Accession to Facility Agreement

It is therefore clear that, while there are a number of long and generally accepted principles that apply to the interpretation of treaties, the Scottish judiciary does not always take a coherent approach or a unified view of how these principles apply to the facts of a particular case. In any event, the case remains at the discretion of the court examining the dispute. In this particular case, the question was not what the language used in the instruments of accession meant, but a reference was made to a date that was manifestly incorrect. The parties did not deny that the date was wrong, nor that there was only an initial guarantee agreement to which the companies could join, so it was to be hoped that a commercially reasonable approach would be applied in the circumstances and that the same result would be achieved in Scotland. It is common for credit and guarantee documents to include lender and creditor protection in the event that an existing borrower or group of companies acquires additional subsidiaries or otherwise wishes to include other group companies in its financing agreements. In general, it is likely that these guarantees will require the parent company to ensure that each new subsidiary becomes a party to the facility agreement as a borrower and/or guarantor and provides security for some or all of the assets to the lender(s) with respect to the obligations of the borrower and the collateral companies under the facility documentation. This is often governed by an instrument of accession to (i) the installation agreement and (ii) the relevant safety documentation. With each instrument of accession, the subsidiary confirms that it intends to be bound by the terms of the Facility Agreement as a new borrower and/or guarantor and that it intends to be bound by the terms of the existing collateral arrangement(s) and to provide collateral for its assets on the same terms as that original collateral arrangement. Each instrument of accession shall refer to the original installation or security agreement to identify the arrangement(s) to which they will be adhered to. From the lender`s point of view, it is of course crucial that the membership documents work in such a way that new companies are linked to the original documentation. But what if the description of the original documentation is incorrect? Does such an error invalidate membership and render ineffective an alleged security right in the assets of the member subsidiary, or can the errors contained in the documents be interpreted differently to ensure their effectiveness? These are some of the issues that the English High Court recently had to deal with in the case of Pathway Finance Sàrl v London Hanger Lane Centre Ltd [2020] EWHC 1191 (Ch) (“Pathway”). I am a New York Licensed Attorney with over 6 years of experience in drafting, reviewing and negotiating a variety of contracts and agreements.

I have experience in sports and entertainment, real estate, healthcare, estate planning and with start-ups. I am confident that I can help you with all your legal needs. The English High Court corrects a drafting error in making the effective security order when the court`s decision can guarantee lenders holding securities containing incorrect references to existing documents or other errors that nothing should be done in the circumstances, it goes without saying that if the effectiveness of a poorly worded document is at the discretion of the court, it is crucial to avoid editorial errors (no matter how harmless) in the first place. It is easy to see how this happened – a document was reused whenever a new accession was required, and therefore all the errors in the first document were copied into each subsequent instrument of accession. One should never assume that a template attached to another document is correct, and lawyers should always avoid simply reusing a previous document, even if they believe the previous document is correct. Keep going from scratch when you need to join. And if all else fails, check, check and check again! A membership agreement, also known as an Act of Accession, is used to allow a new party to acquire shares in a private company and become part of the company`s shareholders` agreement. Shares may be transferred from an existing shareholder to the new member or the company may issue new shares to the investor. With the signing of the membership agreement, the new investor is now bound by the company`s shareholders` agreement like the original members. This allows shareholders to avoid having to draft a new agreement and terminate the agreement each time a new party invests in the company. It should be noted that the risk of this type of error occurring in Scotland is generally lower than south of the border, as in Scotland fee debtors generally issue autonomous security documents under Scottish law and are not inclined to adhere to existing security arrangements through accession instruments, so that all Scottish risks exist: in many respects, limited to cross-border transactions, where Scottish companies could be parties to documents under English law that are more likely to be granted and concluded on a composite basis and then accepted.

(b) Upon entry into force of this Agreement, the Administrative Agent shall immediately inform the Lenders. Would this case have been decided differently in Scotland? One. Reference is made to the five-year revolving credit agreement dated October 2, 2007 (as amended, the “Credit Agreement”) between Alcoa, the lenders and issuers, Citibank, N.A. (“Citi”) as managing agent for lenders and issuers and Barclays Bank PLC as syndication agent. SECTION 6. Governing Law. THIS AGREEMENT SHALL BE CONSTRUED, GOVERNED BY AND CONSTRUED IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK. .

Unauthorized attempts to upload information and/or modify information to any part of this website are strictly prohibited and subject to prosecution under the Computer Fraud and Abuse Act of 1986 and the National Information Infrastructure Protection Act of 1996 (see Title 18 U.S.C §§ 1001 and 1030). Note that this policy may change if the SEC manages to SEC.gov to ensure that the site operates efficiently and remains available to all users. . Once the data subject becomes a creditor, the total obligations shall be increased by the amount set out in the relevant accession agreement on the additional facility as an obligation of the lender for the additional facility. . SECTION 3. Efficiency. (a) This Agreement will come into force on July 28, 2008 (the “Effective Date”), subject to receipt of (i) the considerations to this Agreement duly signed on behalf of each of the member lenders and alcoa, and (ii) the documents to be provided by Alcoa pursuant to the penultimate sentence of Section 2.20 of the Credit Agreement. Except to the extent provided in the applicable borrower`s membership agreement or the guarantor`s membership agreement, each debtor is classified as a corporation for U.S.

federal income tax purposes. [Signature page for notification of obligations of potential lenders]. It is important to note that this is an English High Court case that is not binding on the Scottish courts, so no Scottish court would have to follow the findings of the English High Court. In recent years, however, a number of English cases have turned to the Supreme Court with questions of contract interpretation that would be persuasive in Scotland and could lead to the application of similar principles of treaty interpretation. Nevertheless, Scotland`s approach to treaty interpretation remains changing, with a number of Scottish judges having different views on treaty interpretation and its approach in Scotland, including recently in several cases heard in 2019. For example: Experienced lawyer and tax analyst who has worked in government and the private sector. Experience in public speaking, contract law, corporate governance and contract negotiations. Strong professional graduate of Penn State Law. Pursuant to Section 2.20(a) of the Loan Agreement, Alcoa and one of the potential lenders listed below hereby notify you that each such Potential Lender will renew an obligation under the Loan Agreement in the amount set out below on behalf of the Potential Lender (each, an “Extended Commitment”) effective effective Date (as defined in the Membership Agreement dated July 28).

2008 under Alcoa, each of the potential lenders and the managing agent mentioned below): The content of this website is provided for informational purposes only and should not be construed as legal advice and should not be treated as a substitute for specific advice. Morton Fraser LLP assumes no responsibility for the content of third party websites to which this website links. Morton Fraser LLP is authorised and regulated by the Financial Conduct Authority. . SECTION 8. Remarks. All notices and notices under this Agreement shall be in writing and given in accordance with Section 10.01 of the Credit Agreement. All notices and notices under this Agreement to each subscribing lender will be delivered to them at the address indicated under their signature.

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