+ All Categories
Home > Documents > CLSA Schedule 1

CLSA Schedule 1

Date post: 03-Jun-2018
Category:
Upload: richard-osband
View: 225 times
Download: 0 times
Share this document with a friend

of 18

Transcript
  • 8/12/2019 CLSA Schedule 1

    1/18

    Schedule 1

    Schedule 1 Guarantor urIEnhancement

    Part I - General Provisionsuarantee

    Subject to the following provisions of this Sched ule, in consideration of the Council enteringinto this Agreement the Guarantor:

    1.1 uarantees to and covenants with the Council irrevocably and unconditionally as a continuingsecurity that the Bu yer wil l discharge the financial obligations of the Buyer to the Council inrelation to the Outstanding Liabil ities in the event that the Buyer fai ls to discharge suc hobligations;

    1.2 grees, save in respect of express provision for deduction, set of or adjustments in thisAgreem ent, that any sum payable to the Council pursuant to paragraph 1.1 of this Sch edulemust be paid without any deduction set-off or counterclaim;

    1.3 cknowledges that the Guarantor is:1.3.1 principal debtor or guarantor for the financial obligations of the Buyer to the Council in

    relation to the Outstanding Liabilities as between the Council and the Guarantor;1.3 .2 ot released and this guarantee is not prejudiced by:

    a) any time or indulgence given to the Buyer;b) any variation or arrangem ent or alteration of terms being mad e or agree d w ith theBuyer;

    (c ) any lack o f o r l im ita tion on the powers o f the Buyer;d) the absenc e of au thority of any person purporting to represent or act on beh alf of the

    Buyer;e) any act omission or thing whatsoever whereby the Guarantor might be released or as

    a result of which the Buyer s Obligations may not be enforceable against the B uyer;or

    f) the liquidation administration or other insolvency of or any change in the constitutionof the Buyer or the Guarantor.

    1 A he Guarantor confirms that i t is in its own com mercial interest to enter into this Agreem entas Guarantor and that it is not aware that by doing so it is prejudicing any of its creditors.

    he Guaranteed Amount Release Substitution or Provision of AdditionalSecurity

    2.1 he liabil i ty of the Guarantor shall be l imited to the Gu aranteed Am ount. The GuaranteedAm ount shall be su bject to adjustment in accordanc e w ith the following provisions of thisparagraph 2.

    42878078.2\1008 29RGB/90883 00001/951 0001 11

  • 8/12/2019 CLSA Schedule 1

    2/18

    Schedule 1

    2 2 ubject to the provisions of this Schedule the Buyer shall provide the following items to theCouncil in respect of any Accounting Date that shall fall within the Security Monitoring PeriodPROVIDED THAT the Buyer shall not be obliged to provide any NAV Report in respect of anyAccounting period expiring before 30 April 2013:

    2 2 1 ithin 4 months following any Interim Accounting Date an Interim NAV Report prepared to therelevant Interim NAV Certification Date

    2.2.2 within 4 months following any Annual Accounting Date (or such later date as the Council shallhave requested in order to enable such Annual NAV Report to have regard to auditedaccounts) an Annual NAV Report prepared to the Annual NAV Certification Date;

    2.2.3 provided that in the event that having used reasonable endeavours to do so the Buyer isunable to procure an Interim NAV Report or an Annual NAV Report in accordance with theprovisions of this paragraph the Buyer shall notify the Council to this effect and the Councilshall be entitled to request and the Buyer shall use reasonable endeavours to provide suchinformation as the Council shall reasonably require in order to ascertain the Total NAV andthe parties shall use reasonable endeavours to agree such Total NAV provided that wherethey are unable to do so within one month of notification by the Buyer that such reports arenot available either party may refer the determination of such Total NAV to the Expert inaccordance with the provisions of clause 40 and both parties shall provide such relevantinformation for such purpose as the Expert reasonably requires and is within their respectivecontrol

    2 3 he Buyer shall serve a Material Adverse Change Notice on the Council if it becomes awareof a Material Adverse Change.

    2 4 f the Council receives a Material Adverse Change Notice or the Council reasonably considersthat a Material Adverse Change has occurred the Council may (subject to paragraph 2.4.2) bywritten notice served on the Buyer require the Buyer to provide a MAC NAV Report providedthat:

    2.4.1 where a Material Adverse Change Notice is served such request is made by the Council bywritten notice served on the Buyer within 10 Working Days of the service of the MaterialAdverse Change Notice;

    2.4.2 the Council cannot request a MAC NAV Report and any such request or related MAC NAVReport shall have no effect if (a) a Material Adverse Change is attributable in whole orpredominantly to fluctuations in market conditions or (b) (subject to paragraph 2.4.3) if thenext Accounting Date of the Relevant Entity is less than four months from the date of anysuch request;

    2 4 3 n the event that the Council is not entitled to request a MAC NAV Report by virtue ofparagraph 2.4.2(b) but the Council reasonably considers that a Material Adverse Change hasoccurred the Council may request the Buyer to procure confirmation from the Auditor as towhether a Material Adverse Change has taken place since the date of the immediatelypreceding NAV Report subject to paragraph 2.4.4;

    2 4 4 n providing such confirmation the Auditor shall only be required to base its opinion on theAuditor s enquiries of the directors of the Relevant Entity and it shall not be required to carryout enquiries or due diligence other than enquiries of the bank as provided by paragraph2 7 3;

    42878078.2\b08 30RGB/90883 00001/951 0001 11

  • 8/12/2019 CLSA Schedule 1

    3/18

    Schedule 1

    2.4.5 such confirmation shall be provided within one month of the Council s request in accordancewith paragraph 2.4.3;

    2.4.6 in the event that the Auditor confirms that a Material Adverse Change has occurred pursuantto paragraph 2.4.3 the Council may by written notice served on the Buyer within 10 WorkingDays of the said Auditor s confirmation require the Buyer to provide a MAC NAV Report; and

    2.4.7 any MAC NAV Report shall be prepared to the relevant MAC Certification Date.2 5 ny MAC NAV Report to be provided pursuant to paragraph 2.4 shall be provided to the

    Council within 2 months of such request PROVIDED THAT it shall be permissible for suchMAC NAV Report to be provided by a suitably qualified officer or employee of the Buyer orthe Relevant Entity in lieu of the Auditor and if such MAC NAV Report is provided by suchofficer or employee as aforesaid then such MAC NAV Report shall include or be accompaniedby a declaration by the Buyer or the Relevant Entity to the effect that the relevant MAC NAVReport shall have been prepared with the same reasonable care and skill as could have beenexpected from an independent suitably qualified accountant.

