SCHEDULE 1
LMA TEMPLATE RELEASE LETTER
PRIVATE AND CONFIDENTIAL - RELEASE LETTER TO PROSPECTIVE LEAD
BANK(S)
[Name and Address of prospective Lead Bank(s)]
[Date]
Dear Sirs
[Insert description of deal (the "Proposed Transaction")]
In this letter:
"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.
"Holding Company" means, in relation to a person, any other person in respect of which it is a
Subsidiary.
"Subsidiary" means a subsidiary undertaking within the meaning of section 1162 of the
Companies Act 2006.
1.
Introduction
1.1
We refer to our [draft] report dated [date of Report] on [insert name of company/group]
(the "[Company"/"Group]") in connection with the Proposed Transaction (the
"Report"), and prepared on the basis of the instructions set out in the engagement letter
dated [•] between us and [client name] (the "Instructing Client") (the "Engagement
Letter") and any further information or explanations we may provide to you or your
professional advisers in relation to the contents of the Report or the matters dealt with in
it (the "Information").
1.2
We understand that you are considering whether to provide, and/or arrange, and/or act as
agent, security trustee and/or security agent for a syndicate of banks and financial
institutions providing, debt finance for and in connection with the Proposed Transaction
(where, in each such capacity, you will be acting as a "Lead Bank").
1.3
We understand that you wish to be provided with a copy of the Report. The Instructing
Client has authorised us to provide a copy of the Report and the Information to you.
1.4
This letter sets out the terms upon which we will agree to release the Report and the
Information to you and explains certain matters in relation to the Report and the
Information.
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2.
Terms
2.1
The Report and the Information are provided to you to assist you in assessing whether or
not you wish to act as a Lead Bank in relation to and participate in the Proposed
Transaction. You agree not to use the Report or the Information for any other purpose.
2.2
You accept that our providing you with a copy of the Report and our providing you with
the Information is on the understanding that, to the fullest extent permitted by law 1, we
neither owe nor accept any duty or responsibility or liability to you or any other party,
whether in contract, tort (including negligence) or otherwise and shall not be liable in
respect of any loss, damage or expense which is caused by your or any other party's
reliance upon the Report or the Information except, in each case, as we agree otherwise
in writing.2
2.3
Subject to paragraph 2.4 below, you agree not to disclose all or any part of the Report or
the Information to any other person, by any means, without our prior written consent
except to the extent that disclosure is required by law or regulation, required or requested
by any competent judicial, governmental, supervisory or regulatory body or required by
the rules of any stock exchange on which your or your Affiliates' shares or other
securities are listed. Whether or not we have given our consent, we will not accept any
liability or responsibility to any third party who may gain access to the Report or the
Information.
2.4
You may make copies of the Report available to and share the Information with (i) your
Affiliates3 and your and your Affiliates' directors, officers and employees involved in
considering the Proposed Transaction, (ii) your and your Affiliates' financial and
professional advisers4 and (iii) any potential lender who is considering providing finance
for or otherwise participating in the Proposed Transaction (who can in turn disclose the
Report and share the Information in the manner described in paragraph 2.3 and points (i)
1
Included in place of a lengthier carve out from the exclusion of liability for e.g. loss or damage in relation to death
or personal injury caused by negligence within the meaning of the Unfair Contract Terms Act 1977, or for fraud.
2
To streamline the documentation process (and to avoid the requirement to append a form of reliance letter to the
release letter), no reference is made in this letter to the reliance letter which will need to be entered into for the
report provider to assume a duty of care to the Lead Bank/recipient.
3
Disclosure to "Related Funds" has not been included in the release letter as our view is that it is unlikely that
funds/Related Funds would be involved in the transaction at this stage. Reference to Related Funds is, however,
included in the Template Reliance Letter. The definition of "Related Funds" is as follows:
"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or advised by the
same investment manager or adviser as the first fund or, if it is managed by a different investment manager
or adviser, a fund whose investment manager or adviser is an Affiliate of the investment manager or
adviser of the first fund.
