CM/CM
29072015/REDI27556.2
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APPLICABLE PRICING SUPPLEMENT
REDINK RENTALS (RF) LIMITED
(Incorporated in South Africa with limited liability under registration number 2015/090404/06)
Issue of R15 073 000 Secured Class A Notes
under its Secured Note Programme
Transaction No.2 – RentWorks Africa Proprietary Limited
Rental Receivables
This document constitutes the Applicable Pricing Supplement relating to the issue of
Notes described in this Applicable Pricing Supplement.
This Applicable Pricing Supplement must be read in conjunction with the Programme
Memorandum issued by Redink Rentals (RF) Limited, dated 29 May 2015. To the extent
that there is any conflict or inconsistency between the contents of this Applicable Pricing
Supplement and the Programme Memorandum, the provisions of this Applicable Pricing
Supplement shall prevail.
Any capitalised terms not defined in this Applicable Pricing Supplement shall have the
meanings ascribed to them in the section of the Programme Memorandum entitled
"Terms and Conditions of the Notes" or in the Common Terms Agreement in relation to
this Transaction No.2, dated on or about 17 August 2015. References in this Applicable
Pricing Supplement to the Terms and Conditions are to the section of the Programme
Memorandum entitled "Terms and Conditions of the Notes". References to any Condition
in this Applicable Pricing Supplement are to that Condition of the Terms and Conditions.
The Issuer certifies that to the best of its knowledge and belief there are no facts that
have been omitted from this Applicable Pricing Supplement which would make any
statement false or misleading and that all reasonable enquiries to ascertain such facts
have been made and that this Applicable Pricing Supplement contains all information
required by Applicable Law and the JSE Debt Listings Requirements. The Issuer accepts
full responsibility for the information contained in this Applicable Pricing Supplement, the
Programme Memorandum and the annual financial report and any amendment to the
annual financial report or any supplements from time to time, except otherwise stated
therein.
The Issuer certifies that the Principal Amount of the Notes to be issued and described in
this Applicable Pricing Supplement together with the aggregate Outstanding Principal
Amount of all other Notes in issue at the Issue Date will not exceed the Transaction Limit
as specified in item 59 below.
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DESCRIPTION OF THE TRANSACTION
1
Transaction No.2
Acquisition
by
the
Issuer
from
RentWorks Africa Proprietary Limited of
Sale Assets (as defined in the Sale
Agreement)
2
Seller
RentWorks Africa Proprietary Limited
3
Address, description and significant
business activities of the Seller
RentWorks Place, Turnberry Office Park,
48 Grosvenor Road, Bryanston
RentWorks Africa Proprietary Limited
provides asset rental and management
services. The company was established
in 1998 and was one of the first
companies to offer genuine residualbased rental solutions. For further
information,
please
see:
www.rentworks.co.za
4
Servicer
FRS Rental Services Proprietary Limited
5
Back-up Servicer
N/A
6
Description of the Business Activities of
the Administrator
TMF Corporate Services (South Africa)
Proprietary Limited is part of the TMF
Group, a provider of financial, legal and
HR services in more than 80 countries.
The TMF Group is one of the largest
independent
administrators
of
structured finance entities in the world,
with teams located in all key onshore
and offshore locations. They are experts
in structured finance and provide
services to more than 2,000 special
purpose vehicles around the globe
7
Description of assets to be acquired
("Sale Assets")
All the right, title and interest of the
Seller a) to receive Rental Payments, as
such term is defined in the Sale
Agreement
("Sale
Assets
Agreement
Payments")
payable
under
the
Rental
Agreement which forms the
subject of Transaction 2 ("Sale
Assets Agreement") and as
specified in a Sale Notice to the
Sale Agreement; and
b) to enforce payment of the Sale
Assets Agreement Payments;
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c) in the account nominated in
writing by the Seller into which
the Obligor must make payment
of all amounts owing under the
relevant Sale Assets Agreement,
whether by electronic funds
transfer or in terms of a debit
order instruction;
d) the relevant equipment (as
described in the Sale Notice to
the Sale Assets Agreement);
e) the Sale Assets Agreement,
other than in respect of the
Seller's right, title and interest in
and to Excluded Amounts, such
amounts being those amounts
which
are
relevant
to
Transaction 2 and which are
specified as Excluded Amounts/
Claims in the Sale Notice to the
Sale Agreement; and
f) the relevant collateral security,
that is, the relevant Rental
Collateral Security as specified in
the Sale Notice to the Sale
Agreement.
Please see Annexure B, which
contains the relevant extracts from
the Sale Agreement and Annexure
C, which includes the relevant
extracts from the Sale Notice
8
Description of Security to be provided
to Secured Creditors of Transaction
No.2
Pursuant
to
the
Security
SPV
Guarantee,
dated
on
or
about
21 August 2015 ("Transaction No.2
Security
SPV
Guarantee"),
the
Security SPV undertakes in favour of
each Secured Creditor of Transaction
No.2 to pay to it the full amount then
owing to it by the Issuer if an Event of
Default should occur under the Notes or
the respective Transaction Documents
in relation to Transaction No.2.
The liability of the Security SPV
pursuant to the Transaction No.2
Security SPV Guarantee will be limited
in the aggregate of the net amount
recovered by the Security SPV from the
Issuer arising out of the Issuer
Indemnity,
dated
on
or
about
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17 August 2015 ("Transaction No.2
Issuer Indemnity"), in terms of which
the
Issuer
irrevocably
and
unconditionally indemnifies the Security
SPV from and holds the Security SPV
harmless against all and any claims
arising out of, or in the enforcement of,
the Transaction No.2 Security SPV
Guarantee.
