any prior or pari passu Security.

 

19.23Ownership

 

From the Utilisation Date, except for changes to which the Agent (acting on the instructions of all the Lenders) has given its prior written consent or which are expressly permitted by this Agreement:

 

19.23.1each Borrower's entire issued share capital is legally and beneficially owned and controlled by a Shareholder

 

19.23.2First Shareholder's entire issued share capital is owned (including, to the extent applicable, legally and beneficially owned) and controlled by First Holdco;

 

19.23.3Second Shareholder's entire issued share capital is legally and beneficially owned and controlled by Second Holdco; and

 

19.23.4the Structure Chart delivered to the Agent pursuant to Clause 4.1.1 (Initial conditions precedent) is true, accurate and complete.

 

19.24Shares

 

19.24.1All shares which are expressed to be subject to any Security created or expressed to be created pursuant to a Security Document are fully paid and none are subject to any option to purchase, cancel or similar rights.

 

19.24.2Any shares which are subject to such Security are free from any restrictions as to transfer or registration.

 

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19.25No contracts

 

No Obligor is a party to nor has entered into any material contracts, other than:

 

19.25.1the Transaction Documents (but, in the case of Transaction Documents entered into after the date of this Agreement, only if entered into in accordance with this Agreement);

 

19.25.2any contract which is unconditionally and irrevocably discharged or terminated on or prior to the Utilisation Date; and

 

19.25.3any other contracts to which the Agent has given its prior written consent.

 

19.26Acquisitions on arms' length

 

19.26.1The acquisitions pursuant to the Acquisition Documents were carried out on arms' length terms for full market value and are not liable, and will not be liable, to be set aside or unwound by any applicable insolvency or other laws.

 

19.26.2As at the date of this Agreement and the Utilisation Date, there is no breach of any warranty given by any party to an Acquisition Document which has not been disclosed in a Property Report.

 

19.26.3All obligations and liabilities (whether actual or contingent, present or future) of any Transaction Obligor under or in connection with the Acquisition Documents have been fully and finally discharged.

 

19.27Financial Indebtedness

 

From the Utilisation Date, each Obligor has no Financial Indebtedness other than Financial Indebtedness incurred pursuant to a Finance Document or Subordinated Debt.

 

19.28Shareholder Investment

 

From the Utilisation Date, the Subordinated Debt and equity identified in the Funds Flow Statement has been and remains invested in the Obligors.

 

19.29No adverse consequences

 

19.29.1It is not necessary under the laws of its Relevant Jurisdictions:

 

(A)in order to enable any Finance Party to enforce its rights under any Finance Document; or

 

(B)by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,

 

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.

 

19.29.2No Finance Party is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of any Finance Document.

 

19.30Subordinated Debt Documents

 

Each Subordinated Debt Document is governed by Delaware, New York or Luxembourg law.

 

19.31Intellectual Property

 

It:

 

19.31.1is the sole legal and beneficial owner of or has licensed to it on arms' length terms all the Intellectual Property which is material to the conduct by it of its business and where failure to do so is in the Agent’s opinion (acting reasonably) likely to have a Material Adverse Effect;

 

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19.31.2does not, in carrying on its businesses, infringe any Intellectual Property of any third party; and

 

19.31.3has taken all formal or procedural actions (including payment of fees) required to maintain any Intellectual Property owned or licensed by it.

 

19.32Transaction Documents

 

19.32.1The Transaction Documents (other than the Subordination Agreement, any Duty of Care Agreement, any Hedging Agreement and the Security Documents) are in full force and effect in accordance with their terms, they have been validly executed and they are enforceable by the Obligor that is party to the Transaction Document against the other parties thereto.

 

19.32.2On and from the Utilisation Date, the Subordination Agreement, any Duty of Care Agreement, any Hedging Agreement and the Security Documents are in full force and effect in accordance with their terms, they have been validly executed and they are enforceable by the Obligor that is party to the Transaction Document against the other parties thereto.

 

19.32.3Neither it nor (to the best of its knowledge and belief) any other party to any Transaction Document is in breach of or in default of any of the terms and conditions of such Transaction Document.

 

19.32.4It is not aware of any circumstances in which any other party to any Transaction Document to which it is party would be entitled not to honour or otherwise to avoid its obligations under that Transaction Document.

 

19.33Anti-corruption law

 

Each member of the Group has conducted its businesses in compliance with applicable anti-corruption laws and has instituted and maintains policies and procedures designed to promote and achieve compliance with anti-corruption laws.

 

19.34Sanctions

 

19.34.1No member of the Group or their respective directors and employees or any Subsidiary of any member of the Group, is a Sanctioned Person, and none of any member of the Group or any member of the Group's directors and employees acts directly or indirectly on behalf of a Sanctioned Person.

 

19.34.2No member of the Group is incorporated, located or resident in a country which is subject to Sanctions.

 

19.34.3Each member of the Group and their respective Subsidiaries are in compliance with all applicable Sanctions and is not engaged in any activities that would reasonably be expected to result in any member of the Group or such Subsidiaries being designated as a Sanctioned Person.

 

19.35ERISA

 

19.35.1Each Obligor acknowledges that as at the date of this Agreement the source of funds from which the Original Lenders (other than Lloyds Bank plc) is extending its participation in each Loan will include one or more of the following:

 

(A)an "insurance company general account" as that term is defined in Prohibited Class Exemption ("PTE") 95-60 (60 Fed. Reg. 35925 (Jul. 12, 1995)), as to which each of the Original Lenders meets the conditions for relief in Sections I and IV of PTE 95-60;

 

(B)pooled and single client insurance company separate accounts which are subject to the provisions of ERISA;

 

(C)one or more insurance company separate accounts maintained solely in connection with fixed contractual obligations of the insurance company, under which the amounts payable or credited to the plan are not affected in any matter by the investment performance of the separate account; and

 

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(D)an account of one or more entities, the assets of which do not constitute "plan assets" of one or more plans within the meaning of 29 C.F.R. Section 2510.3-101 and Section 3(42) of ERISA.

 

19.35.2No Obligor is an "employee benefit plan" as defined in Section 3(3) of ERISA, or a "governmental plan" within the meaning of Section 3(32) of ERISA.