4
Disclosure is permitted to a recipient's "financial and professional" advisers to allow disclosure to financial advisory
firms (which are not members of professional bodies) who may require access to the report. Disclosure does not,
however, extend to professional advisors of directors, officers and employees. Whilst this omission may not be
relevant to an acquisition finance transaction, where such packages are an issue for the borrower and the target
group rather than the Finance Parties, Addressees may wish to consider whether an express authority for disclosure
to such persons would be useful in order to enable an informed negotiation of management incentives in the context
of a restructuring transaction.
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and (ii) of this paragraph 2.4)5 provided that in each case the person making the Report
available or sharing the Information takes reasonable steps to ensure that the recipient
understands that:
2.4.1
the Report and the Information are confidential and may not be disclosed to any
other parties without our prior written consent except to the extent that
disclosure is required by law or regulation, or required or requested by any
competent judicial, governmental, supervisory or regulatory body or required by
the rules of any stock exchange on which the shares or other securities of the
recipient or any of its Affiliates are listed;
2.4.2
they may use the Report and the Information only for the purposes of assisting
you in your consideration as to whether to act as a Lead Bank in relation to the
Proposed Transaction or, in the case of potential lenders, for the purpose of
assisting them in their consideration as to whether or not to participate in the
Proposed Transaction; and
2.4.3
to the fullest extent permitted by law, we accept no responsibility or liability to
them, whether in contract, tort (including negligence) or otherwise in respect of
any use they may make of the Report or the Information and shall not be liable
to them in respect of any loss, damage or expense which is caused by their
reliance upon the Report or the Information until such time as, in the case of
potential lenders, they participate in the primary syndication of the debt
facilities provided in connection with the Proposed Transaction and have agreed
to be bound by the terms of a reliance letter.
2.5
You understand that the Report was prepared solely on the instructions of the Instructing
Client.
2.6
We have not undertaken any work or made any enquiries of the [Company's/Group's]
management in relation to the matters dealt with in the Report and the Report has not
been updated in each case since its date.
3.
General
3.1
If any term or provision of this letter is or becomes invalid, illegal or unenforceable, the
remainder shall survive unaffected.
3.2
[The obligations under this letter of each person to whom this letter is addressed are
several. No person to whom this letter is addressed is responsible for the obligations
under this letter of any other person to whom this letter is addressed.]6
5
The additional wording at sub-paragraph (iii) expands this paragraph to cover the situation where several banks are
considering acting as Lead Bank and forming a syndicate in respect of the Proposed Transaction and allows them to
disclose the Report and the Information to their potential syndicate members, prior to reliance being obtained.
Query whether the concept of Information is likely to be acceptable in this context.
6
Insert if letter is addressed to more than one prospective Lead Bank.
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4.
Third party rights
4.1
A person who is not a party to this letter has no right under the Contracts (Rights of
Third Parties) Act 1999 to enforce or to enjoy the benefit of any of its terms.
4.2
The consent of any person who is not a party to this letter is not required to rescind or
vary this letter at any time.
5.
Counterparts
This letter 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 letter.
6.
Entire agreement
This letter sets out the entire understanding between us in relation to the conditions upon
which the Report and the Information are provided to you.
7.
Governing law and jurisdiction
7.1
This letter (including the agreement constituted by your acknowledgement of its terms)
and any non-contractual claims arising from it are governed by English law.
7.2
The parties submit to the [exclusive]/[non-exclusive]7 jurisdiction of the English courts.
7.3
[Without prejudice to any other mode of service allowed under any relevant law you:
8.
(a)
irrevocably appoint [] as your agent for service of process in relation to any
proceedings before the English courts in connection with this letter and will
promptly deliver a copy of a letter from the agent accepting its appointment as
agent for service of process; and
(b)
agree that failure by a process agent to notify you of the process will not
invalidate the proceedings concerned.]8
Acknowledgement and acceptance
If you wish to receive a copy of the Report and the Information on the terms set out in
this letter, please record your agreement to the terms of this letter by signing the enclosed
copy of this letter and returning it to us, marked for the attention of [•].
Yours faithfully
[Report Provider]
7
To be determined in accordance with the relevant circumstances e.g. where the jurisdiction of incorporation of the
report provider is outside England and Wales then a non-exclusive jurisdiction clause may be appropriate.
8
Delete if the addressee is incorporated in England and Wales
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We confirm that we wish to receive a copy of the Report and the Information referred to in the
letter dated [insert date] from [Report Provider] on the basis of the terms set out in that letter.
