The Agreed Security Principles Sample Clauses
The Agreed Security Principles clause sets out the fundamental standards and requirements that must be followed to secure interests or assets under a contract, typically in the context of financing or lending arrangements. These principles outline the types of security interests to be created, the jurisdictions in which they must be perfected, and the procedures for maintaining and enforcing those interests. For example, the clause may require that all security documents comply with local laws and that any necessary filings or registrations are completed promptly. Its core practical function is to ensure that all parties have a clear, consistent framework for creating and maintaining security, thereby reducing legal uncertainty and protecting the interests of secured parties.
The Agreed Security Principles embody a recognition by all parties that there may be certain legal and practical difficulties in obtaining effective guarantees and security from all Material Companies and other members of the Group required to give guarantees and security (the “Guarantor Companies”) in every jurisdiction in which Guarantor Companies are or may in the future be located. In particular:
(a) general statutory limitations, financial assistance, capital maintenance, corporate benefit, fraudulent preference, fraudulent conveyance, preference, “thin capitalisation” rules, retention of title claims and similar principles may limit the ability of a Guarantor Company to provide a guarantee or security or may require that the guarantee or security be limited by an amount or otherwise (including any legal fees, registration fees, stamp duty taxes and any other fees or related costs). The Company shall use reasonable endeavours to overcome any such limitation to the extent reasonably practicable. If, following the reasonable endeavours of the Company to overcome such limitations any such limit continues to apply, the guarantees and security provided will be limited to the maximum amount which the relevant member of the Group may provide having regard to applicable law (including any jurisprudence) and otherwise so as to minimise stamp duty, notarisation, registration tax or other applicable fees, taxes and duties;
(b) the giving of a guarantee, the granting and the terms of security or the perfection of the security granted will not be required to the extent it would (or could) incur any cost (including any legal fees, notarisation, registration or other applicable fees, stamp duty or other duties, taxes and any other fees or related costs) to the Group which are disproportionate to the benefit for the Finance Parties of obtaining such guarantees or security;
(c) where a class of assets to be secured includes material and immaterial assets, if the cost of granting security over the immaterial assets is disproportionate to the benefit of such security, security will be granted over the material assets only;
(d) it is expressly acknowledged that in certain jurisdictions it may be either impossible or impractical to grant guarantees or create security over certain categories of assets, in which event such guarantees will not be granted and security will not be taken over such assets provided that the Company shall use reasonable endeavours to overcome any such obstacle;
(e) unless grant...
The Agreed Security Principles embody a recognition by all parties that there may be certain legal and practical difficulties in obtaining effective guarantees from the Parent Guarantor and its Subsidiaries (collectively, the “Group”) in certain jurisdictions. In particular:
(a) mandatory law provisions, general legal, statutory and constitutional documents’ limitations, capital maintenance, the prohibition of an intervention threatening the existence of a German member of the Group (Verstoß gegen das Verbot des existenzvernichtenden Eingriffs), financial assistance, corporate benefit, fraudulent preference, “thin capitalization” rules, “transfer pricing”, retention of title claims, exchange control restrictions, employee consultation or approval requirements, regulatory restrictions and similar principles may limit the ability of a member of the Group to provide a guarantee or may require that the guarantee be limited by an amount or otherwise. If any such limit applies, the guarantees provided will be limited to the maximum amount which the relevant member of the Group may provide having regard to applicable law;
(b) unless each consent required by law, statute, the terms of any applicable contract, instrument or constitutional document or otherwise from the minority shareholders in, or any relevant corporate body of, any member of the Group which is not wholly owned (directly or indirectly) by another member of the Group is obtained, such Group member shall not be required to grant guarantees provided that the relevant company and the Parent Guarantor have used reasonable efforts to obtain such consent;
The Agreed Security Principles embody a recognition by all parties that there may be certain legal and practical difficulties in obtaining effective guarantees and/or security from all members of the Group in every jurisdiction in which members of the Group are located. In particular:
