AMENDMENT AND RESTATEMENT AGREEMENT

EX-10.A 2 exhibit10anew_lloydsxarfac.htm EXHIBIT 10.A exhibit 10.a new_lloyds_ARFacilitiesAgreement


Exhibit (10)a



AMENDMENT AND RESTATEMENT AGREEMENT
dated 19 May 2015
between
SCHUH GROUP LIMITED
as Parent

and others as Borrowers and Guarantors
LLOYDS BANK PLC
as Arranger
LLOYDS BANK PLC
as Agent
and
LLOYDS BANK PLC
as Security Trustee
 






Edinburgh

    


THIS AGREEMENT is dated 19 May 2015 and made between:
(1)
SCHUH GROUP LIMITED, a company incorporated in Scotland with registered number SC379625 and having its registered office at 1 Neilson Square, Deans Industrial Estate, Livingston, West Lothian EH54 8RQ (the "Parent");
(2)
THE SUBSIDIARIES of the Parent listed in Part I of Schedule 1 as borrowers (the "Borrowers");
(3)
THE SUBSIDIARIES of the Parent listed in Part II of Schedule 1 as guarantors (the "Guarantors");
(4)
LLOYDS BANK PLC (in this capacity the "Arranger");
(5)
LLOYDS BANK PLC (in this capacity the "Original Lender");
(6)
LLOYDS BANK PLC as agent of the other Finance Parties (the "Agent"); and
(7)
LLOYDS BANK PLC as security trustee for the Secured Parties (the "Security Trustee").
WHEREAS:
(A)
The Parent, the Guarantors, the Borrowers, the Agent, the Arranger, the Security Trustee and the Original Lender entered into a senior term facilities agreement dated 10 November 2010 as amended and restated on 23 June 2011, 1 November 2013 and on 19 June 2014 (as amended, restated, novated or varied from time to time the "Facilities Agreement") in terms of which certain facilities were made available to the Borrowers (as defined therein);
(B)
the parties wish to amend and restate the Facilities Agreement in accordance with the terms of this Agreement.
NOW IT IS HEREBY AGREED as follows:
1.
DEFINITIONS AND INTERPRETATION
1.1.
In this Agreement:
"Amended and Restated Facilities Agreement" means the Facilities Agreement as amended and restated in the form set out in Schedule 3 (Form of Amended and Restated Facilities Agreement).
"Effective Date" means the date on which the Agent confirms in writing to the Parent that it has received (or has waived the requirement to receive) the documents and/or evidence listed in Schedule 2 (Conditions Precedent), in each case in form and substance satisfactory to the Agent.
"Resigning Obligor" means Schuh (ROI) Limited, a company incorporated in the Republic of Ireland with Registered Number 272987.
1.2.
In this Agreement a term defined in the Facilities Agreement has the same meaning when used in this Agreement and Clause 1 (Definitions and Interpretation) of the



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Facilities Agreement shall apply hereto except that references in such Clause to the Facilities Agreement are to be construed as references to this Agreement.
1.3.
Unless expressly provided to the contrary in this Agreement, a person who is not a party to this Agreement has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Agreement. Notwithstanding any term of any Finance Document, the consent of any person who is not a party to this Agreement is not required to rescind or vary this Agreement at any time.
1.
AMENDMENT OF THE FACILITIES AGREEMENT AND NOVATION
1.4.
With effect from the Effective Date, the Facilities Agreement shall be amended and restated in the form set out as Schedule 3 to this Agreement.
1.5.
Subject to the terms of this Agreement, the Facilities Agreement shall remain in full force and effect. With effect from the Effective Date, this Agreement and the Facilities Agreement shall be read and construed as one document and all references in the Facilities Agreement and in each of the Finance Documents to the Facilities Agreement shall be read and construed as references to the Amended and Restated Facilities Agreement.
1.6.
Save to the extent expressly provided in this Agreement, the Finance Documents shall remain in full force and effect.
1.7.
If the Effective Date has not occurred by 5pm (UK time) on 21 May 2015, this Agreement shall lapse and shall cease to have any effect other than Clause 5 (Fees and expenses) which shall remain in full force and effect.
1.8.
The parties to this Agreement hereby confirm and agree that:
(i)
amounts drawn under Facility A and Facility B of the Facilities Agreement in the form operative immediately prior to the Effective Date shall be deemed to be drawn under Facility A of the Amended and Restated Facility Agreement and any such amounts drawn by Holdings shall be novated as at the Effective Date to be owed by the Parent so that as at the Effective Date:
(A)
Holdings transfers by novation to the Parent, and the Parent shall accept the transfer by novation of, all the rights, liabilities, duties and obligations of Holdings under and in respect of all amounts drawn by Holdings under Facility A and Facility B of the Facilities Agreement in the form operative immediately prior to the Effective Date, being an aggregate principal amount of £5,783,471 as at the date hereof (the “Novated Debt”);
(B)
the Parent shall acquire rights, title, interest and benefits in and to the Novated Debt which are identical in character to the entire rights, title, interest and benefits in and to the Novated Debt which Holdings had in its capacity as Borrower prior to the Effective Date;



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(C)
the Parent undertakes to (i) perform the obligations of Holdings in respect of the Novated Debt which are identical in character to the obligations in respect of the Novated Debt which Holdings had in its capacity as Borrower prior to the Effective Date and (ii) be bound by the terms of the Finance Documents in every way as if Parent were and had been prior to the Effective Date party to the Facilities Agreement as the Borrower in respect of the Novated Debt; and
(D)
the Parent agrees that with effect from and including the Effective Date it shall repay the Novated Debt and pay all interest, fees and other amounts owing in respect of the Novated Date, in each case to the Lenders on the due dates in accordance with the terms of the Amended and Restated Facilities Agreement; and
(ii)
amounts drawn under Facility C of the Facilities Agreement in the form operative immediately prior to the Effective Date shall be deemed to be drawn under Facility B of the Amended and Restated Facility Agreement,
in each case on and with effect from the Effective Date. For the avoidance of doubt, it is acknowledged that Facility D of the Facilities Agreement in the form operative immediately prior to the Effective Date has been repaid in full prior to the Effective Date.
2.
CONSENTS
The Agent (on behalf of the Lenders) hereby consents with effect from the Effective Date to Genesco Inc. lending £5,500,000 to the Company provided that such debt obligation is replaced by a debt obligation owed by the Company to the UK Acquisition Company within 10 Business Days after the Effective Date.
3.
REPRESENTATIONS AND WARRANTIES
3.1.
Each Obligor represents and warrants to each Finance Party on the date of this Agreement and on the Effective Date in terms of the Repeating Representations, in each case as if references to "this Agreement" and "the Finance Documents" in those representations are construed as references to this Agreement and (on the Effective Date) the Amended and Restated Facilities Agreement.
3.2.
Each Obligor represents and warrants to the Agent and the other Finance Parties on the date of this Agreement and on the Effective Date that:
(i)
the Parent has complied with the terms of Clause 22 (Financial Covenants) of the Facilities Agreement at all times prior to the date hereof; and
(ii)
on each date within the next 12 months on which any of the financial covenants contained in Clause 22 (Financial Covenants) of the Facilities Agreement falls to be tested, the Parent shall comply with the terms of Clause 22 (Financial Covenants) of the Facilities Agreement.
4.
FEES AND EXPENSES



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4.1.
The Parent shall promptly on demand pay to the Agent and the Security Trustee the amount of all costs and expenses (together with any VAT or similar taxes thereon) reasonably incurred by them or by the Lenders in connection with this Agreement and the documents contemplated by this Agreement (including, without limitation, legal fees).
4.2.
The Parent shall pay to the Arranger on the Effective Date an arrangement fee of £400,000.
5.
PRESERVATION OF GUARANTEES AND SECURITY
Each Obligor (other than the Resigning Guarantor):
(i)
confirms its consent to the amendment and restatement of the terms of the Facilities Agreement as contemplated by this Agreement; and
(ii)
confirms that the Transaction Security Documents granted by it on or prior to the date of this Agreement, the guarantee granted by it pursuant to Clause 19 (Guarantee and Indemnity) of the Facilities Agreement and the security rights constituted or evidenced by the Transaction Security Documents are and remain in full force and effect and apply as from the Effective Date to, inter alia, the Amended and Restated Facilities Agreement and the guarantees granted pursuant to Clause 19 (Guarantee and Indemnity) of the Facilities Agreement will continue to be legal, valid, binding and enforceable in accordance with their respective terms.
6.
RESIGNATION OF RESIGNING GUARANTOR
The Parent (on its own behalf and on behalf of the Resigning Guarantor in its capacity as Obligors' Agent) and the other Parties agree that the Resigning Guarantor shall resign as a Guarantor and shall cease in such capacity to be party to the Amended and Restated Facilities Agreement with effect from the Effective Date and shall cease to be bound in such capacity by its terms.
7.
GENERAL
7.1.
The provisions of Clauses 36 (Remedies and Waivers), 35 (Partial Invalidity), 33 (Notices) and 43 (Enforcement) of the Facilities Agreement shall be deemed to be incorporated in this Agreement (with such conforming amendments as the context requires) as if set out in this Agreement.
7.2.
Neither the execution of this Agreement nor the making of any amount available under the Facilities Agreement or the Amended and Restated Facilities Agreement amounts to a waiver of any outstanding Event of Default.
7.3.
This Agreement is designated by the Parent and the Agent as a Finance Document.
7.4.
Each Obligor hereby confirms that the amendment and restatement of the Facilities Agreement pursuant to this Agreement is an amendment and restatement within the contemplation of the Finance Documents.
7.5.
The Parent shall, and shall procure that each other Obligor will, at the request of the Agent and at its own expense, do all such acts and things necessary to give effect to the amendments effected or to be effected pursuant to this Agreement.



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8.
COUNTERPARTS
This Agreement may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of this Agreement.
9.
GOVERNING LAW
This Agreement is, and any non-contractual obligations arising out of or in connection with it are, governed by English law.
This Agreement has been entered into on the date stated at the beginning of this Agreement.



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SCHEDULE 1

PART I
THE BORROWERS

Schuh Group Limited (Reg. No. SC379625)
Schuh (Holdings) Limited (Reg. No. SC265833)
Schuh Limited (Reg. No. SC125327)



PART II
THE GUARANTORS
Schuh Group Limited (Reg. No. SC379625)
Schuh (Holdings) Limited (Reg. No. SC265833)
Schuh Limited (Reg. No. SC125327)






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SCHEDULE 2

CONDITIONS PRECEDENT

1.
Obligors
(a)
A copy of the Constitutional Documents and of the constitutional documents of each other Obligor, or a certificate of an authorised signatory of the Parent confirming that there has been no change to such documents since 19 June 2014.
(b)
A copy of a resolution of the board or, if applicable, a committee of the board of directors of each Obligor:
(i)
approving the terms of, and the transactions contemplated by, this Agreement and resolving that it execute, deliver and perform this Agreement;
(ii)
authorising a specified person, on its behalf to sign and/or despatch all documents and notices to be signed and/or despatched by it under or in connection with this Agreement.
(c)
A certificate of an authorised signatory of the Parent certifying that each copy document relating to it specified in this Schedule 2 is true and complete and in full force and effect as at a date no earlier than the date of this Agreement.
2.
Legal Opinions
Legal opinions of Dickson Minto W.S., legal advisers to the Agent as to Scots law and English law each addressed to the Finance Parties.
3.
Other documents and evidence
(a)    This Agreement executed by the Obligors.
(b)    An updated copy of the Group Structure Chart.
(c)    A list of the directors of the Parent as at the Effective Date.
(d)
Any information and evidence required by the Finance Parties in respect of any Obligor to comply with its know your customer or anti money laundering procedures.
(e)
A copy of any other Authorisation or other document, opinion or assurance which the Agent considers to be necessary or desirable (if it has notified the Parent accordingly) in connection with the entry into and performance of the transactions contemplated by this Agreement or for the validity and enforceability of this Agreement.
(f)
An updated business plan and financial projections in form and substance satisfactory to the Agent.



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(g)
Evidence satisfactory to the Agent that there has been no material and adverse change in the financial condition of any member of the Group since the date of the most recent audited consolidated financial statements which have been delivered to the Agent in accordance with clause 21.1(a) of the Facilities Agreement.
(h)
Evidence satisfactory to the Agent that the Parent is in compliance with clause 23.35 (Guarantors) of the Amended and Restated Facilities Agreement as at the Effective Date.
(i)
The Ranking Agreement.
(j)
The Original Financial Statements.
(k)
Confirmation to the Agent that the £5,500,000 promissory note originally issued by Schuh Limited to Genesco Inc. will be owed by Schuh Limited to Genesco (UK) Limited within 10 Business Days of the Effective Date.
(l)
Confirmation by the Parent to the Agent of all amounts due by it or any of its Subsidiaries to Genesco Inc. or any of its Subsidiaries (other than the Parent and its Subsidiaries) as at the Effective Date.





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SCHEDULE 3

FORM OF AMENDED AND
RESTATED FACILITIES AGREEMENT
£51,562,500
FACILITIES AGREEMENT
for
SCHUH GROUP LIMITED
as Parent
arranged by
LLOYDS BANK PLC
as Mandated Lead Arranger
with
LLOYDS BANK PLC
acting as Agent
and
LLOYDS BANK PLC
acting as Security Trustee





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CONTENTS

1.DEFINITIONS AND INTERPRETATION    13
2.THE FACILITIES    46
3.PURPOSE    49
4.CONDITIONS OF UTILISATION    50
5.UTILISATION – LOANS    51
6.REPAYMENT    54
7.ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION    57
8.MANDATORY PREPAYMENT    59
9.RESTRICTIONS    62
10.INTEREST    64
11.INTEREST PERIODS    65
12.CHANGES TO THE CALCULATION OF INTEREST    67
13.FEES        68
14.TAX GROSS UP AND INDEMNITIES    70
15.INCREASED COSTS    78
16.OTHER INDEMNITIES    79
17.MITIGATION BY THE LENDERS    82
18.COSTS AND EXPENSES    82
19.GUARANTEE AND INDEMNITY    84
20.REPRESENTATIONS    88
21.INFORMATION UNDERTAKINGS    96
22.FINANCIAL COVENANTS    101
23.GENERAL UNDERTAKINGS    108
24.EVENTS OF DEFAULT    118
25.CHANGES TO THE LENDERS    124
26.CHANGES TO THE OBLIGORS    131



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27.ROLE OF THE AGENT, THE ARRANGER AND OTHERS    136
28.ROLE OF THE SECURITY TRUSTEE    147
29.CONDUCT OF BUSINESS BY THE FINANCE PARTIES    155
30.SHARING AMONG THE FINANCE PARTIES    155
31.PAYMENT MECHANICS    158
32.SET-OFF    162
33.NOTICES    162
34.CALCULATIONS AND CERTIFICATES    165
35.PARTIAL INVALIDITY    165
36.REMEDIES AND WAIVERS    165
37.AMENDMENTS AND WAIVERS    166
38.CONFIDENTIALITY    170
39.COUNTERPARTS    175
40.GOVERNING LAW    180
41.ENFORCEMENT    180




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THIS AGREEMENT is the amended and restated form of a facility agreement originally dated 10 November 2010 and as amended and restated on 1 November 2013, 19 June 2014 and 19 May 2015 and in its amended and restated form is made between:
(1)
SCHUH GROUP LIMITED a company incorporated in Scotland with registered number SC379625 and with its registered office at 5th Floor, Quartermile Two, 2 Lister Square, Edinburgh EH3 9GL (the "Parent");
(2)
THE SUBSIDIARY of the Parent listed in Part I of Schedule 1 (The Original Parties) as borrower (together with the Parent being the "Borrowers");
(3)
THE SUBSIDIARIES of the Parent listed in Part I of Schedule 1 (The Original Parties) as guarantors (together with the Parent, the "Guarantors");
(4)
LLOYDS BANK PLC with registered number 00002065 and having its registered office at 25 Gresham Street, London EC2V 7HN as mandated lead arranger (the "Arranger");
(5)
THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The Original Parties) as lenders (the "Original Lenders");
(6)
LLOYDS BANK PLC with registered number 00002065 and having its registered office at 25 Gresham Street, London EC2V 7HN as agent of the other Finance Parties (the "Agent"); and
(7)
LLOYDS BANK PLC with registered number 00002065 and having its registered office at 25 Gresham Street, London EC2V 7HN as security trustee for the Secured Parties (the "Security Trustee").
IT IS AGREED as follows:



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SECTION 1
INTERPRETATION



14    


1.
DEFINITIONS AND INTERPRETATION
1.1.
Definitions
In this Agreement:
"Acceptable Bank" means:
(a)
a bank or financial institution duly authorised under applicable laws to carry on the business of banking (including, without limitation, the business of making deposits) which is approved in writing by the Agent; or
(b)
any Finance Party.
"Accession Letter" means a document substantially in the form set out in Schedule 7 (Form of Accession Letter).
"Accounting Period" means each of the twelve periods in any Financial Year for which the Parent is to prepare monthly management accounts for the purposes of this Agreement.
"Accounting Principles" means generally accepted accounting principles in the UK, including IFRS.
"Accounting Reference Date" means the accounting reference date for the purposes of section 391 of the Companies Act 2006, being 31 January in the case of each member of the Group, (with their financial year ending not more than 7 days after, or less than 7 days before, such date).
"Acquisition Agreement" means the sale and purchase agreement dated on or about the Restatement Date setting out the terms on which the UK Acquisition Company is to acquire the shares in the Parent.
"Additional Borrower" means a company which becomes a Borrower in accordance with Clause 26 (Changes to the Obligors).
"Additional Guarantor" means a company which becomes a Guarantor in accordance with Clause 26 (Changes to the Obligors).
"Additional Livingston Property" means the subjects known as 240 (and formerly known as Plot D, Phase II), J4M8 Distribution Park, Bathgate, EH48 2EA being the subjects (IN THE FIRST PLACE) registered in the Land Register of Scotland under Title Number WLN39760; and (IN THE SECOND PLACE) the subjects at J4M8 Distribution Park lying to the north west of Inchmuir Road, Whitehill Industrial Estate, by Bathgate, shown tinted pink on the plan 2 contained in Schedule 4 and forming part of the subjects registered under Title Number WLN6795.
"Additional Obligor" means an Additional Borrower or an Additional Guarantor.
"Additional Standard Security" means the standard security by the Company in favour of the Security Trustee in respect of the Additional Livingston Property dated on or around the Second Restatement Date.



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"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company.
"Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of this Agreement dated on the Restatement Date.
"Annual Financial Statements" means the financial statements for a Financial Year delivered pursuant to paragraph (a) of Clause 21.1 (Financial Statements).
"Anti-Corruption Laws" means all laws, rules and regulations of any jurisdiction applicable to any Obligor from time to time concerning or relating to bribery, money-laundering or corruption.
"Assignment Agreement" means an agreement substantially in the form set out in Schedule 6 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee.
"Auditors" means one of PricewaterhouseCoopers, Ernst & Young, KPMG, Deloitte & Touche or such other firm approved in advance by the Majority Lenders (such approval not to be unreasonably withheld or delayed).
"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.
"Availability Period" means, in respect of Facility A and Facility B, the period from and including the date of this Agreement to and including the Fourth Restatement Date and, in respect of Facility C, the period from and including the Fourth Restatement Date to the Termination Date in respect of Facility C.
"Available Commitment" means, in relation to a Facility, a Lender's Commitment under that Facility minus (subject as set out below):
(a)
the amount of its participation in any outstanding Utilisations under that Facility; and
(b)
in relation to any proposed Utilisation, the amount of its participation in any other Utilisations that are due to be made under that Facility on or before the proposed Utilisation Date,
other than, in relation to any proposed Utilisation under Facility C only, that Lender's participation in any Facility C Loans that are due to be repaid or prepaid on or before the proposed Utilisation Date.
"Available Facility" means, in relation to a Facility, the aggregate for the time being of each Lender's Available Commitment in respect of that Facility.
"Borrower" means a Borrower listed in Part I of Schedule 1 (the Original Parties) or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 26 (Changes to the Obligors).
"Break Costs" means the amount (if any) by which:
(a)
the interest (excluding Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan



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or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b)
the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.
"Budget" any budget delivered by the Parent to the Agent pursuant to Clause 21.4 (Budget).
"Business Acquisition" means the acquisition of a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or the incorporation of a company.
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London.
"Business Plan" means the business plan prepared by the Parent and delivered to the Agent on or around 23 July 2010 including the agreed form financial projections of the Group.
"Capital Expenditure" means any expenditure or obligation (other than expenditure or obligations in respect of Business Acquisitions) in respect of expenditure which, in accordance with the Accounting Principles, is treated as capital expenditure (and including the capital element of any expenditure or obligation incurred in connection with a Finance Lease).
"Cash" means, at any time, cash in hand or at bank or amounts on deposit with a Lender (which, for the avoidance of any doubt, includes any cash held by way of cash cover for any reason) which are freely transferable and freely convertible and accessible by a member of the Group within 7 days together with (without double counting) cash in transit and in any such case is not subject to any Security (other than the Transaction Security).
"Cashflow" has the meaning given to that term in Clause 22.2 (Financial definitions).
"Change of Control" means (A) any person or group of persons acting in concert gains direct or indirect control of Genesco Inc. after the Restatement Date, (B) Genesco Inc. ceases to have legal and beneficial ownership of the entire issued share capital of UK Acquisition Company, (C) UK Acquisition Company ceases to have legal and beneficial ownership of the entire issued share capital of the Parent or (D) any person or group of persons acting in concert gains direct or indirect control of the Parent after the Restatement Date. For the purposes of this definition:
(a)
"control" of the Parent means:
(i)
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:



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(A)
cast, or control the casting of, more than 50% of the maximum number of votes that might be cast at a general meeting of the Parent; or
(B)
appoint or remove all, or the majority, of the directors or other equivalent officers of the Parent; or
(C)
give directions with respect to the operating and financial policies of the Parent with which the directors or other equivalent officers of the Parent are obliged to comply; and/or
(ii)
the holding beneficially of more than 50% of the issued share capital of the Parent (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital);
(b)
"control" of Genesco Inc. means:
(i)
any "person" or "group" (as such terms are used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, but excluding any employee benefit plan of such person or its subsidiaries, and any person or entity acting in its capacity as trustee, agent or other fiduciary or administrator of any such plan) becomes the "beneficial owner" (as defined in Rules 13d-3 and 13d-5 under the Securities Exchange Act of 1934, except that a person or group shall be deemed to have "beneficial ownership" of all securities that such person or group has the right to acquire, whether such right is exercisable immediately or only after the passage of time (such right being an "option right") directly or indirectly, of more than 50% of the equity securities of Genesco Inc. entitled to vote for members of the board of directors or equivalent governing body of Genesco Inc. on a fully-diluted basis (and taking into account all such securities that such person or group has the right to acquire pursuant to any option right); and/or
(ii)
during any period of 12 consecutive months, a majority of the members of the board of directors or other equivalent body of Genesco Inc. cease to be composed of individuals (i) who were members of that board or equivalent governing body on the first day of such period, (ii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in paragraph (i) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body or (iii) whose election or nomination to that board or equivalent governing body was approved by individuals referred to in paragraphs (i) and (ii) above constituting at the time of such election or nomination at least a majority of that board or equivalent governing body;
(c)
"acting in concert" means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition directly or indirectly of shares in the Parent by any of them, either directly or indirectly, to obtain or consolidate control of the Parent.