Signed:
……………………………………………..
Name and position: ……………………………………………..
On behalf of [insert name of relevant bank or financial institution]
Date:
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SCHEDULE 2
LMA TEMPLATE RELIANCE LETTER
PRIVATE AND CONFIDENTIAL - RELIANCE LETTER
The Arranger, the Agent and [the Security Trustee][the Security Agent] (as such terms are
defined in the Facilities Agreement (as defined below)) and the Primary Syndicate Members
(as defined below).1
[Date]
Dear Sirs
[Insert description of deal (the "Proposed Transaction")]
In this letter:
"Addressee" means the Instructing Client and each person to whom this letter is addressed.
"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.
"Facilities" means [describe facilities and the purpose for which they have been provided].
"Facilities Agreement" means the facilities agreement dated [•] between, amongst others, []
(as the parent), [•] (as original borrowers), [•] (as original guarantors), [•] (as arranger, agent,
[security trustee] [security agent] and issuing bank) and certain lenders (as original lenders).
"Holding Company" means, in relation to a person, any other person in respect of which it is a
Subsidiary.
"Primary Syndicate Members" means [] and any lender under the Facilities Agreement who
(a) participates in the primary syndication of the Facilities and (b) has authorised (or before it
participates in the Facilities ratifies) the acceptance by the Arranger and/or the Agent of this
letter on its behalf2.
"Recipient Parties" means any entity to whom a duty of care is owed by [the Report Provider]
in connection with the Report.
1
If an Agent or Security Agent/Security Trustee has not been appointed at the date of the reliance letter, appropriate
consequential amendments to this letter will be required.
2
Note: The Facilities Agreement should be checked to ensure that it contains a provision reflecting the terms of
Clause 32.19 (Reliance and engagement letters) of the LMA Senior Multicurrency Term and Revolving Facilities
Agreement for Leveraged Acquisition Finance Transactions (Senior/Mezzanine) which provides a confirmation
from each Finance Party and each Secured Party (as defined therein) that the Arranger and Agent have the authority
to accept on its behalf (and that such entity will ratify the Agent or Arranger's acceptance on its behalf) the terms of
a reliance letter or engagement letter relating to any reports.
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"Related Fund" in relation to a fund (the "first fund"), means a fund which is managed or
advised by the same investment manager or adviser as the first fund or, if it is managed by a
different investment manager or adviser, a fund whose investment manager or adviser is an
Affiliate of the investment manager or adviser of the first fund.
"Subsidiary" means a subsidiary undertaking within the meaning of section 1162 of the
Companies Act 2006.
1.
Introduction
1.1
We refer to our report(s)3 dated [date of Report] on [insert name of company/group] (the
"[Company"/"Group"]) in connection with the Proposed Transaction (the "Report")
and prepared on the basis of the instructions set out in the engagement letter dated []
between us and [client name] (the "Instructing Client") (the "Engagement Letter").4
1.2
We understand that you have been provided with a copy of the Report and that you wish
to make copies of the Report available to prospective Primary Syndicate Members.
1.3
In consideration of us agreeing to assume a duty of care to you in relation to the Report,
you agree to the terms set out in this letter upon which we agree to assume a duty of care
to you and explain certain matters in respect of the Report.
2.
Scope of work
2.1
You understand that the Report was prepared solely on the instructions of the Instructing
Client. We have not verified the completeness and/or accuracy of the information
provided to or obtained by us.
2.2
[We have not undertaken any work or made any enquiries of the [Company's/Group's]
management in relation to the matters dealt with in the Report and no updates have been
made to the Report in each case since its date.]
2.3
If, prior to completion of the Proposed Transaction, we produce updated, supplemented
or amended versions of the Report on the instructions of the Instructing Client, we shall
promptly provide you with a copy of such Report. The terms of this letter shall apply to
all versions of the Report including any annexes or supplements thereto and if
applicable, the terms of this letter shall be regarded as having been amended to be
applicable to each version of the Report.
3.
Limitation on liability
3.1
The aggregate liability of [Report Provider] for all losses or damages (including interest
thereon, if any) and costs suffered or incurred, directly or indirectly, by the Recipient
Parties under or in connection with the Report (as the same may be amended or varied),
3
Consider including reference to multiple reports (for example in the case of a financial due diligence report and a
tax structure report prepared by the same report provider).