 

19.35.3No Obligor is a "party in interest", as defined in section 3(14) of ERISA, other than as a service provider or an affiliate of a service provider to any employee benefit plan that has invested in a separate account as described in Clause 19.35.1(B), from which funds have been derived to make the Loans, or, if so, the execution of the Finance Documents and the making of the Loans do not constitute non-exempt prohibited transactions under ERISA.

 

19.35.4No Obligor is subject to state statutes regulating investments and fiduciary obligations with respect to governmental plans, or, if subject to such statutes, is not in violation thereof in the execution of the Finance Documents and the making of the Loans.

 

19.35.5The assets of each Obligor do not constitute "plan assets" of one or more plans within the meaning of 29 C.F.R. Section 2510.3-101 or any similar state statute.

 

19.36Repetition

 

19.36.1Each of the representations set out in this Clause 19 are deemed to be made by each Obligor by reference to the facts and circumstances then existing on the date of the Utilisation Request and the Utilisation Date.

 

19.36.2The Repeating Representations are deemed to be made by each Obligor by reference to the facts and circumstances then existing on each Interest Payment Date, the date of each subsequent Utilisation Request and each subsequent Utilisation Date, and the date of Disposal of a Property, the date of Disposal of the shares in a Borrower or the date on which an Incoming Property is acquired (except that those contained in Clauses 19.13.1 to 19.13.3 (Financial statements), will cease to be so made once subsequent financial statements have been delivered under this Agreement).

 

20.Information Undertakings

 

The undertakings in this Clause 20 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.

 

20.1Financial statements

 

The Obligors' Agent shall supply to the Agent in sufficient copies for all the Lenders as soon as they are available, but in any event within 180 days after the end of each of its financial years, the unaudited financial statements for that financial year for each Borrower.

 

20.2Compliance Certificate

 

20.2.1The Obligors' Agent shall supply to the Agent, with each set of financial statements delivered pursuant to Clauses 20.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause 21 (Financial Covenants) as at the date as at which those financial statements were drawn up.

 

20.2.2The Obligors' Agent shall supply to the Agent, with each quarterly report delivered pursuant to Clause 20.4 (Monitoring of Property), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with:

 

(A)Clause 21.1 (Historical Interest Cover) as at the Quarter Date falling immediately prior to the date by which that report is required to be delivered;

 

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(B)Clause 21.2 (Projected Interest Cover) as at the Interest Payment Date falling immediately after the date by which that report is required to be delivered; and

 

(C)Clause 21.3 (Loan to Value) as at the date of that Compliance Certificate.

 

20.2.3If, at any time, the Agent disagrees in any material respect with the Obligors' Agent's calculations or any financial information contained, or referred to, as relevant in any Compliance Certificate, any Utilisation Request or in any other certificate delivered to the Agent, the Agent shall confer with the Obligors' Agent with a view to agreeing those calculations. After first consulting with the Obligors' Agent and after all parties (acting in good faith) being unable to reach an agreement:

 

(A)the Agent may (but shall not be obliged to), engage auditors or other professional advisers for the purposes of reviewing and verifying any calculations or financial information provided, or referred to, as relevant by the Obligors' Agent in any such Compliance Certificate, Utilisation Request or other certificate having reviewed such information or calculations in accordance with its usual internal procedures; and

 

(B)any calculation by the Agent of any amounts referred to in any Compliance Certificate, any Utilisation Request or in any other certificate delivered to the Agent shall (in the absence of manifest error) prevail over any calculation of an Obligor.

 

The Obligors will provide such information as the Agent (acting reasonably) may request for the purpose of this Clause 20.2.3. The reasonably incurred fees and costs of such auditors or other professional advisers incurred pursuant to this Clause 20.2.3 shall be at the cost of the Obligors. Nothing herein shall waive or amend or grant any grace from the Obligors' Agent's obligations to deliver Compliance Certificates (and the calculations required to be contained therein) in accordance with this Clause 20.2 (Compliance Certificate).

 

20.2.4Each Compliance Certificate shall be signed by an Authorised Signatory of the Obligors' Agent.

 

20.3Requirements as to financial statements

 

20.3.1Each set of financial statements delivered by the Obligors' Agent pursuant to Clause 20.1 (Financial statements) shall be certified by an Authorised Signatory as fairly representing the financial condition of each Borrower as at the date as at which those financial statements were drawn up.

 

20.3.2The Obligors shall procure that each set of financial statements delivered pursuant to Clause 20.1 (Financial statements) is prepared using GAAP.

 

20.3.3The Obligors shall procure that each set of financial statements delivered pursuant to Clause 20.1 (Financial statements) is prepared using GAAP and accounting practices consistent (so far as applicable) with those applied in the preparation of the Original Financial Statements for that Borrower unless, in relation to any set of financial statements, it notifies the Agent that there has been a relevant change in GAAP or such accounting practices and its auditors deliver to the Agent:

 

(A)a description of any change necessary for those financial statements to reflect GAAP and accounting practices upon which that Borrower's Original Financial Statements were prepared; and

 

(B)sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to make an accurate comparison between the financial position indicated in those financial statements and that Borrower's Original Financial Statements.

 

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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 the Original Financial Statements were prepared.

 

20.3.4If the financial statements delivered pursuant to Clause 20.1 (Financial statements) do not enable the Agent to make the calculations as to compliance with Clause 21.1 (Historical Interest Cover), Clause 21.2 (Projected Interest Cover) or Clause 21.3 (Loan to Value), the Obligors shall, promptly upon request by the Agent, provide such additional financial information as the Agent may require in order to enable it to make the relevant calculations.

 

20.4Monitoring of Property

 

20.4.1Unless otherwise agreed in writing by the Agent, on or before the date falling ten days before each Interest Payment Date (provided where such date is not a Business Day, it shall instead be the Business Day preceding that date), the Borrowers must supply to the Agent (for the Finance Parties) a report in the form set out in Schedule 13 (Property Monitoring Report) and otherwise in form and substance satisfactory to the Agent, in respect of the quarterly period ending on the Quarter Date falling immediately prior to that Interest Payment Date.

 

20.4.2Each Borrower must notify the Agent of:

 

(A)any likely occupational tenant of any part of a Property; and

 

(B)any likely buyer of any part of a Property (including terms of reference).

