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Section 1: 8-K (8-K)

PAG_8k_UK_Credit_Agreement

 

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):

December 12, 2018

 

Penske Automotive Group, Inc.

 


(Exact name of registrant as specified in its charter)

 

 

 

 

 

 

Delaware

    

1-12297

    

22-3086739

(State or other jurisdiction

 

(Commission

 

(I.R.S. Employer

of incorporation)

 

File Number)

 

Identification No.)

 

 

 

 

 

2555 Telegraph Road, Bloomfield Hills,
Michigan

 

 

 

48302

(Address of principal executive offices)

 

 

 

(Zip Code)

 

 

 

 

 

Registrant’s telephone number, including area code:

 

248-648-2500

 

 

 

 

 

Not Applicable

 

 

Former name or former address, if changed since last report

 

 

 

 

 

 

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 1.01 Entry into a Material Definitive Agreement.

On December 12, 2018, we amended and restated the revolving credit agreement among our subsidiaries in the U.K. (the “U.K. subsidiaries”) and National Westminster Bank plc and BMW Financial Services (GB) Limited (BMW Financial) principally to extend the facility for five years through December 12, 2023 (the “U.K. credit agreement”). 

As amended, the U.K. credit agreement provides up to a £150.0 million revolving line of credit and up to an additional £52.0 million of demand overdraft lines of credit to be used for working capital, acquisitions, capital expenditures, investments and general corporate purposes.  The revolving loans generally bear interest between defined LIBOR plus 1.10% and defined LIBOR plus 2.10%.  In addition, the U.K. credit agreement now includes a £100.0 million “accordion” feature which allows the U.K. subsidiaries to request up to an additional £100.0 million of facility capacity.  The lenders may agree to provide the additional capacity, and, if not, the U.K. subsidiaries may add an additional lender, if available, to the facility to provide such additional capacity.

The U.K. credit agreement is fully and unconditionally guaranteed on a joint and several basis by our U.K. subsidiaries, and contains a number of significant covenants that, among other things, restrict the ability of our U.K. subsidiaries to pay dividends, dispose of assets, incur additional indebtedness, repay other indebtedness, create liens on assets, make investments or acquisitions and engage in mergers or consolidations.  In addition, our U.K. subsidiaries are required to comply with defined ratios and tests, including:  a ratio of earnings before interest, taxes, amortization, and rental payments (“EBITAR”) to interest plus rental payments, a measurement of maximum capital expenditures, and a debt to EBITDA ratio.  A breach of these requirements would give rise to certain remedies under the U.K. credit agreement, the most severe of which is the termination of the agreement and acceleration of any amounts owed. 

The U.K. credit agreement also contains typical events of default, including change of control and non-payment of obligations and cross-defaults to other material indebtedness of our U.K. subsidiaries.  Substantially all of our U.K. subsidiaries’ assets are subject to security interests granted to the lenders under the U.K. credit agreement.

We purchase motor vehicles from subsidiaries of BMW Group,  the parent company and affiliate of BMW Financial, a lender under the U.K. credit agreement, for sale at certain of our dealerships.  BMW Group subsidiaries also provide certain of our dealerships with “floor-plan,”  mortgage and consumer financing.

Item 9.01 Financial Statements and Exhibits.

4.1 Amended and Restated Credit Agreement dated December 12, 2018, by and among our U.K. subsidiaries, National Westminster Bank plc, and BMW Financial Services (GB) Limited. 

 


 

 

Exhibit Index

 

 

 

 

Exhibit No.

 

Description

4.1

 

Amended and Restated Credit Agreement dated December 12, 2018, by and among our U.K. subsidiaries, National Westminster Bank plc, and BMW Financial Services (GB) Limited.

 

 

 

 

 

 


 

 

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.

 

 

 

 

 

 

    

Penske Automotive Group, Inc.

 

 

 

December 17, 2018

 

By: 

/s/ Shane M. Spradlin

 

 

 

Name: Shane M. Spradlin

 

 

 

Title: Executive Vice President

 

 

 


(Back To Top)

Section 2: EX-4.1 (EX-4.1)

PAG_EX_41_RBS_Credit_Facility

EXHIBIT 4.1

EXECUTION VERSION

 

DATED 16 DECEMBER 2011

(1) PAG INTERNATIONAL LIMITED

(as Parent)

(2) SYTNER GROUP LIMITED

(as Company and Original Borrower)

(3) THE COMPANIES LISTED IN PART 1 OF SCHEDULE 1 OF THIS AGREEMENT

(as Original Guarantors)

(4) NATIONAL WESTMINSTER BANK PLC AND BMW FINANCIAL SERVICES (GB) LIMITED

(as Mandated Lead Arranger)

(5) THE FINANCIAL INSTITUTIONS LISTED IN PART 2 AND PART 3 OF SCHEDULE 1 OF THIS AGREEMENT

(as Original Lenders)

(6) THE ROYAL BANK OF SCOTLAND PLC

(as Agent)

(7) NATWEST MARKETS PLC

(as Security Agent)

___________________________________________________________________

 

£150,000,000 REVOLVING FACILITY AGREEMENT

AS AMENDED AND RESTATED ON 19 DECEMBER 2014, 2 APRIL 2015 AND

12 DECEMBER 2018

___________________________________________________________________

 

Pinsentmasons


 

CONTENTS

 

 

 

 

Clause

 

 

Page

1

DEFINITIONS AND INTERPRETATION

 

1

2

THE FACILITY

 

46

3

PURPOSE

 

53

4

CONDITIONS OF UTILISATION

 

53

5

UTILISATION – LOANS

 

55

6

ANCILLARY FACILITIES

 

56

7

REPAYMENT

 

62

8

ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION

 

63

9

MANDATORY PREPAYMENT

 

64

10

RESTRICTIONS

 

65

11

INTEREST

 

67

12

INTEREST PERIODS

 

68

13

CHANGES TO THE CALCULATION OF INTEREST

 

68

14

FEES

 

70

15

TAX GROSS UP AND INDEMNITIES

 

72

16

INCREASED COSTS

 

82

17

OTHER INDEMNITIES

 

84

18

MITIGATION BY THE LENDERS

 

86

19

COSTS AND EXPENSES

 

86

20

GUARANTEE AND INDEMNITY

 

88

21

REPRESENTATIONS

 

92

22

INFORMATION UNDERTAKINGS

 

99

23

FINANCIAL COVENANTS

 

104

24

GENERAL UNDERTAKINGS

 

109

25

EVENTS OF DEFAULT

 

121

26

CHANGES TO THE LENDERS

 

126

27

RESTRICTION ON DEBT PURCHASE TRANSACTIONS

 

131

28

CHANGES TO THE OBLIGORS

 

132

 


 

 

29

ROLE OF THE AGENT, THE ARRANGER AND OTHERS

 

136

30

CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

146

31

SHARING AMONG THE FINANCE PARTIES

 

146

32

PAYMENT MECHANICS

 

149

33

SET-OFF

 

153

34

NOTICES

 

153

35

CALCULATIONS AND CERTIFICATES

 

157

36

PARTIAL INVALIDITY

 

157

37

REMEDIES AND WAIVERS

 

157

38

AMENDMENTS AND WAIVERS

 

157

39

CONFIDENTIALITY

 

162

40

CONFIDENTIALITY OF FUNDING RATES

 

166

41

COUNTERPARTS

 

168

42

GOVERNING LAW

 

169

43

ENFORCEMENT

 

169

SCHEDULE 1 - THE ORIGINAL PARTIES

 

170

 

PART 1 - THE ORIGINAL OBLIGORS

 

170

 

PART 2 - THE ORIGINAL LENDERS - OTHER THAN UK NON-BANK LENDERS

 

172

 

PART 3 - THE ORIGINAL LENDERS - UK NON-BANK LENDERS

 

173

SCHEDULE 2 - CONDITIONS PRECEDENT

 

174

 

PART 1 - CONDITIONS PRECEDENT TO SIGNING OF THE AGREEMENT

 

174

 

PART 2 - CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR

 

177

SCHEDULE 3 – UTILISATION REQUEST

 

179

SCHEDULE 4 - FORM OF TRANSFER CERTIFICATE

 

180

SCHEDULE 5 - FORM OF ASSIGNMENT AGREEMENT

 

184

SCHEDULE 6 - FORM OF ACCESSION DEED

 

188

SCHEDULE 7 - FORM OF RESIGNATION LETTER

 

191

SCHEDULE 8 - FORM OF COMPLIANCE CERTIFICATE

 

192

SCHEDULE 9 – TIMETABLE

 

194

 


 

 

SCHEDULE 10 - AGREED SECURITY PRINCIPLES

 

195

SCHEDULE 11 - FORM OF INCREASE CONFIRMATION

 

197

SCHEDULE 12 - FORMS OF NOTIFIABLE DEBT PURCHASE TRANSACTION NOTICE

 

200

 

PART 1 - FORM OF NOTICE ON ENTERING INTO NOTIFIABLE DEBT PURCHASE TRANSACTION

 

200

 

PART 2 - FORM OF NOTICE ON TERMINATION OF NOTIFIABLE DEBT PURCHASE TRANSACTION/NOTIFIABLE DEBT PURCHASE TRANSACTION CEASING TO BE WITH SPONSOR AFFILIATE

 

201

SCHEDULE 13 – FRANCHISES

 

202

SCHEDULE 14 - FORM OF NEW COMMITMENTS NOTICE

 

204

SCHEDULE 15 - LENDER ACCESSION LETTER

 

205

 

 


 

THIS AGREEMENT is made on 16 December 2011 as amended and restated on 19 December 2014, 2 April 2015 and 12 December 2018

BETWEEN:-

(1)         PAG INTERNATIONAL LIMITED (previously known as UAG UK Holdings Limited, the "Parent");

(2)         SYTNER GROUP LIMITED (the "Company");

(3)         THE COMPANIES listed in Part 1 of Schedule 1  (The Original Parties) as original borrowers (the "Original Borrowers");

(4)         THE SUBSIDIARIES of the Company listed in Part 1 of Schedule 1  (The Original Parties) as original guarantors (together with the Parent and the Company, the "Original Guarantors");

(5)         NATIONAL WESTMINSTER BANK PLC AND BMW FINANCIAL SERVICES (GB) LIMITED as mandated lead arrangers (whether acting individually or together) (the "Arranger");

(6)         THE FINANCIAL INSTITUTIONS listed in Part 2 and Part 3 of Schedule 1  (The Original Parties) as lenders (the "Original Lenders");

(7)         THE ROYAL BANK OF SCOTLAND PLC as agent of the other Finance Parties (the "Agent"); and

(8)         NATWEST MARKETS PLC as security trustee for the Secured Parties (the "Security Agent").

IT IS AGREED as follows:-

SECTION 1

INTERPRETATION

1.           DEFINITIONS AND INTERPRETATION

1.1        Definitions

In this Agreement:-

 

 

 

 

"2012 Amendment Deed"  

means the amendment deed dated 10 January 2012 amending this Agreement

 

"Acceptable Bank"

means:-

(a)           a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of A or higher by Standard & Poor's Rating Services or Fitch Ratings Ltd or A2 or higher by Moody's Investors Service Limited or a comparable rating from an internationally recognised credit rating agency or

(b)            a Lender or

 

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(c)            any other bank or financial institution approved by the Agent

"Accession Deed"

means a document substantially in the form set out in Schedule 6 (Form of Accession Deed)

"Accounting Principles"

means generally accepted accounting principles in the United Kingdom, including IFRS

"Accounting Reference Date"

means 31 December

"Additional Borrower"

means a company which becomes an Additional Borrower in accordance with Clause 28 (Changes to the Obligors)

"Additional Guarantor"

means a company which becomes an Additional Guarantor in accordance with Clause 28 (Changes to the Obligors)

"Additional Obligor"

means an Additional Borrower or an Additional Guarantor

"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. Notwithstanding the foregoing, in relation to The Royal Bank of Scotland plc, the term "Affiliate" shall not include (i) the UK government or any member or instrumentality thereof, including Her Majesty's Treasury and UK Financial Investments Limited (or any directors, officers, employees or entities thereof) or (ii) any persons or entities controlled by or under common control with the UK government or any member or instrumentality thereof (including Her Majesty's Treasury and UK Financial Investments Limited) and which are not part of The Royal Bank of Scotland Group plc and its subsidiaries or subsidiary undertakings

"Agreed Security Principles"

means the principles set out in Schedule 10 (Agreed Security Principles)

"Ancillary Commencement Date"

means, in relation to an Ancillary Facility, the date on which that Ancillary Facility is first made available, which date shall be a Business Day within the Availability Period for the Facility

"Ancillary Commitment"

means, in relation to an Ancillary Lender and an Ancillary Facility, the maximum amount which that Ancillary Lender has agreed (whether or not subject to satisfaction of conditions precedent) to make available from time to time under an Ancillary Facility and which has been authorised as such under Clause 6 (Ancillary Facilities), to the extent that amount is not cancelled or reduced under this Agreement or the Ancillary Documents relating to that Ancillary Facility

"Ancillary Document"

means each document relating to or evidencing the terms of an Ancillary Facility

"Ancillary Facility"

means any ancillary facility made available by an Ancillary Lender in accordance with Clause 6 (Ancillary Facilities)

 

2


 

 

 

 

"Ancillary Lender"

means each Lender (or Affiliate of a Lender) which makes available an Ancillary Facility in accordance with Clause 6 (Ancillary Facilities)

"Ancillary Outstandings"

means, at any time, in relation to an Ancillary Lender and an Ancillary Facility then in force the aggregate of the equivalents (as calculated by that Ancillary Lender) of the following amounts outstanding under that Ancillary Facility:-

(a)           the principal amount under each overdraft facility and on-demand short term loan facility (net of any Available Credit Balance)

(b)           the face amount of each guarantee, bond and letter of credit under that Ancillary Facility and

(c)           the amount fairly representing the aggregate exposure (excluding interest and similar charges) of that Ancillary Lender under each other type of accommodation provided under that Ancillary Facility

in each case as determined by such Ancillary Lender, acting reasonably in accordance with its normal banking practice and in accordance with the relevant Ancillary Document

"Assignment Agreement"

means an agreement substantially in the form set out in Schedule 5 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee

"Audit Laws"

means the EU Regulation (537/2014) on specific requirements regarding statutory audit of public-interest entities and repealing Commission Decision 2005/909/EC and the EU Directive (2014/56/EU) amending Directive 2006/43/EC on statutory audits of annual accounts and consolidated accounts and any law or regulation which implements that EU Directive (2014/56/EU)

"Authorisation"

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

"Availability Period"

means the period from and including the date of this Agreement to and including the date falling one week prior to the Termination Date

"Available Commitment"

means, in relation to the Facility, a Lender's Commitment minus (subject as set out below):-

(a)           the amount of its participation in any outstanding Utilisations and the amount of the aggregate of its (and its Affiliate's) Ancillary Commitments and

(b)           in relation to any proposed Utilisation, the amount of its participation in any other Utilisations that are due to be made under the Facility on or before the proposed Utilisation Date and the amount of its (and its Affiliate's) Ancillary Commitment in relation to any new Ancillary Facility that is due to be made available on or before the proposed Utilisation Date

 

3


 

 

 

For the purposes of calculating that Lender's Available Commitment in relation to any proposed Utilisation the following amounts shall not be deducted from that Lender's Commitment:-

(i)            that Lender's participation in any Utilisations that are due to be repaid or prepaid on or before the proposed Utilisation Date and

(ii)           that Lender's (and its Affiliate's) Ancillary Commitments to the extent that they are due to be reduced or cancelled on or before the proposed Utilisation Date

"Available Credit Balance"

means, in relation to an Ancillary Facility, credit balances on any account of any Borrower of that Ancillary Facility with the Ancillary Lender making available that Ancillary Facility to the extent that those credit balances are freely available to be set off by that Ancillary Lender against liabilities owed to it by that Borrower under that Ancillary Facility

"Available Facility"

means the aggregate for the time being of each Lender's Available Commitment

"Bilateral Overdraft Lender"

means National Westminster Bank Plc in its capacity as lender under the NatWest Overdraft Letter

"BMW Cardiff Property"

means the property known as 285 Penath Road, Cardiff, CF11 8TT which will be constructed after the Third Amendment and Restatement Date

"BMW Cardiff Term Facility"

means the term facility agreement to be entered into between Sytner Limited as borrower and BMW Financial Services (GB) Limited as lender

"BMW Sheffield Property"

means the property known as Sytner Sheffield BMW & MINI Centre, 445 Brightside Lane, Sheffield S9 2RR which is registered with title absolute at the Land Registry with title number SYK397343

"BMW Sheffield Term Facility"

means the term facility agreement dated 19 December 2017 and entered into between Sytner Limited as borrower and BMW Financial Services (GB) Limited as lender