    2 6 n valuing assets for the purposes of the NAV Test the following shall apply:2 6 1 here (a) the assets of the Relevant Entity include Farm Lane (whether or not included in the

    SAP at the relevant time) or (b) Farm Lane is held by an entity that is not a Relevant Entityand is included in the SAP or otherwise is subject to security for the performance of theOutstanding Obligations the value of such asset shall be deemed for the purposes of the NAVTest to be not less than 5.7m but if it shall have a higher value then such higher value shallbe used. Such value shall be determined on the basis that the property is free from any rightsof the Council under this Agreement or the Farm Lane Mortgage.

    2.6.2 Where (a) the assets of the Relevant Entity include Gibbs Green School (whether or notincluded in the SAP at the relevant time) or (b) Gibbs Green School (or the right thereto) isheld by an entity that is not a Relevant Entity and is included in the SAP or otherwise issubject to security for the performance of the Outstanding Obligations (i) the value of suchasset shall be deemed for the purposes of the NAV Test to be not less than 9.3m but if itshall have a higher value then such higher value shall be used and (ii) such asset shall bevalued on the basis that the Relevant Entity or other entity as aforesaid shall be the legalowner free of any rights of the Council under this Agreement with the benefit of the rights tobe granted by the Gibbs Green School Transfer and on the basis that the Relevant Entity isactually registered at HM Land Registry with title absolute free of any rights of the Councilunder this Agreement or the GGS Charge or the GGS Legal Mortgage.

    2.6.3 Where the assets of the Relevant Entity include any Existing Home or other property acquiredfrom a third party (a) the value of such asset shall be deemed for the purposes of the NAVTest to be not less than purchase price paid for the property (unless acquired pursuant to aVoluntary Advance Purchase Contract in which event the value of such asset shall be itsmarket value) but if it shall have a higher value then such higher value shall be used and (b)such asset shall be valued on the basis that it is free of any rights of the Council under thisAgreement or any charge or other security for the benefit of the Council.

    2.6.4 Where the assets of the Relevant Entity include any Existing Home acquired from the Councilthen such asset shall be valued at not less than its market value on the basis that RelevantEntity is the legal and beneficial owner of the property free from any rights of the Councilunder this Agreement and that the Relevant Entity is registered at HM Land Registry with titleabsolute free of any rights of the Council under this Agreement.

    42878078 2\1o08 31RGB/90883.00001/951 0001.11

  • 8/12/2019 CLSA Schedule 1

    4/18

    Schedule 1

    2 6 5 he foregoing provisions of this clause 2.6 shall apply to the valuation of assets held byRelevant Entities whether or not such assets are also included within the SAP and whether ornot such assets comprise Existing Homes that are subject to security in favour of the Councilunder clause 9.18.

    2.6.6 Where any other asset is not held by a Relevant Entity but is included within the SAP then theSecured Amount applicable to such asset shall be included as part of the gross asset value inthe calculation of the Total NAy.

    2.6.7 Where an Existing Home is not held by a Relevant Entity but is subject to security in favour ofthe Council under clause 9.18 then the amount so secured shall be included as part of thegross asset value in the calculation of the Total NAV and for the avoidance of doubt theOutstanding Liability shall include the sum so secured).

    2.6.8 Where the Council has been granted all the Replacement Home Accommodation Leases inrespect of a Relevant Phase then whether or not the Relevant Phase Completion hasoccurred the Buyer shall be deemed to be the owner of the Relevant Demolition Phase withvacant possession free of any rights of the Council or any third party and the value of theRelevant Demolition Phase for calculating the Total NAV shall be higher of the value of theRelevant Demolition Phase calculated on such basis or the aggregate of sums paid to acquirethe Existing Homes on the Relevant Demolition Phase.

    2 7 n relation to any Relevant NAV Report:2 7 1 o the extent that it is possible to do so having used reasonable endeavours the Buyer shall

    procure that the Auditor certifying the Total NAV shall provide the Council with anacknowledgement that the Auditor owes a duty of care to the Council with regard to theRelevant NAV Report ( NAy Duty of Care ) subject to paragraph 2.7.2 and Provided Thatwhere it is unable to do so having used such reasonable endeavours the proviso to paragraph2 2 3 shall apply

    2.7.2 The NAV Duty of Care shall be on such terms and conditions as may reasonably be requiredby the Council having regard to the purposes for which NAV Reports are required and thepotential losses to the Council should it rely on a NAV Report that has not been prepared withthe required reasonable care and skill to the extent that such terms and conditions canreasonably be obtained in the relevant market at the time PROVIDED THAT where the Buyeralleges that such terms and conditions cannot reasonably be obtained by reason of the costthereof this shall only be a ground for failure to obtain such NAV Duty of Care where suchterms can only be obtained at a prohibitive cost being unreasonable and disproportionate tothe nature of the task and responsibility undertaken).

    2 7 3 n preparing NAV Reports the Auditor shall be entitled to rely on asset valuations preparedby a suitably qualified independent valuer in accordance with the requirements of the relevantexchange where the Relevant Entity is listed or otherwise to market value pursuant to anyapplicable RICS valuation guidance from time to time and such valuations being not morethan 6 months old at the relevant NAV Certification Date) and the other information providedby an appropriate officer of the Relevant Entity to which the relevant NAV Report relates orwhere applicable) the owner of the relevant asset where such owner is not a Relevant Entity

    and no further verification of such matters shall be required other than in the case of anInterim NAV Report or a MAC NAV Report only) obtaining any relevant bank confirmation inrelation to the cash balances of such Relevant Entities and liabilities owed by such RelevantEntities to such bank or banks it being noted that in the case of Annual NAV Reports such

    42878078 2\1008 32RGB/90883.00001/951 0001.11

  • 8/12/2019 CLSA Schedule 1

    5/18

    Schedule 1

    cash balances and liabilities shall be determined by reference to the published auditedaccounts as provided in paragraph 2.7.5).

