Additional Principles. (a) These Agreed Security Principles embody recognition by all parties to the Indenture to which these Agreed Security Principles are attached (the “Indenture”) that there may be certain legal and practical difficulties in granting and/or taking guaranties from Foreign Guarantors, and/or granting and/or providing an effective security interest by the Foreign Guarantors in the jurisdictions in which they are organized. In particular, guarantees shall not be granted by any Foreign Guarantors and liens on or security interests in any assets and/or property shall not be created or perfected to the extent that (as applicable): (i) the cost (including adverse effects on taxes (including, in the Company’s reasonable discretion in respect of the Group, its investors and/or its shareholders (including the Investors)), burden, difficulty or consequence (including any adverse effect on the ability of such Person to conduct its operations and business in the ordinary course) of obtaining or perfecting a security interest therein (including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary)) outweighs the practical benefit afforded thereby or is excessive in light of the practical benefit of the security afforded thereby, in each case, as reasonably determined by the Company. Further, the Trustee, the Notes Collateral Agent and Holders acknowledge and agree that the maximum amount of the First Lien Notes Obligations that may be guaranteed by any Foreign Guarantor, and the Collateral that may be provided by any Foreign Guarantor, may be limited to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties and to minimize adverse effects on the ability of any Foreign Guarantor to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangement, in each case, not prohibited under the Indenture where the benefit to the First Lien Secured Parties of increasing the guaranteed or secured amount is disproportionate to the cost of such fees, taxes, duties and adverse effects; or (ii) the Company or another Foreign Guarantor, as applicable, subject to using commercially reasonable efforts, is unable to demonstrate that adequate corporate benefit accrues to the Company or each relevant Foreign Guarantor, as applicable, and are unable to overcome any such other limitations to the extent reasonably practicable (iii) general legal and statutory limitations, regulatory restrictions, anti-trust and other competition authority restrictions, financial assistance, capital maintenance, corporate benefit, fraudulent preference, equitable subordination, thin capitalization rules, earnings stripping, transfer pricing, interest stripping, controlled foreign corporation and other tax restrictions, exchange control restrictions, liquidity impairment rules, tax restrictions, employee consultation or approval requirements, retention of title claims, related party transactions and similar principles impose limits on the ability of a Foreign Guarantor to provide a guarantee or a security or may require that the guarantee or security be limited as to amount or otherwise. If any such limit applies, the guarantee and security provided will be limited accordingly and shall be subject to the fiduciary duties of management; provided that, before signing any applicable security or joinder document, the Company or the applicable Foreign Guarantor will use commercially reasonable efforts (but without incurring material cost and without adverse impact on relationships with third parties as determined by the Company or applicable Foreign Guarantor) to structure the provision of such Note Guarantee and Collateral by such Foreign Guarantor to avoid or address such restrictions; provided, further, that with respect to any guarantee or security to be granted by a Swiss Guarantor, any requirement for such Swiss Guarantor to amend its articles of association must allow sufficient time for the registration of such amendment in the relevant commercial register to become published in the relevant Swiss publication body prior to the relevant guarantee or security being granted; (iv) in certain jurisdictions it is impossible or impractical to grant guaranties or create security over certain categories of assets, in which case, such guaranties will not be granted and security will not be taken over such assets; (v) if it is not within the legal capacity of a Foreign Guarantor to give guaranties or enter into security documents or if the same would conflict with the fiduciary duties of the directors or managers (as applicable) of such Foreign Guarantor or result in, or could reasonably be expected to result in, a material risk of personal or criminal liability for any officer, director or manager (as applicable), employee or member of management of such Foreign Guarantor; provided that the Company or such Foreign Guarantor shall use commercially reasonable efforts to structure the provision of Note Guarantees and Collateral granted by such Foreign Guarantor to avoid or address such restrictions; (vi) in respect of any guarantee or security which, in the determination of the Company (acting reasonably), may be required to be discharged and/or released in connection with any upcoming corporate, tax structuring or other reorganization of the Group permitted by the Indenture or in respect of which the requisite percentage of Holders have given their consent (an “Anticipated Reorganization”), the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs guarantee fees payable to any person that is not a member of the Group and all applicable legal fees) or other consequences of taking, and then subsequently discharging and/or releasing such guarantee or security in connection with any Anticipated Reorganization, will not be disproportionate in relation to the benefit accruing to the First Lien Secured Parties of obtaining such guarantee or security; or (vii) the provision of such Note Guarantee and/or Collateral requires the consent of certain advisory boards, supervisory boards, works councils regulator or other