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Honours PLC (BM19)

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Friday 17 May, 2019

Honours PLC

Consent Solicitation and Liquidity Facility

RNS Number : 4598Z
Honours PLC
17 May 2019
 

17 May 2019

THIS ANNOUNCEMENT CONTAINS INSIDE INFORMATION FOR THE PURPOSES OF ARTICLE 7 OF THE MARKET ABUSE REGULATION (EU) 596/2014

FOR DISTRIBUTION ONLY OUTSIDE THE UNITED STATES TO PERSONS OTHER THAN "U.S. PERSONS" (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED). NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION IN OR INTO, OR TO ANY PERSON LOCATED OR RESIDENT IN, ANY OTHER JURISDICTION WHERE IT IS UNLAWFUL TO RELEASE, PUBLISH OR DISTRIBUTE THIS ANNOUNCEMENT

HONOURS PLC
(the Issuer)

(incorporated with limited liability in England and Wales with registered number 03702189)

 

To the holders of those of the:
£291,950,000 Class A1 Asset Backed Floating Rate Notes due 2029 (ISIN: XS0273149962)

£54,200,000 Class A2 Asset Backed Floating Rate Notes due 2029 (ISIN: XS0273152677)

£33,350,000 Class B Asset Backed Floating Rate Notes due 2029 (ISIN: XS0273153998)

£18,000,000 Class C Asset Backed Floating Rate Notes due 2029 (ISIN: XS0273156587)

£11,950,000 Class D Asset Backed Floating Rate Notes due 2029 (ISIN: XS0273158443)

£8,750,000 Class E Asset Backed Floating Rate Notes due 2029 (ISIN: XS0273159250)

of the Issuer presently outstanding
(the Noteholders and the Notes respectively).

 

Announcement relating to Consent Solicitation and Liquidity Facility

NOTICE IS HEREBY GIVEN to the Noteholders that:

Consent Solicitation

1)   The Issuer announces that it is today launching a consent solicitation (the Consent Solicitation) to obtain consent from the holders of each class of Notes through the passing of certain extraordinary resolutions (the Extraordinary Resolutions) in connection with the (i) implementation of the remediation plan proposed by the Issuer, and (ii) release and application of the cash paid by Capita Customer Management Limited (Capita) to the Issuer in full and final settlement of any claims the Issuer may have against Capita for certain regulatory breaches, standing to the credit of a separate account of the Issuer (the Settlement Account) (together, the Proposals).

2)   The meetings of each class of Noteholders to consider, and if thought fit, pass the Extraordinary Resolutions will be held on 10 June 2019 at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS. A copy of each notice of meeting of the holders of each Class of Notes is attached hereto at Annex A, Annex B, Annex C, Annex D, Annex E and Annex F (the Notices).

3)   As noted in the Notices, full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the consent solicitation memorandum dated the date of this notice, copies of which are available upon request from the Issuer or Wilmington Trust (London) Limited (as Tabulation Agent), the contact details for which are set out in this notice below and in the Notices annexed hereto.

4)   The implementation of the Extraordinary Resolutions in respect of each Class of Notes is conditional on the passing of the Extraordinary Resolutions in respect of each other Class of Notes.

Liquidity Facility

5)   As previously notified to Noteholders in notices dated 24 October 2018 and 23 April 2019:

a)   owing to a clerical error by the Issuer, the renewal request notice in respect of the renewal of the liquidity facility provided by Danske Bank A/S (Danske) since 2006 was not served on Danske within the five day notice period window in October 2018, as a result of this Danske both refused to extend and asserted that the Issuer could not make a standby drawing because it had not submitted its extension request in time. Danske only agreed to extend the liquidity facility for a further 6 month period;

b)   despite continued efforts, the Issuer was unable to find a replacement liquidity provider; and

c)   the liquidity facility provided by Danske terminated on 25 April 2019.

6)   The Honours structure does have an internal liquidity reserve funding mechanism, whereby the Issuer is required to establish out of Actual Redemption Funds and maintain out of Available Revenue Funds a reserve in the Issuer Account (the Liquidity Reserve), but this mechanism is only triggered if (a) there is an event of default under the Liquidity Facility, or if (b) the Liquidity Reserve Funding Condition has been met and the aggregate of the Liquidity Reserve Pre-Funding Amounts paid, less any Liquidity Reserve Releases made, is greater than or equal to the Liquidity Reserve Requirement.

7)   The Liquidity Reserve Funding Condition shall be met if:

a)   the balance of the Class A Notes is greater than the aggregate of the balance of the Qualifying Loans and the balance of the Liquidity Reserve (including any Liquidity Reserve Pre-Funding Amounts for that period);

b)   the aggregate balance of the Qualifying Loans is less than £100,000,000; or

c)   if the Class A Notes have been redeemed.

8)   As at 30 April 2019, the aggregate Principal Amount Outstanding of the Class A Notes is approximately £87.2m and the aggregate balance of the Qualifying Loans is approximately £134.2m and therefore the Liquidity Reserve Funding Condition is not met.

9)   Accordingly, from now until the Liquidity Reserve Funding Condition is satisfied, the Issuer does not have a Liquidity Facility or Liquidity Reserve and it could be argued that the failure to renew the Liquidity Facility and its subsequent termination may constitute a breach of obligation under the Transaction Documents and/or an Event of Default under the Notes.

10) The Rating Agencies are aware of the fact that the Liquidity Facility has terminated and not been replaced but to date have not indicated whether they intend to take any action in respect thereof.

Capitalised terms in this notice shall, except where the context otherwise requires and save where otherwise defined herein, bear the meanings ascribed to them in the Transaction Master Definitions and Framework Deed between, inter alios, the Issuer and the Security Trustee dated 10 November 2006, copies of which are available for inspection during usual business hours at the offices of the Issuer set out below.

For further information, please contact:

Honours plc
Third Floor
1 King's Arms Yard
London EC2R 7AF

Attention:         The Directors

Telephone:       +44 (0) 20 7397 3600

Fax:                 +44 (0) 20 7397 3601

e-mail:             [email protected]

Ref:                 Honours PLC

DISCLAIMER

This Document does not contain or constitute an offer of, or the solicitation of an offer to buy, securities to any person in the United States or in any jurisdiction to whom or in which such offer or solicitation is unlawful. The securities referred to in this Document may not be offered or sold in the United States absent registration under the US Securities Act of 1933, as amended (the Securities Act) or another exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The offer and sale of the securities referred to in this Document has not been and will not be registered under the Securities Act. There will be no public offer of the securities in the United States.

 

 

Annex A - Notice of Meeting of the Class A1 Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS A1 NOTEHOLDERS.  IF CLASS A1 NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

HONOURS PLC
(the "Issuer")

(Incorporated in England and Wales with registered number 03702189)

NOTICE OF A MEETING

of the holders (the "Class A1 Noteholders") of those of the
£291,950,000 Class A1 Asset Backed Floating Rate Notes due 2029
of the Issuer presently outstanding
(the "Class A1 Notes")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the Class A1 Noteholders convened by the Issuer will be held at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS at 2.00 p.m. (London time) on 10 June 2019 for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Extraordinary Resolutions (to be passed as Basic Terms Modifications) in accordance with the provisions of the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the Class A1 Noteholders and constituting the Class A1 Notes. Pursuant to the terms of the Note Trust Deed, the Issuer will convene separate meetings of Noteholders of each Class of Notes for each meeting to consider the Extraordinary Resolutions in respect of such Class of Notes, which if passed by all Classes of Notes, will approve the Proposals (as defined below).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the Note Trust Deed, the terms and conditions of the Notes (the "Conditions"), the consent solicitation memorandum dated 17 May 2019 from the Issuer addressed to the Noteholders (the "Consent Solicitation Memorandum") or the Extraordinary Resolutions, as applicable.

EXTRAORDINARY RESOLUTIONS

"THAT this meeting (the "Meeting") of the holders of those of the £291,950,000 Class A1 Asset Backed Floating Rate Notes due 2029 issued by Honours PLC (the "Issuer") presently outstanding (the "Class A1 Notes") constituted by the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the holders of the Class A1 Notes (the "Class A1 Noteholders") hereby:

(a)        sanction, authorise and approve the implementation of the Remediation Plan proposed by the Issuer (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions) (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time, provided that such amendments will not result in substantial costs being incurred by the Issuer);

(b)        authorise, direct, request and empower Deloitte LLP ("Deloitte") and Link Financial Outsourcing Limited ("LFO") to take any action and steps and do all things as may be necessary, appropriate or desirable to carry out and give effect to the Remediation Plan (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions);

(c)        authorise the release of the cash standing to the credit of the Settlement Account from the Security as and when withdrawn and authorise the Issuer to use the cash standing to the credit of the Settlement Account in accordance with the Settlement Account Agreement, which will provide that this cash will be applied by the Issuer -

(i)         to make cash refunds to the affected borrowers and the Authority pursuant to the Remediation Plan, by transferring amounts to LFO to enable LFO to make such payments;

(ii)        to pay Deloitte's and LFO's costs relating to implementing the Remediation Plan, up to a maximum aggregate amount of £1,000,000;

(iii)       to reimburse the structure in respect of third party costs (including legal and financial advisory costs) incurred by the structure up to and including 31 March 2019 in connection with (i) dealing with the non-compliance issues in relation to the CCA, including negotiating and finalising the settlement with Capita, and (ii) the formulation of the Remediation Plan, by adding an amount in respect of such third party costs (after having paid or provided for the amounts referred to in paragraphs (i) and (ii) above and (v) below) to the Available Revenue Funds, up to a maximum aggregate amount of £1,000,000;

(iv)       to pay all third party costs (including, without limitation, any legal, Note Trustee, Security Trustee, Cash Manager and financial advisory costs) incurred after 31 March 2019 to the date of completion of the Remediation Plan which the Issuer is obliged to pay or reimburse in connection with (i) the formulation and implementation of the Remediation Plan, and (ii) the consent solicitation process, by transferring the relevant amount(s) in respect of such third party costs to the relevant third party (after having paid or provided for the amounts referred to in paragraphs (i), (ii) and (iii) above and (v) below), but only to the extent that having covered the expenses and items in paragraphs (i), (ii) and (iii) above and (v) below, at least £1,500,000 will be remaining in the Settlement Account to establish the reserve fund contemplated in (vi) below;

(v)        for PDL remediation (where remediation is payable to a borrower whose loan is still outstanding, the borrower's account balance will be reduced by the amount of the remediation) by adding amounts (not used in paragraphs (i), (ii), (iii) and (iv) above) to the Available Revenue Funds to offset the impact of balance adjustments, both in terms of interest cancelled and any principal reductions as a result of the implementation of the Remediation Plan by adding equivalent sums to the PDL;

(vi)       to keep any remaining cash (after applying it in the manner contemplated in paragraphs (i), (ii), (iii), (iv) and (v) above) in the Settlement Account as a reserve fund for a period of 36 months (the "Reserve Period") to be used to meet any potential future liability, costs, claims, expenses or losses to the Honours structure as a result of any borrower and/or the Authority making any claim or demand or taking any action against the Issuer and/or the Purchaser in connection with the Remediation Plan or arising as a result of the non-compliance issues in relation to the CCA (the "Claims"), and after the Reserve Period:

(A)       if there has been less than £100,000 of Claims made against the Issuer and/or the Purchaser during the Reserve Period, with less than £10,000 of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to use any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period by transferring such remaining amount to the Issuer Account to be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments at that time; and

(B)       if there has been £100,000 or more of Claims made against the Issuer and/or the Purchaser during the Reserve Period and/or £10,000 or more of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to obtain approval from the Noteholders at that point in time as to the manner in which any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period should be retained/released and applied;

(d)        authorise, direct, request and empower the Purchaser and the Issuer, (i) to agree and execute (as applicable) a supplemental agreement to the Administration Agreement with LFO (the "Supplemental Agreement") to provide for any additional services that may be required to be performed by LFO in order to implement the Remediation Plan, including making the relevant cash payments to the affected borrowers and the Authority as contemplated in paragraph (c)(i) above, and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Supplemental Agreement;

(e)        approve and assent to the settlement account agreement in or substantially in the form of the draft set out in Annex A to the Consent Solicitation Memorandum and made available for inspection at the specified offices of the Issuer or the Irish Paying Agent on and from the date of this Notice (the "Settlement Account Agreement") and authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable, (i) to agree and execute (as applicable) the Settlement Account Agreement and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Settlement Account Agreement;

(f)        authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer as applicable (i) to treat and distribute any amounts(s) transferred from the Settlement Account to the Issuer Account as Available Revenue Funds; and (ii) to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the amendment(s) required to be made to the definition of Available Revenue Funds in order to ensure that any amounts(s) transferred from the Settlement Account to the Issuer Account constitute Available Revenue Funds and can be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments, as contemplated by the Extraordinary Resolutions set out in paragraphs, (c)(iii), (c)(v) and (c)(vi)(A);

(g)        once the balance in the Settlement Account is reduced to zero, authorise and sanction the Security Trustee to release the Security granted pursuant to the Deed of Charge over the Settlement Account itself and authorise and sanction the Issuer to close the Settlement Account;

(h)        authorise the Issuer to pay any fees, costs, charges and expenses of any third party reasonably incurred (to the extent not paid from the funds standing to the credit of the Settlement Account) relating to (i) implementing the Remediation Plan and (ii) the consent solicitation process, either at the relevant line item in Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments or line item (vi)(G) of Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments;  

(i)         authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(j)         ratify and confirm each and every act or thing done or effected by the Issuer in relation to the appointment of Deloitte as its financial adviser and the incurrence of its fees in connection therewith; 

(k)        ratify and confirm each and every act or thing that may be done or effected by the Issuer, the Paying Agents, the Tabulation Agent, the Cash Manager, the Note Trustee, the Security Trustee and any of their respective directors, officers, employees, agents or affiliates or any person nominated by the Issuer in the proper exercise of his or her powers and/or authority under the Consent Solicitation Memorandum in order to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(l)         agree, in relation to the submission of a Consent Instruction (if applicable), (i) to do all such acts and things as shall be necessary and execute any additional documents deemed by the Issuer to be desirable, in each case, to perfect any of the authorities expressed to be given under the Consent Solicitation Memorandum and appoint the Tabulation Agent as its authorised attorney to do so on its behalf, and (ii) to execute and deliver any additional documents and/or do such other things deemed by the Issuer to be necessary or desirable to effect delivery of the Consent Instructions related to such Notes or to evidence such power and authority;

(m)       discharge and exonerate each of the Note Trustee, the Security Trustee, the Cash Manager and the Issuer from all liability for which it may have become or may become responsible under the Note Trust Deed, the Deed of Charge, any other Transaction Document or the Notes in respect of any act or omission in connection with the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement; and

(n)        sanction and assent to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Noteholders against the Issuer or any other person (whether such rights shall arise under the Note Trust Deed, the Deed of Charge or otherwise) involved in or resulting from or to be effected by, the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement.