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"Charged Property" means all of the assets of the Obligors which from time to time are, or are expressed to be, the subject of the Transaction Security.
"Commitment" means a Facility A Commitment, a Facility B Commitment or a Facility C Commitment.
"Collateral Warranty Assignment" means the assignment in security granted by the Company in favour of the Security Trustee of the contractor's collateral warranty dated 17 February 2011 between RP IOM GP Limited and RP IOM Nominees Limited and Twintec Limited, as assigned to the Company on or around the Second Restatement Date.
"Company" means Schuh Limited, a company incorporated in Scotland with registered number SC125327 and with its registered office at 1 Neilson Square, Deans Industrial Estate, Livingston EH54 8RQ.
"Compliance Certificate" means a certificate substantially in the form set out in Schedule 9 (Form of Compliance Certificate).
"Confidential Information" means all information relating to the Parent, the Company, any Obligor, the Group, the Finance Documents or a Facility of which a Finance Party becomes aware in its capacity as, for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or a Facility from either:
(a)
any member of the Group or any of its advisers; or
(b)
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes information that:
(i)
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 38 (Confidentiality); or
(ii)
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers;
(iii)
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality.
"Confidentiality Undertaking" means a confidentiality undertaking substantially in a recommended form of the LMA or in any other form agreed between the Parent and the Agent.
"Constitutional Documents" means the certificate of incorporation, the certificate of incorporation on change of name (if any) and the memorandum and articles of association of the Parent.



19    


"CTA" means the Corporation Tax Act 2009.
"Deal Costs" means all fees, costs and expenses, stamp, registration and other Taxes incurred by the Parent or any other member of the Group in connection with the Transaction Documents.
"Debt Purchase Transaction" means, in relation to a person, a transaction where such person:
(i)
purchases by way of assignment or transfer;
(ii)
enters into any sub-participation in respect of; or
(iii)
enters into any other agreement or arrangement having an economic effect substantially similar to a sub-participation in respect of,
any Commitment or amount outstanding under this Agreement.
"Default" means an Event of Default or any event or circumstance specified in Clause 24 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing) be an Event of Default.
"Defaulting Lender" means any Lender:
(a)
which has failed to make its participation in a Loan available or has notified the Agent that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 5.4 (Lenders' participation);
(b)
which has rescinded or repudiated a Finance Document; or
(c)
with respect to which an Insolvency Event has occurred and is continuing,
unless, in the case of paragraph (a) above:
(i)    its failure to pay is caused by:
(A)    administrative or technical error; or
(B)    a Disruption Event; and
payment is made within 5 Business Days of its due date; or
(ii)
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question;
(iii)
it is unlawful in any relevant jurisdiction for the Lender to make that payment (provided that this shall not prejudice the rights of the Borrowers under Clause 7.1 (Illegality);
(iv)
the failure to make that payment is caused by the negligence or wilful default of a third party beyond its control;
(v)
the failure to make that payment is caused by an administrative or technical error experienced by a third party beyond its control; or



20    


(vi)
the Agent is an Impaired Agent and a Borrower has failed to notify the Lenders by giving not less than 3 Business Days prior notice of alternative arrangements for that payment.
"Delegate" means any delegate, agent, attorney or co-trustee appointed by the Security Trustee.
"Disruption Event" means either or both of:
(a)
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facilities (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b)
the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i)
from performing its payment obligations under the Finance Documents; or
(ii)
from communicating with other Parties in accordance with the terms of the Finance Documents,
and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.
"Dormant Subsidiary" means a member of the Group which does not trade (for itself or as agent for any person) and does not own, legally or beneficially, assets (including, without limitation, indebtedness owed to it) which in aggregate have a value of £5,000 or more or its equivalent in other currencies.
"Environment" means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
(a)
air (including, without limitation, air within natural or man-made structures, whether above or below ground);
(b)
water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and
(c)
land (including, without limitation, land under water).
"Environmental Claim" means any claim, proceeding, notice or investigation by any person in respect of any Environmental Law.
"Environmental Law" means any applicable law or regulation which relates to:
(a)
the pollution or protection of the Environment;
(b)
the conditions of the workplace; or



21    


(c)
any emission, generation, handling, storage, disposal, removal, use, release, spillage or discharge of any substance which, alone or in combination with any other, is capable of causing harm to the Environment including, without limitation, any waste.
"Environmental Permits" means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group.
"Escrow Account" means an interest-bearing account:
(a)    held in Scotland by a Borrower with the Agent or the Security Trustee;
(b)
identified in a letter between the Parent and the Agent as the Escrow Account;
(c)
subject to Security in favour of the Security Trustee, which Security is in form and substance satisfactory to the Agent and the Security Trustee; and
(d)
from which no withdrawals may be made by any members of the Group except as contemplated by this Agreement,
(as the same may be re-designated, substituted or replaced from time to time).
"Escrow Account Certificate" means, in respect of any Quarter Date, a certificate signed by two directors of the Parent (one of whom must be the chief financial officer of the Group) confirming that as at such Quarter Date:
(a)    no Default is continuing;
(b)
the Parent has complied with each of the financial covenants set out in Clause 22.2 (Financial condition) on each Quarter Date up to and including the date of the relevant Escrow Account Certificate provided that, in the case of each Quarter Date occurring after the Relevant Quarter Date (as defined in Clause 22.4(a)), no account is taken of any New Shareholder Injection; and
(c)
the Parent will comply with each of the financial covenants set out in Clause 22.2 (Financial condition) on each of the two Quarter Dates falling after the Quarter Date as at which the relevant Escrow Account Certificate is given, and attaching such supporting evidence as the Agent may reasonably request in connection with such confirmation provided that in the case of each of such Quarter Dates no account is taken of any New Shareholder Injection.
"Event of Default" means any event or circumstance specified as such in Clause 24 (Events of Default).
"Existing Retail Facilities" means the retail and merchant service facilities currently provided by Lloyds Cardnet to the Group.
"Facility" means Facility A, Facility B or Facility C and "Facilities" means all or any of them as the context requires.
"Facility A" means the term loan facility made available under this Agreement as described in paragraph (a)(i) of Clause 2.1 (The Facilities).



22    


"Facility A Commitment" means:
(a)
in relation to an Original Lender, the amount set opposite its name under the heading "Facility A Commitment" in Part II of Schedule 1 (The Original Parties) and the amount of any other Facility A Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and
(b)
in relation to any other Lender, the amount of any Facility A Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase),
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Facility A Loan" means a loan made or to be made under Facility A or the principal amount outstanding for the time being of that loan.
"Facility A Repayment Date" means each date set out in paragraph (a) of Clause 6.1 (Repayment of Term Loans).
"Facility A Repayment Instalment" means each of the repayment instalments set out in paragraph (a) of Clause 6.1 (Repayment of Term Loans) opposite the relevant Facility A Repayment Date.
"Facility B" means the term loan facility made available under this Agreement as described in paragraph (a)(ii) of Clause 2.1 (The Facilities).
"Facility B Commitment" means:
(a)
in relation to an Original Lender, the amount set opposite its name under the heading "Facility B Commitment" in Part II of Schedule 1 (The Original Parties) and the amount of any other Facility B Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and
(b)
in relation to any other Lender, the amount of any Facility B Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase),
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Facility B Loan" means a loan made or to be made under Facility B or the principal amount outstanding for the time being of that loan.
"Facility B Repayment Date" means each date set out in paragraph (b) of Clause 6.1 (Repayment of Term Loans).
"Facility B Repayment Instalment" means each of the repayment instalments set out in paragraph (b) of Clause 6.1 (Repayment of Term Loans) opposite the relevant Facility B Repayment Date.
"Facility C" means the revolving loan facility made available under this Agreement as described in paragraph (a)(iii) of Clause 2.1 (The Facilities).



23    


"Facility C Commitment" means:
(c)
in relation to an Original Lender, the amount set opposite its name under the heading "Facility C Commitment" in Part II of Schedule 1 (The Original Parties) and the amount of any other Facility C Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and
(d)
in relation to any other Lender, the amount of any Facility C Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase),
to the extent not cancelled, reduced or transferred by it under this Agreement.
"Facility C Loan" means a loan made or to be made under Facility C or the principal amount outstanding for the time being of that loan.
"Facility Office" means:
(a)
in respect of a Lender, the office or offices notified by that Lender to the Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days' written notice) as the office or offices through which it will perform its obligations under this Agreement; or
(b)
in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes.
"Fee Letter" means any letter or letters dated on or about the date of this Agreement between the Arranger and the Parent (or the Agent and the Parent or the Security Trustee and the Parent) setting out any of the fees referred to in Clause 13 (Fees).
"Finance Document" means this Agreement, any Accession Letter, any Compliance Certificate, any Fee Letter, any Hedging Agreement, any Resignation Letter, any Selection Notice, the Subordination Agreements, any Transaction Security Document, any Utilisation Request, the Working Capital Facility Letter, the Ranking Agreement, the Amendment and Restatement Agreement, the Second Amendment and Restatement Agreement, the Third Amendment and Restatement Agreement, the Fourth Amendment and Restatement Agreement, any document entered into in respect of the Lloyds Retail Facilities and any other document designated as a "Finance Document" by the Agent and the Parent.
"Finance Lease" means any lease or hire purchase contract which would, in accordance with the Accounting Principles, be treated as a finance or capital lease.
"Finance Party" means the Agent, the Arranger, the Security Trustee, a Lender, the Working Capital Lender and Lloyds Bank plc (or any other member of the LBG Group) as provider of the Lloyds Retail Facilities.
"Financial Due Diligence Report" means the report by KPMG dated on or around the date of this Agreement relating to the Parent and its subsidiaries and addressed to, and/or capable of being relied upon by, Lloyds Bank plc as original lender.
"Financial Indebtedness" means any indebtedness for or in respect of:



24    


(a)
moneys borrowed and debit balances at banks or other financial institutions;
(b)
any acceptance under any acceptance credit or bill discounting facility (or dematerialised equivalent);
(c)
any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d)
the amount of any liability in respect of Finance Leases;
(e)
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis and meet any requirement for de-recognition under the Accounting Principles);
(f)
any Treasury Transaction (and, when calculating the value of that Treasury Transaction, only the marked to market value (or, if any actual amount is due as a result of the termination or close-out of that Treasury Transaction, that amount) shall be taken into account);
(g)
any counter-indemnity obligation in respect of a guarantee, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;
(h)
any amount raised by the issue of redeemable shares which are redeemable (other than at the option of the issuer) before 30 September 2019 or are otherwise classified as borrowings under the Accounting Principles;
(i)
any amount of any liability under an advance or deferred purchase agreement if (i) one of the primary reasons behind entering into the agreement is to raise finance or to finance the acquisition or construction of the asset or service in question or (ii) the agreement is in respect of the supply of assets or services and payment is due more than 90 days after the date of supply;
(j)
any amount raised under any other transaction (including any forward sale or purchase, sale and sale back or sale and leaseback agreement) having the commercial effect of a borrowing or otherwise classified as borrowings under the Accounting Principles; and
(k)
the amount of any liability in respect of any guarantee for any of the items referred to in paragraphs (a) to (j) above.
"Financial Quarter" has the meaning given to that term in Clause 22.1 (Financial definitions).
"Financial Year" has the meaning given to that term in Clause 22.1 (Financial definitions).
"Flotation" means:
(i)
a successful application being made for the admission of any part of the share capital of any member of the Group to the Official List of the UK Listing Authority and the admission of any part of the share capital of any member of the Group to trading on the London Stock Exchange plc; or



25    


(ii)
the grant of permission to deal with any part of the issued share capital of any member of the Group on AIM or the Main Board or Growth Board of the ICAP Securities & Derivatives Exchange Limited or on any recognised investment exchange (as that term is used in the Financial Services and Markets Act 2000) or in or on any exchange or market replacing the same or any other exchange or market in any country.
"Fourth Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of this Agreement dated on or around 19 May 2015.
"Fourth Restatement Date" means the Effective Date as defined in the Fourth Amendment and Restatement Agreement.
"Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to paragraph (a)(ii) of Clause 12.4 (Cost of funds).
"Funds Flow" means the funds flow delivered by the Parent to the Agent on or around the date of this Agreement in connection with the facilities being made available to the Group by the Finance Parties.
"Genesco Closing Schedule" means the schedule in the agreed form setting out the dates to which the Group will prepare Monthly Financial Statements after the Restatement Date.
"Group" means the Parent and each of its Subsidiaries for the time being.
"Group Structure Chart" means the group structure chart in the agreed form.
"Guarantor" means a Guarantor listed in Part I of Schedule 1 (the Original Parties) as a Guarantor or an Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause 26 (Changes to the Obligors).
"Hedging Agreement" means any master agreement, confirmation, schedule or other agreement in agreed form entered into or to be entered into by the Parent and a Lender for the purpose of hedging interest rate liabilities in relation to the Term Facilities in accordance with any Hedging Policy Letter.
"Hedging Policy Letter" means any letter entered into at any time by the Parent to the Agent setting out the proposed policy of the Group in relation to the hedging of its exposure to floating rates of interest.
"Holding Account" means an account:
(a)
held in Scotland by a member of the Group with the Agent or Security Trustee;
(b)
identified in a letter between the Parent and the Agent as a Holding Account; and
(c)
subject to Security in favour of the Security Trustee which Security is in form and substance satisfactory to the Security Trustee,
(as the same may be redesignated, substituted or replaced from time to time).



26    


"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.
"Holdings" means Schuh Holdings Limited (Registered No. SC265833).
"Investor" means the UK Acquisition Company.
"IFRS" means international accounting standards within the meaning of IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements.
"Impaired Agent" means the Agent at any time when:
(a)
(if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender";
(b)
an Insolvency Event has occurred and is continuing with respect to the Agent; or
(c)    the Agent rescinds or repudiates a Finance Document.
"Increase Confirmation" means a confirmation substantially in the form set out in Schedule 10 (Form of Increase Confirmation).
"Information Package" means the Reports, the Business Plan and the Funds Flow.
"Insolvency Event" in relation to a Finance Party means:
(a)
a Finance Party being dissolved (other than pursuant to a consolidation, amalgamation or merger);
(b)
a Finance Party admits in writing its inability generally to pay its debts as they become due; or
(c)
the appointment of a liquidator, receiver, administrator, compulsory manager or similar officer in respect of that Finance Party or all or any material part of that Finance Party’s assets or any analogous procedure or any formal step being taken in respect of any such appointment or procedure other than the presentation of a petition for any such appointment or procedure which is dismissed, stayed or discharged within 30 days.
"Insurance Adequacy Letter" means the letter from Aon addressed to the Finance Parties dated on or around the date of this Agreement in respect of the insurance provision of the Group.
"Intellectual Property" means:
(a)
any patents, trade marks, service marks, designs, business names, copyrights, database rights, design rights, domain names, moral rights, inventions, confidential information, know how and other intellectual property rights and interests (which may now or in the future subsist), whether registered or unregistered; and
(b)
the benefit of all applications and rights to use such assets of each member of the Group (which may now or in the future subsist).



27    


"Interest Period" means, in relation to a Loan, each period determined in accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 10.3 (Default interest).
"Interpolated Screen Rate" means, in relation to LIBOR for any Loan, the rate (rounded to the same number of decimal places as the two relevant Screen Rates) which results from interpolating on a linear basis between:
(a)
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and
(b)
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,
each as of 11.00 a.m. on the Quotation Day for the currency of that Loan.
"ITA" means the Income Tax Act 2007.
"Joint Venture" means any joint venture entity, whether a company, unincorporated firm, undertaking, association, joint venture or partnership or any other entity.
"LBG Group" means Lloyds Banking Group plc and its Subsidiaries from time to time.
"Legal Reservations" means:
(a)
the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;
(b)
the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non-payment of UK stamp duty may be void and defences of set-off or counterclaim;
(c)
the principle that any additional interest imposed under any relevant agreement may be held to be unenforceable on the grounds that it is a penalty and thus void;
(d)
the principle that an English court may not give effect to an indemnity for legal costs incurred by an unsuccessful litigant;
(e)
the principle that in certain circumstances security granted by way of fixed charge may be characterised as a floating charge or that security purported to be constituted by way of an assignment may be recharacterised as a charge;
(f)
similar principles, rights and defences under the laws of any Relevant Jurisdiction; and
(g)
any other matters which are set out as qualifications or reservations as to matters of law (but not of fact) expressed in any legal opinion required to be given by this Agreement.
"Lender" means:
(a)
any Original Lender; and



28    


(b)
any bank, financial institution, trust, fund or other entity which has become a Party as a Lender in accordance with Clause 25 (Changes to the Lenders),
which in each case has not ceased to be a Lender in accordance with the terms of this Agreement.
"LIBOR" means, in relation to any Loan:
(a)
the applicable Screen Rate as of 11.00 a.m. on the Quotation Day for sterling and for a period equal in length to the Interest Period of that Loan; or
(b)
as otherwise determined pursuant to Clause 12.1 (Unavailability of Screen Rate),
and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.
"Limitation Acts" means the Limitation Act 1980, the Foreign Limitation Periods Act 1984, the Prescription and Limitation (Scotland) Act 1973, the Prescription and Limitation (Scotland) Act 1984 and any other enactment (whenever passed) relating to the prescription and/or limitation of actions and/or claims in any part of the United Kingdom.
"Livingston Property" means the heritable property situated at 1 Neilson Square, Deans Industrial Estate, Livingston EH54 8EQ (Title Number WLN1738).
"Lloyds Retail Facilities" means the retail and merchant services facilities (if any) provided to the Group by a member of the LBG Group from time to time.
"LMA" means the Loan Market Association.
"Loan" means a Term Loan or a Facility C Loan.
"Majority Lenders" means a Lender or Lenders whose Commitments aggregate more than 662/3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3 per cent. of the Total Commitments immediately prior to that reduction).
"Mandatory Prepayment Account" means an interest-bearing account:
(a)
held in Scotland by a Borrower with the Agent or Security Trustee;
(b)
identified in a letter between the Parent and the Agent as a Mandatory Prepayment Account;
(c)
subject to Security in favour of the Security Trustee which Security is in form and substance satisfactory to the Agent and Security Trustee; and
(d)
from which no withdrawals may be made by any members of the Group except as contemplated by this Agreement,
(as the same may be redesignated, substituted or replaced from time to time).
"Margin" means:



29    


(a)
in relation to any Facility A Loan, one point eight per cent. (1.8%) per annum;
(b)
in relation to any Facility B Loan, two point five per cent. (2.5%) per annum;
(c)
in relation to any Facility C Loan, two point two per cent. (2.2)% per annum;
(d)
in relation to any Unpaid Sum relating or referable to a Facility, the rate per annum specified above for that Facility;
(e)
in relation to any other Unpaid Sum, the highest rate specified above; and
(f)
if at any time a breach of the terms of Clause 22 (Financial Covenants) is continuing each of the rates referred to in (a) to (f) (inclusive) above will increase to two times the Margin which would otherwise be applicable to such amount for so long as such breach continues unwaived.
"Material Adverse Effect" means any event or circumstance which is in the opinion of the Majority Lenders (acting reasonably) materially adverse to:
(a)
the business, operations, property, condition (financial or otherwise) or prospects of the Group taken as a whole; or
(b)
the ability of an Obligor to perform its payment obligations under any of the Finance Documents and/or its obligations under Clause 22.2 (Financial condition) of this Agreement; or
(c)
the validity or enforceability of, or the effectiveness or ranking of any Security granted or purporting to be granted pursuant to any of, the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents.
"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:
(a)
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b)
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c)
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period. "Monthly" shall be construed accordingly.
"Monthly Financial Statements" means the financial statements delivered pursuant to paragraph (b) of Clause 21.1 (Financial Statements).