    2 7 4 f there are contingent liabilities of the Relevant Entity subsisting at the date to which theRelevant NAV Report is prepared and which would be required by the Accounting Standardsto be noted in any published accounts of the Relevant Entity if the same were to be publishedin respect of the period to which the Relevant NAV Report was prepared such liabilities shallalso be noted in the Relevant NAV Report but for the avoidance of doubt shall not beLiabilities for the purposes of the NAV Test (save to the extent they would have to bedischarged on insolvency).

    2.7.5 In the case of any Interim NAV Report the information provided to the Auditor may includeunaudited management accounts but in the case of any Annual NAV Report the Auditor shallin the case of assessing the NAV of the assets of any Relevant Entity have due regard to theinformation in the published audited accounts of any Relevant Entity.

    2.7.6 The Buyer shall use reasonable endeavours to procure that any Interim NAV Report shall beto substantially the same effect as the Outline Interim NAV Report.

    2.7.7 The Buyer shall use reasonable endeavours to procure that any MAC NAV Report shall be tosubstantially the same effect as the Outline Interim NAy Report but with such changes asmay be necessary to refer to the MAC Certification Date in lieu of the Interim NAVCertification Date.

    2.7.8 The Buyer shall use reasonable endeavours to procure that any Annual NAV Report shall beto substantially the same effect as the Outline Annual NAV Report.

    2.7.9 Each Relevant NAV Report shall be prepared to the NAV Certification Date and confirm theTotal NAV as at that date subject to the qualifications and conditions in this Schedule

    2.7.10 Each Relevant NAV Report shall (save in the case of manifest error) be conclusive and finaland binding on the Parties as to the Net Asset Value of the Relevant Entity.

    2.7.11 The Buyer may request that the Council confirms whether or not either and/or both of therequirements in paragraphs 2.7.1 and 2.7.2 have been complied with (or in the case of 2.7.2will be so complied with should the NAV Duty of Care be in the terms prorosed by the Buyer)and if such confirmation is not provided within 10 Working Days the matter may be referred toan Expert pursuant to clause 40.4 for determination.

    2 8 ollowing provision of a Relevant NAV Report the Parties shall endeavour to agree theamount of the Outstanding Liabilities as at the relevant Assessment Date ( RelevantAssessment Date ) and in default of agreement such Outstanding Liabilities shall bedetermined by an Expert appointed pursuant to clause 40.

    2 9 s from the date of this Agreement until the first Relevant Assessment Date and thereafter asfrom each respective Relevant Assessment Date the Guaranteed Amount shall be the lowerof:

    2 9 1 he Initial Guaranteed Amount; and2.9.2 such amount as shall be equal to 120 of the Outstanding Liabilities of the Buyer at the

    Relevant Assessment Date less the Net Asset Value of the Buyer or any permitted BuyersNovatee (subject to the provisions of Schedule 16) as confirmed as at the Relevant NAV

    42878078 2\1o08 33RGB/90883.00001l9510001.1 1

  • 8/12/2019 CLSA Schedule 1

    6/18

    Schedule 1

    Certification Date by a Rele vant NAV Re port (or as agreed or d etermined by an Expertpursuant to clause 40 as provided in paragraph 2.2 of this Sche dule).

    2.10 he NAV Test shall be deemed to be satisfied where the Total NAV as confirmed as at theRelevant NAV Certification Date by a Re levant NAV Re port (or as agreed or determined byan Expert pursuant to clause 40 as provide d in paragraph 2.2 of this Sche du le) equals orexce eds the lower of (i) the Initial Guaranteed Amou nt and (ii) such amount as shall be equalto 120 of the Outstanding Liabil ities of the Buyer at the Relevant Assessment Date (or theBuye rs Novatee if the Bu yer shall have bee n substituted by another entity in accordance withthis Agreeme nt as at the Relevant NAV Certification Date).

    2.11 Relevant Entity or the Relevant Entities are:2.11 i the Buyer (or the Buyer s Novatee if the Buyer shall have been substituted by another entity in

    accordance with this Agreement as at the Relevant Assessment Date); and2.11.2 the Guarantor (or any substituted guarantor that may have been provided for the Guarantor in

    accordance with this Agreem ent and which is l iable in respect of the Guarantors obligationsunde r this Agreeme nt as at the Re levant Assessment Date); and2.11.3 any other entity that may have provided a guarantee or otherwise have a direct liability to the

    Counc il with re gard to the Outstanding Liabil ities (othe r than to the extent of only havingprovide d assets as sec urity for the disch arge of such Outstanding Liabil ities whe ther in theSAP or otherwise) as at the Relevant Assessment Date to the extent such guarantee or directliability shall be subsisting as at such date;

    2.12 f at any Relevant Assessm ent Date (a) the Ne t Asset Value of the Bu yer (or the Buye rsNovatee if the Buye r shall have been su bstituted by another entity in accordance with thisAgreement as at the Relevant Assessment Date) as specified in the Relevant NAV Reportshall alone be sufficient to satisfy the NAV Test then the G uarantor (and any othe r RelevantEntity apart from the Buye r or the Buye rs Novatee (as the c ase may be) shall be releasedfrom all liabil ity and no furthe r guarantee or othe r secu rity shall be requ ired save as providedin paragraph 2.13 of this Sch edu le or (b) the N AV Test wou ld be satisfied notwithstanding therelease of any other Releve nt Entity nominated by the Buye r then such other Re levent Entityshall be released from all liabil ity but without prejudice to paragraph 2.13 of this Sch edu le.