The Issuer's obligations in terms of the
Transaction No.2 Issuer Indemnity are
secured by the cession in securitatem
debiti agreement, dated on or about
17 August 2015, ("Transaction No.2
Security Agreement") in terms of
which the Issuer cedes in securitatem
debiti to and in favour of the Security
SPV all of the Ceded Rights, where
"Ceded Rights" means all the Issuer's
rights, title and interests in and to (a) the bank account opened in the
name of the Issuer with Nedbank
Limited,
account
number
1110818688 , into which all
monies received or to be
received by the Issuer in relation
to Transaction No.2 will be
deposited ("Transaction No.2
Transaction Account");
(b)
all monies held from time to time
in the name of or on behalf of the
Issuer in the Transaction No.2
Transaction Account;
(c)
any Permitted Investment (as
defined
in
the
Programme
Memorandum) to be made by the
Issuer (or the Administrator on
behalf of the Issuer) with cash
standing to the credit of the
Transaction
No.2
Transaction
Account from time to time;
(d)
the Transaction Documents (as
set out below) in relation to
Transaction No.2; and
(e)
the Sale Assets (as defined in the
Sale Agreement, and specifically
described in 7 above),
in relation to Transaction No.2, whether
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actual, prospective or contingent, direct
or indirect, common law or statutory,
whether a claim to payment of money
or to performance of any other
obligation, and whether or not the said
rights and interests were within the
contemplation of the parties at the Date
of Signature of the Security Agreement
9
Transaction Documents
The
documents
constituting
the
transaction titled "Transaction No.2 –
RentWorks Africa Proprietary Limited –
Rental Receivables", being –
(a)
the
Transaction
Indemnity;
No.2
(b)
the Transaction No.2 Security SPV
Guarantee;
(c)
the Transaction
Agreement;
(d)
each Note;
(e)
the Sale Agreement;
(f)
the Servicing Agreement;
(g)
the Preference Share Subscription
Agreement;
(h)
the Note Subscription Agreement
(if applicable); and
(i)
the Common Terms Agreement
No.2
Issuer
Security
DESCRIPTION OF THE NOTES
10
Issuer
Redink Rentals (RF) Limited
11
Status and Class of the Notes
Secured Class A Notes
12
Tranche number
1
13
Series number
2
14
Aggregate
Tranche
15
Issue Date
31 August 2015
16
Minimum Denomination per Note
R1 000 000
17
Issue Price
100%
Principal
Amount
of
this
R15 073 000
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18
Applicable Business Day Convention
Following Business Day
19
Determination Date
means the last day of each calendar
month
20
Interest Commencement Date
31 August 2015
21
Final Redemption Date
5 July 2018, subject to Clause 8 of the
Sale Agreement
Please see Annexure B, which
contains the relevant extracts from
the Sale Agreement
22
Repayment of principal
Principal will be repaid during the term
of the Notes on each Payment Date, as
set out in Annexure D
23
Use of Proceeds
The net proceeds of the issue of this
Tranche will be used to purchase Sale
Assets as described under item 7 above
24
Specified Currency
Rand
25
Hedge Counterparty
N/A
26
Safe Custody Agent
Nedbank Limited
27
Senior Expense Facility Provider(s)
N/A
28
Account Bank
Nedbank Limited
29
Calculation Agent, if not TMF Corporate
Services (South Africa) Proprietary
Limited ("TMF")
N/A
30
Specified Office of the Calculation
Agent
36th Floor
World Trade Centre
Cnr West Road South and Lower Road
Sandton
2196
31
Transfer Agent, if not TMF
N/A
32
Specified Office of the Transfer Agent
36th Floor
World Trade Centre
Cnr West Road South and Lower Road
Sandton, 2196
33
Paying Agent, if not Nedbank Limited
N/A
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34
Specified Office of the Paying Agent
36th Floor
World Trade Centre
Cnr West Road South and Lower Road
Sandton, 2196
FIXED RATE NOTES
35
Fixed Interest Rate
N/A
36
Payment Date(s)
N/A
37
Interest Period(s)
N/A
38
Any other items relating to the
particular method of calculating interest
N/A
FLOATING RATE NOTES
39
Payment Date(s)
5 October, 5 January, 5 April and 5 July,
or if such a day is not a Business Day,
the immediately following Business Day.
40
Interest Commencement Date
31 August 2015
41
Manner in which the Interest Rate is to
be determined
Screen Rate Determination
42
Margin/Spread for the Interest Rate
450 basis points to be added to the
Reference Rate
43
If ISDA Determination
44
45
(a)
Floating Rate Option
N/A
(b)
Designated Maturity
N/A
(c)
Reset Date(s)
N/A
If Screen Determination
(a)
Reference
Rate
(including
relevant period by reference to
which the Interest Rate is to be
calculated)
3 month JIBAR
(b)
Rate Determination Date(s)
The first Business Day of each Interest
Period
(c)
Relevant Screen
Reference Code
page
and
If Interest Rate to be calculated
otherwise than by reference to the
previous two sub-clauses above, insert
ZAR-JIBAR-SAFEX
N/A
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basis
for
determining
Interest
Rate/Margin/Fall back provisions
46
If different from the Calculation Agent,
agent
responsible
for
calculating
amount of interest
N/A
47
Any other terms relating to the
particular method of calculating interest
N/A
GENERAL
48
Additional selling restrictions
49
International
(ISIN)
50
Stock Code
RED201
51
Financial Exchange
JSE Interest Rate Market
52
Dealer(s)
N/A
53
Method of distribution
Private Placement
54
Rating assigned to this Tranche of
Notes (if any)
N/A
55
Rating Agency
N/A
56
Governing Law
South Africa
57
Last Day to Register
By 17h00 on 30 September, 31
December, 31 March and 30 June until
the Final Maturity Date
58
Books Closed Period
The Register will be closed from 1
October to 4 October, 1 January to 4
January, 1 April to 4 April and 1 July to
4 July (all dates inclusive) in each year
until the Final Maturity Date.