Terms used but not otherwise defined in these Extraordinary Resolutions shall have the meaning given in the Note Trust Deed, the Conditions or the Consent Solicitation Memorandum."

Background to Extraordinary Resolutions

The Extraordinary Resolutions are being proposed in connection with the Consent Solicitation.

The purpose of the Consent Solicitation is to invite Noteholders from each Class of Notes to consider and, if thought fit, to approve the Extraordinary Resolutions in connection with the:

(a)        implementation of a remediation plan proposed by the Issuer, as more fully described in the section entitled "Remediation Plan and Release of Settlement Amount" of the Consent Solicitation Memorandum (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time) (the "Remediation Plan"); and

(b)        release and application of the cash standing to the credit of the Settlement Account (as defined in the Consent Solicitation Memorandum) in the manner contemplated in the Consent Solicitation Memorandum and the Extraordinary Resolutions,

(together, the "Proposals").

Full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the Consent Solicitation Memorandum, copies of which are available upon request from the Issuer or Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an eligible Noteholder.

General

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of an Extraordinary Resolution at a Meeting or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below (see in particular paragraph 6). Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at such Meeting (including by way of submitting Consent Instructions) as soon as possible.

Copies of this Notice, the Note Trust Deed (including the Conditions of the Notes), the Deed of Charge and the draft Settlement Account Agreement referred to in the Extraordinary Resolutions set out above and of certain other relevant documents will be available for inspection at the specified offices of the Paying Agents and the Tabulation Agent set out below.

Subject to the approval of the Extraordinary Resolutions with respect to the Class A2 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes (as described in the Consent Solicitation Memorandum) the Extraordinary Resolutions, if approved as described above, will be implemented as soon as reasonably practicable after the announcement via the Clearing Systems and the Irish Stock Exchange website of the results of the Meetings that all of the Extraordinary Resolutions have been approved by each of the Classes of Noteholders.

In accordance with normal practice, the Note Trustee and the Security Trustee express no opinion as to the merits of the Consent Solicitation (as defined in the Consent Solicitation Memorandum) or the Proposals (as defined above) (which they were not involved in negotiating).  They have, however, authorised it to be stated that, on the basis of the information set out in the Consent Solicitation Memorandum (which they recommend the Class A1 Noteholders to read carefully) and in this Notice, it has no objection to the Extraordinary Resolutions referred to above being submitted to the Class A1 Noteholders for their consideration.  The Note Trustee and the Security Trustee have not been involved in formulating the Consent Solicitation, the Extraordinary Resolutions or the Proposals and make no representation that all relevant information has been disclosed to the Class A1 Noteholders in the Consent Solicitation Memorandum and this Notice.  Accordingly, the Note Trustee and the Security Trustee urge the Class A1 Noteholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolutions to seek their own independent legal and financial advice.

By submitting or delivering a duly completed Consent Instruction to the relevant Clearing System, a Class A1 Noteholder instructs the Principal Paying Agent to appoint the Tabulation Agent as proxy to attend and vote at the Meeting in favour of or against the Extraordinary Resolutions. The terms and conditions of the Consent Solicitation Memorandum are without prejudice to the right of a Class A1 Noteholder to attend and vote at the Meeting as set out in this Notice and in the Note Trust Deed.

Voting and Quorum

1.         The provisions governing the convening and holding of a Meeting are set out in Schedule 5 (Provisions for Meetings of Noteholders) to the Note Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the respective specified offices of the Paying Agents and the Tabulation Agent set out below.

2.         All of the Notes of each Class are represented by a global note of the relevant Class held by a common depositary for Clearstream Banking S.A. ("Clearstream, Luxembourg") and/or Euroclear Bank S.A./N.V. ("Euroclear").  For the purposes of the Meeting, a "Noteholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the relevant Class of Notes.

3.         A Noteholder wishing to attend the relevant Meeting in person must produce at that Meeting a valid Voting Certificate issued by a Paying Agent relating to the relevant Class of Notes in respect of which it wishes to vote.

4.         A Noteholder not wishing to attend and vote at the relevant Meeting in person may either deliver its valid Voting Certificate(s) to the person whom he wishes to attend on his behalf or give a voting instruction (by giving his electronic voting instructions (a "Consent Instruction")) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint Wilmington Trust (London) Limited (the "Tabulation Agent") to attend and vote at the Meeting in accordance with his instructions.

5.         A Noteholder must request the relevant clearing system to block the relevant Notes in his own account and to hold the same to the order or under the control of a Paying Agent not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain Voting Certificates or to give Consent Instructions in respect of the relevant Meeting.  Notes of the relevant Class so blocked will not be released until the earlier of:

(a)        in respect of Voting Certificate(s):

(i)         the conclusion of the relevant Meeting (or, if applicable, any adjournment of the relevant Meeting); and

(ii)        the surrender of the Voting Certificate(s) to the Paying Agent who issued the same and the notification by such Paying Agent to the relevant clearing system of such surrender or the compliance in such other manner with the rules of the relevant clearing system; and

(b)        in respect of Consent Instructions:

(i)         the date on which the Consent Solicitation is terminated by the Issuer (provided that such termination is more than 48 hours before the time set for the relevant Meeting);

(ii)        the date on which the relevant Consent Instruction is validly revoked in accordance with the terms of the Consent Solicitation Memorandum; and

(iii)       the conclusion of each of the Meetings of the Class A1 Noteholders, Class A2 Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, and the Class E Noteholders (or, if applicable, any adjournment of any of the Meetings).

6.         The quorum required at each Meeting is two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate holders of not less than 75 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).  If a quorum is not present at the relevant Meeting, such Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolutions will be considered at an adjourned Meeting (notice of which will be given to the relevant Noteholders).  The quorum at such an adjourned Meeting will be two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 25 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).

7.         Voting Certificates and Consent Instructions given in respect of the relevant Meeting (unless surrendered or, as the case may be, revoked at least 48 hours prior to any adjourned Meeting) shall remain valid for such adjourned Meeting.

8.         Every question submitted to the relevant Meeting will be decided on a show of hands unless a poll is duly demanded by the Chairman of that Meeting, the Issuer or one or more Noteholders holding one or more Notes of the relevant Class and/or persons holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 5 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class then outstanding (as defined in the Transaction Master Definitions and Framework Deed).  On a show of hands every person who is present in person and produces a Voting Certificate or is a proxy shall have one vote.  On a poll every person who is so present shall have one vote in respect of each £50,000 principal amount of the Principal Amount Outstanding of the relevant Class of Notes represented by the Voting Certificate so produced or in respect of which that person is a proxy.

9.         To be passed at a Meeting, each Extraordinary Resolution requires a majority of not less than three-fourths of the persons voting at the relevant Meeting upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll. If passed by a Class of Noteholders, the Extraordinary Resolutions shall be binding on all Noteholders of the relevant Class, whether present or not at the relevant Meeting at which it is passed and whether or not voting. However, the Proposals will only be implemented if the Extraordinary Resolutions in respect of all Classes of Notes are approved.

This Notice is given by:
Honours PLC
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors

Dated 17 May 2019

 

Contact Information

Requests for copies of the Consent Solicitation Memorandum and information in relation to the Consent Solicitation and the procedures for the submission of a Consent Instruction should be directed to:

The Tabulation Agent

Wilmington Trust (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors - Honours Tabulation Agent

 

 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Corporate Action Department (email: [email protected])

Clearstream: CIE Department (email: [email protected])

 

The Tabulation Agent does not take responsibility for the contents of this Notice and none of the Issuer or the Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This Notice must be read in conjunction with the Consent Solicitation Memorandum. No offer to acquire any Notes is being made pursuant to this Notice. This Notice and the Consent Solicitation Memorandum contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Distribution Restrictions

This Notice and the Consent Solicitation Memorandum do not constitute an offer or an invitation to participate in the Consent Solicitation in any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer or invitation under applicable securities laws. The distribution of the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by each of the Issuer and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer or the Tabulation Agent in relation to the Consent Solicitation that would permit a public offering of securities.

Any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offer or solicitation is not permitted by law.

 

 

Annex B - Notice of Meeting of the Class A2 Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS A2 NOTEHOLDERS.  IF CLASS A2 NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

HONOURS PLC
(the "Issuer")

(Incorporated in England and Wales with registered number 03702189)

NOTICE OF A MEETING

of the holders (the "Class A2 Noteholders") of those of the
£54,200,000 Class A2 Asset Backed Floating Rate Notes due 2029
of the Issuer presently outstanding
(the "Class A2 Notes")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the Class A2 Noteholders convened by the Issuer will be held at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS at 2.30 p.m. (London time) on 10 June 2019 for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Extraordinary Resolutions (to be passed as Basic Terms Modifications) in accordance with the provisions of the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the Class A2 Noteholders and constituting the Class A2 Notes. Pursuant to the terms of the Note Trust Deed, the Issuer will convene separate meetings of Noteholders of each Class of Notes for each meeting to consider the Extraordinary Resolutions in respect of such Class of Notes, which if passed by all Classes of Notes, will approve the Proposals (as defined below).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the Note Trust Deed, the terms and conditions of the Notes (the "Conditions"), the consent solicitation memorandum dated 17 May 2019 from the Issuer addressed to the Noteholders (the "Consent Solicitation Memorandum") or the Extraordinary Resolutions, as applicable.

EXTRAORDINARY RESOLUTIONS

"THAT this meeting (the "Meeting") of the holders of those of the £54,200,000 Class A2 Asset Backed Floating Rate Notes due 2029 issued by Honours PLC (the "Issuer") presently outstanding (the "Class A2 Notes") constituted by the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the holders of the Class A2 Notes (the "Class A2 Noteholders") hereby:

(a)        sanction, authorise and approve the implementation of the Remediation Plan proposed by the Issuer (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions) (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time, provided that such amendments will not result in substantial costs being incurred by the Issuer);

(b)        authorise, direct, request and empower Deloitte LLP ("Deloitte") and Link Financial Outsourcing Limited ("LFO") to take any action and steps and do all things as may be necessary, appropriate or desirable to carry out and give effect to the Remediation Plan (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions);

(c)        authorise the release of the cash standing to the credit of the Settlement Account from the Security as and when withdrawn and authorise the Issuer to use the cash standing to the credit of the Settlement Account in accordance with the Settlement Account Agreement, which will provide that this cash will be applied by the Issuer -

(i)         to make cash refunds to the affected borrowers and the Authority pursuant to the Remediation Plan, by transferring amounts to LFO to enable LFO to make such payments;

(ii)        to pay Deloitte's and LFO's costs relating to implementing the Remediation Plan, up to a maximum aggregate amount of £1,000,000;

(iii)       to reimburse the structure in respect of third party costs (including legal and financial advisory costs) incurred by the structure up to and including 31 March 2019 in connection with (i) dealing with the non-compliance issues in relation to the CCA, including negotiating and finalising the settlement with Capita, and (ii) the formulation of the Remediation Plan, by adding an amount in respect of such third party costs (after having paid or provided for the amounts referred to in paragraphs (i) and (ii) above and (v) below) to the Available Revenue Funds, up to a maximum aggregate amount of £1,000,000;

(iv)       to pay all third party costs (including, without limitation, any legal, Note Trustee, Security Trustee, Cash Manager and financial advisory costs) incurred after 31 March 2019 to the date of completion of the Remediation Plan which the Issuer is obliged to pay or reimburse in connection with (i) the formulation and implementation of the Remediation Plan, and (ii) the consent solicitation process, by transferring the relevant amount(s) in respect of such third party costs to the relevant third party (after having paid or provided for the amounts referred to in paragraphs (i), (ii) and (iii) above and (v) below), but only to the extent that having covered the expenses and items in paragraphs (i), (ii) and (iii) above and (v) below, at least £1,500,000 will be remaining in the Settlement Account to establish the reserve fund contemplated in (vi) below;

(v)        for PDL remediation (where remediation is payable to a borrower whose loan is still outstanding, the borrower's account balance will be reduced by the amount of the remediation) by adding amounts (not used in paragraphs (i), (ii), (iii) and (iv) above) to the Available Revenue Funds to offset the impact of balance adjustments, both in terms of interest cancelled and any principal reductions as a result of the implementation of the Remediation Plan by adding equivalent sums to the PDL;

(vi)       to keep any remaining cash (after applying it in the manner contemplated in paragraphs (i), (ii), (iii), (iv) and (v) above) in the Settlement Account as a reserve fund for a period of 36 months (the "Reserve Period") to be used to meet any potential future liability, costs, claims, expenses or losses to the Honours structure as a result of any borrower and/or the Authority making any claim or demand or taking any action against the Issuer and/or the Purchaser in connection with the Remediation Plan or arising as a result of the non-compliance issues in relation to the CCA (the "Claims"), and after the Reserve Period:

(A)       if there has been less than £100,000 of Claims made against the Issuer and/or the Purchaser during the Reserve Period, with less than £10,000 of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to use any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period by transferring such remaining amount to the Issuer Account to be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments at that time; and

(B)       if there has been £100,000 or more of Claims made against the Issuer and/or the Purchaser during the Reserve Period and/or £10,000 or more of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to obtain approval from the Noteholders at that point in time as to the manner in which any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period should be retained/released and applied;

(d)        authorise, direct, request and empower the Purchaser and the Issuer, (i) to agree and execute (as applicable) a supplemental agreement to the Administration Agreement with LFO (the "Supplemental Agreement") to provide for any additional services that may be required to be performed by LFO in order to implement the Remediation Plan, including making the relevant cash payments to the affected borrowers and the Authority as contemplated in paragraph (c)(i) above, and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Supplemental Agreement;

(e)        approve and assent to the settlement account agreement in or substantially in the form of the draft set out in Annex A to the Consent Solicitation Memorandum and made available for inspection at the specified offices of the Issuer or the Irish Paying Agent on and from the date of this Notice (the "Settlement Account Agreement") and authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable, (i) to agree and execute (as applicable) the Settlement Account Agreement and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Settlement Account Agreement;

(f)        authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer as applicable (i) to treat and distribute any amounts(s) transferred from the Settlement Account to the Issuer Account as Available Revenue Funds; and (ii) to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the amendment(s) required to be made to the definition of Available Revenue Funds in order to ensure that any amounts(s) transferred from the Settlement Account to the Issuer Account constitute Available Revenue Funds and can be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments, as contemplated by the Extraordinary Resolutions set out in paragraphs, (c)(iii), (c)(v) and (c)(vi)(A);

(g)        once the balance in the Settlement Account is reduced to zero, authorise and sanction the Security Trustee to release the Security granted pursuant to the Deed of Charge over the Settlement Account itself and authorise and sanction the Issuer to close the Settlement Account;

(h)        authorise the Issuer to pay any fees, costs, charges and expenses of any third party reasonably incurred (to the extent not paid from the funds standing to the credit of the Settlement Account) relating to (i) implementing the Remediation Plan and (ii) the consent solicitation process, either at the relevant line item in Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments or line item (vi)(G) of Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments;  

(i)         authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(j)         ratify and confirm each and every act or thing done or effected by the Issuer in relation to the appointment of Deloitte as its financial adviser and the incurrence of its fees in connection therewith; 

(k)        ratify and confirm each and every act or thing that may be done or effected by the Issuer, the Paying Agents, the Tabulation Agent, the Cash Manager, the Note Trustee, the Security Trustee and any of their respective directors, officers, employees, agents or affiliates or any person nominated by the Issuer in the proper exercise of his or her powers and/or authority under the Consent Solicitation Memorandum in order to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(l)         agree, in relation to the submission of a Consent Instruction (if applicable), (i) to do all such acts and things as shall be necessary and execute any additional documents deemed by the Issuer to be desirable, in each case, to perfect any of the authorities expressed to be given under the Consent Solicitation Memorandum and appoint the Tabulation Agent as its authorised attorney to do so on its behalf, and (ii) to execute and deliver any additional documents and/or do such other things deemed by the Issuer to be necessary or desirable to effect delivery of the Consent Instructions related to such Notes or to evidence such power and authority;

(m)       discharge and exonerate each of the Note Trustee, the Security Trustee, the Cash Manager and the Issuer from all liability for which it may have become or may become responsible under the Note Trust Deed, the Deed of Charge, any other Transaction Document or the Notes in respect of any act or omission in connection with the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement; and

(n)        sanction and assent to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Noteholders against the Issuer or any other person (whether such rights shall arise under the Note Trust Deed, the Deed of Charge or otherwise) involved in or resulting from or to be effected by, the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement.

Terms used but not otherwise defined in these Extraordinary Resolutions shall have the meaning given in the Note Trust Deed, the Conditions or the Consent Solicitation Memorandum."

Background to Extraordinary Resolutions

The Extraordinary Resolutions are being proposed in connection with the Consent Solicitation.

The purpose of the Consent Solicitation is to invite Noteholders from each Class of Notes to consider and, if thought fit, to approve the Extraordinary Resolutions in connection with the:

(a)        implementation of a remediation plan proposed by the Issuer, as more fully described in the section entitled "Remediation Plan and Release of Settlement Amount" of the Consent Solicitation Memorandum (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time) (the "Remediation Plan"); and

(b)        release and application of the cash standing to the credit of the Settlement Account (as defined in the Consent Solicitation Memorandum) in the manner contemplated in the Consent Solicitation Memorandum and the Extraordinary Resolutions,

(together, the "Proposals").

Full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the Consent Solicitation Memorandum, copies of which are available upon request from the Issuer or Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an eligible Noteholder.

General

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of an Extraordinary Resolution at a Meeting or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below (see in particular paragraph 6). Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at such Meeting (including by way of submitting Consent Instructions) as soon as possible.

Copies of this Notice, the Note Trust Deed (including the Conditions of the Notes), the Deed of Charge and the draft Settlement Account Agreement referred to in the Extraordinary Resolutions set out above and of certain other relevant documents will be available for inspection at the specified offices of the Paying Agents and the Tabulation Agent set out below.

Subject to the approval of the Extraordinary Resolutions with respect to the Class A1 Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E Notes (as described in the Consent Solicitation Memorandum) the Extraordinary Resolutions, if approved as described above, will be implemented as soon as reasonably practicable after the announcement via the Clearing Systems and the Irish Stock Exchange website of the results of the Meetings that all of the Extraordinary Resolutions have been approved by each of the Classes of Noteholders.

In accordance with normal practice, the Note Trustee and the Security Trustee express no opinion as to the merits of the Consent Solicitation (as defined in the Consent Solicitation Memorandum) or the Proposals (as defined above) (which they were not involved in negotiating).  They have, however, authorised it to be stated that, on the basis of the information set out in the Consent Solicitation Memorandum (which they recommend the Class A2 Noteholders to read carefully) and in this Notice, it has no objection to the Extraordinary Resolutions referred to above being submitted to the Class A2 Noteholders for their consideration.  The Note Trustee and the Security Trustee have not been involved in formulating the Consent Solicitation, the Extraordinary Resolutions or the Proposals and make no representation that all relevant information has been disclosed to the Class A2 Noteholders in the Consent Solicitation Memorandum and this Notice.  Accordingly, the Note Trustee and the Security Trustee urge the Class A2 Noteholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolutions to seek their own independent legal and financial advice.

By submitting or delivering a duly completed Consent Instruction to the relevant Clearing System, a Class A2 Noteholder instructs the Principal Paying Agent to appoint the Tabulation Agent as proxy to attend and vote at the Meeting in favour of or against the Extraordinary Resolutions. The terms and conditions of the Consent Solicitation Memorandum are without prejudice to the right of a Class A2 Noteholder to attend and vote at the Meeting as set out in this Notice and in the Note Trust Deed.

Voting and Quorum

1.         The provisions governing the convening and holding of a Meeting are set out in Schedule 5 (Provisions for Meetings of Noteholders) to the Note Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the respective specified offices of the Paying Agents and the Tabulation Agent set out below.

2.         All of the Notes of each Class are represented by a global note of the relevant Class held by a common depositary for Clearstream Banking S.A. ("Clearstream, Luxembourg") and/or Euroclear Bank S.A./N.V. ("Euroclear").  For the purposes of the Meeting, a "Noteholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the relevant Class of Notes.

3.         A Noteholder wishing to attend the relevant Meeting in person must produce at that Meeting a valid Voting Certificate issued by a Paying Agent relating to the relevant Class of Notes in respect of which it wishes to vote.

4.         A Noteholder not wishing to attend and vote at the relevant Meeting in person may either deliver its valid Voting Certificate(s) to the person whom he wishes to attend on his behalf or give a voting instruction (by giving his electronic voting instructions (a "Consent Instruction")) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint Wilmington Trust (London) Limited (the "Tabulation Agent") to attend and vote at the Meeting in accordance with his instructions.

5.         A Noteholder must request the relevant clearing system to block the relevant Notes in his own account and to hold the same to the order or under the control of a Paying Agent not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain Voting Certificates or to give Consent Instructions in respect of the relevant Meeting.  Notes of the relevant Class so blocked will not be released until the earlier of:

(a)        in respect of Voting Certificate(s):

(i)         the conclusion of the relevant Meeting (or, if applicable, any adjournment of the relevant Meeting); and

(ii)        the surrender of the Voting Certificate(s) to the Paying Agent who issued the same and the notification by such Paying Agent to the relevant clearing system of such surrender or the compliance in such other manner with the rules of the relevant clearing system; and

(b)        in respect of Consent Instructions:

(i)         the date on which the Consent Solicitation is terminated by the Issuer (provided that such termination is more than 48 hours before the time set for the relevant Meeting);

(ii)        the date on which the relevant Consent Instruction is validly revoked in accordance with the terms of the Consent Solicitation Memorandum; and

(iii)       the conclusion of each of the Meetings of the Class A1 Noteholders, Class A2 Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, and the Class E Noteholders (or, if applicable, any adjournment of any of the Meetings).

6.         The quorum required at each Meeting is two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate holders of not less than 75 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).  If a quorum is not present at the relevant Meeting, such Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolutions will be considered at an adjourned Meeting (notice of which will be given to the relevant Noteholders).  The quorum at such an adjourned Meeting will be two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 25 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).

7.         Voting Certificates and Consent Instructions given in respect of the relevant Meeting (unless surrendered or, as the case may be, revoked at least 48 hours prior to any adjourned Meeting) shall remain valid for such adjourned Meeting.

8.         Every question submitted to the relevant Meeting will be decided on a show of hands unless a poll is duly demanded by the Chairman of that Meeting, the Issuer or one or more Noteholders holding one or more Notes of the relevant Class and/or persons holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 5 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class then outstanding (as defined in the Transaction Master Definitions and Framework Deed).  On a show of hands every person who is present in person and produces a Voting Certificate or is a proxy shall have one vote.  On a poll every person who is so present shall have one vote in respect of each £50,000 principal amount of the Principal Amount Outstanding of the relevant Class of Notes represented by the Voting Certificate so produced or in respect of which that person is a proxy.

9.         To be passed at a Meeting, each Extraordinary Resolution requires a majority of not less than three-fourths of the persons voting at the relevant Meeting upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll. If passed by a Class of Noteholders, the Extraordinary Resolutions shall be binding on all Noteholders of the relevant Class, whether present or not at the relevant Meeting at which it is passed and whether or not voting. However, the Proposals will only be implemented if the Extraordinary Resolutions in respect of all Classes of Notes are approved.

This Notice is given by:
Honours PLC
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors

Dated 17 May 2019

 

Contact Information

Requests for copies of the Consent Solicitation Memorandum and information in relation to the Consent Solicitation and the procedures for the submission of a Consent Instruction should be directed to:

The Tabulation Agent

Wilmington Trust (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors - Honours Tabulation Agent

 

 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Corporate Action Department (email: [email protected])

Clearstream: CIE Department (email: [email protected])

 

The Tabulation Agent does not take responsibility for the contents of this Notice and none of the Issuer or the Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This Notice must be read in conjunction with the Consent Solicitation Memorandum. No offer to acquire any Notes is being made pursuant to this Notice. This Notice and the Consent Solicitation Memorandum contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Distribution Restrictions

This Notice and the Consent Solicitation Memorandum do not constitute an offer or an invitation to participate in the Consent Solicitation in any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer or invitation under applicable securities laws. The distribution of the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by each of the Issuer and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer or the Tabulation Agent in relation to the Consent Solicitation that would permit a public offering of securities.

Any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offer or solicitation is not permitted by law.

 

 

Annex C - Notice of Meeting of the Class B Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS B NOTEHOLDERS.  IF CLASS B NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

HONOURS PLC
(the "Issuer")

(Incorporated in England and Wales with registered number 03702189)

NOTICE OF A MEETING

of the holders (the "Class B Noteholders") of those of the
£33,350,000 Class B Asset Backed Floating Rate Notes due 2029
of the Issuer presently outstanding
(the "Class B Notes")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the Class B Noteholders convened by the Issuer will be held at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS at 3.00 p.m. (London time) on 10 June 2019 for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Extraordinary Resolutions (to be passed as Basic Terms Modifications) in accordance with the provisions of the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the Class B Noteholders and constituting the Class B Notes. Pursuant to the terms of the Note Trust Deed, the Issuer will convene separate meetings of Noteholders of each Class of Notes for each meeting to consider the Extraordinary Resolutions in respect of such Class of Notes, which if passed by all Classes of Notes, will approve the Proposals (as defined below).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the Note Trust Deed, the terms and conditions of the Notes (the "Conditions"), the consent solicitation memorandum dated 17 May 2019 from the Issuer addressed to the Noteholders (the "Consent Solicitation Memorandum") or the Extraordinary Resolutions, as applicable.