"Borrower"

means the Original Borrowers or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 28 (Changes to the Obligors) and, in respect of an Ancillary Facility only, any Affiliate of a Borrower that becomes a borrower of that Ancillary Facility with the approval of the relevant Lender pursuant to Clause 6.9 (Affiliates of Borrowers)

"Borrowings"

has the meaning given to that term in Clause 23.1 (Financial definitions)

"Break Costs"

means the amount (if any) by which:-

(a)           the interest (excluding the Margin) which a Lender should have received for the period from the date of

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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:-

(b)           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 for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period

"Budget"

means:-

(a)           in relation to the period beginning on 1 January 2018 and ending on 31 December 2018, the budget delivered by the Company to the Lenders prior to the date of this Agreement

(b)           in relation to any other period, any budget delivered by the Company to the Agent in respect of that period pursuant to Clause 22.4 (Budget) and

(c)           the Management Base Case Model

"Business Day"

means a day (other than a Saturday or Sunday) on which banks are open for general business in London

"Capital Expenditure"

has the meaning given to that term in Clause 23.1 (Financial definitions)

"Cash"

means, at any time, cash denominated in Sterling in hand or at bank and (in the latter case) credited to an account in the name of an Obligor with an Acceptable Bank and to which an Obligor is alone (or together with other Obligors) beneficially entitled and for so long as:-

(a)           that cash is repayable within 30 days after the relevant date of calculation

(b)           repayment of that cash is not contingent on the prior discharge of any other indebtedness of any member of the Group or of any other person whatsoever or on the satisfaction of any other condition

(c)           there is no Security over that cash except for Transaction Security or any Permitted Security constituted by a netting or set‑off arrangement entered into by members of the Group in the ordinary course of their banking arrangements and

(d)           the cash is freely and immediately available to be applied in repayment or prepayment of the Facility

"Cash Equivalent Investments"

means at any time:-

 

5


 

 

 

(a)           certificates of deposit maturing within one year after the relevant date of calculation and issued by an Acceptable Bank

(b)           any investment in marketable debt obligations issued or guaranteed by the government of the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State or by an instrumentality or agency of any of them having an equivalent credit rating, maturing within one year after the relevant date of calculation and not convertible or exchangeable to any other security

(c)           commercial paper not convertible or exchangeable to any other security:-

(i)            for which a recognised trading market exists

(ii)           issued by an issuer incorporated in the United States of America, the United Kingdom, any member state of the European Economic Area or any Participating Member State

(iii)           which matures within one year after the relevant date of calculation and

(iv)          which has a credit rating of either A‑1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P‑1 or higher by Moody's Investors Service Limited, or, if no rating is available in respect of the commercial paper, the issuer of which has, in respect of its long‑term unsecured and non-credit enhanced debt obligations, an equivalent rating

(d)           sterling bills of exchange eligible for rediscount at the Bank of England and accepted by an Acceptable Bank (or their dematerialised equivalent)

(e)           any investment in money market funds which (i) have a credit rating of either A‑1 or higher by Standard & Poor's Rating Services or F1 or higher by Fitch Ratings Ltd or P‑1 or higher by Moody's Investors Service Limited and (ii) which invest substantially all their assets in securities of the types described in sub-clauses (a) to (d) above, to the extent that investment can be turned into cash on not more than 30 days' notice or

(f)            any other debt security approved by the Majority Lenders,

in each case, denominated in Sterling and to which any Obligor is alone (or together with other Obligors beneficially entitled at that time and which is not issued or guaranteed by any member of the Group or subject to any Security (other than Security arising under the Transaction Security Documents)

"Cashflow"

has the meaning given to that term in Clause 23.1 (Financial definitions)

 

6


 

 

"Change of Control"

means PAG ceases to control directly or indirectly the Company and/or any person or group of persons acting in concert gains direct or indirect control of the Company.  For the purposes of this definition:-

(a)            "control" of the Company means:-

(i)             the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:-

(A)          cast, or control the casting of, 51% or more of the maximum number of votes that might be cast at a general meeting of the Company or

(B)          appoint or remove all, or the majority, of the directors or other equivalent officers of the Company or

(C)          give directions with respect to the operating and financial policies of the Company with which the directors or other equivalent officers of the Company are obliged to comply and/or

(ii)            the holding beneficially of 51% of the issued share capital of the Company (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)

(b)          "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 the Company by any of them, either directly or indirectly, to obtain or consolidate control of the Company

"Charged Property"

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

"Closing Date"

means the date on which the Agent confirms to the Company in writing that all of the conditions precedent in Part 1 of Schedule 2 have been satisfied or waived

"Code"

means the US Internal Revenue Code of 1986

"Commitment"

means:-

(a)           in relation to an Original Lender, the amount set opposite its name under the heading "Commitment" in

 

7


 

 

 

Part 2 or Part 3 of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase) and

(b)           in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase)

to the extent:-

(i)             not cancelled, reduced or transferred by it under this Agreement and

(ii)            not deemed to be zero pursuant to Clause 27.2 (Disenfranchisement on Debt Purchase Transactions entered into by Sponsor Affiliates)  

"Company's Auditors"

means any firm appointed by the Company to act as its statutory auditors

"Compliance Certificate"

means a certificate substantially in the form set out in Schedule 8 (Form of Compliance Certificate)

"Confidential Information"

means all information relating to the Parent, the Company, any Obligor, the Group, the Finance Documents or the 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 the Facility from either:-

(a)           the Parent or any member of the Group or any of its advisers or

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

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:

(i)              information that:-

(1)           is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 39 (Confidentiality) or

 

8


 

 

 

(2)           is identified in writing at the time of delivery as non-confidential by the Parent or any member of the Group or any of its advisers or

(3)           is known by that Finance Party before the date the information is disclosed to it in accordance with sub-clauses (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 Parent or the Group 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

(ii)             any Funding Rate

"Confidentiality Undertaking"

means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Company and the Agent

"Contribution Notice"

means a contribution notice issued by the Pensions Regulator under section 38 or section 47 of the Pensions Act 2004

"CTA"

means the Corporation Tax Act 2009

"DB Schemes"

means:-

(a)           the Ryland Group Pension Scheme established by an interim deed dated 29 January 1974

(b)           the William Jacks PLC Retirement Benefits Scheme established by interim trust deed dated 1 November 1953

(c)            the industry-wide MIP Plan and

(d)           the Isaac Agnew (Holdings) Limited Management Pension Plan established by trust deed dated 25 March 1984

 

 

"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 a sub‑participation in respect of

any Commitment or amount outstanding under this Agreement

 

9


 

 

"Default"

means an Event of Default or any event or circumstance specified in Clause 25 (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

"Defaulting Lender"

means any Lender (other than a Lender which is a Sponsor Affiliate):-

(a)           which has failed to make its participation in a Loan available (or has notified the Agent or the Parent (which has notified the Agent) that it will not make its participation in a Loan available) by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders' participation) or which has failed to provide cash collateral

(b)           which has otherwise rescinded or repudiated a Finance Document or

(c)           with respect to which an Insolvency Event has occurred and is continuing

unless, in the case of paragraph (a) above:-

(i)             its failure to pay is caused by:-

(A)           administrative or technical error or

(B)                  a Disruption Event and

payment is made within 3 Business Days of its due date or

(ii)           the Lender is disputing in good faith whether it is contractually obliged to make the payment in question

"Delegate"

means any delegate, agent, attorney or co‑trustee appointed by the Security Agent

"Designated Gross Amount"

means the amount notified by the Parent to the Agent upon the establishment of a Multi-account Overdraft as being the maximum amount of Gross Outstandings that will, at any time, be outstanding under that Multi-account Overdraft

"Designated Net Amount"

means the amount notified by the Parent to the Agent upon the establishment of a Multi-account Overdraft as being the maximum amount of Net Outstandings that will, at any time, be outstanding under that Multi-account Overdraft

"Disposal"

means a sale, lease, licence, transfer, loan or other disposal by a person of any asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions)

 

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"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 the 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

"Dormant Subsidiary"

means a member of the Group which does not trade (for itself or as agent for any person) and does not own, legally or beneficially, assets (including, without limitation, indebtedness owed to it) which in aggregate have a value of £5,000 or more or its equivalent in other currencies

"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, without limitation, air within natural or man-made structures, whether above or below ground)

(b)           water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers) and

(c)           land (including, without limitation, 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)           the conditions of the workplace or

 

11


 

 

 

 

 

(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, without limitation, any waste

"Environmental Permits"

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 member of the Group conducted on or from the properties owned or used by any member of the Group

"Event of Default"

means any event or circumstance specified as such in Clause 25 (Events of Default)

"Existing Security Documents"

means those security documents granted prior to the Third Amendment and Restatement Date

"Facility"

means the revolving credit facility made available under this Agreement as described in Clause 2.1.1

"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

"Fallback Interest Period"

means one week

"FATCA"

 

means:

(a)           sections 1471 to 1474 of the Code or any associated regulations

(b)           any treaty, law or regulation 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 or regulation referred to in paragraph (a) above or

(c)           any agreement pursuant to the implementation of any treaty, law or regulation 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

 

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(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 First Amendment and Restatement Date.

"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

"Fee Letter"

means:-

(a)           any letter or letters dated on or about the date of this Agreement between the Agent and the Company or the Security Agent and the Company setting out any of the fees referred to in Clause 14 (Fees)

(b)           any agreement setting out fees payable to a Finance Party referred to in Clause 2.2.8, Clause 2.4 (Accordion Facility), Clause 14.5 (Interest, commission and fees on Ancillary Facilities) of this Agreement or under any other Finance Document

(c)           any letter or letters dated on or about the Third Amendment and Restatement Date setting out any of the fees payable in connection with the  Third Amendment and Restatement Agreement and

(d)           any other agreement setting out the fees payable to a Finance Party under the Finance Documents

"Finance Document"

means this Agreement, any Accession Deed, any Ancillary Document, any Compliance Certificate, any Fee Letter, any Hedging Agreement, the Intercreditor Agreement, any Resignation Letter, any Transaction Security Document, any Utilisation Request, the Vehicle Financier Deeds of Priority, the 2012 Amendment Deed, the First Amendment and Restatement Agreement, the Second Amendment and Restatement Agreement, the Third Amendment and Restatement Agreement and any other document designated as a "Finance Document" by the Agent and the Company provided that where the term "Finance Document" is used in, and construed for the purposes of, this Agreement or the Intercreditor Agreement, a Hedging

 

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Agreement shall be a Finance Document only for the purposes of:-

(a)           the definition of "Default"

(b)           the definition of "Material Adverse Effect"

(c)           sub-clause (a) of the definition of "Permitted Transaction"

(d)           the definition of "Transaction Security Document"

(e)           Clause 1.2.1(d)

(f)            Clause 20 (Guarantee and Indemnity) and

(g)           Clause 25 (Events of Default) (other than Clause 25.13 (Repudiation and rescission of agreements) and Clause 25.18 (Acceleration))

"Finance Party"

means the Agent, the Arranger, the Security Agent, a Lender, a Hedge Counterparty or any Ancillary Lender provided that where the term "Finance Party" is used in, and construed for the purposes of, this Agreement or the Intercreditor Agreement, a Hedge Counterparty shall be a Finance Party only for the purposes of:-

(a)            the definition of "Secured Parties"

(b)            Clause 1.2.1(a)

(c)            sub-clause (c) of the definition of Material Adverse Effect

(d)            Clause 20 (Guarantee and Indemnity)

(e)            Clause 24.31 (Further assurance) and

(f)             Clause 30 (Conduct of business by the Finance Parties)

"Financial Event of Default"

means an Event of Default arising under any of Clauses 25.1 (Non payment), 25.2 (Other obligations) (to the extent that such Event of Default arises as a breach of Clause 23 (Financial covenants) or Clause 22 (Information Undertakings) (in relation to the delivery of Annual Financial Statements, Quarterly Financial Statements, Monthly Financial Statements and/or Compliance Certificates)), 25.5 (Cross-default), 25.6 (Insolvency), 25.7 (Insolvency proceedings) and 25.8 (Creditor's process)

"Financial Indebtedness"

means any indebtedness for or in respect of:-

 

14


 

 

 

(a)           moneys borrowed and debit balances at banks or other financial institutions

(b)           any amount raised by acceptance under any acceptance credit or bill discounting 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 Finance Leases

(e)           receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and meet any requirement for de-recognition under the Accounting Principles)

(f)            any Treasury Transaction (and, when calculating the value of that Treasury 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 Treasury Transaction, that amount) shall be taken into account)

(g)           any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution in respect of (i) an underlying liability of an entity which is not a member of the Group which liability would fall within one of the other sub-clauses of this definition or (ii) any liabilities of any member of the Group relating to any post-retirement benefit scheme

(h)           any amount raised by the issue of shares which are redeemable (other than at the option of the issuer) before the Termination Date or are otherwise classified as borrowings under the Accounting Principles)

(i)            any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 90 days after the date of supply

(j)            any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under the Accounting Principles and

 

15


 

 

 

(k)           the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in sub‑clauses (a) to (j) above

"Financial Quarter"

has the meaning given to that term in Clause 23.1 (Financial definitions)

"Financial Support Direction"

means a financial support direction issued by the Pensions Regulator under section 43 of the Pensions Act 2004

"Financial Year"

has the meaning given to that term in Clause 23.1 (Financial definitions)

"First Amendment and Restatement Agreement"

means the agreement amending and restating this Agreement entered into between Parties on the First Amendment and Restatement Date

"First Amendment and Restatement Date"

means 19 December 2014

"Franchises"

means the franchises, vehicle distribution agreements and dealerships listed in Schedule 13 (Franchises)

"Funding Rate"

means any individual rate notified by a Lender to the Agent pursuant to Clause 13.3.1(b)  (Cost of funds)

"German Group"

means PAE GmbH and each of its Subsidiaries from time to time

"Gross Outstandings"

means, in relation to a Multi-account Overdraft, the Ancillary Outstandings of that Multi-account Overdraft but calculated on the basis that the words "(net of any Available Credit Balance)" in paragraph (a) of the definition of "Ancillary Outstandings" were deleted

"Group"

means the Company and each of its Subsidiaries for the time being

"Group Structure Chart"

means the group structure chart in the agreed form

"Guarantor"

means an Original Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 28 (Changes to the Obligors)

"Hedge Counterparty"

means any person which has become a Party as a Hedge Counterparty in accordance with Clause 26.8 (Accession of Hedge Counterparties) and which in each case is or has become a party to the Intercreditor Agreement as a Hedge Counterparty in accordance with the provisions of the Intercreditor Agreement

"Hedging Agreement"

means any master agreement, confirmation, schedule or other agreement entered into or to be entered into by an Obligor and a Hedge Counterparty for the purpose of hedging the types of liabilities and/or risks in relation to the Facility which, at the time that that master agreement, confirmation, schedule or other

 

16


 

 

 

agreement (as the case may be) is entered into are permitted to be entered into pursuant to the terms of this Agreement

"Historic Screen Rate"

means, in relation to any Loan, the most recent applicable Screen Rate for the currency of that Loan and for a period equal in length to the Interest Period of that Loan and which is as of a day which is no more than two days before the Quotation Day

"Holding Company"

means, in relation to any person, any other person in respect of which it is a Subsidiary

"IFRS"

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

"Impaired Agent"

means the Agent at any time when:-

(a)           it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment

(b)           the Agent otherwise rescinds or repudiates a Finance Document

(c)           (if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender" or

(d)           an Insolvency Event has occurred and is continuing with respect to the Agent

unless, in the case of paragraph (a) above:-

(i)              its failure to pay is caused by:-

(A)           administrative or technical error or

(B)           a Disruption Event and

payment is made within 3 Business Days of its due date or

(ii)            the Agent is disputing in good faith whether it is contractually obliged to make the payment in question

"Increase Confirmation"  

means a confirmation substantially in the form set out in Schedule 11 (Form of Increase Confirmation)

"Increase Lender"  

has the meaning given to that term in Clause 2.2 (Increase)

"Insolvency Event"

in relation to an entity means that the entity:-

 

17


 

 

 

(a)           is dissolved (other than pursuant to a consolidation, amalgamation or merger)

(b)           becomes insolvent

(c)           has a resolution passed for its winding‑up or liquidation (other than pursuant to a consolidation, amalgamation or merger)

(d)           seeks or becomes subject to the appointment of an administrator, liquidator, receiver, trustee, custodian or other similar official for it or for all or substantially all its assets

(e)           has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter

(f)            causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (e) above or

(g)           takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts

"Intellectual Property"

means:-

(a)           any material patents, trade marks, 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 member of the Group (which may now or in the future subsist)

"Intercreditor Agreement"

means the intercreditor agreement dated the same date as this Agreement and originally made between, among others, the Parent, the Company, the other Obligors, The Royal Bank of Scotland plc as Security Agent, The Royal Bank of Scotland plc as agent, the Lenders, the Arranger, the Ancillary Lenders, the Hedge Counterparties and the Bilateral Overdraft Lender

"Interest Period"

means, in relation to a Loan, each period determined in accordance with Clause 12 (Interest Periods) and, in relation to

 

18


 

 

 

 

 

an Unpaid Sum, each period determined in accordance with Clause 11.3 (Default interest)

"Interpolated Historic 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 most recent 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 most recent applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan

each for the currency of that Loan and each of which is as of a day which is no more than two days before the Quotation Day

"Interpolated Screen Rate"  

means, in relation to LIBOR for 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 the Specified Time on the Quotation Day for the currency of that Loan.