30    


"Non-Consenting Lender" has the meaning given to that term in Clause 37.4 (Replacement of Lender).
"Obligor" means a Borrower or a Guarantor.
"Obligors' Agent" means the Parent, appointed to act on behalf of each Obligor in relation to the Finance Documents pursuant to Clause 2.4 (Obligors' Agent).
"Original Financial Statements" means:
(a)
in relation to the Parent, the audited consolidated financial statements of the Group for its financial year ended 31 January 2015 and the unaudited management accounts for the Accounting Period which ended on 2 May 2015; and
(b)
in relation to any other Obligor, its audited financial statements delivered to the Agent as required by Clause 26 (Changes to the Obligors).
"Participating Member State" means any member state of the European Communities that adopts or has adopted the euro as its lawful currency in accordance with legislation of the European Community relating to Economic and Monetary Union.
"Party" means a party to this Agreement.
"Perfection Requirements" means the making or the procuring of the appropriate registrations, filings, endorsements, notarisations, stampings and/or notifications of the Transaction Security Documents and/or the Transaction Security created thereunder.
"Permitted Acquisition" means:
(a)
an acquisition permitted in terms of Clause 23.29 (Capital Expenditure);
(b)
an acquisition by a member of the Group of an asset sold, leased, transferred or otherwise disposed of by another member of the Group in circumstances constituting a Permitted Disposal;
(c)
an acquisition of shares or securities pursuant to a Permitted Share Issue;
(d)
an acquisition approved in writing by the Majority Lenders.
"Permitted Bank Accounts" means each of the accounts held by Schuh (ROI) Limited with Ulster Bank (or such other bank notified by the Parent to the Agent from time to time) and the accounts held by Genesco Schuh GmbH with Commerzbank (or such other bank notified by the Parent to the Agent from time to time).
"Permitted Disposal" means any sale, lease, licence, transfer or other disposal which is on arms' length terms:
(a)
of trading stock or cash made by any member of the Group in the ordinary course of trading of the disposing entity;
(b)
of any asset by a member of the Group (the "Disposing Company") to another member of the Group (the "Acquiring Company"), but if:



31    


(i)
the Disposing Company is an Obligor, the Acquiring Company must also be an Obligor;
(ii)
the Disposing Company had given Security over the asset, the Acquiring Company must give equivalent Security over that asset; and
(iii)
the Disposing Company is a Guarantor, the Acquiring Company must be a Guarantor guaranteeing at all times an amount no less than that guaranteed by the Disposing Company;
(c)
of assets (other than shares, businesses, any Properties or any Intellectual Property) in exchange for other assets comparable or superior as to type, value or quality;
(d)
of obsolete or redundant vehicles, plant and equipment for cash;
(e)
arising as a result of any Permitted Security; and
(f)
of assets (other than shares, businesses, any Properties or any Intellectual Property) for cash where the higher of the market value and net consideration receivable (when aggregated with the higher of the market value and net consideration receivable for any other sale, lease, licence, transfer or other disposal not allowed under the preceding paragraphs) does not exceed £200,000 (or its equivalent) in any Financial Year of the Parent.
"Permitted Financial Indebtedness" means Financial Indebtedness:
(a)
arising under a foreign exchange transaction for spot or forward delivery entered into in connection with protection against fluctuation in currency rates where that foreign exchange exposure arises in the ordinary course of trade, but not a foreign exchange transaction for investment or speculative purposes;
(b)
arising under a Permitted Loan or a Permitted Guarantee or as permitted by Clause 23.30 (Treasury Transactions);
(c)
of any person acquired by a member of the Group after the date of this Agreement which is incurred under arrangements in existence at the date of acquisition, but not incurred or increased or its maturity date extended in contemplation of, or since, that acquisition, and outstanding only for a period of three months following the date of acquisition;
(d)
under finance or capital leases of vehicles, plant, equipment or computers, provided that the aggregate capital value of all such items so leased under outstanding leases by members of the Group does not exceed £100,000 (or its equivalent in other currencies) at any time;
(e)
arising under the Working Capital Facility Letter;
(f)
arising in respect of the Retail Facilities;
(g)
arising under a loan made by the UK Acquisition Company to any Obligor which is subordinated to the Facilities in accordance with the Subordination Agreements;



32    


(h)
arising by way of a New Shareholder Injection;
(i)
arising under or pursuant to a promissory note originally issued by the Company to Genesco Inc. dated March 2015 (otherwise undated) in respect of the sum of £5,500,000 which is to be replaced within 10 Business Days after the Fourth Restatement Date by a debt obligation owed by Schuh Limited to the UK Acquisition Company plus accrued interest thereon; and
(j)
not permitted by the preceding paragraphs or as a Permitted Transaction and the outstanding principal amount of which does not exceed £100,000 (or its equivalent) in aggregate for the Group at any time.
"Permitted Guarantee" means:
(a)
the endorsement of negotiable instruments in the ordinary course of trade;
(b)
any performance or similar bond guaranteeing performance by a member of the Group under any contract entered into in the ordinary course of trade;
(c)
any guarantee permitted under Clause 23.19 (Financial Indebtedness);
(d)
any guarantee given in respect of the netting or set-off arrangements permitted pursuant to paragraph (b) of the definition of Permitted Security; or
(e)
the Guarantee (as defined in the Ranking Agreement).
"Permitted Joint Venture" means any investment in any Joint Venture where the Parent has obtained the prior written consent (not to be unreasonably withheld or delayed) of the Majority Lenders for the investment in that Joint Venture.
"Permitted Loan" means:
(a)
any trade credit extended by any member of the Group to its customers on normal commercial terms and in the ordinary course of its trading activities;
(b)
Financial Indebtedness which is referred to in the definition of, or otherwise constitutes, Permitted Financial Indebtedness (except under paragraph (c) of that definition);
(c)
a loan made by an Obligor to another Obligor or made by a member of the Group which is not an Obligor to another member of the Group;
(d)
a loan made by a member of the Group to an employee or director of any member of the Group if the amount of that loan when aggregated with the amount of all loans to employees and directors by members of the Group does not exceed £100,000 (or its equivalent) at any time;
(e)
a loan made by the Parent or any of its wholly owned subsidiaries to the UK Acquisition Company in compliance with the terms of paragraph (b) of the definition of Permitted Payment; and
(f)
any other loan so long as the aggregate amount of the Financial Indebtedness under any such loans does not exceed £100,000 (or its equivalent) at any time.



33    


"Permitted Merger" means:
(a)
an amalgamation, demerger, merger, consolidation or corporate reconstruction on a solvent basis of an Obligor where:
(i)
all of the business and assets of that Obligor are retained by one or more other Obligors;
(ii)
the surviving entity of that amalgamation, demerger, merger, consolidation or corporate reconstruction is liable for the obligations of the Obligor it has merged with and is incorporated in the same jurisdiction as that Obligor; and
(iii)
the Agent and the Security Trustee are given thirty Business Days' notice by the Parent of that proposed amalgamation, demerger, merger, consolidation or corporate reconstruction and the Security Trustee, acting reasonably, is satisfied that the Finance Parties will enjoy the same or equivalent Security over the same assets and over that Obligor and the shares in it (or the shares of the surviving entity); or
(b)
an amalgamation, demerger, merger, consolidation or corporate reconstruction on a solvent basis of a member of the Group which is not an Obligor where all of the business and assets of that member remain within the Group; or
(c)
an amalgamation or merger between an Obligor and another entity in connection with a Permitted Acquisition where such Obligor is the surviving entity.
"Permitted Payment" means:
(a)
the payment of a dividend to the Parent or any of its wholly-owned Subsidiaries;
(b)
the payment of a dividend, the making of a loan or the repayment of a loan (other than in respect of the debt obligation referred to in paragraph (c) below) in each case by the Parent to the UK Acquisition Company provided that:
(i)
no Event of Default would occur as a result of that loan, loan repayment and/or dividend;
(ii)
the Parent provides to the Agent such information as the Agent may reasonably require so as to demonstrate to the Agent that:
(A)
such loan and/or dividend and/or repayment would not cause a breach of the financial covenants under Clause 22 (Financial Covenants) of this Agreement in the period of 12 months following the making/repaying of such loan and/or payment of such dividend; and
(B)
Leverage shall not exceed the ratio of 1:1 as at the end of each Relevant Period in the period of 12 months following the making/repaying of such loan and/or payment of such dividend;
(c)
the repayment by the Company to the UK Acquisition Company of the amounts outstanding under the promissory note originally issued in March 2015 by Schuh Limited to Genesco Inc. (which is to be replaced by a debt obligation in the



34    


same amount payable by Schuh Limited to UK Acquisition Company within 10 Business Days after the Fourth Restatement Date) provided that such payment may only be made after 30 January 2016; or
(d)
the payment of any other dividend agreed between the Parent and the Lenders.
"Permitted Security" means:
(a)
any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group;
(b)
any netting or set-off arrangement entered into by any member of the Group with Lloyds Bank plc in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances of members of the Group but only so long as (i) such arrangement does not permit credit balances of Obligors to be netted or set off against debit balances of members of the Group which are not Obligors and (ii) such arrangement does not give rise to other Security over the assets of Obligors in support of liabilities of members of the Group which are not Obligors;
(c)
any Security or Quasi-Security over or affecting any asset acquired by a member of the Group after the date of this Agreement, if:
(i)
the Security or Quasi-Security was not created in contemplation of the acquisition of that asset by a member of the Group;
(ii)
the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a member of the Group; and
(iii)
the Security or Quasi-Security is removed or discharged within three months of the date of acquisition of such asset;
(d)
any Security or Quasi-Security over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security or Quasi-Security is created prior to the date on which that company becomes a member of the Group, if:
(i)
the Security or Quasi-Security was not created in contemplation of the acquisition of that company;
(ii)
the principal amount secured has not increased in contemplation of or since the acquisition of that company; and
(iii)
the Security or Quasi-Security is removed or discharged within three months of that company becoming a member of the Group;
(e)
any Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a member of the Group in the ordinary course of trading and on the supplier's standard or usual terms and not arising as a result of any default or omission by any member of the Group;



35    


(f)
any Security or Quasi-Security arising as a consequence of any finance or capital lease permitted pursuant to paragraph (e) of the definition of "Permitted Financial Indebtedness";
(g)
any Security in favour of Bank of Scotland plc or any other member of the LBG Group by any member of the Group;
(h)
any Security securing indebtedness the outstanding principal amount of which (when aggregated with the outstanding principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any permitted under paragraphs (a) to (g) above) does not exceed £100,000; or
(i)
the Noteholder Securities (as defined in the Ranking Agreement).
"Permitted Share Issue" means an issue of:
(a)
ordinary shares by the Parent to employees, paid for in full in cash upon issue and which by their terms are not redeemable and where such issue does not lead to a Change of Control of the Parent;
(b)
shares by a member of the Group which is a Subsidiary to its immediate Holding Company where (if the existing shares of the Subsidiary are the subject of the Transaction Security) the newly-issued shares also become subject to the Transaction Security on the same terms.
"Permitted Transaction" means:
(a)
any disposal required, Financial Indebtedness incurred, guarantee, indemnity or Security or Quasi-Security given, or other transaction arising, under the Finance Documents;
(b)
the solvent liquidation or reorganisation of any member of the Group which is not an Obligor so long as any payments or assets distributed as a result of such liquidation or reorganisation are distributed to an Obligor; or
(c)
transactions (other than (i) any sale, lease, license, transfer or other disposal and (ii) the granting or creation of Security or the incurring or permitting to subsist of Financial Indebtedness) conducted in the ordinary course of trading on arms' length terms.
"Properties" means the heritable or freehold properties owned by the Group at the date of this Agreement and any other freehold property acquired by a member of the Group after the date of this Agreement. A reference to "Property" is a reference to any of the Properties.
"Qualifying Lender" has the meaning given to that term in Clause 14 (Tax gross-up and indemnities).
"Quarter Date" has the meaning given to that term in Clause 22.1 (Financial Definitions).
"Quasi-Security" has the meaning given to that term in Clause 23.13 (Negative pledge).



36    


"Quotation Day" means, in relation to any period for which an interest rate is to be determined, the first day of that period.
"Ranking Agreement" means the ranking agreement dated on or around the Fourth Restatement Date and made between the Security Trustee, the Noteholder Security Trustee (as defined therein), Schuh Limited and Schuh (ROI) Limited.
"Receiver" means a receiver or receiver and manager or administrative receiver of the whole or any part of the Charged Property.
"Reference Bank Quotation" means any quotation supplied to the Agent by a Reference Bank.
"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks:
(a)
(other than where paragraph (b) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in sterling for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or
(b)
if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the Screen Rate are asked to submit to the relevant administrator.
"Reference Banks" means the principal London offices of Barclays Bank PLC, Bank of Scotland plc and The Royal Bank of Scotland plc or such other banks as may be appointed by the Agent in consultation with the Parent.
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the same investment manager or investment adviser as the first fund or, if it is managed by a different investment manager or investment adviser, a fund whose investment manager or investment adviser is an Affiliate of the investment manager or investment adviser of the first fund.
"Relevant Jurisdiction" means, in relation to an Obligor:
(a)
its jurisdiction of incorporation;
(b)
any jurisdiction where any asset subject to or intended to be subject to the Transaction Security to be created by it is situated;
(c)
any jurisdiction where it conducts its business; and
(d)
the jurisdiction whose laws govern the perfection of any of the Transaction Security Documents entered into by it.
"Relevant Period" has the meaning given to that term in Clause 22.2 (Financial definitions).
"Repayment Date" means a Facility A Repayment Date, the Facility B Repayment Date or a Facility C Repayment Date.



37    


"Repeating Representations" means each of the representations set out in Clause 20.2 (Status) to Clause 20.7 (Governing law and enforcement) (inclusive), Clause 20.11 (No default), paragraphs (f) and (g) of Clause 20.13 (Original Financial Statements), Clause 20.19 (Ranking) to Clause 20.21 (Legal and beneficial ownership) (inclusive), Clause 20.28 (Centre of main interests and establishments) and Clause 20.30 (Sanctions and Anti Corruption Law).
"Reports" means the Financial Due Diligence Report and the Tax Letter.
"Resignation Letter" means a letter substantially in the form set out in Schedule 8 (Form of Resignation Letter).
"Restatement Date" means 22 June 2011.
"Retail Facilities" means the retail and merchant services facilities used by the Group from time to time (including, without limitation, the Existing Retail Facilities and the Lloyds Retail Facilities).
"Rollover Loan" means one or more Facility C Loans:
(a)
made or to be made on the same day that a maturing Facility C Loan is due to be repaid;
(b)
the aggregate amount of which is equal to or less than the amount of the maturing Facility C Loan; and
(c)
made or to be made to the same Borrower for the purpose of refinancing that maturing Facility C Loan.
"Sanctioned Country" means, at any time, a country or territory which is itself the subject of comprehensive country-wide or territory-wide Sanctions (including, but not limited to, at the date of the Fourth Amendment and Restatement Agreement , Cuba, Iran, North Korea, Sudan and Syria) and, for the avoidance of doubt, excluding a country or territory where Sanctions only target specific activities.
"Sanctioned Person" means, at any time, (i) any person listed in any Sanctions List or related list of designated persons maintained by the Office of Foreign Assets Control of the U.S. Department of the Treasury or the U.S. Department of State, or by the United Nations Security Council, the United Kingdom Government, the European Union (or any of its member states) or any other country to the extent recognised and implemented by any of the foregoing, (ii) any person operating, organised or resident in a Sanctioned Country or (iii) any person owned or controlled by any such person or persons.
"Sanctions" means the economic or trade sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by: (i) the United Kingdom Government; (ii) the United States Government; (iii) the United Nations; (iv) the European Union (or any of its member states); and (v) any other economic or trade sanctions laws, regulations, embargoes or restrictive measures imposed, administered, enacted or enforced by any other relevant sanctions authority, as recognised and implemented by any of the foregoing; and with regard to (i)-(v) above, the respective governmental institutions and agencies of any of the foregoing, including, without limitation, the Office of Foreign Assets Control of the US Department of Treasury ("OFAC"), the United States Department of State, and Her Majesty's Treasury ("HMT"), (together the "Sanctions Authorities").



38    


"Sanctions List" means the "Specially Designated Nationals and Blocked Persons" list maintained by OFAC, the "Consolidated List of Financial Sanctions Targets" maintained by HMT, or any similar list maintained by any of the Sanctions Authorities.
"Screen Rate" means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for the relevant period displayed (or any correction, recalculation or republication by the administrator if and only if such correct, recalculated or republished rate is lower) on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate). If the agreed page is replaced or service ceases to be available, the Agent may specify another page or service displaying the appropriate rate after consultation with the Parent and the Lenders.
"Second Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of this Agreement dated on the Second Restatement Date.
"Second Restatement Date" means 1 November 2013.
"Secured Obligations" means all present and future obligations and liabilities (whether actual or contingent, whether owed jointly, severally or in any other capacity whatsoever and whether originally incurred by an Obligor or by some other person) of each Obligor to the Finance Parties (or any of them) under each of the Finance Documents except for any obligation or liability which, if it were so included, would cause that obligation or liability or any of the Security in respect thereof, to be unlawful or prohibited by any applicable law.
"Secured Parties" means each Finance Party from time to time and any Receiver or Delegate.
"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.
"Selection Notice" means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause 11 (Interest Periods) in relation to a Term Facility.
"Senior Management" means each and all of Colin Temple, Mark Crutchley, Kenneth Ball and David Spencer.
"Senior Management Event" means Colin Temple and Mark Crutchley cease (in the period of 24 months following the Fourth Restatement Date) to be employed by the Parent (as chief executive officer and chief financial officer of the Group respectively) (the date on which both of such individuals cease to be so employed being for these purposes the "Trigger Date") and, following the presentation to the Lenders of the Group's alternative arrangements for the senior management of the Group (including, without limitation, the identity of the proposed new chief executive officer and chief financial officer of the Group) within 120 days of the Trigger Date, the Agent (acting on the instructions of the Majority Lenders, acting reasonably) does not provide a written consent to such cessation within 180 days of the Trigger Date. This definition shall also apply to any replacement person approved by the Agent in accordance with the terms



39    


of this definition as if references in this Clause to Colin Temple or to Mark Crutchley were references to that replacement person.
"Standard Security" means the standard security by the Company in favour of the Security Trustee in respect of the Livingston Property dated on or around the date of this Agreement.
"Sterling" and the figure "£" means the lawful currency of the UK.
"Subordination Agreements" means the subordination agreement between the Borrower, UK Acquisition Company and the Security Trustee as security trustee for the Finance Parties dated 22 June, 23 June and 7 November 2011 and the subordination agreement between the Obligors, the UK Acquisition Company and the Security Trustee as security trustee for the Finance Parties dated on or around 10 Business Days after the Fourth Restatement Date.
"Subsidiary" means, in relation to any company, corporation or legal entity (a "holding company"), any company, corporation or legal entity:
(a)
which is controlled, directly or indirectly, by the holding company; or
(b)
more than half the issued share capital of which is beneficially owned, directly or indirectly, by the holding company; or
(c)
which is a subsidiary of another subsidiary of the holding company,
and, for these purposes, a company, corporation or legal entity shall be treated as being controlled by another if that other company, corporation or legal entity is able to direct its affairs and/or to control the composition of its board of directors or equivalent body.
"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).
"Tax Letter" means the letter dated on or around the date of this Agreement from KPMG to the Finance Parties in respect of the tax position of the Group.
"Taxes Act" means the Income and Corporation Taxes Act 1988.
"Term Facilities" means Facility A and Facility B and "Term Facility" means any of them as the context may require.
"Termination Date" means:
(a)
in relation to Facility A, 29 April 2017;
(b)
in relation to Facility B, 30 September 2019; and
(c)
in relation to Facility C, 30 September 2019.
"Term Loan" means a Facility A Loan or a Facility B Loan.



40    


"Third Amendment and Restatement Agreement" means the amendment and restatement agreement in respect of this Agreement dated on the Third Restatement Date.
"Third Restatement Date" means 19 June 2014.
"Total Commitments" means the aggregate of the Total Facility A Commitments, the Total Facility B Commitments and the Total Facility C Commitments being £51,562,500 at the Fourth Restatement Date.
"Total Facility A Commitments" means the aggregate of the Facility A Commitments, being £17,500,000 at the Fourth Restatement Date.
"Total Facility B Commitments" means the aggregate of the Facility B Commitments, being £11,562,500 at the Fourth Restatement Date.
"Total Facility C Commitments" means the aggregate of the Facility C Commitments, being £22,500,000 at the Fourth Restatement Date.
"Trade Sale" means a disposal (whether in a single transaction or a series of related transactions) of all or substantially all of the business and assets of the Group.
"Transaction Documents" means the Acquisition Agreement, the Constitutional Documents and the Finance Documents.
"Transaction Security" means the Security created or expressed to be created in favour of the Security Trustee pursuant to the Transaction Security Documents.
"Transaction Security Documents" means each of floating charges in favour of the Security Trustee granted by the Parent, Holdings and the Company, each dated 10 November 2010, the share pledge in favour of the Security Trustee by Group over the shares in Holdings dated 10 November 2010, the share pledge in favour of the Security Trustee by Holdings over the shares in the Company dated 10 November 2010, the Standard Security, the Additional Standard Security, the Collateral Warranty Assignment and any document required to be delivered to the Agent under paragraph 13 of Part II of Schedule 2 (Conditions Precedent) together with any other any document entered into by any Obligor creating or expressed to create any Security over all or any part of its assets in respect of the obligations of any of the Obligors under any of the Finance Documents.
"Transfer Certificate" means a certificate substantially in the form set out in Schedule 5 (Form of Transfer Certificate) or any other form agreed between the Agent and the Parent.
"Transfer Date" means, in relation to an assignment or transfer, the later of:
(a)
the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and
(b)
the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.
"Treasury Transactions" means any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.