59
Transaction Limit
R10 000 000 000
60
Aggregate
Outstanding
Principal
Amount of Notes in issue on the issue
Date of this Tranche
R20 000 000, excluding this Tranche of
Notes and any other Tranche(s) of
Notes to be issued on the Issue Date
Securities
N/A
Numbering
ZAG000129180
OTHER PROVISIONS
61
Description of additional Terms and
Conditions relating to the Notes and/or
amendments
to
the
Priority
of
Payments
1.
The Pre-Enforcement Priority of
Payments as contained in the
Programme
Memorandum
is
amended as set out in Annexure A;
2.
The Post-Enforcement Priority of
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Payments as contained in the
Programme
Memorandum
is
amended as set out in Annexure A;
3.
RentWorks
Africa
Proprietary
Limited as Seller under the Sale
Agreement is a Secured Creditor for
purposes of and as set out in the
Post-Enforcement
Priority
of
Payments;
4.
In terms of the Sale Agreement,
after delivery of an Enforcement
Notice
and
subject
to
the
Post-Enforcement
Priority
of
Payments, the Seller shall, pro rata
and
pari
passu
with
the
Noteholders, be entitled to receive
an amount in the ratio which the
Seller's Claim in respect of the
Residual Value bears to the
Noteholders' claims under the
Transaction at that time;
5.
After payment of the Seller's Claim
in respect of the Residual Value to
the Seller, the Seller shall be
entitled to receive an amount equal
to the Residual Value Differential;
6.
The "Seller's Claim in respect of
the Residual Value” shall in all
instances be the Residual Value
plus interest from the date of
issuance of the Notes to the date of
delivery of the Enforcement Notice,
at the weighted average rate equal
to the Interest Rate applicable to
the Notes plus the margin referred
to in 42 above;
7.
The "Residual Value" shall be the
amount as specified in the relevant
Sale Notice;
8.
The "Residual Value Differential"
shall be –
(a)
the difference between the
Residual Value calculated at
the Seller's standard internal
rate of return from time to
time; and
(b)
the amount of the Seller's
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Claim in respect
Residual Value.
of
the
ADDITIONAL INFORMATION
62
(a)
number and value of assets
1 (one) Sale Asset with an aggregate
gross rental value of R15 700 000
Please see Annexure C, which
includes the relevant extracts from
the Sale Notice
(b)
the seasoning of the assets
N/A
(c)
rights of recourse against the
originator to the extent allowed
in law, including a list of
material representations and
warranties given to the Issuer
relating to the Sale Assets
See clause 5 of the Sale Agreement
rights to substitute the assets
and the qualifying criteria
See clause 5.5 of the Sale Agreement
the
treatment
of
amortisation of the assets
See clause 8 of the Sale Agreement
(d)
(e)
(f)
early
Please see Annexure B, which
contains the relevant extracts from
the Sale Agreement
Please see Annexure B, which
contains the relevant extracts from
the Sale Agreement
Please see Annexure B, which
contains the relevant extracts from
the Sale Agreement
level of concentration of the
obligors in the asset pool,
identifying obligors that account
for 10% or more of the asset
value
100%
(g)
where there is no concentration
of obligors above 10%, the
general
characteristics
and
descriptions of the obligors
N/A
(h)
Financial
lessee
The annual financial statements of Basil
Read Mining SA Proprietary Limited will
be made available within six months
from the date of its financial year end,
at the request of the Seller and / or
Issuer, and will be made available at
www.redinkrentals.co.za
(i)
Financial year end of lessee
statements
for
the
Basil Read
Limited
Mining
SA
Proprietary
The financial year end of Basil Read
Mining SA Proprietary Limited is
31 December
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(j)
Availability of this
Pricing Supplement
Applicable
This Applicable Pricing Supplement will
be
made
available
at
www.redinkrentals.co.za
63
Legal jurisdiction where the Eligible
Assets are situated
South Africa
64
Eligibility Criteria
See Annexures C and D of the Sale
Agreement
Please see Annexure B, which
contains the relevant extracts from
the Sale Agreement
DISCLOSURE REQUIREMENTS IN TERMS OF PARAGRAPH 3(5) OF THE
COMMERCIAL PAPER REGULATIONS
65
At the date of this Applicable Pricing Supplement:
66
Paragraph 3(5)(a)
The ultimate borrower is the Issuer.
67
Paragraph 3(5)(b)
The Issuer is a going concern and can in all circumstances be reasonably expected
to meet its commitments under the Notes.
68
Paragraph 3(5)(c)
The auditor of the Issuer is Sizwe Ntsaluba Gobodo.
69
Paragraph 3(5)(d)
As at the date of this issue:
the Issuer has not issued any Notes (excluding Notes issued under this Applicable
Pricing Supplement); and
it is anticipated that the Issuer will issue ZAR500 000 000 Notes during its current
financial year (including Notes issued under this Applicable Pricing Supplement).
70
Paragraph 3(5)(e)
Prospective investors in the Notes are to consider this Applicable Pricing
Supplement, the Programme Memorandum and the documentation incorporated
therein by reference in order to ascertain the nature of the financial and
commercial risks of an investment in the Notes. In addition, prospective investors
in the Notes are to consider the latest audited financial statements of the Issuer
which are incorporated into the Programme Memorandum by reference and which
may be requested from the Issuer.
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71
Paragraph 3(5)(f)
There has been no material adverse change in the Issuer’s financial position since
the date of its last audited financial statements.
72
Paragraph 3(5)(g)
The Notes issued will be listed.
73
Paragraph 3(5)(h)
The funds to be raised through the issue of the Notes are to be used by the Issuer
for its general corporate purposes and / or to refinance the amounts outstanding
under existing Notes in issue.
74
Paragraph 3(5)(i)
The Notes are secured.
75
Paragraph 3(5)(j)
Sizwe Ntsaluba Gobodo, the auditor of the Issuer, has confirmed that nothing has
come to its attention to indicate that this issue of Notes issued under the
Programme will not comply in all respects with the relevant provisions of the
Commercial Paper Regulations.