"ITA"

means the Income Tax Act 2007

"Joint Venture"

means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity

"Legal Opinion"

means any legal opinion delivered to the Agent under Clause 4.1 (Initial conditions precedent) or Clause 28 (Changes to the Obligors)

"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

 

19


 

 

 

 

 

 

 

 

 

 

duty may be void and defences of set-off or counterclaim

(c)            the principle that in certain circumstances Security granted by way of fixed charge may be characterised as a floating charge or that Security purported to be constituted by way of an assignment may be recharacterised as a charge

(d)           the principle that any additional interest imposed pursuant to any relevant agreement may be held to be unenforceable on the grounds that it is a penalty and thus void

(e)           the principle that an English court or a court of Northern Ireland may not give effect to an indemnity for legal costs incurred by an unsuccessful litigant

(f)            similar principles, rights and defences under the laws of any Relevant Jurisdiction and

(g)           any other matters which are set out as qualifications or reservations as to matters of law of general application in the Legal Opinions

"Lender"

means:-

(a)           any Original Lender and

(b)           any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 2.2 (Increase), Clause 2.4 (Accordion Facility) or Clause 26 (Changes to the Lenders)

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

"Lender Accession Letter"

means a letter delivered by a New Commitments Lender in accordance with Clause 2.4 (Accordion Facility) substantially in the form set out in Schedule 15 (Lender Accession Letter)

"LIBOR"

means, in relation to any Loan:-

(a)           the applicable Screen Rate as of the Specified Time for the currency of that Loan and for a period equal in length to the Interest Period of that Loan or

(b)           as otherwise determined pursuant to Clause 13.1  (Unavailability of Screen Rate)

and if, in either case any such rate is below zero, LIBOR will be deemed to be zero

 

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"Limitation Acts"

means the Limitation Act 1980 and the Foreign Limitation Periods Act 1984

"LMA"

means the Loan Market Association

"Loan"

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

"Majority Lenders"

means:-

(a)           subject to paragraph (b) below, a Lender or Lenders whose Commitments aggregate more than 662/3 per cent of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3 per cent of the Total Commitments immediately prior to that reduction)

(b)           for the purposes of Clause 25.18 (Acceleration) where an Event of Default has occurred and is continuing under any of Clauses 25.1 (Non-payment), 25.2 (Financial covenants and other obligations) (where such Event of Default arises from a breach of Clause 23 (Financial covenants)), 25.5 (Cross default), 25.6 (Insolvency), 25.7 (Insolvency proceedings), 25.8 (Creditors' process), a Lender or Lenders whose Commitments aggregate 50 per cent or more of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated 50 per cent or more of the Total Commitments immediately prior to that reduction)

"Management Base Case Model"

means the funding model dated for the 5 year period beginning on 1 January 2018 and ending on 31 December 2022 on a month by month basis incorporating consolidated profit and loss, balance sheet, cash flow statements and annual financial covenant calculations together with key assumptions used with file reference "UK Forecast final 2018 – 2022 v2.xlsx" as provided to the Lenders as a condition precedent under the Third Amendment and Restatement Agreement

"Margin"

means in relation to any Loan or any Unpaid Sum, 2.10 per cent per annum but if:-

(a)           no Event of Default has occurred and is continuing

(b)           the ratio of Consolidated Net Borrowings to Consolidated EBITDA in respect of the most recently completed Relevant Period is within a range set out below,

then the Margin for each Loan will be the percentage per annum set out below in the column opposite that range:-

 

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Consolidated Net Borrowings: Consolidated EBITDA

Margin % pa

 

Greater than 2.5:1

2.10

 

Greater than 2.0:1 but less than or equal to 2.5:1

1.70

 

Greater than 1.5:1 but less than or equal to 2.0:1

1.50

 

Greater than 1.0:1 but less than or equal to 1.5:1

1.30

 

Less than or equal to 1.0:1

1.10

 

However:-

(i)            any increase or decrease in the Margin for a Loan shall take effect on the date (the "reset date") which is three Business Days following receipt by the Agent of the Compliance Certificate for that Relevant Period pursuant to Clause 22.2 (Provision and contents of Compliance Certificate)

(ii)           if, following receipt by the Agent of the annual audited financial statements of the Group and related Compliance Certificate, those statements and Compliance Certificate do not confirm the basis for a reduced Margin, then the provisions of Clause 11.2 (Payment of interest) shall apply and the Margin for that Loan shall be the percentage per annum determined using the table above and the revised ratio of Consolidated Net Borrowings to Consolidated EBITDA calculated using the figures in that Compliance Certificate

(iii)          while an Event of Default is continuing, the Margin for each Loan shall be the highest percentage per annum set out above and

(iv)          for the purpose of determining the Margin, Consolidated Net Borrowings, Consolidated EBITDA and Relevant Period shall be determined in accordance with Clause 23.1 (Financial definitions)

"Material Adverse Effect"

means a material adverse effect on:-

(a)           the business or financial condition of the Group taken as a whole or

(b)           the ability of an Obligor to perform its obligations under the Finance Documents or

 

 

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(c)           the validity or enforceability of any Finance Document

"Material Company"

means, at any time:-

(a)           an Obligor or

(b)           a wholly‑owned member of the Group that holds shares in an Obligor or

(c)           a Subsidiary of the Company which has earnings before interest, tax, depreciation and amortisation calculated on the same basis as Consolidated EBITDA (as defined in Clause 23.1 (Financial definitions) (but on an unconsolidated basis)) representing 10 per cent. or more of Consolidated EBITDA (as defined in Clause 23.1 (Financial definitions)) or has gross assets, net assets or turnover (excluding intra-group items) representing 10 per cent. or more of the gross assets, net assets or turnover of the Group, calculated on a consolidated basis

Compliance with the condition set out in sub-clause (c) shall be determined by reference to the most recent Compliance Certificate supplied by the Company and/or the latest audited financial statements of that Subsidiary (consolidated in the case of a Subsidiary which itself has Subsidiaries) and the latest audited consolidated financial statements of the Group.  However, if a Subsidiary has been acquired since the date as at which the latest audited consolidated financial statements of the Group were prepared, the financial statements shall be deemed to be adjusted in order to take into account the acquisition of that Subsidiary (that adjustment being certified by two directors of the Company as representing an accurate reflection of the revised Consolidated EBITDA (as defined in Clause 23.1 (Financial definitions)), gross assets, net assets or turnover of the Group).

A report by the Company's Auditors that a Subsidiary is or is not a Material Company shall, in the absence of manifest error, be conclusive and binding on all Parties

"Material Franchising Agreement"

means a franchising agreement entered into by any member of the Group:-

(a)           where the profits attributable to, or generated under such franchising agreement are equal to or greater than 20 per cent. of the aggregate profits of the Group; or

(b)           where the turnover attributable to or generated under such franchising agreement is equal to or greater than 20 per cent. of the aggregate turnover of the Group

"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:-

 

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(a)           (subject to sub-clause (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

"Multi-account Overdraft"

means an Ancillary Facility which is an overdraft facility comprising more than one account

"Net Outstandings"

means, in relation to a Multi-account Overdraft, the Ancillary Outstandings of that Multi-account Overdraft

"NatWest Overdraft Letter"

means the overdraft letter dated on the First Amendment and Restatement Date between National Westminster Bank Plc and the Company (as amended, varied or replaced from time to time) provided that the amount of the overdraft and ancillary facilities made available pursuant to its terms shall not exceed £15,500,000 at any time plus the Seasonal Excess Amount

"New Commitments"

means, in relation to any Lender, the amount stated to be the New Commitments of that Lender in a New Commitments Notice

"New Lender"

has the meaning given to that term in Clause 26 (Changes to the Lenders)

"Northern Bank Agreement"

means the £2,000,000 facility agreement dated 17 August 2007 as amended on 25 August 2011 made between Danske Bank (previously Northern Bank Limited) and Agnew Corporate Ltd

"Northern Irish Obligors"

means the companies listed in Schedule 1 Part 1 which are incorporated under the laws of Northern Ireland

"Notifiable Debt Purchase Transaction"

has the meaning given to that term in Clause 27.2.2

"Obligor"

means a Borrower or a Guarantor

 

24


 

 

"Obligors' Agent"

means the Company appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.3.2 (Obligors' Agent)

"Original Financial Statements"

means:-

(a)           in relation to each Original Obligor its audited financial statements for its Financial Year ended 31 December 2010

(b)           in relation to any other Obligor, its audited financial statements delivered to the Agent as required by Clause 28 (Changes to the Obligors)  

"Original Jurisdiction"

means, in relation to an Obligor, the jurisdiction under whose laws that Obligor is incorporated as at the date of this Agreement or, in the case of an Additional Obligor, as at the date on which that Additional Obligor becomes Party as a Borrower or a Guarantor (as the case may be)

"Original Obligor"

means an Original Borrower or an Original Guarantor

"PAE GmbH"

means Penske Automotive Europe GmbH (a company incorporated in Germany)

"PAG"

Penske Automotive Group Inc

"Participating Member State"

means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union

"Party"

means a party to this Agreement

"Pensions Regulator"

means the body corporate called the Pensions Regulator established under Part I of the Pensions Act 2004

"Permitted Acquisition"

means:-

(a)           the acquisition of the entire issued share capital of each of Agnew Retail Limited, Road-field Motors Limited and Agnew Autoexchange Limited

(b)           acquisitions or investments of motor retail operations made in the ordinary course of trade

(c)           an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group in circumstances constituting a Permitted Disposal

(d)           an acquisition of securities which are Cash Equivalent Investments so long as those Cash Equivalent Investments become subject to the Transaction Security as soon as is reasonably practicable

 

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(e)           an acquisition for cash consideration, of (A) all of the issued share capital of a limited liability company or (B) (if the acquisition is made by a limited liability company whose sole purpose is to make the acquisition) a business or undertaking carried on as a going concern, but only if:-

(i)            no Default is continuing on the closing date for the acquisition or would occur as a result of the acquisition

(ii)           the acquired company, business or undertaking is incorporated or established, and carries on its principal business in, the United Kingdom and

(iii)          the cash consideration (including associated costs and expenses) for the acquisition (the "Total Purchase Price") does not exceed in aggregate £25,000,000 or its equivalent

(f)            an acquisition made with the prior written consent of the Agent (acting on the instructions of the Lenders)

Any acquisition will only be permitted under sub-clauses (e)  and (f) if the Company has delivered to the Agent not later than 5 Business Days before legally committing to make such acquisition a certificate signed by two directors of the Company to which is attached a copy of the latest audited accounts (or if not available, management accounts) of the target company or business

"Permitted Disposal"

means any sale, lease, licence, transfer or other disposal which, except in the case of sub-clause (b) is on arm's length terms:-

(a)           of trading stock or cash made by any member of the Group in the ordinary course of trading of the disposing entity

(b)           of any asset by a member of the Group (the "Disposing Company") to another member of the Group (the "Acquiring Company"), but if:-

(i)            the Disposing Company is an Obligor, the Acquiring Company must also be an Obligor

(ii)           the Disposing Company had given Security over the asset, the Acquiring Company must give equivalent Security over that asset and

(iii)          the Disposing Company is a Guarantor, the Acquiring Company must be a Guarantor guaranteeing at all times an amount no less than that guaranteed by the Disposing Company

 

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(c)           of assets (other than shares, businesses, Real Property/Intellectual Property) in exchange for other assets (excluding cash) comparable or superior as to type, value and quality (other than an exchange of a non-cash asset for cash)

(d)           of obsolete or redundant vehicles, plant and equipment for cash

(e)           of Cash Equivalent Investments for cash or in exchange for other Cash Equivalent Investments

(f)            constituted by a licence of intellectual property rights permitted by Clause 24.26 (Intellectual Property)

(g)           to a Joint Venture, to the extent permitted by Clause 24.10 (Joint ventures)

(h)           arising as a result of any Permitted Security

(i)            arising as a result of a Permitted Sale and Leaseback Transaction

(j)            of any of the Franchises

(k)           of assets where the proceeds of the Disposal are used within 12 months of that Disposal for the purchase of assets to replace the asset which is the subject of that Disposal with assets of a similar type and quality

(l)            of assets which are not expressed in the Transaction Security Documents to be subject to a fixed charge for cash where (A) the higher of the book value and net consideration receivable in respect of any individual asset the subject of the Disposal does not exceed £19,000,000 and (B) where the higher of the book value and net consideration receivable (when aggregated with the higher of the book value and net consideration receivable for any other sale, lease, licence, transfer or other disposal not allowed under the preceding sub-clauses does not exceed £50,000,000 (or its equivalent) in any Financial Year of the Company and

(m)          made with the prior written consent of the Agent (acting on the instructions of the Lenders) such consent not to be unreasonably withheld or delayed

"Permitted Distribution"

means:-

(a)              the payment of a dividend by the Company to the Parent provided that:

(i)            the amount of such dividend (the "Total Dividend Amount") shall not exceed 50 per cent of the consolidated profit of the Group

 

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on ordinary activities before taxation in the Financial Year prior to that in which the payment of the dividend is to be made (the "Base Year") (as evidenced by the unaudited consolidated accounts of the Company for the Base Year delivered to the Agent in accordance with Clause 22.1.3 (Financial statements)) and no dividend shall be paid prior to receipt by the Agent of those financial statements;

(ii)            no Financial Event of Default is outstanding at the time such payment is made nor will occur as a result of such payment and

(iii)           such dividend must be paid within the 12 month period following the end of the Base Year

(b)           the payment of a dividend to the Company or any of its wholly‑owned Subsidiaries

(c)           the payment of a dividend by the Company to the Parent of up to a maximum amount of £18,800,000 on or after the First Amendment and Restatement Date provided that this dividend is for the purpose of clearing an inter-company balance and there is no cash movement to the Parent in connection with this dividend after the First Amendment and Restatement Date and

(d)           the payment of a dividend by the Company with the prior written consent of the Agent (acting on the instructions of the Lenders) such consent not be unreasonably withheld or delayed unless an Event of Default is continuing

"Permitted Financial Indebtedness"

means Financial Indebtedness:-

(a)           arising under the Finance Documents

(b)           arising under any Stocking Facility

(c)           arising under the NatWest Overdraft Letter (provided that the aggregate amount of all overdraft and other facilities made available pursuant to the NatWest Overdraft Letter shall not exceed £15,500,000 at any time plus the Seasonal Excess Amount)

(d)           to the extent covered by a letter of credit, guarantee or indemnity issued under an Ancillary Facility

(e)           arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary

 

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course of trade, but not a foreign exchange transaction for investment or speculative purposes

(f)            arising under a Permitted Loan or a Permitted Guarantee

(g)           as permitted by Clause 24.30 (Treasury Transactions)

(h)           of any person acquired by a member of the Group after the Closing Date which is incurred under arrangements in existence at the date of acquisition, but not incurred or increased or having its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of six months following the date of acquisition

(i)            under Finance Leases of, or hire purchase agreements relating to, motor vehicles

(j)            existing at the date of this Agreement

(k)           which is subordinated to the Facility on terms satisfactory to the Agent (acting reasonably)

(l)            incurred with the prior written consent of the Agent (acting on the instructions of the Lenders)

(m)          arising under the Ulster Bank Agreement provided that the Financial Indebtedness arising under such agreement will only be permitted if it is less than or equal to £2,500,000

(n)           arising under a Short Term Loan

(o)           arising under the BMW Sheffield Term Facility up to a maximum principal amount of £19,080,000 in respect of the mortgage of the BMW Sheffield Property

(p)           arising under the BMW Cardiff Term Facility up to a maximum principal amount of £15,000,000 in respect of the mortgage of the BMW Cardiff Property and

(q)           not otherwise permitted by the preceding paragraphs or as a Permitted Transaction and the outstanding principal amount of which does not exceed £12,500,000 (or its equivalent) in aggregate for the Group at any time

"Permitted Guarantee"

means:-

(a)           the endorsement of negotiable instruments in the ordinary course of trade

 

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(b)           any performance or similar bond guaranteeing performance by a member of the Group under any contract entered into in the ordinary course of trade

(c)           any guarantee of a Joint Venture to the extent permitted by Clause 24.10 (Joint ventures)