41    


"UK Acquisition Company" means Genesco (UK) Limited (Reg. No. 7667223).
"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.
"Utilisation" means a Loan.
"Utilisation Date" means the date on which a Utilisation is made.
"Utilisation Request" means a notice substantially in the form set out in Part 1 of Schedule 3 (Requests).
"VAT" means value added tax as provided for in the Value Added Tax Act 1994 and any other tax of a similar nature.
"Working Capital Facility" means the working capital facilities provided by the Working Capital Lender to various members of the Group pursuant to the terms of the Working Capital Facility Letter.
"Working Capital Facility Letter" means the working capital facility letter between each of the Parent, Holdings and the Company and Lloyds Bank plc dated on or around the Fourth Restatement Date or any other facility letter entered into from time to time between members of the Group and the Working Capital Lender setting out the terms on which working capital facilities (including any overdraft facility) are available to the Group.
"Working Capital Lender" means Lloyds Bank plc (or another member of the LBG Group) as provider of the Working Capital Facility.
1.2.
Construction
(a)
Unless a contrary indication appears, a reference in this Agreement to:
(i)
the "Agent", the "Arranger", any "Finance Party", any "Lender", any "Obligor", any "Party", any "Secured Party", the "Security Trustee" or any other person shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents and, in the case of the Security Trustee, any person for the time being appointed as Security Trustee or Security Trustees in accordance with the Finance Documents;
(ii)
a document in "agreed form" is a document which is previously agreed in writing by or on behalf of the Parent and the Agent or, if not so agreed, is in the form specified by the Agent;
(iii)
"assets" includes present and future properties, revenues and rights of every description;
(iv)
a "Finance Document" or a "Transaction Document" or any other agreement or instrument is a reference to that Finance Document or Transaction Document or other agreement or instrument as amended or novated (however fundamentally) and includes (without limiting the generality of the foregoing) any variation, increase, extension or addition of or to any facility or amount made available under any such



42    


document or any variation of the purposes for which such facility or amount may be available from time to time;
(v)
"guarantee" means (other than in Clause 19 (Guarantee and Indemnity) any guarantee, letter of credit, bond, indemnity or similar assurance against loss, or any obligation, direct or indirect, actual or contingent, to purchase or assume any indebtedness of any person or to make an investment in or loan to any person or to purchase assets of any person where, in each case, such obligation is assumed in order to maintain or assist the ability of such person to meet its indebtedness;
(vi)
"indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(vii)
a "person" includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium or partnership (whether or not having separate legal personality);
(viii)
a "regulation" includes any regulation, rule, official directive, request or guideline (whether or not having the force of law but, if not having the force of law, being one with which it is customary to comply) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other authority or organisation;
(ix)
a provision of law is a reference to that provision as amended or re-enacted;
(x)
a time of day is a reference to London time; and
(xi)
the "date of this Agreement" shall be a reference to 10 November 2010.
(b)
Section, Clause and Schedule headings are for ease of reference only.
(c)
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(d)
A Default (other than an Event of Default) is "continuing" if it has not been remedied or waived and an Event of Default is "continuing" if it has not been remedied or waived.
1.3.
Third party rights
(a)
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or enjoy the benefit of any term of this Agreement.
(b)
Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.



43    







44    


SECTION 2
THE FACILITIES
2.
THE FACILITIES
2.1.
The Facilities
(a)
Subject to the terms of this Agreement, the Lenders make available:
(i)
a Sterling term loan facility in an aggregate amount equal to the Total Facility A Commitments which will be made available to the Parent; and
(ii)
a Sterling term loan facility in an aggregate amount equal to the Total Facility B Commitments which shall be made available to the Company; and
(iii)
a Sterling revolving loan facility in an aggregate amount equal to the Total Facility C Commitments which shall be made available to the Company.
2.2.
Increase
(a)
The Parent may by giving prior notice to the Agent by no later than the date falling 5 Business Days after the effective date of a cancellation of:
(i)
the Available Commitments of a Defaulting Lender in accordance with Clause 7.5 (Right of cancellation in relation to a Defaulting Lender); or
(ii)
the Commitments of a Lender in accordance with Clause 7.1 (Illegality),
request that the Commitments relating to any Facility be increased (and the Commitments relating to that Facility shall be so increased) in an aggregate amount of up to the amount of the Available Commitments or Commitments so cancelled as follows:
(iii)
the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities (each an "Increase Lender") selected by the Company (each of which shall not be a member of the Group nor an Investor nor an Affiliate of an Investor and which is further acceptable to the Agent (acting reasonably)) and each of which confirms its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender;
(iv)
each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender;
(v)
each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume



45    


obligations towards one another and acquire rights against one another as that Increase Lender and those Finance Parties would have assumed and/or acquired had the Increase Lender been an Original Lender;
(vi)
the Commitments of the other Lenders shall continue in full force and effect; and
(vii)
any increase in the Commitments relating to a Facility shall take effect on the date specified by the Company in the notice referred to above or any later date on which the conditions set out in paragraph (b) below are satisfied.
(b)
An increase in the Commitments relating to a Facility will only be effective on:
(i)
the execution by the Agent of an Increase Confirmation from the relevant Increase Lender promptly on receipt on such Increase Confirmation; and
(ii)
in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase:
(A)
the Increase Lender entering into any intercreditor documentation required by the Agent and the Lenders (acting reasonably); and
(B)
the performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Company and the Increase Lender.
(c)
Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective.
(d)
Unless the Agent otherwise agrees or the increased Commitment is assumed by an existing Lender, the Company shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee of £5,000 and the Company shall promptly on demand pay the Agent and the Security Trustee the amount of all costs and expenses (including legal fees) reasonably incurred by either of them and, in the case of the Security Trustee, by any Receiver or Delegate in connection with any increase in Commitments under this Clause 2.2.
(e)
The Parent may pay to the Increase Lender a fee in the amount and at the times agreed between the Parent and the Increase Lender in a Fee Letter.
(f)
Clause 25.4 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:
(i)
an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase;



46    


(ii)
the "New Lender" were references to that "Increase Lender"; and
(iii)
a "re-transfer" and "re-assignment" were references to respectively a "transfer" and "assignment".
2.3.
Finance Parties' rights and obligations
(a)
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(b)
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.
(c)
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.
2.4.
Obligors' Agent
(a)
Each Obligor (other than the Parent) by its execution of this Agreement or an Accession Letter irrevocably appoints the Parent (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:
(i)
the Parent on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to execute on its behalf any Accession Letter, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and
(ii)
each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Parent,
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
(b)
Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Obligors' Agent or given to the Obligors' Agent under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or



47    


other communications of the Obligors' Agent and any other Obligor, those of the Obligors' Agent shall prevail.
3.
PURPOSE
3.1.
Purpose
(a)
The Parent shall apply all amounts borrowed by it (either directly or which has been novated to be due by it) under Facility A towards the payment of certain sums due pursuant to or in connection with the Acquisition Agreement (including, without limitation, any amounts payable under any management incentive plan agreed thereunder), towards the refinance of certain facilities previously made available to it and certain of its Subsidiaries by any member of LBG Group and repay indebtedness due by the UK Acquisition Company to various of its former shareholders.
(b)
The Company shall apply all amounts borrowed by it under Facility B toward the financing of the acquisition of the Additional Livingston Property, a new sorter, restructuring costs and the conversion of existing warehouse premises to offices.
(c)
The Company shall apply all amounts borrowed by it under Facility C towards amounts payable under any management incentive plan agreed in respect of the Acquisition Agreement and for the general corporate purposes of that Borrower (excluding any Business Acquisition).
3.2.
Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4.
CONDITIONS OF UTILISATION
4.1.
Initial conditions precedent
The Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation) in relation to any Utilisation if on or before the Utilisation Date for that Utilisation, the Agent has received all of the documents and other evidence listed in Part I of Schedule 2 (Conditions precedent) in form and substance satisfactory to the Agent. The Agent shall notify the Parent and the Lenders promptly upon being so satisfied.
4.2.
Further conditions precedent
Subject to Clause 4.1 (Initial conditions precedent), the Lenders will only be obliged to comply with Clause 5.4 (Lenders' participation), if on the date of the Utilisation Request and on the proposed Utilisation Date:
(a)
in the case of a Rollover Loan, no Event of Default is continuing or would result from the proposed Loan and, in the case of any other Loan, no Default is continuing or would result from the proposed Utilisation; and
(b)
in relation to any Utilisation on the date of this Agreement, all the representations and warranties in Clause 20 (Representations) or, in relation to any other Utilisation, the Repeating Representations, to be made by each Obligor are true.



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4.3.
Maximum number of Utilisations
(a)
A Borrower (or the Parent) may not deliver a Utilisation Request if as a result of the proposed Utilisation seven or more Term Loans would be outstanding or four or more Facility C Loans would be outstanding.
(b)
A Borrower (or the Parent) may not request that a Facility A Loan be divided if, as a result of the proposed division, three or more Facility A Loans would be outstanding.
(c)
The Company (or the Parent) may not request that a Facility B Loan be divided.



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SECTION 3
UTILISATION
5.
UTILISATION – LOANS
5.1.
Delivery of a Utilisation Request
A Borrower (or the Parent on its behalf) may utilise a Facility by delivery to the Agent of a duly completed Utilisation Request not later than 10.00 a.m. one Business Day prior to the proposed Utilisation Date.
5.2.
Completion of a Utilisation Request for Loans
(a)
Each Utilisation Request for a Loan is irrevocable and will not be regarded as having been duly completed unless:
(i)
it identifies the Facility to be utilised;
(ii)
the proposed Utilisation Date is a Business Day within the Availability Period applicable to that Facility;
(iii)
the currency and amount of the Utilisation comply with Clause 5.3 (Currency and amount); and
(iv)
the proposed Interest Period complies with Clause 11 (Interest Periods).
(b)
Multiple Utilisations may be requested in a Utilisation Request where the proposed Utilisation Date is the date of this Agreement. Only one Utilisation may be requested in each subsequent Utilisation Request.
5.3.
Currency and amount
(a)
The currency specified in a Utilisation Request must be Sterling.
(b)
The amount of the proposed Utilisation must be:
(i)
an amount equal to £6,607,000 for that part of Facility A which is to be drawn down by the Parent prior to the Fourth Restatement Date or, if less, the Available Facility;
(ii)
an amount equal to £10,893,000 for that part of Facility A which is to be drawn down by the Parent on or after the Fourth Restatement Date or, if less, the Available Facility;
(iii)
an amount equal to £11,562,500 for Facility B or, if less, the Available Facility; or
(iv)
a minimum amount of £500,000 (or, if less, the Available Facility) during the Availability Period in respect of Facility C.
5.4.
Lenders' participation



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(a)
If the conditions set out in this Agreement have been met and subject to clause 6.2 (Repayment of Facility C Loans), each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.
(b)
The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
(c)
The Agent shall notify each Lender of the amount of each Loan, the amount of its participation in that Loan and, in the case of a Facility C Loan and if different, the amount of that participation to be made available in accordance with Clause 31.1 (Payments to the Agent), in each case by not later than 12.00 pm one Business Day prior to the proposed Utilisation Date.
5.5.
Limitations on Utilisations
A Term Facility or Facility C may only be utilised in accordance with the terms of this Agreement.
5.6.
Cancellation of Commitment
(a)
The Facility A Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility A.
(b)
The Facility B Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility B.
(c)
The Facility C Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period for Facility C.
5.7.
Clean down
The Parent shall ensure that:
(a)
the amount outstanding under Facility C in excess of £17,500,000 (net of any cancellation of the Available Facility in respect of Facility C); PLUS
(b)
the amount outstanding under the Working Capital Facility Letter; LESS
(c)
any amount of cash (other than cash held in a Holding Account or Mandatory Prepayment Account) held by wholly-owned members of the Group,
(as confirmed in a certificate signed by a director of the Parent provided to the Agent within 15 Business Days after the end of each Financial Year) shall not exceed zero for a period of not less than 10 successive days in each of its Financial Years. Not less than 9 months shall elapse between two such periods.



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SECTION 4
REPAYMENT, PREPAYMENT AND CANCELLATION
6.
REPAYMENT
6.1.
Repayment of Term Loans
(a)
The Borrowers shall repay the Facility A Loans in instalments by repaying on each Facility A Repayment Date the amount set out opposite that Facility A Repayment Date below:
Facility A Repayment Date
Repayment Instalment (£)
1 August 2015
2,000,000
31 October 2015
1,000,000
30 January 2016
4,750,000
30 April 2016
1,000,000
30 July 2016
2,000,000
29 October 2016
1,000,000
28 January 2017
4,750,000
29 April 2017
1,000,000
(b)
The Borrowers shall repay the Facility B Loans in instalments by repaying on each Facility B Repayment Date the amount set out opposite that Facility B Repayment Date below:
Facility B Repayment Date
Repayment Instalment (£)
30 June 2015
312,500
30 September 2015
312,500
31 December 2015
312,500
31 March 2016
312,500
30 June 2016
312,500
30 September 2016
312,500
31 December 2016
312,500
31 March 2017
312,500
30 June 2017
312,500
30 September 2017
312,500
31 December 2017
312,500
31 March 2018
312,500
30 June 2018
312,500
30 September 2018
312,500
31 December 2018
312,500
31 March 2019
312,500
30 June 2019
312,500
30 September 2019
6,250,000



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(c)
The Borrowers may not reborrow any part of a Term Facility which is repaid.
6.2.
Repayment of Facility C Loans
(a)
Each Borrower which has drawn a Facility C Loan shall repay that Loan on the last day of its Interest Period.
(b)
Without prejudice to each Borrower's obligation under paragraph (a) above, if:
(i)
one or more Facility C Loans are to be made available to a Borrower:
(A)
on the same day that a maturing Facility C Loan is due to be repaid by that Borrower; and
(B)
in whole or in part for the purpose of refinancing the maturing Facility C Loan; and
(ii)
the proportion borne by each Lender's participation in the maturing Facility C Loan to the amount of that maturing Facility C Loan is the same as the proportion borne by that Lender's participation in the new Facility C Loans to the aggregate amount of those new Facility C Loans,
the aggregate amount of the new Facility C Loans shall, unless the Parent notifies the Agent to the contrary in the relevant Utilisation Request, be treated as if applied in or towards repayment of the maturing Facility C Loan so that:
(C)
if the amount of the maturing Facility C Loan exceeds the aggregate amount of the new Facility C Loans;
(1)
the relevant Borrower will only be required to make a payment under Clause 31.1 (Payments to the Agent) in an amount in the relevant currency equal to that excess; and
(2)
each Lender's participation in the new Facility C Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation in the maturing Facility C Loan and that Lender will not be required to make a payment under Clause 31.1 (Payments to the Agent) in respect of its participation in the new Facility C Loans; and
(D)
if the amount of the maturing Facility C Loan is equal to or less than the aggregate amount of the new Facility C Loans:
(1)
the relevant Borrower will not be required to make a payment under Clause 31.1 (Payments to the Agent); and
(2)
each Lender will be required to make a payment under Clause 31.1 (Payments to the Agent) in respect of its participation in the new Facility C Loans only to the extent that its participation in the new Facility C Loans



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exceeds that Lender's participation in the maturing Facility C Loan and the remainder of that Lender's participation in the new Facility C Loans shall be treated as having been made available and applied by the Borrower in or towards repayment of that Lender's participation in the maturing Facility C Loan.
6.3.
Effect of cancellation and prepayment on scheduled repayments and reductions of Term Loans
(a)
If the Parent cancels the whole or any part of the Facility A Commitments in accordance with Clause 7.5 (Right of cancellation and repayment in relation to a single Lender) or if the Facility A Commitment of any Lender is reduced under Clause 7.1 (Illegality) then the amount of the Facility A Repayment Instalment for each Facility A Repayment Date falling after that cancellation will reduce pro rata by the amount cancelled.
(b)
If any of the Facility A Loans are prepaid in accordance with Clause 7.5 (Right of cancellation and repayment in relation to a single Lender) or Clause 7.1 (Illegality) then the amount of the Facility A Repayment Instalment for each Facility A Repayment Date falling after that prepayment will reduce pro rata by the amount of the Facility A Loan.
(c)
If any of the Facility A Loans are prepaid in accordance with Clause 7.3 (Voluntary prepayment of Term Loans) or Clause 8.3 (Application of mandatory prepayments) then the amount of the Facility A Repayment Instalment for each Facility A Repayment Date falling after that prepayment will reduce in inverse order of maturity by the amount of the Facility A Loan prepaid.
(d)
If the Parent cancels the whole or any part of the Facility B Commitments in accordance with Clause 7.5 (Right of cancellation and repayment in relation to a single Lender) or if the Facility B Commitment of any Lender is reduced under Clause 7.1 (Illegality) then the amount of the Facility B Repayment Instalment for each Facility B Repayment Date falling after that cancellation will reduce pro rata by the amount cancelled.
(e)
If any of the Facility B Loans are prepaid in accordance with Clause 7.5 (Right of cancellation and repayment in relation to a single Lender) or Clause 7.1 (Illegality) then the amount of the Facility B Repayment Instalment for each Facility B Repayment Date falling after that prepayment will reduce pro rata by the amount of the Facility B Loan.
(f)
Subject to the terms of paragraph (d) below, if any of the Facility B Loans are prepaid in accordance with Clause 7.3 (Voluntary prepayment of Term Loans) or Clause 8.3 (Application of mandatory prepayments) then the amount of the Facility B Repayment Instalment for each Facility B Repayment Date falling after that prepayment will reduce in inverse order of maturity by the amount of the Facility B Loan prepaid.
(g)
If any of the Facility B Loans are prepaid pursuant to the terms of Clause 7.3(a), Clause 8.2(b) or Clause 8.3(c)(ii) then the amount prepaid will be applied against the Facility B Repayment Instalments falling after that prepayment in inverse order of maturity.



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7.
ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION
7.1.    Illegality
If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund, issue or maintain its participation in any Utilisation:
(a)
that Lender shall promptly notify the Agent upon becoming aware of that event;
(b)
upon the Agent notifying the Parent, each Available Commitment of that Lender will be immediately cancelled; and
(c)
each Borrower shall repay that Lender's participation in the Utilisations made to that Borrower on the last day of the Interest Period for each Utilisation occurring after the Agent has notified the Parent or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).
7.2.    Voluntary cancellation
(a)
Subject to paragraph (b) below, the Parent may, if it gives the Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of £250,000 and an integral multiple of £250,000) of an Available Facility. Any cancellation under this Clause 7.2 shall reduce the Commitments of the Lenders rateably under that Facility.
(b)
The Parent shall not cancel any part of the Available Commitment with respect to Facility B unless there is no Available Commitment with respect to Facility A. The Parent shall not cancel any part of the Available Commitment with respect to Facility C unless there is no Available Commitment with respect to Facility A or Facility B.
7.3.    Voluntary prepayment of Term Loans
(a)
Subject to paragraph (b) below, a Borrower to which a Term Loan has been made may, if it gives the Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of that Term Loan (but, if in part, being an amount that reduces the amount of that Term Loan by a minimum amount of £250,000 and an integral multiple of £50,000).
(b)
A Term Loan may only be prepaid after the last day of the Availability Period for the applicable Facility (or, if earlier, the day on which the applicable Available Facility is zero).
(c)
A Facility B Loan may only be prepaid if the whole of the Facility A Loans have been prepaid or will be prepaid at the same time. A prepayment of the Facility A Loans shall be applied to reduce the Facility A Repayment Instalments in inverse order of maturity and a prepayment of the Facility B Loans shall be applied to reduce the Facility B Repayment Instalments in inverse order of maturity.