EXTRAORDINARY RESOLUTIONS

"THAT this meeting (the "Meeting") of the holders of those of the £33,350,000 Class B Asset Backed Floating Rate Notes due 2029 issued by Honours PLC (the "Issuer") presently outstanding (the "Class B Notes") constituted by the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the holders of the Class B Notes (the "Class B Noteholders") hereby:

(a)        sanction, authorise and approve the implementation of the Remediation Plan proposed by the Issuer (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions) (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time, provided that such amendments will not result in substantial costs being incurred by the Issuer);

(b)        authorise, direct, request and empower Deloitte LLP ("Deloitte") and Link Financial Outsourcing Limited ("LFO") to take any action and steps and do all things as may be necessary, appropriate or desirable to carry out and give effect to the Remediation Plan (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions);

(c)        authorise the release of the cash standing to the credit of the Settlement Account from the Security as and when withdrawn and authorise the Issuer to use the cash standing to the credit of the Settlement Account in accordance with the Settlement Account Agreement, which will provide that this cash will be applied by the Issuer -

(i)         to make cash refunds to the affected borrowers and the Authority pursuant to the Remediation Plan, by transferring amounts to LFO to enable LFO to make such payments;

(ii)        to pay Deloitte's and LFO's costs relating to implementing the Remediation Plan, up to a maximum aggregate amount of £1,000,000;

(iii)       to reimburse the structure in respect of third party costs (including legal and financial advisory costs) incurred by the structure up to and including 31 March 2019 in connection with (i) dealing with the non-compliance issues in relation to the CCA, including negotiating and finalising the settlement with Capita, and (ii) the formulation of the Remediation Plan, by adding an amount in respect of such third party costs (after having paid or provided for the amounts referred to in paragraphs (i) and (ii) above and (v) below) to the Available Revenue Funds, up to a maximum aggregate amount of £1,000,000;

(iv)       to pay all third party costs (including, without limitation, any legal, Note Trustee, Security Trustee, Cash Manager and financial advisory costs) incurred after 31 March 2019 to the date of completion of the Remediation Plan which the Issuer is obliged to pay or reimburse in connection with (i) the formulation and implementation of the Remediation Plan, and (ii) the consent solicitation process, by transferring the relevant amount(s) in respect of such third party costs to the relevant third party (after having paid or provided for the amounts referred to in paragraphs (i), (ii) and (iii) above and (v) below), but only to the extent that having covered the expenses and items in paragraphs (i), (ii) and (iii) above and (v) below, at least £1,500,000 will be remaining in the Settlement Account to establish the reserve fund contemplated in (vi) below;

(v)        for PDL remediation (where remediation is payable to a borrower whose loan is still outstanding, the borrower's account balance will be reduced by the amount of the remediation) by adding amounts (not used in paragraphs (i), (ii), (iii) and (iv) above) to the Available Revenue Funds to offset the impact of balance adjustments, both in terms of interest cancelled and any principal reductions as a result of the implementation of the Remediation Plan by adding equivalent sums to the PDL;

(vi)       to keep any remaining cash (after applying it in the manner contemplated in paragraphs (i), (ii), (iii), (iv) and (v) above) in the Settlement Account as a reserve fund for a period of 36 months (the "Reserve Period") to be used to meet any potential future liability, costs, claims, expenses or losses to the Honours structure as a result of any borrower and/or the Authority making any claim or demand or taking any action against the Issuer and/or the Purchaser in connection with the Remediation Plan or arising as a result of the non-compliance issues in relation to the CCA (the "Claims"), and after the Reserve Period:

(A)       if there has been less than £100,000 of Claims made against the Issuer and/or the Purchaser during the Reserve Period, with less than £10,000 of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to use any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period by transferring such remaining amount to the Issuer Account to be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments at that time; and

(B)       if there has been £100,000 or more of Claims made against the Issuer and/or the Purchaser during the Reserve Period and/or £10,000 or more of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to obtain approval from the Noteholders at that point in time as to the manner in which any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period should be retained/released and applied;

(d)        authorise, direct, request and empower the Purchaser and the Issuer, (i) to agree and execute (as applicable) a supplemental agreement to the Administration Agreement with LFO (the "Supplemental Agreement") to provide for any additional services that may be required to be performed by LFO in order to implement the Remediation Plan, including making the relevant cash payments to the affected borrowers and the Authority as contemplated in paragraph (c)(i) above, and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Supplemental Agreement;

(e)        approve and assent to the settlement account agreement in or substantially in the form of the draft set out in Annex A to the Consent Solicitation Memorandum and made available for inspection at the specified offices of the Issuer or the Irish Paying Agent on and from the date of this Notice (the "Settlement Account Agreement") and authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable, (i) to agree and execute (as applicable) the Settlement Account Agreement and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Settlement Account Agreement;

(f)        authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer as applicable (i) to treat and distribute any amounts(s) transferred from the Settlement Account to the Issuer Account as Available Revenue Funds; and (ii) to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the amendment(s) required to be made to the definition of Available Revenue Funds in order to ensure that any amounts(s) transferred from the Settlement Account to the Issuer Account constitute Available Revenue Funds and can be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments, as contemplated by the Extraordinary Resolutions set out in paragraphs, (c)(iii), (c)(v) and (c)(vi)(A);

(g)        once the balance in the Settlement Account is reduced to zero, authorise and sanction the Security Trustee to release the Security granted pursuant to the Deed of Charge over the Settlement Account itself and authorise and sanction the Issuer to close the Settlement Account;

(h)        authorise the Issuer to pay any fees, costs, charges and expenses of any third party reasonably incurred (to the extent not paid from the funds standing to the credit of the Settlement Account) relating to (i) implementing the Remediation Plan and (ii) the consent solicitation process, either at the relevant line item in Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments or line item (vi)(G) of Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments;  

(i)         authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(j)         ratify and confirm each and every act or thing done or effected by the Issuer in relation to the appointment of Deloitte as its financial adviser and the incurrence of its fees in connection therewith; 

(k)        ratify and confirm each and every act or thing that may be done or effected by the Issuer, the Paying Agents, the Tabulation Agent, the Cash Manager, the Note Trustee, the Security Trustee and any of their respective directors, officers, employees, agents or affiliates or any person nominated by the Issuer in the proper exercise of his or her powers and/or authority under the Consent Solicitation Memorandum in order to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(l)         agree, in relation to the submission of a Consent Instruction (if applicable), (i) to do all such acts and things as shall be necessary and execute any additional documents deemed by the Issuer to be desirable, in each case, to perfect any of the authorities expressed to be given under the Consent Solicitation Memorandum and appoint the Tabulation Agent as its authorised attorney to do so on its behalf, and (ii) to execute and deliver any additional documents and/or do such other things deemed by the Issuer to be necessary or desirable to effect delivery of the Consent Instructions related to such Notes or to evidence such power and authority;

(m)       discharge and exonerate each of the Note Trustee, the Security Trustee, the Cash Manager and the Issuer from all liability for which it may have become or may become responsible under the Note Trust Deed, the Deed of Charge, any other Transaction Document or the Notes in respect of any act or omission in connection with the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement; and

(n)        sanction and assent to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Noteholders against the Issuer or any other person (whether such rights shall arise under the Note Trust Deed, the Deed of Charge or otherwise) involved in or resulting from or to be effected by, the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement.

Terms used but not otherwise defined in these Extraordinary Resolutions shall have the meaning given in the Note Trust Deed, the Conditions or the Consent Solicitation Memorandum."

Background to Extraordinary Resolutions

The Extraordinary Resolutions are being proposed in connection with the Consent Solicitation.

The purpose of the Consent Solicitation is to invite Noteholders from each Class of Notes to consider and, if thought fit, to approve the Extraordinary Resolutions in connection with the:

(a)        implementation of a remediation plan proposed by the Issuer, as more fully described in the section entitled "Remediation Plan and Release of Settlement Amount" of the Consent Solicitation Memorandum (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time) (the "Remediation Plan"); and

(b)        release and application of the cash standing to the credit of the Settlement Account (as defined in the Consent Solicitation Memorandum) in the manner contemplated in the Consent Solicitation Memorandum and the Extraordinary Resolutions,

(together, the "Proposals").

Full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the Consent Solicitation Memorandum, copies of which are available upon request from the Issuer or Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an eligible Noteholder.

General

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of an Extraordinary Resolution at a Meeting or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below (see in particular paragraph 6). Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at such Meeting (including by way of submitting Consent Instructions) as soon as possible.

Copies of this Notice, the Note Trust Deed (including the Conditions of the Notes), the Deed of Charge and the draft Settlement Account Agreement referred to in the Extraordinary Resolutions set out above and of certain other relevant documents will be available for inspection at the specified offices of the Paying Agents and the Tabulation Agent set out below.

Subject to the approval of the Extraordinary Resolutions with respect to the Class A1 Notes, the Class A2 Notes, the Class C Notes, the Class D Notes and the Class E Notes (as described in the Consent Solicitation Memorandum) the Extraordinary Resolutions, if approved as described above, will be implemented as soon as reasonably practicable after the announcement via the Clearing Systems and the Irish Stock Exchange website of the results of the Meetings that all of the Extraordinary Resolutions have been approved by each of the Classes of Noteholders.

In accordance with normal practice, the Note Trustee and the Security Trustee express no opinion as to the merits of the Consent Solicitation (as defined in the Consent Solicitation Memorandum) or the Proposals (as defined above) (which they were not involved in negotiating).  They have, however, authorised it to be stated that, on the basis of the information set out in the Consent Solicitation Memorandum (which they recommend the Class B Noteholders to read carefully) and in this Notice, it has no objection to the Extraordinary Resolutions referred to above being submitted to the Class B Noteholders for their consideration.  The Note Trustee and the Security Trustee have not been involved in formulating the Consent Solicitation, the Extraordinary Resolutions or the Proposals and make no representation that all relevant information has been disclosed to the Class B Noteholders in the Consent Solicitation Memorandum and this Notice.  Accordingly, the Note Trustee and the Security Trustee urge the Class B Noteholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolutions to seek their own independent legal and financial advice.

By submitting or delivering a duly completed Consent Instruction to the relevant Clearing System, a Class B Noteholder instructs the Principal Paying Agent to appoint the Tabulation Agent as proxy to attend and vote at the Meeting in favour of or against the Extraordinary Resolutions. The terms and conditions of the Consent Solicitation Memorandum are without prejudice to the right of a Class B Noteholder to attend and vote at the Meeting as set out in this Notice and in the Note Trust Deed.

Voting and Quorum

1.         The provisions governing the convening and holding of a Meeting are set out in Schedule 5 (Provisions for Meetings of Noteholders) to the Note Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the respective specified offices of the Paying Agents and the Tabulation Agent set out below.

2.         All of the Notes of each Class are represented by a global note of the relevant Class held by a common depositary for Clearstream Banking S.A. ("Clearstream, Luxembourg") and/or Euroclear Bank S.A./N.V. ("Euroclear").  For the purposes of the Meeting, a "Noteholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the relevant Class of Notes.

3.         A Noteholder wishing to attend the relevant Meeting in person must produce at that Meeting a valid Voting Certificate issued by a Paying Agent relating to the relevant Class of Notes in respect of which it wishes to vote.

4.         A Noteholder not wishing to attend and vote at the relevant Meeting in person may either deliver its valid Voting Certificate(s) to the person whom he wishes to attend on his behalf or give a voting instruction (by giving his electronic voting instructions (a "Consent Instruction")) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint Wilmington Trust (London) Limited (the "Tabulation Agent") to attend and vote at the Meeting in accordance with his instructions.

5.         A Noteholder must request the relevant clearing system to block the relevant Notes in his own account and to hold the same to the order or under the control of a Paying Agent not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain Voting Certificates or to give Consent Instructions in respect of the relevant Meeting.  Notes of the relevant Class so blocked will not be released until the earlier of:

(a)        in respect of Voting Certificate(s):

(i)         the conclusion of the relevant Meeting (or, if applicable, any adjournment of the relevant Meeting); and

(ii)        the surrender of the Voting Certificate(s) to the Paying Agent who issued the same and the notification by such Paying Agent to the relevant clearing system of such surrender or the compliance in such other manner with the rules of the relevant clearing system; and

(b)        in respect of Consent Instructions:

(i)         the date on which the Consent Solicitation is terminated by the Issuer (provided that such termination is more than 48 hours before the time set for the relevant Meeting);

(ii)        the date on which the relevant Consent Instruction is validly revoked in accordance with the terms of the Consent Solicitation Memorandum; and

(iii)       the conclusion of each of the Meetings of the Class A1 Noteholders, Class A2 Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, and the Class E Noteholders (or, if applicable, any adjournment of any of the Meetings).

6.         The quorum required at each Meeting is two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate holders of not less than 75 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).  If a quorum is not present at the relevant Meeting, such Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolutions will be considered at an adjourned Meeting (notice of which will be given to the relevant Noteholders).  The quorum at such an adjourned Meeting will be two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 25 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).

7.         Voting Certificates and Consent Instructions given in respect of the relevant Meeting (unless surrendered or, as the case may be, revoked at least 48 hours prior to any adjourned Meeting) shall remain valid for such adjourned Meeting.

8.         Every question submitted to the relevant Meeting will be decided on a show of hands unless a poll is duly demanded by the Chairman of that Meeting, the Issuer or one or more Noteholders holding one or more Notes of the relevant Class and/or persons holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 5 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class then outstanding (as defined in the Transaction Master Definitions and Framework Deed).  On a show of hands every person who is present in person and produces a Voting Certificate or is a proxy shall have one vote.  On a poll every person who is so present shall have one vote in respect of each £50,000 principal amount of the Principal Amount Outstanding of the relevant Class of Notes represented by the Voting Certificate so produced or in respect of which that person is a proxy.

9.         To be passed at a Meeting, each Extraordinary Resolution requires a majority of not less than three-fourths of the persons voting at the relevant Meeting upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll. If passed by a Class of Noteholders, the Extraordinary Resolutions shall be binding on all Noteholders of the relevant Class, whether present or not at the relevant Meeting at which it is passed and whether or not voting. However, the Proposals will only be implemented if the Extraordinary Resolutions in respect of all Classes of Notes are approved.