(d)           any guarantee permitted under Clause 24.19 (Financial Indebtedness)

(e)           any guarantee given in respect of the netting or set‑off arrangements permitted pursuant to sub‑clause (b) of the definition of Permitted Security or

(f)            any indemnity given in the ordinary course of the documentation of an acquisition or disposal transaction which is a Permitted Acquisition or Permitted Disposal which indemnity is in a customary form and subject to customary limitations

(g)           any guarantee given by a member of the Group which is an Obligor in respect of the obligations or liabilities of another member of the Group which is an Obligor

(h)           any guarantee given by a member of the Group which is not an Obligor in respect of the obligations or liabilities of another member of the Group

(i)            any guarantee given with the prior written consent of the Agent (acting on the instructions of the Lenders)

(j)            the guarantee dated 27 February 2007 granted by the Parent and certain members of the Group in favour of the Bilateral Overdraft Lender

(k)           the guarantee granted by each member of the Group party to the Ulster Bank Agreement in favour of Ulster Bank Limited in respect of the Ulster Bank Agreement

(l)            the guarantees granted by the Company in relation to the obligations of Agnew Autoexchange Limited, Isaac Agnew (Holdings) Limited, Isaac Agnew Limited, I A P C B Limited and Isaac Agnew (Mallusk) Limited to Volkswagen Financial Services (UK) Limited and Volkswagen Bank GmbH and

(m)          any guarantees granted in addition to those permitted under paragraphs (a) to (l) above provided that the maximum aggregate liability (whether present or future, actual or contingent) of all members of the Group under all such guarantees does not exceed £9,500,000  at any time

 

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"Permitted Joint Venture"  

means any investment in any Joint Venture where:-

(a)           the Joint Venture is incorporated, or established, and carries on its principal business, in the United Kingdom

(b)           the Joint Venture is engaged in a business substantially the same as that carried on by the Group and

(c)            in any Financial Year of the Company, the aggregate (the "Joint Venture Investment") of:-

(i)            all amounts subscribed for shares in, lent to, or invested in all such Joint Ventures by any member of the Group;

(ii)           the contingent liabilities of any member of the Group under any guarantee given in respect of the liabilities of any such Joint Venture and

(iii)          the market value of any assets transferred by any member of the Group to any such Joint Venture,

when aggregated with the Total Purchase Price in respect of Permitted Acquisitions in that Financial Year permitted pursuant to sub‑clause (e) of the definition of Permitted Acquisition does not exceed £25,000,000 (or its equivalent in other currencies)

"Permitted Loan"

means:-

(a)           any trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities

(b)           Financial Indebtedness which is referred to in the definition of, or otherwise constitutes, Permitted Financial Indebtedness (except under sub‑clause (f) of that definition)

(c)            a loan made to a Joint Venture to the extent permitted under Clause 24.10 (Joint ventures)

(d)           a loan made by a member of the Group which is an Obligor to another member of the Group which is an Obligor or made by a member of the Group which is not an Obligor to another member of the Group

(e)           any loan made by any member of the Group to a member of the German Group so long as the aggregate amount of the Financial Indebtedness under any such loans does not exceed £9,500,000 (or its equivalent) at any time

 

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(f)            the subscription for vendor loan notes in connection with a Permitted Disposal

(g)           a loan made by a member of the Group to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed £600,000 (or its equivalent) at any time

(h)           a loan made by the Company to any Subsidiary of PAG which is not a member of the Group, provided that the maximum aggregate amount of all such loans made in any Financial Year of the Company when aggregated with the Total Dividend Amount (as defined in the definition of "Permitted Distribution") in respect of Permitted Distributions paid or made in that Financial Year of the Company shall not exceed 50 per cent of the consolidated profit of the Group on ordinary activities before taxation in the Base Year (as defined in the definition of "Permitted Distribution") (as evidenced by the unaudited cumulative consolidated accounts of the Company for the Base Year delivered to the Agent in accordance with Clause 22.1.3 (Financial statements)) and no loan permitted pursuant to this paragraph (h) shall be paid prior to receipt by the Agent of those financial statements and

(i)            any loan (other than a loan made by a member of the Group to another member of the Group) so long as the aggregate amount of the Financial Indebtedness under any such loans does not exceed £3,000,000 (or its equivalent) at any time,

so long as in the case of:-

(j)            sub-clause (d) above the creditor of such Financial Indebtedness shall (if it is an Obligor) grant security over its rights in respect of such Financial Indebtedness in favour of the Secured Parties on terms acceptable to the Agent (acting on the instructions of the Majority Lenders) and

(k)           sub-clause (f) above to the extent required by the Intercreditor Agreement, the creditor and (if the debtor is a member of the Group) the debtor of such Financial Indebtedness are or become party to the Intercreditor Agreement as an Intra‑Group Lender and a Debtor (as defined, in each case, in the Intercreditor Agreement) respectively

"Permitted Sale and Leaseback Transaction"

means a sale and leaseback of any asset of a member of the Group where the net consideration received by the relevant member of the Group does not exceed:

 

 

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(a)            £19,000,000 in respect of any single sale and leaseback transaction and

(b)            £50,000,000 in aggregate in any Financial Year of the Company

"Permitted Security"

means:-

(a)           any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group

(b)           any netting or set-off arrangement entered into by any member of the Group with National Westminster Bank plc in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of members of the Group (including a Multi-account Overdraft) but only so long as (i) such arrangement does not permit credit balances of Obligors to be netted or set off against debit balances of members of the Group which are not Obligors and (ii) such arrangement does not give rise to other Security over the assets of Obligors in support of liabilities of members of the Group which are not Obligors except, in the case of (i) and (ii) above, to the extent such netting, set‑off or Security relates to, or is granted in support of, a loan permitted pursuant to sub‑clause (e) of the definition of "Permitted Loan"

(c)           any payment or close out netting or set‑off arrangement pursuant to any Treasury Transaction or foreign exchange transaction entered into by a member of the Group which constitutes Permitted Financial Indebtedness, excluding any Security or Quasi‑Security under a credit support arrangement

(d)           any Security or Quasi‑Security over or affecting any asset acquired by a member of the Group after the Closing Date if:-

(i)            the Security or Quasi‑Security was not created in contemplation of the acquisition of that asset by a member of the Group

(ii)           the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a member of the Group and

(iii)          the Security or Quasi‑Security is removed or discharged within 6 months of the date of acquisition of such asset

(e)           any Security or Quasi‑Security over or affecting any asset of any company which becomes a member of the Group after the Closing Date, where the Security or

 

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Quasi‑Security is created prior to the date on which that company becomes a member of the Group if:-

(i)            the Security or Quasi‑Security was not created in contemplation of the acquisition of that company

(ii)           the principal amount secured has not increased in contemplation of or since the acquisition of that company and

(iii)          the Security or Quasi‑Security is removed or discharged within six months of that company becoming a member of the Group

(f)            any Security or Quasi‑Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a member of the Group in the ordinary course of trading and on the supplier's standard or usual terms and not arising as a result of any default or omission by any member of the Group

(g)           any Quasi-Security arising as a result of a disposal which is a Permitted Disposal

(h)           any Security or Quasi-Security arising as a consequence of any finance or capital lease permitted pursuant to sub‑clause (i) of the definition of "Permitted Financial Indebtedness"

(i)             any Security arising pursuant to, or in connection with, a Stocking Facility

(j)             any Security arising pursuant to the Existing Security Documents

(k)           any Security or Quasi-Security arising under any agreement entered into by a member of the Group in the ordinary course of its trading activities to sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re‑acquired by any member of the Group

(l)            the Security existing at the date of this Agreement and the Third Amendment and Restatement Date in favour of the Bilateral Overdraft Lender

(m)          any Security notified to the Lenders in writing prior to the date of this Agreement and the Third Amendment and Restatement Date except to the extent the principal amount secured by that Security exceeds the amount stated in that notification

(n)           the Security executed by the target companies described in paragraph (a) of the definition of

 

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"Permitted Acquisition" and their subsidiaries in favour of National Westminster Bank Plc

(o)           the legal charge granted by Sytner Limited to BMW Financial Services (UK) Limited over the BMW Sheffield Property as security for (inter alia) the BMW Sheffield Term Facility

(p)           any legal charge granted by an Obligor to BMW Financial Services (UK) Limited over the BMW Cardiff Property as security for (inter alia) the BMW Cardiff Term Facility or

(q)           any Security securing indebtedness the outstanding principal amount of which (when aggregated with the outstanding principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any permitted under sub‑clauses (a) to (o) above) does not exceed £9,500,000 (or its equivalent in other currencies)

"Permitted Treasury Transaction"

means

(a)           the hedging transactions documented by the Hedging Agreements;

(b)           spot and forward delivery foreign exchange contracts entered into in the ordinary course of business and not for speculative purposes

(c)           any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group for a period of not more than four years and not for speculative purposes or

(d)           a Treasury Transaction on commercial terms acceptable to the Lenders entered into by a member of the Group with a person other than a Finance Party which does not benefit from Security granted by any member of the Group

"Permitted Transaction"

means:-

(a)           any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising, under the Finance Documents

(b)           the solvent liquidation or reorganisation of any member of the Group which is not an Obligor so long as any payments or assets distributed as a result of such

 

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liquidation or reorganisation are distributed to other members of the Group or

(c)           transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arm's length terms

"Properties"

means any Real Property acquired by an Obligor after the date of this Agreement.  A reference to a "Property" is a reference to any of the Properties

"Qualifying Lender"

has the meaning given to that term in Clause 15 (Tax gross‑up and indemnities)

"Quarter Date"

means the last day of a Financial Quarter

"Quasi-Security"

has the meaning given to that term in Clause 24.13 (Negative pledge)

"Quotation Day"

means, in relation to any period for which an interest rate is to be determined, the first day of that period, unless market practice differs in the Relevant Market for that currency, in which case the Quotation Day for that currency 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)

"Real Property"

means:-

(a)            any freehold, leasehold or immovable property and

(b)           any buildings, fixtures, fittings, fixed plant or machinery from time to time situated on or forming part of that freehold, leasehold or immovable property

"Receiver"

means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property

"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

"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

 

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(c)           any jurisdiction where it conducts its business and

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

"Relevant Market"

means the London interbank market

"Relevant Nominating Body"

means any applicable central bank, regulator or other supervisory authority or a group of them, or any working group or committee sponsored or chaired by, or constituted at the request of, any of them or the Financial Stability Board

 

"Relevant Period"

has the meaning given to that term in Clause 23.1 (Financial definitions)

"Repayment Date"

means the last day of an Interest Period for a Loan

"Repeating Representations"

means each of the representations set out in Clause 21.2 (Status) to Clause 21.7 (Governing law and enforcement), Clause 21.11 (No default), Clause 21.12.2, Clause 21.13 (Original Financial Statements), Clause 21.20 (Ranking) to Clause 21.22 (Legal and beneficial ownership) and Clause 21.28 (Centre of main interests and establishments)

"Replacement Benchmark"

means a benchmark rate which is:

 

(a)         formally designated, nominated or recommended as the replacement for a Screen Rate by:

(i)          the administrator of that Screen Rate (provided that the market or economic reality that such benchmark rate measures is the same as that measured by the Screen Rate) or

(ii)         any Relevant Nominating Body,

and if replacements have, at the relevant time, been formally designated, nominated or recommended under both paragraphs, the "Replacement Benchmark" will be the replacement under paragraph (ii) above

 

(b)         in the opinion of the Lenders and the Company, generally accepted in the international or any relevant domestic syndicated loan markets as the appropriate successor to a Screen Rate or

 

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(c)         in the opinion of the Lenders  and the Company, an appropriate successor to a Screen Rate

"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 7 (Form of Resignation Letter)

Restricted Person”

means a person that is (i) listed on, or owned or controlled by a person listed on any Sanctions List; (ii) located in, incorporated under the laws of, or owned or controlled by, or acting on behalf of, a person located in or organised under the laws of a country or territory that is the target of country-wide Sanctions; or (iii) otherwise a target of Sanctions

 

"Rollover Loan"

means one or more Loans:-

(a)           made or to be made on the same day that a maturing Loan is due to be repaid or

(b)           the aggregate amount of which is equal to or less than the amount of the maturing Loan

(c)           made or to be made to the same Borrower for the purpose of refinancing that maturing Loan

Sanctions”

means any economic sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United States government; (ii) the United Nations; (iii) the European Union; (iv) the United Kingdom; or (v) the respective governmental institutions and agencies of any of the foregoing, including without limitation, the Office of Foreign Assets Control of the US Department of Treasury (“OFAC”), the United States Department of State, and Her Majesty’s Treasury (together “Sanctions Authorities”)

Sanctions List

means the “Specially Designated Nationals and Blocked Persons” list issued by OFAC, the Consolidated List of Financial Sanctions Targets issued by Her Majesty’s Treasury, or any similar list issued or maintained or made public by any of the Sanctions Authorities

"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 the relevant currency and period displayed (before any correction, recalculation or republication by the administrator) on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays the 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

 

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relevant rate after consultation with the Company and the Lenders

"Screen Rate Replacement Event"

means, in relation to a Screen Rate:

 

(a)           the methodology, formula or other means of determining that Screen Rate has, in the opinion of the Lenders and the Company materially changed

(b)

(i)

(A)             the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent or

(B)             information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,

provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate

(ii)         the administrator of that Screen Rate publicly announces that it has ceased or will cease to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate

(iii)        the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued or

(iv)        the administrator of that Screen Rate or its supervisor announces that that Screen Rate may no longer be used or

(c)           the administrator of that Screen Rate determines that that Screen Rate should be calculated in accordance with its reduced

 

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submissions or other contingency or fallback policies or arrangements and either:

(i)          the circumstance(s) or event(s) leading to such determination are not (in the opinion of the Lenders and the Company) temporary or

(ii)         that Screen Rate is calculated in accordance with any such policy or arrangement for a period of no less than 30 days or

(d)         in the opinion of the Lenders  and the Company, that Screen Rate is otherwise no longer appropriate for the purposes of calculating interest under this Agreement

 

"Seasonal Excess Amount"

means an additional amount up to a maximum of £40,000,000 made available during the following periods:

(a)            20 March to 30 April in each year; and

(b)            20 September to 31 October in each year

 

 

"Second Amendment and Restatement Agreement"

means the agreement amending and restating this Agreement entered into between Parties on the Second Amendment and Restatement Date

"Second Amendment and Restatement Date"

means 2 April 2015

"Secured Parties"

means each Finance Party from time to time party to this Agreement, any Receiver or 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

"Short Term Loan"

means a loan from PAG or any of its Subsidiaries (other than a member the Group) to any member of Group provided that:

(a)           each such loan is to be repaid within 45 days of being made to the relevant member(s) of the Group (subject to Clause 24.18.3);

(b)           a maximum of two such loans may be made available to the relevant member(s) of the Group in each calendar year; and

(c)           such a loan may not be made available unless a period of at least 90 days has elapsed since the previous loan was repaid by the relevant member(s) of the Group

 

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"Specified Time"

means a time determined in accordance with Schedule 9  (Timetables)

"Sponsor Affiliate"

means PAG, each of its Affiliates, any trust of which PAG or any of its Affiliates is a trustee, any partnership of which PAG 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, PAG or any of its Affiliates provided that any such trust, fund or other entity which has been established for at least 6 months solely for the purpose of making, purchasing or investing in loans or debt securities and which is managed or controlled independently from all other trusts, funds or other entities managed or controlled by PAG or any of its Affiliates which have been established for the primary or main purpose of investing in the share capital of companies shall not constitute a Sponsor Affiliate

"Stocking Facility"

means any facility provided to a member of the Group for vehicle stock, used demonstrators and/or consignment stock

"Subsidiary"

means a subsidiary undertaking within the meaning of section 1159 of the Companies Act 2006

"Tax"

means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same)

"Termination Date"

means the date falling on the fifth anniversary of the Third Amendment and Restatement Date

"Testing Date"

means the date when the financial covenants contained in Clause 0 (Financial condition) are to be tested

"Third Amendment and Restatement Agreement"

means the agreement amending and restating this Agreement entered into between Parties on the Third Amendment and Restatement Date

"Third Amendment and Restatement Date"

means                                           2018

"Total Commitments"

means the aggregate of the Commitments, being £150,000,000 at the Third Amendment and Restatement Date

"Trade Instruments"

means any performance bonds, or advance payment bonds or documentary letters of credit issued in respect of the obligations of any member of the Group arising in the ordinary course of trading of that member of the Group

"Transaction Security"

means the Security created or expressed to be created in favour of the Security Agent pursuant to the Transaction Security Documents

"Transaction Security Documents"

means each of the documents listed as being a Transaction Security Document in paragraph 2.6 of Part 1 of Schedule 2 (Conditions Precedent), any document required to be delivered to the Agent under paragraph 13 of Part 2 of Schedule 2

 

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(Conditions Precedent), the debenture dated 24 January 2012 entered into by the Northern Irish Obligors in favour of the Security Agent,  together with any other document entered into by any Obligor creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents 

"Transfer Certificate"

means a certificate substantially in the form set out in Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Company

"Transfer Date"

means, in relation to an assignment or 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

"Treasury Transactions"

means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price

"Ulster Bank Agreement"

means the working capital facility agreement most recently entered into on 3 July 2014 (and renewed annually) documenting the terms of a working capital facility of up to £2,500,000 to be made available by Ulster Bank Limited to Agnew Retail Limited, Isaac Agnew (Holdings) Limited, Agnew Commercials Limited, Bavarian Garages (N.I.) Limited, GAP Software Solutions Ltd, Isaac Agnew (Mallusk) Limited, Stanley Motor Works (1932) Limited, Agnew Autoexchange Limited, Agnew Trade Centre Limited,  Agnew Corporate Ltd, I A P C B Limited and Isaac Agnew Limited

"Unpaid Sum"

means any sum due and payable but unpaid by an Obligor under the Finance Documents

"US"

means the United States of America

"US Tax Obligor"

means:-

(a)           a Borrower 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 Loan

"Utilisation Date"

means the date of a Utilisation, being the date on which the relevant Loan is to be made

"Utilisation Request"

means a notice substantially in the relevant form set out in Schedule 3 (Requests and Notices)

 

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"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

"Vehicle Financier Deeds of Priority"

means deeds of priority entered into between, among others, the Security Agent and each of the following financiers (in their respective capacities as providers of vehicle finance to certain members of the Group):-

(a)         BMW Financial Services (GB) Limited;

(b)         Volkswagen Financial Services (UK) Limited and Volkswagen Bank GmbH (trading as Volkswagen Bank United Kingdom Branch); and

(c)         Mercedes-Benz Bank AG UK Branch,

(each, a "Vehicle Financier Deed of Priority").