external bodies or similar, or that Persons may be required to enable a Foreign Guarantor to provide the Note Guarantee or Collateral and such consent has not been received (provided that the relevant Foreign Guarantor shall use commercially reasonable efforts to structure the provision of the Note Guarantee and Collateral granted by such Guarantor to avoid or address such restrictions). (b) For the avoidance of doubt, in these Agreed Security Principles, “cost” as set out in paragraph 2(a)(i) above includes, but is not limited to, (i) income tax cost, registration taxes payable on the creation or enforcement, or for the continuance of, any Collateral, adverse effects on taxes (including, in the Company’s reasonable discretion, in respect of the Group, its investors and/or its shareholders), interest deductibility, stamp duties, out-of-pocket expenses, notary fees, translation fees and other fees and expenses directly or indirectly incurred by the relevant potential Foreign Guarantor or any of its direct or indirect parent companies, subsidiaries or Affiliates and (ii) any adverse effects on the ability of any Foreign Guarantor to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangement, and shall take into consideration whether the benefit to the First Lien Secured Parties of increasing the guaranteed or secured amount is disproportionate to the cost of such fees, taxes, duties and adverse effects; provided that the maximum aggregate amount payable by any Foreign Guarantor in respect of legal fees, costs, expenses, disbursements and VAT relating to the provision by any Foreign Guarantor of the Note Guarantee or the grant or perfection of a security interest in any Collateral will be limited to an amount to be reasonably determined by the applicable Foreign Guarantor (and consistent with the amounts agreed to with respect to the corresponding provision of the Credit Agreement), but excluding any such legal fees, costs, expenses and VAT relating to additional loans and refinancing loans. (c) It is agreed and understood that in no event will the Collateral include any Excluded Asset (as defined in the Notes Security Agreement). (d) No action will be required to be taken at the expense of any Foreign Guarantor in relation to the Note Guarantees or Collateral, nor shall any Foreign Guarantor be responsible for any transfer or other taxes that may arise as a result of, the assignment, participation, sub-participation or other transfer of any Note by any Holder to any other Person (including any secondary assignments, participations, sub-participations or other transfers that occur in connection with the primary syndication). (e) No security will be taken over fixed assets, parts, stock, moveable plant or equipment (i) of a Swiss Guarantor or (ii) if it would require labelling, segregation or periodic listing, specification or equivalent. (f) No security will be required (or maintained) over any assets subject to security in favor of a third party (other than in relation to security under general business conditions of account banks which do not prohibit or prevent the creation of security over such accounts) or any cash constituting regulatory capital or customer cash (and such assets or cash shall be excluded from any relevant security document) or other customary depository or statutory liens. (g) No Foreign Guarantor shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement. (h) The granting or perfection of security, when required, and other legal formalities will be completed in the time frames specified therefor in the Note Documents or (if earlier or to the extent no such time periods are specified in the Note Documents) within the time periods specified by applicable Requirements of Law in order to ensure due perfection; provided that for the avoidance of doubt, no guarantees or security with respect to each Foreign Guarantor shall be required prior to the date that is 120 days after the Completion Date. (i) Any security document will only be required to be notarized if required by applicable Requirements of Law in order for the relevant security to become effective or admissible in evidence. (j) All security documents and the Note Guarantee with respect to Foreign Guarantors will include customary limitations including but not limited to applicable laws and regulations (including any applicable financial assistance rules), with respect to the provision of security and/or guarantees). (k) No guarantee or security shall guarantee or secure any “Excluded Swap Obligations” defined in accordance with the LSTA Market Advisory Update dated February 15, 2013 entitled “Swap Regulations’ Implications for Loan Documentation”, and any update thereto by the LSTA. (l) The closure, unavailability, or reduced service of any governmental or regulatory systems, any functions or any facilities (including notarial or legal facilities) necessary or customarily used for the granting of security or guarantees, or the taking of any perfection requirements in connection therewith, may affect and/or delay the ability of a member of the Group to provide a guarantee or security or take any related steps in connection with any perfection requirements. (m) No title investigations or other diligence on assets will be required and no title insurance will be required. (n) No security shall be provided to the extent it would constitute or may constitute unlawful financial assistance or any equivalent provision of any applicable law. (o) Each security document shall be deemed not to restrict or condition any transaction not prohibited under the Note Documents and the security granted under each security document entered into after the Completion Date shall be deemed to be subject to these Agreed Security Principles, before and after the execution of the relevant security document and creation of the relevant security. (p) No security may be provided on terms which are inconsistent with the turnover or sharing provisions (or any substantially equivalent provisions) in the Note Documents.