The Transaction Documents are available for inspection by Noteholders, during normal
office hours, at the Specified Office of the Issuer.
Investor reports will be made available at www.redinkrentals.co.za.
Application is hereby made to list this Tranche of Notes, as from 27 August 2015,
pursuant to the Redink Rentals (RF) Limited Secured Note Programme.
REDINK RENTALS (RF) LIMITED
By:
_____________________________
By:
Director, duly authorised
_________________________
Director, duly authorised
Paul Lutge
Name: _____________________________
Name:
R. Thanthony
27 August 2015
Date: _____________________________
Date:
27 August 2015
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ANNEXURE A – PRIORITY OF PAYMENTS
1
Pre-Enforcement Priority of Payments
1.1
In relation to each Transaction, the funds standing to the credit of the relevant
Transaction Account as determined on each Determination Date and the Senior
Expense Reserve (if required), will be applied on each Payment Date in
relation to that Transaction, after taking into account Excluded Amounts, in the
order of priority set out below. Prior to the delivery of an Enforcement Notice
in respect of that Transaction, this pre-enforcement priority of payments shall
apply and payments will be made in the following order -
1.1.1
first, to pay or provide for the Issuer's liability or potential liability for Tax
and any statutory fees, costs and expenses, attributable to the receipts or
accruals made by the Issuer under that Transaction;
1.1.2
second, to pay or provide for pari passu and pro rata -
1.1.2.1
the remuneration due and payable to the Security SPV and/or the
Security SPV Owner Trustee (inclusive of VAT, if any) and any fees,
costs, charges, liabilities and expenses (inclusive of VAT, if any)
incurred by the Security SPV and/or the Security SPV Owner Trustee
under the provisions of the Security Agreements and/or any of the
Programme Documents, in relation to the Transaction, and/or the
Notes;
1.1.2.2
the remuneration due and payable to the Issuer Owner Trustee
(inclusive of VAT, if any) and any fees, costs, charges, liabilities and
expenses (inclusive of VAT, if any) incurred by the Issuer Owner
Trustee under the provisions of the Security Agreements and/or any
of the Programme Documents, in relation to the Transaction, and/or
the Notes; and
1.1.2.3
all fees, costs, charges, liabilities and expenses (inclusive of VAT, if
any) incurred by the Issuer in relation to the Transaction, which are
due and payable to third parties and incurred without breach by the
Issuer of its obligations under the Programme Documents and not
provided for payment elsewhere (including payment of the Rating
Agency, the Safe Custody Agent, the JSE, the audit fees, legal fees,
the directors of the Issuer and company secretarial expenses);
1.1.3
third, to pay or provide for pari passu and pro rata -
1.1.3.1
the fee due and payable to the Servicer (inclusive of VAT, if any)
together with costs and expenses which are due and payable to the
Servicer under the Servicing Agreement;
1.1.3.2
the fee due and payable to the Administrator (inclusive of VAT, if
any) together with costs and expenses which are due and payable to
the Administrator under the Administration and Agency Agreement;
1.1.3.3
all amounts due and payable or accrued to the Transfer Agent,
Calculation Agent and Paying Agent in relation to the Transaction, in
accordance with the Administration and Agency Agreement; and
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1.1.3.4
all amounts due and payable or accrued to the Arranger and/or the
Debt Sponsor in relation to the Transaction, in accordance with the
Programme Agreement;
1.1.4
fourth, to pay or provide for any net settlement amounts and Hedge
Termination Amounts due and payable to any Hedge Counterparty, in
relation to the Transaction, in accordance with the Hedging Agreements
(but excluding any Hedge Termination Amounts where the Hedge
Counterparty is in default) and swap reinstatement payments due and
payable in respect of a new Hedge Counterparty, in relation to the
Transaction;
1.1.5
fifth, to pay or provide for pari passu and pro rata, all amounts of
interest, fees and other expenses due and payable to the Noteholders in
respect of the Notes on each Payment Date;
1.1.6
sixth, to pay or provide for, pari passu and pro rata, all amounts of
principal due and payable to the Noteholders on that Payment Date or
Final Redemption Date, as the case may be;
1.1.7
seventh, to pay or credit funds to the Senior Expense Reserve, in order to
fund the Senior Expense Reserve up to the Senior Expense Reserve
Required Amount;
1.1.8
eighth, to pay or provide for, Hedge Termination Amounts due and
payable to any Hedge Counterparty in accordance with the Hedging
Agreements where the Hedge Counterparty is in default;
1.1.9
ninth, to pay or provide for, the Programme Management Fee (inclusive
of VAT, if any) due and payable to the Programme Manager in accordance
with the Programme Management Agreement;
1.1.10
tenth, to pay or provide for, all amounts, interest and principal due and
payable to the Senior Expense Facility Provider(s) in accordance with the
Senior Expense Facility Agreement;
1.1.11
eleventh, to pay or provide for, any other fees, interest, costs or
expenses due and payable under any Tranche of Notes or any Programme
Document in relation to the Transaction, which have not previously been
paid;
1.1.12
twelfth, to pay or provide for dividends payable to the Preference
Shareholders; and
1.1.13
thirteenth, to pay or provide for dividends payable to the holder of the
ordinary shares in the issued share capital of the Issuer.