 

1.2           Construction

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

(a)           the "Agent", the "Arranger", any "Finance Party", any "Hedge Counterparty", any "Lender", any "Obligor", any "Party", any "Secured Party", the "Security Agent", the "Bilateral Overdraft Lender" 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 Company 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)           a "Finance Document" or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;

(e)           a "group of Lenders" includes all the Lenders;

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(f)            "guarantee" means (other than in Clause 20  (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;

(g)          "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;

(h)           a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership or other entity (whether or not having separate legal personality);

(i)            a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but if not having the force of law, being one which is customarily complied with in the relevant jurisdiction by persons or entities equivalent to the relevant person or entity in question) of any governmental, intergovernmental or supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;

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

(k)           "date of this Agreement" means 16 December 2011; and

(l)            a time of day is a reference to London time.

1.2.2       The 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.

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

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

1.2.5        A Borrower providing "cash cover" for an Ancillary Facility means a Borrower paying an amount in the currency of the Ancillary Facility) to an interest-bearing account in the name of the Borrower and the following conditions being met:-

(a)           the account is with the Security Agent or with the Ancillary Lender for which that cash cover is to be provided;

(b)           until no amount is or may be outstanding under that Ancillary Facility, withdrawals from the account may only be made to pay the relevant Finance Party amounts due and payable to it under this Agreement in respect of that Ancillary Facility; and

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(c)           the Borrower has executed a security document over that account, in form and substance satisfactory to the Finance Party with which that account is held, creating a first ranking security interest over that account.

1.2.6        A 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.

1.2.7        A Borrower "repaying" or "prepaying" an Ancillary Outstandings means:-

(a)           that Borrower providing cash cover in respect of the Ancillary Outstandings;

(b)           the maximum amount payable under the Ancillary Facility being reduced or cancelled in accordance with its terms; or

(c)           the Ancillary Lender being satisfied that it has no further liability under that Ancillary Facility,

and the amount by which the Ancillary Outstandings are, repaid or prepaid under Clauses 1.2.7(a) and 1.2.7(b) above is the amount of the relevant cash cover, reduction or cancellation.

1.2.8        An amount borrowed includes any amount utilised under an Ancillary Facility.

1.3           Currency symbols and definitions

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

1.4           Third party rights

1.4.1       A person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Agreement.

1.4.2       Notwithstanding 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.

1.5           Provision of information by directors

If any provision of a Finance Document requires a director or any member of the Group to provide any information, to certify any matter or to make any presentation, any such provision, certification or presentation shall, provided it is made in good faith, be made without personal liability on the part of such director (other than in the case of fraud or gross negligence).

 

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SECTION 2

THE FACILITY

2.             THE FACILITY

2.1           The Facility

2.1.1        Subject to the terms of this Agreement, the Lenders make available a Sterling revolving credit facility in an aggregate amount equal to the Total Commitments.

2.1.2        The Facility will be available to the Borrowers.

2.1.3        Subject to the terms of this Agreement and the Ancillary Documents, an Ancillary Lender may make all or part of its Commitment available to any Borrower as an Ancillary Facility.

2.2           Increase

2.2.1        The Parent or the Company may by giving prior notice to the Agent by no later than the date falling 10 Business Days after the effective date of a cancellation of:-

(a)           the Available Commitments of a Defaulting Lender in accordance with Clause 8.5  (Right of cancellation in relation to a Defaulting Lender); or

(b)           the Commitments of a Lender in accordance with Clause 8.1 (Illegality),

request that the Total Commitments be increased (and the Total Commitments under that Facility shall be so increased) in an aggregate amount in Sterling of up to the amount of the Available Commitments or Commitments so cancelled as follows:-

(c)           the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an "Increase Lender") selected by the Parent or the Company (each of which shall not be a Sponsor Affiliate or a member of the Group) and which is acceptable to the Agent (acting reasonably) and each of which confirms in writing (whether in the relevant Increase Confirmation or otherwise) its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender in respect of those Commitments;

(d)           each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume; and

(e)           each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender in

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respect of that part of the increased Commitments which it is to assume; and

(f)            the Commitments of the other Lenders shall continue in full force and effect.

2.2.2       The Agent shall, subject to Clause 2.2.3 below, as soon as reasonably practicable after receipt by it of a duly completed Increase Confirmation appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Increase Confirmation.

2.2.3       The Agent shall only be obliged to execute an Increase Confirmation delivered to it by an Increase Lender once it is satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender.

2.2.4       An increase in the Commitments relating to the Facility will only be effective if the Increase Lender enters into the documentation required for it to accede as a party to the Intercreditor Agreement.

2.2.5       Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as it would have been had it been an Original Lender.

2.2.6       The Parent shall promptly on demand pay the Agent and the Security Agent the amount of all costs and expenses (including legal fees) reasonably incurred by either of them and, in the case of the Security Agent, by any Receiver or Delegate in connection with any increase in Commitments under this Clause 2.2.

2.2.7       The Increase Lender shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee in an amount equal to the fee which would be payable under Clause 26.3  (Assignment or transfer fee) if the increase was a transfer pursuant to Clause 26.5  (Procedure for transfer) and if the Increase Lender was a New Lender.

2.2.8       The Parent may pay to the Increase Lender a fee in the amount and at the times agreed between the Parent and the Increase Lender in a letter between the Parent and the Increase Lender setting out that fee. A reference in this Agreement to a Fee Letter shall include any letter referred to in this Clause.

2.2.9       Neither the Agent nor any Lender shall have any obligation to find an Increase Lender and in no event shall any Lender whose Commitment is replaced by an Increase Lender be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents.

2.2.10     Clause 26.4  (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:-

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(a)           an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase;

(b)           the "New Lender" were references to that "Increase Lender"; and

(c)           a "re‑transfer" and "re‑assignment" were references to respectively a "transfer" and "assignment".

2.3           Finance Parties' rights and obligations

2.3.1       The obligations of each Finance Party under the Finance Documents are several.  Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents.  No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

2.3.2       The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor 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 the Loan or any other amount owed by an Obligor which relates to a Finance Party's participation in the 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.

2.3.3       A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.

2.4           Accordion Facility

2.4.1       At any time up to the date falling 12 months before the end of the Availability Period for the Facility, the Parent or the Company may give notice (a "Requested New Commitments Notice") to the Agent that it wishes to increase the Total Commitments.  The Requested New Commitments Notice must specify the amount by which the Total Commitments are to be increased (the "Requested New Commitments").

2.4.2       On receipt of any Requested New Commitments Notice, the Agent shall notify the relevant Lenders in accordance with Clauses 2.4.3 and 2.4.4 below.  From the date of such notification, the Agent and any Lender shall have up to 10 Business Days to request such further information relating to the Group from the Company as they may reasonably require. The Company shall provide such further information, as reasonably requested, to the Agent or the requesting Lender within 10 Business Days of receiving such request ("Further Information").

2.4.3       The opportunity to participate in the Requested New Commitments shall:

(a)           firstly, be offered to Lenders on a pro-rata basis to their existing Commitments and each such Lender shall have:

(i)            10 Business Days from the date on which the Requested New Commitments Notice is served on a Lender; or

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(ii)           if later, five Business Days from the date on which the Lenders receive the Further Information from the Company,

(the "Acceptance Period") to confirm to the Agent whether it wishes to provide all or any part of the Requested New Commitments and the amount of any proposed arrangement fee payable in respect of the Requested New Commitments it is prepared to make available (the "New Commitments Arrangement Fee") and any additional conditions precedent required by it (acting reasonably), including any additional Transaction Security (in form and substance satisfactory to the Finance Parties), ("Additional CPs") to be satisfied as a condition precedent to it providing the Requested New Commitments;

(b)

(i)            in the event that one or more of the existing Lenders offers to make the Requested New Commitments available on the basis of proposed New Commitments Arrangement Fees which are lower than the proposed New Commitments Arrangement Fees offered by other existing Lenders, the Company shall offer to those Lenders who have proposed the higher New Commitments Arrangement Fee the opportunity to provide the Requested New Commitments at such lower New Commitments Arrangement Fee, and each such Lender shall have five Business Days to respond to such offer; and

(ii)           thereafter, the Company may elect to re-offer the Requested New Commitments bearing the higher proposed New Commitments Arrangement Fees to the existing Lenders (other than those who have proposed the higher New Commitments Arrangement Fee) on a pro-rata basis or as otherwise agreed between those Lenders and each such Lender shall have five Business Days to respond to such offer; and

(c)           in the event that any one or more Lenders notifies the Agent that it does not wish to provide all or any part of any Requested New Commitments (or a Lender has failed to notify the Agent within the Acceptance Period that it wishes to provide all or any part of the Requested New Commitments) (the "Declined New Commitments") the amount of such Declined New Commitments shall be offered to the Lenders who have agreed to provide all or any part of the Requested New Commitments on a pro-rata basis or as otherwise agreed between those Lenders; and if one or more Lenders (as the case may be) do not agree to provide the Requested New Commitments (or as the case may be, Declined New Commitments) offered to them (in full or in part) or if the Company has exercised its right of election under paragraph (b) above and there are existing Lenders who are unwilling to match the lowest proposed New Commitments Arrangement Fees (the aggregate of the amount of the Requested New Commitments not provided by one or more of the Lenders (as the case may be) and the amount of the Requested New Commitments in respect of which the proposed New Commitments Arrangement Fees exceed the lowest proposed New Commitments Arrangement Fees being a "New Commitments Shortfall"), then, in accordance with Clause 2.4.4 the Company may

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offer to other persons the opportunity to take up the Requested New Commitments in an amount equal to the New Commitments Shortfall.

2.4.4       If, following consultation with the Lenders in accordance with Clause 2.4.3, there is a New Commitments Shortfall, the Requested New Commitments or the New Commitments Shortfall (as appropriate) may be offered by the Company (in full or in part) (the "Offered New Commitments") to any bank, financial institution, trust, fund or other entity (which is not a member of, a nominee of, or an entity that is in any way affiliated to, the Group) that is not a Lender (a "New Commitments Lender") or to any existing Lender for a period not exceeding 10 Business Days from the last day of the process detailed at Clause 2.4.3.  Any New Commitments Lender may provide the Offered New Commitments to the Company, provided that the arrangement fee to be applied by that existing Lender or New Commitments Lender to the Offered New Commitments shall not be higher than agreed by the existing Lenders with respect to the Requested New Commitments, except if the arrangement fee is higher, the Offered New Commitments will first be offered to the existing Lenders in accordance with Clause 2.4.3 (save that the 10 Business Day period shall be reduced to five Business Days).

2.4.5       Once the procedures outlined at clause 2.4.1 to 2.4.4 above have been followed, and either the Requested New Commitments have all been allocated or the Company has agreed that they will not all be so allocated, the Company may then serve a notice on the Agent identifying the agreed New Commitments and all details relating thereto in the form set out in Schedule 14 (the “New Commitments Notice”).

2.4.6       The Company shall not increase the Commitments pursuant to the provisions of this Clause 2.4 on more than 3 occasion(s).

2.4.7       A  New Commitments Notice shall request New Commitments in aggregate of not less than £15,000,000.

2.4.8       No New Commitments may be proposed under this Clause 2.4 if the aggregate of all New Commitments would be greater than £100,000,000.

2.4.9       The assumption of the New Commitments on the date specified at paragraph 3 of the New Commitments Notice will only be effective if:-

(a)           the Repeating Representations to be made by each Obligor are true in all material respects on such date;

(b)           the Agent has received a New Commitments Notice duly executed by all parties thereto confirming that no Default has occurred and is continuing and no Default would occur on the Effective Date as a result of the assumption of the New Commitments and the New Commitments Lender or existing Lender providing New Commitments (as appropriate) confirming that it is satisfied (acting reasonably) that its Additional CPs have been satisfied; and

(c)           in relation to a New Commitments Lender:-

(i)            such New Commitments Lender has acceded to this Agreement as a Lender by delivering a duly completed and executed Lender Accession Letter to the Agent; and

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(ii)           the Agent has performed all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the New Commitments by that New Commitments Lender,

such date being the  "Effective Date" and following the confirmation and completion of the actions in paragraphs (a),  (b) and (c) above (including by executing the relevant documents) the Agent shall promptly notify the Company, any New Commitments Lender and the other Lenders that the Effective Date has occurred.

2.4.10      If the Effective Date has not occurred by the earlier of:-

(a)           the date falling 40 Business Days after the date of the Requested New Commitments Notice; or

(b)           the date falling 10 Business Days after a New Commitments Notice is delivered,

then any offer by a Lender to provide the Requested New Commitments or New Commitments as appropriate shall lapse and no Lender shall be obliged to provide such Requested New Commitments or New Commitments as appropriate.  For the avoidance of doubt, any such offer that lapses pursuant to this Clause 2.4.10 shall not be deemed as an increase of the Commitments for the purposes of the limit in Clause 2.4.5.

2.4.11      A New Commitments Notice is irrevocable and will not be regarded as having been duly completed unless it specifies:-

(a)           the date on which the New Commitments are to be assumed; and

(b)           the amount of the New Commitments allocated to each Lender and/or New Commitments Lender named in the New Commitments Notice,

and has been executed on behalf of the Company, the Agent and each Lender and/or New Commitments Lender which is making available New Commitments.  The Agent shall sign each New Commitment Notice presented to it which appears, on its face, to be in order.

2.4.12     Each New Commitments Lender shall comply with the provisions of Clause 26  (Changes to the Lenders) to the extent applicable.

2.4.13     Each of the Obligors and any New Commitments Lender shall assume the obligations towards one another and/or acquire rights against one another as the Obligors and the New Commitments Lender would have assumed and/or acquired had the New Commitments Lender been an Original Lender.

2.4.14     Each New Commitments Lender shall become a Party as a "Lender" and any New Commitments Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that New Commitments Lender and those Finance Parties would have assumed and/or acquired had the New Commitments Lender been an Original Lender.

2.4.15     Subject to Clause 2.4.10, by signing the Lender Accession Letter and / or the New Commitments Notice each such New Commitments Lender (or Lender as

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applicable) agrees to commit the New Commitments set out against its name in the New Commitments Notice on the Effective Date and on the Effective Date:-

(a)           in the case of an existing Lender providing a New Commitment, its Commitment shall be increased by the amount of the New Commitments which it has agreed to provide; and

(b)           in the case of a person providing a New Commitment which is not already a Lender, it shall become a Lender with a Commitment equal to the New Commitments which it has agreed to provide.

2.4.16     Each Party shall co-operate to ensure that, on and following the Effective Date, the proportion of the aggregate amount of all the Facility Loans which each Lender holds is the same as the proportion which the Commitment of each Lender at such time bears to the Total Commitments.

2.4.17     Upon the Effective Date, the terms of this Agreement (including, for the avoidance of doubt, the Margin but excluding the arrangement fees) shall apply to the New Commitments as if the New Commitments were Commitments at the date of this Agreement.