 

20.5Information: miscellaneous

 

The Borrowers shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

 

20.5.1at the same time as they are dispatched, copies of all documents dispatched by it to its shareholders (or any class of them) or its creditors generally (or any class of them);

 

20.5.2copies of all material correspondence with insurance brokers handling the insurance of any Property in respect of any claim or potential claim in excess of £50,000;

 

20.5.3promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings or investigations which are current, threatened or pending against any member of the Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect;

 

20.5.4promptly, such further information regarding the financial condition, business and operations of any Obligor as any Finance Party (through the Agent) may reasonably request; and

 

20.5.5the details of any Environmental Claim or other communication received by it in respect of any actual or alleged breach of or liability under Environmental Law, or any event or circumstance which is reasonably likely to result in any such claim or notice which, in each case, if adversely determined would reasonably be expected to result in aggregate liabilities of or expenditure by a Borrower in respect of that Environmental Claim in excess of £1,000,000 (or its equivalent in any other currency) in aggregate;

 

20.5.6details of any material repairs required to the Property and progress reports of any refurbishments being carried out on the Property;

 

20.5.7any other information that is required by a Lender's standard reporting package as notified in writing by the Agent to the Obligors' Agent from time to time;

 

20.5.8without prejudice to Clause 19.23 (Ownership), promptly, details of any change in the legal and/or beneficial ownership or the directors of each Borrower, each Shareholder and each Subordinated Creditor; and

 

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20.5.9such further information regarding:

 

(A)the financial condition, business, assets or operations of any Obligor; or

 

(B)verification of the information supplied in any Compliance Certificate,

 

as any Finance Party (through the Agent) may reasonably request to the extent such information is reasonably available provided the same may be reasonably obtained by the Obligors without third party cost or expense.

 

20.6Notification of default

 

20.6.1An Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).

 

20.6.2Promptly upon a request by the Agent, each Borrower shall supply to the Agent a certificate signed by an Authorised Signatory 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).

 

20.7"Know your customer" checks

 

20.7.1If:

 

(A)the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

(B)any change in the status of an Obligor, or the composition of the shareholders of an Obligor, after the date of this Agreement; or

 

(C)a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,

 

obliges the Agent or any Lender (or, in the case of paragraph (C) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (C) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (C) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations or which it is required to carry out in accordance with its internal policies and procedures in relation to the transactions contemplated in the Finance Documents.

 

20.7.2Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations or which it is required to carry out in accordance with its internal policies and procedures in relation to the transactions contemplated in the Finance Documents.

 

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21.Financial Covenants

 

21.1Historical Interest Cover

 

The Obligors must ensure that Historical Interest Cover is, on each Quarter Date, at least 275%.

 

21.2Projected Interest Cover

 

The Obligors must ensure that Projected Interest Cover for each of the three Month period and 12 Month period commencing on each Interest Payment Date is, at all times, at least 275%.

 

21.3Loan to Value

 

The Obligors must ensure that the Loan to Value does not:

 

21.3.1at any time on or prior to the second anniversary of the date of this Agreement exceed 60%; and

 

21.3.2at any time after the second anniversary of the date of this Agreement exceed 55%.

 

21.4Cure rights

 

21.4.1If on any date the requirement in Clause 21.1 (Historical Interest Cover), Clause 21.2 (Projected Interest Cover) is breached, an Obligor may, within ten Business Day of the earlier of:

 

(A)a Compliance Certificate being delivered in accordance with Clause 20.2 (Compliance Certificate);

 

(B)a Valuation being delivered to the Agent which shows the breach and an Obligor being informed of the same; or

 

(C)the breach being notified to an Obligor by the Agent,

 

notify the Agent that they intend to cure the relevant breach in accordance with Clause 21.4.4 within ten Business Days of the date of that notification.

 

21.4.2If on any date the requirement in Clause 21.3 (Loan to Value) is breached, an Obligor may, within three Business Days after the expiry of the consultation period referred to in Clause 24.2.1 (Financial Covenants), notify the Agent that they intend to cure the relevant breach in accordance with Clause 21.4.4 within ten Business Days of the date of that notification.

 

21.4.3A Cure Notification:

 

(A)must be in writing;

 

(B)may only be made if the Obligors are entitled to cure the relevant breach in accordance with this Agreement; and

 

(C)provide details of (i) the sources of any funds being used to make any relevant prepayment and/or deposit in the Cash Trap and Cure Account, (ii) the proposed property which is to be made subject to the Transaction Security; (iii) the proposed Acceptable Letter of Credit; (iv) the evidence to be provided referred to in Clause 21.4.4(C)(2) below in connection with a proposed GNL Guarantee, in each case in accordance with Clause 21.4.4 below.

 

21.4.4Within seven Business Days of the date of a Cure Notification, the Obligors shall:

 

(A)deposit into the Cash Trap and Cure Account (provided that at the time such deposit is made the relevant Obligor making such deposit confirms in writing to the Agent that such deposit is being made pursuant to this Clause 21.4.4) such amounts;

 

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(B)grant Security over such properties as have been expressly approved for the purpose of this Clause 21.4.4(B) by the Agent in writing (acting in its absolute discretion) whose Market Value is;

 

(C)if no GNL Guarantee is in full force and effect, procure that the Ultimate Owner delivers to the Agent:

 

(1)a duly executed and unconditional GNL Guarantee; and

 

(2)such evidence as the Agent may require (including corporate authorisations and legal opinions) to confirm the GNL Guarantee is valid, binding and enforceable against the Ultimate Owner,

 

provided that the amount that can be claimed in respect of the Guaranteed Obligations (as defined in that GNL Guarantee) is;

 

(D)procure that an Acceptable Letter of Credit is unconditionally delivered to the Security Agent which has a face value; and/or

 

(E)prepay the Loans in accordance with Clause 7.5 (Voluntary prepayment of Loans) (excluding the notice and minimum amount requirements) by such amounts;

 

in aggregate greater than or equal to the aggregate of the Relevant Cure Amount and the Prepayment Amount, and each of the deposits, prepayments, deliveries or grants of Security referred to in Clauses 21.4.4(A), (B), (C), (D) or (E) above respectively shall be the exercise of a Cure Right.

 

21.4.5Subject to Clause 21.5 (Limitation on Cure Rights), no Event of Default under Clause 21.1 (Historical Interest Cover), Clause 21.2 (Projected Interest Cover) and/or Clause 21.3 (Loan to Value) will occur until:

 

(A)the ten Business Day period referred to in Clause 21.4.1 above has expired and no Cure Notification has been served in accordance with Clause 21.4.1 or 21.4.2 (as applicable) and 21.4.3; or

 

(B)where a Cure Notification has been served in accordance with Clause 21.4.1 or 21.4.2 (as applicable) and 21.4.3, the seven Business Day period referred to in Clause 21.4.4 has expired without the Borrowers complying with Clause 21.4.4.

 

21.5Limitation on Cure Rights

 

The Cure Rights may:

 

21.5.1in respect of the cure of a breach of the requirements in Clause 21.1 (Historical Interest Cover) or Clause 21.2 (Projected Interest Cover), may:

 

(A)only be exercised a maximum of three times in aggregate during the life of the Facilities;

 

(B)not be exercised more than twice in any 12 Month period;

 

21.5.2not be exercised in respect of a breach of Clause 21.1 (Historical Interest Cover) if the Historical Interest Cover is less than 225%;

 

21.5.3not be exercised in respect of a breach of Clause 21.2 (Projected Interest Cover) if Projected Interest Cover is less than 225%; and

 

21.5.4not be exercised at any time on and from the date commencing 12 Months prior to the Termination Date.

 

21.6Testing of financial covenants

 

The financial covenants referred to in this Clause 21 shall be tested by reference to the information contained in each of the financial statements, each report delivered pursuant to Clause 20.4 (Monitoring of Property), each Compliance Certificate delivered pursuant to Clause 20.2 (Compliance Certificate) and each Valuation delivered pursuant to Clause 16.3 (Valuations).

 

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22.General Undertakings

 

The undertakings in this Clause 22 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.

 

22.1Authorisations

 

Each Obligor shall promptly:

 

22.1.1obtain, comply with and do all that is necessary to maintain in full force and effect; and

 

22.1.2supply certified copies to the Agent of,

 

any Authorisation required under any law or regulation of a Relevant Jurisdiction to enable it to:

 

(A)enter into and perform its obligations under the Transaction Documents to which it is a party and to ensure the legality, validity, enforceability or admissibility in evidence of any Transaction Document to which it is a party; or

 

(B)own its assets and carry on its business as it is being conducted.

 

22.2Compliance with laws

 

Each Obligor shall comply in all respects with all laws and regulations to which it or its assets may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.

 

22.3Negative pledge

 

In this Clause 22.3, "Quasi-Security" means an arrangement or transaction described in Clause 22.3.2 below.

 

22.3.1No Obligor shall create or permit to subsist any Security over any of its assets.

 

22.3.2No Obligor shall:

 

(A)sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor;

 

(B)sell, transfer or otherwise dispose of any of its 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; or

 

(D)enter into any other preferential arrangement having a similar effect,

 

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.

 

22.3.3Clauses 22.3.1 and 22.3.2 above do not apply to any Security or (as the case may be) Quasi-Security, listed below:

 

(A)the Transaction Security;

 

(B)any lien arising by operation of law and in the ordinary course of trading; or

 

(C)any Security that is irrevocably discharged or released prior to the Utilisation Date.

 

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22.4Disposals

 

22.4.1No Obligor shall enter into a single transaction or a series of transactions (whether related or not and whether voluntary or involuntary) to dispose of all or any part of any asset.

 

22.4.2Clauses 22.4.1 above does not apply to any disposal:

 

(A)permitted under Clause 23.2 (Occupational Leases);

 

(B)of a Property or the shares in a Borrower, in each case in accordance with Clause 22.4.3 below; or

 

(C)of a Property or the shares in a Borrower, in each case as part of a Substitution carried out in accordance with Clause 22.5 (Substitution);

 

(D)of cash by way of a payment out of an Account in accordance with this Agreement; or

 

(E)made in the ordinary course of trading of any asset subject to the floating charge created under a Security Agreement.

 

22.4.3An Obligor may dispose of its Property or a Shareholder may dispose of its shares in a Borrower if:

 

(A)no Default is continuing or would result from that disposal;

 

(B)the transaction is on arms' length terms with an unrelated third party and the gross disposal proceeds to be received by the relevant Obligor in respect of that Property or shares of the Borrower:

 

(1)in the case of a disposal of a Property, are:

 

(a)no lower than the Market Value of that Property as detailed in the latest Valuation; or

 

(b)if lower, represent the highest offer received following a competitive sales process conducted for the relevant Borrower by a reputable sales agent in accordance with and for the time period consistent with market practice for the sale of UK real estate on a non-forced basis; or

 

(2)in the case of a disposal of the shares in a Borrower, are:

 

(a)no lower than the aggregate Market Value of each Property owned by that Borrower as detailed in the latest Valuation; or

 

(b)if lower, represent the highest offer received following a competitive sales process conducted for the relevant Obligor by a reputable sales agent in accordance with and for the time period consistent with market practice for the sale of UK real estate on a non-forced basis;

 

(C)the net disposal proceeds in respect of that Property or shares of the Borrower are not less than:

 

(1)in the case of a disposal of a Property, the applicable Release Amount; or

 

(2)in the case of a disposal of the shares in a Borrower, the aggregate of the applicable Release Amounts for each Property owned by the Borrower;

 

(D)at least 15 days (but no more than 30 days) before such disposal, the Obligors' Agent delivers to the Agent a revocable written request containing full details of such disposal together with a Compliance Certificate dated as at the date of the proposed disposal (and which assumes for the purposes of the calculations therein that the relevant Property or shares have been disposed of and attaches such supporting information and calculations in respect of the tests referred to in Clause 21 (Financial covenants) below as the Agent shall require);

 

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(E)the Obligors have agreed to reimburse the Finance Parties for all reasonable third party fees, costs and expenses they may incur in connection with such disposal; and

 

(F)the aggregate net disposal proceeds payable or paid to the Obligors in respect of all previous disposals made pursuant to this Clause 22.4.3 together with the net disposal proceeds to be paid to the Obligors pursuant to the proposed disposal, is less than £50,000,000.

 

22.4.4The Obligors must ensure that the net disposal proceeds are immediately applied:

 

(A)in accordance with Clause 7.3 (Mandatory prepayment); or

 

(B)paid into the Disposals Account for application in accordance with Clause 17.5 (Disposals Account).

 

22.4.5A Property disposed of, or a Property owned by a Borrower the shares of which are disposed of, in each case in accordance with Clause 22.4.3 above will cease to be a Property.

 

22.5Substitution

 

22.5.1No disposal of an Outgoing Property or addition of an Incoming Property (in each case, as part of a Substitution) may be made without the prior written consent of all Lenders. Any request for consent for a Substitution (a "Substitution Request") must be in writing and must be delivered to the Agent at least 40 Business Days (or such shorter period as the Agent may agree in writing) prior to the date of the proposed addition of an Incoming Property (as part of the relevant Substitution).

 

22.5.2A Substitution Request must specify:

 

(A)the name of the Outgoing Property together with full details of the proposed disposal; and

 

(B)if an Obligor has identified an Incoming Property at the time of the Substitution Request:         

 

(1)full details of the Incoming Property together with all information required by the Agent to evaluate the asset and perform all necessary due diligence (including, but not limited to, details of the Market Value of the Incoming Property, details of leases, occupants and licensees (including credit quality of the same), the use of property and its location, appearance, quality, age and cashflow); and

 

(2)if the Incoming Property is to be (or has within the previous 12 months been) acquired from a third party, the vendors of the Incoming Property and details of how and when the Incoming Property was or will be acquired.

 

22.5.3If an Obligor has not identified an Incoming Property at the time of the Substitution Request, the Obligors will, on identifying an Incoming Property (and in any event at least 60 (or such shorter period as the Agent may agree in writing) Business Days before the proposed addition of the Incoming Property), deliver to the Agent a fully completed Substitution Request including the details of the Incoming Property set out in Clause 22.5.2(B) above.

 

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22.5.4No Substitution (and no disposal of an Outgoing Property (or the shares in the relevant Borrower) as part of a Substitution) may be made without the prior written consent of all Lenders. The Lenders will consider giving their consent to a Substitution if the following conditions have been fulfilled (but for the avoidance of doubt a Lender may still withhold such if such conditions have been fulfilled):

 

(A)no Default is continuing or would be likely to arise as a result of the Substitution (or the application of net disposal proceeds to the Disposals Account);

 

(B)the disposal of the Outgoing Property (or the shares in the relevant Borrower) and the acquisition of the Incoming Property (or the shares in the relevant Additional Obligor) are (in each case) on arm's length terms for full Market Value and are not capable of being declared void, invalid, illegal or of otherwise being set aside, unwound or successfully challenged under any insolvency or other laws;

 

(C)the Incoming Property will, on the date of the proposed Substitution, be wholly owned by an existing Borrower or an Additional Borrower which has acceded to this Agreement in accordance with Clause 26.2 (Additional Obligors);

 

(D)the Obligors' Agent has delivered to the Agent a Compliance Certificate dated as at the date of the proposed Substitution (which assumes for the purposes of the calculations therein that the Substitution has occurred) confirming that immediately after the Substitution the requirements of Clause 21 (Financial covenants) will be satisfied;

 

(E)the Agent is satisfied that the Incoming Property has the following characteristics:

 

(1)it is used an investment office or for retail or logistics purposes;

 

(2)it is subject to an Occupational Lease in form and substance satisfactory to the Lenders, including that it has an earliest termination date falling no earlier than 5 years from the date it is proposed to become an Incoming Property to tenants which are:

 

(a)investment grade;

 

(b)unrated investment grade-equivalent tenants; or

 

(c)if tenant does not satisfy sub-Clauses(a) or (b) above, the credit characteristics of the tenant are better than the tenant of the Outgoing Property;

 

(3)is located in the United Kingdom and, once the Incoming Property has become a Property, the majority of the Properties will be located in England in suitable locations for their type

 

(4)it is in good and substantial repair and specified for long term occupation with minimal risk of obsolescence by the expiration of any relevant Occupational Leases; and

 

(5)will be held by the relevant Borrower as freehold or subject to a Headlease in form and substance satisfactory to the Lenders.

 

(F)any other condition which a Lender may require as a condition of its consent to the proposed Substitution has been satisfied, including:

 

(1)the Agent has received (in form and substance satisfactory to it) such documents, evidence, authorisations, reports, searches, undertakings, guarantees, security and opinions as the Agent may specify including those of the type set out in Part A of Schedule 2 (Conditions precedent) including an Initial Valuation of the Incoming Property;

 

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(2)any conditions relevant to the documentation of and completion arrangements for the acquisition of the Incoming Property including how the application of the Disposal Proceeds from the disposal of the Outgoing Property will be held and/or applied towards the costs of the acquisition of the Incoming Property.

 

(3)any amendments to any Finance Documents which may be required by the Agent have been made;

 

(4)the Agent has received satisfactory tax, property, legal, financial and technical due diligence in respect of the Incoming Property and such financial and other information relating to the Incoming Property as the Lenders may require;

 

(5)in respect of any Substitution to be financed or refinanced (in whole or part) from amounts standing to the credit of the Disposals Account, a funds flow statement setting out the sources and uses of funds (including the relevant net disposal proceeds) in relation to acquisition of the Incoming Property or shares in the Additional Borrower together with the details of any amount of net disposal proceeds to be released to the relevant Borrower following the acquisition pursuant to Clause 22.5.5 below; and

 

(6)the Agent has received an updated Property Schedule (including the Incoming Property).

 

22.5.5If the Lenders consent to a Substitution and the addition of the relevant Incoming Property (as part of that Substitution) is to be financed or refinanced (in whole or part) from amounts standing to the credit of the Disposals Account, any Disposal Proceeds required to effect that Substitution that remain standing to the credit of the Disposals Account (in respect of the disposal of the relevant Outgoing Property) shall be withdrawn from the Disposals Account by the Security Agent and applied towards the acquisition of the Incoming Property in accordance with the completion arrangements (as approved by the Agent) for such acquisition in accordance with the funds flow statement approved by the Agent pursuant to Clause 22.5.4(F)(5) above.

 

22.5.6Any net disposal proceeds that remain standing to the credit of the Disposals Account (in respect of the disposal of the relevant Outgoing Property which are in excess of the relevant Release Amount) after the completion of the acquisition of the Incoming Property and provided the Agent is satisfied that:

 

(A)any conditions in respect of such Substitution have been satisfied;

 

(B)no Default is continuing or would result from a transfer contemplated by Clauses 22.5.6(F) or (G) below (as applicable);

 

(C)the Repeating Representations are correct in all material respects and will be correct in all material respects immediately after a transfer contemplated by Clauses 22.5.6(F) or (G) below;

 

(D)the Incoming Property is wholly owned by an existing Borrower or an Additional Borrower which has acceded to this Agreement in accordance with Clause 26.2 (Additional Obligors) and the Incoming Property has become a Property for the purposes of this Agreement; and

 

(E)the Incoming Property is subject to such Transaction Security as the Agent may require,

 

shall:

 

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(F)if no Cash Trap Event is continuing, be transferred by the Security Agent to a General Account; or

 

(G)otherwise, be transferred by the Security Agent to the Cash Trap and Cure Account.

 

22.6Financial Indebtedness

 

22.6.1No Obligor may incur or permit to be outstanding any Financial Indebtedness.

 

22.6.2Clause 22.6.1 above does not apply to:

 

(A)any Financial Indebtedness incurred under the Finance Documents;

 

(B)any Financial Indebtedness repaid prior to the Utilisation; or

 

(C)any Subordinated Debt if the relevant Subordinated Creditor's rights in respect of, and title to, such Subordinated Debt are subject to Transaction Security pursuant to an existing Security Document in respect of which the Agent has received a legal opinion as a condition precedent under this Agreement or otherwise in form and substance satisfactory to the Agent.

 

22.7Lending and guarantees

 

22.7.1No Obligor may be the creditor in respect of any loan or any form of credit or financial accommodation to any person other than another Obligor by way of Subordinated Debt.

 

22.7.2No Obligor may give or allow to be outstanding any guarantee or indemnity to or for the benefit of any person in respect of any obligation of any other person (whether actual or contingent) or enter into any document under which that Obligor assumes any liability (whether actual or contingent) of any other person other than any guarantee or indemnity given under the Finance Documents.

 

22.8Merger

 

22.8.1No Obligor shall enter into any amalgamation, demerger, merger or corporate reconstruction.

 

22.8.2Clause 22.8.1 above does not apply to any disposal permitted pursuant to Clause 22.4 (Disposals).

 

22.9Change of business

 

22.9.1No Obligor may carry on any business other than:

 

(A)in the case of the Shareholders, the ownership of the Borrowers; and

 

(B)in the case of each Borrower, other than the ownership and management of its interests in the Property or Properties or any Management Company in which it has an interest.

 

22.9.2The Shareholders must not have any Subsidiary other than a Borrower.

 

22.9.3No Borrower may have any Subsidiary other than a Management Company.

 

22.9.4Each Obligor shall only conduct its business separately from other entities or businesses except as otherwise expressly contemplated by this Agreement.

 

22.10Acquisitions

 

No Obligor may make any acquisition or investment other than as permitted under this Agreement or agreed in writing with the Agent.

 

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22.11Other agreements

 

No Obligor may enter into any agreement other than:

 

22.11.1the Transaction Documents;

 

22.11.2a Permitted Contract; and

 

22.11.3any other agreement expressly allowed under any other term of this Agreement.

 

22.12Transaction Documents

 

Each Obligor shall:

 

22.12.1duly observe and perform all of its obligations under each of the Transaction Documents to which it is (or will be) a party in all material respects and, with respect to each Borrower, shall manage its Property at all times in accordance with the Finance Documents;

 

22.12.2exercise such rights as it may from time to time have under or pursuant to any of the Transaction Documents to which it is a party to procure the due performance by each other party thereto of such party's respective obligations under each such Transaction Document to the extent that it is commercially reasonable or prudent to do so;

 

22.12.3take all reasonable steps available to it to preserve and enforce its rights and pursue any claims and remedies under each of the Transaction Documents to which it is a party;

 

22.12.4not amend or consent to an amendment of a Transaction Document without the prior written consent of the Agent unless the amendment is purely administrative or technical in nature and would not prejudice the interests of the Finance Parties;

 

22.12.5not rescind, cancel, terminate, frustrate, repudiate or otherwise end any Transaction Document;

 

22.12.6not do or knowingly permit anything to be done which may make any Transaction Document void or voidable;

 

22.12.7notify the Agent (promptly upon becoming aware of the same) of any breach by any party of its obligations or a default or the exercise of any right of rescission or termination under any Transaction Document on the part of itself or any other party, together with that Obligor's proposals for remedying any breach or default on its part. Subject to the Agent’s approval of such proposals, the Borrower shall immediately implement them at its own expense to the satisfaction of the Agent; and

 

22.12.8notify the Agent promptly of any claim made or to be made under a Transaction Document and provide the Agent with reasonable details of that claim and its progress and notify the Agent as soon as practicable upon that claim being resolved

 

22.13Shares, dividends and share redemption

 

22.13.1No Obligor shall:

 

(A)issue any further shares unless such shares are subject to Transaction Security or Transaction Security is granted or perfected in respect of such shares; or

 

(B)amend any rights attaching to its issued shares.

 

22.13.2Except as permitted under Clause 22.13.3 below, no Obligor shall:

 

(A)declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);

 

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(B)repay or distribute any dividend or share premium reserve (including for the avoidance of doubt, any distribution of capital contributions (apports en capitaux propres non rémunéré par des titres) allocated to the account 115 of the Luxembourg Standard Chart of Accounts;

 

(C)pay any management, advisory or other fee to or to the order of any of the shareholders of any Obligor;

 

(D)redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or

 

(E)make any repayments or prepayments of Subordinated Debt or any payments of interest or fees on or by reference to Subordinated Debt.

 

22.13.3Clause 22.13.2 above does not apply to a Permitted Payment.

 

22.13.4No Borrower shall exercise any rights attaching to any shares or any other interest it has in a Management Company in a way that is prejudicial to the interests of the Finance Parties under the Finance Documents..         

 

22.14VAT group

 

No Obligor may be a member of a VAT Group other than a group made up solely of Obligors.

 

22.15Taxes

 

22.15.1Each Obligor must pay all Taxes due and payable by it prior to the accrual of any fine or penalty for late payment, . unless (and only to the extent that):

 

(A)payment of those Taxes is being contested in good faith;

 

(B)adequate reserves are being maintained for those Taxes and the costs required to contest them; and

 

(C)failure to pay those Taxes is not reasonably likely to have a Material Adverse Effect

 

22.15.2Each Obligor must ensure that its residence for Tax purposes is solely in its Original Jurisdiction and must ensure that it does not have a permanent establishment for Tax purposes through which it carries on a trading activity in any jurisdiction other than its Original Jurisdiction.