4
We have omitted the concept of Information from the Reliance Letter, in contrast to the Release Letter, on the basis
that it is unusual for reliance to be given in respect of ad hoc supplementary information and explanations, many of
which may be verbal, and on the basis that significant additional information is usually required to be documented
in amendments or updates to the written Report.
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including as a result of breach of contract, breach of statutory duty, tort (including
negligence), fault or other act or omission by [Report Provider] shall be limited to the
maximum amount of [•]5.
3.2
Nothing in this letter shall exclude or reduce our liability in respect of our fraud,
dishonesty or wilful default or for any other liability that cannot be excluded as a matter
of law.
3.3
We accept no duty of care to anyone other than the Addressees.
4.
Proportionality
[Our liability shall be limited to that proportion (the "Proportion") of the total loss or
damage, after taking into account your contributory negligence (if any) or the
contributory negligence (if any) of any other Addressees, which is just and equitable
having regard to the extent of our responsibility for the loss or damage concerned and the
extent of responsibility of any other party also responsible for such loss and damage. For
the purposes of determining the Proportion, no account shall be taken of any liability cap
agreed or imposed on the liability of any other party also responsible for such loss and
damage.]6
5.
Confidentiality and disclosure
5.1
Subject to paragraphs 5.2, 5.3 and 5.4 below, you agree not to disclose all or any part of
the Report to any other person by any means without our prior written consent, except to
the extent that disclosure is required by law or regulation, or required or requested by any
competent judicial, governmental, supervisory or regulatory body or required by the
rules of any stock exchange on which your or your Affiliates' shares or other securities
are listed. Whether or not we have given our consent, we will not accept any liability or
responsibility to any third party who may gain access to the Report.
5.2
You may make copies of the Report available to (i) your Affiliates and Related Funds
and your and their directors, officers and employees involved in considering the
Proposed Transaction and your and their financial and professional advisers;7 and (ii) any
potential lender who is considering providing finance for or otherwise participating in
the Proposed Transaction (who can in turn disclose the Report in the manner described in
point (i) of this paragraph 5.2), provided that in each case the person making the Report
available takes reasonable steps to ensure that the recipient understands that:
5
This language should be included where the concept of a liability cap has been commercially agreed between the
parties.
6
The guidelines agreed between the BVCA and certain accountancy firms in 1998 suggest that proportionality
language would be appropriate where the transaction size is greater than £55 million. The inclusion of this language
is, however, subject to commercial negotiation between the parties.
7
Disclosure is permitted to a recipient's "financial and professional" advisers to allow disclosure to financial advisory
firms (which are not members of professional bodies) who may require access to the report. Disclosure does not,
however, extend to professional advisors of directors, officers and employees. Whilst this omission may not be
relevant to an acquisition finance transaction, where such packages are an issue for the borrower and the target
group rather than the Finance Parties, Addressees may wish to consider whether an express authority for disclosure
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5.3
5.2.1
the Report is confidential and may not be disclosed to any other parties without
our prior written consent except to the extent that disclosure is required by law
or regulation, or required or requested by any competent judicial, governmental,
supervisory or regulatory body or required by the rules of any stock exchange
on which the shares or other securities of the recipient or any of its Affiliates are
listed;
5.2.2
they may use the Report only for the purposes of their consideration of matters
related to the Proposed Transaction and in the case of their financial and
professional advisers only for the purpose of advising on the Proposed
Transaction;
5.2.3
to the fullest extent permitted by law, we accept no responsibility or liability to
them, whether in contract, tort (including negligence) or otherwise in respect of
any use they may make of the Report and shall not be liable to them in respect
of any loss, damage or expense which is caused by their reliance upon the
Report.