(a) general statutory limitations, financial assistance, corporate benefit or interest, fraudulent preference, retention of title claims and similar principles may limit the ability of a member of the Group to provide a guarantee or security or may require that the guarantee be limited by an amount or otherwise (it is agreed however that (1) the guarantees and security provided by Luxco 2, Luxco 3, Luxco 4, Luxco 5, Bidco and the Surviving Entity will not contain any limitations (save for those limitations provided for in the Finance Documents on the Signing Date) and (2) the guarantees and security provided by the Target will be limited to amounts owing by it to Luxco 5 and the Lenders (under the Domestic Facility and the Ancillary Facilities) and Notes issued by Luxco 5 for the purpose of funding purchases by Luxco 5 of Bonds from the Target);
(b) a factor in determining whether or not security shall be taken is the applicable cost which shall not be disproportionate to the benefit to the Creditors (or other beneficiary of the security) of obtaining such security;
(c) any assets subject to third party arrangements (including shareholder agreements or joint venture agreements) which prevent those assets from being charged will be excluded from any relevant security document; provided that reasonable endeavours to obtain consent to charging any such assets shall be used by the Group if the relevant asset is material;
(d) members of the Group will not be required to give guarantees or enter into security documents if:
The Agreed Security Principles embody a recognition by all parties that there may be certain legal, commercial and practical difficulties in obtaining effective security from the Company and each of its Restricted Subsidiaries in every jurisdiction in which the Company and its Restricted Subsidiaries are located. In particular:
(a) general statutory limitations, financial assistance, corporate benefit, fraudulent preference, “thin capitalization” rules, retention of title claims and similar matters may limit the ability of the Company or any of its Restricted Subsidiaries to provide a Guarantee or Liens or may require that it be limited as to amount or otherwise, and if so the same shall be limited accordingly, provided that the Company or the relevant Restricted Subsidiary shall use reasonable endeavors to overcome such obstacle. The Company will use reasonable endeavors to assist in demonstrating that adequate corporate benefit accrues to each of the Restricted Subsidiary;
The Agreed Security Principles embody a recognition by all parties that there may be certain legal and practical difficulties in obtaining effective guarantees or security from all relevant members of the Group (and for the purposes of this Schedule the “Group” shall mean Parent and the Restricted Subsidiaries) in every jurisdiction in which those members are located. In particular:
i. general statutory limitations, financial assistance, corporate benefit, fraudulent preference, “earnings stripping”, “controlled foreign corporation”, “thin capitalisation” rules, tax restrictions, retention of title claims and similar matters may limit the ability of a member of the Group to provide a guarantee or security or may require that it be limited as to amount or otherwise and if so, the same shall be limited accordingly, provided that the relevant member of the Group shall use reasonable endeavours to overcome such obstacle;
ii. members of the Group will not be required to give guarantees or enter into security documents if (or to the extent) it is not within the legal capacity of the relevant members of the Group or if the same would conflict with the fiduciary duties of those directors or contravene any legal prohibition, contractual restriction or regulatory condition or have the potential to result in a material risk of personal or criminal liability for any officer or director of any member of the Group, provided that the relevant member of the Group shall use reasonable endeavours to overcome any such obstacle;
iii. a key factor in determining whether or not a guarantee or security shall be taken is the applicable cost (including adverse effects on interest deductibility, stamp duty, registration taxes and notarial costs) which shall not be disproportionate to the benefit to the Lenders of obtaining such guarantee or security;
iv. where there is material incremental cost involved in creating security over all assets owned by a Loan Party in a particular category (for example, real estate), regard shall be had to the principle stated at paragraph (iii) above which shall apply and, where such security is to be given at all in light of the Agreed Security Principles, only the material assets in that category (for example, real estate of substantial economic or strategic value) shall be subject to security;
v. having regard to the principle stated at paragraph (iii) above, the Parent and the Collateral Agent shall discuss in good faith (having regard to customary practice in the applicable ju...