2.4.18     Each Lender agrees that it shall, within 10 Business Days of a request to do so, sign any amendment agreement required in respect of this Agreement in order to document any purely administrative amendment required solely to record the amount of any New Commitments and its terms provided in accordance with this Clause 2.4.  Each Party shall use reasonable endeavours to ensure that any such amendment agreement is agreed and signed within the timeframes set out in this Clause 2.4.

2.4.19      The Company shall:

(a)            on each Effective Date, pay to the Agent (for its own account):

(i)             a fee of £2,500; and

(ii)            a fee in an amount equal to the fee which would be payable under Clause 26.3 (Assignment or transfer fee) in circumstances where any of the New Commitments are provided by a New Commitments Lender; and

(b)           promptly on demand pay the Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.4.

2.4.20      The Agent shall notify all Parties of:-

(a)             the Effective Date;

(b)             the amount of the New Commitments being made available by each Lender; and

(c)             the identity of any New Commitments Lender.

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2.5           Obligors' Agent

2.5.1       Each Obligor (other than the Company) by its execution of this Agreement or an Accession Deed irrevocably appoints the Company (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:-

(a)           the Company 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, in the case of a Borrower, Utilisation Requests), to execute on its behalf any Accession Deed, 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 Company,

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.

2.5.2       Every 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 another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) 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 other Obligor, those of the Obligors' Agent shall prevail.

3.             PURPOSE

3.1           Each Borrower shall apply all amounts borrowed by it under the Facility and any utilisation of any Ancillary Facility towards the general corporate and working capital purposes of the Group (but not, in the case of any utilisation of any Ancillary Facility, towards prepayment of any Utilisation).

3.2           Monitoring

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

4.             CONDITIONS OF UTILISATION

4.1           Initial conditions precedent

4.1.1       The Lenders will only be obliged to comply with Clause 5.4  (Lenders' participation) in relation to any Utilisation if on or before the Utilisation Date for that Utilisation, the Agent has received (or waived its requirement to receive) all of the documents and other evidence listed in Part 1 of Schedule 2  (Conditions precedent) in form and substance satisfactory to the Agent.  The Agent shall notify the Company and

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the Lenders promptly upon being so satisfied. The documents and other evidence listed in Part 1 of Schedule 2  (Conditions precedent) were satisfied or waived on or around 16 December 2011.

4.1.2       Other than to the extent that the Majority 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.

4.2           Further conditions precedent

Subject to Clause 4.1 (Initial Conditions Precedent), the Lenders will only be obliged to comply with Clause 5.4  (Lenders' participation), if on the date of the Utilisation Request and on the proposed Utilisation Date:-

4.2.1        in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan, and in the case of any other Utilisation, no Default is continuing or would result from the proposed Utilisation; and

4.2.2        in relation to any Utilisation on the Closing Date, all the representations and warranties in Clause 21  (Representations) or, in relation to any other Utilisation, the Repeating Representations to be made by each Obligor are true in all material respects.

4.3           Maximum number of Utilisations

A Borrower (or the Company) may not deliver a Utilisation Request if as a result of the proposed Utilisation more than 10 Utilisations would be outstanding.

 

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SECTION 3

UTILISATION

5.             UTILISATION - LOANS

5.1           Delivery of a Utilisation Request

A Borrower (or the Company on its behalf) may utilise the Facility by delivery to the Agent of a duly completed Utilisation Request not later than the Specified Time.

5.2           Completion of a Utilisation Request for Loans

5.2.1       Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless:-

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

(b)           the currency and amount of the Utilisation comply with Clause 5.3  (Currency and amount); and

(c)           the proposed Interest Period complies with Clause 12  (Interest Periods).

5.2.2        Only one Utilisation may be requested in each Utilisation Request.

5.3           Currency and amount

5.3.1       The currency specified in a Utilisation Request must be Sterling.

5.3.2       The amount of the proposed Utilisation must be an amount which is not more than the Available Facility and which is a minimum of £250,000 or, if less, the Available Facility.

5.4           Lenders' participation

5.4.1       If the conditions set out in this Agreement have been met, and subject to Clause 7.1  (Repayment of Loans), each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.

5.4.2       Other than as set out in Clause 5.4.3 below, the amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.

5.4.3       If a Utilisation is made to repay Ancillary Outstandings, each Lender's participation in that Utilisation will be in an amount (as determined by the Agent) which will result as nearly as possible in the aggregate amount of its participation in the Utilisations then outstanding bearing the same proportion to the aggregate amount of the Utilisations then outstanding as its Commitment bears to the Total Commitments.

5.4.4       The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan and, if different, the amount of that participation to be made available in accordance with Clause 32.1  (Payments to the Agent), in each case by the Specified Time.

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5.5           Limitations on Utilisations

5.5.1       The maximum aggregate amount of the Ancillary Commitments of all the Lenders shall not at any time exceed £15,000,000.

5.5.2       The maximum aggregate amount of the Ancillary Commitments of all the Lenders made available by way of overdraft, same-day access LIBOR loan facility or other facility made available on a short term basis shall not at any time exceed £10,000,000.

5.6           Cancellation of Commitment

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

6.             ANCILLARY FACILITIES

6.1           Type of Facility

An Ancillary Facility may be by way of:-

6.1.1       an overdraft facility;

6.1.2       a same-day access LIBOR loan facility;

6.1.3       a guarantee, bonding, documentary or stand-by letter of credit facility; or

6.1.4       any other facility or accommodation required in connection with the business of the Group and which is agreed by the Company with an Ancillary Lender.

6.2           Availability

6.2.1       If the Company and a Lender agree and except as otherwise provided in this Agreement, the Lender may provide all or part of its Commitment as an Ancillary Facility).  For the avoidance of doubt, BMW Financial Services (GB) Limited shall not be an Ancillary Lender.  National Westminster Bank Plc shall make available to the Company within 45 days of the date of this Agreement, an Ancillary Facility by way of a same-day access LIBOR loan facility on an un-committed basis provided that no Default has occurred or is continuing and that the other terms of this Agreement relating to the provision of Ancillary Facilities have been complied with in relation to that Ancillary Facility;

6.2.2       An Ancillary Facility shall not be made available unless, not later than 5 Business Days prior to the Ancillary Commencement Date for an Ancillary Facility, the Agent has received from the Company:-

(a)           a notice in writing of the establishment of an Ancillary Facility and specifying:-

(i)            the proposed Borrower(s) (or Affiliates of a Borrower) which may use the Ancillary Facility;

(ii)           the proposed Ancillary Commencement Date and expiry date of the Ancillary Facility;

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(iii)          the proposed type of Ancillary Facility to be provided;

(iv)          the proposed Ancillary Lender;

(v)           the proposed Ancillary Commitment, the maximum amount of the Ancillary Facility and, in the case of a Multi-account Overdraft, its Designated Gross Amount and its Designated Net Amount; and

(b)           any other information which the Agent may reasonably request in connection with the Ancillary Facility.

The Agent shall promptly notify the Ancillary Lender and the other Lenders of the establishment of an Ancillary Facility.

6.2.3        Subject to compliance with Clause 6.2.2 above:-

(a)             the Lender concerned will become an Ancillary Lender; and

(b)             the Ancillary Facility will be available,

with effect from the date agreed by the Company and the Ancillary Lender.

6.3           Terms of Ancillary Facilities

6.3.1        Except as provided below, the terms of any Ancillary Facility will be those agreed by the Ancillary Lender and the Company.

6.3.2        Those terms:-

(a)           must be based upon normal commercial terms at that time (except as varied by this Agreement);

(b)           may allow only Borrowers (or Affiliates of Borrowers nominated pursuant to Clause 6.9  (Affiliates of Borrowers)) to use the Ancillary Facility;

(c)           may not allow the Ancillary Outstandings to exceed the Ancillary Commitment;

(d)           may not allow a Lender's Ancillary Commitment to exceed that Lender's Available Commitment (before taking into account the effect of the Ancillary Facility on that Available Commitment); and

(e)           must require that the Ancillary Commitment is reduced to zero, and that all Ancillary Outstandings are repaid not later than the Termination Date (or such earlier date as the Commitment of the relevant Ancillary Lender (or its Affiliate) is reduced to zero).

6.3.3        If there is any inconsistency between any term of an Ancillary Facility and any term of this Agreement, this Agreement shall prevail except for:

(a)           Clause 35.3 (Day count convention) which shall not prevail for the purposes of calculating fees, interest or commission relating to an Ancillary Facility;

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(b)           an Ancillary Facility comprising more than one account where the terms of the Ancillary Documents shall prevail to the extent required to permit the netting of balances on those accounts; and

(c)           where the relevant term of this Agreement would be contrary to, or inconsistent with, the law governing the relevant Ancillary Document, in which case that term of this Agreement shall not prevail.

6.3.4       Interest, commission and fees on Ancillary Facilities are dealt with in Clause 14.5  (Interest, commission and fees on Ancillary Facilities).

6.4           Repayment of Ancillary Facility

6.4.1       An Ancillary Facility shall cease to be available on the Termination Date or such earlier date on which its expiry date occurs or on which it is cancelled in accordance with the terms of this Agreement.

6.4.2       If an Ancillary Facility expires in accordance with its terms the Ancillary Commitment of the Ancillary Lender shall be reduced to zero (and its Commitment shall be increased accordingly).

6.4.3       No Ancillary Lender may demand repayment or prepayment of any Ancillary Outstandings prior to the expiry date of the relevant Ancillary Facility unless:-

(a)           required to reduce the Gross Outstandings of a Multi-account Overdraft to or towards an amount equal to its Net Outstandings;

(b)           the Total Commitments have been cancelled in full, or all outstanding Utilisations under the Facility have become due and payable in accordance with the terms of this Agreement;

(c)           it becomes unlawful in any applicable jurisdiction for the Ancillary Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in its Ancillary Facility (or it becomes unlawful for any Affiliate of the Ancillary Lender for the Ancillary Lender to do so); or

(d)           both:

(i)            the Available Commitments; and

(ii)           the notice of the demand given by the Ancillary Lender,

(e)           would not prevent the relevant Borrower funding the repayment of those Ancillary Outstandings in full by way of Utilisation.

6.4.4        If a Utilisation is made to repay Ancillary Outstandings in full, the relevant Commitment shall be reduced to zero.

6.5           Limitation on Ancillary Outstandings

Each Borrower shall procure that:-

6.5.1       the Ancillary Outstandings under any Ancillary Facility shall not exceed the Ancillary Commitment applicable to that Ancillary Facility; and

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6.5.2       in relation to a Multi-account Overdraft:-

(a)           the Ancillary Outstandings shall not exceed the Designated Net Amount applicable to that Multi-account Overdraft; and

(b)           the Gross Outstandings shall not exceed the Designated Gross Amount applicable to that Multi-account Overdraft.

6.6          Adjustment for Ancillary Facilities upon acceleration

In this Clause 6.6:-

"Revolving Outstandings"

means, in relation to a Lender, the aggregate of:-

(a)           its participation in each Utilisation then outstanding (together with the aggregate amount of all accrued interest, fees and commission owed to it as a Lender under the Facility); and

(b)           if the Lender is also an Ancillary Lender, the Ancillary Outstandings in respect of Ancillary Facilities provided by that Ancillary Lender (or by its Affiliate) (together with the aggregate amount of all accrued interest, fees and commission owed to it (or to its Affiliate) as an Ancillary Lender in respect of the Ancillary Facility); and

"Total Revolving Outstandings"

means the aggregate of all Revolving Outstandings

 

6.6.1        If a notice is served under Clause 25.18  (Acceleration) (other than a notice declaring Utilisations to be due on demand), each Lender and each Ancillary Lender shall (subject to Clause 6.6.6 below) promptly adjust (by making or receiving (as the case may be) corresponding transfers of rights and obligations under the Finance Documents relating to Revolving Outstandings) their claims in respect of amounts outstanding to them under the Facility and each Ancillary Facility to the extent necessary to ensure that after such transfers the Revolving Outstandings of each Lender bear the same proportion to the Total Revolving Outstandings as such Lender's Commitment bears to the Total Commitments, each as at the date the notice is served under Clause 25.18  (Acceleration).

6.6.2        If an amount outstanding under an Ancillary Facility is a contingent liability and that contingent liability becomes an actual liability or is reduced to zero after the original adjustment is made under Clause 6.6.1, then each Lender and Ancillary Lender will make a further adjustment (by making or receiving (as the case may be) corresponding transfers of rights and obligations under the Finance Documents relating to Revolving Outstandings to the extent necessary) to put themselves in the position they would have been in had the original adjustment been determined by reference to the actual liability or, as the case may be, zero liability and not the contingent liability.

6.6.3        Any transfer of rights and obligations relating to Revolving Outstandings made pursuant to this Clause 6.6 shall be made for a purchase price in cash, payable at the time of transfer, in an amount equal to those Revolving Outstandings (less

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any accrued interest, fees and commission to which the transferor will remain entitled to receive notwithstanding that transfer, pursuant to Clause 26.10  (Pro rata interest settlement)).

6.6.4        Prior to the application of the provisions of Clause 6.6.1, an Ancillary Lender that has provided a Multi-account Overdraft shall set-off any Available Credit Balance on any account comprised in that Multi-account Overdraft.

6.6.5        All calculations to be made pursuant to this Clause 6.6 shall be made by the Agent based upon information provided to it by the Lenders and Ancillary Lenders and the Agent's Spot Rate of Exchange.

6.6.6        This Clause 6.6 shall not oblige any Lender to accept the transfer of a claim relating to an amount outstanding under an Ancillary Facility which is not denominated (pursuant to the relevant Finance Document) in Sterling for the purpose of any Utilisation or in another currency which is acceptable to that Lender.

6.7           Information

Each Borrower and each Ancillary Lender shall, promptly upon request by the Agent, supply the Agent with any information relating to the operation of an Ancillary Facility (including the Ancillary Outstandings) as the Agent may reasonably request from time to time.  Each Borrower consents to all such information being released to the Agent and the other Finance Parties.

6.8           Affiliates of Lenders as Ancillary Lenders

6.8.1       Subject to the terms of this Agreement, an Affiliate of a Lender may become an Ancillary Lender.  In such case, the Lender and its Affiliate shall be treated as a single Lender whose Commitment is the amount set out opposite the relevant Lender's name in Part 2 or Part 3 of Schedule 1  (The Original Parties) and/or the amount of any Commitment transferred to or assumed by that Lender under this Agreement, to the extent (in each case) not cancelled, reduced or transferred by it under this Agreement.  For the purposes of calculating the Lender's Available Commitment with respect to the Facility, the Lender's Commitment shall be reduced to the extent of the aggregate of the Ancillary Commitments of its Affiliates.

6.8.2       The Company shall specify any relevant Affiliate of a Lender in any notice delivered by the Company to the Agent pursuant to Clause 6.2.2(a).

6.8.3       An Affiliate of a Lender which becomes an Ancillary Lender shall accede to the Intercreditor Agreement as an Ancillary Lender and any person which so accedes to the Intercreditor Agreement shall, at the same time, become a Party as an Ancillary Lender in accordance with clause 20.5.2 (Deeds of Accession) of the Intercreditor Agreement.

6.8.4       If a Lender assigns all of its rights and benefits or transfers all of its rights and obligations to a New Lender, its Affiliate shall cease to have any obligations under this Agreement or any Ancillary Document.

6.8.5       Where this Agreement or any other Finance Document imposes an obligation on an Ancillary Lender and the relevant Ancillary Lender is an Affiliate of a Lender which is not a party to that document, the relevant Lender shall ensure that the obligation is performed by its Affiliate.

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6.9           Affiliates of Borrowers

6.9.1       Subject to the terms of this Agreement, an Affiliate of a Borrower may with the approval of the relevant Lender become a borrower with respect to an Ancillary Facility.

6.9.2       The Company shall specify any relevant Affiliate of a Borrower in any notice delivered by the Company to the Agent pursuant to Clause 6.2.2(a).

6.9.3        If a Borrower ceases to be a Borrower under this Agreement in accordance with Clause 28.3  (Resignation of a Borrower), its Affiliate shall cease to have any rights under this Agreement or any Ancillary Document.

6.9.4        Where this Agreement or any other Finance Document imposes an obligation on a Borrower under an Ancillary Facility and the relevant Borrower is an Affiliate of a Borrower which is not a party to that document, the relevant Borrower shall ensure that the obligation is performed by its Affiliate.

6.9.5        Any reference in this Agreement or any other Finance Document to a Borrower being under no obligations (whether actual or contingent) as a Borrower under such Finance Document shall be construed to include a reference to any Affiliate of a Borrower being under no obligations under any Finance Document or Ancillary Document.

6.10         Commitment amounts

Notwithstanding any other term of this Agreement, each Lender shall ensure that at all times its Commitment is not less than:-

6.10.1      its Ancillary Commitment; or

6.10.2      the Ancillary Commitment of its Affiliate.