Appears in 2 contracts
Sources: Indenture (Beach Acquisition Co Parent, LLC), Indenture (Skechers Usa Inc)
Additional Principles. (a) These Agreed Security Principles embody the recognition by all parties to the Indenture to which these Agreed Security Principles are attached (the “Indenture”) that there may be certain legal and practical difficulties in granting obtaining effective or commercially reasonable guarantees and/or taking guaranties security from Foreign Guarantors, and/or granting and/or providing an effective security interest by the Foreign Guarantors Note Parties in the jurisdictions each jurisdiction in which they are organizedit has been agreed that guarantees and security will be granted by those Foreign Note Parties. In particular, guarantees shall not be granted by any Foreign Guarantors and liens on or security interests in any assets and/or property shall not be created or perfected to the extent that (as applicable)::
(i) the cost (including adverse effects on taxes (including, in the Company’s reasonable discretion in respect of the Group, its investors and/or its shareholders (including the Investors)), burden, difficulty or consequence (including any adverse effect on the ability of such Person to conduct its operations and business in the ordinary course) of obtaining or perfecting a security interest therein (including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary)) outweighs the practical benefit afforded thereby or is excessive in light of the practical benefit of the security afforded thereby, in each case, as reasonably determined by the Company. Further, the Trustee, the Notes Collateral Agent and Holders acknowledge and agree that the maximum amount of the First Lien Notes Obligations that may be guaranteed by any Foreign Guarantor, and the Collateral that may be provided by any Foreign Guarantor, may be limited to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties and to minimize adverse effects on the ability of any Foreign Guarantor to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangement, in each case, not prohibited under the Indenture where the benefit to the First Lien Secured Parties of increasing the guaranteed or secured amount is disproportionate to the cost of such fees, taxes, duties and adverse effects; or
(ii) the Company or another Foreign Guarantor, as applicable, subject to using commercially reasonable efforts, is unable to demonstrate that adequate corporate benefit accrues to the Company or each relevant Foreign Guarantor, as applicable, and are unable to overcome any such other limitations to the extent reasonably practicable
(iiia) general legal and statutory limitations, regulatory restrictionsrestrictions (including foreign exchange controls), financial assistance, anti-trust and other competition authority restrictions, financial assistance, capital maintenancecorporate object, corporate benefit, fraudulent preference, legal and equitable subordination, "transfer pricing", "thin capitalization rulescapitalisation", "earnings stripping", transfer pricing, interest stripping, controlled foreign corporation and other tax restrictions, "exchange control restrictions", "capital maintenance" rules and "liquidity impairment impairment" rules, tax restrictions, employee consultation or approval requirements, retention of title claims, related party transactions employee consultation or approval requirements and similar principles impose limits on may limit the ability of a Foreign Guarantor member of the Group to provide a guarantee or a security or may require that the guarantee or security be limited as to amount or otherwise. If any such limit appliesotherwise and, if so, the guarantee and or security provided will be limited accordingly and shall be subject to the fiduciary duties of management; accordingly, provided that, to the extent requested by the Notes Collateral Agent or the Trustee before signing any applicable security or joinder accession document, the relevant member of the group consisting of the Company or and its Subsidiaries (the applicable Foreign Guarantor will “Group”) shall use commercially reasonable efforts (but without incurring material cost and without adverse impact on relationships with third parties as determined by the Company or applicable Foreign Guarantorparties) to structure the provision of overcome any such Note Guarantee and Collateral by obstacle or otherwise such Foreign Guarantor to avoid or address such restrictions; provided, further, that with respect to any guarantee or security document shall be subject to be granted by such limit;
(b) a Swiss Guarantor, any requirement for such Swiss Guarantor to amend its articles of association must allow sufficient time for the registration of such amendment key factor in the relevant commercial register to become published in the relevant Swiss publication body prior to the relevant determining whether or not a guarantee or security being granted;
(iv) in certain jurisdictions it is impossible or impractical to grant guaranties or create security over certain categories of assets, in which case, such guaranties will not be granted and security will not be taken over such assets;
(v) if it is not within the legal capacity of a Foreign Guarantor to give guaranties or enter into security documents or if the same would conflict with the fiduciary duties of the directors or managers (as applicable) of such Foreign Guarantor or result in, or could reasonably be expected to result in, a material risk of personal or criminal liability for any officer, director or manager (as applicable), employee or member of management of such Foreign Guarantor; provided that the Company or such Foreign Guarantor shall use commercially reasonable efforts to structure the provision of Note Guarantees and Collateral granted by such Foreign Guarantor to avoid or address such restrictions;
(vi) in respect of any guarantee or security whichthe security, in the determination extent of the Company (acting reasonably), may be required to be discharged its perfection and/or released in connection with any upcoming corporate, tax structuring or other reorganization of the Group permitted by the Indenture or in respect of which the requisite percentage of Holders have given their consent (an “Anticipated Reorganization”), registration) is the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs costs, guarantee fees payable to any person that is not a member of the Group and all applicable legal fees) or other consequences of taking, and then subsequently discharging and/or releasing such guarantee or security in connection with any Anticipated Reorganization, which will not be disproportionate in relation to the benefit accruing to #96393093v27 the First Lien Secured Parties Holders of obtaining such guarantee or security; or, as determined by the Company and the Notes Collateral Agent);