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7.4.    Voluntary Prepayment of Facility C Loans
The Borrower to which a Facility C Loan has been made may, if it gives the Agent not less than 5 Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Facility C Loan (but if in part being an amount that reduces the amount of the Facility C Loan by a minimum amount of £250,000).
7.5.    Right of cancellation and repayment in relation to a single Lender
(a)
If:
(i)
any sum payable to any Lender by an Obligor is required to be increased under paragraph (i) of Clause 14.2 (Tax gross-up); or
(ii)
any Lender claims indemnification from the Parent or an Obligor under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs),
the Parent may, whilst the circumstance giving rise to the requirement for indemnification continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation in the Utilisations.
(b)
On receipt of a notice referred to in paragraph (a) above in relation to a Lender, the Commitment of that Lender shall immediately be reduced to zero.
(c)
On the last day of each Interest Period which ends after the Parent has given notice under paragraph (a) above in relation to a Lender (or, if earlier, the date specified by the Parent in that notice), each Borrower to which a Utilisation is outstanding shall repay that Lender's participation in that Utilisation together with all interest and other amounts accrued under the Finance Documents.
7.6.    Right of cancellation in relation to a Defaulting Lender
(a)
If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Agent 5 Business Days' notice of cancellation of each Available Commitment of that Lender.
(b)
On the notice referred to in paragraph (a) above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero.
(c)
The Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders.
8.
MANDATORY PREPAYMENT
8.1.    Exit
Upon the occurrence of:
(i)
any Flotation;
(ii)
a Change of Control;



56    


(iii)
a Trade Sale; or
(iv)
a Senior Management Event,
the Facilities will be cancelled and all outstanding Utilisations, together with accrued interest, and all other amounts accrued under the Finance Documents, shall become immediately due and payable.
8.2.    Disposal and Insurance Proceeds
(a)
For the purposes of this Clause 8.2, Clause 8.3 (Application of mandatory prepayments) and Clause 8.4 (Mandatory Prepayment Accounts and Holding Accounts):
"Disposal" means a sale, lease, licence, transfer, loan or other disposal by a person of any asset, undertaking or business (whether by a voluntary or involuntary single transaction or series of transactions).
"Disposal Proceeds" means the consideration receivable by any member of the Group (including any amount receivable in repayment of intercompany debt) for any Disposal made by any member of the Group except for Excluded Disposal Proceeds and after deducting:
(i)
any reasonable expenses which are incurred by any member of the Group with respect to that Disposal to persons who are not members of the Group; and
(ii)
any Tax incurred and required to be paid by the seller in connection with that Disposal (as reasonably determined by the seller, on the basis of existing rates and taking account of any available credit, deduction or allowance).
"Excluded Disposal Proceeds" means any Disposal Proceeds which:
(i)
are applied in replacement of the assets in respect of which the relevant Disposal was made as soon as possible (but in any event within 90 days or, in the case of a disposal of land or buildings, within 12 months or, in any case, such longer period as the Majority Lenders may agree) after receipt; or
(ii)
do not exceed £1,000,000.
"Excluded Insurance Proceeds" means any proceeds of an insurance claim which the Parent notifies the Agent are, or are to be, applied:
(a)    to meet a third party claim;
(b)
to compensate for a loss to be covered under any business interruption insurance policies; or
(c)
to the replacement, reinstatement and/or repair of the assets or otherwise in amelioration of the loss in respect of which the relevant insurance claim was made,



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as soon as possible (but in any event within 120 days or, in the case of proceeds in relation to any land or buildings, within 12 months or, in any case, such longer period as the Majority Lenders may agree) after receipt and provided that the amount of such proceeds will cease to fall within this definition if they are not so applied within such period.
"Insurance Proceeds" means the proceeds of any insurance claim received by any member of the Group except for Excluded Insurance Proceeds and after deducting any reasonable expenses in relation to that claim which are incurred by any member of the Group to persons who are not members of the Group.
(b)
The Parent shall ensure that the Borrowers prepay Utilisations in the following amounts at the times and in the order of application contemplated by Clause 8.3 (Application of mandatory prepayments):
(i)
the amount of Disposal Proceeds; and
(ii)
the amount of Insurance Proceeds.
8.3.    Application of mandatory prepayments
(a)
A prepayment made under Clause 8.2 (Disposal and Insurance Proceeds) shall be applied in prepayment of Loans as contemplated in paragraphs (b) to (e) inclusive below.
(b)
Unless the Parent makes an election under paragraph (d) below, the Borrowers shall prepay Loans promptly upon receipt of the relevant amount of Disposal Proceeds or Insurance Proceeds.
(c)
A prepayment under Clause 8.2 (Disposal and Insurance) shall prepay the Loans as follows:
(i)
firstly, in reducing the Facility A Repayment Instalment for each Facility A Repayment Date falling after the date of prepayment in the manner contemplated by paragraph (d) of Clause 6.3 (Effect of cancellation and prepayment on scheduled repayment and reductions of Term Loans);
(ii)
secondly, once Facility A has been repaid in full, in reducing the Facility B Repayment Instalment for each Facility B Repayment Date falling after the date of prepayment in the manner contemplated by paragraph (e) of Clause 6.3 (Effect of cancellation and prepayment on scheduled repayments and reductions of Term Loans); and
(iii)
thirdly, in pro rata prepayment of any Facility C Loans.
(d)
Subject to paragraph (e) below, the Parent may elect that any prepayment under Clause 8.2 (Disposal and Insurance Proceeds) be applied in prepayment of a Loan on the last day of the Interest Period relating to that Loan. If the Parent makes that election then a proportion of the Loan equal to the amount of the relevant prepayment will be due and payable on the last day of its Interest Period.
(e)
If the Parent has made an election under paragraph (d) above but a Default has occurred and is continuing, that election shall no longer apply and a proportion of the Loan in respect of which the election was made equal to the amount of



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the relevant prepayment shall be immediately due and payable (unless the Majority Lenders otherwise agree in writing).
8.4.    Mandatory Prepayment Accounts and Holding Accounts
(a)
The Parent shall ensure that:
(i)
Disposal Proceeds and Insurance Proceeds in respect of which the Parent has made an election under paragraph (d) of Clause 8.3 (Application of mandatory prepayments) are paid into a Mandatory Prepayment Account as soon as reasonably practicable after receipt by a member of the Group; and
(ii)
any amounts which represent Excluded Insurance Proceeds and/or Excluded Disposal Proceeds which are to be applied for the specific purpose with the specific periods (as set out in the definitions of Excluded Insurance Proceeds and/or Excluded Disposal Proceeds) are paid into a Holding Account as soon as reasonably practicable after receipt by a member of the Group.
(b)
The Parent and each Borrower irrevocably authorise the Agent to apply:
(i)
amounts credited to the Mandatory Prepayment Account; and
(ii)
amounts credited to the Holding Account which have not been applied within any applicable periods detailed in the definitions of Excluded Insurance Proceeds and/or Excluded Disposal Proceeds,
to pay amounts due and payable under Clause 8.3 (Application of mandatory prepayments) and otherwise under the Finance Documents. The Parent and each Borrower further irrevocably authorise the Agent to so apply amounts credited to the Holding Account whether or not the periods detailed in the definitions of Excluded Insurance Proceeds and/or Excluded Disposal Proceeds have elapsed since receipt of those proceeds if a Default has occurred and is continuing. The Parent and each Borrower also irrevocably authorise the Agent to transfer any amounts credited to the Holding Account referred to in this paragraph (b) to the Mandatory Prepayment Account pending payment of amounts due and payable under the Finance Documents (but if all such amounts have been paid any such amounts remaining credited to the Mandatory Prepayment Account may (unless a Default has occurred) be transferred back to the Holding Account.
(c)
A Lender, Security Trustee or Agent with which a Mandatory Prepayment Account or Holding Account is held acknowledges and agrees that (i) interest shall accrue at normal commercial rates on amounts credited to those accounts and that the account holder shall be entitled to receive such interest (which shall be paid in accordance with the mandate relating to such account) unless a Default is continuing and (ii) each such account is subject to the Transaction Security.
8.5.    Excluded proceeds
Where Excluded Disposal Proceeds and Excluded Insurance Proceeds include amounts which are intended to be used for a specific purpose within a specified period (as set out in the relevant definition of Excluded Disposal Proceeds or Excluded Insurance



59    


Proceeds), the Parent shall ensure that those amounts are used for that purpose and, if requested to do so by the Agent, shall promptly deliver a certificate to the Agent at the time of such application and at the end of such period confirming the amount (if any) which has been so applied within the requisite time periods provided for in the relevant definition.
9.
RESTRICTIONS
9.1.    Notices of Cancellation or Prepayment
Any notice of cancellation, prepayment, authorisation or other election given by any Party under Clause 7 (Illegality, voluntary prepayment and cancellation), paragraph (d) of Clause 8.3 (Application of mandatory prepayments) or Clause 8.4 (Mandatory prepayment Accounts and Holding Accounts) shall (subject to the terms of those Clauses) be irrevocable and, unless a contrary indication appears in this Agreement, any such notice shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
9.2.    Interest and other amounts
Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and Break Costs.
9.3.    No reborrowing of Term Facilities
No Borrower may reborrow any part of a Term Facility which is prepaid.
9.4.    Re-borrowing of Facility C
Unless a contrary indication appears in this Agreement, any part of Facility C which is prepaid or repaid may be re-borrowed in accordance with the terms of this Agreement.
9.5.    Prepayment in accordance with Agreement
No Borrower shall repay or prepay all or any part of the Utilisations or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
9.6.    No reinstatement of Commitments
No amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
9.7.    Agent's receipt of Notices
If the Agent receives a notice under Clause 7 (Illegality, voluntary prepayment and cancellation) or an election under paragraph (d) of Clause 8.3 (Application of mandatory prepayments) it shall promptly forward a copy of that notice or election to either the Parent or the affected Lender, as appropriate.
9.8.    Prepayment elections



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The Agent shall notify the Lenders as soon as possible of any proposed prepayment of any Loan under Clause 7.3 (Voluntary prepayment of Term Loans), Clause 8.4 (Voluntary Prepayment of Facility C Loans) or Clause 8.2 (Disposal and Insurance Proceeds).



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SECTION 5
COSTS OF UTILISATION
10.
INTEREST
10.1.    Calculation of interest
The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(a)
Margin; and
(b)
LIBOR.
10.2.    Payment of interest
The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than three Months, on the dates falling at three Monthly intervals after the first day of the Interest Period).
10.3.    Default interest
(a)
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is two times the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably). Any interest accruing under this Clause 10.3 shall be immediately payable by the Obligor on demand by the Agent.
(b)
If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:
(i)
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(ii)
the rate of interest applying to the overdue amount during that first Interest Period shall be two times the rate which would have applied if the overdue amount had not become due.
(c)
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
10.4.    Notification of rates of interest
(a)
The Agent shall promptly notify the Lenders and the relevant Borrower (or the Parent) of the determination of a rate of interest under this Agreement.



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(b)
The Agent shall promptly notify the relevant Borrower (or the Parent) of each Funding Rate relating to a Loan.
11.
INTEREST PERIODS
11.1.    Selection of Interest Periods
(a)
A Borrower (or the Parent on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan is a Term Loan and has already been borrowed) in a Selection Notice.
(b)
Each Selection Notice for a Term Loan is irrevocable and must be delivered to the Agent by the Borrower (or the Parent on behalf of the Borrower) to which that Term Loan was made not later than 10.00 a.m. on the Business Day prior to the last day of the then current Interest Period.
(c)
If a Borrower (or the Parent) fails to deliver a Selection Notice to the Agent in accordance with paragraph (b) above, the relevant Interest Period will, subject to Clause 11.2 (Changes to Interest Periods), be three Months.
(d)
Subject to this Clause 11, a Borrower (or the Parent) may select an Interest Period of three or six Months or any other period agreed between the Parent and the Agent (acting on the instructions of all the Lenders). In addition, a Borrower (or the Parent on its behalf) may select an Interest Period of (in relation to Facility A or Facility B) a period of less than three Months, if necessary to ensure that:
(i)
there are Facility A Loans (with an aggregate amount equal to or greater than a Facility A Repayment Instalment) which have an Interest Period ending on a Facility A Repayment Date for the Borrowers to make the relevant Facility A Repayment Instalment due on that date; or
(ii)
there are Facility B Loans (with an aggregate amount equal to or greater than a Facility B Repayment Instalment) which have an Interest Period ending on a Facility B Repayment Date for the Borrowers to make the relevant Facility B Repayment Instalment due on that date.
(e)
An Interest Period for a Loan shall not extend beyond the Termination Date applicable to its Facility.
(f)
Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period.
(g)
A Facility C Loan has one Interest Period only.
11.2.    Changes to Interest Periods
(a)
Prior to determining the interest rate for a Facility A Loan or a Facility B Loan, the Agent may shorten an Interest Period for any Facility A Loan or Facility B Loan (as applicable) to ensure there are sufficient Facility A Loans (with an aggregate amount equal to or greater than the relevant Facility A Repayment Instalment) or Facility B Loans (with an aggregate amount equal to or greater than the relevant Facility B Repayment Instalment) (as applicable) which have an Interest Period ending on a Facility A Repayment Date or Facility B



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Repayment Date (as applicable) for the Borrowers to make the relevant Facility A Repayment Instalment or Facility B Repayment Instalment due on that date.
(b)
If the Agent makes any of the changes to an Interest Period referred to in this Clause 11.2, it shall promptly notify the Parent and the Lenders.
11.3.    Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
11.4.    Consolidation and division of Facility A Loans
(a)
Subject to paragraph (b) below, if two or more Interest Periods:
(i)
relate to Facility A Loans;
(ii)
end on the same date; and
(iii)
are made to the same Borrower,
those Facility A Loans will, unless the Parent specifies to the contrary in the Selection Notice for the next Interest Period, be consolidated into, and treated as, a single Facility A Loan on the last day of the Interest Period.
(b)
Subject to Clause 4.3 (Maximum number of Utilisations) and Clause 5.3 (Currency and amount), if the Parent requests in a Selection Notice that a Facility A Loan be divided into two or more Facility A Loans, that Facility A Loan will, on the last day of its Interest Period, be so divided with amounts specified in that Selection Notice, having an aggregate amount equal to the amount of the Facility A Loan immediately before its division.
12.
CHANGES TO THE CALCULATION OF INTEREST
12.1.    Unavailability of Screen Rate
(a)
Interpolated Screen Rate: If no Screen Rate is available for LIBOR for the Interest Period of a Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan.
(b)
Reference Bank Rate: If no Screen Rate is available for LIBOR for:
(i)
Sterling; or
(ii)
the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate,
the applicable LIBOR shall be the Reference Bank Rate as of 11.00 a.m. on the Quotation Date for Sterling and for a period equal in length to the Interest Period of that Loan.
(c)
Cost of funds: If paragraph (b) above applies but no Reference Bank Rate is available for Sterling or the relevant Interest Period there shall be no LIBOR



64    


for that Loan and Clause 12.4 (Cost of funds) shall apply to that Loan for that Interest Period.
12.2.    Calculation of Reference Bank Rate
(a)
Subject to paragraph (b) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by 11.00 a.m. on the Quotation Date, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.
(b)
If at or about noon on the Quotation Day, none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.
12.3.    Market disruption
If before close of business in London on the Quotation Day for the relevant Interest Period the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 25% per cent. of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select would be in excess of LIBOR then Clause 12.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period.
12.4.    Cost of funds
(a)
If this Clause 12.4 applies, the rate of interest on the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(i)    the Margin; and
(ii)
the rate notified to the Agent by that Lender as soon as practicable and in any event within 1 Business Day of the first day of that Interest Period (or, if earlier, on the date falling 1 Business Day before the date on which interest is due to be paid in respect of that Interest Period), to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select.
(b)
If this Clause 12.4 applies and the Agent or the Parent so requires, the Agent and the Parent shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.
(c)
Any alternative basis agreed pursuant to paragraph (b) above shall, with the prior consent of all the Lenders and the Parent, be binding on all Parties.
(d)
If this Clause 12.4 applies but any Lender does not supply a quotation by the time specified in paragraph (a)(ii) above the rate of interest shall be calculated on the basis of the quotations of the remaining Lenders.
12.5.    Break Costs
(a)
Each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan



65    


or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
(b)
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
13.
FEES
13.1.    Arrangement fee
The Parent shall pay to the Arranger an arrangement fee in the amount and at the times agreed in the Fee Letter.
13.2.    Agency fee
The Parent shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in the Fee Letter.
13.3.    Commitment fee
(a)
The Parent shall pay to the Agent (for the account of each Lender) a fee computed at the rate of 40 per cent. per annum on the Margin of that Lender's Available Commitment under Facility C for the Availability Period applicable to Facility C.
(b)
The accrued commitment fee is payable on the last day of each successive period of three months which ends during the relevant Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.
 



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SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
14.
TAX GROSS UP AND INDEMNITIES
14.1.    Definitions
(a)
In this Agreement:
"Protected Party" means a Finance Party which is or will be subject to any liability or required to make any payment for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.
"Qualifying Lender" means:
(i)
a Lender (other than a Lender within sub-paragraph (ii) below) which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:
(A)
a Lender:
(1)
which is a bank (as defined for the purpose of Section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payment of interest made in respect of that advance or would be within such charge as respects such payment apart from Section 18A of the CTA; or
(2)
in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of Section 879 of the ITA) at the time that that advance was made and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or
(B)
a Lender which is:
(1)
a company resident in the United Kingdom for United Kingdom tax purposes;
(1)
a partnership each member of which is:
(a)
a company so resident in the United Kingdom; or
(b)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of



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Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of the CTA;
(2)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of Section 19 of the CTA) of that company; or
(C)
a Treaty Lender; or
(ii)
a Lender which is a building society (as defined for the purposes of section 880 of the ITA) making an advance under a Finance Document.
"Tax Confirmation" means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
(i)
a company resident in the United Kingdom for United Kingdom tax purposes;
(ii)
a partnership each member of which is:
(1)
a company so resident in the United Kingdom; or
(2)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(iii)
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.
"Tax Credit" means a credit against, relief or remission for, or repayment of, any Tax.
"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document.
"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity).
"Treaty Lender" means a Lender which:
(i)
is treated as a resident of a Treaty State for the purposes of the Treaty;



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(ii)
does not carry on a business in the United Kingdom through a permanent establishment with which that Lender's participation in the Loan is effectively connected; and
(iii)
fulfils any other conditions which must be fulfilled under the double taxation agreement by residents of that Treaty State for such residents to obtain exemptions from United Kingdom taxation on interest, subject to the completion of procedural formalities.
"Treaty State" means a jurisdiction having a double taxation agreement (a "Treaty") with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest.
(a)
Unless a contrary indication appears, in this Clause 14 a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.
14.2.    Tax gross-up
(a)
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b)
The Parent shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly. Similarly, a Lender shall notify the Agent on becoming so aware in respect of a payment payable to that Lender. If the Agent receives such notification from a Lender it shall notify the Parent and that Obligor.
(c)
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
(d)
A payment shall not be increased under paragraph (c) above by reason of a Tax Deduction on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due:
(i)
the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or published concession of any relevant taxing authority; or
(ii)

(A)
the relevant Lender is a Qualifying Lender solely by virtue of paragraph (i)(B) of the definition of Qualifying Lender;
(B)
an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a "Direction") under section 931 of the ITA (as that provision has effect on the date on which the



69    


relevant Lender became a Party) which relates to the payment and that Lender has received from that Obligor or the Parent a certified copy of that Direction; and
(C)
the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or
(iii)
the relevant Lender is a Qualifying Lender solely by virtue of paragraph (i)(B) of the definition of Qualifying Lender and:
(A)
the relevant Lender has not given a Tax Confirmation to the Parent; and
(B)
the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Parent, on the basis that the Tax Confirmation would have enabled the Parent to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of section 930 of the ITA; or
(iv)
the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (g) below.
(e)
If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(f)
Within thirty days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment statement under Section 975 of ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
(g)
(i)    Subject to paragraph (ii) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.
(ii)
Nothing in paragraph (i) above shall require a Treaty Lender to:
(A)
register under the HMRC DT Treaty Passport scheme;
(B)
apply the HMRC DT Treaty Passport scheme to any Utilisation if it has so registered; or
(C)
file Treaty forms if it has included an indication to the effect that it wishes the HMRC DT Treaty Passport scheme to apply to this Agreement in accordance with paragraph (h) below or paragraph (a) of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation),



70    


and the Obligor making that payment has not complied with its obligations under paragraph (i) below or paragraph (b) of Clause 14.6 (HMRC DT Treaty Passport scheme confirmation).
14.3.    Tax indemnity
(a)
The Parent shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(b)
Paragraph (a) above shall not apply:
(i)
with respect to any Tax assessed on a Finance Party:
(A)
under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for tax purposes; or
(B)
under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income received or receivable (but not any sum deemed to be received or receivable) by that Finance Party; or
(ii)
to the extent a loss, liability or cost:
(A)
is compensated for by an increased payment under Clause 14.2 (Tax gross-up); or
(B)
would have been compensated for by an increased payment under Clause 14.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 14.2 (Tax gross-up) applied.
(c)
A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Agent of the event which will give, or has given, rise to the claim, following which the Agent shall notify the Parent.
(d)
A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3, notify the Agent.
14.4.    Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(a)
a Tax Credit is attributable either to an increased payment of which that Tax Payment forms part or to that Tax Payment; and
(b)
that Finance Party has obtained, utilised and retained that Tax Credit,



71    


the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor. Notwithstanding anything to the contrary, in no event shall any Finance Party be required to pay any amount to the Borrowers the payment of which would place such Finance Party in a less favourable net after tax position than such Finance Party would have been in if the Tax giving rise to the indemnity payments had never been paid.
14.5.    Lender Status Confirmation
Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate or Assignment Agreement or Increase Confirmation which it executes on becoming a Party, and for the benefit of the Agent and without liability to any Obligor, which of the following categories it falls in:
(a)    not a Qualifying Lender;
(b)    a Qualifying Lender (other than a Treaty Lender); or
(c)    a Treaty Lender.
If a New Lender fails to indicate its status in accordance with this Clause 14.5 then such New Lender shall be treated for the purposes of this Agreement as if it is not a Qualifying Lender until such time as it notifies the Agent which category applies (and the Agent, upon receipt of such notification, shall inform the Company). For the avoidance of doubt, a Transfer Certificate, Assignment Agreement or Increase Confirmation shall not be invalidated by any failure of a Lender to comply with this Clause 14.5.
14.6.    HMRC DT Treaty Passport scheme confirmation



72    


(a)
A New Lender or an Increase Lender that is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which then wishes that scheme to apply to this Agreement, shall include an indication to that effect (for the benefit of the Agent and without liability to any Obligor) in the Transfer Certificate, Assignment Agreement or Increase Confirmation which it executes by including its scheme reference number and its jurisdiction of tax residence in that Transfer Certificate, Assignment Agreement or Increase Confirmation.
(b)
Where a New Lender or an Increase Lender includes the indication described in paragraph (a) above in the relevant Transfer Certificate, Assignment Agreement or Increase Confirmation:
(i)
each Borrower which is a Party as a Borrower as at the relevant Transfer Date or the date on which the increase in Total Commitments described in the relevant Increase Confirmation takes effect shall, and to the extent that that New Lender or Increase Lender becomes a Lender under a Facility which is made available to that Borrower pursuant to Clause 2 (The Facilities), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of that Transfer Date or that date on which the increase in Total Commitments takes effect and shall promptly provide the Lender with a copy of that filing; and
(ii)
each Additional Borrower which becomes an Additional Borrower after the relevant Transfer Date or the date on which the increase in Total Commitments described in the relevant Increase Confirmation takes effect shall, to the extent that that New Lender or Increase Lender is a Lender under a Facility which is made available to that Additional Borrower pursuant to Clause 2 (The Facilities), file a duly completed form DTTP2 in respect of such Lender with HM Revenue & Customs within 30 days of becoming an Additional Borrower and shall promptly provide the Lender with a copy of that filing.
14.7.    Stamp taxes
The Parent shall pay and, within three Business Days of demand, indemnify each Secured Party and Arranger against any cost, loss or liability that Secured Party or Arranger incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
14.8.    Notification to Parent and Agent
Each Lender will notify the Parent and the Agent if it is not or ceases to be a Qualifying Lender.
14.9.    Value added tax
(a)
All consideration expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is charged on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account



73    


to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT.
(b)
If VAT is or becomes chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any Party other than the Recipient (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
(i)
(where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
(ii)
(where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
(c)
Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment from the relevant tax authority in respect of the VAT.
(d)
Any reference in this Clause 14.9 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the representative member of such group at such time (the term "representative member" to have the same meaning as in the Value Added Tax Act 1994 or in the case of Ireland, the group member notified by the Revenue Commissioners in accordance with section 15(1)(a) of the Value Added Tax Consolidation Act 2010 of Ireland as being the member responsible for complying with the provisions of that act in respect of the group).
(e)
In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party's VAT registration and such other information as is reasonably requested in connection with such Finance Party's VAT reporting requirements in relation to such supply.