6.11         Amendments and Waivers - Ancillary Facilities

No amendment or waiver of a term of any Ancillary Facility shall require the consent of any Finance Party other than the relevant Ancillary Lender unless such amendment or waiver itself relates to or gives rise to a matter which would require an amendment of or under this Agreement (including, for the avoidance of doubt, under this Clause 6).  In such a case, Clause 38  (Amendments and waivers) will apply.

 

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SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

7.             REPAYMENT

7.1           Repayment of Loans

7.1.1        Each Borrower which has drawn a Loan shall repay that Loan on the last day of its Interest Period.

7.1.2        Without prejudice to each Borrower's obligation under Clause 7.1.1 above, if:

(a)             one or more Loans are to be made available to a Borrower:-

(i)              on the same day that a maturing Loan is due to be repaid by that Borrower; and

(ii)             in whole or in part for the purpose of refinancing the maturing Loan; and

(b)           the proportion borne by each Lender's participation in the maturing Loan to the amount of that maturing Loan is the same as the proportion borne by that Lender's participation in the new Loan to the aggregate amount of those new Loans,

the aggregate amount of the new Loans shall , unless the Borrower notifies the Agent to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Loan so that:-

(a)             if the amount of the maturing Loan exceeds the aggregate amount of the new Loans:-

(i)            the relevant Borrower will only be required to make a payment under Clause 32.1 (Payments to the Agent) in an amount in the relevant currency equal to that excess; and

(ii)           each Lender's participation in the new Loans shall be treated as having been made available  and applied by the Borrower in or towards repayment of that Lender's participation in the maturing Loan and that Lender will not be required to make a payment under Clause 32.1 (Payments to the Agent) in respect of its participation in the new Loans; and

(b)           if the amount of the maturing Loan is equal to or less than the aggregate amount of the new Loans:-

(i)            the relevant Borrower will not be required to make a payment under Clause 32.1 (Payments to the Agent); and

(ii)           each Lender will be required to make a payment under Clause 32.1 (Payments to the Agent) in respect of its participation in the new Loans available only to the extent that its participation in the new Loans exceeds that Lender's participation in the maturing Loan and the remainder of that Lender's participation

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in the new Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation in the maturing Loan.

8.             ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION

8.1           Illegality

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:-

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

8.1.2       upon the Agent notifying the Company, each Available Commitment of that Lender will be immediately cancelled; and

8.1.3       each Borrower shall repay that Lender's participation in the Utilisations made to that Borrower on the last day of the Interest Period for each Utilisation occurring after the Agent has notified the Company or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender's corresponding Commitment(s) shall be cancelled in the amount of the participations repaid.

8.2           Voluntary cancellation

The Company may, if it gives the Agent not less than 10 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount and an integral multiple, of £250,000) of the Available Facility.  Any cancellation under this Clause 8.2 shall reduce the Commitments of the Lenders rateably under the Facility.

8.3           Voluntary prepayment of Utilisations

A Borrower to which a Utilisation has been made may, if it or the Company gives the Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Utilisation (but if in part, being an amount that reduces the amount of the Utilisation by a minimum amount, and an integral multiple, of £250,000).

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

8.4.1        If:-

(a)           any sum payable to any Lender by an Obligor is required to be increased under Clause 15.2.3; or

(b)           any Lender claims indemnification from the Company or an Obligor under Clause 15.3  (Tax indemnity) or Clause 16.1  (Increased costs),

the Company 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 Utilisations.

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8.4.2       On receipt of a notice referred to in Clause 8.4.1 above in relation to a Lender, the Commitment of that Lender shall immediately be reduced to zero.

8.4.3       On the last day of each Interest Period which ends after the Company has given notice under Clause 8.4.1 above in relation to a Lender (or, if earlier, the date specified by the Company in that notice), each Borrower to which a Utilisation is outstanding shall repay that Lender's participation in that Utilisation together with all interest and other amounts accrued under the Finance Documents.

8.5           Right of cancellation in relation to a Defaulting Lender

8.5.1       If any Lender becomes a Defaulting Lender, the Parent or the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 10 Business Days' notice of cancellation of each Available Commitment of that Lender.

8.5.2       On the notice referred to in Clause 8.5.1 above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero.

8.5.3       The Agent shall as soon as practicable after receipt of a notice referred to in Clause 8.5.1 above, notify all the Lenders.

9.             MANDATORY PREPAYMENT

9.1           Exit

9.1.1       For the purpose of this Clause 9.1:-

"FCA"

means the Financial Conduct Authority acting in accordance with Part 6 of the Financial Services and Markets Act 2000

"Flotation"

means:-

(a)           a successful application being made for the admission of any part of the share capital of any member of the Group (or Holding Company of any member of the Group) to the Official List maintained by the FCA and the admission of any part of the share capital of any member of the Group (or Holding Company of any member of the Group) to trading on the London Stock Exchange plc or

(b)           the grant of permission to deal in any part of the issued share capital of any member of the Group (or Holding Company of any member of the Group) on the Alternative Investment Market or the Main Board or the Growth Market of the ICAP Securities & Derivatives Exchange (ISDX) or on any recognised investment exchange (as that term is used in the Financial Services and Markets Act 2000) or in or on any exchange or market

 

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replacing the same or any other exchange or market in any country

 

9.1.2        Upon the occurrence of:-

(a)            any Flotation; or

(b)            a Change of Control; or

(c)            the sale of all or substantially all of the assets of the Group whether in a single transaction or a series of related transactions,

the Facility will be cancelled and all outstanding Utilisations and Ancillary Outstandings, together with accrued interest, and all other amounts accrued under the Finance Documents, shall become immediately due and payable.

10.          RESTRICTIONS

10.1        Notices of Cancellation or Prepayment

Any notice of cancellation, prepayment, authorisation or other election given by any Party under Clause 8  (Illegality, voluntary prepayment and cancellation) shall (subject to the terms of that Clause) be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

10.2        Interest and other amounts

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

10.3        Reborrowing of the Facility

Unless a contrary indication appears in this Agreement, any part of the Facility which is prepaid or repaid may be reborrowed in accordance with the terms of this Agreement.

10.4        Prepayment in accordance with Agreement

No Borrower shall repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

10.5         No reinstatement of Commitments

Subject to Clause 2.2  (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

10.6         Agent's receipt of Notices

If the Agent receives a notice under Clause 8  (Illegality, voluntary prepayment and cancellation) it shall promptly forward a copy of that notice or election to either the Company or the affected Lender, as appropriate.

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10.7        Effect of Repayment and Prepayment on Commitments

If all or part of any Lender's participation in a Utilisation under the Facility is repaid or prepaid and is not available for redrawing (other than by operation of Clause 4.2  (Further conditions precedent)), an amount of that Lender's Commitments (equal to the amount of the participation which is repaid or prepaid) in respect of the Facility will be deemed to be cancelled on the date of repayment or prepayment.

10.8        Application of prepayments

Any prepayment of a Loan (other than a prepayment pursuant to Clause 8.1  (Illegality) shall be applied pro rata to each Lender's participation in that Utilisation.

 

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SECTION 5

COSTS OF UTILISATION

11.           INTEREST

11.1         Calculation of interest

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:-

11.1.1      Margin; and

11.1.2      LIBOR.

11.2         Payment of interest

11.2.1     The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six Monthly intervals after the first day of the Interest Period).

11.2.2     If the annual audited financial statements of the Group and related Compliance Certificate received by the Agent show that a higher Margin should have applied during a certain period, then the Company shall (or shall ensure the relevant Borrower shall) promptly pay to the Agent any amounts necessary to put the Agent and the Lenders in the position they would have been in had the appropriate rate of the Margin applied during such period.

11.3         Default interest

11.3.1     If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to Clause 11.3.2 below, is 2.0 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).  Any interest accruing under this Clause 11.3 shall be immediately payable by the Obligor on demand by the Agent.

11.3.2     If 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 2.0 per cent per annum higher than the rate which would have applied if the overdue amount had not become due.

11.3.3     Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

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11.4         Notification of rates of interest

11.4.1     The Agent shall promptly notify the relevant Lenders and the relevant Borrower (or the Company) of the determination of a rate of interest under this Agreement.

11.4.2     The Agent shall promptly notify the relevant Borrower of each Funding Rate relating to a Loan.

12.           INTEREST PERIODS

12.1         Selection of Interest Periods and Terms

12.1.1      A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan.

12.1.2     Subject to this Clause 12, a Borrower (or the Company) may select an Interest Period of one week or one, three or six months or any other period agreed between the Company and the Agent (acting on the instructions of all the Lenders in relation to the relevant Loan).

12.1.3     An Interest Period for a Loan shall not extend beyond the Termination Date.

12.1.4     Each Interest Period for a Loan shall start on the Utilisation Date.

12.1.5     A Loan has one Interest Period only.

12.2         Non‑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).

13.           CHANGES TO THE CALCULATION OF INTEREST

13.1         Unavailability of Screen Rate

13.1.1     Interpolated 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.

13.1.2     Shortened Interest Period:  If no Screen Rate is available for LIBOR for:-

(a)            the currency of a Loan; or

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

the Interest Period of that Loan shall (if it is longer than the applicable Fallback Interest Period) be shortened to the applicable Fallback Interest Period and the applicable LIBOR for that shortened Interest Period shall be determined pursuant to the definition of LIBOR.

13.1.3     Shortened Interest Period and Historic Screen Rate: If the Interest Period of a Loan is, after giving effect to Clause 13.1.2 above, either the applicable Fallback

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Interest Period or shorter than the applicable Fallback Interest Period and, in either case, no Screen Rate is available for LIBOR for:-

(a)           the currency of that Loan; or

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

the applicable LIBOR shall be the Historic Screen Rate for that Loan.

13.1.4     Shortened Interest Period and Interpolated Historic Screen Rate: If Clause 13.1.3 above applies but no Historic Screen Rate is available for the Interest Period of the Loan, the applicable LIBOR shall be the Interpolated Historic Screen Rate for a period equal in length to the Interest Period of that Loan.

13.1.5     Cost of funds: If Clause 13.1.4 above applies but it is not possible to calculate the Interpolated Historic Screen Rate, there shall be no LIBOR for that Loan and Clause 13.3  (Cost of funds) shall apply to that Loan for that Interest Period.

13.2         Market disruption

If before close of business in London on the date falling three Business Days after the Quotation Day for the relevant Interest Period of the Loan, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 35 per cent. 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 13.3  (Cost of funds) shall apply to that Loan for the relevant Interest Period.

13.3         Cost of funds

13.3.1     If this Clause 13.3 applies, then the rate of interest on each Lender's share of 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 by close of business on the date falling 3 Business Days after the Quotation Day (or, if earlier, on the date falling 3 Business Days before the date on which interest is due to be paid in respect of that Interest Period) to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.

13.3.2     If this Clause 13.3 applies and the Agent or the Company so requires, the Agent and the Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

13.3.3     Any alternative basis agreed pursuant to Clause 13.3.2 above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties.

13.3.4     If this Clause 13.3 applies pursuant to Clause 13.2  (Market disruption) and:-

(a)             a Lender's Funding Rate is less than LIBOR; or

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(b)             a Lender does not supply a quotation by the time specified in Clause 13.3.1 above,

the cost to that Lender of funding its participation in that Loan for that Interest Period shall be deemed, for the purposes of Clause 13.3.1 above, to be LIBOR.

13.4         Notification to Company

If Clause 13.3  (Cost of funds) applies the Agent shall, as soon as is practicable, notify the Company.

13.5         Break Costs

13.5.1     Each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

13.5.2     Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

14.           FEES

14.1         Commitment fee

14.1.1     The Company shall pay to the Agent (for the account of each Lender) a fee in Sterling computed at the rate of 35 per cent of the applicable Margin per annum on that Lender's Available Commitment for the Availability Period.

14.1.2     The accrued commitment fee is payable on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.

14.2         Arrangement fee

The Company shall pay to the Arrangers (for their own account) an arrangement fee in the amount and at the times agreed in a Fee Letter.

14.3         Agency fee

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

14.4         Security Agent fee

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

14.5         Interest, commission and fees on Ancillary Facilities

The rate and time of payment of interest, commission, fees and any other remuneration in respect of each Ancillary Facility shall be determined by agreement between the relevant Ancillary Lender and the Borrower of that Ancillary Facility based upon normal market rates

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and terms (provided that the rate and time of payment of interest, commission, fees and any other remuneration in respect of the same-day access LIBOR facility referred to in clause 6.2.1 shall be on terms no more onerous than the Facility as at the Third Amendment and Restatement Date).

 

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SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

15.           TAX GROSS UP AND INDEMNITIES

15.1         Definitions

In this Agreement:-

"Borrower DTTP Filing"

means an HM Revenue & Customs' Form DTTP2 duly completed and filed by the Borrower, which:

(c)           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 2 of Schedule 1 (The Original Parties) and

(iv)          where the Borrower is an Original Borrower, is filed with HM Revenue & Customs; or

(v)           where the Borrower is an Additional Borrower, is filed with HM Revenue & Customs within 30 days of the date on which that Borrower becomes an Additional Borrower; or

(d)           where it relates to a Treaty Lender that is not an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the documentation which it executes on becoming a Party as a Lender, and

(ii)          where the Borrower is a Borrower as at the date that Treaty Lender becomes a party as a Lender, is filed with HM Revenue & Customs within 30 days of that date; or

(vi)          where the Borrower is not a Borrower as at the date that Treaty Lender becomes a party as a Lender, is filed with HM Revenue & Customs within 30 days of the date on which that Borrower becomes an Additional Borrower

"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 (other than a Lender within sub-clause (b) below) which is beneficially entitled to interest payable to that

 

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Lender in respect of an advance under a Finance Document and is:-

(i)             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;

(ii)            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:-

(1)           a company so resident in the United Kingdom 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

(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

 

 

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that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company or

(iii)           a Treaty Lender or

(b)           a Lender which is a building society (as defined for the purposes 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

(b)           a partnership each member of which is:-

(i)            a company so resident in the United Kingdom 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 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 the chargeable profits (within the meaning of section 19 of the CTA) of that company

"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 15.2 (Tax gross‑up) or a payment under Clause 15.3 (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

 

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

"Treaty State"

means a jurisdiction having a double taxation agreement (a "Treaty") with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest

"UK Non‑Bank Lender"

means:-

(a)           a Lender listed in Part 3 of Schedule 1 (The Original Parties); and

(b)           a Lender which is not an Original Lender and which gives a Tax Confirmation in the Assignment Agreement or Transfer Certificate which it executes on becoming a Party as a Lender

 

Unless a contrary indication appears, in this Clause 15 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

15.2         Tax gross‑up

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

15.2.2     The Company shall promptly upon becoming aware that an Obligor 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 the Company and that Obligor.

15.2.3     If 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.

15.2.4     A payment shall not be increased under Clause 15.2.3 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

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(b)            the relevant Lender is a Qualifying Lender solely by virtue of sub-clause (a)(ii) of the definition of Qualifying Lender and:-

(i)            an officer of HM 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 or from the Company a certified copy of that Direction; and

(ii)           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 sub-clause (a)(ii) of the definition of Qualifying Lender and:-

(i)            the relevant Lender has not given a Tax Confirmation to the Company; and

(ii)           the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company, on the basis that the Tax Confirmation would have enabled the Company 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 Clauses 15.2.7  or 15.2.9 (as applicable) below.

15.2.5     If 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.

15.2.6     Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the 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.

15.2.7     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.

15.2.8

(a)           A Treaty Lender which is an Original Lender and 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 2 of Schedule 1  (The Original Parties); and

(b)           A Treaty Lender which is not an Original Lender and holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that

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scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the documentation which it executes on becoming a Party as a Lender,

and, having done so, that Lender shall be under no obligation pursuant to Clause 15.2.7 above.

15.2.9      If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with Clause 15.2.8 above and:

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

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

(i)            the Borrower DTTP Filing has been rejected by HM Revenue & Customs; or

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

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

15.2.10   If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with Clause 15.2.8 above, no Obligor 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(s) or its participation in any Loan unless the Lender otherwise agrees.

15.2.11   The Company 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.

15.2.12   A UK Non‑Bank Lender which is an Original Lender gives a Tax Confirmation to the Company by entering into this Agreement.

15.2.13   A UK Non‑Bank Lender shall promptly notify the Company and the Agent if there is any change in the position from that set out in the Tax Confirmation.

15.3         Tax indemnity

15.3.1     The Company shall (within three 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.

15.3.2     Clause 15.3.1 above shall not apply:-

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

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(i)            under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or

(ii)           under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or

(b)           to the extent a loss, liability or cost:-

(i)              is compensated for by an increased payment under Clause 15.2  (Tax gross‑up);

(ii)             would have been compensated for by an increased payment under Clause 15.2  (Tax gross‑up) but was not so compensated solely because one of the exclusions in Clause 15.2.4 applied; or

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

15.3.3      A Protected Party making, or intending to make a claim under Clause 15.3.1 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 Company.