    2.13 otwithstanding that the Gu arantor (and any other Re levant Entities) may h ave bee nreleased from liabili ty pursuant to paragraph 2.12 of this Sch edu le:2.13.1 Annual NAV Reports and Interim NAV Reports where required shall continue to be provided

    in relation to the Bu yer (or the Buyers Novatee (as the c ase may be );2.13.2 the Outstanding Liabilities shall continue to be determined; and2.13.3 the Guaranteed Amount shall continue to be ascertained in accordance with this Schedule,

    throughout the Se curity Monitoring Period.2.14 f on any Relevant Assessm ent Date fol lowing any release pu rsuant to paragraph 2.12 theNAV T est is not satisfied then the Buyer sh all if so required by the Council by written notice

    procure ( Remedial Action Notice ) that one or more of the actions listed in paragraph 2.17as decided upon by the Buyer ( Remedial Actions ) of this Sched ule is taken so that i f theNAV Te st were applied on completion of such actions the NAV Te st would be satisfied (the

    Remediation Objective )428780 78.2\1008 34RGB/90883 00001/9510001 11

  • 8/12/2019 CLSA Schedule 1

    7/18

    Schedule 1

    2 15 mmediately upon the release of any Relevant Entity from its liability in relation to the liabilitiesof the Buyer or any Buyers novatee as the case may be) the Council shall provide a LiabilityRelease Certificate to the Relevant Entity confirming such release in such form as mayreasonably be required and the same shall be conclusive but not necessary) evidence ofsuch release.

    216 f in relation to any Relevant Assessment Date the Relevant NAV Reports show that the NAVTest shall not be satisfied then the Buyer or the Guarantor shall if so required by the Councilby written notice (Remedial Action Notice ) procure that one or more of the RemedialActions listed in paragraph 2.17 as decided upon by the Buyer and/or the Guarantor( Remedial Actions ) is taken so that if the NAV Test were applied on completion of suchactions the NAV Test would be satisfied the Remediation Objective )

    2 17 he Remedial Actions comprise the following:2.17.1 the acquisition of additional assets by the Buyer and/or any other Relevant Entities;

    2.1 7.2 the reduction of the Liabilities of the Buyer and/or any other Relevant Entities;2,1 7.3 the substitution of any of the Relevant Entities;2.17.4 the provision of additional guarantors on similar terms to those applicable in relation to the

    Guarantor which such variations as may be approved by the Council acting reasonably);2.17.5 the provision of bonds cash deposits or other suitable security in amounts and on terms

    acceptable to the Council acting reasonably) ( Additional Security Arrangements).2 18 ny dispute as to whether the Council shall be acting reasonably in connection the matters in

    paragraph 2.17.4 and 2.17.5 shall be determined by an Expert in accordance with clause 40 ifthe Buyer so requires.

    2 19 f such Remedial Actions as are required to achieve the Remediation Objective have not beencompleted within 6 months of the relevant Remedial Action Notice as extended by suchperiod as may be required to settle any dispute under paragraph 2.18) then the Council shalluntil such time as such action may in fact be completed have the right to Terminate thisAgreement in accordance with and subject to the provisions of Schedule 16

    ollateral Security3 1 ubject to and in accordance with the provisions of this paragraph 3 the Buyer will procure

    that specified assets ( the Secured Assets ) are subject to security arrangements theApplicable Security Arrangements ) as security for the discharge of a proportion of theGuaranteed Amount such proportion being hereinafter defined in paragraph 3.9 as the

    Minimum Security Cover .3 2 ach Secured Asset shall be charged with such amount of the Minimum Security Cover as

    the Buyer may specify in writing to the Council from time to time subject to the provisions ofthis paragraph the Secured Amount ).

    3 3 he Secured Assets may comprise such property, cash deposits, escrow arrangements orother assets as may be approved by the Council such approval not to be unreasonablywithheld or delayed).

    42878078 2\1o08 3 5RG13/90883 00001/9510001 11

  • 8/12/2019 CLSA Schedule 1

    8/18

    Schedule 1

    3 4 he Secured Assets that shall be subject to the Applicable Security Arrangements from timeto time shall be referred to as the Security Asset Pool or SAP .

    3 5 he Buyer may vary the Secured Amount in relation to any Secured Asset and may changethe Secured Assets in the SAP in accordance with the provisions of this Schedule.

    3 6 he Total Security Requirement is that:3.6.1 the Recognised Value of each Secured Asset in the SAP shall not be less than the Secured

    Amount relating to such Secured Asset; and3 6 2 he aggregate of the Secured Amounts relating to Secured Assets in the SAP shall not be

    less than the Minimum Security Cover; and3.6.3 The aggregate of the Recognised Values of the Secured Assets in the SAP shall not be less

    than the Minimum Security Cover.

    3 7 he Recognised Value of a Secured Asset is as provided in this paragraph 3.7,3 7 1 he Recognised Value of a Secured Asset is its value in sterling at the Relevant Asset

    Valuation Date as agreed or determined in accordance with the following provisions of thisSchedule.

    3.7.2 the Recognised Values of the Initial Assets shall not be less than the values specified inparagraph 3.25

    3.7.3 the Recognised Values of any Buyers Estate Assets shall not in any event be less than theamount paid for them provided that in the case of an acquisition pursuant to a VoluntaryAdvance Purchase Contact the value cannot exceed its market value.