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15.
INCREASED COSTS
15.1.    Increased costs
(a)
Subject to Clause 15.3 (Exceptions) the Parent shall, within three Business Days of a demand by the Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation or (ii) compliance with any law or regulation made after the date of this Agreement.
(b)
In this Agreement "Increased Costs" means:
(i)
a reduction in the rate of return from a Facility or on a Finance Party's (or its Affiliate's) overall capital;
(ii)
an additional or increased cost; or
(iii)
a reduction of any amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document.
15.2.    Increased cost claims
(a)
A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Parent.
(b)
Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.
15.3.    Exceptions
(a)
Clause 15.1 (Increased Costs) does not apply to the extent any Increased Cost is:
(i)
attributable to a Tax Deduction required by law to be made by an Obligor;
(ii)
compensated for by Clause 14.3 (Tax indemnity) (or would have been compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 14.3 (Tax indemnity) applied); or
(iii)
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
(b)
In this Clause 15.3 reference to a "Tax Deduction" has the same meaning given to the term in Clause 14.1 (Definitions).



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16.
OTHER INDEMNITIES
16.1.    Currency indemnity
(a)
If any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:
(i)
making or filing a claim or proof against that Obligor; or
(ii)
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify the Arranger and each other Secured Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b)
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
16.2.    Other indemnities
(a)
The Parent shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify the Arranger and each other Secured Party against any cost, loss or liability incurred by it as a result of:
(i)
the occurrence of any Event of Default;
(ii)
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 30 (Sharing among the Finance Parties);
(iii)
funding, or making arrangements to fund, its participation in a Utilisation requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone);
(iv)
a Utilisation (or part of a Utilisation) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Parent.
(b)
The Parent shall promptly indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or liability incurred by that Finance Party or its Affiliate (or officer or employee of that Finance Party or Affiliate) in connection with or arising out of the Acquisition or the funding of the Acquisition (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the Acquisition),



76    


unless such loss or liability is caused by the gross negligence or wilful misconduct of that Finance Party or its Affiliate (or employee or officer of that Finance Party or Affiliate). Any Affiliate or any officer or employee of a Finance Party or its Affiliate may rely on this Clause 16.2.
16.3.    Indemnity to the Agent
The Parent shall promptly indemnify the Agent against:
(a)
any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:
(i)
investigating any event which it reasonably believes is a Default;
(ii)
entering into or performing any foreign exchange contract for the purposes of paragraph (b) of Clause 31.10 (Change of currency);
(iii)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
(iv)
instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement; and
(b)
any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) in acting as Agent under the Finance Documents.
16.4.    Indemnity to the Security Trustee
(a)
Each Obligor shall promptly indemnify the Security Trustee and every Receiver and Delegate against any cost, loss or liability incurred by any of them as a result of:
(i)
any failure by the Parent to comply with its obligations under Clause 18 (Costs and Expenses);
(ii)
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised;
(iii)
the taking, holding, protection or enforcement of the Transaction Security,
(iv)
the exercise of any of the rights, powers, discretions and remedies vested in the Security Trustee and each Receiver and Delegate by the Finance Documents or by law;
(v)
any default by any Obligor in the performance of any of the obligations expressed to be assumed by it in the Finance Documents; or
(vi)
acting as Security Trustee, Receiver or Delegate under the Finance Documents or which otherwise relates to any of the Charged Property (otherwise, in each case, than by reason of the relevant Security



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Trustee's, Receiver's or Delegate's gross negligence or wilful misconduct);
(b)
The Security Trustee may, in priority to any payment to the Secured Parties, indemnify itself out of the Charged Property in respect of, and pay and retain, all sums necessary to give effect to the indemnity in this Clause 16.4 and shall have a lien on the Transaction Security and the proceeds of the enforcement of the Transaction Security for all monies payable to it.
17.
MITIGATION BY THE LENDERS
17.1.    Mitigation
(a)
Each Finance Party shall, in consultation with the Parent, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 7.1 (Illegality), Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
(b)
Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
17.2.    Limitation of liability
(a)
The Parent shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1 (Mitigation).
(b)
A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.
18.
COSTS AND EXPENSES
18.1.    Transaction expenses
The Parent shall within three Business Days of demand pay the Agent, the Arranger and the Security Trustee the amount of all costs and expenses (including legal fees) reasonably incurred by any of them (and, in the case of the Security Trustee, by any Receiver or Delegate) in connection with the negotiation, preparation, printing, execution, syndication and perfection of:
(a)
this Agreement and any other documents referred to in this Agreement and the Transaction Security;
(b)
any other Finance Documents executed after the date of this Agreement.
18.2.    Amendment costs
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 31.10 (Change of currency), the Parent shall, within three Business Days of demand, reimburse each of the Agent and the Security Trustee for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent



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and the Security Trustee (and, in the case of the Security Trustee, by any Receiver or Delegate) in responding to, evaluating, negotiating or complying with that request or requirement.
18.3.    Security Trustee's ongoing costs
(a)
In the event of (i) a Default or (ii) the Security Trustee considering it necessary or expedient or (iii) the Security Trustee being requested by an Obligor or the Majority Lenders to undertake duties which the Security Trustee and the Parent agree to be of an exceptional nature and/or outside the scope of the normal duties of the Security Trustee under the Finance Documents, the Parent shall pay to the Security Trustee any additional remuneration that may be agreed between them.
(b)
If the Security Trustee and the Parent fail to agree upon the nature of the duties or upon any additional remuneration, that dispute shall be determined by an investment bank (acting as an expert and not as an arbitrator) selected by the Security Trustee and approved by the Parent or, failing approval, nominated (on the application of the Security Trustee) by the President for the time being of the Law Society of England and Wales (the costs of the nomination and of the investment bank being payable by the Parent) and the determination of any investment bank shall be final and binding upon the parties to this Agreement.
18.4.    Enforcement and preservation costs
The Parent shall, within three Business Days of demand, pay to the Arranger and each other Secured Party the amount of all costs and expenses (including legal fees) incurred by it in connection with the enforcement of or the preservation of any rights under any Finance Document and the Transaction Security and any proceedings instituted by or against the Security Trustee as a consequence of taking or holding the Transaction Security or enforcing these rights.



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SECTION 7
GUARANTEE
19.
GUARANTEE AND INDEMNITY
19.1.    Guarantee and indemnity
Each Guarantor irrevocably and unconditionally jointly and severally:
(a)
guarantees to each Finance Party punctual performance by each other Obligor of all that Obligor's obligations under the Finance Documents;
(b)
undertakes with each Finance Party that whenever another Obligor does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it was the principal obligor; and
(c)
agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of an Obligor not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by a Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 19 if the amount claimed had been recoverable on this basis of a guarantee.
19.2.    Continuing Guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
19.3.    Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of each Guarantor under this Clause 19 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
19.4.    Waiver of defences
The obligations of each Guarantor under this Clause 19 will not be affected by an act, omission, matter or thing which, but for this Clause 19, would reduce, release or prejudice any of its obligations under this Clause 19 (without limitation and whether or not known to it or any Finance Party) including:
(a)
any time, waiver or consent granted to, or composition with, any Obligor or other person;



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(b)
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(c)
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(d)
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
(e)
any amendment, novation, supplement, extension (whether of maturity or otherwise) or restatement (in each case, however fundamental and of whatsoever nature, whether or not more onerous) or replacement of a Finance Document or any other document or security including, without limitation, any change in the purpose of, any extension of or increase in any facility or the addition of any new facility under and Finance Document or other document or security;
(f)
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
(g)
any insolvency or similar proceedings.
19.5.    Guarantor Intent
Without prejudice to the generality of Clause 19.4 (Waiver of Defences), each Guarantor expressly confirms that it intends that this guarantee shall extend from time to time to any (however fundamental) variation, increase, extension or addition of or to any of the Finance Documents and/or any facility or amount made available under any of the Finance Documents for the purposes of or in connection with any of the following: acquisitions of any nature; increasing working capital; enabling investor distributions to be made; carrying out restructurings; refinancing existing facilities; refinancing any other indebtedness; making facilities available to new borrowers; any other variation or extension of the purposes for which any such facility or amount might be made available from time to time; and any fees, costs and/or expenses associated with any of the foregoing.
19.6.    Immediate recourse
Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause 19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
19.7.    Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(a)
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect



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of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and
(b)
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause 19.
19.8.    Deferral of Guarantors' rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 19:
(a)
to be indemnified by an Obligor;
(b)
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents;
(c)
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
(d)
to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which any Guarantor has given a guarantee, undertaking or indemnity under Clause 19.1 (Guarantee and Indemnity);
(e)
to exercise any right of set off against any Obligor; and/or
(f)
to claim or prove as a creditor of any Obligor in competition with any Finance Party.
If a Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Agent or as the Agent may direct for application in accordance with Clause 31 (Payment mechanics) of this Agreement.
19.9.    Release of Guarantors' right of contribution
If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:
(a)
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and



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(b)
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.
19.10.    Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
19.11.    Guarantee Limitations
This guarantee does not apply to any liability to the extent that it would result in this guarantee constituting unlawful financial assistance within the meaning of Section 678 or 679 of the Companies Act 2006 or, as applicable, section 60 of the Companies Act 1963 of Ireland (as amended) and, with respect to any Additional Guarantor, is subject to any limitations set out in the Accession Letter applicable to such Additional Guarantor. In particular, but without limiting the generality of the foregoing provisions, it is agreed that any guarantee and indemnity by Schuh (ROI) Limited in terms of this Clause 19 shall not include the payment of any arrangement fee payable under this Agreement (or any agreement amending or varying the terms of this Agreement) or the payment of any fees, costs or expenses payable by any member of the Group in connection with the Acquisition Agreement or with this Agreement (or any agreement amending or varying the terms of this Agreement).



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SECTION 8
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
20.
REPRESENTATIONS
20.1.    General
Each Obligor makes the representations and warranties set out in this Clause 20 to each Finance Party.
20.2.    Status
(a)
It and each of its Subsidiaries is a limited liability corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.
(b)
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.
20.3.    Binding obligations
Subject to the Legal Reservations and to any of the matters specified in paragraphs (a) to (e) inclusive of Clause 20.9:
(a)
the obligations expressed to be assumed by it in each Transaction Document to which it is a party are legal, valid, binding and enforceable obligations; and
(b)
(without limiting the generality of paragraph (a) above), each Transaction Security Document to which it is a party creates the security interests which that Transaction Security Document purports to create and those security interests are valid and effective.
20.4.    Non-conflict with other obligations
The entry into and performance by it of, and the transactions contemplated by, the Transaction Documents and the granting of the Transaction Security do not and will not conflict with:
(a)
any law or regulation applicable to it;
(b)
the constitutional documents of any member of the Group; or
(c)
any agreement or instrument binding upon it or any member of the Group or any of its or any member of the Group's assets or constitute a default or termination event (however described) under any such agreement or instrument.
20.5.    Power and authority
(a)
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Transaction Documents to which it is or will be a party and the transactions contemplated by those Transaction Documents.



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(b)
No limit on its powers will be exceeded as a result of the borrowing, grant of security or giving of guarantees or indemnities contemplated by the Transaction Documents to which it is a party.
20.6.    Validity and admissibility in evidence
(a)
All Authorisations required or desirable:
(i)
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Transaction Documents to which it is a party; and
(ii)
to make the Transaction Documents to which it is a party admissible in evidence in its Relevant Jurisdictions,
have been obtained or effected and are in full force and effect.
(b)
All Authorisations necessary for the conduct of the business, trade and ordinary activities of members of the Group have been obtained or effected and are in full force and effect to the extent that failure to obtain or effect those Authorisations has or would reasonably be expected to have a Material Adverse Effect.
20.7.    Governing law and enforcement
(a)
Subject to the Legal Reservations, the choice of governing law of the Finance Documents will be recognised and enforced in its Relevant Jurisdictions.
(b)
Subject to the Legal Reservations, any judgment obtained in relation to a Finance Document in the jurisdiction of the governing law of that Finance Document will be recognised and enforced in its Relevant Jurisdictions.
20.8.    Insolvency
No:
(a)
corporate action, legal proceeding or other procedure or step described in paragraph (a) of Clause 24.7 (Insolvency proceedings); or
(b)
creditors' process described in Clause 24.8 (Creditors' process),
has been taken or, to the knowledge of the Parent, threatened in relation to a member of the Group and none of the circumstances described in Clause 24.6 (Insolvency) applies to a member of the Group.
20.9.    No filing or stamp taxes
Under the laws of its Relevant Jurisdiction it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration, notarial or similar Taxes or fees be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents except:
(a)
registration of particulars of the Transaction Security Documents at the Companies Registration Office in Scotland under Section 878 of the Companies Act 2006 and payment of associated fees;



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(b)
filing of the statutory declarations by directors (and, in the case of an Obligor incorporated in Ireland, section 60 of the Companies Act 1963 of Ireland) copies of which are delivered to the Agent under Clause 4.1 (Initial conditions precedent) at the Companies Registration Office in England and Wales;
(c)
registration of the Standard Security at the Land Register of Scotland and payment of associated fees,
which registrations, filings, taxes and fees will be made and paid promptly after the date of the relevant Finance Document.
20.10.    Deduction of Tax
It is not required to make any deduction for or on account of Tax from any payment it may make under any Finance Document.
20.11.    No default
(a)
No Event of Default and, on the date of this Agreement, no Default is continuing or is reasonably likely to result from the making of any Utilisation or the entry into, the performance of, or any transaction contemplated by, any Transaction Document.
(b)
No other event or circumstance is outstanding which constitutes (or, with the expiry of a grace period, the giving of notice, the making of any determination or any combination of any of the foregoing, would constitute) a default or termination event (however described) under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries') assets are subject which has or is reasonably likely to have a Material Adverse Effect.
20.12.    No misleading information
Save as disclosed in writing to the Agent prior to the date of this Agreement:
(a)
to the best of its knowledge and belief (having made due and diligent enquiry), any factual information contained in the Information Package was true and accurate in all material respects as at the date of the relevant report or document containing the information or (as the case may be) as at the date the information is expressed to be given;
(b)
the Business Plan has been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements, and the financial projections contained in the Business Plan have been prepared on the basis of recent historical information, are fair and based on reasonable assumptions and have been approved by the board of directors of the Parent;
(c)
any financial projection or forecast contained in the Information Package has been prepared on the basis of recent historical information and on the basis of reasonable assumptions and was fair (as at the date of the relevant report or document containing the projection or forecast) and arrived at after careful consideration;



86    


(d)
the expressions of opinion or intention provided by or on behalf of an Obligor for the purposes of the Information Package were made after careful consideration and (as at the date of the relevant report or document containing the expression of opinion or intention) were fair and based on reasonable grounds;
(e)
to the best of its knowledge and belief (having made due and diligent enquiry), no event or circumstance has occurred or arisen and no information has been omitted from the Information Package and no information has been given or withheld that results in the information, opinions, intentions, forecasts or projections contained in the Information Package being untrue or misleading in any material respect;
(f)
to the best of its knowledge and belief (having made due and diligent enquiry), all material information provided to a Finance Party by or on behalf of the Parent or the Company on or before the date of this Agreement and not superseded before that date (whether or not contained in the Information Package) is accurate and not misleading in any material respect and all projections provided to any Finance Party on or before the date of this Agreement have been prepared in good faith on the basis of assumptions which were reasonable at the time at which they were prepared and supplied; and
(g)
to the best of its knowledge and belief (having made due and diligent enquiry), all other written information provided by any member of the Group (including its advisers) to a Finance Party or the provider of any Report was true, complete and accurate in all material respects as at the date it was provided and is not misleading in any respect.
20.13.    Original Financial Statements
(a)
Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied.
(b)
Its unaudited Original Financial Statements fairly represent its financial condition and results of operations for the relevant month or financial quarter unless expressly disclosed to the Agent in writing to the contrary prior to the date of this Agreement.
(c)
Its audited Original Financial Statements give a true and fair view of its financial condition and results of operations during the relevant financial year unless expressly disclosed to the Agent in writing to the contrary prior to the date of this Agreement.
(d)
To the best of its knowledge and belief (having made due and diligent enquiry), there has been no material adverse change in its assets, business or financial condition (or the assets, business or consolidated financial condition of the Group, in the case of the Parent) since the date of the Original Financial Statements.
(e)
The Original Financial Statements of the Company and the Parent do not consolidate the results, assets or liabilities of any person or business which does not form part of the Company Shares.



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(f)
Its most recent financial statements delivered pursuant to Clause 21.1 (Financial Statements):
(i)
have been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements and the Business Plan; and
(ii)
give a true and fair view of (if audited) or fairly present (if unaudited) its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.
(g)
The budgets and forecasts supplied under this Agreement were arrived at after careful consideration and have been prepared in good faith on the basis of recent historical information and on the basis of assumptions which were reasonable as at the date they were prepared and supplied.
(h)
Since the date of the most recent financial statements delivered pursuant to Clause 21.1 (Financial Statements) there has been no material adverse change in the business, assets or financial condition of the Group.
20.14.    No proceedings pending or threatened
Other than as disclosed to the Agent prior to the date of this Agreement, no litigation, arbitration or administrative proceedings or investigations of, or before, any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect have (to the best of its knowledge and belief (having made due and careful enquiry)) been started or threatened against it or any of its Subsidiaries.
20.15.    No breach of laws
(a)
It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.
(b)
No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect.
20.16.    Environmental laws
(a)
Each member of the Group is in compliance with Clause 23.3 (Environmental compliance) and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.
(b)
No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect.
20.17.    Taxation
(a)
It is not (and none of its Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Subsidiaries is) overdue in the payment



88    


of any amount in respect of Tax of £100,000 (or its equivalent in any other currency) or more.
(b)
No claims or investigations are being, or are reasonably likely to be, made or conducted against it (or any of its Subsidiaries) with respect to Taxes such that a liability of, or claim against, any member of the Group of £100,000 (or its equivalent in any other currency) or more is reasonably likely to arise.
(c)
It is resident for Tax purposes only in the jurisdiction of its incorporation.
20.18.    Security and Financial Indebtedness
(a)
No Security or Quasi-Security exists over all or any of the present or future assets of any member of the Group other than as permitted by this Agreement.
(b)
No member of the Group has any Financial Indebtedness outstanding other than as permitted by this Agreement.
20.19.    Ranking
The Transaction Security has or will have first ranking priority and it is not subject to any prior ranking or pari passu ranking Security.
20.20.    Good title to assets
It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted.
20.21.    Legal and beneficial ownership
It and each of its Subsidiaries is the sole legal and beneficial owner of the respective assets over which it purports to grant Security.
20.22.    Shares
The shares of any member of the Group which are subject to the Transaction Security are fully paid and not subject to any option to purchase or similar rights. The constitutional documents of companies whose shares are subject to the Transaction Security do not and could not restrict or inhibit any transfer of those shares on creation or enforcement of the Transaction Security. Other than in relation to share options granted or to be granted to employees in terms of any share option schemes operated by the Group, there are no agreements in force which provide for the issue or allotment of, or grant any person the right to call for the issue or allotment of, any share or loan capital of any member of the Group (including any option or right of pre-emption or conversion).
20.23.    Intellectual Property
It and each of its Subsidiaries:
(a)
is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property which is material in the context



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of its business and which is required by it in order to carry on its business as it is being conducted and as contemplated in the Business Plan;
(b)
does not (nor does any of its Subsidiaries), in carrying on its businesses, infringe any Intellectual Property of any third party in any respect which has or is reasonably likely to have a Material Adverse Effect; and
(c)
has taken all formal or procedural actions (including payment of fees) required to maintain any material Intellectual Property owned by it.
20.24.    Group Structure Chart
The Group Structure Chart delivered to the Agent pursuant to Part I of Schedule 2 (Conditions Precedent) is true, complete and accurate in all material respects.
20.25.    Obligors
The Parent has no Subsidiaries other than the Obligors where to do so would breach Clause 23.35 (Guarantors).
20.26.    Accounting reference date
The Accounting Reference Date of each member of the Group is 31 January.
20.27.    Equity Documents
Not restated.
20.28.    Centre of main interests and establishments
For the purposes of The Council of the European Union Regulation No. 1346/2000 on Insolvency Proceedings (the "Regulation"), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in its jurisdiction of incorporation and it has no "establishment" (as that term is used in Article 2(h) of the Regulations) in any other jurisdiction.
20.29.    Pensions
(a)
Neither it nor any of its Subsidiaries is or has at any time been an employer (for the purposes of Sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pensions Schemes Act 1993).
(b)
Neither it nor any of its Subsidiaries is or has at any time been "connected" with or an "associate" of (as those terms are used in Sections 39 and 43 of the Pensions Act 2004) such an employer.
20.30.    Sanctions and anti corruption law