15.3.4      A Protected Party shall, on receiving a payment from an Obligor under this Clause 15.3, notify the Agent.

15.4         Tax Credit

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

15.4.1     a 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

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

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

15.5         Lender Status Confirmation

Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the documentation 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:-

15.5.1      not a Qualifying Lender;

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

15.5.3      a Treaty Lender.

If such a Lender fails to indicate its status in accordance with this Clause 15.5 then that 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 Company).  For the avoidance of doubt, the documentation which a Lender executes on becoming a Party as a Lender shall not be invalidated by any failure of a Lender to comply with this Clause 15.5.

15.6         Stamp taxes

The Company shall pay and, within three Business Days of demand, indemnify each Secured Party against any cost, loss or liability each Secured Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.

15.7         VAT

15.7.1      All 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 15.7.2 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 the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).

15.7.2      If 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 Clause 15.7.2(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 chargeable on that supply; and

(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.

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15.7.3    Where 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.

15.7.4     Any reference in this Clause 15.7 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).

15.7.5     In 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.

15.8        FATCA Information

15.8.1     Subject to Clause 15.8.3 below, each Party shall, within ten Business Days of a reasonable request by another Party:

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

(i)              a FATCA Exempt Party; or

(ii)             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.

15.8.2     If a Party confirms to another Party pursuant to Clause 15.8.1(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.

15.8.3     Clause15.8.1 above shall not oblige any Finance Party to do anything, and Clause 15.8.1(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.

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15.8.4      If 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 Clauses 15.8.1(a) or 15.8.1(b) (including, for the avoidance of doubt, where Clause 15.8.3 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.

15.8.5      If a Borrower 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 ten Business Days of:-

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

(b)           where a Borrower is a US Tax Obligor on a date on which any other Lender becomes a Party as a Lender, that date;

(c)           the date a new US Tax Obligor accedes as a Borrower; or

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

supply to the Agent:-

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

(ii)           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.

15.8.6     The Agent shall provide any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 15.8.5 above to the relevant Borrower.

15.8.7     If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Agent by a Lender pursuant to Clause 15.8.5 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 Borrower.

15.8.8     The Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to Clause 15.8.5 or 15.8.7 above without further verification. The Agent shall not be liable for any action taken by it under or in connection with Clause 15.8.5,  15.8.6 or 15.8.7 above.

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15.9         FATCA Deduction

15.9.1     Each 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.

15.9.2     Each 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 Company and the Agent and the Agent shall notify the other Finance Parties.

16.           INCREASED COSTS

16.1         Increased costs

16.1.1     Subject to Clause 16.3  (Exceptions) the Company shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation, (ii) compliance with any law or regulation made after the date of this Agreement, or (iii) the implementation or application of or compliance with Basel III including, for the avoidance of doubt and without prejudice to the foregoing generality, 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, a Finance Party or any of its Affiliates).

16.1.2      In this Agreement:-

(a)             "Basel III" means:

(i)            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;

(ii)           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

(iii)          any further guidance or standards published by the Basel Committee on Banking Supervision relating to "Basel III".

(b)           "CRD IV"   means, together, the Capital Requirements Regulation (Regulation (EU) no. 575/2013 of 26 June 2013 on prudential

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requirements for credit institutions and investment firms and amending regulation (EU) No. 648/2012 and the Capital Requirements Directive (Directive 2013/36/EU of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directive 2006/48/EC and 2006/49/EC) of the European Parliament and the Council, as either of the same may be amended, supplemented or restated from time to time

(c)             "Increased Costs" means:-

(i)            a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;

(ii)           an additional or increased cost; or

(iii)          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 an Ancillary Commitment or funding or performing its obligations under any Finance Document

16.2         Increased cost claims

16.2.1      A Finance Party intending to make a claim pursuant to Clause 16.1  (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Company.

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

16.3         Exceptions

16.3.1      Clause 16.1  (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 15.3  (Tax indemnity) (or would have been compensated for under Clause 15.3  (Tax indemnity) but was not so compensated solely because any of the exclusions in Clause 15.3.2 applied); or

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

16.3.2     In this Clause 16.3 reference to a "Tax Deduction" has the same meaning given to the term in Clause 15.1  (Definitions).

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17.           OTHER INDEMNITIES

17.1         Currency indemnity

17.1.1      If 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 (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

17.1.2     Each 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.

17.2         Other indemnities

17.2.1     The Company shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify the Arranger and each other Secured Party against any cost, loss or liability incurred by it as a result of:-

(a)           the occurrence of any Event of Default;

(b)           a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 31  (Sharing among the Finance Parties);

(c)           funding, or making arrangements to fund, its participation in a Utilisation requested by the Company or 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 (other than by reason of default or negligence by that Finance Party alone); or

(d)           a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Company.

17.3         Indemnity to the Agent

The Company shall promptly indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:-

17.3.1      investigating any event which it reasonably believes is a Default;

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17.3.2     acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

17.3.3     instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and

17.3.4     any cost, loss or liability (including, without limitation, 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 32.11  (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.

17.4         Indemnity to the Security Agent

17.4.1      Each Obligor jointly and severally shall promptly indemnify the Security Agent and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:-

(a)           any failure by the Borrower to comply with its obligations under Clause 19  (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,

(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 Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or

(f)            acting as Security Agent, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Security Agent's, Receiver's or Delegate's gross negligence or wilful misconduct).

17.4.2     Each Obligor expressly acknowledges and agrees that the continuation of its indemnity obligations under this Clause 17.4 will not be prejudiced by any release or disposal under the Intercreditor Agreement taking into account the operation of the provisions of that agreement.

17.4.3     The Security Agent and every Receiver and Delegate may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 17.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.

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18.           MITIGATION BY THE LENDERS

18.1         Mitigation

18.1.1     Each Finance Party shall, in consultation with the Company, take all reasonable steps to mitigate any circumstances which arise and which would result in the Facility ceasing to be available or any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 8.1  (Illegality), Clause 15  (Tax gross‑up and indemnities) or Clause 16  (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

18.1.2     Clause 18.1.1 above does not in any way limit the obligations of any Obligor under the Finance Documents.

18.2         Limitation of liability

18.2.1     The Company shall promptly 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 18.1  (Mitigation).

18.2.2     A Finance Party is not obliged to take any steps under Clause 18.1  (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

19.           COSTS AND EXPENSES

19.1         Transaction expenses

The Company shall promptly on demand pay the Agent, the Arranger and the Security Agent the amount of all costs and expenses (including legal fees) reasonably 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, syndication and perfection of:-

19.1.1     this Agreement and any other documents referred to in this Agreement and the Transaction Security; and

19.1.2     any other Finance Documents executed after the date of this Agreement.

19.2         Amendment costs

If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 32.10  (Change of currency), the Company shall, within three 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 and 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.

19.3         Security Agent's ongoing costs

19.3.1      Any amount payable to the Security Agent under Clause 17.4  (Indemnity to the Security Agent) and this Clause 19 shall include the properly incurred cost of utilising the Security Agent's management time or other reasonable and appropriate resources and will be calculated on the basis of such reasonable daily

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or hourly rates as the Security Agent may notify to the Borrower and the Lenders, and is in addition to any other fee paid or payable to the Security Agent.

19.3.2      Without prejudice to Clause 19.3.1 above, in the event of:

(a)           a Default;

(b)           the Security Agent considering it necessary (acting reasonably);

(c)           the Security Agent being requested by an Obligor or the Majority Lenders to undertake duties which the Security Agent and the Company agree to be of an exceptional nature or outside the scope of the normal duties of the Security Agent under the Finance Documents; or

(d)           the Security Agent and the Company agreeing that it is otherwise appropriate in the circumstances,

the Company shall pay to the Security Agent any additional remuneration that may be agreed between them or determined pursuant to Clause 19.3.3 below.

19.3.3     If the Security Agent and the Company fail to agree upon the nature of the duties or upon the additional remuneration referred to in Clause 19.3.2 above or whether additional remuneration is appropriate in the circumstances, any dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Agent and approved by the Company or, failing approval, nominated (on the application of the Security Agent) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Company) and the determination of any investment  bank shall be final and binding upon the parties to this Agreement.

19.4         Enforcement and preservation costs

The Company shall, within three Business Days of demand, pay to each Secured Party the amount of all costs and expenses (including legal fees) properly incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Agent as a consequence of taking or holding the Transaction Security or enforcing these rights.

 

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SECTION 7

GUARANTEE

20.           GUARANTEE AND INDEMNITY

20.1         Guarantee and indemnity

Each Guarantor irrevocably and unconditionally jointly and severally:-

20.1.1     guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents;

20.1.2     undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and

20.1.3     agrees 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 a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 20 if the amount claimed had been recoverable on the basis of a guarantee.

20.2         Continuing Guarantee

This guarantee is a continuing guarantee 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.

20.3         Reinstatement

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 Guarantor under this Clause 20 will continue or be reinstated as if the discharge, release or arrangement had not occurred.

20.4         Waiver of defences

The obligations of each Guarantor under this Clause 20 will not be affected by an act, omission, matter or thing which, but for this Clause 20, would reduce, release or prejudice any of its obligations under this Clause 20 (without limitation and whether or not known to it or any Finance Party) including:-

20.4.1     any time, waiver or consent granted to, or composition with, any Obligor or other person;

20.4.2     the 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;

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20.4.3     the 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;

20.4.4     any 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;

20.4.5     any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under any Finance Document or other document or security;

20.4.6     any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

20.4.7     any insolvency or similar proceedings.

20.5         Guarantor Intent

Without prejudice to the generality of Clause 20.4  (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension, replacement 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: business acquisitions of any nature; increasing working capital; enabling investor 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 such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.

20.6         Immediate recourse

Each Guarantor 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 Guarantor under this Clause 20.  This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

20.7         Appropriations

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:-

20.7.1     refrain 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 Guarantor shall be entitled to the benefit of the same; and

20.7.2      hold in an interest‑bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 20.

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20.8         Deferral of Guarantors' rights

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 and unless the Agent otherwise directs, no Guarantor 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 20:-

20.8.1     to be indemnified by an Obligor;

20.8.2     to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;

20.8.3     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;

20.8.4     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 Guarantor has given a guarantee, undertaking or indemnity under Clause 20.1  (Guarantee and Indemnity);

20.8.5     to exercise any right of set-off against any Obligor; and/or

20.8.6     to claim or prove as a creditor of any Obligor in competition with any Finance Party.

If a Guarantor 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 32  (Payment mechanics).

20.9         Release of Guarantors' right of contribution

If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:-

20.9.1     that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

20.9.2     each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents 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 Guarantor.

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20.10       Additional security

This guarantee 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.

20.11       Guarantee Limitations

This guarantee does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of sections 678 or 679 of the Companies Act 2006 or any equivalent and applicable provisions under the laws of the Original Jurisdiction of the relevant Guarantor and, with respect to any Additional Guarantor, is subject to any limitations set out in the Accession Deed applicable to such Additional Guarantor.

 

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SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

21.          REPRESENTATIONS

21.1        General

Each Obligor makes the representations and warranties set out in this Clause 21 to each Finance Party.

21.2        Status

21.2.1     It and each of its Subsidiaries is a limited liability corporation, duly incorporated and validly existing under the law of its Original Jurisdiction.

21.2.2     It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.

21.3        Binding obligations

Subject to the Legal Reservations:-

21.3.1     the obligations expressed to be assumed by it in each Finance Document to which it is a party are legal, valid, binding and enforceable obligations; and

21.3.2     (without limiting the generality of Clause 21.3.1 above), each Transaction Security Document to which it is a party creates the security interests which that Transaction Security Document purports to create and those security interests are valid and effective.

21.4        Non-conflict with other obligations

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents and the granting of the Transaction Security pursuant to the Agreed Security Principles do not and will not conflict with:-

21.4.1     any law or regulation applicable to it;

21.4.2     the constitutional documents of any member of the Group; or

21.4.3     (any agreement or instrument binding upon it or any member of the Group or any of its or any member of the Group's assets or constitute a default or termination event (however described) under any such agreement or instrument which has or is reasonably likely to have a Material Adverse Effect.

21.5        Power and authority

21.5.1     It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is or will be a party and the transactions contemplated by those Finance Documents.

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21.5.2     No 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 Finance Documents to which it is a party.

21.6        Validity and admissibility in evidence

21.6.1      All Authorisations required:-

(a)           to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and

(b)           to make the Finance 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 except any Authorisation referred to in Clause 21.9  (No filing or stamp taxes), which Authorisations will be promptly obtained or effected after the date of this Agreement.

21.6.2     All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect if failure to obtain or effect those Authorisations has or is reasonably likely to have a Material Adverse Effect.

21.7        Governing law and enforcement

21.7.1     Subject to the Legal Reservations, the choice of governing law of the Finance Documents will be recognised and enforced in its Relevant Jurisdictions.

21.7.2     Subject 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.

21.8        Insolvency

No:-

21.8.1      corporate action, legal proceeding or other procedure or step described in Clause 25.7.1; or

21.8.2      creditors' process described in Clause 25.8  (Creditors' process),

is being taken or, to the knowledge of the Parent or the Company, is threatened in writing in relation to the Parent or a member of the Group; and none of the circumstances described in Clause 25.6  (Insolvency) applies to the Parent or a member of the Group.

21.9        No filing or stamp taxes

Under the laws of its Relevant Jurisdictions it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except registration of particulars of the Transaction Security at Companies House in the UK under section 860 of the Companies Act 2006 and payment of associated fees, which

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registrations and filings will be made promptly after the date of the relevant Finance Document.

21.10      Deduction of Tax

It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document to a Lender which is:-

21.10.1    a Qualifying Lender:-

(a)           falling within paragraph (a)(i) of the definition of Qualifying Lender; or

(b)           except where a Direction has been given under section 931 of the ITA in relation to the payment concerned, falling within paragraph (a)(ii) of the definition of Qualifying Lender; or

(c)           falling within paragraph (b) of the definition of Qualifying Lender;  or

21.10.2    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).

21.11      No default

21.11.1   No Event of Default and, on the date of this Agreement, no Default is continuing or will result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Finance Document.

21.11.2   No 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 termination event (however described) under any other agreement or instrument which is binding on it or any Material Company or to which its (or any Material Company's) assets are subject,

which in each case has or is reasonably likely to have a Material Adverse Effect.

21.12      No misleading information

Save as disclosed in writing to the Agent and the Arranger prior to the date of this Agreement:-

21.12.1   all material information provided to a Finance Party by or on behalf of the Parent or the Company in connection with this Agreement and the provision of the Facility and/or the Group on or before the date of this Agreement and not superseded before that date is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and

21.12.2   all other written information provided by the Parent or any member of the Group (including its advisers) to a Finance Party was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any material respect.

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21.13      Original Financial Statements

21.13.1   Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied unless expressly disclosed to the Agent in writing to the contrary.  However in the case of monthly and quarterly statements, normal year end adjustments were not made.

21.13.2   Its unaudited Original Financial Statements fairly represent its financial condition and results of operations (consolidated in the case of each of the target companies described in paragraph (a) of the definition of Permitted Acquisition) for the relevant month or financial quarter.

21.13.3   Its audited Original Financial Statements fairly present its financial condition and its results of operations (consolidated in the case of each of the target companies described in paragraph (a) of the definition of Permitted Acquisition) during the relevant Financial Year.

21.13.4   There has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Parent and/or the Company) since the date of the Original Financial Statements.

21.13.5   The Original Financial Statements of the Company (and each of the target companies described in paragraph (a) of the definition of Permitted Acquisition) do not consolidate the results, assets or liabilities of any person or business which does not form part of the Group or the group of companies formed of the target companies described in paragraph (a) of the definition of Permitted Acquisition and each of their Subsidiaries (as applicable).

21.13.6   Its most recent financial statements delivered pursuant to Clause 22.1  (Financial Statements):-

(a)           have been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements; and

(b)           fairly present its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.

21.13.7   The budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied.

21.13.8   Since the date of the most recent financial statements delivered pursuant to Clause 22.1 (Financial Statements) there has been no material adverse change in the business, assets or financial condition of the Group.

21.14      No proceedings pending or threatened

21.14.1   No 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 and are ongoing or threatened in writing against it or any of its Subsidiaries.

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21.14.2   No judgment or order of a court, arbitral body or agency which, if adversely determined, are 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 or any of its Subsidiaries.

21.15      Anti-corruption law

Each member of the Group has conducted its business in compliance with applicable anti-corruption laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.

21.16      No breach of laws

21.16.1   It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

21.16.2   No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against the Parent or any member of the Group which have or are reasonably likely to have a Material Adverse Effect.