2
2.1
Post-Enforcement Priority of Payments
In relation to each Transaction, after taking into account Excluded Amounts,
the funds standing to the credit of the relevant Transaction Account and the
Senior Expense Reserve (if required), after the delivery of an Enforcement
Notice will be applied in the order of priority set out below -
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2.1.1
first, to pay or provide for the Issuer's liability or potential liability for Tax
and any statutory fees, costs and expenses, attributable to the receipts or
accruals made by the Issuer under that Transaction;
2.1.2
second, to pay all amounts payable by the Issuer under the Issuer
Indemnity;
2.1.3
third, to pay or provide for pari passu and pro rata -
2.1.3.1
the remuneration due and payable to the Security SPV and/or the
Security SPV Owner Trustee (inclusive of VAT, if any) and any fees,
costs, charges, liabilities and expenses (inclusive of VAT, if any)
incurred by the Security SPV and/or the Security SPV Owner Trustee
under the provisions of the Security Agreements and/or any of the
Programme Documents, in relation to the Transaction, and/or the
Notes;
2.1.3.2
the remuneration due and payable to the Issuer Owner Trustee
(inclusive of VAT, if any) and any fees, costs, charges, liabilities and
expenses (inclusive of VAT, if any) incurred by the Issuer Owner
Trustee under the provisions of the Security Agreements and/or any
of the Programme Documents, in relation to the Transaction, and/or
the Notes;
2.1.3.3
all fees, costs, charges, liabilities and expenses (inclusive of VAT, if
any) incurred by the Issuer in relation to the Transaction, which are
due and payable to third parties and incurred without breach by the
Issuer of its obligations under the Programme Documents and not
provided for payment elsewhere (including payment of the Rating
Agency, the JSE, the Safe Custody Agent, audit fees, legal fees, the
directors of the Issuer and company secretarial expenses);
2.1.4
fourth, to pay or provide for pari passu and pro rata -
2.1.4.1
the fee due and payable to the Servicer (inclusive of VAT, if any)
together with costs and expenses which are due and payable to the
Servicer under the Servicing Agreement;
2.1.4.2
the fee due and payable to the Administrator (inclusive of VAT, if
any) together with costs and expenses which are due and payable to
the Administrator under the Administration and Agency Agreement;
2.1.4.3
all amounts due and payable or accrued to the Transfer Agent,
Calculation Agent and Paying Agent in relation to the Transaction, in
accordance with the Administration and Agency Agreement; and
2.1.4.4
all amounts due and payable or accrued to the Arranger and/or the
Debt Sponsor in relation to the Transaction, in accordance with the
Programme Agreement;
2.1.5
2.1.5.1
fifth, to pay or provide for pari passu and pro rata –
any net settlement amounts and Hedge Termination Amounts due
and payable to any Hedge Counterparty, in relation to the
Transaction, in accordance with the Hedging Agreements (but
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excluding any Hedge Termination Amounts where the Hedge
Counterparty is in default);
2.1.5.2
all amounts of interest and principal due and payable to the relevant
Noteholders in respect of the Notes;
2.1.5.3
the Seller's Claim in respect of the Residual Value to the Seller;
2.1.6
sixth, to pay or provide for, the Residual Value Differential to the Seller;
2.1.7
seventh, to pay or provide for, the Hedge Termination Amounts due and
payable to any Hedge Counterparty, in relation to the Transaction, in
accordance with the Hedging Agreements where the Hedge Counterparty
is in default;
2.1.8
eighth, to pay or provide for, the Programme Management Fee (inclusive
of VAT, if any) due and payable to the Programme Manager in accordance
with the Programme Management Agreement;
2.1.9
ninth, to pay or provide for, all amounts, interest and principal due and
payable to the Senior Expense Facility Provider(s) in accordance with the
Senior Expense Facility Agreement;
2.1.10
tenth, to pay or provide for, any other fees, interest, costs or charges due
and payable under any Tranche of Notes or any Programme Document in
relation to the Transaction, which have not previously been paid;
2.1.11
eleventh, to pay or provide for dividends payable to the Preference
Shareholders; and
2.1.12
twelfth, to pay or provide for dividends payable to the holder of the
ordinary shares in the issued share capital of the Issuer.
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ANNEXURE B – EXTRACTS FROM SALE AGREEMENT
[…]
1
INTERPRETATION
[…]
1.4
The following expressions shall bear the meanings assigned to them below and
cognate expressions shall bear corresponding meanings […]
1.4.26
"Rental Agreement" -
1.4.26.1
an agreement for the rental of certain Equipment concluded by the
Seller and a Lessee/Renter; or
1.4.26.2
an agreement for the rental of certain Equipment concluded by a
Rentor and a Lessee/Renter and ceded to the Seller,
which agreement -
1.4.26.3
shall be in a form approved by the Seller and the Issuer from time to
time (it is agreed that, as at the effective date hereof, the rental
agreement may be in the form of either a singular (once off) rental
agreement or in the form of a rental schedule to the master rental
agreement concluded between the Rentor and the Lessee/Renter or
between the Seller and the Lessee/Renter ("Master Rental
Agreement"), each such rental schedule constituting an
independent rental agreement upon the terms and the conditions of
the Master Rental Agreement and the said rental schedule); and
1.4.26.4
shall not incorporate an option or a right on the part of the
Lessee/Renter to acquire ownership of the Equipment at any time
during or after termination of the agreement, or, if such option is
given, is only given to a Lessee/Renter in circumstances where the
transaction falls outside of the application of the National Credit Act
("NCA") by virtue of the transaction size and/or the Lessee/Renter
being a juristic person whose asset value/ annual gross turnover of
the Lessee/Renter exceeds the thresholds determined under the NCA
from time to time or by virtue of the Lessee/Renter being an organ
of state or by virtue of any further exemptions or exclusions enacted
under the NCA from time to time,
and which agreement forms the subject of a Sale Notice which is duly
accepted by the Issuer in terms of 3.2. For the sake of clarity, where the
Obligor has contracted with the Seller or the Rentor or the Originator for
the acquisition, rental or use of equipment which is exclusively software
or software systems, such agreement shall, for the purposes of this
Agreement, the Servicing Agreement and the Programme, be classified as
an Eligible Securities Agreement;
[…]
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1.4.32
"Sale Assets" - all the right, title and interest of the Seller in -
1.4.32.1
the Receivables;
1.4.32.2
the Account (to the extent that the monies in the Account represent
Sale Assets Agreement Payments which are collected by the Seller
on behalf of the Servicer and/or the Issuer from time to time in
terms of a sub-contracting agreement between the Servicer and the
Seller or any other agreement between the Issuer and the Seller);
1.4.32.3
the Equipment (if applicable), including the right to receive the
Insurance Proceeds and Sale Proceeds upon the occurrence of an
event of default during the Initial Term of the Rental Agreement as
set out in 7.4 of this Agreement. For all purposes hereof, the Issuer
acknowledges and agrees that, notwithstanding anything to the
contrary in this Agreement, the Sale Assets under Sale Assets
Agreements which are ceded to the Seller by a Rentor or an
Originator and which are sold and ceded to the Issuer in terms
hereof are limited to the rights sold and ceded to the Seller under
the sale and cession agreement concluded between such Rentor or
the Originator and the Seller;
1.4.32.4
the Sale Assets Agreement, other than in respect of the Seller's
right, title and interest in and to the Excluded Amounts/Claims; and
1.4.32.5
the Rental Collateral Securities or Eligible Securities Collateral, as
the case may be;
[…]
5
REPRESENTATIONS AND WARRANTIES
5.1
Representations and Warranties by the Seller
The Seller represents and warrants to the Issuer in respect of the Sale Assets
sold to it that, as at the relevant Transfer Date of such Sale Assets -
5.1.1
it has been duly incorporated as a company with limited liability in
accordance with the laws of the RSA, is validly existing under those laws
and has power and authority to carry on its business as it is now being
conducted;
5.1.2
it has full power and authority to enter into and perform its obligations (if
any) under the Sale Assets Agreement and the Rental Collateral Security
and/or Eligible Securities Collateral and to exercise its rights thereto (if
any);
5.1.3
the Seller has or will have, immediately after it has paid the relevant
supplier or Originator or Rentor, as the case may be, from the proceeds
of the Purchase Price received from the Issuer, title and full power and
authority to sell the Sale Assets as provided in this Agreement and, the
Sale Assets are, upon payment having been effected to the supplier,
Originator or Rentor, as the case may be, the exclusive property of the
Seller, free of all encumbrances and rights of set-off, counterclaim or
other equity;
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5.1.4
in the case of a Rental Agreement, the Rental Agreement and the Rental
Collateral Security as attached or specified in the relevant Sale Notice
contain all the contractual arrangements between the Seller and the
Lessee/Renter concerning the Equipment;
5.1.5
the Seller has not made any representations or warranties to the
Lessee/Renter in relation to the taxation or accounting treatment of the
Rental Agreement;
5.1.6
no litigation or other dispute proceeding has been notified or threatened
in relation to the Sale Assets Agreement or any Rental Collateral Security
or Eligible Securities Collateral of which the Seller is aware;
5.1.7
there has been no default or event of default (howsoever described in the
Sale Assets Agreement) in relation to the Sale Assets Agreement or any
Rental Collateral Security or Eligible Securities Collateral pertinent thereto
of which the Seller is aware; provided that the Seller shall not be in
breach of this warranty if the default of the Lessee/Renter relates to
payment of Interim Rentals or Sale Assets Agreement Payments not sold,
to the extent that such default has not persisted for a duration of longer
than three months as reckoned from the first payment date as defined or
envisaged in the Rental Agreement;
5.1.8
the Sale Assets Agreement and Rental Collateral Securities or Eligible
Securities Collateral are in all respects legally binding and otherwise in
order and valid and will have been duly completed and signed by or on
behalf of the parties thereto, who are fully aware of all the terms,
conditions and stipulations thereof;
5.1.9
the Equipment or, if applicable, the software subject of an Eligible
Securities Agreement, has been or will be delivered to the Obligor;
5.1.10
except as otherwise disclosed, no guarantee has been given or
representation has been made by the Seller to the Obligor in respect of
the suitability or otherwise of the Equipment or any software subject of a
Sale Assets Agreement or any part thereof;
5.1.11
all facts and circumstances material to the transaction known to the
Seller as at the Transfer Date and not known to the Issuer and which
would be reasonably likely to be material to the Issuer and/or to the
Purchase Price have been disclosed to the Issuer, (including but not
limited to the details required to be delivered to the Issuer in terms of
3.1.4);
5.1.12
the Rental Agreement will comply with such requirements pertaining to
the Public Finance Management Act, 1999, Local Government Municipal
Finance Management Act, 2003, and the regulations thereto in
accordance with such requirements or approvals as may have been
reasonably stipulated by the Issuer from time to time in writing, provided
that it shall be deemed that the Seller has complied with this warranty if
the Issuer has provided such documentation as the Issuer may have
stipulated in this regard and the Issuer has accepted the same and has
purchased the Rental Agreement;
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5.1.13
to the best of its knowledge, all documentation executed by or on behalf
of an Obligor has been properly executed by person(s) that prima facie
are duly authorised thereto and, where necessary, is properly registered
and stamped; and
5.1.14
the Sale Assets comply with the Eligibility Criteria, as set out in [the
Annexure below] […].
5.2
Undertakings by the Seller
The Seller will not, without the Issuer's prior consent -
5.2.1
do anything which would result in any waiver, set-off or reduction arising
in respect of the Obligor's (or any provider of any Rental Collateral
Security or Eligible Securities Collateral) obligations under any Sale
Assets Agreement or any Rental Collateral Security or Eligible Securities
Collateral forming the subject of any Sale Notice accepted by the Issuer
insofar as they relate to the Sale Assets; or
5.2.2
do anything to modify the Sale Assets Agreement or any Rental Collateral
Security or Eligible Securities Collateral in any way insofar as they relate
to the Sale Assets.
5.3
No Other Reliance
The Issuer acknowledges that, other than the representations made in 5.1, it
has not relied upon any representations made by the Seller to induce it to
purchase any Sale Assets. Without derogating from the generality of the
aforegoing, the Issuer specifically acknowledges and agrees that the Seller has
not undertaken any investigation and/or assessment into the financial
conditions and/or creditworthiness of the Obligor and that it makes no
representations and assumes no risk whatsoever in that regard.
5.4
Undertakings by the Issuer
Unless necessary for the Issuer to enforce its rights under this Agreement, or
under any other agreement, the Issuer will not communicate with the Obligor
in any manner in relation to this Agreement or the Sale Assets or the Sale
Assets Agreement or any Rental Collateral Security or Eligible Securities
Collateral nor send any promotional material, bank statements, auditor's
confirmation certificates or similar material to the Obligor for the duration of
this Agreement.
5.5
Indemnity by the Seller/Repurchase Obligations of the Seller
5.5.1
Subject to 5.6, the Seller shall indemnify the Issuer, upon first written
demand, against any loss, liability, expense and/or any costs incurred by
the Issuer arising out of the non performance of or breach of any
obligation of the Seller under this Agreement or the Sale Assets
Agreement and/or a breach by the Seller of any of the representations,
warranties and undertakings contained in 5.1 and 5.2 of this Agreement.
5.5.2
The Issuer undertakes to notify the Seller in writing of any event referred
to in 5.5.1 in respect of which it has a claim against the Seller under the
above indemnity. The Seller shall be entitled (but not obliged), in its sole
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discretion, and within five Business Days of receipt of the Issuer's notice
and, upon written notice to the Issuer, to elect to repurchase the relevant
Sale Asset ("Affected Asset") if the event referred to in 5.5.1 relates to a
Sale Asset or Sale Asset Agreement, upon the following terms and
conditions 5.5.2.1
the consideration payable by the Seller to the Issuer on any such
repurchase of an Affected Asset ("Repurchase Price") shall be
calculated in the same manner as the settlement amount referred to
in 8.1 below or, subject to the prior written consent of the Security
SPV, such lesser amount as may be agreed between the parties at
the time. The Seller shall pay the Repurchase Price to the Issuer not
later than three Business Days after it has notified the Issuer of its
election to repurchase the Affected Asset;
5.5.2.2
upon receipt of the Repurchase Price, the Issuer shall deliver the
Sale Assets Agreement and the Rental Collateral Securities or
Eligible Securities Collateral in respect of the Affected Asset to the
Seller and the Issuer’s right, title and interest in and to the Sale
Assets Agreement and the Rental Collateral Securities or Eligible
Securities Collateral in question, together with ownership in the
Equipment subject of the Rental Agreement (if any), shall be
deemed to have been ceded and transferred back to the Seller upon
such delivery, provided that the non-delivery of the documents shall
not affect the validity of the aforesaid cession of the Issuer’s right,
title and interest in and to the Affected Asset and/or the Sale Assets
Agreement and/or the Rental Collateral Securities or the Eligible
Securities Collateral in question, if the Seller elects in its discretion
not to require the same and/or does not receive the same for any
reason whatsoever.
5.5.3
For the avoidance of doubt -
5.5.3.1
the Seller shall always have the right to dispute any claim which the
Issuer may have against the Seller under the indemnity referred to
in 5.5.1 after payment of the amount claimed by the Issuer under
5.5.1 or payment of the Repurchase Price under 5.5.2 above;
5.5.3.2
the Issuer and the Security SPV agree that the Seller's liability to the
Issuer for any and all claims, losses, damages or expenses from any
cause whatsoever shall in no event exceed the amounts as would be
payable by the Seller to the Issuer in respect of the Affected Asset
had the Seller elected to repurchase the Affected Asset in terms of
this 5.5 plus arrear interest plus legal costs on a party and party
scale.; and
5.5.3.3
in no event shall the Seller be liable to the Issuer or any third party
for any claim, loss, expense, harm or damage to such party arising
directly or indirectly as a result of the Obligor’s inability to pay any
amounts owing under the Sale Assets Agreement or under this
Agreement.
5.6
Notwithstanding anything to the contrary contained in this Agreement, neither
party shall be liable to the other party for any indirect or consequential loss or
damage, including without limitation, loss of profit, revenue, anticipated
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savings, business transactions or goodwill or other Sale Asset Agreements
unless such indirect or consequential loss or damage resulted from the wilful
misconduct or fraud on the part of the other party.
[…]
8
EARLY SETTLEMENT
8.1
Settlement Amount
In respect of all rights under the Sale Assets Agreement which are sold to the
Issuer, the Issuer may allow voluntary early settlement of the amount
outstanding under the Sale Assets Agreement, upon receipt of a written
request from the Seller or Servicer, as the case may be, provided that the
Issuer shall receive an amount equal to the aggregate of -
8.1.1
the amount of any Sale Assets Agreement Payments owing and unpaid up
to and including the early settlement date; plus
8.1.2
the net present value (as determined under 8.3) of the Sale Assets
Agreement Payments that would have been payable under the Sale
Assets Agreement after the early settlement date had the Receivables not
been settled early; plus
8.1.3
break costs incurred by the Issuer due to such early settlement, if any, as
referred to in the relevant Sale Notice.
Notwithstanding that the Issuer may allow voluntary early settlement in terms
of this 8.1, the Issuer shall nevertheless be bound by the restrictions provided
for in 3.4.3 in respect of the disposal of the Equipment.
8.2
Restrictions on Termination Rights
Save as set out in 8.1 above, the Issuer acknowledges that, in recognition of
the Seller’s interests in, inter alia, the Residual Value, the Excess Usage
Charges, the return of the Equipment after termination of a Rental Agreement,
and the Seller's obligations (if any) vis-à-vis an Originator or Rentor in respect
of their respective interests in the Sale Assets, it shall not agree to an early
settlement of the Sale Assets under the Sale Assets Agreement or otherwise,
or to agree to a voluntary early termination of the Sale Assets Agreement
without the Seller's prior written consent (which shall not be unreasonably
withheld).
8.3
Calculation
8.3.1
For the purposes of 5.5.2.1, 7.3.2, and 8.1.2, the net present value of
Sale Assets Agreement Payments shall (unless the Issuer and the Seller
agree otherwise) be calculated in accordance with the default provisions
of the relevant Sale Assets Agreement
8.3.2
In the case of the repurchase of an Affected Asset or indemnity payment
in terms of 5.5.2.1 or a settlement in terms of 7.3.2, or a settlement in
terms of 8.1.2, the net present value of Sale Assets Agreements
Payments shall be calculated to include a net present value of the Sale
Assets Agreement Payments discounted at a rate equal to the interest
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rate applicable to the issued Notes as referred to in the Applicable Pricing
Supplement issued in respect of the Rental Agreement or Sale Asset
Agreement in question.
8.3.3
In the event of a dispute between the Issuer and the Seller as to the
calculation of the amounts referred to in 8.1 8.3 and 8.3.2, the parties
shall refer such dispute within three Business Days of the occurrence of
such dispute, to an independent auditor appointed for this purpose by the
Issuer and the Seller. In the absence of agreement between the parties
within two Business Days after the parties are required to appoint an
independent auditor, an independent auditor shall be appointed by the
President for the time being of the South African Institute of Chartered
Accountants (or its successor body). The independent auditor appointed
shall act as an expert and not as an arbitrator and its decision shall be
final and binding on the parties. The costs of the independent auditor
shall be borne by the Seller and the Issuer on a 50/50 basis.
[…]
ANNEXURE TO THE SALE AGREEMENT - ELIGIBILITY CRITERIA (RENTAL
AGREEMENTS)
Eligibility Criteria for Rental Agreements
The general criteria that each Rental Agreement must satisfy in order to qualify
for acquisition by the Issuer are set out below.
With respect to Each Rental Agreement:
1
the Seller has sole and exclusive legal title to the Rental Agreement, and is
entitled to enforce its rights and obligations thereunder;
2
the sale and transfer by the Seller of its right, title and interest in and to
the Rental Agreement and, where applicable, the Equipment, does not
breach the provisions of such Rental Agreement;
3
the Rental Agreement may be sold and transferred without the consent of
the Lessee/Renter under such agreement;
4
the Rental Agreement constitutes an unconditional, irrevocable valid,
binding and enforceable obligation of the Lessee/Renter to pay such
amounts as are due and payable from time to time under the Rental
Agreement in accordance with the terms of the Rental Agreement;
5
payments or instalments due under the Rental Agreement are not subject
to set off, counterclaim, withholding or reduction;
6
Rental Payments under the Rental Agreement are required to be paid
periodically over the term of such agreement;
7
the Rental Agreement is not in arrears at the time of sale to the Issuer:
provided that the Seller shall not be in breach of this criterion if the default
of the Lessee/Renter relates to payment of Excluded Amounts to the
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extent that such default has not persisted for a duration of longer than
three months as reckoned from the first payment date as defined in the
Rental Agreement;
8
unless this requirement is otherwise waived by the Issuer in writing, the
Rental Agreement is denominated in Rand;
9
the Rental Agreement has not been amended or modified, except in
writing, and copies of all such amendments and modifications, if any, are
reflected in or attached to the relevant agreement; and
10
the Rental Agreement is not subject to the provisions of the National Credit
Act, 2007;
In addition to the above criteria, with respect to Equipment subject of the Rental Agreement:
1
there is no obligation on the Seller under the Rental Agreement to repair
or maintain the Equipment or to render technical support or other services
in respect of the Equipment;
2
unless the Seller notifies the Issuer in writing otherwise and/or the Issuer
waives this requirement in writing, in the Seller’s reasonable opinion, the
Initial Term of the Rental Agreement does not exceed the expected life of
such Equipment;
3
upon sale and cession on the Transfer Date, ownership of Equipment
subject of the Rental Agreement will pass to the Issuer;
4
as at the Transfer Date, the Equipment shall be covered by
comprehensive casualty insurance up to its full insurable value; and
5
as at the Transfer Date, the Equipment was not situated on any leased
premises, or if so situated, the Rental Agreement obliges the
Lessee/Renter to notify the landlord of such premises in writing (or the
Seller has notified the landlord of the premises in writing by registered
mail) that the ownership of such Equipment does not vest in the landlord’s
tenant.
a
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ANNEXURE C - APPLICABLE CONTENTS OF THE RELEVANT SALE NOTICE
We refer to […] the Rental Agreement No. 42013638 dated 17 August 2015 entered into
by the Seller and Basil Read Mining SA Proprietary Limited (registration number
1990/005815/07)] ("the Lessee/Renter"), [….], (the "Rental Agreement").
[…]
1.4
the Rental Collateral Security for the Sale Assets are: The guarantee dated
[on or about 21 August 2015] given by Basil Read Holdings Limited ("the
Guarantor") in favour of the Seller, its successors in title, cessionaries and/or
assigns and/or anyone who takes transfer of rights under the guarantee or its
successors or assigns ("the Beneficiary"), in connection with the obligations
and indebtedness of whatsoever nature and howsoever arising (whether same
are existing, future and/or contingent) of Basil Read Mining SA Proprietary
Limited, Registration Number 1990/005815/07 ("the Lessee/Rentor");
[…]
1.9
Excluded Amounts: N/A;
[…]
1.12
Equipment: Liebherr Excavator R984C Excavator, Bucket No: B8037 – Serial
Number:35100;
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ANNEXURE D – PRINCIPAL REPAYMENT SCHEDULE
Payment Date
Estimate Scheduled
Principal Repayment
05-Oct-15
R 1 144 993
05-Jan-16
05-Apr-16
05-Jul-16
05-Oct-16
05-Jan-17
05-Apr-17
05-Jul-17
05-Oct-17
05-Jan-18
R
R
R
R
R
R
R
R
R
05-Apr-18
R 1 236 573
05-Jul-18
R 1 128 444
2
1
1
1
1
1
1
1
1
773
000
027
051
080
114
142
170
202
015
732
678
902
537
090
019
575
441
26