    3 8 he Relevant Asset Valuation Date is (a) where the Secured Asset is an asset not alreadywithin the SAP the date on which the relevant asset is included in a New Secured AssetNotice pursuant to paragraph 3.17 and (b) where the Buyer serves notice under paragraph3.15 requiring the Recognised Value of any Secured Asset in the SAP to be increased andthe current Recognised Value is less than the proposed new Secured Amount the RelevantAsset Valuation Date shall be the date of such notice

    3 9 he Minimum Security Cover is as provided in this paragraph

    3 9 1 rom the date of this Agreement to the date on which the first Advance Payment is made theamount of 30m;

    3.9.2 from the date on which the first Advance Payment is made to the date on which the secondAdvance Payment is made the sum of 1 Sm; and

    3.9.3 as from the date on which the second Advance Payment is made the amount shall be zero.3 10 orthwith on the earlier of (a) the Minimum Security Cover reaching zero and (b) the payment

    of any outstanding sums in relation to Outstanding Liabilities due to the Council on the Expiryor earlier Termination of this Agreement and (c) when the Buyer (here meaning the entity atthe relevant time liable as principal obligor to perform the obligations of the Buyer under thisAgreement) shall have been released from such liabilities as a result of a novation the Councilshall (i) release all security in relation to all Secured Assets in the SAP and shall execute allsuch documents and do all such other things as may be necessary to effect such release and

    42878078 2\1o08 36RGB/90883.00001/951 0001.11

  • 8/12/2019 CLSA Schedule 1

    9/18

    Schedule 1

    (ii) procure that all registrations or notices in relation to such secu rity at the Land RegistryLand Charges R egistry or Companies House or otherwise are cancelled

    3.11 he Sec ured Assets may be owne d or controlled by any entity and need not be owned orcontrolled by Buyer or the Guarantor or any other entity with obligations in connection withthis Agreement.

    3.12 or the purposes of assessing whether the Total Security Requirement has been satisfied thefull amount of the Recognised Value of the Secu red Assets in the SAP will be taken intoaccount even if the actual value of any relevant Secured Asset m ay have fallen since theRelevant Asset Valuation Date subject and without prejudice to the following provisions of thisSchedule.

    3.13 he Se cured Am ount in relation to any Secu red Asset shall be as specified by the B uyer tothe Council from time to time subject to this provisions of this Schedule.

    3.14 he Sec ured Amount m ay be less than the Recognised Value of the Secured Asset but i t maynot be more.

    3.15 ubject to clauses 3.15.3 and 3. 15 .43.15.1 the Buyer may at any time serve notice on the Council requiring that the Secured Amount in

    relation to a Secu red Asset shall be increased ( Secured Amount Increase Notice ) to suchamount as m ay be specified in the Secu red Am ount Increase Notice together with a valuationfrom a suitably qualified independent valuer that is not less than 6 months old at the date ofthe Secured Amount Increase Notice in respect of which the valuer shall owe a duty of care tothe Council (whether by way of the report being addressed to the C ouncil or some otheracknowledgement being provided by the valuer to the Council) on such terms as the Councilmay approve acting reasonably having regard to the purposes for which the report is to beprovided and having regard to market practice at the relevant time and provided that anydispute as to the terms or proposed of the duty of care may be referred by either party to anExpert for determination under clause 40.

    3.15.2 if the Buyer shall do so then 0 the value specified in such valuation shall be conclusiveevidence of such value and it shall be the Re cognised Value and (i i) the Secured Amountshall be the increased to the Secured Am ount specified in the Se cured Am ount IncreaseNotice provided that this is not more than the revised R ecognised Value

    3.15.3 the Buyer may not increase the Recognised Value of any asset in the SAP relating to thatasset more than once in any period of 12 m onths but shall be free to adjust the SecuredAmount on the basis of the relevant applicable Recognised Value subject to the otherprovision of this Schedule

    3.15.4 where the valuation shows an increase in the value of the relevant asset of less than 10 ofits existing Recognised Value then its Recognised Value shall remain at its existingRecognised Value but without prejudice to the Buyers right to require it to be increased at asubsequent date in accordance w ith the forgoing provisions subject to clause 3 .15.3 andprovided that where such increase is more than 10 for the whole of such increase shall betaken into account and not just the amount in excess of 10

    3.16 he Buyer may remove Secured Assets from the S AP in accordance with the followingprovisions.

    42878078.2\1008 37RGB/90883 00001/9510001 11

  • 8/12/2019 CLSA Schedule 1

    10/18

    Schedule 1

    3.16.1 The effect of such removal shall be that the Secured Amount applicable in relation to therelevant Secured Asset shall cease to be taken into account when assessing whether theTotal Security requirement shall be satisfied.

    3.16.2 The Buyer may only remove a Secured Asset from the SAP if immediately following suchremoval the Total Security Requirement shall remain satisfied.

    3.16.3 The Buyer may nominate Secured Assets for removal ( Removed Assets ) by serving writtennotice providing details thereof to the Council ( Removal Notice ).

    3.16.4 If within 10 Working Days of the service of a Removal Notice the Council shall serve writtennotice on the Buyer objecting to such removal on the grounds that the Total AssetRequirement shall not continue to be satisfied if the relevant Secured Asset is removed fromthe SAP an Objection Notice ) then in default of agreement as to whether or not this is thecase the matter shall be referred to an Expert for determination pursuant to clause 40 and ifthe Council shall fail to serve an Objection Notice within such period the Total AssetRequirement shall be deemed to continue to be satisfied notwithstanding the removal of theRemoved Assets

    3.16.5 Where it is agreed or determined or deemed that the Total Asset Requirement shall continueto be satisfied notwithstanding the removal of the Removed Assets then a) the security inrelation thereto shall forthwith cease to have effect and b) the Council shall as soon aspossible i) execute all such documents and do all such other things as may be necessary toeffect such release and ii) procure that all registrations or notices in relation to such securityat the Land Registry Land Charges Registry or Companies House or otherwise are cancelled

    3 17 he Buyer may place additional or alternative Secured Assets ( New Secured Assets ) inthe SAP in accordance with the following provisions.

    3.17.1 The Buyer may serve written notice on the Council a New Secured Asset Notice )specifying a) the New Secured Assets b) the proposed Recognised Value of the NewSecured Assets and c) the proposed Applicable Security Arrangements in relation to each ofthe New Secured Assets and d) the proposed Secured Amount in respect of each of the NewSecured Assets.

    3A 7 2 The Recognised Value of the New Secured Assets shall be established in accordance withthe following provisions this Schedule.

    3.17.3 The Applicable Security Arrangements in relation to the New Secured Assets shall beestablished in accordance with the provisions of paragraphs 3.20 below.