(viic) unless otherwise required by the provision Indenture, members of such Note Guarantee and/or Collateral requires the consent of certain advisory boards, supervisory boards, works councils regulator or other external bodies or similar, or that Persons may Group will not be required to enable a Foreign Guarantor to provide give guarantees or enter into security documents if they are not directly or indirectly wholly owned by the Note Guarantee Company or Collateral and such consent has if it is not been received (provided that within the legal capacity of the relevant Foreign Guarantor shall members of the Group or if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for any member of the Group, provided that, to the extent requested by the Notes Collateral Agent or the Trustee before signing any applicable security document or accession document, the relevant member of the Group shall, in relation to a contractual prohibition or restriction only, use commercially reasonable efforts (but without incurring material cost and without adverse impact on relationships with third parties) to structure overcome any such obstacle or otherwise such guarantee or security document shall be subject to such limit;
(d) having regard to the principle in paragraph (b) above, the Company and the Notes Collateral Agent shall discuss in good faith (having regard to customary practice in applicable jurisdictions) with a view to determining whether certain security can be provided by the relevant Foreign Note Party granting a promise to pledge in favour of the Secured Parties coupled with an irrevocable power of attorney to the Notes Collateral Agent as opposed to a definitive legal mortgage or pledge over the relevant asset;
(e) guarantees and security will be limited so that the aggregate of notarial costs and all registration and like taxes and duties relating to the provision of security will not exceed an amount to be agreed between the Note Guarantee Company and the Notes Collateral granted by such Guarantor to avoid or address such restrictions).Agent;
(bf) For where a class of assets to be secured includes material and immaterial assets, if the avoidance cost of doubtgranting security over the immaterial assets is disproportionate to the benefit of such security to the Secured Parties, as determined by the Company and the Notes Collateral Agent, security will be granted over the material assets only;
(g) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined by the Company and the Notes Collateral Agent, in these Agreed Security Principleswhich event security will not be taken over such assets;
(h) in each case to the extent the applicable restriction, “cost” as set out condition or third party right did not arise in paragraph 2(a)(i) above includes, but is not limited to, (i) income tax cost, registration taxes payable on contemplation of the creation relevant guarantee or enforcement, or for the continuance ofgrant of security, any Collateralasset subject to a legal requirement, adverse effects on taxes contract, lease, licence, instrument, regulatory constraint (includingincluding any agreement with any government or regulatory body) or other third party arrangement, in which may prevent or condition the Company’s reasonable discretionasset from being charged, secured or being subject to the applicable security document (including requiring a consent of any third party, supervisory board or works council (or equivalent)) and any asset which, if subject to the applicable security document, would give a third party the right to terminate or otherwise amend any rights, benefits and/or obligations with respect to any member of the Group in respect of the Groupasset or require the relevant chargor to take any action materially adverse to the interests of the Group or any member thereof, its investors and/or its shareholders)in each case will be excluded from a guarantee or security document, interest deductibility, stamp duties, out-of-pocket expenses, notary fees, translation fees and other fees and expenses directly or indirectly incurred provided that commercially reasonable efforts to obtain consent to securing any asset (where otherwise prohibited) shall be used by the relevant potential Foreign Guarantor Group if the Notes Collateral Agent specifies prior to the date of the security or any accession document #96393093v27 that the asset is material and the Company is satisfied that such endeavors will not involve placing relationships with third parties in jeopardy;
(i) the giving of its direct or indirect parent companiesa guarantee, subsidiaries or Affiliates the granting of security and (ii) any the registration and/or the perfection of the security granted will not be required if it would have a material adverse effects effect on the ability of any Foreign Guarantor to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangement, and shall take into consideration whether the benefit to the First Lien Secured Parties of increasing the guaranteed or secured amount is disproportionate to the cost of such fees, taxes, duties and adverse effects; provided that the maximum aggregate amount payable by any Foreign Guarantor in respect of legal fees, costs, expenses, disbursements and VAT relating to the provision by any Foreign Guarantor relevant member of the Note Guarantee or the grant or perfection of a security interest in any Collateral will be limited Group to an amount to be reasonably determined by the applicable Foreign Guarantor (conduct its operations and consistent with the amounts agreed to with respect to the corresponding provision of the Credit Agreement), but excluding any such legal fees, costs, expenses and VAT relating to additional loans and refinancing loans.
(c) It is agreed and understood that in no event will the Collateral include any Excluded Asset (as defined business in the Notes Security Agreement).
(d) No action will be required to be taken at the expense of any Foreign Guarantor in relation to the Note Guarantees or Collateral, nor shall any Foreign Guarantor be responsible for any transfer or other taxes that may arise ordinary course as a result of, the assignment, participation, sub-participation or other transfer of any Note otherwise permitted by any Holder to any other Person (including any secondary assignments, participations, sub-participations or other transfers that occur in connection with the primary syndication).