This Notice is given by:
Honours PLC
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors

Dated 17 May 2019

 

Contact Information

Requests for copies of the Consent Solicitation Memorandum and information in relation to the Consent Solicitation and the procedures for the submission of a Consent Instruction should be directed to:

The Tabulation Agent

Wilmington Trust (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors - Honours Tabulation Agent

 

 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Corporate Action Department (email: [email protected])

Clearstream: CIE Department (email: [email protected])

 

The Tabulation Agent does not take responsibility for the contents of this Notice and none of the Issuer or the Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This Notice must be read in conjunction with the Consent Solicitation Memorandum. No offer to acquire any Notes is being made pursuant to this Notice. This Notice and the Consent Solicitation Memorandum contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Distribution Restrictions

This Notice and the Consent Solicitation Memorandum do not constitute an offer or an invitation to participate in the Consent Solicitation in any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer or invitation under applicable securities laws. The distribution of the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by each of the Issuer and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer or the Tabulation Agent in relation to the Consent Solicitation that would permit a public offering of securities.

Any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offer or solicitation is not permitted by law.

 

 

 

Annex D - Notice of Meeting of the Class C Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS C NOTEHOLDERS.  IF CLASS C NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

HONOURS PLC
(the "Issuer")

(Incorporated in England and Wales with registered number 03702189)

NOTICE OF A MEETING

of the holders (the "Class C Noteholders") of those of the
£18,000,000 Class C Asset Backed Floating Rate Notes due 2029
of the Issuer presently outstanding
(the "Class C Notes")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the Class C Noteholders convened by the Issuer will be held at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS at 3.30 p.m. (London time) on 10 June 2019 for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Extraordinary Resolutions (to be passed as Basic Terms Modifications) in accordance with the provisions of the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the Class C Noteholders and constituting the Class C Notes. Pursuant to the terms of the Note Trust Deed, the Issuer will convene separate meetings of Noteholders of each Class of Notes for each meeting to consider the Extraordinary Resolutions in respect of such Class of Notes, which if passed by all Classes of Notes, will approve the Proposals (as defined below).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the Note Trust Deed, the terms and conditions of the Notes (the "Conditions"), the consent solicitation memorandum dated 17 May 2019 from the Issuer addressed to the Noteholders (the "Consent Solicitation Memorandum") or the Extraordinary Resolutions, as applicable.

EXTRAORDINARY RESOLUTIONS

"THAT this meeting (the "Meeting") of the holders of those of the £18,000,000 Class C Asset Backed Floating Rate Notes due 2029 issued by Honours PLC (the "Issuer") presently outstanding (the "Class C Notes") constituted by the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the holders of the Class C Notes (the "Class C Noteholders") hereby:

(a)        sanction, authorise and approve the implementation of the Remediation Plan proposed by the Issuer (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions) (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time, provided that such amendments will not result in substantial costs being incurred by the Issuer);

(b)        authorise, direct, request and empower Deloitte LLP ("Deloitte") and Link Financial Outsourcing Limited ("LFO") to take any action and steps and do all things as may be necessary, appropriate or desirable to carry out and give effect to the Remediation Plan (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions);

(c)        authorise the release of the cash standing to the credit of the Settlement Account from the Security as and when withdrawn and authorise the Issuer to use the cash standing to the credit of the Settlement Account in accordance with the Settlement Account Agreement, which will provide that this cash will be applied by the Issuer -

(i)         to make cash refunds to the affected borrowers and the Authority pursuant to the Remediation Plan, by transferring amounts to LFO to enable LFO to make such payments;

(ii)        to pay Deloitte's and LFO's costs relating to implementing the Remediation Plan, up to a maximum aggregate amount of £1,000,000;

(iii)       to reimburse the structure in respect of third party costs (including legal and financial advisory costs) incurred by the structure up to and including 31 March 2019 in connection with (i) dealing with the non-compliance issues in relation to the CCA, including negotiating and finalising the settlement with Capita, and (ii) the formulation of the Remediation Plan, by adding an amount in respect of such third party costs (after having paid or provided for the amounts referred to in paragraphs (i) and (ii) above and (v) below) to the Available Revenue Funds, up to a maximum aggregate amount of £1,000,000;

(iv)       to pay all third party costs (including, without limitation, any legal, Note Trustee, Security Trustee, Cash Manager and financial advisory costs) incurred after 31 March 2019 to the date of completion of the Remediation Plan which the Issuer is obliged to pay or reimburse in connection with (i) the formulation and implementation of the Remediation Plan, and (ii) the consent solicitation process, by transferring the relevant amount(s) in respect of such third party costs to the relevant third party (after having paid or provided for the amounts referred to in paragraphs (i), (ii) and (iii) above and (v) below), but only to the extent that having covered the expenses and items in paragraphs (i), (ii) and (iii) above and (v) below, at least £1,500,000 will be remaining in the Settlement Account to establish the reserve fund contemplated in (vi) below;

(v)        for PDL remediation (where remediation is payable to a borrower whose loan is still outstanding, the borrower's account balance will be reduced by the amount of the remediation) by adding amounts (not used in paragraphs (i), (ii), (iii) and (iv) above) to the Available Revenue Funds to offset the impact of balance adjustments, both in terms of interest cancelled and any principal reductions as a result of the implementation of the Remediation Plan by adding equivalent sums to the PDL;

(vi)       to keep any remaining cash (after applying it in the manner contemplated in paragraphs (i), (ii), (iii), (iv) and (v) above) in the Settlement Account as a reserve fund for a period of 36 months (the "Reserve Period") to be used to meet any potential future liability, costs, claims, expenses or losses to the Honours structure as a result of any borrower and/or the Authority making any claim or demand or taking any action against the Issuer and/or the Purchaser in connection with the Remediation Plan or arising as a result of the non-compliance issues in relation to the CCA (the "Claims"), and after the Reserve Period:

(A)       if there has been less than £100,000 of Claims made against the Issuer and/or the Purchaser during the Reserve Period, with less than £10,000 of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to use any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period by transferring such remaining amount to the Issuer Account to be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments at that time; and

(B)       if there has been £100,000 or more of Claims made against the Issuer and/or the Purchaser during the Reserve Period and/or £10,000 or more of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to obtain approval from the Noteholders at that point in time as to the manner in which any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period should be retained/released and applied;

(d)        authorise, direct, request and empower the Purchaser and the Issuer, (i) to agree and execute (as applicable) a supplemental agreement to the Administration Agreement with LFO (the "Supplemental Agreement") to provide for any additional services that may be required to be performed by LFO in order to implement the Remediation Plan, including making the relevant cash payments to the affected borrowers and the Authority as contemplated in paragraph (c)(i) above, and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Supplemental Agreement;

(e)        approve and assent to the settlement account agreement in or substantially in the form of the draft set out in Annex A to the Consent Solicitation Memorandum and made available for inspection at the specified offices of the Issuer or the Irish Paying Agent on and from the date of this Notice (the "Settlement Account Agreement") and authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable, (i) to agree and execute (as applicable) the Settlement Account Agreement and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Settlement Account Agreement;

(f)        authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer as applicable (i) to treat and distribute any amounts(s) transferred from the Settlement Account to the Issuer Account as Available Revenue Funds; and (ii) to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the amendment(s) required to be made to the definition of Available Revenue Funds in order to ensure that any amounts(s) transferred from the Settlement Account to the Issuer Account constitute Available Revenue Funds and can be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments, as contemplated by the Extraordinary Resolutions set out in paragraphs, (c)(iii), (c)(v) and (c)(vi)(A);

(g)        once the balance in the Settlement Account is reduced to zero, authorise and sanction the Security Trustee to release the Security granted pursuant to the Deed of Charge over the Settlement Account itself and authorise and sanction the Issuer to close the Settlement Account;

(h)        authorise the Issuer to pay any fees, costs, charges and expenses of any third party reasonably incurred (to the extent not paid from the funds standing to the credit of the Settlement Account) relating to (i) implementing the Remediation Plan and (ii) the consent solicitation process, either at the relevant line item in Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments or line item (vi)(G) of Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments;   

(i)         authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(j)         ratify and confirm each and every act or thing done or effected by the Issuer in relation to the appointment of Deloitte as its financial adviser and the incurrence of its fees in connection therewith; 

(k)        ratify and confirm each and every act or thing that may be done or effected by the Issuer, the Paying Agents, the Tabulation Agent, the Cash Manager, the Note Trustee, the Security Trustee and any of their respective directors, officers, employees, agents or affiliates or any person nominated by the Issuer in the proper exercise of his or her powers and/or authority under the Consent Solicitation Memorandum in order to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(l)         agree, in relation to the submission of a Consent Instruction (if applicable), (i) to do all such acts and things as shall be necessary and execute any additional documents deemed by the Issuer to be desirable, in each case, to perfect any of the authorities expressed to be given under the Consent Solicitation Memorandum and appoint the Tabulation Agent as its authorised attorney to do so on its behalf, and (ii) to execute and deliver any additional documents and/or do such other things deemed by the Issuer to be necessary or desirable to effect delivery of the Consent Instructions related to such Notes or to evidence such power and authority;

(m)       discharge and exonerate each of the Note Trustee, the Security Trustee, the Cash Manager and the Issuer from all liability for which it may have become or may become responsible under the Note Trust Deed, the Deed of Charge, any other Transaction Document or the Notes in respect of any act or omission in connection with the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement; and

(n)        sanction and assent to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Noteholders against the Issuer or any other person (whether such rights shall arise under the Note Trust Deed, the Deed of Charge or otherwise) involved in or resulting from or to be effected by, the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement.

Terms used but not otherwise defined in these Extraordinary Resolutions shall have the meaning given in the Note Trust Deed, the Conditions or the Consent Solicitation Memorandum."

Background to Extraordinary Resolutions

The Extraordinary Resolutions are being proposed in connection with the Consent Solicitation.

The purpose of the Consent Solicitation is to invite Noteholders from each Class of Notes to consider and, if thought fit, to approve the Extraordinary Resolutions in connection with the:

(a)        implementation of a remediation plan proposed by the Issuer, as more fully described in the section entitled "Remediation Plan and Release of Settlement Amount" of the Consent Solicitation Memorandum (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time) (the "Remediation Plan"); and

(b)        release and application of the cash standing to the credit of the Settlement Account (as defined in the Consent Solicitation Memorandum) in the manner contemplated in the Consent Solicitation Memorandum and the Extraordinary Resolutions,

(together, the "Proposals").

Full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the Consent Solicitation Memorandum, copies of which are available upon request from the Issuer or Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an eligible Noteholder.

General

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of an Extraordinary Resolution at a Meeting or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below (see in particular paragraph 6). Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at such Meeting (including by way of submitting Consent Instructions) as soon as possible.

Copies of this Notice, the Note Trust Deed (including the Conditions of the Notes), the Deed of Charge and the draft Settlement Account Agreement referred to in the Extraordinary Resolutions set out above and of certain other relevant documents will be available for inspection at the specified offices of the Paying Agents and the Tabulation Agent set out below.

Subject to the approval of the Extraordinary Resolutions with respect to the Class A1 Notes, the Class A2 Notes, the Class B Notes, the Class D Notes and the Class E Notes (as described in the Consent Solicitation Memorandum) the Extraordinary Resolutions, if approved as described above, will be implemented as soon as reasonably practicable after the announcement via the Clearing Systems and the Irish Stock Exchange website of the results of the Meetings that all of the Extraordinary Resolutions have been approved by each of the Classes of Noteholders.

In accordance with normal practice, the Note Trustee and the Security Trustee express no opinion as to the merits of the Consent Solicitation (as defined in the Consent Solicitation Memorandum) or the Proposals (as defined above) (which they were not involved in negotiating).  They have, however, authorised it to be stated that, on the basis of the information set out in the Consent Solicitation Memorandum (which they recommend the Class C Noteholders to read carefully) and in this Notice, it has no objection to the Extraordinary Resolutions referred to above being submitted to the Class C Noteholders for their consideration.  The Note Trustee and the Security Trustee have not been involved in formulating the Consent Solicitation, the Extraordinary Resolutions or the Proposals and make no representation that all relevant information has been disclosed to the Class C Noteholders in the Consent Solicitation Memorandum and this Notice.  Accordingly, the Note Trustee and the Security Trustee urge the Class C Noteholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolutions to seek their own independent legal and financial advice.

By submitting or delivering a duly completed Consent Instruction to the relevant Clearing System, a Class C Noteholder instructs the Principal Paying Agent to appoint the Tabulation Agent as proxy to attend and vote at the Meeting in favour of or against the Extraordinary Resolutions. The terms and conditions of the Consent Solicitation Memorandum are without prejudice to the right of a Class C Noteholder to attend and vote at the Meeting as set out in this Notice and in the Note Trust Deed.

Voting and Quorum

1.         The provisions governing the convening and holding of a Meeting are set out in Schedule 5 (Provisions for Meetings of Noteholders) to the Note Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the respective specified offices of the Paying Agents and the Tabulation Agent set out below.

2.         All of the Notes of each Class are represented by a global note of the relevant Class held by a common depositary for Clearstream Banking S.A. ("Clearstream, Luxembourg") and/or Euroclear Bank S.A./N.V. ("Euroclear").  For the purposes of the Meeting, a "Noteholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the relevant Class of Notes.

3.         A Noteholder wishing to attend the relevant Meeting in person must produce at that Meeting a valid Voting Certificate issued by a Paying Agent relating to the relevant Class of Notes in respect of which it wishes to vote.

4.         A Noteholder not wishing to attend and vote at the relevant Meeting in person may either deliver its valid Voting Certificate(s) to the person whom he wishes to attend on his behalf or give a voting instruction (by giving his electronic voting instructions (a "Consent Instruction")) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint Wilmington Trust (London) Limited (the "Tabulation Agent") to attend and vote at the Meeting in accordance with his instructions.