    3.17.4 Once the Recognised Values of the New Secured Assets and the Applicable SecurityArrangements in relation thereto have been so established the Buyer shall confirm to theCouncil in writing a Confirmation Notice ) whether or not the Buyer wishes to include theNew Secured Assets in the SAP and if the Buyer confirms in such notice that the Buyer doeswish to include the New Secured Assets in the SAP then Parties shall execute suchdocuments and do all such other things as may be necessary to bring such ApplicableSecurity Arrangements into effect as soon as possible.

    3.17.5 Once the Applicable Security Arrangement have been brought into effect a) the NewSecured Assets shall form part of the SAP b) the Secured Amounts specified in relation tothe New Secured Assets shall be taken into account in determining whether the Total SecurityRequirement shall be satisfied and c) the Recognised Values of the New Secured Assets

    42878078.2\ioO8 38RGB/90883 00001 /9510001 11

  • 8/12/2019 CLSA Schedule 1

    11/18

    Schedule 1

    established u nder paragraphs 3.18 and 3.19 shall be the Recognised Values of the Ne wSecu red Assets for the purposes of this Agreement.

    3.18 ubject to paragraph 3.19 and 3.25 the Re cognised Value of any assets in sterl ing otherthan sterl ing itself) shall be the value of the asset at the Relevant Asset Valuation Date asagreed betwe en the Parties or in default of agreement suc h value as shall be de termined byan Expert in accordanc e w ith clause 40 on the application of either party.

    3.19 n the case of any applicable property the Buyer m ay provide to the Counc il with a) avaluation from a suitably qualified independent valuer that is not less than 6 m onths old at theRelevant Asset Valuation Date and b) a duty of care unde rtaking from the valuer to theCouncil and if the Bu yer shall do so then the value spe cified in suc h valuation shall beconclusive evidence of such value and shall be the Recognised Value.

    3.20 n relation to any Secu red Assets the A pplicable Se curity Arrangeme nt shall be as approvedby the Council such approval not to be unreasonably withheld or de layed) provided that:

    3.20.1 in relation to real property a fixed legal charge for the relevant Secured Amount in similarterms to the Standard Property Mortgage shall be deem ed to be approved.3.20.2 Any dispute in relation to any such approval shall be determined by an Expert pursuant to

    clause 40.3.21 n the date of this Agreem ent the SAP shall comprise:3.21.1 Gibbs Green School subject to the GGS Charge3.21 .2 Farm Lane as subject to the Farm Lane Mortgage3.21 .3 The Northern Access Road subject to the NAR Mortgage

    ( the Initial Assets )3.22 he Sec ured A mounts in respect of the Initial Assets shall be as follows:

    Farm Lane - 5.7mGibbs Green School - 9.3mNorthern Access Road 15m

    3.23 he Farm Lane Mortgage shall be com pleted imme diately following the transfer of Farm Laneto the Buyer pursuant to this Agreeme nt.

    3.24 he NAR Mortgage and the GGS Charge shall be completed immediately following exchangeof this Agreement.3.25 he C ouncil confirms that for the pu rposes of the SAP the Re cognised Values of the Initial

    Assets as at the d ate hereof is not less than the following:Farm Lane - 5.7mGibbs Green Sc hool - 9.3m

    42878078.2\1o08 39RGB/90883 00001/951 0001 11

  • 8/12/2019 CLSA Schedule 1

    12/18

    Schedule 1

    Northern Access Road 18m

    3 26 he Council further confirms that the Initial Assets and the relevant Applicable SecurityArrangements referred to in this Schedule in relation to the Initial Assets and the respectivetitles thereto are accepted by the Council and that the Council shall have no right or claim withregard to any such matters.

    3 27 or the avoidance of doubt3.27.1 The provisions of paragraph 3.15 shall apply to the Initial Assets so that their Recognised

    Values may be increased but their Recognised Values shall be deemed always to be not lessthan their Initial Recognised Values specified in paragraph 3.25.

    3.27.2 The bases of valuation specified in paragraph 2.6 shall also apply to the valuation of therelevant assets for the purposes of the SAP

    3 28 he following provisions apply in relation to Gibbs Green School:3.28.1 The GGS Charge creates a charge over the Buyer s beneficial interest in Gibbs Green School

    created by this Agreement.3.28.2 If the GGS Charge shall still be subsisting at the date of the transfer of Gibbs Green School to

    the Buyer or its nominee pursuant to this Agreement completion of the transfer of GibbsGreen School to the Buyer or its nominee pursuant to this Agreement the GGS Charge will bereleased on such completion and the Council shall as soon as possible (i) execute all suchdocuments and do all such other things as may be necessary to effect such release and (ii)procure that all registrations or notices in relation to such security at the Land Registry LandCharges Registry or Companies House or otherwise are cancelled

    3.28.3 The Buyer may by written notice served on the Council on or before such completion electthat Gibbs Green School shall continue to be included in the SAP and if the Buyer makessuch an election then the Buyer (or the nominee as the case may be) and the Council shallenter into the GGS Legal Mortgage immediately following completion of the transfer of GibbsGreen School as aforesaid

    3.28.4 The property shall be deemed to have remained in the SAP at its Recognised Valueimmediately prior to the release of the GGS Charge and completion of the GGS LegalMortgage and the provisions of this Schedule shall apply as if the property had been includedin the SAP subject to such new charge as from the date hereof in lieu of the property assubject to the GGC Charge

    3.28.5 For the avoidance of doubt the provisions of this paragraph 3.28 shall be without prejudice tothe requirement that the Buyer maintains the Minimum Security Cover in accordance with theprovisions of this Schedule

    ubstitution of SecurityWithout prejudice to any other provision of this Schedule:

    4 1 nother guarantor or guarantors may be substituted at any time for any entity guaranteeingthe obligations of the Buyer with the prior consent of the Council (such consent not beunreasonably withheld or delayed) provided that consent shall be deemed granted if theprovisions of paragraph 4.3 are complied with.