(e) No security will be taken over fixed assets, parts, stock, moveable plant or equipment (i) of a Swiss Guarantor or (ii) if it would require labelling, segregation or periodic listing, specification or equivalent.
(f) No security will be required (or maintained) over any assets subject to security in favor of a third party (other than in relation to security under general business conditions of account banks which do not prohibit or prevent the creation of security over such accounts) or any cash constituting regulatory capital or customer cash (and such assets or cash shall be excluded from any relevant security document) or other customary depository or statutory liens.
(g) No Foreign Guarantor shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement.
(h) The granting or perfection of security, when required, and other legal formalities will be completed in the time frames specified therefor in the Note Documents (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (if earlier or allowing to the extent no such time periods are specified lapse) any rights, benefits or obligations, in the Note Documents) within the time periods specified by applicable Requirements each case prior to an Applicable Event which is continuing), and any requirement under these Agreed Security Principles to seek consent of Law in order to ensure due perfection; provided that for the avoidance of doubt, no guarantees any person or security with respect to each Foreign Guarantor take or not take any other action shall be required prior subject to the date that is 120 days after the Completion Date.this paragraph (i);
(ij) Any any security document will only be required to be notarized notarised if required by applicable Requirements of Law law in order for the relevant security to become effective (including against third parties), enforceable or admissible in evidence.
(j) All security documents and the Note Guarantee with respect to Foreign Guarantors will include customary limitations including but not limited to applicable laws and regulations evidence (including any applicable financial assistance ruleswithout limitation evidence before third parties), with respect to the provision of security and/or guarantees).;
(k) No guarantee or security shall guarantee or secure any “Excluded Swap Obligations” defined in accordance with the LSTA Market Advisory Update dated February 15, 2013 entitled “Swap Regulations’ Implications for Loan Documentation”, and any update thereto by the LSTA.
(l) The closure, unavailability, or reduced service of any governmental or regulatory systems, any functions or any facilities (including notarial or legal facilities) necessary or customarily used for the granting of security or guarantees, or the taking of any perfection requirements in connection therewith, may affect and/or delay the ability of a member of the Group to provide a guarantee or security or take any related steps in connection with any perfection requirements.
(m) No title investigations or other diligence on assets will be required and no title insurance will be required.
(n) No security shall be provided to the extent it would constitute possible and unless required by applicable law in order for any assignee or may constitute unlawful financial assistance transferee to benefit from the guarantees or any equivalent provision of any applicable law.
(o) Each security document shall security, there should be deemed not to restrict or condition any transaction not prohibited under the Note Documents and the security granted under each security document entered into after the Completion Date shall be deemed no action required to be subject taken in relation to these Agreed Security Principlesthe guarantees or security when any secured party assigns or transfers any of its participation to a new secured party (and, before and after unless explicitly agreed to the execution of the relevant security document and creation of the relevant security.
(p) No security may be provided on terms which are inconsistent with the turnover or sharing provisions (or any substantially equivalent provisions) contrary in the Note Documents., no Foreign Note Party shall bear or otherwise be liable for any taxes, any notarial, registration or perfection fees or any other costs, fees or expenses that result from any transfer by a Holder except if an Applicable Event has occurred and is continuing);
Appears in 1 contract
Sources: First Supplemental Indenture (DIEBOLD NIXDORF, Inc)
Additional Principles. (a) These Agreed Security Principles embody the recognition by all parties to the Indenture to which these Agreed Security Principles are attached (the “Indenture”) that there may be certain legal and practical difficulties in granting obtaining effective or commercially reasonable guarantees and/or taking guaranties security from Foreign Guarantors, and/or granting and/or providing an effective security interest by the Foreign Guarantors Note Parties in the jurisdictions each jurisdiction in which they are organizedit has been agreed that guarantees and security will be granted by those Foreign Note Parties. In particular, guarantees shall not be granted by any Foreign Guarantors and liens on or security interests in any assets and/or property shall not be created or perfected to the extent that (as applicable)::
(i) the cost (including adverse effects on taxes (including, in the Company’s reasonable discretion in respect of the Group, its investors and/or its shareholders (including the Investors)), burden, difficulty or consequence (including any adverse effect on the ability of such Person to conduct its operations and business in the ordinary course) of obtaining or perfecting a security interest therein (including, without limitation, the cost of title insurance, surveys or flood insurance (if necessary)) outweighs the practical benefit afforded thereby or is excessive in light of the practical benefit of the security afforded thereby, in each case, as reasonably determined by the Company. Further, the Trustee, the Notes Collateral Agent and Holders acknowledge and agree that the maximum amount of the First Lien Notes Obligations that may be guaranteed by any Foreign Guarantor, and the Collateral that may be provided by any Foreign Guarantor, may be limited to minimize stamp duty, notarization, registration or other applicable fees, taxes and duties and to minimize adverse effects on the ability of any Foreign Guarantor to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangement, in each case, not prohibited under the Indenture where the benefit to the First Lien Secured Parties of increasing the guaranteed or secured amount is disproportionate to the cost of such fees, taxes, duties and adverse effects; or