5.         A Noteholder must request the relevant clearing system to block the relevant Notes in his own account and to hold the same to the order or under the control of a Paying Agent not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain Voting Certificates or to give Consent Instructions in respect of the relevant Meeting.  Notes of the relevant Class so blocked will not be released until the earlier of:

(a)        in respect of Voting Certificate(s):

(i)         the conclusion of the relevant Meeting (or, if applicable, any adjournment of the relevant Meeting); and

(ii)        the surrender of the Voting Certificate(s) to the Paying Agent who issued the same and the notification by such Paying Agent to the relevant clearing system of such surrender or the compliance in such other manner with the rules of the relevant clearing system; and

(b)        in respect of Consent Instructions:

(i)         the date on which the Consent Solicitation is terminated by the Issuer (provided that such termination is more than 48 hours before the time set for the relevant Meeting);

(ii)        the date on which the relevant Consent Instruction is validly revoked in accordance with the terms of the Consent Solicitation Memorandum; and

(iii)       the conclusion of each of the Meetings of the Class A1 Noteholders, Class A2 Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, and the Class E Noteholders (or, if applicable, any adjournment of any of the Meetings).

6.         The quorum required at each Meeting is two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate holders of not less than 75 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).  If a quorum is not present at the relevant Meeting, such Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolutions will be considered at an adjourned Meeting (notice of which will be given to the relevant Noteholders).  The quorum at such an adjourned Meeting will be two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 25 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).

7.         Voting Certificates and Consent Instructions given in respect of the relevant Meeting (unless surrendered or, as the case may be, revoked at least 48 hours prior to any adjourned Meeting) shall remain valid for such adjourned Meeting.

8.         Every question submitted to the relevant Meeting will be decided on a show of hands unless a poll is duly demanded by the Chairman of that Meeting, the Issuer or one or more Noteholders holding one or more Notes of the relevant Class and/or persons holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 5 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class then outstanding (as defined in the Transaction Master Definitions and Framework Deed).  On a show of hands every person who is present in person and produces a Voting Certificate or is a proxy shall have one vote.  On a poll every person who is so present shall have one vote in respect of each £50,000 principal amount of the Principal Amount Outstanding of the relevant Class of Notes represented by the Voting Certificate so produced or in respect of which that person is a proxy.

9.         To be passed at a Meeting, each Extraordinary Resolution requires a majority of not less than three-fourths of the persons voting at the relevant Meeting upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll. If passed by a Class of Noteholders, the Extraordinary Resolutions shall be binding on all Noteholders of the relevant Class, whether present or not at the relevant Meeting at which it is passed and whether or not voting. However, the Proposals will only be implemented if the Extraordinary Resolutions in respect of all Classes of Notes are approved.

This Notice is given by:
Honours PLC
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors

Dated 17 May 2019

 

Contact Information

Requests for copies of the Consent Solicitation Memorandum and information in relation to the Consent Solicitation and the procedures for the submission of a Consent Instruction should be directed to:

The Tabulation Agent

Wilmington Trust (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors - Honours Tabulation Agent

 

 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Corporate Action Department (email: [email protected])

Clearstream: CIE Department (email: [email protected])

 

The Tabulation Agent does not take responsibility for the contents of this Notice and none of the Issuer or the Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This Notice must be read in conjunction with the Consent Solicitation Memorandum. No offer to acquire any Notes is being made pursuant to this Notice. This Notice and the Consent Solicitation Memorandum contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Distribution Restrictions

This Notice and the Consent Solicitation Memorandum do not constitute an offer or an invitation to participate in the Consent Solicitation in any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer or invitation under applicable securities laws. The distribution of the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by each of the Issuer and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer or the Tabulation Agent in relation to the Consent Solicitation that would permit a public offering of securities.

Any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offer or solicitation is not permitted by law.

 

 

 

Annex E - Notice of Meeting of the Class D Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS D NOTEHOLDERS.  IF CLASS D NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

HONOURS PLC
(the "Issuer")

(Incorporated in England and Wales with registered number 03702189)

NOTICE OF A MEETING

of the holders (the "Class D Noteholders") of those of the
£11,950,000 Class D Asset Backed Floating Rate Notes due 2029
of the Issuer presently outstanding
(the "Class D Notes")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the Class D Noteholders convened by the Issuer will be held at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS at 4.00 p.m. (London time) on 10 June 2019 for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Extraordinary Resolutions (to be passed as Basic Terms Modifications) in accordance with the provisions of the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the Class D Noteholders and constituting the Class D Notes. Pursuant to the terms of the Note Trust Deed, the Issuer will convene separate meetings of Noteholders of each Class of Notes for each meeting to consider the Extraordinary Resolutions in respect of such Class of Notes, which if passed by all Classes of Notes, will approve the Proposals (as defined below).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the Note Trust Deed, the terms and conditions of the Notes (the "Conditions"), the consent solicitation memorandum dated 17 May 2019 from the Issuer addressed to the Noteholders (the "Consent Solicitation Memorandum") or the Extraordinary Resolutions, as applicable.

EXTRAORDINARY RESOLUTIONS

"THAT this meeting (the "Meeting") of the holders of those of the £11,950,000 Class D Asset Backed Floating Rate Notes due 2029 issued by Honours PLC (the "Issuer") presently outstanding (the "Class D Notes") constituted by the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the holders of the Class D Notes (the "Class D Noteholders") hereby:

(a)        sanction, authorise and approve the implementation of the Remediation Plan proposed by the Issuer (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions) (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time, provided that such amendments will not result in substantial costs being incurred by the Issuer);

(b)        authorise, direct, request and empower Deloitte LLP ("Deloitte") and Link Financial Outsourcing Limited ("LFO") to take any action and steps and do all things as may be necessary, appropriate or desirable to carry out and give effect to the Remediation Plan (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions);

(c)        authorise the release of the cash standing to the credit of the Settlement Account from the Security as and when withdrawn and authorise the Issuer to use the cash standing to the credit of the Settlement Account in accordance with the Settlement Account Agreement, which will provide that this cash will be applied by the Issuer -

(i)         to make cash refunds to the affected borrowers and the Authority pursuant to the Remediation Plan, by transferring amounts to LFO to enable LFO to make such payments;

(ii)        to pay Deloitte's and LFO's costs relating to implementing the Remediation Plan, up to a maximum aggregate amount of £1,000,000;

(iii)       to reimburse the structure in respect of third party costs (including legal and financial advisory costs) incurred by the structure up to and including 31 March 2019 in connection with (i) dealing with the non-compliance issues in relation to the CCA, including negotiating and finalising the settlement with Capita, and (ii) the formulation of the Remediation Plan, by adding an amount in respect of such third party costs (after having paid or provided for the amounts referred to in paragraphs (i) and (ii) above and (v) below) to the Available Revenue Funds, up to a maximum aggregate amount of £1,000,000;

(iv)       to pay all third party costs (including, without limitation, any legal, Note Trustee, Security Trustee, Cash Manager and financial advisory costs) incurred after 31 March 2019 to the date of completion of the Remediation Plan which the Issuer is obliged to pay or reimburse in connection with (i) the formulation and implementation of the Remediation Plan, and (ii) the consent solicitation process, by transferring the relevant amount(s) in respect of such third party costs to the relevant third party (after having paid or provided for the amounts referred to in paragraphs (i), (ii) and (iii) above and (v) below), but only to the extent that having covered the expenses and items in paragraphs (i), (ii) and (iii) above and (v) below, at least £1,500,000 will be remaining in the Settlement Account to establish the reserve fund contemplated in (vi) below;

(v)        for PDL remediation (where remediation is payable to a borrower whose loan is still outstanding, the borrower's account balance will be reduced by the amount of the remediation) by adding amounts (not used in paragraphs (i), (ii), (iii) and (iv) above) to the Available Revenue Funds to offset the impact of balance adjustments, both in terms of interest cancelled and any principal reductions as a result of the implementation of the Remediation Plan by adding equivalent sums to the PDL;

(vi)       to keep any remaining cash (after applying it in the manner contemplated in paragraphs (i), (ii), (iii), (iv) and (v) above) in the Settlement Account as a reserve fund for a period of 36 months (the "Reserve Period") to be used to meet any potential future liability, costs, claims, expenses or losses to the Honours structure as a result of any borrower and/or the Authority making any claim or demand or taking any action against the Issuer and/or the Purchaser in connection with the Remediation Plan or arising as a result of the non-compliance issues in relation to the CCA (the "Claims"), and after the Reserve Period:

(A)       if there has been less than £100,000 of Claims made against the Issuer and/or the Purchaser during the Reserve Period, with less than £10,000 of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to use any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period by transferring such remaining amount to the Issuer Account to be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments at that time; and

(B)       if there has been £100,000 or more of Claims made against the Issuer and/or the Purchaser during the Reserve Period and/or £10,000 or more of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to obtain approval from the Noteholders at that point in time as to the manner in which any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period should be retained/released and applied;

(d)        authorise, direct, request and empower the Purchaser and the Issuer, (i) to agree and execute (as applicable) a supplemental agreement to the Administration Agreement with LFO (the "Supplemental Agreement") to provide for any additional services that may be required to be performed by LFO in order to implement the Remediation Plan, including making the relevant cash payments to the affected borrowers and the Authority as contemplated in paragraph (c)(i) above, and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Supplemental Agreement;

(e)        approve and assent to the settlement account agreement in or substantially in the form of the draft set out in Annex A to the Consent Solicitation Memorandum and made available for inspection at the specified offices of the Issuer or the Irish Paying Agent on and from the date of this Notice (the "Settlement Account Agreement") and authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable, (i) to agree and execute (as applicable) the Settlement Account Agreement and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Settlement Account Agreement;

(f)        authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer as applicable (i) to treat and distribute any amounts(s) transferred from the Settlement Account to the Issuer Account as Available Revenue Funds; and (ii) to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the amendment(s) required to be made to the definition of Available Revenue Funds in order to ensure that any amounts(s) transferred from the Settlement Account to the Issuer Account constitute Available Revenue Funds and can be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments, as contemplated by the Extraordinary Resolutions set out in paragraphs, (c)(iii), (c)(v) and (c)(vi)(A);

(g)        once the balance in the Settlement Account is reduced to zero, authorise and sanction the Security Trustee to release the Security granted pursuant to the Deed of Charge over the Settlement Account itself and authorise and sanction the Issuer to close the Settlement Account;

(h)        authorise the Issuer to pay any fees, costs, charges and expenses of any third party reasonably incurred (to the extent not paid from the funds standing to the credit of the Settlement Account) relating to (i) implementing the Remediation Plan and (ii) the consent solicitation process, either at the relevant line item in Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments or line item (vi)(G) of Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments;  

(i)         authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(j)         ratify and confirm each and every act or thing done or effected by the Issuer in relation to the appointment of Deloitte as its financial adviser and the incurrence of its fees in connection therewith; 

(k)        ratify and confirm each and every act or thing that may be done or effected by the Issuer, the Paying Agents, the Tabulation Agent, the Cash Manager, the Note Trustee, the Security Trustee and any of their respective directors, officers, employees, agents or affiliates or any person nominated by the Issuer in the proper exercise of his or her powers and/or authority under the Consent Solicitation Memorandum in order to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(l)         agree, in relation to the submission of a Consent Instruction (if applicable), (i) to do all such acts and things as shall be necessary and execute any additional documents deemed by the Issuer to be desirable, in each case, to perfect any of the authorities expressed to be given under the Consent Solicitation Memorandum and appoint the Tabulation Agent as its authorised attorney to do so on its behalf, and (ii) to execute and deliver any additional documents and/or do such other things deemed by the Issuer to be necessary or desirable to effect delivery of the Consent Instructions related to such Notes or to evidence such power and authority;

(m)       discharge and exonerate each of the Note Trustee, the Security Trustee, the Cash Manager and the Issuer from all liability for which it may have become or may become responsible under the Note Trust Deed, the Deed of Charge, any other Transaction Document or the Notes in respect of any act or omission in connection with the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement; and

(n)        sanction and assent to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Noteholders against the Issuer or any other person (whether such rights shall arise under the Note Trust Deed, the Deed of Charge or otherwise) involved in or resulting from or to be effected by, the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement.

Terms used but not otherwise defined in these Extraordinary Resolutions shall have the meaning given in the Note Trust Deed, the Conditions or the Consent Solicitation Memorandum."

Background to Extraordinary Resolutions

The Extraordinary Resolutions are being proposed in connection with the Consent Solicitation.

The purpose of the Consent Solicitation is to invite Noteholders from each Class of Notes to consider and, if thought fit, to approve the Extraordinary Resolutions in connection with the:

(a)        implementation of a remediation plan proposed by the Issuer, as more fully described in the section entitled "Remediation Plan and Release of Settlement Amount" of the Consent Solicitation Memorandum (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time) (the "Remediation Plan"); and

(b)        release and application of the cash standing to the credit of the Settlement Account (as defined in the Consent Solicitation Memorandum) in the manner contemplated in the Consent Solicitation Memorandum and the Extraordinary Resolutions,

(together, the "Proposals").

Full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the Consent Solicitation Memorandum, copies of which are available upon request from the Issuer or Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an eligible Noteholder.

General

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of an Extraordinary Resolution at a Meeting or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below (see in particular paragraph 6). Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at such Meeting (including by way of submitting Consent Instructions) as soon as possible.

Copies of this Notice, the Note Trust Deed (including the Conditions of the Notes), the Deed of Charge and the draft Settlement Account Agreement referred to in the Extraordinary Resolutions set out above and of certain other relevant documents will be available for inspection at the specified offices of the Paying Agents and the Tabulation Agent set out below.

Subject to the approval of the Extraordinary Resolutions with respect to the Class A1 Notes, the Class A2 Notes, the Class B Notes, the Class C Notes and the Class E Notes (as described in the Consent Solicitation Memorandum) the Extraordinary Resolutions, if approved as described above, will be implemented as soon as reasonably practicable after the announcement via the Clearing Systems and the Irish Stock Exchange website of the results of the Meetings that all of the Extraordinary Resolutions have been approved by each of the Classes of Noteholders.