    42878078 2\1o08 40RGB/90883 00001/951 0001 11

  • 8/12/2019 CLSA Schedule 1

    13/18

    Schedule

    4.2 substitute guarantor or guarantors may be provided as follows:4.2.1 he Buyer m ay apply to the C ouncil for consent to substitute any gua rantor as aforesaid

    together with a) NAV Re ports for the Relevant Entities who are not to be substituted and alsofor the Buyer and/or b) draft documentation by which any such substitution is to be effected( Guarantor Substitution Documents)

    4.2.2 n this case the Relevant Assessm ent Date for assessing the Ou tstanding Liabilit ies of theBuyer and determining whether the NA V Test shall be satisfied shall be 5 Working Da ys afterthe provision of the said N AV R eports.

    4.2.3 The Parties shall endeavour to agree whether the NAV Test so applied shall be satisfied anddefault of agreement the m atter shall be determined by an Expert in accordance with clause40.

    4.2.4 f it shall be agreed or determined that the NA V Test so applied shall be satisfied then theconsent of the Council shall be deemed to have been given subject to settlement of theGuarantor Substitution D ocumen ts.

    4.2.5 The parties shall endeavour to agree the Guarantor Substitution Documents as soon aspossible and in default of agreement the same shall be determined by an Expert inaccordance with clause 40.

    4.2.6 Following agreement or determination of the terms of the Guarantor Substitution Documentsas aforesaid the Council shall complete such Gu arantor Substitution Docum entation within 1 0Working Da ys of the provision of engrossments to the Co uncil.

    4.3 n alternative security package to that provided for in this Schedule including withoutlimitation the Collateral Security arrangements unde r paragraph 3 of this Schedule as well asany guarantees o r other security) or that may otherwise subsisting from time to time pursuantto the provisions of this paragraph such as one com prising performance bonds, cash depo sitsor other security with or without a guarantee or guarantees in addition) together the NewSecurity Package ) may be provided to replace the existing security package with the priorconsent of the Council such consent not be unreasonably withheld or delayed) provided thatthe Coun dil will not withhold its consent if it is satisfied acting reason ably) that the NewSecurity Package together with the Net Asset Value o f the Buyer) provides sufficientcovenant strength or adequate security to meet or exceed the Guaranteed Am ount as at thedate of the p roposed substitution.

    4.4 he Buyer may apply for consent under paragraph 4.3 together with a) such financial andother information and/or b) draft docume ntation whereby the New Security Package is to bebrought into effect in substitution for the relevant existing arrangements ( New SecurityDocumentation ) as may reasona bly be required for the Coun cil to determine w hether or notto grant such consent ( New Security Package Consent Application )

    4.5 n default of agreeme nt as to whether the C ouncil can reasonably withhold consent to theadoption of the New S ecurity Package and/or the terms of the New Security Documentationthe ma tter shall at the request of the Buyer be referred to an Exp ert for determinationpursuant to clause 40.

    4.6 f so required by the Buyer following agreemen t or determination of the form of any Ne wSecurity Documentation the Cou ncil shall enter into such docume ntation and do a ll such otherthings as may reasonably be required by the Bu yer to give effect thereto as soon as possible.

    42878078.2\1o08 41RGB/90883.00001 /9510001.11

  • 8/12/2019 CLSA Schedule 1

    14/18

    Schedule 1

    4 7 here consent is required from the Council pursuant to paragraph 4.1 or 4.3 it is a conditionof consent that the Buyer reimburse or procure the reimbursement of the Councilsreasonable and proper costs which are reasonably and properly incurred in relation to theapplication for such consent but without prejudice to any award of costs by the Expert in theevent of a referral to the Expert.

    art II

    Outline Form of Interim N V ReportWe refer to the Conditional Land Sale Agreement dated # between The Mayor andBurgesses of the London Borough of Hammersmith and Fulham (1) EC Properties LP (2)and Earls Court Limited (3) ( CLSA )

    2 This in an Interim NAV Report required pursuant to the CLSA.3 The Relevant Entities for the purposes of this report are #4 The Interim Accounting Date for the purposes of this report is #

    5 We have reviewed:5 1 inancial information provided to us by the Relevant Entities which has not been audited

    5 2 list of the properties (if any) comprised in the Secured Asset Pool (SAP ) referred to in theCLSA as at the Interim Accounting Date which are not held by any Relevant Entity and theSecured Amounts relating to each of the same and which we have been required to takeinto account

    5 3 list of the properties (if any) comprised in the SAP which are held by any Relevant Entityas at the Interim Accounting Date and the Secured Amounts with regard to each of these) inrespect of which we have been required to take into account the Secured Amounts relatingto the same in lieu of their actual value.

    5 4 list of properties owned by any Relevant Entity charged to the Council under clause 9.17of the CLSA as at the Interim Accounting Date and the amount secured on such propertieswhere we have been required to take into account such sums in lieu of the actual value ofsuch properties

    5 5 list of properties not owned by any Relevant Entity charged to the Council under clause9.17 of the CLSA as at the Interim Accounting Date and the amount secured on suchproperties

    5 6 list of the properties (if any) held by any Relevant Entity in respect of which we have beenrequired to take into account their actual value (as opposed to any other amount) asevidenced by valuations provided to us that are not more than 6 months old as at the InterimAccounting Date.

    5 7 aluations provided to us which were less than 6 months old at the Interim Accounting Datein respect of properties referred to in clause 5.6.