(ii) the Company or another Foreign Guarantor, as applicable, subject to using commercially reasonable efforts, is unable to demonstrate that adequate corporate benefit accrues to the Company or each relevant Foreign Guarantor, as applicable, and are unable to overcome any such other limitations to the extent reasonably practicable
(iiia) general legal and statutory limitations, regulatory restrictionsrestrictions (including foreign exchange controls), financial assistance, anti-trust and other competition authority restrictions, financial assistance, capital maintenancecorporate object, corporate benefit, fraudulent preference, legal and equitable subordination, "transfer pricing", "thin capitalization rulescapitalisation", "earnings stripping", transfer pricing, interest stripping, controlled foreign corporation and other tax restrictions, "exchange control restrictions", "capital maintenance" rules and "liquidity impairment impairment" rules, tax restrictions, employee consultation or approval requirements, retention of title claims, related party transactions employee consultation or approval requirements and similar principles impose limits on may limit the ability of a Foreign Guarantor member of the Group to provide a guarantee or a security or may require that the guarantee or security be limited as to amount or otherwise. If any such limit appliesotherwise and, if so, the guarantee and or security provided will be limited accordingly and shall be subject to the fiduciary duties of management; accordingly, provided that, to the extent requested by the Notes Collateral Agent or the Trustee before signing any applicable security or joinder accession document, the relevant member of the group consisting of the Company or and its Subsidiaries (the applicable Foreign Guarantor will “Group”) shall use commercially reasonable efforts (but without incurring material cost and without adverse impact on relationships with third parties as determined by the Company or applicable Foreign Guarantorparties) to structure the provision of overcome any such Note Guarantee and Collateral by obstacle or otherwise such Foreign Guarantor to avoid or address such restrictions; provided, further, that with respect to any guarantee or security document shall be subject to be granted by such limit;
(b) a Swiss Guarantor, any requirement for such Swiss Guarantor to amend its articles of association must allow sufficient time for the registration of such amendment key factor in the relevant commercial register to become published in the relevant Swiss publication body prior to the relevant determining whether or not a guarantee or security being granted;
(iv) in certain jurisdictions it is impossible or impractical to grant guaranties or create security over certain categories of assets, in which case, such guaranties will not be granted and security will not be taken over such assets;
(v) if it is not within the legal capacity of a Foreign Guarantor to give guaranties or enter into security documents or if the same would conflict with the fiduciary duties of the directors or managers (as applicable) of such Foreign Guarantor or result in, or could reasonably be expected to result in, a material risk of personal or criminal liability for any officer, director or manager (as applicable), employee or member of management of such Foreign Guarantor; provided that the Company or such Foreign Guarantor shall use commercially reasonable efforts to structure the provision of Note Guarantees and Collateral granted by such Foreign Guarantor to avoid or address such restrictions;
(vi) in respect of any guarantee or security whichthe security, in the determination extent of the Company (acting reasonably), may be required to be discharged its perfection and/or released in connection with any upcoming corporate, tax structuring or other reorganization of the Group permitted by the Indenture or in respect of which the requisite percentage of Holders have given their consent (an “Anticipated Reorganization”), registration) is the applicable time and cost (including adverse effects on taxes, interest deductibility, stamp duty, registration taxes, notarial costs costs, guarantee fees payable to any person that is not a member of the Group and all applicable legal fees) or other consequences of taking, and then subsequently discharging and/or releasing such guarantee or security in connection with any Anticipated Reorganization, which will not be disproportionate in relation to the benefit accruing to #96405991v19 the First Lien Secured Parties Holders of obtaining such guarantee or security; or, as determined by the Company and the Notes Collateral Agent);