 

22.15.3Except for ARC NRSLDUK001, LLC, ARC BKSCOUK001, LLC, and ARC BBWYKUK001, LLC, each Obligor shall:

 

(A)ensure that it is at all times registered for United Kingdom VAT and that it or the representative member of its VAT Group uses all reasonable endeavours promptly to obtain such recoveries of VAT from HM Revenue & Customs (whether by way of set-off or repayment) that are available to it and shall pay all recoveries of VAT from HM Revenue & Customs into the Rent Account; and

 

(B)exercise any option or right of election available at law that the supplies made in respect of the Properties shall be taxable for VAT purposes at the standard or any other applicable rate (other than zero), including under Part 1 of Schedule 10 to the Value Added Tax Act 1994 and not (where applicable) carry out or permit to be carried out any action which will or may cause any option or right of election that the supplies made in respect of any lease or tenancy of the same shall be taxable for VAT purposes at the standard or any other applicable rate which has already been exercised, to be disapplied.

 

22.15.4Each of ARC NRSLDUK001, LLC, ARC BKSCOUK001, LLC, and ARC BBWYKUK001, LLC, shall not unless otherwise agreed in writing with the Agent:

 

(A)become registered for United Kingdom VAT; and

 

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(B)exercise any option or right of election available at law that the supplies made in respect of the Properties shall be taxable for VAT purposes at the standard or any other applicable rate (other than zero), including under Part 1 of Schedule 10 to the Value Added Tax Act 1994 and shall (where applicable) carry out or permit to be carried out any action which will or may cause any option or right of election that the supplies made in respect of any lease or tenancy of the same shall be taxable for VAT purposes at the standard or any other applicable rate which has already been exercised, to be disapplied.

 

22.15.5Each Obligor shall:

 

(A)ensure that no tax losses belonging to it or tax reliefs available to it are surrendered, waived or otherwise disposed of without the Agent's prior written consent other than to another Obligor; and

 

(B)other than as a result of a transaction expressly permitted under this Agreement, ensure that no latent capital gains tax, stamp duty land tax or land and buildings transaction tax liability of any Obligor is triggered or realised, whether by reason of capital gains tax degrouping, stamp duty land tax or land and buildings transaction tax claw back or for any other reason.

 

22.15.6Each Obligor shall obtain and maintain approval from all relevant tax authorities for Rental Income to be received without deduction or withholding on account of tax.

 

22.15.7Each Obligor must file all Tax returns, filings and notifications required to be made by the due date of such return, filing or notification (taking into account any permitted extensions).

 

22.15.8No Obligor shall become a US Tax Obligor.

 

22.16Jeopardy of assets

 

No Obligor shall, without the prior written consent of the Agent do, cause, permit or suffer to be done anything which may depreciate, jeopardise or otherwise prejudice the value or marketability of any asset over which Transaction Security is, or is expressed to be, created.

 

22.17Centre of Main Interests

 

22.17.1No Obligor shall permit its centre of main interests, both for the purposes of the EC Regulation and The Cross-Border Insolvency Regulations 2006, to be in any jurisdiction other than England or Wales or its Original Jurisdiction.

 

22.17.2No Obligor shall permit to exist an establishment, both for the purpose of the EC Regulation and The Cross-Border Insolvency Regulations 2006, in any jurisdiction other than England or Wales or its Original Jurisdiction.

 

22.18Balance Sheet Management

 

22.18.1Each Obligor agrees that all or part of the Loans or Commitment, or any Lender's interest therein or under any Finance Document may be syndicated, securitised and/or repackaged (whether alone or in conjunction with any other loan or loans).

 

22.18.2Subject to Clauses 22.18.3 and 22.18.4 below, each Obligor shall, in connection with any Balance Sheet Management Transaction (whether alone or in conjunction with other facilities) co-operate and assist any Lender and provide any information as a Lender may reasonably request in connection with any steps that Lender may wish to take to achieve a Balance Sheet Management Transaction. Such assistance to include;

 

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(A)making amendments to the Finance Documents and execute such intercreditor arrangements as a Finance Party, Transferee or Rating Agency may request in connection with a Balance Sheet Management Transaction and deliver to the Agent such documents as the Agent may reasonably require to ensure that such amendments or arrangements are legal, valid and enforceable obligations of the Obligors, including board minutes, constitutional documents and directors’ certificates, provided such amendments do not require any change in tenor or aggregate amount of any Loan or any other amount payable thereunder, impose any adverse change to any obligation under the Finance Documents or materially prejudice the position of the Obligors under the Finance Documents;

 

(B)providing access (at reasonable times and on reasonable notice) to the Properties for the purpose of site visits by potential Lenders, Transferees, Rating Agencies or investors;

 

(C)participate in, or assist in the preparation of, presentations to potential Lenders, Transferees or Rating Agencies on a reasonable number of occasions once per calendar quarter;

 

(D)obtaining appropriate authorisations from the relevant Borrower's auditors, consultants, valuers and other professional advisers to release for the benefit of the Lenders, Transferees or Rating Agencies, any information addressed to a Borrower and/or the Agent in connection with this Agreement or any Property to the extent that it is commercially reasonable to do so;

 

(E)refraining making any statement, announcement or publication or doing any act or thing which would obstruct or have a material negative impact on any Balance Sheet Management Transaction in any way unless required to do so pursuant to law or regulation;

 

(F)assisting the Agent and Arranger in the preparation and review of any material information which the Agent and/or the Arranger may reasonably require for the purposes of any Balance Sheet Management Transaction, including reviewing any information memorandum and/or offering circular; and

 

(G)using commercially reasonable endeavours to take such steps as a Lender, Transferee or Rating Agency may require to ensure full compliance with the listing rules of any applicable stock exchange or any other regulatory body that may become applicable as a result of any Balance Sheet Management Transaction.

 

22.18.3No Obligor shall be required to do anything pursuant to Clause 22.18.2 above that would result in:

 

(A)its obligations under the Finance Documents being more onerous to perform or comply with;

 

(B)the increase in any amount payable by an Obligor on any date or in aggregate (whether by an increase in the Margin, fees or otherwise); or

 

(C)a breach of any applicable laws and regulations.