In accordance with normal practice, the Note Trustee and the Security Trustee express no opinion as to the merits of the Consent Solicitation (as defined in the Consent Solicitation Memorandum) or the Proposals (as defined above) (which they were not involved in negotiating).  They have, however, authorised it to be stated that, on the basis of the information set out in the Consent Solicitation Memorandum (which they recommend the Class D Noteholders to read carefully) and in this Notice, it has no objection to the Extraordinary Resolutions referred to above being submitted to the Class D Noteholders for their consideration.  The Note Trustee and the Security Trustee have not been involved in formulating the Consent Solicitation, the Extraordinary Resolutions or the Proposals and make no representation that all relevant information has been disclosed to the Class D Noteholders in the Consent Solicitation Memorandum and this Notice.  Accordingly, the Note Trustee and the Security Trustee urge the Class D Noteholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolutions to seek their own independent legal and financial advice.

By submitting or delivering a duly completed Consent Instruction to the relevant Clearing System, a Class D Noteholder instructs the Principal Paying Agent to appoint the Tabulation Agent as proxy to attend and vote at the Meeting in favour of or against the Extraordinary Resolutions. The terms and conditions of the Consent Solicitation Memorandum are without prejudice to the right of a Class D Noteholder to attend and vote at the Meeting as set out in this Notice and in the Note Trust Deed.

Voting and Quorum

1.         The provisions governing the convening and holding of a Meeting are set out in Schedule 5 (Provisions for Meetings of Noteholders) to the Note Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the respective specified offices of the Paying Agents and the Tabulation Agent set out below.

2.         All of the Notes of each Class are represented by a global note of the relevant Class held by a common depositary for Clearstream Banking S.A. ("Clearstream, Luxembourg") and/or Euroclear Bank S.A./N.V. ("Euroclear").  For the purposes of the Meeting, a "Noteholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the relevant Class of Notes.

3.         A Noteholder wishing to attend the relevant Meeting in person must produce at that Meeting a valid Voting Certificate issued by a Paying Agent relating to the relevant Class of Notes in respect of which it wishes to vote.

4.         A Noteholder not wishing to attend and vote at the relevant Meeting in person may either deliver its valid Voting Certificate(s) to the person whom he wishes to attend on his behalf or give a voting instruction (by giving his electronic voting instructions (a "Consent Instruction")) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint Wilmington Trust (London) Limited (the "Tabulation Agent") to attend and vote at the Meeting in accordance with his instructions.

5.         A Noteholder must request the relevant clearing system to block the relevant Notes in his own account and to hold the same to the order or under the control of a Paying Agent not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain Voting Certificates or to give Consent Instructions in respect of the relevant Meeting.  Notes of the relevant Class so blocked will not be released until the earlier of:

(a)        in respect of Voting Certificate(s):

(i)         the conclusion of the relevant Meeting (or, if applicable, any adjournment of the relevant Meeting); and

(ii)        the surrender of the Voting Certificate(s) to the Paying Agent who issued the same and the notification by such Paying Agent to the relevant clearing system of such surrender or the compliance in such other manner with the rules of the relevant clearing system; and

(b)        in respect of Consent Instructions:

(i)         the date on which the Consent Solicitation is terminated by the Issuer (provided that such termination is more than 48 hours before the time set for the relevant Meeting);

(ii)        the date on which the relevant Consent Instruction is validly revoked in accordance with the terms of the Consent Solicitation Memorandum; and

(iii)       the conclusion of each of the Meetings of the Class A1 Noteholders, Class A2 Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, and the Class E Noteholders (or, if applicable, any adjournment of any of the Meetings).

6.         The quorum required at each Meeting is two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate holders of not less than 75 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).  If a quorum is not present at the relevant Meeting, such Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolutions will be considered at an adjourned Meeting (notice of which will be given to the relevant Noteholders).  The quorum at such an adjourned Meeting will be two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 25 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).

7.         Voting Certificates and Consent Instructions given in respect of the relevant Meeting (unless surrendered or, as the case may be, revoked at least 48 hours prior to any adjourned Meeting) shall remain valid for such adjourned Meeting.

8.         Every question submitted to the relevant Meeting will be decided on a show of hands unless a poll is duly demanded by the Chairman of that Meeting, the Issuer or one or more Noteholders holding one or more Notes of the relevant Class and/or persons holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 5 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class then outstanding (as defined in the Transaction Master Definitions and Framework Deed).  On a show of hands every person who is present in person and produces a Voting Certificate or is a proxy shall have one vote.  On a poll every person who is so present shall have one vote in respect of each £50,000 principal amount of the Principal Amount Outstanding of the relevant Class of Notes represented by the Voting Certificate so produced or in respect of which that person is a proxy.

9.         To be passed at a Meeting, each Extraordinary Resolution requires a majority of not less than three-fourths of the persons voting at the relevant Meeting upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll. If passed by a Class of Noteholders, the Extraordinary Resolutions shall be binding on all Noteholders of the relevant Class, whether present or not at the relevant Meeting at which it is passed and whether or not voting. However, the Proposals will only be implemented if the Extraordinary Resolutions in respect of all Classes of Notes are approved.

This Notice is given by:
Honours PLC
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors

Dated 17 May 2019

 

Contact Information

Requests for copies of the Consent Solicitation Memorandum and information in relation to the Consent Solicitation and the procedures for the submission of a Consent Instruction should be directed to:

The Tabulation Agent

Wilmington Trust (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]ntrust.com
Attention:         The Directors - Honours Tabulation Agent

 

 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Corporate Action Department (email: [email protected])

Clearstream: CIE Department (email: [email protected])

 

The Tabulation Agent does not take responsibility for the contents of this Notice and none of the Issuer or the Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This Notice must be read in conjunction with the Consent Solicitation Memorandum. No offer to acquire any Notes is being made pursuant to this Notice. This Notice and the Consent Solicitation Memorandum contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Distribution Restrictions

This Notice and the Consent Solicitation Memorandum do not constitute an offer or an invitation to participate in the Consent Solicitation in any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer or invitation under applicable securities laws. The distribution of the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by each of the Issuer and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer or the Tabulation Agent in relation to the Consent Solicitation that would permit a public offering of securities.

Any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offer or solicitation is not permitted by law.

 

 

 

Annex F - Notice of Meeting of the Class E Notes

THIS NOTICE IS IMPORTANT AND REQUIRES THE IMMEDIATE ATTENTION OF CLASS E NOTEHOLDERS.  IF CLASS E NOTEHOLDERS ARE IN ANY DOUBT AS TO THE ACTION THEY SHOULD TAKE, THEY SHOULD CONSULT THEIR OWN INDEPENDENT PROFESSIONAL ADVISERS AUTHORISED UNDER THE FINANCIAL SERVICES AND MARKETS ACT 2000 IMMEDIATELY.

HONOURS PLC
(the "Issuer")

(Incorporated in England and Wales with registered number 03702189)

NOTICE OF A MEETING

of the holders (the "Class E Noteholders") of those of the
£8,750,000 Class E Asset Backed Floating Rate Notes due 2029
of the Issuer presently outstanding
(the "Class E Notes")

NOTICE IS HEREBY GIVEN that a meeting (the "Meeting") of the Class E Noteholders convened by the Issuer will be held at the offices of Freshfields Bruckhaus Deringer LLP at 65 Fleet Street, London EC4Y 1HS at 4.30 p.m. (London time) on 10 June 2019 for the purpose of considering and, if thought fit, passing the following resolutions which will be proposed as Extraordinary Resolutions (to be passed as Basic Terms Modifications) in accordance with the provisions of the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the Class E Noteholders and constituting the Class E Notes. Pursuant to the terms of the Note Trust Deed, the Issuer will convene separate meetings of Noteholders of each Class of Notes for each meeting to consider the Extraordinary Resolutions in respect of such Class of Notes, which if passed by all Classes of Notes, will approve the Proposals (as defined below).

Unless the context otherwise requires, capitalised terms used but not defined in this Notice shall have the meaning given in the Note Trust Deed, the terms and conditions of the Notes (the "Conditions"), the consent solicitation memorandum dated 17 May 2019 from the Issuer addressed to the Noteholders (the "Consent Solicitation Memorandum") or the Extraordinary Resolutions, as applicable.

EXTRAORDINARY RESOLUTIONS

"THAT this meeting (the "Meeting") of the holders of those of the £8,750,000 Class E Asset Backed Floating Rate Notes due 2029 issued by Honours PLC (the "Issuer") presently outstanding (the "Class E Notes") constituted by the Note Trust Deed dated 10 November 2006 (the "Note Trust Deed") made between the Issuer and Deutsche Trustee Company Limited (the "Note Trustee") as trustee for the holders of the Class E Notes (the "Class E Noteholders") hereby:

(a)        sanction, authorise and approve the implementation of the Remediation Plan proposed by the Issuer (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions) (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time, provided that such amendments will not result in substantial costs being incurred by the Issuer);

(b)        authorise, direct, request and empower Deloitte LLP ("Deloitte") and Link Financial Outsourcing Limited ("LFO") to take any action and steps and do all things as may be necessary, appropriate or desirable to carry out and give effect to the Remediation Plan (in accordance with the Consent Solicitation Memorandum and these Extraordinary Resolutions);

(c)        authorise the release of the cash standing to the credit of the Settlement Account from the Security as and when withdrawn and authorise the Issuer to use the cash standing to the credit of the Settlement Account in accordance with the Settlement Account Agreement, which will provide that this cash will be applied by the Issuer -

(i)         to make cash refunds to the affected borrowers and the Authority pursuant to the Remediation Plan, by transferring amounts to LFO to enable LFO to make such payments;

(ii)        to pay Deloitte's and LFO's costs relating to implementing the Remediation Plan, up to a maximum aggregate amount of £1,000,000;

(iii)       to reimburse the structure in respect of third party costs (including legal and financial advisory costs) incurred by the structure up to and including 31 March 2019 in connection with (i) dealing with the non-compliance issues in relation to the CCA, including negotiating and finalising the settlement with Capita, and (ii) the formulation of the Remediation Plan, by adding an amount in respect of such third party costs (after having paid or provided for the amounts referred to in paragraphs (i) and (ii) above and (v) below) to the Available Revenue Funds, up to a maximum aggregate amount of £1,000,000;

(iv)       to pay all third party costs (including, without limitation, any legal, Note Trustee, Security Trustee, Cash Manager and financial advisory costs) incurred after 31 March 2019 to the date of completion of the Remediation Plan which the Issuer is obliged to pay or reimburse in connection with (i) the formulation and implementation of the Remediation Plan, and (ii) the consent solicitation process, by transferring the relevant amount(s) in respect of such third party costs to the relevant third party (after having paid or provided for the amounts referred to in paragraphs (i), (ii) and (iii) above and (v) below), but only to the extent that having covered the expenses and items in paragraphs (i), (ii) and (iii) above and (v) below, at least £1,500,000 will be remaining in the Settlement Account to establish the reserve fund contemplated in (vi) below;

(v)        for PDL remediation (where remediation is payable to a borrower whose loan is still outstanding, the borrower's account balance will be reduced by the amount of the remediation) by adding amounts (not used in paragraphs (i), (ii), (iii) and (iv) above) to the Available Revenue Funds to offset the impact of balance adjustments, both in terms of interest cancelled and any principal reductions as a result of the implementation of the Remediation Plan by adding equivalent sums to the PDL;

(vi)       to keep any remaining cash (after applying it in the manner contemplated in paragraphs (i), (ii), (iii), (iv) and (v) above) in the Settlement Account as a reserve fund for a period of 36 months (the "Reserve Period") to be used to meet any potential future liability, costs, claims, expenses or losses to the Honours structure as a result of any borrower and/or the Authority making any claim or demand or taking any action against the Issuer and/or the Purchaser in connection with the Remediation Plan or arising as a result of the non-compliance issues in relation to the CCA (the "Claims"), and after the Reserve Period:

(A)       if there has been less than £100,000 of Claims made against the Issuer and/or the Purchaser during the Reserve Period, with less than £10,000 of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to use any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period by transferring such remaining amount to the Issuer Account to be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments at that time; and

(B)       if there has been £100,000 or more of Claims made against the Issuer and/or the Purchaser during the Reserve Period and/or £10,000 or more of Claims made against the Issuer and/or the Purchaser within the 12 month period preceding the last day of the Reserve Period, to obtain approval from the Noteholders at that point in time as to the manner in which any excess/surplus cash remaining in the Settlement Account at the end of the Reserve Period should be retained/released and applied;

(d)        authorise, direct, request and empower the Purchaser and the Issuer, (i) to agree and execute (as applicable) a supplemental agreement to the Administration Agreement with LFO (the "Supplemental Agreement") to provide for any additional services that may be required to be performed by LFO in order to implement the Remediation Plan, including making the relevant cash payments to the affected borrowers and the Authority as contemplated in paragraph (c)(i) above, and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Supplemental Agreement;

(e)        approve and assent to the settlement account agreement in or substantially in the form of the draft set out in Annex A to the Consent Solicitation Memorandum and made available for inspection at the specified offices of the Issuer or the Irish Paying Agent on and from the date of this Notice (the "Settlement Account Agreement") and authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable, (i) to agree and execute (as applicable) the Settlement Account Agreement and (ii) to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the Settlement Account Agreement;

(f)        authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer as applicable (i) to treat and distribute any amounts(s) transferred from the Settlement Account to the Issuer Account as Available Revenue Funds; and (ii) to concur in, and to execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to the amendment(s) required to be made to the definition of Available Revenue Funds in order to ensure that any amounts(s) transferred from the Settlement Account to the Issuer Account constitute Available Revenue Funds and can be distributed by the Cash Manager (for and on behalf of the Issuer) as Available Revenue Funds in accordance with the Pre-Enforcement Revenue Priority of Payments, as contemplated by the Extraordinary Resolutions set out in paragraphs, (c)(iii), (c)(v) and (c)(vi)(A);