(viic) unless otherwise required by the provision Indenture, members of such Note Guarantee and/or Collateral requires the consent of certain advisory boards, supervisory boards, works councils regulator or other external bodies or similar, or that Persons may Group will not be required to enable a Foreign Guarantor to provide give guarantees or enter into security documents if they are not directly or indirectly wholly owned by the Note Guarantee Company or Collateral and such consent has if it is not been received (provided that within the legal capacity of the relevant Foreign Guarantor shall members of the Group or if it would conflict with the fiduciary or statutory duties of their directors or contravene any applicable legal, regulatory or contractual prohibition or restriction or have the potential to result in a material risk of personal or criminal liability for any director or officer of or for any member of the Group, provided that, to the extent requested by the Notes Collateral Agent or the Trustee before signing any applicable security document or accession document, the relevant member of the Group shall, in relation to a contractual prohibition or restriction only, use commercially reasonable efforts (but without incurring material cost and without adverse impact on relationships with third parties) to structure overcome any such obstacle or otherwise such guarantee or security document shall be subject to such limit;
(d) having regard to the principle in paragraph (b) above, the Company and the Notes Collateral Agent shall discuss in good faith (having regard to customary practice in applicable jurisdictions) with a view to determining whether certain security can be provided by the relevant Foreign Note Party granting a promise to pledge in favour of the Secured Parties coupled with an irrevocable power of attorney to the Notes Collateral Agent as opposed to a definitive legal mortgage or pledge over the relevant asset;
(e) guarantees and security will be limited so that the aggregate of notarial costs and all registration and like taxes and duties relating to the provision of security will not exceed an amount to be agreed between the Note Guarantee Company and the Notes Collateral granted by such Guarantor to avoid or address such restrictions).Agent;
(bf) For where a class of assets to be secured includes material and immaterial assets, if the avoidance cost of doubtgranting security over the immaterial assets is disproportionate to the benefit of such security to the Secured Parties, as determined by the Company and the Notes Collateral Agent, security will be granted over the material assets only;
(g) it is expressly acknowledged that it may be either impossible or impractical to create security over certain categories of assets, as determined by the Company and the Notes Collateral Agent, in these Agreed Security Principleswhich event security will not be taken over such assets;
(h) in each case to the extent the applicable restriction, “cost” as set out condition or third party right did not arise in paragraph 2(a)(i) above includes, but is not limited to, (i) income tax cost, registration taxes payable on contemplation of the creation relevant guarantee or enforcement, or for the continuance ofgrant of security, any Collateralasset subject to a legal requirement, adverse effects on taxes contract, lease, licence, instrument, regulatory constraint (includingincluding any agreement with any government or regulatory body) or other third party arrangement, in which may prevent or condition the Company’s reasonable discretionasset from being charged, secured or being subject to the applicable security document (including requiring a consent of any third party, supervisory board or works council (or equivalent)) and any asset which, if subject to the applicable security document, would give a third party the right to terminate or otherwise amend any rights, benefits and/or obligations with respect to any member of the Group in respect of the Groupasset or require the relevant chargor to take any action materially adverse to the interests of the Group or any member thereof, its investors and/or its shareholders)in each case will be excluded from a guarantee or security document, interest deductibility, stamp duties, out-of-pocket expenses, notary fees, translation fees and other fees and expenses directly or indirectly incurred provided that commercially reasonable efforts to obtain consent to securing any asset (where otherwise prohibited) shall be used by the relevant potential Foreign Guarantor Group if the Notes Collateral Agent specifies prior to the date of the security or any accession document #96405991v19 that the asset is material and the Company is satisfied that such endeavors will not involve placing relationships with third parties in jeopardy;
(i) the giving of its direct or indirect parent companiesa guarantee, subsidiaries or Affiliates the granting of security and (ii) any the registration and/or the perfection of the security granted will not be required if it would have a material adverse effects effect on the ability of the relevant member of the Group to conduct its operations and business in the ordinary course as otherwise permitted by the Note Documents (including dealing with the secured assets and all contractual counterparties or amending, waiving or terminating (or allowing to lapse) any Foreign Guarantor rights, benefits or obligations, in each case prior to obtain or maintain local facilities or other financing arrangements, including any factoring or similar arrangementan Applicable Event which is continuing), and any requirement under these Agreed Security Principles to seek consent of any person or take or not take any other action shall take into consideration whether the benefit be subject to the First Lien Secured Parties of increasing the guaranteed or secured amount is disproportionate to the cost of such fees, taxes, duties and adverse effects; provided that the maximum aggregate amount payable by any Foreign Guarantor in respect of legal fees, costs, expenses, disbursements and VAT relating to the provision by any Foreign Guarantor of the Note Guarantee or the grant or perfection of a security interest in any Collateral will be limited to an amount to be reasonably determined by the applicable Foreign Guarantor this paragraph (and consistent with the amounts agreed to with respect to the corresponding provision of the Credit Agreementi), but excluding any such legal fees, costs, expenses and VAT relating to additional loans and refinancing loans.;
(cj) It is agreed and understood that in no event any security document will the Collateral include any Excluded Asset (as defined in the Notes Security Agreement).