 

22.18.4To the extent an Obligor will incur any third party fees in complying with any request by a Lender to comply with this Clause 22.18, it shall not be obliged to comply with any such request until that Lender has agreed to reimburse that Obligor for any such agreed third party fees to be reasonably incurred.

 

22.19Anti-corruption law

 

22.19.1No Obligor shall directly or indirectly use the proceeds of a Facility for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

 

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22.19.2Each Obligor shall (and the Borrowers shall ensure that each other member of the Group will):

 

(A)conduct its businesses in compliance with applicable anti-corruption laws; and

 

(B)maintain policies and procedures designed to promote and achieve compliance with such laws.

 

22.20Compliance with Sanctions

 

Each Obligor shall and shall ensure that each other member of the Group shall:

 

22.20.1comply in all respects with all applicable Sanctions;

 

22.20.2not, and not permit or authorise any other person to, directly or indirectly, use, lend, make payments of, or otherwise make available, all or any part of the proceeds of a Facility:

 

(A)in connection with any trade, business or other activities with or for the benefit of any Sanctioned Person;

 

(B)in any other manner that could result in any breach of any applicable Sanctions or any member of the Group being subject to any penalties or restrictive measures being imposed pursuant to Sanctions, or being designated as a Sanctioned Person;

 

22.20.3not use any revenue or benefit derived from any activity or dealing with a Sanctioned Person to discharge any obligation due to a Finance Party;

 

22.20.4to the extent permitted by law, promptly upon becoming aware of them, provide to the Agent details of any claim, action, suit, proceedings or investigation against it with respect to Sanctions by any Sanctions Authority; and

 

22.20.5maintain in effect policies and procedures reasonably designed to ensure compliance by it with applicable Sanctions.

 

22.21Limitations on Activities and Special Purpose Entity

 

22.21.1Each Obligor which is formed in Delaware shall comply in all respects with the terms of Article XI (Special Purpose Entity Provisions) of the limited liability company agreement relating to it dated as at the Utilisation Date (each such agreement, an "LLC Agreement") as if each such Article XI were set out in this Agreement in full, with necessary changes.

 

22.21.2Each Obligor which is formed in Delaware shall:

 

(A)not amend and shall not give any consent or waiver to any person in relation to, the terms of its LLC Agreement;

 

(B)procure that any person appointed as an "Independent Manager" (as defined in its LLC Agreement) at all times fulfils the requirements of that definition.

 

22.22Consents

 

Each Obligor must ensure that all statutory requirements, as are necessary:

 

22.22.1to enable it to perform its obligations under the Transaction Documents to which it is a party; and

 

22.22.2(in connection with the management, use and occupation of the Properties,

 

are duly obtained and maintained in full force and effect or, as the case may be, complied with.

 

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22.23Intellectual Property

 

Each Obligor shall:

 

22.23.1promptly provide to the Agent details of any Intellectual Property that is required to conduct all or any part of its business;

 

22.23.2preserve and maintain the subsistence and validity of the Intellectual Property necessary or material for its business;

 

22.23.3use all reasonable endeavours to prevent any infringement in any material respect of any Intellectual Property;

 

22.23.4promptly notify the Agent of any infringements of any Intellectual Property and take all steps as may be necessary to prevent such infringement and/or to recover damages in respect thereof;

 

22.23.5to the extent that it is commercially prudent to do so, make registrations and pay all registration fees and taxes necessary to maintain any Intellectual Property in full force and effect and record its interest in any Intellectual Property;

 

22.23.6not use or permit any Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil its right to use such property; and

 

22.23.7not discontinue the use of any Intellectual Property.

 

22.24Business Plan

 

Each Obligor shall:

 

22.24.1use reasonable endeavours to:

 

(A)undertake its business in accordance with the Business Plan;

 

(B)manage the Properties at all times in accordance with the Business Plan in all material respects (having regard to how properties of a similar quality, in a similar geographic area, are managed);

 

22.24.2not, without the prior written consent of the Agent, make any amendment or variation to the Business Plan; and

 

22.24.3at least once in each calendar year, and in any event 30 days prior to the end of its financial year to which its audited accounts (if available) or otherwise, accounts relate, deliver to the Agent any proposed material updates to the Business Plan since the form last approved by the Agent or confirm to the Agent there are none.

 

22.25ERISA

 

22.25.1Each Obligor shall use reasonable endeavours deliver to the Agent such certifications and/or other evidence reasonably requested by the Agent to verify the representations and warranties in Clause 19.35 (ERISA).

 

22.25.2No sale, assignment or transfer of any direct or indirect right, title or interest in any Obligor or a Property (including creation of a junior lien, encumbrance or leasehold interest), shall be permitted which would negate any representation or warranty in Clause 19.35 (ERISA) or cause the Finance Documents or any exercise of a Secured Party's rights under the Finance Document to:

 

(A)constitute a non-exempt prohibited transaction under ERISA; or

 

(B)violate ERISA or any state statute regulating governmental plans.

 

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22.25.3At least 20 Business Days before any sale, assignment or transfer referred to in Clause 22.25.2, each Obligor shall obtain from the proposed transferee or lienholder:

 

(A)a certification to each Secured Party that the representations and warranties in Clause 19.35 (ERISA) will be true after consummation of that sale, assignment or transfer; and

 

(B)an undertaking to comply with this Clause 22.25 (ERISA).

 

22.26GNL Guarantee

 

By no later than 10 Business Days after the occurrence of a Cash Trap Event, the Obligors shall procure that the Ultimate Owner delivers to the Agent:

 

22.26.1a duly executed and unconditional GNL Guarantee; and

 

22.26.2such evidence as the Agent may require (including corporate authorisations and legal opinions) to confirm the GNL Guarantee is valid, binding and enforceable against the Ultimate Owner.

 

22.27Condition subsequent – Closing Accounts

 

22.27.1On and from the date of this Agreement, the Obligors shall ensure that no deposits are made into the Closing Accounts.

 

22.27.2By no later than 10 October 2019, the Obligors shall deliver to the Agent evidence (in form and substance satisfactory to the Agent) that:

 

(A)all amounts in the Closing Accounts have been transferred to the Rent Account; and

 

(B)the Closing Accounts have been irrevocably closed.