The Agent and the Arranger may make copies of the Report available to prospective
Primary Syndicate Members and each prospective Primary Syndicate Member may make
copies of the Reports available to their Affiliates and their Related Funds, and their and
their Affiliates' and their Related Funds' directors, officers and employees involved in
considering the Proposed Transaction and their and their Affiliates' and their Related
Funds' financial and professional advisers8, provided that in each case the person making
the Report available takes reasonable steps to ensure that the recipient understands that:
5.3.1
the Report is confidential and may not be disclosed to any other parties without
our prior written consent except to the extent that disclosure is required by law
or regulation, or required or requested by any competent judicial, governmental,
supervisory or regulatory body or required by the rules of any stock exchange
on which the shares or other securities of the recipient or any of its Affiliates are
listed;
5.3.2
they may use the Report only for the purposes of their consideration of matters
related to the Proposed Transaction and in the case of their financial and
professional advisers only for the purpose of advising them in relation to their
consideration as to whether to become a Primary Syndicate Member; and
5.3.3
to the fullest extent permitted by law, we accept no responsibility or liability to
them, whether in contract, tort (including negligence) or otherwise in respect of
any use they may make of the Report and shall not be liable to them in respect
of any loss, damage or expense which is caused by their reliance upon the
Report until such time as, in the case of prospective Primary Syndicate
Members, they become a Primary Syndicate Member and the Agent and/or the
Arranger have signed this letter on their behalf.
to such persons would be useful in order to enable an informed negotiation of management incentives in the context
of a restructuring transaction.
8
See footnote 8 above.
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5.4
Nothing in this letter shall prevent you from disclosing all or any part of the Report (i) to
advance any defence that you or your Affiliates or your Related Funds may wish to
advance in any claim or proceeding in connection with the Proposed Transaction or (ii)
where it is reasonable to do so for the purpose of resolving any actual or potential dispute
to which you are a party in connection with the Proposed Transaction.
6.
General
6.1
If any term or provision of this letter is or becomes invalid, illegal or unenforceable, the
remainder shall survive unaffected.
6.2
We agree that we shall not use your name, or the fact that we are providing services to
you under the terms of this letter, for any marketing purposes without your prior consent.
6.3
Each Addressee's obligations under this letter are several and no Addressee is
responsible for any other Addressee's obligations under this letter.
7.
Third party rights
7.1
Unless expressly provided to the contrary in this letter, a person who is not a party to this
letter has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to
enjoy the benefit of any of its terms.
7.2
Notwithstanding any term of this letter, the consent of any person who is not a party to
this letter is not required to rescind or vary this letter at any time.
8.
Counterparts
This letter 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 letter.
9.
Entire agreement
This letter sets out the entire understanding between us in relation to the conditions upon
which the Report is provided to you.
10.
Governing Law and jurisdiction
10.1
This letter (including the agreement constituted by your acknowledgement of its terms)
and any non-contractual claims arising from it are governed by English law.
10.2
The parties submit to the [exclusive]/[non-exclusive]9 jurisdiction of the English courts.
10.3
[Without prejudice to any other mode of service allowed under any relevant law you:
(a)
9
irrevocably appoint [] as your agent for service of process in relation to any
proceedings before the English courts in connection with this letter and will
promptly deliver a copy of a letter from the agent accepting its appointment as
agent for service of process; and
To be determined in accordance with the relevant circumstances e.g. where the jurisdiction of incorporation of the
report provider is outside England and Wales then a non-exclusive jurisdiction clause may be appropriate.
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(b)
11.
agree that failure by a process agent to notify you of the process will not
invalidate the proceedings concerned.]10
Acknowledgement and acceptance
If you wish us to assume a duty of care to you on the terms set out above, please record
your agreement to the terms of this letter by signing the enclosed copy of this letter and
returning it to us, marked for the attention of [].
Yours faithfully
[Report Provider]
10
Delete if the addressee is incorporated in England and Wales
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We confirm our acceptance of the terms set out in the letter dated [insert date] from [Report
Provider].
The Arranger (for itself and for and on behalf of the Primary Syndicate Members)
Signed:
……………………………………………..
Name and position: ……………………………………………..
On behalf of [insert name of bank or financial institution]
Date:
………………………………………………
The Agent (for itself and for and on behalf of the Primary Syndicate Members)
Signed:
……………………………………………..
Name and position: ……………………………………………..
On behalf of [insert name of bank or financial institution]
Date:
………………………………………………
The [Security Trustee]/[Security Agent]
Signed:
……………………………………………..
Name and position: ……………………………………………..
On behalf of [insert name of bank or financial institution]
Date:
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