    5 8 nformation provided by or on behalf of [ ] confirming the value of any other securityavailable to the Council for the discharge of the Outstanding Liabilities as defined in theCLSA

    42878078 2\1o08 42RGB/90883 00001/951 0001 11

  • 8/12/2019 CLSA Schedule 1

    15/18

    Schedule I

    6. e confirm that6.1 he total of the Secured Amounts under clause 5.2 is #6.2 he total of the Secured Amounts under clause 5.3 is L6.3 he total required to be taken into account under clause 5.4 is L6.4 he total required to be taken into account under clause 5.5 is L6.5 he total required to be taken into account under clause 5.6 (as supported by the valuations

    required under clause 5.7) is L#6 .6 he total required to be taken into account under clause 5.8 is L7 ased on the above information and directions we confirm7.1 a) the total value of the assets of each of the Relevant Entities calculated as required above

    and (b) the Liabilities of the Relevant Entities (as such Liabilities are defined in the CLSA)and (c) the NAV of the Relevant Entities (being (a) - (b) ) is as follows:

    Relevant Entity otal Value of iabilities Vssets

    7.2 he Total NAV for the purposes of the CLSA as at the Interim Accounting Date is Lx thisbeing the aggregate ofa) the aggregate NAV of the Relevant Entities as calculated under clause 7.1; andb) any Secured Amounts in relation to properties not held by any Relevant Entity under

    clause 5.2; andc) the amount secured under clause 9.17 of the CLSA on properties not held by any

    Relevant Entity; andd) the value of any other security falling within clause 5.8

    8. n relation to contingent liabilities of any Relevant Entity where (in accordance with theCLSA) these have not been included as Liabilities and deducted from the gross value ofthe assets of the Relevant Entity under clause 7.1 we confirm based on the informationprovided to us that with regard to those contingent liabilities that would be required by theaccounting standards adopted by the Relevant Entity to be noted on any published accountsof the Relevant Entity that the amount of such liabilities is as set out in the table below:

    42878078 2\1o08 43RGB190883.0000119510001 .11

  • 8/12/2019 CLSA Schedule 1

    16/18

    Schedule 1

    Relevant Entity mount of Contingent Liabilities Requiredto be Noted

    9 here details of bank accounts of any Relevant Entity have been provided to us and suchenquiries have been authorised by the Relevant Entity we have made our own enquiries ofthe relevant banks and have confirmed (a) the amount of any bank balances held for theRelevant Entity and (b) the liability of the Relevant Entity to the relevant bank. The amountof such cash balances has been taken in to account in calculating the gross assets of therelevant Entity (notwithstanding a different amount may have been shown in any financialinformation provided by the Relevant Entity) and in so far as the liabilities to the bank fall tobe deducted from the gross asset value as Liabilities as defined in the CLSA the amount ofsuch liabilities as verified has been deducted (notwithstanding a different amount may havebeen shown in any financial in formation provided by the relevant Entity)

    Outline Form of nnual N V ReportWe refer to the Conditional Land Sale Agreement dated # between The Mayor andBurgesses of the London Borough of Hammersmith and Fulham (1) EC Properties LP (2)and Earls Court Limited (3) ( CLSA )This in an Annual NAV Report required pursuant to the CLSA.The Relevant Entities for the purposes of this report are #

    4 The Annual Accounting Date for the purposes of this report is #

    5 We have reviewed:5 1 udited accounts and other financial information provided to us by the Relevant Entities5 2 list of the properties (if any) comprised in the Secured Asset Pool ( SAP ) referred to in the

    CLSA as at the Annual Accounting Date which are not held by any Relevant Entity and theSecured Amounts relating to each of the same and which we have been required to takeinto account

    5 3 list of the properties (if any) comprised in the SAP which are held by any Relevant Entityas at the Annual Accounting Date and the Secured Amounts with regard to each of these) inrespect of which we have been required to take into account the Secured Amounts relatingto the same in lieu of their actual value

    42878078 2\1008 44RGB/90883 00001/951 0001 11

  • 8/12/2019 CLSA Schedule 1

    17/18

    Schedule 1

    5 4 list of properties owned by any Relevant Entity charged to the Council under clause 9.17of the CLSA as at the Annual Accounting Date and the amount secured on such propertieswhere we have been required to take into account such sums in lieu of the actual value ofsuch properties

    5 5 list of properties not owned by any Relevant Entity charged to the Council under clause9.17 of the CLSA as at the Annual Accounting Date and the amount secured on suchproperties

    5 6 list of the properties (if any) held by any Relevant Entity in respect of which we have beenrequired to take into account their actual value (as opposed to any other amount) asevidenced by valuations provided to us that are not more than 6 months old as at the AnnualAccounting Date

    5 7 aluations provided to us which were less than 6 months old at the Annual Accounting Datein respect of properties referred to in clause 5.6

    5 8 nformation provided by or on behalf of [ ] confirming the value of any other securityavailable to the Council for the discharge of the Outstanding Liabilities as defined in theCLSA

    6 We confirm that:6 1 he total of the Secured Amounts under clause 5.2 is 6 2 he total of the Secured Amounts under clause 5.3 is 6 3 he total required to be taken into account under clause 5.4 is

    6 4 he total required to be taken into account under clause 5.5 is 6 5 he total required to be taken into account under clause 5.6 (as supported by the valuations

    required under clause 5.7) is 6 6 he total required to be taken into account under clause 5.8 is 7 Based on the above information and directions and having due regard to the audited

    accounts we confirm:7 1 a) the total value of the assets of each of the Relevant Entities calculated as required above

    and (b) the Liabilities of the Relevant Entities (as such Liabilities are defined in the CLSA)and (c) the NAV of the Relevant Entities (being (a) - (b) ) is as follows:

    Relevant Entity otal Value of iabilities Vssets

    42878078 2\1o08 45RGB/90883.00001/9510001.1 1

  • 8/12/2019 CLSA Schedule 1

    18/18

    Schedule

    7 2 he Total NAV for the purposes of the CLSA as at the Annual Accounting Date is x hisbeing the aggregate of

    a) the aggregate NAV of the Relevant Entities as calculated under clause 7.1; andb) any Secured Amounts in relation to properties not held by any Relevant Entity under

    clause 5.2; andc) the amount secured under clause 9.17 of the CLSA on properties not held by anyRelevant Entity; andd) the value of any other security falling within clause 5.8

    8. n relation to contingent liabilities of any Relevant Entity where (in accordance with theCLSA) these have not been included as Liabilities and deducted from the gross value ofthe assets of the Relevant Entity under clause 7.1 we confirm based on the informationprovided to us that with regard to those contingent liabilities that would be required by theaccounting standards adopted by the Relevant Entity to be noted on any published accountsof the Relevant Entity that the amount of such liabilities is as set out in the table below:

    Relevant Entity mount of Contingent Liabilities Requiredto be Noted

    42878078.2\1o08 46


Recommended