(g)        once the balance in the Settlement Account is reduced to zero, authorise and sanction the Security Trustee to release the Security granted pursuant to the Deed of Charge over the Settlement Account itself and authorise and sanction the Issuer to close the Settlement Account;

(h)        authorise the Issuer to pay any fees, costs, charges and expenses of any third party reasonably incurred (to the extent not paid from the funds standing to the credit of the Settlement Account) relating to (i) implementing the Remediation Plan and (ii) the consent solicitation process, either at the relevant line item in Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments or line item (vi)(G) of Condition 2(i) (Order of Priority) of the pre-enforcement priority of payments;  

(i)         authorise, direct, request and empower the Note Trustee, the Security Trustee, the Cash Manager and the Issuer, as applicable to agree and execute and do, all such other deeds, instruments, acts and things as may be necessary or appropriate to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(j)         ratify and confirm each and every act or thing done or effected by the Issuer in relation to the appointment of Deloitte as its financial adviser and the incurrence of its fees in connection therewith; 

(k)        ratify and confirm each and every act or thing that may be done or effected by the Issuer, the Paying Agents, the Tabulation Agent, the Cash Manager, the Note Trustee, the Security Trustee and any of their respective directors, officers, employees, agents or affiliates or any person nominated by the Issuer in the proper exercise of his or her powers and/or authority under the Consent Solicitation Memorandum in order to carry out and give effect to (i) the Remediation Plan and (ii) any Extraordinary Resolution;

(l)         agree, in relation to the submission of a Consent Instruction (if applicable), (i) to do all such acts and things as shall be necessary and execute any additional documents deemed by the Issuer to be desirable, in each case, to perfect any of the authorities expressed to be given under the Consent Solicitation Memorandum and appoint the Tabulation Agent as its authorised attorney to do so on its behalf, and (ii) to execute and deliver any additional documents and/or do such other things deemed by the Issuer to be necessary or desirable to effect delivery of the Consent Instructions related to such Notes or to evidence such power and authority;

(m)       discharge and exonerate each of the Note Trustee, the Security Trustee, the Cash Manager and the Issuer from all liability for which it may have become or may become responsible under the Note Trust Deed, the Deed of Charge, any other Transaction Document or the Notes in respect of any act or omission in connection with the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement; and

(n)        sanction and assent to every abrogation, amendment, modification, compromise or arrangement in respect of the rights of the Noteholders against the Issuer or any other person (whether such rights shall arise under the Note Trust Deed, the Deed of Charge or otherwise) involved in or resulting from or to be effected by, the implementation of the Remediation Plan, these Extraordinary Resolutions, the Supplemental Agreement and/or the Settlement Account Agreement.

Terms used but not otherwise defined in these Extraordinary Resolutions shall have the meaning given in the Note Trust Deed, the Conditions or the Consent Solicitation Memorandum."

Background to Extraordinary Resolutions

The Extraordinary Resolutions are being proposed in connection with the Consent Solicitation.

The purpose of the Consent Solicitation is to invite Noteholders from each Class of Notes to consider and, if thought fit, to approve the Extraordinary Resolutions in connection with the:

(a)        implementation of a remediation plan proposed by the Issuer, as more fully described in the section entitled "Remediation Plan and Release of Settlement Amount" of the Consent Solicitation Memorandum (with such amendments as the Issuer may consider necessary, appropriate or desirable from time to time) (the "Remediation Plan"); and

(b)        release and application of the cash standing to the credit of the Settlement Account (as defined in the Consent Solicitation Memorandum) in the manner contemplated in the Consent Solicitation Memorandum and the Extraordinary Resolutions,

(together, the "Proposals").

Full details of the background to, and the reasons for, the implementation of the Proposals and the Extraordinary Resolutions are contained in the Consent Solicitation Memorandum, copies of which are available upon request from the Issuer or Tabulation Agent, the contact details for which are set out below. In order to receive a copy of the Consent Solicitation Memorandum, a Noteholder will be required to provide confirmation as to his or her status as an eligible Noteholder.

General

The attention of Noteholders is particularly drawn to the procedures for voting, quorum and other requirements for the passing of an Extraordinary Resolution at a Meeting or any meeting held following any adjournment of any Meeting, which are set out in "Voting and Quorum" below (see in particular paragraph 6). Having regard to such requirements, Noteholders are strongly urged either to attend the relevant Meeting or to take steps to be represented at such Meeting (including by way of submitting Consent Instructions) as soon as possible.

Copies of this Notice, the Note Trust Deed (including the Conditions of the Notes), the Deed of Charge and the draft Settlement Account Agreement referred to in the Extraordinary Resolutions set out above and of certain other relevant documents will be available for inspection at the specified offices of the Paying Agents and the Tabulation Agent set out below.

Subject to the approval of the Extraordinary Resolutions with respect to the Class A1 Notes, the Class A2 Notes, the Class B Notes, the Class C Notes and the Class D Notes (as described in the Consent Solicitation Memorandum) the Extraordinary Resolutions, if approved as described above, will be implemented as soon as reasonably practicable after the announcement via the Clearing Systems and the Irish Stock Exchange website of the results of the Meetings that all of the Extraordinary Resolutions have been approved by each of the Classes of Noteholders.

In accordance with normal practice, the Note Trustee and the Security Trustee express no opinion as to the merits of the Consent Solicitation (as defined in the Consent Solicitation Memorandum) or the Proposals (as defined above) (which they were not involved in negotiating).  They have, however, authorised it to be stated that, on the basis of the information set out in the Consent Solicitation Memorandum (which they recommend the Class E Noteholders to read carefully) and in this Notice, it has no objection to the Extraordinary Resolutions referred to above being submitted to the Class E Noteholders for their consideration.  The Note Trustee and the Security Trustee have not been involved in formulating the Consent Solicitation, the Extraordinary Resolutions or the Proposals and make no representation that all relevant information has been disclosed to the Class E Noteholders in the Consent Solicitation Memorandum and this Notice.  Accordingly, the Note Trustee and the Security Trustee urge the Class E Noteholders who are in any doubt as to the impact of the implementation of the Extraordinary Resolutions to seek their own independent legal and financial advice.

By submitting or delivering a duly completed Consent Instruction to the relevant Clearing System, a Class E Noteholder instructs the Principal Paying Agent to appoint the Tabulation Agent as proxy to attend and vote at the Meeting in favour of or against the Extraordinary Resolutions. The terms and conditions of the Consent Solicitation Memorandum are without prejudice to the right of a Class E Noteholder to attend and vote at the Meeting as set out in this Notice and in the Note Trust Deed.

Voting and Quorum

1.         The provisions governing the convening and holding of a Meeting are set out in Schedule 5 (Provisions for Meetings of Noteholders) to the Note Trust Deed, a copy of which is available for inspection by the Noteholders during normal business hours at the respective specified offices of the Paying Agents and the Tabulation Agent set out below.

2.         All of the Notes of each Class are represented by a global note of the relevant Class held by a common depositary for Clearstream Banking S.A. ("Clearstream, Luxembourg") and/or Euroclear Bank S.A./N.V. ("Euroclear").  For the purposes of the Meeting, a "Noteholder" shall mean each person who is for the time being shown in the records of Euroclear or Clearstream, Luxembourg as the holder of a particular principal amount outstanding of the relevant Class of Notes.

3.         A Noteholder wishing to attend the relevant Meeting in person must produce at that Meeting a valid Voting Certificate issued by a Paying Agent relating to the relevant Class of Notes in respect of which it wishes to vote.

4.         A Noteholder not wishing to attend and vote at the relevant Meeting in person may either deliver its valid Voting Certificate(s) to the person whom he wishes to attend on his behalf or give a voting instruction (by giving his electronic voting instructions (a "Consent Instruction")) to Clearstream, Luxembourg and/or Euroclear instructing a Paying Agent to appoint Wilmington Trust (London) Limited (the "Tabulation Agent") to attend and vote at the Meeting in accordance with his instructions.

5.         A Noteholder must request the relevant clearing system to block the relevant Notes in his own account and to hold the same to the order or under the control of a Paying Agent not later than 48 hours before the time appointed for holding the relevant Meeting in order to obtain Voting Certificates or to give Consent Instructions in respect of the relevant Meeting.  Notes of the relevant Class so blocked will not be released until the earlier of:

(a)        in respect of Voting Certificate(s):

(i)         the conclusion of the relevant Meeting (or, if applicable, any adjournment of the relevant Meeting); and

(ii)        the surrender of the Voting Certificate(s) to the Paying Agent who issued the same and the notification by such Paying Agent to the relevant clearing system of such surrender or the compliance in such other manner with the rules of the relevant clearing system; and

(b)        in respect of Consent Instructions:

(i)         the date on which the Consent Solicitation is terminated by the Issuer (provided that such termination is more than 48 hours before the time set for the relevant Meeting);

(ii)        the date on which the relevant Consent Instruction is validly revoked in accordance with the terms of the Consent Solicitation Memorandum; and

(iii)       the conclusion of each of the Meetings of the Class A1 Noteholders, Class A2 Noteholders, Class B Noteholders, Class C Noteholders, Class D Noteholders, and the Class E Noteholders (or, if applicable, any adjournment of any of the Meetings).

6.         The quorum required at each Meeting is two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate holders of not less than 75 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).  If a quorum is not present at the relevant Meeting, such Meeting will be adjourned for a period of not fewer than 14 days and not more than 42 days and the Extraordinary Resolutions will be considered at an adjourned Meeting (notice of which will be given to the relevant Noteholders).  The quorum at such an adjourned Meeting will be two or more Noteholders present in person holding Notes of the relevant Class and/or persons present in person holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 25 per cent. in Principal Amount Outstanding of the Notes of the relevant Class for the time being outstanding (as defined in the Transaction Master Definitions and Framework Deed).

7.         Voting Certificates and Consent Instructions given in respect of the relevant Meeting (unless surrendered or, as the case may be, revoked at least 48 hours prior to any adjourned Meeting) shall remain valid for such adjourned Meeting.

8.         Every question submitted to the relevant Meeting will be decided on a show of hands unless a poll is duly demanded by the Chairman of that Meeting, the Issuer or one or more Noteholders holding one or more Notes of the relevant Class and/or persons holding Voting Certificates and/or being proxies and being or representing in the aggregate the holders of not less than 5 per cent. of the Principal Amount Outstanding of the Notes of the relevant Class then outstanding (as defined in the Transaction Master Definitions and Framework Deed).  On a show of hands every person who is present in person and produces a Voting Certificate or is a proxy shall have one vote.  On a poll every person who is so present shall have one vote in respect of each £50,000 principal amount of the Principal Amount Outstanding of the relevant Class of Notes represented by the Voting Certificate so produced or in respect of which that person is a proxy.

9.         To be passed at a Meeting, each Extraordinary Resolution requires a majority of not less than three-fourths of the persons voting at the relevant Meeting upon a show of hands or if a poll is duly demanded by a majority consisting of not less than three-fourths of the votes cast on such poll. If passed by a Class of Noteholders, the Extraordinary Resolutions shall be binding on all Noteholders of the relevant Class, whether present or not at the relevant Meeting at which it is passed and whether or not voting. However, the Proposals will only be implemented if the Extraordinary Resolutions in respect of all Classes of Notes are approved.

This Notice is given by:
Honours PLC
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors

Dated 17 May 2019

 

Contact Information

Requests for copies of the Consent Solicitation Memorandum and information in relation to the Consent Solicitation and the procedures for the submission of a Consent Instruction should be directed to:

The Tabulation Agent

Wilmington Trust (London) Limited
Third Floor
1 King's Arms Yard
London EC2R 7AF
Telephone:       +44 207 397 3600
E-mail:             [email protected]
Attention:         The Directors - Honours Tabulation Agent

 

 

Noteholders whose Notes are held by Euroclear or Clearstream, Luxembourg should contact the following for further information:

Euroclear: Corporate Action Department (email: [email protected])

Clearstream: CIE Department (email: [email protected])

 

The Tabulation Agent does not take responsibility for the contents of this Notice and none of the Issuer or the Tabulation Agent, or any of their respective directors, employees or affiliates makes any representation or recommendation whatsoever regarding the Consent Solicitation. This Notice must be read in conjunction with the Consent Solicitation Memorandum. No offer to acquire any Notes is being made pursuant to this Notice. This Notice and the Consent Solicitation Memorandum contain important information, which should be read carefully before any decision is made with respect to the Consent Solicitation. If any holder of the Notes is in any doubt as to the action it should take, it is recommended to seek its own advice, including as to any tax consequences, from its stockbroker, bank manager, solicitor, accountant or other independent adviser.

Distribution Restrictions

This Notice and the Consent Solicitation Memorandum do not constitute an offer or an invitation to participate in the Consent Solicitation in any jurisdiction in or from which, or to or from any person to or from whom, it is unlawful to make such offer or invitation under applicable securities laws. The distribution of the Consent Solicitation Memorandum in certain jurisdictions may be restricted by law. Persons into whose possession the Consent Solicitation Memorandum comes are required by each of the Issuer and the Tabulation Agent to inform themselves about, and to observe, any such restrictions.

No action has been or will be taken in any jurisdiction by the Issuer or the Tabulation Agent in relation to the Consent Solicitation that would permit a public offering of securities.

Any materials relating to the Consent Solicitation do not constitute, and may not be used in connection with, any form of offer or solicitation in any place where such offer or solicitation is not permitted by law.

 

 

 

This announcement has been issued through the Companies Announcement Service of Euronext Dublin.


This information is provided by RNS, the news service of the London Stock Exchange. RNS is approved by the Financial Conduct Authority to act as a Primary Information Provider in the United Kingdom. Terms and conditions relating to the use and distribution of this information may apply. For further information, please contact [email protected] or visit www.rns.com.
 
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ISELLFSSEIIDLIA

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