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(a)
Each Obligor and each of their respective directors, officers and employees are in compliance with Anti-Corruption Laws and Sanctions applicable to it in all material respects.
(b)
Neither any Obligor nor any of their respective directors, officers and employees, is a Sanctioned Person or has received notice of any claim, action, suit, proceeding or investigation against it with respect to Sanctions by any Sanctions Authority.
(c)
No Utilisation, use of proceeds or other transaction contemplated by this Agreement will violate:
(i)
Anti-Corruption Laws; or
(ii)
applicable Sanctions.
20.31.    Times when representations made
(a)
All the representations and warranties in this Clause 20 are made by each Obligor on the date of this Agreement.
(b)
The Repeating Representations are deemed to be made by each Obligor on the date of each Utilisation Request, on each Utilisation Date and on the first day of each Interest Period (except that those contained in paragraphs (a) – (e) of Clause 20.13 (Original Financial Statements) will cease to be so made once subsequent financial statements have been delivered under this Agreement).
(c)
All the representations and warranties in this Clause 20 except Clause 20.12 (No misleading information) and Clause 20.24 (Group Structure Chart) are deemed to be made by each Additional Obligor on the day on which it becomes (or it is proposed that it becomes) an Additional Obligor.
(d)
Each representation or warranty deemed to be made after the date of this Agreement shall be deemed to be made by reference to the facts and circumstances existing at the date the representation or warranty is deemed to be made.
21.
INFORMATION UNDERTAKINGS
The undertakings in this Clause 21 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1.    Financial statements
The Parent shall supply to the Agent in sufficient copies for all the Lenders:
(a)
as soon as they are available, but in any event within 120 days after the end of each of its Financial Years:
(i)
its audited consolidated financial statements for that Financial Year;
(ii)
the audited financial statements (consolidated if appropriate) of each Obligor for that Financial Year; and



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(iii)
the audited financial statements of any other Subsidiary for that Financial Year if requested by the Agent;
(b)
at any time when (by reference to the level of EBITDA and Cashflow disclosed in any financial statements provided to the Agent in terms of this Agreement) the financial performance of the Group is below that anticipated in the Budget for the relevant period by more than 15%, as soon as they are available, but in any event within 30 days after the end of each Accounting Period its financial statements on a consolidated basis for that Accounting Period (to include cumulative management accounts for the Financial Year to date); and
(c)
as soon as they are available, but in any event within 30 days after the last date of each month its Monthly Financial Statements on a consolidated basis for that month (to include cumulative management accounts for the Financial Year to date).
21.2.    Provision and contents of Compliance Certificate
(a)
The Parent shall supply a Compliance Certificate to the Agent with each set of its audited consolidated Annual Financial Statements and each set of its Monthly Financial Statements in respect of each Quarter Dates.
(b)
The Compliance Certificate shall, amongst other things, set out (in reasonable detail) computations as to compliance with Clause 22 (Financial Covenants).
(c)
Each Compliance Certificate shall be signed by one director of the Parent.
21.3.    Requirements as to financial statements
(a)
The Parent shall procure that each set of Annual Financial Statements, and Monthly Financial Statements includes a balance sheet, profit and loss account and cashflow statement. In addition the Parent shall procure that:
(i)
each set of Annual Financial Statements shall be audited by the Auditors;
(ii)
each set of Monthly Financial Statements is accompanied by a narrative by the finance director of the Parent commenting on the performance of the Group for the Accounting Period to which the financial statements relate and the Financial Year to date and any material developments or proposals affecting the Group or its business.
(b)
Each set of financial statements delivered pursuant to Clause 21.1 (Financial statements):
(i)
shall be certified by a director of the relevant company as giving a true and fair view of (in the case of Annual Financial Statements for any Financial Year), or fairly representing (in other cases), its financial condition and operations as at the date as at which those financial statements were drawn up;
(ii)
in the case of consolidated financial statements of the Group, shall be accompanied by a narrative comparing actual performance for the



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period to which the financial statements relate to the projected performance for that period set out in the Budget; and
(iii)
shall be prepared using the Accounting Principles, accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements for that Obligor unless, in relation to any set of financial statements, the Parent notifies the Agent that there has been a change in the Accounting Principles or the accounting practices and its Auditors (or, if appropriate, the Auditors of the Obligor) deliver to the Agent:
(A)
a description of any change necessary for those financial statements to reflect the Accounting Principles or accounting practices upon which the relevant Obligor's Original Financial Statements were prepared; and
(B)
sufficient information, in form and substance as may be reasonably required by the Agent, to enable the Lenders to determine whether Clause 22 (Financial covenants) has been complied with and to make an accurate comparison between the financial position indicated in those financial statements and the relevant Obligor's Original Financial Statements.
Any reference in this Agreement to any financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.
(c)
If the Agent wishes to discuss the financial position of any member of the Group with the Auditors, the Agent may notify the Parent, stating the questions or issues which the Agent wishes to discuss with the Auditors. In this event, the Parent must ensure that the Auditors are authorised (at the expense of the Parent):
(iv)
to discuss the financial position of each member of the Group with the Agent on request from the Agent; and
(v)
to disclose to the Agent for the Finance Parties any information which the Agent may reasonably request.
21.4.    Budget
(a)
The Parent shall supply to the Agent, in sufficient copies for all the Lenders, as soon as the same become available but in any event within 60 days after the start of each of its Financial Years, an annual Budget for that financial year.
(b)
The Parent shall ensure that each Budget:
(i)
is in a form reasonably acceptable to the Agent and includes a projected consolidated profit and loss, balance sheet and cashflow statement for the Group, projected financial covenant calculations and projected Capital Expenditure (including, without limitation, any such Capital Expenditure incurred using funds provided for the purpose by the UK Acquisition Company);



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(ii)
is prepared in accordance with the Accounting Principles and the accounting practices and financial reference periods applied to financial statements under Clause 21.1 (Financial statements); and
(iii)
has been approved by the board of directors of the Parent.
(c)
If the Parent updates or changes the Budget, it shall within not more than five days of the update or change being made deliver to the Agent, in sufficient copies for each of the Lenders, such updated or changed Budget together with a written explanation of the main changes in that Budget.
21.5.    Presentations
Once in every financial year, or more frequently if requested to do so by the Agent if the Agent reasonably suspects a Default is continuing or may have occurred or may occur, at least two directors of the Parent (one of whom shall be the finance director) must give a presentation to the Finance Parties about:
(a)
the on-going business and financial performance of the Group; and
(b)
any other matter which a Finance Party may reasonably request.
21.6.    Year-end
(a)
The Parent shall, as soon as reasonably practicable after the Restatement Date, change its Accounting Reference Date (and the Accounting Reference Date of each other member of the Group) to 31 January but shall not otherwise change its Accounting Reference Date and shall procure that (other than to 31 January) no member of the Group changes its Accounting Reference Date.
(b)
The Parent shall procure that each Accounting Period ends on an accounting date for the purposes of the preparation of the financial statements of the Group.
21.7.    Information: miscellaneous
The Parent shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):
(a)
at the same time as they are dispatched, copies of all documents dispatched by the Parent to its shareholders generally (or any class of them) or dispatched by the Parent or any Obligors to its creditors generally (or any class of them);
(b)
promptly upon becoming aware of them, the details of any litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which, if adversely determined, are reasonably likely to have a Material Adverse Effect or which would involve a liability, or a potential or alleged liability, exceeding £100,000 (or its equivalent in other currencies);
(c)
promptly upon becoming aware of the relevant disposal or claim, details of any disposal or insurance claim which will require a prepayment under Clause 8.2 (Disposal and Insurance Proceeds);



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(d)
at the same time as each board pack in relation to any proposed new store opening is distributed to the board of directors of the Parent or any other member of the Group, a copy of that board pack;
(e)
promptly, such information as the Security Trustee may reasonably require about the Charged Property and compliance of the Obligors with the terms of any Transaction Security Documents; and
(f)
promptly on request, such further information regarding the financial condition, assets and operations of the Group and/or any member of the Group (including any requested amplification or explanation of any item in the financial statements, budgets or other material provided by any Obligor under this Agreement, any changes to Senior Management and an up to date copy of its shareholders' register (or equivalent in its jurisdiction of incorporation)) as any Finance Party through the Agent may reasonably request.
21.8.    Notification of default
(a)
Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b)
Promptly upon a request by the Agent, the Parent shall supply to the Agent a certificate signed by one of its directors or senior officers on its behalf certifying that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
21.9.    "Know your customer" checks
(a)
If:
(i)
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(ii)
any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or
(iii)
a proposed assignment or transfer by a Lender of any of its rights and/or obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
obliges the Agent or any Lender (or, in the case of paragraph (iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph (iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable



95    


laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(b)
Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(c)
The Parent shall, by not less than 10 Business Days' prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause 26 (Changes to the Obligors).
(d)
Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Obligor obliges the Agent or any Lender to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Parent shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor.
22.
FINANCIAL COVENANTS
22.1.    Financial definitions
In this Agreement:
"Cashflow" means, in respect of any Relevant Period, EBITDA for that Relevant Period after:
(a)
adding the amount of any decrease (and deducting the amount of any increase) in Working Capital for that Relevant Period;
(b)
adding the amount of any cash receipts (and deducting the amount of any cash payments) during that Relevant Period in respect of any Exceptional Items not already taken account of in calculating EBITDA for any Relevant Period (other than, in the case of cash receipts, Relevant Proceeds);
(c)
adding the amount of any cash receipts during that Relevant Period in respect of any Tax rebates or credits and deducting the amount actually paid or due and payable in respect of Taxes during that Relevant Period by any member of the Group;
(d)
adding the amount of any increase in provisions, other non-cash debits and other non-cash charges (which are not Current Assets or Current Liabilities) and deducting the amount of any non-cash credits (which are not Current Assets or



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Current Liabilities) in each case to the extent taken into account in establishing EBITDA;
(e)
deducting the amount of any Capital Expenditure actually made during that Relevant Period by any member of the Group (other than any amounts contributed for such purpose by the UK Acquisition Company in accordance with the terms of Clause 23.29(a)) less, to the extent not already taken into account in determining EBITDA, any landlords' inducements actually received in cash;
(f)
adding the amount of any New Shareholder Injections permitted to be included in Cashflow pursuant to Clause 22.4 (Equity Cure),
and so that no amount shall be added (or deducted) more than once and there shall be excluded the effect of all cash movements associated with the Deal Costs.
"Cashflow Cover" means the ratio of Cashflow to Debt Service in respect of any Relevant Period.
"Current Assets" means the aggregate (on a consolidated basis) of all inventory, work in progress, trade and other receivables of each member of the Group including prepayments in relation to operating items and sundry debtors (but excluding Cash) maturing within twelve months from the date of computation but excluding amounts in respect of:
(a)
receivables in relation to Tax;
(b)
Exceptional Items and other non-operating items;
(c)
any interest owing to any member of the Group; and
(d)
prepaid Deal Costs.
"Current Liabilities" means the aggregate (on a consolidated basis) of all liabilities (including trade creditors, accruals and provisions) of each member of the Group falling due within twelve months from the date of computation but excluding amounts in respect of:
(a)
liabilities for Financial Indebtedness and Finance Charges;
(b)
liabilities for Tax;
(c)
Exceptional Items and other non-operating items; and
(d)
liabilities in relation to dividends declared but not paid by the Parent or by a member of the Group in favour of a person which is not a member of the Group.
"Debt Service" means, in respect of any Relevant Period, the aggregate of:
(a)
Finance Charges for that Relevant Period;
(b)
the aggregate of all scheduled repayments of Financial Indebtedness falling due during that Relevant Period but excluding:



97    


(i)
any amounts falling due under the Working Capital Facility Letter, Facility C or any other overdraft or revolving facility and which were available for simultaneous redrawing according to the terms of that facility; and
(ii)
any such obligations owed to any member of the Group;
(c)
all payments made in that Relevant Period falling within the definition of "Permitted Payment", other than under paragraph (a) of that definition; and
(d)
the amount of the capital element of any payments in respect of that Relevant Period payable under any Finance Lease entered into by any member of the Group,
and so that no amount shall be included more than once.
"EBIT" means, in respect of any Relevant Period, the consolidated operating profit of the Group before taxation:
(a)
before deducting any Finance Charges;
(b)
not including any accrued interest owing to any member of the Group;
(c)
before taking into account any Exceptional Items;
(d)
before deducting any Deal Costs;
(e)
excluding the amount of any profit of any member of the Group which is attributable to minority interests;
(f)
before taking into account any unrealised gains or losses on any financial instrument (other than any derivative instrument which is accounted for on a hedge accounting basis);
(g)
before taking into account any gain or loss arising from an upward or downward revaluation of any other asset;
(h)
before deducting any amount that in accordance with the Accounting Principles is required to be deducted from the operating profits of the Group but which is in fact attributable to payments to be made by the UK Acquisition Company to either of Colin Temple or Mark Crutchley in accordance with the terms of the Acquisition Agreement;
in each case, to the extent added, deducted or taken into account, as the case may be, for the purposes of determining operating profits of the Group before taxation.
"EBITDA" means, in respect of any Relevant Period, EBIT for that Relevant Period after adding back any amount attributable to the amortisation, depreciation or impairment of assets of members of the Group.
"Exceptional Items" means any material items of an unusual or non-recurring nature which represent gains or losses including those arising on:



98    


(a)
the restructuring of the activities of an entity and reversals of any provisions for the cost of restructuring;
(b)
disposals, revaluations or impairment of non-current assets;
(c)
disposals of assets associated with discontinued operations; and
(d)
the termination of any Treasury Transaction.
"Finance Charges" means, for any Relevant Period, the aggregate amount of the accrued interest, commission, fees, discounts, prepayment fees, premiums or charges and other finance payments in respect of Financial Indebtedness whether paid or payable by any member of the Group (calculated on a consolidated basis) in respect of that Relevant Period:
(a)
including the interest (but not the capital) element of payments in respect of Finance Leases;
(b)
including any commission, fees, discounts and other finance payments payable by (and deducting any such amounts payable to) any member of the Group under any interest rate hedging arrangement;
(c)
excluding any Deal Costs,
and so that no amount shall be added (or deducted) more than once.
"Financial Quarter" means the period commencing on the day after one Quarter Date and ending on the next Quarter Date.
"Financial Year" means the annual accounting period of the Group ending on or about 31 January.
"Interest Cover" means the ratio of EBITDA to Finance Charges in respect of any Relevant Period.
"Leverage" means, in respect of any Relevant Period, the ratio of Total Net Debt on the last day of that Relevant Period to EBITDA in respect of that Relevant Period.
"New Shareholder Injection" means the aggregate amount of cash subscribed for by any Holding Company of the Parent for ordinary shares in the Parent or for subordinated loan notes (or other subordinated debt instruments) in the Parent, such subordination to be on the terms set out in the Subordination Agreements or otherwise acceptable to the Lenders.
"Quarter Date" means 31 January, 30 April, 31 July and 31 October (or such other date as represents the last trading Saturday in the relevant month or the next month as set out in the Genesco Closing Schedule) in each year.
"Relevant Period" means the period of 12 months ending on a Quarter Date.
"Relevant Proceeds" means Disposal Proceeds or Insurance Proceeds (each as defined in Clause 8.2 (Disposal, Insurance Proceeds)).



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"Total Net Debt" means, at any time, the aggregate amount of all obligations of members of the Group for or in respect of Financial Indebtedness at that time but:
(a)
excluding any such obligations to any other member of the Group;
(b)
including, in the case of Finance Leases only, their capitalised value;
(c)
excluding any amount falling within paragraph (f) (Treasury Transactions) of the definition of Financial Indebtedness; and
(d)
deducting the aggregate amount of Cash held by any member of the Group at that time,
and so that no amount shall be included or excluded more than once.
"Working Capital" means, on any date, Current Assets less Current Liabilities.
22.2.    Financial condition
The Parent shall ensure that:
(a)
Cashflow Cover: Cashflow Cover in respect of any Relevant Period up to and including the Relevant Period ending on or around 29 April 2017 shall not be less than 1:1. For the avoidance of doubt, Cashflow Cover will not be tested after the test in respect of the Relevant Period ending on or around 29 April 2017.
(b)
Interest Cover: Interest Cover in respect of any Relevant Period shall be not less than 4.5:1.
(c)
Leverage: Leverage in respect of any Relevant Period ending on the Quarter Date specified in column 1 below shall not exceed the ratio set out in column 2 below opposite that Quarter Date:



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Column 1
Quarter Date
Column 2
Ratio
1 August 2015
2.25:1
31 October 2015
2.25:1
30 January 2016
2.25:1
30 April 2016
2.0:1
30 July 2016
2.0:1
29 October 2016
2.0:1
28 January 2017
2.0:1
29 April 2017
1.75:1
29 July 2017
1.75:1
28 October 2017
1.75:1
3 February 2018
1.75:1
28 April 2018
1.75:1
28 July 2018
1.75:1
27 October2018
1.75:1
2 February 2019
1.75:1
4 May 2019
1.75:1
3 August 2019
1.75:1
22.3.    Financial testing
The financial covenants set out in Clause 22.2 (Financial condition) shall be calculated in accordance with the Accounting Principles as applied to the Original Financial Statements and tested by reference to each of the financial statements delivered pursuant to paragraphs (a)(i) and (b) of Clause 21.1 (Financial Statements) and/or each Compliance Certificate delivered pursuant to Clause 21.2 (Provision and contents of Compliance Certificate).
22.4.    Equity Cure



101    


(a)
In the event of any breach of any of the financial covenants in Clause 22.2 (Financial condition) (each a "Financial Covenant") for any Relevant Period ending on a Quarter Date (the "Relevant Quarter Date"), the Parent may, not later than 15 Business Days (the "Reference Date") after the last date for delivery of the Compliance Certificate for that Relevant Period, inject into the Group the cash proceeds of any New Shareholder Injection (the "Cure Amount") to remedy non-compliance with a Financial Covenant.
(b)
The effect of the Cure Amount shall (subject to the provisions of this Clause) be that each Financial Covenant is recalculated to give effect to the following adjustments:
(i)
for the purpose of calculating Cashflow Cover, the Cure Amount shall either (at the option of the Parent):
(1)
be included in the calculation of Cashflow for that Relevant Period and (unless and until it is released to the Parent in terms of paragraph (e) below) the next three Relevant Periods; or
(2)
reduce Total Net Debt as at the start of the Relevant Period in which the non-compliance occurred and (unless and until it is released to the Parent in terms of paragraph (e) below) the next three Relevant Periods, and Debt Service shall be recalculated for such Relevant Periods on a pro forma basis as if the Total Net Debt has been so reduced (and applied against Facility A, Facility B and Facility C in accordance with the terms of Clause 7.3(b));
(ii)
for the purpose of calculating Leverage, the Cure Amount shall reduce Total Net Debt as at the end of that Relevant Period; and
(iii)
for the purpose of calculating Interest Cover, the Cure Amount shall be deemed to have been applied in prepayment of the Facilities at the beginning of that Relevant Period and at the beginning of the next three Relevant Periods and Finance Charges for that Relevant Period and (unless and until it is released to the Parent in terms of paragraph (e) below) the next three Relevant Periods shall be recalculated on a pro forma basis as if the Facilities had been so reduced.
(c)
If the re-testing of the Financial Covenants after giving effect to paragraphs (a) and (b) above demonstrates no breach has occurred in respect of the Relevant Period, then the relevant breach shall be deemed to have been remedied.
(d)
A Cure Amount may be injected up to four times over the duration of the Facilities and may not be injected in consecutive Financial Quarters.
(e)
The Parent shall procure that each Cure Amount is credited to the Escrow Account and shall be retained in the Escrow Account until the date of the Quarter Date falling 6 Months after the Relevant Quarter Date at which time it will be released to the Parent if the Parent delivers an Escrow Account Certificate to the Agent within 5 Business Days of such date. In the event that any Default occurs while any amount is held in the Escrow Account or the Parent fails to deliver an Escrow Account Certificate to the Agent within 5 Business Days of



102    


the date falling 6 Months after the Relevant Quarter Date, the balance of the Escrow Account may (at the discretion of the Agent, acting on the instructions of the Majority Lenders) be applied immediately in or towards permanent prepayment of Loans with such amount being applied against the Loans in the same manner as voluntary prepayments under Clause 7.3 (Voluntary Prepayment of Term Loans) or Clause 7.4 (Voluntary Prepayment of Facility C Loans).
(f)
Any recalculation made under this Clause 22.4 will be solely for the purpose of curing a Financial Covenant breach and not for any other purpose such as calculation of Margin.
23.
GENERAL UNDERTAKINGS
The undertakings in this Clause 23 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
23.1.    Authorisations
Each Obligor shall promptly:
(a)
obtain, comply with and do all that is necessary to maintain in full force and effect; and
(b)
supply certified copies to the Agent of,
any Authorisation required under any law or regulation of a Relevant Jurisdiction to:
(i)
enable it to perform its obligations under the Finance Documents;
(ii)
ensure the legality, validity, enforceability or admissibility in evidence of any Finance Document; and
(iii)
carry on its business where failure to do so has or is reasonably likely to have a Material Adverse Effect.
23.2.    Compliance with laws
Each Obligor shall (and the Parent shall ensure that each member of the Group will) comply in all respects with all laws to which it may be subject, if failure so to comply has or is reasonably likely to have a Material Adverse Effect.
23.3.    Environmental compliance
Each Obligor shall (and the Parent shall ensure that each member of the Group will):
(i)
comply with all Environmental Law;
(ii)
obtain, maintain and ensure compliance with all requisite Environmental Permits;
(iii)
implement procedures to monitor compliance with and to prevent liability under any Environmental Law,



103    


where failure to do so has or is reasonably likely to have a Material Adverse Effect.
23.4.    Environmental claims
Each Obligor shall (through the Parent), promptly upon becoming aware of the same, inform the Agent in writing of:
(a)
any Environmental Claim against any member of the Group which is current, pending or threatened; and
(b)
any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,
where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
23.5.    Taxation
(a)
Each Obligor shall (and the Parent shall ensure that each member of the Group will) pay and discharge all Taxes imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:
(i)
such payment is being contested in good faith;
(ii)
adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements delivered to the Agent under Clause 21.1 (Financial statements); and
(iii)
such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.
(b)
No member of the Group may change its residence for Tax purposes.
23.6.    Merger
No Obligor shall (and the Parent shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger, consolidation or corporate reconstruction other than a Permitted Transaction or a Permitted Merger.
23.7.    Change of business
The Parent shall procure that no substantial change is made to the general nature of the business of the Group from that carried on by the Group at the date of this Agreement without the prior written consent of the Majority Lenders.
23.8.    Acquisitions
(a)
Except as permitted under either Clause 23.29 (Capital Expenditure) or paragraph (b) below, no Obligor shall (and the Parent shall ensure that no other member of the Group will):



104    


(i)
acquire a company or any shares or securities or a business or undertaking (or, in each case, any interest in any of them) or any assets; or
(ii)
incorporate a company.
(b)
Paragraph (a) above does not apply to an acquisition of a company, of shares, securities or a business or undertaking or any assets (or, in each case, any interest in any of them) or the incorporation of a company which is:
(i)
a Permitted Acquisition; or
(ii)
a Permitted Transaction.
23.9.    Joint ventures
(a)
Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will):
(i)
enter into, invest in or acquire (or agree to acquire) any shares, stocks, securities or other interest in any Joint Venture; or
(ii)
transfer any assets or lend to or guarantee or give an indemnity for or give Security for the obligations of a Joint Venture or maintain the solvency of or provide working capital to any Joint Venture (or agree to do any of the foregoing).
(b)
Paragraph (a) above does not apply to any acquisition (or agreement to acquire) any interest in a Joint Venture or transfer of assets (or agreement to transfer assets) to a Joint Venture or loan made to or guarantee given in respect of the obligations of a Joint Venture if such transaction is a Permitted Joint Venture.
23.10.    Dormant subsidiaries
Not restated.
23.11.    Preservation of assets
Each Obligor shall (and the Parent shall ensure that each member of the Group will) maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business.
23.12.    Pari passu ranking
Each Obligor shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
23.13.    Negative pledge
In this Clause 23.13, "Quasi-Security" means a transaction described in paragraph (b) below.