(d) No action will only be required to be notarised if required by law in order for the relevant security to become effective (including against third parties), enforceable or admissible in evidence (including without limitation evidence before third parties);
(k) to the extent possible and unless required by applicable law in order for any assignee or transferee to benefit from the guarantees or security, there should be no action required to be taken at the expense of any Foreign Guarantor in relation to the guarantees or security when any secured party assigns or transfers any of its participation to a new secured party (and, unless explicitly agreed to the contrary in the Note Guarantees Documents, no Foreign Note Party shall bear or Collateral, nor shall any Foreign Guarantor otherwise be responsible liable for any taxes, any notarial, registration or perfection fees or any other costs, fees or expenses that result from any transfer by a Holder except if an Applicable Event has occurred and is continuing);
(l) no title investigations or other taxes that may arise as a result of, the assignment, participation, sub-participation or other transfer of any Note by any Holder to any other Person (including any secondary assignments, participations, sub-participations or other transfers that occur in connection with the primary syndication).
(e) No security will be taken over fixed assets, parts, stock, moveable plant or equipment (i) of a Swiss Guarantor or (ii) if it would require labelling, segregation or periodic listing, specification or equivalent.
(f) No security diligence on assets will be required and no title insurance will be required;
(or maintainedm) security will not be required over any assets subject to security in favor of a third party (other than in relation to security under general business conditions of account banks which do not prohibit or prevent the creation of security over such accounts) or any cash constituting regulatory capital or customer cash (and such assets or cash shall be excluded from any relevant security document) or other customary depository or statutory liens.);
(gn) No Foreign Guarantor shall be required to seek any landlord lien waiver, bailee letter, estoppel, warehouseman waiver or other collateral access or similar letter or agreement.
(h) The granting or perfection of security, when required, and other legal formalities will be completed in the time frames specified therefor in the Note Documents or (if earlier or to the extent no such time periods are specified legally effective, all security will be given in favour of the Note Documents) within Notes Collateral Agent and not the time periods specified Secured Parties individually (with the Notes Collateral Agent to hold one set of security documents for all the Secured Parties unless otherwise required by applicable Requirements of Law in order to ensure due perfectionlocal law); provided that "parallel debt" provisions will be used where necessary and recognised; for the avoidance of doubt, no guarantees or in relation to accessory security with respect to each Foreign Guarantor shall under German law (akzessorische Sicherheiten), such security will be required prior to given in favour of the date that is 120 days after the Completion Date.
(i) Any security document will only be required to be notarized if required by applicable Requirements of Law in order for the relevant security to become effective or admissible in evidence.
(j) All security documents Notes Collateral Agent and the Note Guarantee with respect to Foreign Guarantors will include customary limitations including but not limited to applicable laws and regulations (including any applicable financial assistance rules), with respect to the provision of Secured Parties; it is acknowledged that certain security and/or guarantees).
(k) No guarantee or security shall guarantee or secure any “Excluded Swap Obligations” defined in accordance with the LSTA Market Advisory Update dated February 15, 2013 entitled “Swap Regulations’ Implications for Loan Documentation”, and any update thereto by the LSTA.
(l) The closure, unavailability, or reduced service of any governmental or regulatory systems, any functions or any facilities (including notarial or legal facilities) necessary or customarily used for the granting of security or guarantees, or the taking of any perfection requirements in connection therewith, may affect and/or delay the ability of a member of the Group to provide a guarantee or security or take any related steps in connection with any perfection requirements.
(m) No title investigations or other diligence on assets will be required and no title insurance will be required.
(n) No security shall be provided granted for those Secured Parties that satisfy any local law requirements necessary to the extent it would constitute or may constitute unlawful financial assistance or any equivalent provision of any applicable law.benefit from such security;
(o) Each each security document shall be deemed not to restrict or condition any transaction not prohibited permitted under the Note Documents and the security granted under each security document entered into after the Completion Issue Date shall be deemed to be subject to these Agreed Security Principles, before and after the execution of the relevant security document and creation of the relevant security.;
(p) No each security may document must be provided on terms which are not inconsistent with the turnover or sharing provisions in the Domestic Guarantee Agreement, the Foreign Guarantee Agreement and/or the Indenture; #96405991v19
(q) no guarantee or security shall guarantee or secure any "Excluded Swap Obligations" defined in accordance with the LSTA Market Advisory Update dated February 15, 2013 entitled "Swap Regulations' Implications for Note Documentation", and any update thereto by the LSTA;
(r) no translation of any document relating to any security or any substantially equivalent provisionsasset subject to any security will be required to be prepared or provided to the Secured Parties, unless (i) any document which is to be signed by the Notes Collateral Agent or any notice to be delivered to the Notes Collateral Agent or (ii) required for such documents to become effective or admissible in evidence or (iii) an Applicable Event is continuing; and
(s) local security documents may be executed in any number of counterparts, each of which when so executed shall be deemed to be an original and all of which taken together shall constitute one and the Note Documentssame agreement, and delivery of an executed counterpart to any security document by facsimile transmission or other electronic transmission (such as .pdf) shall be effective as delivery of a manually signed counterpart, in each case to the extent such execution is effective under local law.
Appears in 1 contract
Sources: First Supplemental Indenture (DIEBOLD NIXDORF, Inc)