105    


Except as permitted under paragraph (c) below:
(a)
No Obligor shall (and the Parent shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.
(b)
No Obligor shall (and the Parent shall ensure that no other member of the Group will):
(i)
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(ii)
sell, transfer or otherwise dispose of any of its receivables on recourse terms;
(iii)
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(iv)
enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c)
Paragraphs (a) and (b) above do not apply to any Security or (as the case may be) Quasi-Security, which is:
(i)
a Permitted Security; or
(ii)
a Permitted Transaction.
23.14.    Disposals
(a)
Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset.
(b)
Paragraph (a) above does not apply to any sale, lease, transfer or other disposal which is:
(i)
a Permitted Disposal; or
(ii)
a Permitted Transaction.
23.15.    Arms' length basis
(a)
Except as permitted by paragraph (b) below, no Obligor shall (and the Parent shall ensure no member of the Group will) enter into any transaction with any person except on arms' length terms and for full market value.
(b)
The following transactions shall not be a breach of this Clause 23.15:



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(i)
intra-Group loans permitted under Clause 23.16 (Loans or credit);
(ii)
fees, costs and expenses payable under the Transaction Documents in the amounts set out in the Transaction Documents delivered to the Agent under Clause 4.1 (Initial conditions precedent) or agreed by the Agent; and
(iii)
any Permitted Transactions.
23.16.    Loans or credit
(a)
Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) be a creditor in respect of any Financial Indebtedness.
(b)
Paragraph (a) above does not apply to:
(i)
a Permitted Loan; or
(ii)
a Permitted Transaction.
23.17.    No Guarantees or indemnities
(a)
Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.
(b)
Paragraph (a) does not apply to a guarantee which is:
(i)
a Permitted Guarantee; or
(ii)
a Permitted Transaction.
23.18.    Corporate fees, dividends and share redemptions
(a)
Except as permitted under paragraph (b) below, the Parent shall not (and will ensure that no other member of the Group will):
(i)
declare, make or pay any dividend, charge, fee or other distribution (or interest on any unpaid dividend, charge, fee or other distribution) (whether in cash or in kind) on or in respect of its share capital (or any class of its share capital);
(ii)
repay or distribute any dividend or share premium reserve;
(iii)
pay or allow any member of the Group to pay any management charges or fees or any advisory or other fees to (or to the order of) any of the shareholders of the Parent (or to any Holding Company of any such shareholders);
(iv)
redeem, repurchase, defease, retire or repay any of its share capital or resolve to do so; or



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(v)
repay any loans advanced by the UK Acquisition Company or its Holding Company other than by way of a Permitted Payment.
(b)
Paragraph (a) above does not apply to:
(i)
a Permitted Payment;
(ii)
a Permitted Transaction (other than one referred to in paragraph (c) of the definition of that term); or
(iii)
management charges or fees or other advisory or other fees payable by members of the Group to the UK Acquisition Company not exceeding £500,000 in aggregate in any Financial Year.
23.19.    Financial Indebtedness
(a)
Except as permitted under paragraph (b) below, no Obligor shall (and the Parent shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.
(b)
Paragraph (a) above does not apply to Financial Indebtedness which is:
(i)
Permitted Financial Indebtedness; or
(ii)
a Permitted Transaction.
23.20.    Share capital
No Obligor shall (and the Parent shall ensure no member of the Group will) issue any shares except pursuant to:
(a)
a Permitted Share Issue; or
(b)
a Permitted Transaction.
23.21.    Insurance
(a)
Each Obligor shall (and the Parent shall ensure that each member of the Group will) maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.
(b)
All insurances must be with reputable independent insurance companies or underwriters.
(c)
Not restated.
(d)
Within 30 days of the date of this Agreement, the Parent shall provide to the Agent written evidence that the insurance policy(ies) relating to the Charged Property contain (in form and substance reasonably satisfactory to the Security Trustee) an endorsement naming the Security Trustee as sole loss payee.



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23.22.    Pensions
The Parent shall ensure that no member of the Group is or has been at any time an employer (for the purposes of Sections 38 to 51 of the Pensions Act 2004) of an occupational pension scheme which is not a money purchase scheme (both terms as defined in the Pension Schemes Act 1993) or "connected" with or an "associate" of (as those terms are under in Sections 38 or 43 of the Pensions Act 2004) such an employer.
23.23.    Access
If a Default is continuing or the Agent reasonably suspects a Default is continuing or may occur, each Obligor shall, and the Parent shall ensure that each Obligor will, (not more than once in every Financial Year unless the Agent reasonably suspects a Default is continuing or may occur) permit the Agent and/or the Security Trustee and/or accountants or other professional advisers and contractors of the Agent or Security Trustee free access at all reasonable times and on reasonable notice at the risk and cost of the Obligors to (a) the premises, assets, books, accounts and records of each Obligor and (b) meet and discuss matters with Senior Management.
23.24.    Management
(a)
The Parent must ensure that there is in place in respect of each Obligor qualified management with appropriate skills.
(b)
If any of the Senior Management ceases (whether by reason of death, retirement at normal retiring age or through ill health or otherwise) to perform his or her duties, the Parent must as soon as reasonably practicable thereafter:
(i)
notify the Agent; and
(ii)
after consultation with the Agent as to the identity of such replacement person, find and appoint an adequately qualified replacement for him or her as promptly as practicable.
23.25.    Intellectual Property
Each Obligor shall and the Parent shall procure that each member of the Group will:
(a)
preserve and maintain the subsistence and validity of the Intellectual Property necessary for the business of the relevant member of the Group;
(b)
use reasonable endeavours to prevent any infringement in any material respect of the Intellectual Property;
(c)
make registrations and pay all registration fees and taxes necessary to maintain the Intellectual Property in full force and effect and record its interest in that Intellectual Property;
(d)
not use or permit the Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of the Intellectual Property or imperil the right of any member of the Group to use such property; and
(e)
not discontinue the use of the Intellectual Property,



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where failure to do so, in the case of paragraphs (a) and (b) above, or, in the case of paragraphs (d) and (e) above, such use, permission to use, omission or discontinuation, is reasonably likely to have a Material Adverse Effect.
23.26.    Amendments
No Obligor shall (and the Parent shall ensure that no member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of a Transaction Document or any other document delivered to the Agent pursuant to Clauses 4.1 (Initial conditions precedent) or Clause 26 (Changes to the Obligors) or enter into any agreement with any shareholders of the Parent or any of their Affiliates which is not a member of the Group except in writing:
(a)
in accordance with the provisions of Clause 37 (Amendments and Waivers); or
(b)
after the date of this Agreement, in a way which could not be reasonably expected materially and adversely to affect the interests of the Lenders.
The Parent shall promptly supply to the Agent a copy of any document relating to any of the matters referred to in paragraphs (a) and (b) above.
23.27.    Financial assistance
Each Obligor shall (and the Parent shall procure each member of the Group will) comply in all respects with Section 63 of the Companies Act 1963 in Ireland and any equivalent legislation in other jurisdictions including in relation to the execution of the Transaction Security Documents and payment of amounts due under this Agreement, in each case where relevant.
23.28.    Group bank accounts
The Parent shall ensure that all bank accounts of the Group (other than the Permitted Bank Accounts but including the Holding Account, the Mandatory Prepayment Account and the Escrow Account) shall be opened and maintained with a Finance Party or an Affiliate of a Finance Party and are subject to valid Security under the Transaction Security Documents.
23.29.    Capital Expenditure
(a)
Subject to paragraph (b) below, the aggregate Capital Expenditure of the Group in respect of any Financial Year shall not exceed 115% of the amount approved by the Agent in the Budget (or in any updated or changed Budget) for that Financial Year.
(b)
Capital Expenditure of the Group in excess of the limit specified in paragraph (a) above (or any other limit agreed between the Parent and the Majority Lenders) may be incurred using funds provided for the purpose by the UK Acquisition Company, and made available by subscription for ordinary shares in the Parent or by way of loan complying with the terms of paragraph (g) of Permitted Financial Indebtedness.



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23.30.    Treasury Transactions
(a)
No Obligor shall (and the Parent will procure that no members of the Group will) enter into any Treasury Transaction, other than (with a member of the LBG Group provided that its terms are broadly competitive):
(i)
the hedging transactions documented by the Hedging Agreements;
(ii)
spot and forward delivery foreign exchange contracts entered into in the ordinary course of business and not for speculative purposes; and
(iii)
any Treasury Transaction entered into for the hedging of actual or projected real exposures arising in the ordinary course of trading activities of a member of the Group for a period of not more than 12 months and not for speculative purposes.
(b)
Not restated.
23.31.    Further assurance
(a)
Each Obligor shall (and the Parent shall procure that each member of the Group will) promptly do all such acts or execute all such documents (including assignments, transfers, mortgages, charges, notices and instructions) as the Security Trustee may reasonably specify (and in such form as the Security Trustee may reasonably require in favour of the Security Trustee or its nominee(s)):
(i)
to perfect the Security created or intended to be created under or evidenced by the Transaction Security Documents (which may include the execution of a mortgage, charge, assignment or other Security over all or any of the assets which are, or are intended to be, the subject of the Transaction Security) or for the exercise of any rights, powers and remedies of the Security Trustee or the Finance Parties provided by or pursuant to the Finance Documents or by law;
(ii)
to confer on the Security Trustee or confer on the Finance Parties Security over any property and assets of that Obligor located in any jurisdiction equivalent or similar to the Security intended to be conferred by or pursuant to the Transaction Security Documents; and/or
(iii)
to facilitate the realisation of the assets which are, or are intended to be, the subject of the Transaction Security.
(b)
Each Obligor shall (and the Parent shall procure that each member of the Group shall) take all such action as is available to it (including making all filings and registrations) as may be necessary for the purpose of the creation, perfection, protection or maintenance of any Security conferred or intended to be conferred on the Security Trustee or the Finance Parties by or pursuant to the Finance Documents.
23.32.    Payment of Loan Notes
Not restated.



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23.33.    Acquisition Agreement
The Parent will not agree to amend or waive or permit the amendment or waiver of any of the material terms of the Acquisition Agreement, without the consent of the Agent, which consent will not be unreasonably withheld or delayed.
23.34.    Sanctions and anti-corruption law
No Borrower may request any Loan, and no Borrower shall use, and each Borrower shall procure that its Subsidiaries and its or their respective directors, officers and employees shall not use, the proceeds of any Loan:
(a)
in furtherance of an offer, payment, promise to pay, or authorisation of the payment or giving of money, or anything else of value, to any Sanctioned Person or in violation of any Anti-Corruption Laws;
(b)
for the purpose of funding, financing or facilitating any activities, business or transaction of or with any Sanctioned Person, or in any Sanctioned Country; or
(c)
in any manner that would result in the violation of any Sanctions applicable to any party hereto.
23.35.    Guarantors
The Parent shall ensure that, at all times after the Fourth Restatement Date, the aggregate gross assets, aggregate operating profit and aggregate turnover (net of VAT) of the Guarantors (in each case calculated on an unconsolidated basis and excluding all intra-group items and investments in Subsidiaries of any member of the Group) represents not less than ninety (90) per cent of consolidated gross assets, operating profit and turnover (net of VAT) of the Group.
23.36.    Condition Subsequent
23.36.1.
The Parent shall procure that the Noteholder Securities (as defined in the Ranking Agreement) are released on or by the later of (a) 30 June 2015 and (b) the date that the amounts secured by the Noteholder Securities (as defined in the Ranking Agreement) are repaid in full.
23.36.2.
The Parent shall procure that within 10 Business Days of the Fourth Restatement Date it shall deliver to the Agent:
(i)
evidence satisfactory to the Agent that the £5,500,000 promissory note originally issued by Schuh Limited to Genesco Inc. has been assigned to be owed by Schuh Limited to Genesco (UK) Limited; and
(ii)
a subordination agreement in form and substance satisfactory to the Agent signed by the UK Acquisition Company, the Security Trustee and each Obligor.
24.
EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 23.35 is an Event of Default (save for Clause 24.21 (Acceleration)).
24.1.    Non-payment



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An Obligor does not pay on the due date any amount payable pursuant to a Finance Document (other than amounts due and payable under the Working Capital Facility Letter) at the place at and in the currency in which it is expressed to be payable unless:
(a)
its failure to pay is caused by:
(i)
administrative or technical error; or
(ii)
a Disruption Event; and
(b)    payment is made within three Business Days of its due date.
24.2.    Financial covenants and other obligations
(a)
Any requirement of Clause 22 (Financial covenants) is not satisfied or an Obligor does not comply with the provisions of any of Clauses 21.1 (Financial Statements), 21.2 (Provision and contents of Compliance Certificate), 23.13 (Negative Pledge), 23.14 (Disposals), 23.16 (Loans or credit), 23.17 (No Guarantees or indemnities), 23.18 (Dividends and share redemption), 23.19 (Financial Indebtedness), 23.26 (Amendments) and 23.36 (Conditions Subsequent).
(b)
An Obligor does not comply with any provision of any Transaction Security Document.
24.3.    Other obligations
(a)
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 24.1 (Non-payment) and Clause 24.2 (Financial covenants and other obligations)).
(b)
No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 15 Business Days (or such other period (if any) as the Agent may agree) of the earlier of (i) the Agent giving notice to the Parent or relevant Obligor or (ii) the Parent or an Obligor becoming aware of the failure to comply.
24.4.    Misrepresentation
(a)
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any other document delivered by or on behalf of any Obligor under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
(b)
No Event of Default under paragraph (a) will occur if the matter giving rise to the breach is capable of remedy and is remedied within 15 Business Days (or such other period (if any) as the Agent may agree) of the earlier of (i) the Agent giving notice to the Parent or relevant Obligor or (ii) the Parent or an Obligor becoming aware of the breach.
24.5.    Cross default



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(a)
Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period.
(b)
Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c)
Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).
(d)
Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).
(e)
No Event of Default will occur under this Clause 24.5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (d) above is less than £100,000 (or its equivalent in any other currency or currencies) or (for a period of 15 Business Days) if the Financial Indebtedness relates to the Working Capital Facility.
24.6.    Insolvency
(a)
A member of the Group is unable or admits inability to pay its debts as they fall due or is deemed to or declared to be unable to pay its debts under applicable law, suspends or threatens to suspend making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.
(b)
The value of the assets of any member of the Group is less than its liabilities (taking into account contingent and prospective liabilities).
(c)
A moratorium is declared in respect of any indebtedness of any member of the Group. If a moratorium occurs, the ending of the moratorium will not remedy any Event of Default caused by that moratorium.
24.7.    Insolvency proceedings
(a)
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
(i)
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, examination or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any member of the Group;
(ii)
a composition, compromise, assignment or arrangement with any creditor of any member of the Group;
(iii)
the appointment of a liquidator, receiver, administrator, administrative receiver, examiner, compulsory manager or other similar officer in respect of any member of the Group or any of its assets; or



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(iv)
enforcement of any Security over any assets of any member of the Group,
or any analogous procedure or step is taken in any jurisdiction.
(b)
Paragraph (a) shall not apply to:
(i)
any winding-up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 14 days of commencement or, if earlier, the date on which it is advertised; or
(ii)
any step or procedure contemplated by paragraph (b) of the definition of Permitted Transaction.
24.8.    Creditors' process
Any expropriation, attachment, sequestration, distress or execution or any analogous process in any jurisdiction affects any asset or assets of Obligor having an aggregate value of £250,000 or more (after taking into account the anticipated level of insurance proceeds (if any) which the Obligor will be entitled to receive and which in the opinion of the Agent (acting reasonably) is not being contested) and is not discharged within 10 Business Days.
24.9.    Unlawfulness and invalidity
(a)
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents or any Transaction Security created or expressed to be created or evidenced by the Transaction Security Documents ceases to be effective.
(b)
Any obligation or obligations of any Obligor under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable and the cessation individually or cumulatively materially and adversely affects the interests of the Lenders under the Finance Documents.
(c)
Any Finance Document ceases to be in full force and effect or any Transaction Security ceases to be legal, valid, binding, enforceable or effective or is alleged by a party to it (other than a Finance Party) to be ineffective.
24.10.    Cessation of business
Any member of the Group suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business except as a result of a Permitted Disposal or a Permitted Transaction.
24.11.    Change of ownership
(a)
After the date of this Agreement, an Obligor (other than the Parent) ceases to be a wholly-owned Subsidiary of the Parent; or
(b)
an Obligor ceases to own at least the same percentage of shares in a Material Company as at the date of this Agreement,



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except, in either case, as a result of a disposal which is a Permitted Disposal or a Permitted Transaction.
24.12.    Constitutional Documents
The Parent amends, varies, supplements, supersedes, waives or terminates its Constitutional Documents in any way that has a material and adverse impact on the Lenders without the prior written consent of the Majority Lenders.
24.13.    Change of management
Not restated.
24.14.    Change of Key Personnel
Not restated.
24.15.    Audit qualification
The Auditors of the Group qualify the audited annual consolidated financial statements of the Parent in a manner which the Majority Lenders (acting reasonably) consider material in the context of the Finance Documents.
24.16.    Expropriation
The authority or ability of any member of the Group to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any member of the Group or any of its assets.
24.17.    Repudiation and rescission of agreements
An Obligor (or any other relevant party) rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or any of the Transaction Security or evidences an intention to rescind or repudiate a Finance Document or any Transaction Security.
24.18.    Litigation
Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Transaction Documents or the transactions contemplated in the Transaction Documents or against any member of the Group or its assets which has or is reasonably likely to have a Material Adverse Effect.
24.19.    Material adverse change
Any event or circumstance occurs which is reasonably likely to have a Material Adverse Effect.



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24.20.    Employee Benefit Trust
Not restated.
24.21.    Acceleration
On and at any time after the occurrence of an Event of Default which is continuing the Agent may, and shall if so directed by the Majority Lenders, by notice to the Parent:
(a)
cancel the Total Commitments at which time they shall immediately be cancelled;
(b)
declare that all or part of the Utilisations, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable;
(c)
declare that all or part of the Utilisations be payable on demand, at which time they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders; and/or
(d)
exercise or direct the Security Trustee to exercise any or all of its rights, remedies, powers or discretions under the Finance Documents.



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SECTION 9
CHANGES TO PARTIES
25.
CHANGES TO THE LENDERS
25.1.    Assignments and transfers by the Lenders
Subject to this Clause 25 a Lender (the "Existing Lender") may:
(a)
assign any of its rights; or
(b)
transfer by novation any of its rights and obligations,
under any Finance Document to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets (the "New Lender").
25.2.    Conditions of assignment or transfer
(a)
An Existing Lender must consult with the Parent for no more than 10 days before it may make an assignment or transfer in accordance with Clause 25.1 (Assignments and transfers by the Lenders) unless the assignment or transfer is:
(i)
to another Lender or an Affiliate of a Lender;
(ii)
if the Existing Lender is a fund, to a fund which is a Related Fund of the Existing Lender; or
(iii)
made at a time when an Event of Default is continuing.
(b)
An assignment will only be effective on:
(i)
receipt by the Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties and the other Secured Parties as it would have been under if it was an Original Lender;
(ii)
the New Lender entering into the documentation required for it to accede as a party to the Intercreditor Agreement; and
(iii)
the performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Lender and the New Lender.
(c)
A transfer will only be effective if the New Lender enters into the documentation required for it to accede as a party to the Intercreditor Agreement and if the procedure set out in Clause 25.5 (Procedure for transfer) is complied with.
(d)
If:



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(iv)
a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(v)
as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender or Lender acting through its new Facility Office under Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased Costs),
then the New Lender or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred.
(e)
Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Agent has the authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
25.3.    Assignment or transfer fee
Unless the Agent otherwise agrees and excluding an assignment or transfer (i) to an Affiliate of a Lender, or (ii) to a Related Fund or (iii) made in connection with primary syndication of the Facilities, the New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of £1,500.
25.4.    Limitation of responsibility of Existing Lenders
(a)
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
(i)
the legality, validity, effectiveness, adequacy or enforceability of the Transaction Documents, the Transaction Security or any other documents;
(ii)
the financial condition of any Obligor;
(iii)
the performance and observance by any Obligor or any other member of the Group of its obligations under the Transaction Documents or any other documents; or
(iv)
the accuracy of any statements (whether written or oral) made in or in connection with any Transaction Document or any other document,
and any representations or warranties implied by law are excluded.
(b)
Each New Lender confirms to the Existing Lender, the other Finance Parties and the Secured Parties that it:
(i)
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor