Exhibit 10.1
$300,000,000
FACILITY AGREEMENT
dated 20 JULY 2007
for
AHR CAPITAL MS LIMITED
as the Borrower
arranged by
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE SERVICING LTD
acting as the Security Trustee
and
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK
as the Initial Lender and Agent
-------------------------------------------------
AMENDED AND RESTATED MULTICURRENCY REVOLVING
FACILITY AGREEMENT
-------------------------------------------------
CONTENTS
CLAUSE Page
1. Definitions And Interpretation.........................................1
2. The Facility..........................................................20
3. Purpose...............................................................20
4. Conditions Of Loans...................................................21
5. Procedure For Loans...................................................21
6. Optional Currencies...................................................27
7. Repayment.............................................................28
8. Repayment, Pre-Payment And Cancellation...............................28
9. Interest..............................................................32
10. Changes To The Calculation Of Interest................................32
11. Fees..................................................................34
12. Tax Gross Up And Indemnities..........................................35
13. Increased Costs.......................................................39
14. Other Indemnities.....................................................40
15. Costs And Expenses....................................................41
16. Mitigation By The Lenders.............................................42
17. Representations.......................................................44
18. Information Undertakings..............................................48
19. General Undertakings..................................................49
20. Events Of Default.....................................................54
21. Changes To The Lenders................................................59
22. Changes To The Obligors...............................................62
23. Role Of The Agent.....................................................62
24. Conduct Of Business By The Finance Parties............................69
25. Sharing Among The Finance Parties.....................................69
26. Payment Mechanics.....................................................71
27. Set-Off...............................................................73
28. Notices...............................................................73
29. Calculations And Certificates.........................................75
30. Partial Invalidity....................................................76
31. Remedies And Waivers..................................................76
32. Amendments And Waivers................................................76
33. Counterparts..........................................................76
34. Entire Agreement......................................................80
35. Governing Law.........................................................81
36. Enforcement...........................................................81
Schedule 1 THE ORIGINAL PARTIES..............................................83
Part I The Obligors..................................................83
Part II The Initial Lender............................................84
Schedule 2 CONDITIONS PRECEDENT..............................................85
Part I Conditions Precedent To First Loan Under This Agreement......85
Part II Conditions Precedent To All Loans............................86
Part III Additional Requirements......................................88
Part IV Conditions Precedent To The Amendment And Restatement........89
Schedule 3 REQUEST FOR BORROWING.............................................91
Schedule 4 MANDATORY COST FORMULAE...........................................93
Schedule 5 FORM OF TRANSFER CERTIFICATE......................................96
Schedule 6 [RESERVED]........................................................98
Schedule 7 [RESERVED]........................................................99
Schedule 8 LMA FORM OF CONFIDENTIALITY UNDERTAKING..........................100
Schedule 9 [RESERVED].......................................................105
Schedule 10 PRICING MATRIX..................................................106
Schedule 11 REPRESENTATIONS AND WARRANTIES RE: ELIGIBLE COLLATERAL..........108
Schedule 12 FORM OF CUSTODIAL AGREEMENT.....................................116
Schedule 13 FORM OF OPINIONS COUNSEL TO BORROWER............................117
Schedule 14 [RESERVED]......................................................118
Schedule 15 [RESERVED]......................................................119
Schedule 16 SERVICER NOTICE.................................................120
THIS AMENDED AND RESTATED AGREEMENT is dated 20 July 2007 and made between:
(1) AHR CAPITAL MS LIMITED (the "Borrower");
(2) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE SERVICING LTD. ("the Security Trustee"); and
(3) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK (the "Initial Lender" and "the Agent").
IT IS AGREED as follows:
SECTION 1
INTERPRETATION
1. DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement:
"Account Bank" shall mean LaSalle Bank National Association.
"Additional Cost Rate" has the meaning given to it in Schedule 4
(Mandatory Cost formulae).
"Advance Rate" shall mean, for each item of Collateral, the advance rate
set forth in the Request for Borrowing which shall be consistent with
the Pricing Matrix, as set forth in Schedule 10 (Pricing Matrix).
"Affiliate" shall mean, in relation to any person, a Subsidiary of that
person or a Holding Company of that person or any other Subsidiary of
that Holding Company and, with respect to the Borrower, any Person
managed by the Borrower.
"the Agent's Spot Rate of Exchange" shall mean the Agent's spot rate of
exchange for the purchase of the relevant currency with the Base
Currency in the London foreign exchange market at or about 11:00 a.m.
London Time on a particular day.
"Applicable Margin" shall mean, with respect to each item of Collateral
the Applicable Margin applicable to such item of Collateral as set forth
in Schedule 10 (Pricing Matrix) or such other Applicable Margin as may
be mutually agreed to by the Borrower and the Agent.
"Appraisal" shall mean a valuation of any Property prepared by a valuer
reasonably acceptable to the Agent.
"Asset-Specific Loan Balance" shall mean the portion of any Loan
allocable to each item of Eligible Collateral (converted into the
Base Currency using the Agent's Spot Rate of Exchange as at the day
which was one (1) Business Day prior to the relevant Funding Date of
such Loan). Such portion shall initially consist of the sum of the
Loans made on account of such Eligible Collateral, advance costs and
fees to the extent properly incurred by the Lenders and the Agent and
the Security Trustee hereunder and borrowed by the Borrower
hereunder. Whenever this Agreement states that principal payments on
account of a Loan are to be allocated or applied to or against the
Asset-Specific Loan Balance of a specific item of Eligible
Collateral, the Asset-Specific Loan Balance of such item of Eligible
Collateral shall be deemed reduced accordingly by the amount of the
principal payments so applied (converted into the Base Currency using
the Agent's Spot Rate of Exchange as at the day which was one (1)
-1-
Business Day prior to the day on which such principal payments
on account of such Loan are actually so allocated and applied).
"Asset Value" shall mean, as of any date in respect of any item of
Eligible Collateral, the price (if not expressed in the Base Currency,
converted into the Base Currency using the Agent's Spot Rate of Exchange
on the day such calculation is made) at which such item of Eligible
Collateral could readily be sold, after giving effect to the value of
any Interest Rate Protection Agreements with respect to such item of
Eligible Collateral which are to be secured in favour of the Security
Trustee as Collateral, as determined in good faith discretion by the
Agent, which price may be determined to be zero and in no event shall
exceed the then outstanding par value (where applicable) of the subject
Eligible Collateral which consists of a Collateral Loan. The Agent's
determination of Asset Value, which may be made at any time and from
time to time, shall be conclusive, absent manifest error, upon the
parties to this Agreement; provided that, without limiting the effect of
Clause 8.3 (Mandatory Pre-Payment or granting of further security to the
Security Trustee), the Asset Value shall be deemed to be:
(1) zero or such greater amount as determined in sole but good
faith discretion by the Agent in respect of each item of
Eligible Collateral in respect of which there is a breach of a
representation or warranty by a Collateral Obligor;
(2) zero or such greater amount as determined in good faith, by,
but at the sole discretion of the Agent in respect of each
item of Eligible Collateral in respect of which there is a
delinquency in the payment of principal and/or interest which
continues for a period in excess of thirty (30) days (after
taking into account any applicable grace periods);
(3) zero or such greater amount as determined in good faith, by,
but at the sole discretion of, the Agent, in respect of each
item of Collateral which has been released from the possession
of the Custodian under the Custodial Agreement to the Borrower
for a period in excess of fourteen (14) days unless the Agent
and Custodian have approved such release for a longer period
of time; and
(4) zero or such greater amount as determined in good faith, but
at the sole discretion of, the Agent following the failure of
Borrower to deliver the Collateral File associated with such
item of Eligible Collateral to the Custodian within five (5)
Business Days after the Funding Date associated with the Loan
made in respect of such item of Eligible Collateral.
Notwithstanding anything to the contrary contained in this definition,
whenever an Asset Value determination is required under this Agreement:
(a) the Borrower shall cooperate with the Agent in its good faith
determination of the Asset Value of each item of Eligible
Collateral (including, without limitation, providing all
information and documentation in the possession of the
Borrower or otherwise within the control of the Borrower
regarding such item of Eligible Collateral); and
(b) the Agent shall be entitled to consider any and all factors
relevant to the determination of Asset Value including,
without limitation, general and specific changes in the
capital markets and the real estate markets, and other
factors affecting any item of
-2-
Eligible Collateral, the Borrower, any Collateral Obligor or the
transactions contemplated hereunder. Each communication by the
Agent to the Borrower of an Asset Value determination
pertaining to one or more items of Eligible Collateral shall
be subject to the disclaimer provisions set forth in Clause
33.3 (Disclaimers).
"Authorisation" shall mean an authorisation, consent, approval,
resolution, licence, exemption, filing, notarisation or registration.
"Availability Period" shall mean the period from and including the
Effective Date to and including the Termination Date.
"Available Credit" shall mean, with respect to any Lender, such Lender's
Maximum Credit minus:
(a) the Base Currency Amount of its participation in any
outstanding Loans; and
(b) in relation to any Loans that are proposed to be made, the
Base Currency Amount of its proportional participation in any
Loans that are due to be made on or before the proposed
Funding Date,
other than such Lender's participation in any Loans that are due to be
repaid or prepaid on or before the proposed Funding Date.
"B Notes" shall mean the original executed subordinated note or other
evidence of a subordinated interest with respect to a Mortgage Loan or a
Mezzanine Loan (to which the applicable representations and warranties
in Clause 17.13 (Collateral; Collateral Security) hereof are correct).
"Bank Agreement" shall mean the Collection Account Security and Control
Agreement between inter alios the Borrower and the Security Trustee
dated 17 February 2006.
"Base Currency" shall mean dollars.
"Base Currency Amount" shall mean, in relation to a Loan, the amount
specified in the Request for Borrowing for that Loan (or, if the amount
requested is not denominated in the Base Currency, that amount converted
into the Base Currency at the Agent's Spot Rate of Exchange on the date
which is one (1) Business Day before the Funding Date) adjusted to
reflect any repayment, pre-payment, consolidation or division of the
Loans.
"Borrower Bank Accounts" or "Accounts" means the Borrower Sterling
Account, the Borrower Yen Account and the Borrower Euro Account or
either of them as the context may require (and any renewal or
redesignation of such accounts) maintained with the Account Bank, the
Irish Bank Accounts and any other bank accounts as the Borrower may open
and maintain from time to time in accordance with the Bank Agreement and
notified to the Agent and the Lenders.
"Borrower Euro Account" means the euro denominated Borrower Bank Account
maintained by the Account Bank with account number ▇▇▇▇▇▇▇▇, account
name AHR Capital MS Limited Euro Account (and any redesignation of such
account).
-3-
"Borrower Irish Tax Requirements" shall mean the following:
(a) the Borrower is and shall continue to be resident in the
Republic of Ireland for the purposes of the Irish Taxes Act;
(b) the Borrower carries on and shall continue to carry on in the
Republic of Ireland the business of holding, managing or both
the holding and managing of the Eligible Collateral or
interests in the Eligible Collateral;
(c) apart from activities ancillary to the business of managing or
holding the Eligible Collateral or interests in the Eligible
Collateral, the Borrower carries on and shall continue to
carry on no other activities;
(d) the market value of the Eligible Collateral or interests in
the Eligible Collateral held or managed by the Borrower was
not less than EUR 10,000,000 on the day on which the Eligible
Collateral or interests in the Eligible Collateral were first
held by it;
(e) all of the transactions entered into or that will be entered
into by the Borrower have been or will be entered into, as the
case may be, on an arm's length basis, apart from any
transaction or arrangement where Section 110(4) of the Irish
Taxes Act applies to any interest or other distribution
payable under the transaction or arrangement unless the
transaction or arrangement concerned is excluded from that
provision by virtue of Section 110(5) of the Irish Taxes Act;
(f) the Borrower has notified the Irish Revenue Commissioners in
the prescribed form that it is or intends to be a qualifying
company for the purposes of Section 110(1) of the Irish Taxes
Act and has supplied to the Irish Revenue Commissioners such
other particulars relating to it as may be specified in the
prescribed form;
(g) the proceeds of all monies or funding received by the Borrower
have been, or as applicable, shall be used by the Borrower in
the course of its business as a qualifying company within the
meaning of Section 110 of the Irish Taxes Act;
(h) excluding costs of incorporation of the Borrower, any material
expenses (being expenses in the aggregate exceeding $50,000
per annum) incurred or to be incurred by the Borrower
including interest payable by the Borrower shall be deductible
in computing its profits for the purposes of the Irish Taxes
Act; and
(i) any transaction entered into by the Borrower is not or will
not be entered into by such Borrower for tax avoidance
reasons.
"Borrower Sterling Account" means the sterling denominated Borrower Bank
Account maintained by the Account Bank with account number ▇▇▇▇▇▇▇▇,
account name AHR Capital MS Limited Sterling Account (and any
redesignation of such account).
"Borrower Yen Account" means the Yen denominated Borrower Bank Account
maintained by the Account Bank with account number ▇▇▇▇▇▇▇▇, account
name AHR Capital MS Limited Yen Account (and any redesignation of such
account).
-4-
"Borrowing Base" shall mean the aggregate Collateral Value of the
Collateral utilised pursuant to the Debenture to secure the amounts from
time to time outstanding under the Finance Documents, including, but not
limited to, the Loans.
"Borrowing Base Deficiency" shall have the meaning provided in paragraph
(a) of Clause 8.3(a) (Mandatory Pre-Payment or granting of further
security to the Security Trustee) hereof. "Business Day" shall mean, a
day (other than a Saturday or Sunday) on which banks are open for
general business in:
(a) London, or in relation to any date for payment or purchase of
a currency other than sterling or euro the principal financial
centre of the country of that currency;
(b) in relation to any date for payment or purchase of euro, any
TARGET Day; or
(c) in relation to any notice to be given to a party pursuant to
this Agreement (including a Request for Borrowing) the city in
which such party's office for service is located.
"Capital Lease Obligations" shall mean, for any person, all obligations
of such person to pay rent or other amounts under a lease of (or other
agreement conveying the right to use) Property to the extent such
obligations are required to be classified and accounted for as a capital
lease on a balance sheet of such person under GAAP, and, for purposes of
this Agreement, the amount of such obligations shall be the capitalised
amount hereof, determined in accordance with GAAP.
"CMBS" shall mean, in the singular or plural as the context requires,
debt securities backed by mortgages or other comparable security over
commercial real estate or by securities, interests or other obligations
backed directly or indirectly by such mortgages or other comparable
security with the assigned Rating by the corresponding Rating Agency as
set forth in Schedule 10 (Pricing Matrix).
"Collateral" shall mean, all of the Borrower's right, title and interest
in, to and under each of the following items of Property, whether now
owned or hereafter acquired, now existing or hereafter created and
wherever located:
(a) All Eligible Collateral with respect to which a Loan is made
hereunder;
(b) All Collateral Documents with respect to which a Loan is made
hereunder and as to which the Custodian has been instructed to
hold for the Security Trustee pursuant to the Custodial
Agreement;
(c) All guarantees and insurance (issued by any Governmental
Authority or otherwise) and any insurance certificate or other
document evidencing such guarantees or insurance relating to
any Collateral and all claims and payments thereunder;
(d) All Interest Rate Protection Agreements;
(e) All other insurance policies and insurance proceeds relating
to the Collateral or related Property;
-5-
(f) All collateral or security however defined, under any other
agreement between or any Obligor and the Lender and/or or any
of their respective Affiliates; and
(g) Any and all replacements, substitutions, distributions on or
proceeds of any and all of the foregoing.
"Collateral Documents" shall mean the documents comprising the
Collateral File for each item of Eligible Collateral.
"Collateral File" shall mean, as to each item of Collateral, those
documents set forth in a schedule to be delivered by the Borrower or the
Agent to the Custodian and which are delivered to the Custodian pursuant
to the terms of this Agreement or the Custodial Agreement including,
without limitation, all documents required by the Agent to better enable
the Borrower to grant in favour of the Security Trustee and to perfect a
first priority security interest in such item of Collateral.
"Collateral Loan" shall mean, any Eligible Collateral consisting of a
loan or an interest in a loan.
"Collateral Obligor" shall mean, any obligor with respect to any
Eligible Collateral any issuer of any debt security comprising any
portion of the Collateral and the issuer of any Preferred Equity
Interest.
"Collateral Schedule" shall mean a list of the Eligible Collateral to be
granted by way of security to the Security Trustee for the Secured
Obligations under the Finance Documents attached to a Custodial
Identification Certificate setting forth, as to each item of Eligible
Collateral, the applicable information for such Collateral type
specified in the Custodial Agreement.
"Collateral Schedule and Exception Report" shall mean any collateral
schedule and exception report prepared by the Custodian pursuant to the
Custodial Agreement.
"Collateral Value" shall mean on any day, with respect to each item of
Collateral, the product obtained by multiplying the Asset Value of such
item of Collateral (converted into the Base Currency calculated by the
Agent determining the Base Currency equivalent of such Asset Value by
converting such Asset Value into the Base Currency using the Agent's
Spot Rate of Exchange on such day) by the Advance Rate set forth in the
Request for Borrowing associated therewith.
"Commitment Fee" shall have the meaning provided in Clause 11 (Fees)
hereof.
"Corporate Services Agreement" shall mean the Management Agreement dated
27 January 2006 between the Borrower and Citco Corporate Services
(Ireland) Limited.
"Custodian" shall mean, LaSalle Bank National Association, as Custodian
under the Custodial Agreement, and its successors and permitted assigns
thereunder.
"Custodial Agreement" shall mean the Custodial Agreement, dated as of 17
February 2006, between the Borrower, the Custodian and the Agent,
substantially in the form of Schedule 12 (Form of Custodial Agreement)
hereto, as the same shall be modified and supplemented and in effect
from time to time.
-6-
"Custodial Identification Certificate" shall mean, the certificate
executed by the Borrower in connection with the pledge of Eligible
Collateral to the Security Trustee in the form of Schedule 3 to the
Custodial Agreement.
"Debenture" shall mean the Debenture to be entered into by, inter alios,
the Borrower in favour of the Security Trustee.
"Default" shall mean an Event of Default or any event or circumstance
which would (with the expiry of a grace period, the giving of notice, or
any combination of any of the foregoing) be an Event of Default.
"Diligence Materials" shall mean the Preliminary Due Diligence Package
together with the materials requested in the Supplemental Due Diligence
List.
"dollars" or "$" shall mean the lawful currency of the United States
of America.
"Due Diligence Review" shall have the meaning set forth in Clause 33.2
(Periodic Due Diligence Review).
"Effective Date" shall mean, February 17, 2006.
"Eligible Collateral" shall mean collectively: Mortgage Loans, Mezzanine
Loans, B Notes, Preferred Equity Interests and CMBS and Other Approved
Collateral to which the applicable section of Schedule 11
(Representations and Warranties Re: Eligible Collateral) hereof is
correct.
"Eligible Collateral Asset" shall mean any particular item of Eligible
Collateral.
"Encumbered Property" shall mean the real property (including all
improvements, buildings, fixtures, building equipment and personal
property thereon and all additions, alterations and replacements made at
any time with respect to the foregoing) and all other collateral
securing repayment of the debt comprised in a Mortgage Loan, or, in the
case of any Mezzanine Loan, the Equity Interests and the real property
related thereto.
"Equity Interest" shall mean any interest in a person constituting a
share of stock or a partner or membership interest or other right or
interest in a person not characterised as indebtedness under GAAP
(including, without limitation, a Preferred Equity Interest).
"Equity Proceeds" shall mean with respect to the Guarantor, an amount
equal to the net proceeds from the issuance of any securities of the
Guarantor or the net proceeds due to the Guarantor from contributions to
capital or otherwise by another person.
"EURIBOR" means in relation to any Loan in euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of
that Loan) the arithmetic mean of the rates (rounded upwards
to four decimal places) as supplied to the Agent at its
request quoted by the Reference Banks to leading banks in the
European interbank market;
-7-
as of the Specified Time on the Quotation Day for the offering of
deposits in euro for a period comparable to the Interest Period of the
relevant Loan.
"euro" or "EUR" shall mean the single currency unit of the Participating
Member States.
"EU Insolvency Regulation" means Council Regulation (EC) No. 1346/2000
of 20 May 2000.
"Event of Default" shall mean any event or circumstance specified as
such in Clause 20 (Events of Default).
"Examiner" has the meaning given to it in Section 2 of the Companies
(Amendment) Act, 1990 of the Republic of Ireland and "Examinership"
shall be construed accordingly.
"Exit Fee" shall have the meaning ascribed to it in Clause 11.2 (Exit
Fee).
"Exit Fee Related Collateral" shall have the meaning ascribed to it in
Clause 11.2 (Exit Fee).
"Facility" shall mean the revolving loan facility made available under
this Agreement as described in Clause 2 (The Facility).
"Facility Office" shall mean the office or offices notified by a Lender
to the Agent in writing on or before the date it becomes a Lender (or,
following that date, by not less than five (5) Business Days' written
notice) as the office or offices through which it will perform its
obligations under this Agreement.
"Finance Documents" shall mean this Agreement, the Debenture, the
Guarantee, the Custodial Agreement, the Bank Agreement, each Interest
Rate Protection Agreement and any other document designated as such by
the Agent and the Borrower.
"Finance Party" shall mean the Agent, the Security Trustee and each
Lender as the case may be and the context requires.
"Funding Costs" shall mean, collectively, the actual costs to a Lender
of breaking an interbank contract for LIBOR, or if applicable, EURIBOR
(or the costs that would have been incurred if such a Lender had entered
into a broken interbank contract prior to the expiration of the contract
period applicable thereto in connection with (a) a pre-payment (whether
voluntary or involuntary) of all or any portion of an Asset-Specific
Loan Balance or other principal repayment required or permitted under
the Finance Documents that is made at any time other than at the
expiration of an Interest Period, (b) any voluntary or involuntary
acceleration of the Termination Date that in effect occurs on any date
that is not the last day of an Interest Period with respect to any
Asset-Specific Loan Balance, and (c) any other set of circumstances not
attributable solely to a Lender's acts, or related to an amendment of
this Agreement by the parties hereto. Subject to the foregoing, Funding
Costs shall not include a diminution in yield suffered by a Lender upon
re-lending or re-investing the principal of a Loan after any pre-payment
of such Loan.
"Funding Date" shall mean the date on which a Loan is made hereunder.
-8-
"GAAP" shall mean
(a) in respect of the Borrower, generally accepted accounting
principles in effect from time to time in the Republic of
Ireland; and
(b) in respect of the Guarantor, generally accepted accounting
principles in effect from time to time in the United States of
America.
"Governmental Authority" shall mean, any nation or government, any state
or other political subdivision thereof, any entity exercising executive,
legislative, judicial, regulatory or administrative functions of or
pertaining to government and any court or arbitrator having jurisdiction
over the Borrower, the Guarantor or any of their respective Subsidiaries
or any of their respective properties.
"Guarantee" shall mean the Parent Guaranty and Indemnity executed by the
Guarantor in favour of the Security Trustee dated 17 February 2006.
"the Guarantor" shall mean Anthracite Capital, Inc., a Maryland
corporation.
"Holding Company" means, in relation to a company or corporation, any
other company or corporation in respect of which it is a Subsidiary.
"Indebtedness" shall mean any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit
facility or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or
the issue of bonds, notes, debentures, loan stock or any
similar instrument;
(d) the amount of any liability in respect of any lease or hire
purchase contract which would, in accordance with GAAP, be
treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to
the extent they are sold on a non-recourse basis);
(f) any amount raised under any other transaction (including any
forward sale or purchase agreement) having the commercial
effect of a borrowing;
(g) any derivative transaction entered into in connection with
protection against or benefit from fluctuation in any rate or
price (and, when calculating the value of any derivative
transaction, only the marked to market value shall be taken
into account);
(h) any counter-indemnity obligation in respect of a guarantee,
indemnity, bond, standby or documentary letter of credit or
any other instrument issued by a bank or financial
institution;
(i) any Capital Lease Obligations;
-9-
(j) any amount of any liability under an advance or deferred
purchase agreement if one of the primary reasons behind the
entry into this agreement is to raise finance;
(k) (without double counting) the amount of any liability in
respect of any guarantee or indemnity for any of the items
referred to in paragraphs (a) to (k) above; and
(l) any other indebtedness of the Borrower whether financial or
otherwise.
"Information Memorandum" shall mean, the document in the form approved
by the Borrower concerning the Borrower which, at its request and on its
behalf, is to be prepared in relation to this transaction and
distributed prior to the Syndication Date in connection with
syndication.
"Institutional Investor" shall mean a bank, insurance company, pension
fund, real estate investment trust, registered investment advisor or
other institutional investor or a corporation whose shares are publicly
traded on the New York Stock Exchange or the American Stock Exchange,
the London Stock Exchange, the Irish Stock Exchange or a similar
internationally recognised stock exchange of another nation or any
Affiliate of the foregoing, in each case, having not less than
$500,000,000 in assets and $250,000,000 in equity, and having a long
term unsecured debt rating of "A" by S&P or the equivalent by Moody's.
"Institutional Owner" shall mean an insurance company, bank, savings and
loan association, REIT, Real Estate Mortgage Investment Conduit, grantor
trust, trust company, commercial credit corporation, pension plan,
pension fund or pension fund advisory firm, mutual fund or other
investment company, governmental entity or plan, "qualified
institutional buyer", within the meaning of Rule 144A under the
Securities Act (U.S.) of 1993, as amended (other than a broker/dealer)
or an institution substantially similar to any of the foregoing, or any
entity wholly owned by any one or more such institutions, in each case,
having not less than $500,000,000 in assets and $250,000,000 in equity,
and having a long term unsecured debt rating of "A" by S&P or the
equivalent by Moody's.
"Intangible Assets" shall mean the excess of the cost over book value of
assets acquired, patents, trademarks, trade names, copyrights,
franchises and other intangible assets (excluding, in any event, the
value of any residual securities and the value of any owned or purchased
mortgage servicing rights).
"Interest Payment Date" shall mean the first Business Day of each month
and for the last month of this Agreement, the first Business Day of such
last month and the Termination Date.
"Interest Period" for any Loan shall mean (i) the period commencing on
the Funding Date and ending on the day immediately preceding the next
succeeding Interest Payment Date, and thereafter (ii) the period
commencing on each Interest Payment Date and ending on the date
immediately preceding the next succeeding Interest Payment Date.
"Interest Rate Protection Agreement" shall mean, any, futures contract,
options related contract, interest rate swap, cap or collar agreement or
similar arrangement providing for protection against fluctuations in
interest rates or the exchange of nominal interest obligations, either
generally or under specific contingencies.
-10-
"Investment Management Agreement" shall mean the Investment Management
Agreement dated 27 January 2006 between the Borrower and BlackRock
Financial Management, Inc.
"Irish Bank Accounts" means, collectively, the current account (account
No. ▇▇▇▇▇▇▇▇) and the deposit account (account No. ▇▇▇▇▇▇▇▇) in the name
of the Borrower with the Governor and Company of the Bank of Ireland.
"Irish Taxes Act" has the meaning given to it in Clause 12.1
(Definitions).
"the Lender" shall mean:
(a) ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank, a Utah Corporation; and
(b) any bank, financial institution, trust, fund or other entity
which has become a Party in accordance with Clause 21 (Changes
to the Lenders),
which in each case has not ceased to be a Party in accordance with the
terms of this Agreement.
"Lenders' Net Aggregate Exposure" shall mean on any day, with respect to
all Loans, a fraction:
(a) the numerator of which shall be the sum of (i) the aggregate
amounts of the Loans plus (ii) the aggregate amount of any and
all senior Indebtedness and senior Preferred Equity
Interest(s) secured in whole or in part by real property or
direct or indirect beneficial interests therein relating to
all Eligible Collateral securing such Loans; and
(b) the denominator of which shall be the fair market value (in
the Base Currency and if not expressed in the Base Currency,
converted into the Base Currency using the Agent's Spot Rate
of Exchange on the day such calculation is made) of the real
property or direct or indirect beneficial interests referred
to in (a) above as determined by the Agent in its sole good
faith discretion.
"Lenders' Net Exposure" shall mean, with respect to each Loan, a
fraction:
(a) the numerator of which shall be sum of (i) the Base Currency
Amount of such Loan plus (ii) the amount of any and all
Indebtedness and senior Preferred Equity Interest(s) (in each
case converted into the Base Currency using the Agent's Spot
Rate of Exchange on such day) secured in whole or in part by
real property or direct or indirect beneficial interests
therein relating to the Eligible Collateral granted as
security to the Security Trustee in connection with such Loan;
and
(b) the denominator of which shall be the fair market value (in
the Base Currency and if not expressed in the Base Currency,
converted into the Base Currency using the Agent's Spot Rate
of Exchange on the day such calculation is made) of the real
property or direct or indirect beneficial interests referenced
in (a) above as determined by the Agent in its sole good faith
discretion.
"LIBOR" shall mean, in relation to any Loan:
(a) the applicable Screen Rate; or
-11-
(b) (if no Screen Rate is available for the currency or Interest
Period of that Loan) the arithmetic mean of the rates (rounded
upwards to four decimal places) as supplied to the Agent at
its request quoted by the Reference Banks to leading banks in
the London interbank market,
on or about 11:00 a.m. London time on the Quotation Day for the offering
of deposits in the currency of that Loan and for a period of thirty (30)
days.
"LMA" shall mean the Loan Market Association.
"Loan" shall mean a loan made or to be made under the Facility or the
principal amount outstanding for the time being of that loan.
"Loan-To-Value Ratio" or "LTV" shall mean, as of any date in respect to
any item of Eligible Collateral, the ratio that (x) the aggregate
outstanding principal balances of all loans and preferred equity
interests secured in whole or in part by real property or direct or
indirect beneficial interests therein relating to such Eligible
Collateral bears to (y) the value, determined by an Appraisal in a form
reasonably acceptable to the Agent, of the real property (together with
all applicable appurtenant interests and subject to all applicable
security interests, encumbrances and tenancies), or direct or indirect
beneficial interests which form the basis of such Eligible Collateral.
"Majority Lenders" shall mean:
(a) if there are no Loans then outstanding, a Lender or Lenders
whose Total Maximum Credit aggregate more than 66(2)/3% of the
Total Maximum Credit (or, if the Total Maximum Credit have
been reduced to zero, aggregated more than 66(2)/3% of the
Total Maximum Credit immediately prior to the reduction); or
(b) at any other time, a Lender or Lenders whose participations in
the Loans then outstanding aggregate more than 66(2)/3% of all
the Loans then outstanding.
"Mandatory Cost" shall mean the percentage rate per annum calculated by
the Agent in accordance with Schedule 4 (Mandatory Cost formulae).
"Material Adverse Effect" shall mean a material adverse effect on:
(a) the business, operations, Property, condition (financial or
otherwise) or prospects of the Borrower or the Guarantor;
(b) the ability of an Obligor to perform its obligations under any
of the Finance Documents;
(c) the validity or enforceability of any of the Finance Documents
or the rights or remedies of any Finance Party under any of
the Finance Documents;
(d) the timely payment of principal or of interest on a Loan or
other amounts payable in connection therewith; or
(e) the Collateral.
-12-
"Maximum Credit" shall mean in relation to any Lender, the amount in the
Base Currency set opposite its name under the heading "Maximum Credit"
in Part II of Schedule 1 (The Original Parties) and the amount in the
Base Currency of any other Maximum Credit transferred to it under this
Agreement as the same may be reduced in accordance with this Agreement
to the extent not cancelled, reduced or transferred by it under this
Agreement.
"Mezzanine Loan" shall mean indebtedness of an owner or owners of any
Equity Interest or any other equity or ownership interests in property
secured only by such Equity Interest or other equity or ownership
interest, each encumbering one or more commercial (including retail
office, industrial, self-storage, hospitality or other commercial uses)
or multi-family residential properties to which the applicable
representations and warranties in Clause 17.13 (Collateral: Collateral
Security) hereof are correct.
"Moody's" shall mean ▇▇▇▇▇'▇ Investors Service Inc. or any successor
to its rating business.
"Mortgage" shall mean the mortgage, charge or other instrument securing
a Mortgage Loan, which creates a first ranking security interest on real
property.
"Mortgage Loan" shall mean a performing mortgage loan encumbering one or
more commercial (including retail, office, industrial, self storage,
hospitality or other commercial uses) or multi-family residential
properties to which the applicable representations and warranties in
Clause 17.13 (Collateral; Collateral Security) hereof are correct.
"MS & Co." shall mean ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ & Co. Incorporated, a registered
broker-dealer.
"MS Indebtedness" means any Indebtedness of any Obligor owed to the
Initial Lender or any of its respective Affiliates.
"Net Worth" shall mean the amount which would be included under
shareholders equity on a consolidated balance sheet of the Borrower and
the Guarantor and its subsidiaries determined on a consolidated basis in
accordance with GAAP.
"Obligors" shall mean the Borrower and the Guarantor and "Obligor" shall
mean either one of them as the context may require.
"Optional Currency" shall mean sterling, Yen or euros or any other
currency mutually agreed to by the Borrower and the Agent.
"Other Approved Collateral" shall mean such other proposed Property of
the Borrower as the Agent shall accept as Collateral for a Loan.
"Participating Member State" shall mean any member state of the
European Communities that adopts or has adopted the euro as its lawful
currency in accordance with legislation of the European Community
relating to Economic and Monetary Union.
"Party" shall mean a party to this Agreement.
"Post Default Rate of Interest" shall have the meaning ascribed to it in
Clause 9.3 (Default Interest).
-13-
"Preferred Equity Interest" shall mean any interest in a person
constituting preference shares or a preferred partnership or membership
interest or other preferred right or interest in a person that is not
characterised as indebtedness under GAAP.
"Preliminary Due Diligence Package" shall mean, with respect to any item
of Eligible Collateral, the following due diligence information relating
to such item of Eligible Collateral to be provided by the Borrower to
the Agent pursuant to this Agreement:
(a) a summary memorandum outlining the proposed transaction,
including potential transaction benefits and all material
underwriting risks, all Underwriting Issues and all other
characteristics of the proposed transaction that a prudent
lender would consider material;
(b) a cash flow pro-forma, plus historical information, if
available;
(c) a description of the Property comprised in such Eligible
Collateral (whether real property, a loan or other
collateral);
(d) the indicative relevant Loan-To-Value Ratio;
(e) the Borrower's or the Guarantor's or any Affiliate thereof's
relationship with its Collateral Obligor or any Affiliate of
such Collateral Obligor, if any;
(f) a Phase I environmental report (including asbestos and lead
paint report);
(g) third party reports, to the extent available and applicable,
including:
(i) current Appraisal;
(ii) Phase II environmental report or other follow-up
environmental report if such was recommended in the
relevant Phase I environmental report;
(iii) seismic reports; and
(iv) an operations and maintenance plan with respect to
asbestos containing materials;
(h) documents comprising such Eligible Collateral, or current
drafts thereof, including, without limitation, the underlying
debt and the related finance documents (including any
guarantees), the Collateral Obligor's organisational, or
constitutional, documents, warrant agreements, and loan and
collateral security agreements, as applicable;
(i) a list that specifically and expressly identifies any
Collateral Documents that relate to such Eligible Collateral
but which are not in the Borrower's possession; and
(j) in the case of Eligible Collateral which is other than an
actual Mortgage Loan, all information and other materials
described in this definition which would otherwise be provided
for the underlying mortgage loan if it were an item of
Eligible Collateral, except that, as to the items set forth in
paragraphs (g) and (h), to the extent the Borrower possesses
such information or has access to such information because it
was provided to the related lead lender and made available to
the Borrower.
-14-
"Principal Receipts" means in relation to any Eligible Collateral
purchased or otherwise acquired by the Borrower, any monies arising from
such Eligible Collateral and received by the Borrower which are of a
principal nature or are on account of principal, or are on account of a
return of capital in relation to a Preferred Equity Interest.
"Property" shall mean, any right or interest in or to property of any
kind whatsoever, whether real, personal or mixed and whether tangible or
intangible.
"Proposed Eligible Collateral" means any item of Collateral that the
Borrower proposes should be the subject of a Loan prior to the approval
by the Agent as Eligible Collateral.
"Qualifying Lender" has the meaning given to it in Clause 12.1
(Definitions).
"Quotation Day" means in relation to any period for which an interest
rate is to be determined the day that is one (1) day prior to the first
day of that period.
"Rating" shall mean the rating (or its equivalent) assigned by each
Rating Agency for CMBS as set forth in Schedule 10 (Pricing Matrix).
"Rating Agency" shall mean Moody's and S&P.
"Reference Banks" shall mean the principal London offices of HSBC Bank
plc, The Royal Bank of Scotland plc, Barclays Bank plc and Lloyds TSB
Bank plc or such other banks as may be appointed by the Agent in
consultation with the Borrower.
"Relevant Interbank Market" shall mean in relation to euro, the European
interbank market, in relation to sterling the London interbank market,
in relation to Yen, the London interbank market and, in relation to any
other currency, the London interbank market.
"Repeating Representations" shall mean the representation and warranties
of the Borrower set forth in Clauses 17.1, 17.2, 17.3, 17.4, 17.5, 17.6,
17.7, 17.9, 17.10, 17.11, 17.12, 17.13, 17.15, 17.16, 17.17, 17.18 and
17.19 of this Agreement.
"Request for Borrowing" shall mean a notice substantially in the form
set out in Schedule 3 (Request for Borrowing).
"Reservations" shall mean (i) the effect of bankruptcy, examination,
insolvency or similar laws affecting generally the enforcement of
creditor's rights, as such laws would apply in the event of any
bankruptcy, examination, receivership, insolvency or similar event
applicable to the relevant Obligor and (ii) general equitable principles
(whether enforceability of such principles is considered in a proceeding
at law or in equity).
"Responsible Officer" shall mean, as to any person, the chief executive
officer, chairman of the board, president, executive vice president,
and, with respect of financial matters, executive vice president, vice
president or the treasurer of such person.
"Revenue Receipts" means any monies received by the Borrower which are
not Principal Receipts (or the proceeds of the investment of the
Borrower Principal Receipts).
"S&P" shall mean Standard and Poor's Rating Services, a division of The
▇▇▇▇▇▇-▇▇▇▇ Companies, Inc. or any successor to its rating business.
-15-
"Screen Rate" means:
(a) in relation to LIBOR, the British Bankers' Association
Interest Settlement Rate for the relevant currency and period;
(b) in relation to EURIBOR, the percentage rate per annum
determined by the Banking Federation of the European Union for
the relevant period;
displayed on the appropriate page of the Reuters screen. If the agreed
page is replaced or service ceases to be available, the Agent may
specify another page or service displaying the appropriate rate after
consultation with the Borrower and the Lenders.
"Secured Parties" or "Secured Party" shall have the meaning provided
in the Debenture.
"the Security Trustee" has the meaning provided in the heading to
this Agreement.
"the Servicer" shall have the meaning provided in Clause 33.1
(Servicing) hereof.
"Servicer Notice" shall have the meaning provided in Clause 33.1
(Servicing) hereof.
"Servicing Agreement" shall have the meaning provided in Clause 33.1
(Servicing) hereof.
"Servicing Records" shall have the meaning provided in Clause 33.1
(Servicing) hereof.
"sterling" or "(pound)" shall mean the lawful currency of the United
Kingdom.
"Subordinated Loan Agreement" shall mean the agreement made between the
Borrower and the Guarantor evidencing the subordinated debt of the
Borrower to the Guarantor which shall not be dated later than the date
of the initial loan under this Agreement.
"Subsidiary" shall mean in the case of a company incorporated in England
and Wales a subsidiary within the meaning of Section 736 of the
Companies ▇▇▇ ▇▇▇▇ and in the case of the Borrower only a subsidiary
within the meaning of Section 155 of the Companies Act, 1963 (as
amended) of the Republic of Ireland:
(a) which is controlled, directly or indirectly, by the first
mentioned company or corporation;
(b) more than half the issued share capital of which is
beneficially owned, directly or indirectly by the first
mentioned company or corporation; or
(c) which is a Subsidiary of another Subsidiary of the first
mentioned company or corporation,
and for this purpose, a company or corporation shall be treated as being
controlled by another if that other company or corporation is able to
direct its affairs and/or to control the composition of its board of
directors or equivalent body.
"Supplemental Due Diligence List" shall mean with respect to any item of
Proposed Eligible Collateral, information or deliveries concerning such
Proposed Eligible Collateral that the Agent shall request in addition to
the Preliminary Due Diligence Package.
-16-
"Syndication Date" shall mean the day which is the day specified by as
the day on which primary syndication of the Facility is completed.
"Table Funded Eligible Collateral" shall mean Eligible Collateral to be
acquired by the Borrower contemporaneously with the making of a Loan to
it, where substantially all of the proceeds of the relevant Loan will be
used to acquire such Eligible Collateral.
"Tangible Net Worth" shall mean, as of a particular date:
(a) all amounts which would be included under equity on the
balance sheet of the Guarantor at such date, determined in
accordance with GAAP, less
(b)
(i) all amounts owing to the Guarantor from Affiliates; and
(ii) Intangible Assets.
"TARGET" means Trans-European Automated Real-time Gross Settlement
Express Transfer payment system.
"TARGET Day" means any day on which TARGET is open for the settlement
of payments in euro.
"Tax" shall mean any tax, levy, impost, duty or other charge or
withholding of a similar nature (including any penalty or interest
payable in connection with any failure to pay or any delay in paying any
of the same).
"Taxes Act" shall mean the Income and Corporation Taxes ▇▇▇ ▇▇▇▇.
"Termination Date" shall mean February 17, 2008 or such earlier date on
which this Agreement may terminate in accordance with its terms or by
operation of law.
"Total Maximum Credit" shall mean the aggregate of the Maximum Credit
being $300,000,000 as at the date of this Agreement.
"Transfer Certificate" shall mean a certificate substantially in the
form set out in Schedule 5 (Form of Transfer Certificate) or any other
form agreed between the Agent and the Borrower.
"Transfer Date" shall mean in relation to a transfer, the later of:
(a) the proposed Transfer Date specified in the Transfer
Certificate; and
(b) the date on which the Agent executes the Transfer Certificate.
"Trust Receipt" shall mean the receipt delivered by the Custodian
pursuant to the Custodial Agreement acknowledging receipt of a
Collateral File in connection with a Loan.
"Underwriting Issues" shall mean, with respect to any Collateral as to
which the Borrower intends to request a Loan, all information that has
come to the Borrower's attention, based on the making of reasonable
inquiries and the exercise of reasonable care and diligence under the
circumstances, which would be considered a materially "negative" factor
(either separately or in the aggregate with other information), or a
material defect in loan documentation or closing
-17-
deliveries (such as any absence of any material Collateral Documents),
to a reasonable institutional lender in determining whether to originate
or acquire the Collateral in question.
"Unpaid Sum" shall mean any sum due and payable but unpaid by an
Obligor under the Finance Documents.
"VAT" shall mean value added tax as provided for in the Value Added Tax
▇▇▇ ▇▇▇▇ as amended, of the Republic of Ireland and any other tax of a
similar nature.
"VAT Group" shall mean a VAT group as defined by Section 8(8) of the
Value Added Tax Act, 1972, as amended of the Republic of Ireland.
"Yen" and "(Y)" each mean the lawful currency for the time being of
Japan.
1.2 Construction
(a) Unless a contrary indication appears any reference in this
Agreement to:
(i) the "the Agent", "the Security Trustee" any "Finance
Party", any "the Lender", any "Obligor" or any "Party"
shall be construed so as to include its successors in
title, permitted assigns and permitted transferees;
(ii) "assets" includes present and future properties, revenues
and rights of every description;
(iii) a "Finance Document" or any other agreement or instrument
is a reference to that Finance Document or other agreement
or instrument as amended or novated;
(iv) "indebtedness" includes any obligation (whether incurred as
principal or as surety) for the payment or repayment of
money, whether present or future, actual or contingent;
(v) a "person" includes any person, firm, company, corporation,
government, state or agency of a state or any association,
trust or partnership (whether or not having separate legal
personality) of two or more of the foregoing;
(vi) a "regulation" includes any regulation, rule, official
directive, request or guideline (whether or not having the
force of law) of any governmental, intergovernmental or
supranational body, agency, department or regulatory,
self-regulatory or other authority or organisation;
(vii) a provision of law is a reference to that provision as
amended or re-enacted; and
(viii) a time of day is a reference to London time.
(b) Section, Clause and Schedule headings are for ease of reference
only.
(c) Unless a contrary indication appears, a term used in any other
Finance Document or in any notice given under or in connection
with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement.
-18-
(d) A Default (other than an Event of Default) and an Event of Default
is "continuing" if it has not been remedied or waived.
(e) Unless a contrary intention appears words importing the singular
shall include the plural and vice versa.
(f) In this Agreement, unless otherwise specified, where an expression
requires any amounts of money to be aggregated or otherwise added
where such amounts are not all denominated in the same currency
then the aggregate of such amounts shall be:
D + X(R)
where "D" is the aggregate of all such amounts denominated in
the Base Currency and "X(R)" is the aggregate of all such
amounts denominated in currency other than the Base Currency
converted into the Base Currency using the Agent's Spot Rate
of Exchange on the day such calculation is made.
1.3 Third party rights
A person who is not a Party has no right under the Contracts (Rights of
Third Parties) ▇▇▇ ▇▇▇▇ to enforce or to enjoy the benefit of any term
of this Agreement.
1.4 Original Facility Agreement
The parties hereto originally entered onto a multicurrency revolving
facility agreement dated 17 February 2006 (the "Original Facility
Agreement"). The parties hereto now wish to amend and restate the
Original Facility Agreement in the manner set out herein.
1.5 Repeating Representations
The Borrower represents and warrants to each Finance Party in the terms
of each of the Repeating Representations on the date hereof.
1.6 Conditions Precedent to Amendment and Restatement
The Borrower may not deliver a Request for Borrowing after the date of
this amended and restated agreement unless the Agent has received all of
the documents and other evidence listed in Part IV of Schedule 2
(Conditions Precedent) in form and substance satisfactory to the Agent.
The Agent shall notify the Borrower and the Lenders, promptly upon being
so satisfied.
1.7 Further Commitment Fee
On the date hereof, the Borrower shall pay to the Agent (for the account
of the Lenders) a fee of $101,643.84.
-19-
SECTION 2
THE FACILITY
2. THE FACILITY
2.1 The Facility
Subject to the terms of this Agreement, the Lenders make available to
the Borrower a multicurrency revolving loan facility in a maximum
aggregate amount from time to time outstanding equal to the Total
Maximum Credit.
2.2 Finance Parties' rights and obligations
(a) The obligations of each Finance Party under the Finance Documents
are several. Failure by a Finance Party to perform its
obligations under the Finance Documents does not affect the
obligations of any other party under the Finance Documents. No
Finance Party is responsible for the obligations of any other
Finance Party under the Finance Documents.
(b) Subject to the terms and conditions of this Agreement, during the
Availability Period the Borrower may borrow, repay and reborrow
hereunder, provided that, notwithstanding the foregoing, no
Lender shall have any obligation to make a Loan to the Borrower
in excess of its Available Credit.
(c) The rights of each Finance Party under or in connection with the
Finance Documents are separate and independent rights and any
debt arising under the Finance Documents to a Finance Party from
an Obligor shall be a separate and independent debt.
(d) A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance
Documents.
3. PURPOSE
3.1 Purpose
The Borrower shall apply all amounts borrowed by it under the Facility
towards the acquisition or funding of Eligible Collateral and the
purchase of Interest Rate Protection Agreements relating to such
Eligible Collateral.
3.2 Monitoring
No Finance Party is bound to monitor or verify the application of
any amount borrowed pursuant to this Agreement.
-20-
SECTION 3
LOANS
4. CONDITIONS OF LOANS
4.1 Initial conditions precedent
The Borrower may not deliver its initial Request for Borrowing unless
the Agent has received all of the documents and other evidence listed in
Part I of Schedule 2 (Conditions Precedent) in form and substance
satisfactory to the Agent. The Agent shall notify the Borrower and the
Lenders, promptly upon being so satisfied.
4.2 Further conditions precedent
The Agent will only be obliged to comply with a Request for Borrowing if
(i) on the Effective Date the representations and warranties made by
each Obligor under each Finance Document are true in all material
respects; and (ii) on any proposed Funding Date:
(a) the Borrower has complied with the provisions of Part II and III
of Schedule 2 (Conditions Precedent);
(b) the Repeating Representations to be made by the Borrower and any
other representations and warranties made by an Obligor under
each Finance Document (other than this Agreement) are true in all
material respects and in the case of the Repeating
Representations, are deemed to be made by the Borrower by
reference to the facts and circumstances then existing;
(c) the procedures set out in Clause 5 (Procedure for Loans) have
been complied with; and
(d) the Availability Period has not expired.
5. PROCEDURE FOR LOANS
5.1 Preliminary Approval of Eligible Collateral
In respect of any assets which the Borrower proposes to be included in
the Borrowing Base and to be granted as security to the Security Trustee
pursuant to the Debenture the Borrower shall:
(a) submit to the Agent a Preliminary Due Diligence Package for the
Agent's review and approval;
(b) not later than five (5) Business Days after the Agent has
received a complete Preliminary Due Diligence Package, the Agent
may: (i) request in the Agent's sole but good faith discretion
additional information that the Agent shall specify on a
Supplemental Due Diligence List; (ii) notify the Borrower of the
Asset Value for the Proposed Eligible Collateral; or (iii) deny,
in the Agent's sole and absolute discretion, the Borrower's
request for a Loan hereunder; and
(c) In the event of a request for supplemental information by the
Agent pursuant to paragraph (b)(i) of Clause 5.1, the Agent shall
thereafter advise the Borrower in accordance with paragraph
(b)(ii) of Clause 5.1 or paragraph (b)(iii) not later than five
(5) Business Days following receipt of the requested information;
-21-
The Agent's failure to respond to the Borrower's request shall be deemed
to be a denial of the Borrower's request for a Loan, unless otherwise
agreed to between the Borrower and the Agent in writing. Nothing in this
Clause 5.1 or elsewhere in this Agreement shall, or be deemed to
prohibit the Agent from determining in its sole but good faith
discretion the adequacy, completeness and appropriateness of or from
disapproving any and all financial and other underwriting data required
to be supplied by the Borrower under this Agreement.
5.2 Final Approval of Proposed Eligible Collateral
In the event that the Agent notifies the Borrower of the Asset Value for
the Proposed Eligible Collateral and the Borrower desires to obtain a
Loan secured by the Proposed Eligible Collateral the Borrower shall:
(a) Notify the Agent of the Advance Rate selected by the Borrower with
respect to such Loan which for greater certainty shall not cause
the Lenders' Net Aggregate Exposure and the Lenders' Net Exposure
for such Loan to exceed 80% and 85%, respectively;
(b) Satisfy the conditions precedent set forth in Part I and/or II, as
applicable, of Schedule 2 (Conditions Precedent); and
(c) Provide the Agent, for the Agent's review, the following to the
extent not otherwise included in the Preliminary Due Diligence
Package:
(i) Environmental and Engineering. If applicable an
environmental report and an engineering report, each in
form and substance satisfactory to the Agent, by an
engineer and environmental consultant reasonably acceptable
to the Agent.
(ii) Appraisal. If applicable an Appraisal.
(iii) Insurance. With respect to Eligible Collateral that is
secured on real property, certificates or other evidence of
insurance demonstrating insurance coverage in respect of
such real property of types, in amounts, with insurers and
otherwise in compliance with the terms, provisions and
conditions set forth in the related Collateral Documents or
the finance documents related to such Eligible Collateral.
Such certificates or other evidence shall indicate that the
lead lender on the whole loan in which the Borrower is a
participant will be named as an additional insured as its
interest may appear and shall contain a loss payee
endorsement in favour of such additional insured with
respect to the property policies required to be maintained
under the related Collateral Documents.
(iv) Survey. With respect to the Collateral, and to the extent
obtained by the Borrower from the Collateral Obligor at the
origination of the underlying loan, relating thereto, a
current survey of such real property in a form reasonably
satisfactory to the Agent.
(v) Security Search Reports. Satisfactory reports of any
registered security interests, tax security, judgment and
litigation searches and certificate of title reports and
updates, as applicable, conducted by a reputable law firm
reasonably acceptable to the Agent with respect to the
Collateral, the Borrower and the related Collateral
Obligor; such searches to be conducted in each location the
Agent shall reasonably designate.
-22-
(vi) Security Instruments. All security instruments and
documents granting, to the extent not already done so by
the Debenture, to the Security Trustee a perfected first
ranking security interest in the Eligible Collateral (and
in or over any Interest Rate Protection Agreements held by
the Borrower with respect thereto) which shall be subject
to no additional security interest except as expressly
permitted by the Agent. Such security instruments and
documents shall contain such representations and warranties
concerning the Eligible Collateral and such other terms as
shall be reasonably satisfactory to the Agent.
(vii) Opinions of Counsel. A copy of an opinion to the underlying
lender on the Eligible Collateral and its successors and
assigns from counsel to the Collateral Obligor on the
underlying loan transaction, as applicable, as to the
enforceability of the loan documents governing such
transaction and such other matters as the Agent shall
require (including, without limitation, opinions as to due
formation and incorporation, authority, choice of law and
perfection of security interests).
(viii) Additional Real Property Matters. To the extent obtained by
the Borrower from the Collateral Obligor relating to any
item of Eligible Collateral at the origination of the
underlying loan or equity interest relating thereto, the
Borrower shall have delivered to the Agent such other real
estate related certificates and documentation as may have
been requested by the Agent pursuant to the terms of this
Agreement, such as reports or certificates on title or
other information in connection with the relevant real
property.
(ix) Eligible Collateral. In the case of Eligible Collateral
which represents a participation interest in a Mortgage
Loan, in addition to the delivery of the items in
paragraphs (vi) and (vii) of Clause 5.2, the Agent shall
have received all documentation specified in paragraphs (i)
and (v) of Clause 5.2 as if the underlying mortgage loan
were the direct Collateral to the extent the Borrower
possesses such documentation or has access to such
documentation because it was provided to the related lead
lender and made available to the Borrower and, in addition,
all documents evidencing the Eligible Collateral,
including, but not limited to, an original participation
certificate and the related participation agreement.
(x) B Notes, Mezzanine Notes, and Preferred Equity Interests.
In the case of a B Note, or Mezzanine Loan or Preferred
Equity Interest, the Agent shall have received all
documentation specified herein as if the underlying loan
were the direct item of Collateral and, in addition, all
documentation evidencing or otherwise relating to such B
Note, Mezzanine Loan or Preferred Equity Interest, as
applicable.
(xi) CMBS. In the case of CMBS, the Agent shall have received
(a) a copy of the applicable servicing agreement, trust
deed, participation agreement or similar document governing
the issuance and administration of the CMBS; (b) a copy of
any new issue asset summary books; (c) copy of the
applicable prospectus or offering memorandum; (d) to the
extent that the CMBS is certificated, an
-23-
original of the relevant certificate duly endorsed in blank
to the Security Trustee; (e) to the extent that the CMBS is
not certificated, all documents requested by the Agent to
confirm that the CMBS is being held in an appropriate
security account or such other evidence of confirmation of
the sale to the Agent as the Agent shall require; and (f) a
copy of any other agreement or instrument evidencing or
otherwise governing the CMBS.
(xii) Other Documents. The Agent shall have received such other
documents as the Agent or its counsel shall request with
respect to each or any item of Eligible Collateral.
5.3 Collateral Approval or Disapproval
Following the date upon which the Borrower satisfied the conditions set
out in Clause 5.2, or has delivered such items or documents fully
executed, if applicable, in final form, the Agent shall either:
(a) if the Collateral Documents with respect to the Collateral or the
security interest to be granted over such Collateral in favour of
the Security Trustee are not reasonably satisfactory in form and
substance to the Agent, notify the Borrower that the Lender has
not approved the Proposed Eligible Collateral; or
(b) notify the Borrower and the Custodian that the Agent has approved
the Proposed Eligible Collateral as Eligible Collateral and such
notice shall identify the documents to be delivered to the
Custodian in connection with such Eligible Collateral pursuant to
Clause 5.2 (Final Approval of Proposed Eligible Collateral) and
Part II and Part III of Schedule 2 (Conditions Precedent) and the
party whom the Agent shall designate to record or register and/or
file, as the case may be, any security interest or any document
or agreement evidencing such security interest necessary to
perfect the Security Trustee's security interest in the Eligible
Collateral.
The terms of delivery and filing and/or recordation or registration of
such security interest shall if the Agent and the Security Trustee deem
it necessary to do so be set forth in a separate agreement between the
Agent, the Security Trustee and their designee. The Agent's failure to
respond to the Borrower within two (2) Business Days shall be deemed to
be a denial of the Borrower's request that the Agent approve the
Proposed Eligible Collateral, unless the Agent and the Borrower have
agreed otherwise in writing.
5.4 Procedure for Loan with Respect to Eligible Collateral
Once the Agent has approved the Eligible Collateral in accordance with
Clause 5.3 (Collateral Approval or Disapproval) above the Borrower may
request a Loan hereunder, on any Business Day during the period from and
including the Effective Date to and including the day falling fifteen
(15) Business Days prior to the Termination Date, by delivering to the
Agent, with a copy to the Security Trustee, a Request for Borrowing,
which request must be received by the Agent prior to 2:00 p.m., London
time, one (1) Business Day prior to the requested Funding Date provided
that if the Borrower requests a Loan to be made in Yen, then the
Borrower shall deliver the Request for Borrowing no later than two (2)
Business Days prior to the requested Funding Date.
-24-
5.5 Completion of Request for Borrowing
The Request for Borrowing shall:
(a) attach a schedule identifying the Eligible Collateral that the
Borrower proposes to grant by way of security to the Security
Trustee and to be included in the Borrowing Base;
(b) specify the Funding Date;
(c) specify the Advance Rate selected by the Borrower, which in no
event shall cause: (i) the Lenders' Net Aggregate Exposure to
exceed 80%; and (ii) the Lenders' Net Exposure for such Loan to
exceed 85%;
(d) specify the Applicable Margin;
(e) specify the account into which the aggregate amount of the Loan
will be transferred;
(f) specify the currency and amount of the Loan in order to comply
with Clause 6 (Optional Currencies); and
(g) attach a certificate signed by a Responsible Officer of the
Borrower certifying as to the truth, accuracy and completeness of
the above, which certificate shall specifically include a
statement that the Borrower is in compliance with any
requirements of any Governmental Authority and is qualified to do
business in all required jurisdictions.
Contemporaneously with the delivery of Request for Borrowing the
Borrower shall deliver to the Agent, with a copy to the Custodian, a
Custodial Identification Certificate along with the accompanying
Collateral Schedule with respect to all proposed Eligible Collateral. In
the event the Borrower revokes the Request for Borrowing delivered to
the Agent, the Borrower shall be liable to pay, no later than one (1)
Business Day after written request from the Agent, and hereby agrees to
indemnify and hold the Agent and the Lenders harmless from and against,
all losses, costs and expenses incurred by the Agent or the Lenders in
connection with the revocation of such Request for Borrowing.
5.6 Delivery of Collateral Files and Finance Documents.
In connection with the approval of the Eligible Collateral and the
delivery of a Request for Borrowing the Borrower shall comply with the
following requirements,
(a) The Borrower shall deliver the Collateral Files in the following
manner:
(i) in the case of Eligible Collateral that is not Table Funded
Eligible Collateral, the Borrower shall deliver to the
Custodian no later than 3:00 p.m., London time, two (2)
Business Days prior to the Funding Date all fully executed
original or copy documents and instruments required by the
Agent to comprise the Collateral File; and
(ii) in the case of Table Funded Eligible Collateral, the
Borrower shall deliver to the Custodian no later than three
(3) Business Days after the Funding Date all fully executed
original or copy documents and instruments required by the
Agent to comprise the Collateral File.
-25-
(b) No later than 5:00 p.m., London time, (1) Business Day prior to
each Funding Date, the Borrower shall provide the Custodian with a
final Custodial Identification Certificate and related Collateral
Schedule with respect to the Eligible Collateral, indicating any
changes, if any, from the Custodial Identification Certificate and
related Collateral Schedule heretofore delivered to the Agent and
the Custodian pursuant to Clause 5.5 (Completion of Request for
Borrowing) above.
(c) If the Borrower shall deliver the Request for a Borrowing pursuant
to Clause 5.4 (Procedure for Loan with respect to Eligible
Collateral) and all conditions precedent set forth in Clauses 5.1
(Preliminary Approval of Eligible Collateral), 5.2 (Final Approval
of Proposed Eligible Collateral), 5.3 (Collateral Approval or
Disapproval), 5.4 (Procedure for Loan with respect to Eligible
Collateral) and Parts I and II of Schedule 2 (Conditions
Precedent) have been met, and provided no Default or Event of
Default shall have occurred and be continuing, the Agent shall
advise the Lender(s) and the Lender(s) shall make a Loan to the
Borrower on the Funding Date, in the amount so requested and
approved by the Agent.
(d) Subject to the satisfaction of the conditions set out in this
Clause 5 and to the provisions of Schedule 2 Parts I and II, a
Loan will be made available to the Borrower on the Funding Date by
no later then 3:00 p.m., London time, on such date, and the funds
comprised in such Loan will then be made available to the Borrower
by the Lender transferring, via wire transfer, to the relevant
account identified by the Borrower in the related Request for
Borrowing in the aggregate amount of such Loan in funds
immediately available to the Borrower. The Agent may consider on a
case-by-case basis in its sole and absolute discretion,
alternative funding arrangements requested by the Borrower.
(e) From time to time, the Borrower shall forward to the Custodian
additional original documents or additional documents evidencing
any: (i) assumption, modification, consolidation or extension of a
Collateral Loan Document comprising a portion of the Collateral;
or (ii) any amendment to the operative documents with respect to
Other Approved Collateral, in each case approved by the Agent in
accordance with the terms of this Agreement and upon receipt of
any such other documents, the Custodian shall hold such other
documents as the Agent shall request from time to time.
(f) With respect to any documents which have been delivered or are
being delivered to recording or registration offices for recording
or registration and have not been returned to the Borrower in time
to permit their delivery hereunder at the time required, in lieu
of delivering such original documents, the Borrower shall deliver
to the Custodian a true copy thereof with a certificate of a
Responsible Officer of the Borrower certifying that such copy is a
true, correct and complete copy of the original, which has been
transmitted for recordation. The Borrower shall deliver such
original documents to the Custodian promptly when they are
received.
(g) Notwithstanding anything in this Agreement to the contrary, if the
Borrower proposes that Other Approved Collateral should serve as
the Collateral for a Loan, then the procedure for the approval of
such Other Approved Collateral, shall follow, mutatis mutandis,
the procedures described in Clauses 5.1 (Preliminary Approval of
Eligible Collateral), 5.2 (Final Approval of Proposed Eligible
-26-
Collateral), 5.3 (Collateral Approval or Disapproval), paragraphs
(a) - (d), (f) and (g) of this Clause 5.6 and such other
procedures including those set out in Schedule 2 Part III as the
Agent shall in its sole discretion require.
5.7 Lenders' participation
(a) If the conditions set out in this Agreement have been met, each
Lender shall make its participation in each Loan available by the
Funding Date through its Facility Office.
(b) The amount of each Lender's participation in each Loan will be
equal to the proportion borne by its Available Credit to the Total
Maximum Credit immediately prior to making the Loan.
(c) The Agent shall determine the Base Currency Amount of each Loan
which is to be made in an Optional Currency and shall notify each
Lender of the amount, currency and the Base Currency Amount of
each Loan and the amount of its participation in that Loan, in
each case on or about 11:00 am London time.
6. OPTIONAL CURRENCIES
6.1 Selection of currency
The Borrower shall select the currency and amount of a loan in a Request
for Borrowing.
6.2 Currency and amount
The currency specified in a Request for Borrowing shall be any Optional
Currency but not dollars.
6.3 Unavailability of a currency
If on the Funding Date:
(a) a Lender notifies the Agent that the Optional Currency requested
is not readily available to it in the amount required; or
(b) a Lender notifies the Agent that compliance with its obligation to
participate in a Loan in the proposed Optional Currency would
contravene a law or regulation applicable to it,
the Agent will give notice to the Borrower to that effect on the Funding
Date. In this event, any Lender that gives notice pursuant to this
Clause 6.3 will be required to participate in the Loan in the Base
Currency, Yen, sterling or euros as the relevant Lender may select in an
amount equal to that Lender's proportionate amount of the proposed Loan
converted to the selected currency at the Agent's Spot Rate of Exchange
for the purchase of the requested optional currency at or around 11:00
am (London time) on the relevant Funding Date. Such Lender's
participation will be treated as a separate Loan denominated in the Base
Currency, Yen, sterling or euros as the Lender may indicate during the
relevant Interest Period.
6.4 Participation in a Loan
Each Lender's participation in a Loan will be determined in accordance
with paragraph (b) of Clause 5.7 (Lenders' participation).
-27-
SECTION 4
REPAYMENT, PRE-PAYMENT AND CANCELLATION,
MANDATORY REPAYMENT OR PLEDGE
7. REPAYMENT
The Borrower shall repay the aggregate outstanding principal amount of
the Loans and all accrued and unpaid interest thereon on the Termination
Date.
8. REPAYMENT, PRE-PAYMENT AND CANCELLATION
8.1 Illegality
If, at any time, it is or will become unlawful in any applicable
jurisdiction for a Lender to perform any of its obligations as
contemplated by this Agreement or to fund or maintain its participation
in any Loan:
(a) the Lender shall promptly notify the Agent upon becoming aware of
that event;
(b) upon the Agent notifying the Borrower, the relevant Loan of that
Lender will be immediately cancelled; and
(c) the Borrower shall repay that Lender's participation in the
relevant Loan made to the Borrower on the date specified by the
Lender in the notice delivered to the Agent (being no earlier than
the last day of any applicable grace period permitted by law).
8.2 Voluntary pre-payment of Loans
The Borrower may, if it gives the Agent not less than two (2) Business
Days' (or such shorter period as the Majority Lenders may agree) prior
notice, prepay the whole or any part of a Loan (but, if in part, being
an amount that reduces the Base Currency Amount of such Loan by a
minimum amount of $100,000), provided that any such pre-payment shall be
accompanied by an amount representing any accrued but unpaid amounts due
under the Finance Documents, and the Exit Fee, if applicable.
8.3 Mandatory Pre-Payment or granting of further security to the Security
Trustee
(a) Pre-Payment or granting of further security on Borrowing Base
Deficiency
The Agent may determine and re-determine the Borrowing Base on any
Business Day and on as many Business Days as it may elect. If at
any time the Base Currency amount of the aggregate outstanding
principal amount of the Loans exceeds the Borrowing Base (a
"Borrowing Base Deficiency"), as determined by the Agent and
notified to the Borrower on any Business Day, the Borrower shall,
not later than one (1) Business Day after receipt of such notice,
either prepay the Loans in part or in whole or grant to the
Security Trustee by way of security for the Secured Obligations
such additional Eligible Collateral (which Eligible Collateral
shall be in all respects acceptable to the Agent in accordance
with the provisions of this Agreement) such that after giving
effect to such pre-payment or the granting of such security that
the aggregate outstanding principal amount of the Loans will not
exceed the Borrowing Base.
-28-
(b) Pre-payment on event of default relating to the Collateral
If at any time under any Collateral Document evidencing
Collateral: (i) there is an "Event of Default" (as defined in the
applicable documents in the Collateral File), or event with which
the giving of notice or lapse of time or both would become an
"Event of Default" (as defined in the applicable documents in the
Collateral File); or (ii) any representation or warranty made by
or on behalf of the relevant Collateral Obligor becomes false or
misleading in any material respect; or (iii) the relevant
Collateral Obligor or person fails to perform or observe any
material covenant or other obligation, the Agent may, in its sole
discretion and without regard to any determination of the Asset
Value of such Collateral, notify the Borrower of such occurrence
and may require that the Asset-Specific Loan Balance related to
the relevant Collateral be prepaid, in whole or in part, in the
determination of the Lender; provided, however, the Borrower may
reallocate the Asset-Specific Loan Balance relating to the
relevant Collateral to other Collateral securing the Loans (if
applicable) to the extent consistent with the terms of this
Agreement, and the Borrower shall only be required to prepay that
portion of such Asset-Specific Loan Balance to the extent such
reallocation would cause a Borrowing Base Deficiency. Not later
than one (1) Business Day after the receipt of such notice, the
Borrower shall prepay such portion of the Asset-Specific Loan
Balance related to such Collateral as shall have been required by
the Agent. The Agent may, in its sole discretion, determine and
re-determine the amount to be prepaid irrespective of whether or
not any statement of fact contained in any officer's certificate
delivered pursuant to paragraph (g) of Clause 5.5 (Completion of
Request for Borrowing) or any representation or warranty of the
Borrower set forth in Clause 17.16 (True and Complete Disclosure)
was true to the Borrower's actual knowledge.
(c) Pre-payment, Amortisation
The Borrower shall utilise all Principal Receipts in pre-paying
the relevant Loan or Loans related to the Eligible Collateral from
which such Principal Receipts have arisen and in any event shall
strictly comply with the provisions of Clause 19.19 (Remittance of
Pre-payments).
(d) Re-payment, General
With respect to any item of Collateral, the Borrower shall pre-pay
to the Agent an amount equal to the amount of casualty or
condemnation proceeds (if any) paid to, or for the benefit of, the
Borrower or any Collateral Obligor in respect of such item of
Collateral that is destroyed to the extent that the Borrower is
not required under the underlying collateral documents with the
Collateral Obligor to reserve, escrow, re-advance or apply such
proceeds for the benefit of such Collateral Obligor or the
underlying collateral. So long as no Default or Event of Default
has occurred and is then continuing, such amounts paid to the
Agent shall be applied in reduction of the Asset-Specific Loan
Balance relating to such item of Collateral. Each voluntary
pre-payment received during the continuation of any Default or
Event of Default hereunder shall be applied in accordance with
provisions contained in Clause 15 of the Debenture.
8.4 Right of repayment and cancellation in relation to a single Lender
(a) If:
-29-
(i) any sum payable to any Lender by the Borrower is required
to be increased under paragraph (c) of Clause 12.2 (Tax
gross-up);
(ii) any Lender claims indemnification from the Borrower under
Clause 12.3 (Tax indemnity) or Clause 13.1 (Increased
costs); or
(iii) any Lender notifies the Agent of its Additional Cost Rate
under paragraph 3 of Schedule 4 (Mandatory Cost formulae),
the Borrower may, whilst (in the case of paragraphs (i) and
(ii) above) the circumstance giving rise to the requirement or
indemnification continues or, (in the case of paragraph (iii)
above) that Additional Cost Rate is greater than zero, give
the Agent notice of cancellation of a Loan of that Lender and
its intention to procure the repayment of that Lender's
participation in the Loans.
(b) On receipt of a notice referred to in paragraph (a) above, the
Loan of that Lender shall immediately be reduced to zero.
(c) Promptly after the Borrower has given notice under paragraph, the
Borrower shall repay that Lender's participation in that Loan.
8.5 Restrictions
(a) Any notice of cancellation or pre-payment given by any Party under
this Clause 8 shall be irrevocable and, unless a contrary
indication appears in this Agreement, shall specify the date or
dates upon which the relevant cancellation or pre-payment is to be
made and the amount of that cancellation or pre-payment.
(b) Any pre-payment under this Agreement shall be made together with
accrued interest on the amount prepaid and, subject to any Funding
Costs (except in the case of a pre-payment under paragraphs (b)
and (d) of Clause 8.3 and paragraph (b) of Clause 10.2 in respect
of which the applicable Funding Costs shall be waived), without
premium or penalty, except for all amounts due under Clause 11
(Fees) hereof
(c) Unless a contrary indication appears in this Agreement, any part
of the Facility which is prepaid may be re-borrowed in accordance
with the terms of this Agreement.
(d) The Borrower shall not repay or prepay all or any part of the
Loans or cancel all or any part of the Total Maximum Credit except
at the times and in the manner expressly provided for in this
Agreement.
(e) No amount of the Total Maximum Credit cancelled under this
Agreement may be subsequently reinstated.
(f) So long as no Default or Event of Default has occurred and is then
continuing, each voluntary pre-payment shall be applied to reduce
any Asset Specific Loan Balance as designated by the Borrower to
the Agent in writing.
(g) Each voluntary pre-payment received during the continuation of any
Default or Event of Default hereunder shall be applied in such
manner as the Security Trustee shall determine in its sole and
absolute discretion subject always to the provisions contained in
Clause 15 of the Debenture.
-30-
8.6 Release of Security Interest
Upon the termination of this Agreement and the repayment by the Borrower
or the Guarantor to Lender of all Loans and the performance of all of
the Obligors' other obligations under the Finance Documents and related
documents in accordance with the Debenture and the discharge in full of
all of the other Secured Obligations the Security Trustee shall release
its security interest in any remaining Collateral.
-31-
SECTION 5
COSTS OF LOAN
9. INTEREST
9.1 Calculation of Interest
The Agent shall calculate the rate of interest on each Loan for each
Interest Period which will be the percentage rate per annum which is the
aggregate of:
(a) the Applicable Margin;
(b) LIBOR or, in relation to any Loan in euro, EURIBOR, plus;
(c) Mandatory Costs, if any.
9.2 Payment of Interest
On each relevant Interest Payment Date the Borrower shall pay all
accrued and unpaid interest on each Loan in respect of the preceding
Interest Period.
9.3 Default Interest
(a) If an Obligor fails to pay any amount payable by it under a
Finance Document on its due date, interest shall accrue on the
overdue amount from the due date up to the date of actual payment
(both before and after judgment) at a rate which, subject to
paragraph (b) below, is two per cent higher than the rate which
would have been payable if the overdue amount had, during the
period of non-payment, constituted a Loan in the currency of the
overdue amount for successive Interest Periods, each of a duration
selected by the Agent (acting reasonably) (the "Post Default Rate
of Interest"). Any interest accruing under this Clause 9.3 shall
be immediately payable by the Obligor on demand by the Agent.
(b) Default interest (if unpaid) arising on an overdue amount will be
compounded with the overdue amount at the end of each Interest
Period applicable to that overdue amount but will remain
immediately due and payable.
9.4 Notification of rates of interest
The Agent shall at the request of a Lender or the Borrower notify the
requesting party of the determination of the rate of interest applicable
to any Interest Period under this Agreement.
9.5 Non-Business Days
If an Interest Period would otherwise end on a day which is not a
Business Day, that Interest Period will instead end on the next Business
Day in that calendar month (if there is one) or the preceding Business
Day (if there is not).
10. CHANGES TO THE CALCULATION OF INTEREST
10.1 Absence of quotations
Subject to Clause 10.2 (Market disruption), if LIBOR, or if applicable,
EURIBOR is to be determined by reference to the Reference Banks but a
Reference Bank does not supply a quotation on or about 11:00 am London
time on the Quotation Day, LIBOR, or if applicable, EURIBOR shall be
determined on the basis of the quotations of the remaining Reference
Banks.
-32-
10.2 Market disruption
(a) If a Market Disruption Event occurs in relation to a Loan then the
Borrower shall be notified promptly thereof by the Agent and the
rate of interest shall be the sum of:
(i) the Applicable Margin;
(ii) the rate notified to the Agent by each Lender of such Loan
as soon as practicable and in any event before interest is
due to be paid in respect of the correct Interest Period in
respect of such Loan, to be that which expresses as a
percentage rate per annum the cost to that Lender of
funding its participation in that Loan from whatever source
it may reasonably select; and
(iii) the Mandatory Cost, if any, applicable to that Lender's
participation in a Loan.
(b) Promptly after determination of the rate of interest in relation
to a Loan in accordance with paragraph (a) of Clause 10.2, the
Agent shall notify the Borrower of such rate of interest whereupon
the Borrower shall either: (i) proceed with the Loan at the rate
of interest provided for in this Agreement; (ii) prepay the Loan
in relation to which the rate of interest in paragraph (a) of
Clause 10.2 was determined; or (iii) revoke the Request for
Borrowing in relation of which the rate of interest was determined
in paragraph (a) of Clause 10.2.
(c) In this Agreement "Market Disruption Event" means:
(i) at 11:00 am, London time on the Quotation Day for the
relevant Interest Period the Screen Rate is not available
and none or only one of the Reference Banks supplies a rate
to the Agent to determine LIBOR, or if applicable, EURIBOR
for the relevant Interest Period; or
(ii) the Lender determines in its discretion that before close
of business in London on the Quotation Day for calculating
interest the Agent receives notifications from a Lender
that the cost to it of obtaining matching deposits in the
Relevant Interbank Market would be in excess of LIBOR, or
if applicable, EURIBOR.
10.3 Alternative basis of interest or funding
(a) If a Market Disruption Event occurs and the Agent or the Borrower
so requires, the Agent and the Borrower shall enter into
negotiations (for a period of not more than thirty (30) days) with
a view to agreeing to a substitute basis for determining the rate
of interest.
(b) Any alternative basis agreed pursuant to paragraph (a) above
shall, with the prior consent of the Agent and the Borrower, be
binding on all Parties.
(c) During the period of negotiations set forth in paragraph (a) above
the rate of interest shall be either:
(i) the rate of interest on such Loan during the last Interest
Period preceding the Market Disruption Event; or
(ii) if no interest rate existed in respect of such Loan prior
to the Market Disruption Event then the rate of interest
calculated in accordance with Clause 10.1 above.
-33-
Following the determination of the rate of interest in
accordance with paragraph (a) above such rate of interest
shall be deemed to be the rate of interest in respect of such
Interest Period, replacing the default rate of interest
stipulated under this paragraph (c) and the amount paid, or
overpaid, by the Borrower to the Agent in respect of the
difference between the two such interest rates, if any, shall
forthwith be paid to the Agent or Borrower as the case may be.
11. FEES
11.1 Commitment Fee
On the Effective Date, the Borrower shall pay to the Agent (for the
account of the Lenders) a fee in the Base Currency computed at the rate
of 0.35 per cent. of the Total Maximum Credit as at the Effective Date.
11.2 Exit Fee
(a) Notwithstanding anything else herein the Borrower shall pay to the
Agent an exit fee (the "Exit Fee") in the Base Currency in respect
of any Collateral released with respect to a Loan being repaid or
pre-paid pursuant to paragraph (a) of Clause 8.2 (Voluntary
pre-payment of Loans) in an amount equal to 0.20 per cent. of the
Collateral Value applicable to such Collateral (the "Exit Fee
Related Collateral"). The Exit Fee contemplated by this Clause
11.2 shall be waived by the Agent in connection with any voluntary
or mandatory pre-payment in whole as a result of a corresponding
payment of amounts of a principal nature arising from the Exit Fee
Related Collateral pursuant to the terms of the Collateral
Documents related thereto.
(b) In circumstances where Exit Fee Related Collateral has been
released and the Borrower has duly paid to the Agent the Exit Fee
required by paragraph (a) of this Clause 11.2, the Agent hereby
agrees that if a securitisation of the Exit Fee Related Collateral
whose refinancing or proposed refinancing has given rise to the
relevant prepayment or re-payment of such Loan is not consummated
within six (6) calendar months following the date of the relevant
repayment or pre-payment then the Agent will refund to the
Borrower the related Exit Fee on the next succeeding Interest
Payment Date.
-34-
SECTION 6
ADDITIONAL PAYMENT OBLIGATIONS
12. TAX GROSS UP AND INDEMNITIES
12.1 Definitions
(a) In this Agreement:
"Codified Banking Directive" means EU Council Directive 2000/12/EC
of 20 March 2000.
"Irish Taxes Act" means the Taxes Consolidation Act, 1997 of the
Republic of Ireland, as amended.
"Protected Party" means a Finance Party, which is or will be
subject to any liability, or required to make any payment, for or
on account of Tax in relation to a sum received or receivable (or
any sum deemed for the purposes of Tax to be received or
receivable) under a Finance Document.
"Qualifying Lender" means any of the following persons:
(a) the holder of a licence for the time being in force granted
under section 9 of the Irish ▇▇▇▇▇▇▇ ▇▇▇▇ ▇▇▇ ▇▇▇▇ or an
authorised credit institution under the terms of EU Council
Directive 2000/12/EC of 20 March 2000 which has duly
established a branch in the Republic of Ireland or has made
all necessary notifications to its home state competent
authorities required thereunder in relation to its intention
to carry on banking business in the Republic of Ireland
provided in each case it is carrying on a bona fide banking
business in the Republic of Ireland and its Facility Office
is located in the Republic of Ireland; or
(b) (i) a person that is resident for the purposes of
tax in a member state of the European Communities
(other than the Republic of Ireland) or in a
territory with which the Republic of Ireland has
concluded a double taxation treaty that is in effect
(residence for these purposes to be determined in
accordance with the laws of the territory of which
the lender claims to be resident); or
(ii) a U.S. corporation, provided the U.S. corporation is
incorporated in the U.S. and subject to tax in the
U.S. on its worldwide income; or
(iii) a U.S. LLC, provided the ultimate recipients of the
interest are resident in and under the laws of a
country with which the Republic of Ireland has a
double taxation treaty or registered in and under
the laws of a member state of the European
Communities (other than the Republic of Ireland) and
the business conducted through the LLC is so
structured for market reasons and not for tax
avoidance purposes;
provided in each case at (i), (ii) or (iii) the Lender
is not carrying on a trade or business in the Republic
of Ireland through an agency or branch with which the
interest paid on the Facility is connected; or
-35-
(c) a Treaty Lender; or
(d) a body corporate which is resident in the Republic of
Ireland for the purposes of Irish tax or which carries on a
trade in the Republic of Ireland through a branch or agency:
(i) which advances money under the Facility in the
ordinary course of a trade which includes the
lending of money; and
(ii) in whose hands any interest payable in respect of
the Facility is taken into account in computing the
trading income of the company; and
(iii) which has complied with all of the provisions of
Section 246(5)(a) of the Irish Taxes Act, including
making the appropriate notifications thereunder to
the Irish Revenue Commissioners and to the relevant
Obligor and has not ceased to be a company to which
Section 246(5)(a) applies; or
(e) a qualifying company within the meaning of Section 110 of
the Irish Taxes Act.
"Tax Credit" means a credit against, relief or remission for, or
repayment of any Tax.
"Tax Deduction" means a deduction or withholding for or on
account of Tax from a payment under a Finance Document.
"Tax Payment" means either the increase in a payment made by
an Obligor to a Finance Party under Clause 12.2 (Tax gross-up)
or a payment under Clause 12.3 (Tax indemnity).
"Treaty Lender" means a Lender which:
(i) is treated as a resident of a Treaty State for the purposes
of a Treaty;
(ii) does not carry on a business in the Republic of Ireland
through a permanent establishment with which the Lender's
commitment under the Facility is effectively connected; and
(iii) has completed any procedural formalities reasonably
available to it to enable the relevant payment to be made
without a Tax deduction.
"Treaty State" means a jurisdiction having a double taxation
agreement (a "Treaty") with the Republic of Ireland which
makes provision for full exemption from tax imposed by the
Republic of Ireland on interest.
(b) Unless a contrary indication appears, in this Clause
12 a reference to "determines" or "determined" means
a reasonable determination made in the good faith
discretion of the person making the determination.
12.2 Tax gross-up
(a) The Borrower shall make all payments to be made by it
without any Tax Deduction, unless a Tax Deduction is
required by law.
-36-
(b) The Borrower shall promptly upon becoming aware that an Obligor
must make a Tax Deduction (or that there is any change in the rate
or the basis of a Tax Deduction) notify the Agent accordingly.
Similarly, a Lender shall notify the Agent on becoming so aware in
respect of a payment payable to that Lender. If the Agent receives
such notification from a Lender it shall notify each Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor,
the amount of the payment due from that Obligor shall be increased
to an amount which (after making any Tax Deduction) leaves an
amount equal to the payment which would have been due if no Tax
Deduction had been required.
(d) An Obligor is not required to make an increased payment to a
Lender under paragraph (c) above for a Tax Deduction in respect of
tax imposed by the Republic of Ireland from a payment of interest
on a Loan, if on the date on which the payment falls due the
payment could have been made to the relevant Lender without a Tax
Deduction if it was a Qualifying Lender, but on that date that
Lender is not or has ceased to be a Qualifying Lender other than
as a result of any change after the date it became a Lender under
this Agreement in (or in the interpretation, administration, or
application of) any law or Treaty, or any published practice or
concession of any relevant taxing authority;
(e) If an Obligor is required to make a Tax Deduction, that Obligor
shall make that Tax Deduction and any payment required in
connection with that Tax Deduction within the time allowed and in
the minimum amount required by law.
(f) Within thirty (30) days of making either a Tax Deduction or any
payment required in connection with that Tax Deduction, the
Obligor making that Tax Deduction shall deliver to the Agent for
the Finance Party entitled to the payment evidence reasonably
satisfactory to that Finance Party that the Tax Deduction has been
made or (as applicable) any appropriate payment paid to the
relevant taxing authority.
(g) A Treaty Lender and each Obligor which makes a payment to which
that Treaty Lender is entitled shall complete all procedural
formalities necessary for that Obligor to obtain authorisation to
make that payment without a Tax Deduction.
(h) The Initial Lender represents to the Borrower that, on the
Effective Date, it is a Qualifying Lender within the meaning of
paragraph (b)(ii) of the definition of Qualifying Lender.
(i) The Lender shall promptly notify the Borrower and the Agent
in the event that it ceases to be a Qualifying Lender.
12.3 Tax indemnity
(a) The Borrower shall (within three (3) Business Days of demand by
the Agent) pay to a Protected Party an amount equal to the loss,
liability or cost which that Protected Party determines will be or
has been (directly or indirectly) suffered for or on account of
Tax by that Protected Party in respect of a Finance Document.
-37-
(b) Paragraph (a) above shall not apply:
(i) with respect to any Tax assessed on a Finance Party:
(A) under the law of the jurisdiction in which that
Finance Party is incorporated or, if different, the
jurisdiction (or jurisdictions) in which that Finance
Party is treated as resident for tax purposes; or
(B) under the law of the jurisdiction in which that
Finance Party's Facility Office is located in respect
of amounts received or receivable in that
jurisdiction,
if that Tax is imposed on or calculated by reference to
the net income received or receivable (but not any sum
deemed to be received or receivable) by that Finance
Party; or
(ii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause
12.2 (Tax gross-up); or
(B) would have been compensated for by an increased payment
under Clause 12.2 (Tax gross-up) but was not so
compensated solely because the exclusion in paragraph
(d) of Clause 12.2 (Tax gross-up) applied.
(c) A Protected Party making, or intending to make a claim under
paragraph (a) above shall promptly notify the Agent of the
event which will give, or has given, rise to the claim,
following which the Agent shall notify the Borrower.
(d) A Protected Party shall, on receiving a payment from an
Obligor under this Clause 12.3, notify the Agent.
12.4 Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party
determines that:
(a) a Tax Credit is attributable either to an increased payment
of which that Tax Payment forms part, or to that Tax
Payment; and
(b) that Finance Party has obtained, utilised and retained that
Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance
Party determines will leave it (after that payment) in the same
after-Tax position as it would have been in had the Tax Payment not been
required to be made by the Obligor.
12.5 Stamp taxes
The Borrower shall pay and, within three (3) Business Days of demand,
indemnify each Finance Party against any cost, loss or liability that
Finance Party incurs in relation to all stamp duty, registration and
other similar Taxes payable in respect of any Finance Document, except
for any such Taxes payable in connection with any transfer or assignment
by any Lender of the rights, benefits or obligations under this
Agreement (including, without limitation the entry into of a Transfer
Certificate).
-38-
12.6 Value added tax
(a) All amounts set out, or expressed to be payable under a Finance
Document by any Party to a Finance Party which (in whole or in
part) constitute the consideration for VAT purposes shall be
deemed to be exclusive of any VAT which is chargeable on such
supply, and accordingly, subject to paragraph (c) below, if VAT is
chargeable on any supply made by any Finance Party to any Party
under a Finance Document and payable to the Finance Party, that
Party shall pay to the Finance Party (in addition to and at the
same time as paying the consideration) an amount equal to the
amount of the VAT (and such Finance Party shall promptly provide
an appropriate VAT invoice to such Party).
(b) If VAT is chargeable on any supply made by any Finance Party (the
"Supplier") to any other Finance Party (the "Recipient") under a
Finance Document, and any Party (the "Relevant Party") is required
by the terms of any Finance Document to pay an amount equal to the
consideration for such supply to the Supplier (rather than being
required to reimburse the recipient in respect of that
consideration), such Party shall also pay to the Supplier (in
addition to and at the same time as paying such amount) an amount
equal to the amount of such VAT if payable to the Supplier. The
Recipient will promptly pay to the Relevant Party an amount equal
to any credit or repayment from the relevant tax authority which
it reasonably determines relates to the VAT chargeable on that
supply.
(c) Where a Finance Document requires any Party to reimburse a Finance
Party for any costs or expenses, that Party shall also at the same
time pay and indemnify the Finance Party against all VAT incurred
by the Finance Party in respect of the costs or expenses to the
extent that the Finance Party reasonably determines that neither
it nor any other member of any group of which it is a member for
VAT purposes is entitled to credit or repayment from the relevant
tax authority in respect of the VAT.
13. INCREASED COSTS
13.1 Increased costs
(a) Subject to Clause 13.3 (Exceptions) the Borrower shall, within
five (5) Business Days of a demand by the Agent, pay for the
account of a Finance Party the amount of any Increased Costs
incurred by that Finance Party or any of its Affiliates as a
result of (i) the introduction of or any change in (or in the
interpretation, administration or application of) any law or
regulation or (ii) compliance with any law or regulation made
after the date of this Agreement.
(b) In this Agreement "Increased Costs" means:
(i) a reduction in the rate of return from the Facility or on a
Finance Party's (or its Affiliate's) overall capital;
(ii) an additional or increased cost; or
(iii) a reduction of any amount due and payable under any
Finance Document, which is incurred or suffered by
-39-
a Finance Party or any of its Affiliates to the extent that
it is attributable to that Finance Party having entered
into its Loan or funding or performing its obligations
under any Finance Document.
13.2 Increased cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 13.1
(Increased costs) shall notify the Agent of the event giving rise
to the claim, following which the Agent shall promptly notify the
Borrower.
(b) Each Finance Party shall, as soon as practicable after a demand by
the Agent, provide a certificate confirming the amount of its
Increased Costs.
13.3 Exceptions
(a) Clause 13.1 (Increased costs) does not apply to the extent any
Increased Cost is:
(i) attributable to a Tax Deduction required by law to be made
by an Obligor;
(ii) compensated for by Clause 12.3 (Tax indemnity) (or would
have been compensated for under Clause 12.3 (Tax indemnity)
but was not so compensated solely because any of the
exclusions in paragraph (b) of Clause 12.3 (Tax indemnity)
applied);
(iii) compensated for by the payment of the Mandatory Cost;
(iv) attributable to the wilful breach by the relevant Finance
Party or its Affiliates of any law or regulation; or
(v) attributable to the implementation or application or
compliance with the "International Convergence of Capital
Measurement and Capital Standards, a Revised Framework"
published by the Basel Committee on Banking Supervision in
June 2004 in the form existing on the date of this
Agreement ("Basel II") or any other law or regulation which
implements Basel II (whether such implication, application
or compliance is by a government, regulator or Finance
Party).
(b) In this Clause 13.3, a reference to a "Tax Deduction" has the same
meaning given to the term in Clause 12.1 (Definitions).
14. OTHER INDEMNITIES
14.1 Currency indemnity
(a) If any sum due from an Obligor under the Finance Documents (a
"Sum"), or any order, judgment or award given or made in relation
to a Sum, has to be converted from the currency (the "First
Currency") in which that Sum is payable into another currency (the
"Second Currency") for the purpose of:
(i) making or filing a claim or proof against that Obligor;
(ii) obtaining or enforcing an order, judgment or award in
relation to any litigation or arbitration proceedings,
-40-
that Obligor shall as an independent obligation, within
three (3) Business Days of demand, indemnify each Finance
Party to whom that Sum is due against any cost, loss or
liability arising out of or as a result of the conversion
including any discrepancy between (A) the rate of exchange
used to convert that Sum from the First Currency into the
Second Currency and (B) the rate or rates of exchange
available to that person at the time of its receipt of that
Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to
pay any amount under the Finance Documents in a currency or
currency unit other than that in which it is expressed to be
payable.
15. COSTS AND EXPENSES
15.1 Indemnification and Expenses
(a) The Borrower agrees to hold each Finance Party and their
Affiliates and their officers, directors, employees, agents and
advisors (each an "Indemnified Party") harmless from and indemnify
any Indemnified Party against all liabilities, losses, damages,
judgments, costs and expenses of any kind which may be imposed on,
incurred by or asserted against such Indemnified Party
(collectively, the "Costs") relating to or arising out of this
Agreement, and any other Finance Document or any transaction
contemplated hereby or thereby, or any amendment, supplement or
modification of, or any waiver or consent under or in respect of,
this Agreement, or any other Finance Document or any transaction
contemplated hereby or thereby, that, in each case, results from
anything other than any Indemnified Party's gross negligence or
wilful misconduct.
(b) Without limiting the generality of the foregoing in clause 15.1(a)
the Borrower agrees to hold any Indemnified Party harmless and
indemnify such Indemnified Party against all Costs with respect to
all Collateral relating to or arising out of:
(i) the occurrence of a Default;
(ii) a failure by an Obligor to pay any amount due under a
Finance Document on its due date, including without
limitation, any cost, loss or ability or liability arising
as a result of Clause 25 (Sharing among the Finance
Parties);
(iii) funding, or making arrangements to fund, its participation
in a Loan requested by the Borrower in a Request for
Borrowing but not made by reason of the operation of any
one or more of the provisions of this Agreement (other than
by reason of default or negligence by that Finance Party
alone);
(iv) a Loan (or part of a Loan) not being prepaid in accordance
with a notice of pre-payment given by the Borrower;
(v) in the case of the Agent, (i) investigating any event which
it reasonably believes is a Default (and a Default then
exists), (ii) acting or relying on any notice, request or
instruction which it reasonably believes to be genuine,
correct and appropriately authorised; and
-41-
(vi) any violation or alleged violation of any environmental
law, rule or regulation or any consumer credit laws,
including without limitation laws with respect to unfair or
deceptive lending practices, and predatory lending
practices, that, in each case, results from anything other
than such Indemnified Party's gross negligence or wilful
misconduct.
(c) In any suit, proceeding or action brought by an Indemnified Party
in connection with any Collateral for any sum owing thereunder, or
to enforce any provisions of any Collateral Document or Finance
Document, the Borrower will save, indemnify and hold such
Indemnified Party harmless from and against all expense, loss or
damage suffered by reason of any defence, set-off, counterclaim,
recoupment or reduction or liability whatsoever of the account
debtor or obligor thereunder, arising out of any other agreement,
indebtedness or liability at any time owing to or in favour of
such account debtor or obligor or its successors from the
Borrower.
(d) The Borrower also agrees to reimburse an Indemnified Party within
five (5) Business Days of when billed by such Indemnified Party
for all such Indemnified Party's costs and expenses incurred in
connection with the enforcement or the preservation of such
Indemnified Party's rights under this Agreement, any other Finance
Document or any transaction contemplated hereby or thereby,
including without limitation the reasonable fees and disbursements
of its counsel.
15.2 Costs
The Borrower agrees to pay within five (5) Business Days of when billed
by the Agent or a Lender all of the out-of-pocket costs and expenses
incurred by the Agent or such Lender in connection with the development,
preparation and execution of, and any amendment, supplement or
modification to, this Agreement, and the Finance Documents or any other
document prepared in connection herewith or therewith. The Borrower
agrees to pay within five (5) Business Days when billed by a Lender and
the Agent all of the out-of-pocket costs and expenses incurred in
connection with the consummation and administration of the transactions
contemplated hereby and thereby including without limitation (i) all the
reasonable fees, disbursements and expenses of counsel to such Lender
and the Agent and (ii) all the due diligence, inspection, testing and
review costs and expenses incurred by such Lender and the Agent with
respect to Collateral under this Agreement, including, but not limited
to, those costs and expenses incurred by a Lender or the Agent pursuant
to Clause 15.1 (Indemnification and Expenses), Clause 33.1 (Servicing)
and Clause 33.2 (Periodic Due Diligence Review) (it being understood and
agreed that neither the Agent nor the Lender has incurred any costs
under this Clause 15.2 as of the date of this Agreement) hereof.
16. MITIGATION BY THE LENDERS
16.1 Mitigation
(a) Each Finance Party shall, in consultation with the Borrower, take
all reasonable steps to mitigate any circumstances which arise and
which would result in any amount becoming payable under or
pursuant to, or cancelled pursuant to, any of Clause 8.1
(Illegality), Clause 12 (Tax gross up and indemnities), Clause 13
(Increased Costs) or paragraph 3 of Schedule 4 (Mandatory Cost
formulae) including (but not limited to) transferring its rights
and obligations under the Finance Documents to another Affiliate
or Facility Office.
-42-
(b) Paragraph (a) above does not in any way limit the obligations of
any Obligor under the Finance Documents.
16.2 Limitation of liability
(a) The Borrower shall indemnify each Finance Party for all costs and
expenses reasonably incurred by that Finance Party as a result of
steps taken by it under Clause 16.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 16.1
(Mitigation) if, in the opinion of that Finance Party (acting
reasonably), to do so might be prejudicial to it.
-43-
SECTION 7
REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT
17. REPRESENTATIONS
The Borrower makes the representations and warranties set out in this
Clause 17 to each Finance Party on the Effective Date and the Repeating
Representations on each day of this Agreement from the Effective Date
unto and including the Termination Date.
17.1 Status and Name
(a) The Borrower is a corporation, duly incorporated and validly
existing under the law of its jurisdiction of incorporation.
(b) The Borrower has the power to own its assets and carry on its
business as it is being conducted.
(c) On the Effective Date the exact legal name of the Borrower is AHR
Capital MS Limited.
(d) On the Effective Date the Borrower is a wholly owned Subsidiary of
the Guarantor and has no Subsidiaries.
(e) The Borrower, as of the date hereof:
(i) maintains its registered head office and head office in the
Republic of Ireland;
(ii) holds all meetings of its board of directors in the
Republic of Ireland;
(iii) has not opened any office or branch outside of the Republic
of Ireland; and
(iv) has not knowingly done anything (except to the extent that
entering into the Finance Documents and the performance of
their terms cause it to be so resident) which may result in
the Borrower creating an establishment in another
jurisdiction other than the Republic of Ireland.
(f) (based on the representations and warranties contained in
sub-claues 17.1(e)(i) to 17.1(e)(iv) inclusive) The Borrower
believes that its "centre of main interests" for the purposes of
Council Regulation (EC) No. 1346/2000 of 20 May 2000 is in the
Republic of Ireland and that it has no establishment (for the
purposes of such Regulation) other than in the Republic of
Ireland.
17.2 Binding obligations
The obligations expressed to be assumed by the Borrower in each Finance
Document are, subject to the Reservations, legal, valid, binding and
enforceable obligations.
17.3 Non-conflict with other obligations
The entry into and performance by the Borrower of, and the transactions
contemplated by, the Finance Documents do not and will not conflict
with:
(a) any law or regulation applicable to it;
(b) its constitutional documents; or
-44-
(c) any agreement or instrument binding upon it or any of its assets.
17.4 Power and authority
The Borrower has the power to enter into, perform and deliver, and has
taken all necessary action to authorise its entry into, performance and
delivery of, the Finance Documents to which it is a party and the
transactions contemplated by those Finance Documents. No authorisations,
approvals or consents of, and no filings or registrations with, any
Governmental Authority or any securities exchange are necessary for the
execution, delivery or performance by the Borrower of the Finance
Documents or for the legality, validity, or subject to the Reservations,
the enforceability thereof, except for filings, recordings and
registrations in respect of the security created pursuant to the
Debenture and any other Finance Document.
17.5 Validity and admissibility in evidence
All authorisations required:
(a) to enable the Borrower lawfully to enter into, exercise its rights
and comply with its obligations in the Finance Documents to which
it is a party; and
(b) to make the Finance Documents to which the Borrower is a party
admissible in evidence in its jurisdiction of incorporation,
have been obtained or effected and are in full force and effect.
17.6 Governing law and enforcement
(a) The relevant choice of English law as the governing law of the
Finance Documents to which the Borrower is a party will be
recognised and enforced in its jurisdiction of incorporation.
(b) Subject to the Reservations, any judgment obtained in England in
relation to a Finance Document will be recognised and enforced in
the Borrower's respective jurisdiction of incorporation.
17.7 Deduction of Tax
The Borrower is not required to make any deduction for or on account of
Tax from any payment it may make under any Finance Document.
17.8 No filing or stamp taxes
Under the law of the jurisdiction of the Borrower's incorporation it is
not necessary that the Finance Documents be filed, recorded or enrolled
with any court or other authority in that jurisdiction or that any
stamp, registration or similar tax be paid on or in relation to the
Finance Documents or the transactions contemplated by the Finance
Documents except for (a) the delivery to the Companies Registration
Office in the Republic of Ireland within twenty-one (21) days of their
creation of the particulars of the security interests created by the
Borrower pursuant to the Debenture and each other security document
entered into by the Borrower, and (b) the stamping of the original of
the Debenture with stamp duty of (euro)630 and each counterpart thereof
and each collateral security document with (euro)12.50, within thirty
(30) days of its execution.
-45-
17.9 No default
(a) No Event of Default and on the date of this Agreement and on any
Funding Date no Default is continuing or might reasonably be
expected to result from the making of any Loan.
(b) No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding
on the Borrower or any of its Subsidiaries or to which its (or any
of its Subsidiaries') assets are subject which might have a
Material Adverse Effect.
17.10 Pari passu ranking
The Borrower's payment obligations under the Finance Documents rank at
least pari passu with the claims of all its other unsecured and
unsubordinated creditors, except for obligations preferred by law
applying to companies generally.
17.11 Litigation
There are no actions, suits, arbitrations, investigations (including,
without limitation, any of the foregoing which are pending or, to the
best of its knowledge, threatened) or other legal or arbitrable
proceedings affecting the Borrower or affecting any of the Collateral of
any of them before any Governmental Authority that: (i) questions or
challenges the validity or enforceability of any the Finance Documents
or any action to be taken in connection with the transactions
contemplated hereby; (ii) makes a claim or claims in an aggregate amount
greater than $5,000,000; (iii) which, individually or in the aggregate,
if adversely determined, could reasonably be likely to have a Material
Adverse Effect; or (iv) requires filing with the Securities and Exchange
Commission in accordance with the 1934 Act or any rules thereunder which
filing has not been made.
17.12 Taxation
(a) The Borrower has duly and punctually paid and discharged all Taxes
imposed upon it or its assets within the time period allowed
without incurring penalties (save to the extent that (i) payment
is being contested in good faith, (ii) it has maintained adequate
reserves for those Taxes and (iii) payment can be lawfully
withheld).
(b) The Borrower is not materially overdue in the filing of any Tax
returns.
(c) No claims are being or are reasonably likely to be asserted
against it with respect to Taxes.
17.13 Collateral; Collateral Security
(a) The Borrower has not assigned, pledged, or otherwise conveyed or
encumbered the Eligible Collateral to any other person, and
immediately prior to the granting of security over the Eligible
Collateral to the Security Trustee, the Borrower was the sole
owner of the Eligible Collateral and had good and marketable title
thereto, free and clear of all security interests and other
Encumbrances, in each case except for such security interests that
were to be released simultaneously with the security interests
which are to be granted in favour of the Security Trustee to
secure the Secured Obligations. No Eligible Collateral granted by
way of security to the Security Trustee under the Debenture or any
other Finance Document was acquired (by purchase or otherwise) by
the Borrower or from one of its Affiliates.
-46-
(b) The provisions of the Debenture and the other Finance Documents
are effective to create in favour of the Security Trustee a valid
security interest in all right, title and interest of the Borrower
in, to and under the Eligible Collateral.
17.14 Jurisdiction of Organisation
On the Effective Date the Borrower's jurisdiction of incorporation and
location of its registered office is the Republic of Ireland.
17.15 Location of Books and Records
The location where the Borrower keeps its books and records, including
all computer tapes and records relating to the Collateral, is its
registered office.
17.16 True and Complete Disclosure
The information, reports, financial statements, exhibits and schedules
furnished in writing by or on behalf of the Borrower to the Agent in
connection with the negotiation, preparation or delivery of this
Agreement and the other Finance Documents or included herein or therein
or delivered pursuant hereto or thereto, when taken as a whole, do not
contain any untrue statement of material fact or omit to state any
material fact necessary to make the statements herein or therein, in
light of the circumstances under which they were made, not misleading.
All written information furnished after the date hereof by or on behalf
of the Borrower to the Agent in connection with this Agreement and the
other Finance Documents and the transactions contemplated hereby and
thereby will be true, complete and accurate in every material respect,
or (in the case of projections) based on reasonable estimates, on the
date as of which such information is stated or certified. There is no
fact known to a Responsible Officer of the Borrower, after due inquiry,
that could reasonably be expected to have a Material Adverse Effect that
has not been disclosed herein, in the other Finance Documents or in a
report, financial statement, exhibit, schedule, disclosure letter or
other writing furnished to the Agent for use in connection with the
transactions contemplated hereby or thereby.
17.17 Defined Benefit Scheme
The Borrower does not maintain a pension scheme in respect of which
there is an unfunded deficit.
17.18 Business Affairs
(a) The Borrower's business and affairs have at all times been, and
will at all times be, managed, controlled and conducted in its own
name as an identifiable business, separate, independent and
identifiable from the business of the other Obligor or any other
person;
(b) The Borrower's records, books, accounts and minutes have at all
times been, and will continue at all future times to be,
maintained separate and distinct from those of the other Obligor
or any other person;
(c) The Borrower's assets and liabilities and the funds have at all
times been, and will continue at all future times to be, kept
separate and distinct from the other Obligor or any other person;
and it has received, deposited, withdrawn, paid and disbursed, and
will at all future times receive, deposit, withdraw, pay and
disburse, all monies, funds and receivables in the ordinary course
of its business and in a manner separate and distinct from the
other Obligor or any other person;
-47-
(d) The Borrower has not paid and will not pay, and is not and will
not become liable for, any debt of the other Obligor or any other
person; and
(e) That all dealings and transactions of the Borrower with all other
persons have at all times been and will continue at all times to
be at arms-length.
17.19 Borrower Irish Tax Requirements
The Borrower satisfies the Borrower Irish Tax Requirements.
17.20 Borrower Documents
Other than the Finance Documents, the Subordinated Loan Agreement (and
the hedging arrangements entered into pursuant to the Subordinated Loan
Agreement the Corporate Services Agreement and the Investment Management
Agreement, the Borrower has not entered into any other agreements or
instruments save for such agreements or instruments as may have been
agreed to in advance of their entry into by the Borrower by the Security
Trustee.
18. INFORMATION UNDERTAKINGS
The undertakings in this Clause 18 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents or any Loan is in force.
18.1 Financial statements
The Borrower shall supply to the Agent in sufficient copies for all the
Lenders:
(a) as soon as available and in any event within forty-five (45) days
after the end of each of the first three quarterly fiscal periods
of each fiscal year of the Borrower, the unaudited balance sheet
of the Borrower as at the end of such period and the related
unaudited statement of income and retained earnings, statement of
cash flows and statement of equity for the Borrower for such
period and the portion of the fiscal year through the end of such
period, setting forth in each case in comparative form the figures
for the previous year, accompanied by a certificate of a
Responsible Officer of the Borrower, which certificate shall state
that said financial statements fairly present the financial
condition and results of operations of the Borrower in accordance
with GAAP, consistently applied, as at the end of, and for, such
period (subject to normal year-end audit adjustments);
(b) as soon as available and in any event within ninety (90) days
after the end of each fiscal year of the Borrower, the balance
sheet of the Borrower as at the end of such fiscal year and the
related statement of income and retained earnings, consolidated
statement of cash flows and statement of equity for the Borrower
for such year, setting forth in each case in comparative form the
figures for the previous year, accompanied by an opinion thereon
of independent certified public accountants of recognised national
standing, which opinion shall not be qualified as to scope of
audit or going concern and shall state that said financial
statements fairly present the financial condition and results of
operations of the Borrower as at the end of, and for, such fiscal
year in accordance with GAAP, and a certificate of such
accountants stating that, in making the examination necessary for
their opinion, they obtained no knowledge, except as specifically
stated, of any Default or Event of Default;
-48-
(c) within fifteen (15) Business Days after the Agent's request, such
other information regarding the operation of or the Collateral, or
the financial condition, operations, or business of the Borrower
as may be reasonably requested by the Agent, including all
business plans prepared by or for the Borrower; and
(d) upon the Agent's request, a copy of any financial or other report
the Borrower shall receive from any Collateral Obligor with
respect to an item of Collateral within fifteen (15) days after
the Borrower's receipt thereof.
18.2 Information: miscellaneous
The Borrower shall supply to the Agent (in sufficient copies for all the
Lenders, if the Agent so requests):
(a) Promptly, and in any event within ten (10) ten days after service
of process on any of the following, give to the Agent notice of
all litigation, actions, suits, arbitrations, investigations
(including, without limitation, any of the foregoing which are
pending or, to Borrower's knowledge threatened) or other legal or
arbitration proceedings affecting the Borrower or affecting any of
the Property of the Borrower before any Governmental Authority
that (i) questions or challenges the validity or enforceability of
any of the Finance Documents or any action to be taken in
connection with the transactions contemplated hereby; (ii) makes a
claim or claims in an aggregate amount greater than $5,000,000;
(iii) which, individually or in the aggregate, if adversely
determined, could be reasonably likely to have a Material Adverse
Effect; or (iv) requires filing with the Securities and Exchange
Commission in accordance with the Securities Exchange Act of 1934
(US) and any rules thereunder which filing has not been made; and
(b) promptly, such further information regarding the financial
condition, business and operations of the Borrower as any Finance
Party (through the Agent) may reasonably request.
18.3 Notification of default
(a) The Borrower shall notify the Agent of any Default (and the steps,
if any, being taken to remedy it) promptly upon becoming aware of
its occurrence.
(b) Promptly upon a request by the Agent (not more than twice annually
commencing on the date of this Agreement), the Borrower shall
supply to the Agent a certificate signed by a Responsible Officer
certifying that no Default is continuing (or if a Default is
continuing, specifying the Default and the steps, if any, being
taken to remedy it).
19. GENERAL UNDERTAKINGS
The undertakings in this Clause 19 remain in force from the date of this
Agreement for so long as any amount is outstanding under the Finance
Documents.
-49-
19.1 Authorisations
The Borrower shall promptly:
(a) obtain, comply with and do all that is necessary to maintain in
full force and effect; and
(b) supply certified copies to the Agent of,
any Authorisation required under any law or regulation of its
jurisdiction of incorporation to enable it to perform its obligations
under the Finance Documents and to ensure the legality, validity,
enforceability or admissibility in evidence in its jurisdiction of
incorporation of any Finance Document.
19.2 Compliance with laws
The Borrower shall comply in all respects with all laws to which it may
be subject, if failure so to comply would have a Material Adverse Effect
on its ability to perform its obligations under the Finance Documents.
19.3 Negative pledge
Other than security interests permitted or contemplated pursuant to the
terms hereof the Borrower shall not create or permit to subsist any
security interest over any of its assets.
19.4 Disposals
The Borrower shall not, without the prior written consent of the Agent,
enter into a single transaction or a series of transactions (whether
related or not) and whether voluntary or involuntary to sell, lease,
transfer, exchanged or otherwise dispose of any of or substantially all
of its assets or enter into any agreements having a similar effect.
19.5 Merger
The Borrower shall not enter into any amalgamation, demerger, merger or
corporate reconstruction.
19.6 Change of Business
The Borrower shall make no substantial change to the general nature of
its business from that carried on at the date of this Agreement.
19.7 Taxation
The Borrower shall duly and punctually pay and discharge all Taxes
imposed upon it or its assets within the time period allowed without
incurring penalties (except to the extent (i) that such payment is being
contested in good faith, (ii) adequate reserves are being maintained for
those Taxes and (iii) where such payment can be lawfully withheld).
19.8 Loans and Guarantees
The Borrower shall not, save as permitted under the Finance Documents,
make any loans, grant any credit or give any guarantee or indemnity
(except as required under any of the Finance Documents) to or for the
benefit of any person or otherwise voluntarily assume any liability,
whether actual or contingent, in respect of any obligation of any
person.
19.9 Syndication
At the cost of the Lenders, the Borrower shall provide reasonable
assistance in the preparation of the Information Memorandum and
the primary syndication of the Facility (including,
-50-
without limitation, by making senior management available for the
purpose of making presentations to, or meeting, potential lending
institutions) and will comply with all reasonable requests for
information from potential syndicate members prior to completion
of syndication.
19.10 Existence, Etc.
The Borrower will:
(a) comply with the requirements of all applicable laws, rules,
regulations and orders of Governmental Authorities (including,
without limitation, all environmental laws, all laws with respect
to unfair and deceptive lending practices and predatory lending
practices) if failure to comply with such requirements would be
reasonably likely (either individually or in the aggregate) to
have a Material Adverse Effect;
(b) keep adequate records and books of account, in which complete
entries will be made in accordance with GAAP consistently applied;
(c) not move its registered head office from the address referred to
in Clause 17.14 (Jurisdiction of Organisation) or change its
jurisdiction of organisation from the jurisdiction referred to in
Clause 17.14 (Jurisdiction of Organisation);
(d) permit representatives of the Agent, during normal business hours,
to examine, copy and make extracts from its books and records, to
inspect any of its Property or assets, and to discuss its business
and affairs with its officers, all to the extent reasonably
requested by the Agent; and
(e) not amend or permit the amendment of its memorandum and articles
of association without the prior written consent of the Security
Trustee and thereafter shall provide the Agent and the Security
Trustee with copies of all amendments to the memorandum and
articles of association or other organisational, constitutional or
governing documents of the Borrower within five (5) Business Days
of the date of the subject amendment.
19.11 No establishment
The Borrower shall not knowingly establish an "establishment" as that
term is used in Article 2(h) of the EU Insolvency Regulation outside of
the Republic of Ireland, except to the extent that entering into the
Finance Documents and the performance of their terms cause it to be
resident and which may result in the Borrower creating an
"establishment" as that term is used in Article 2(h) of the EU
Insolvency Regulation.
19.12 Notices
The Borrower shall give notice to the Agent and the Security Trustee:
(a) promptly upon receipt of notice or knowledge of the occurrence of
any Default or Event of Default;
(b) with respect to any Eligible Collateral granted by way of security
to the Security Trustee under the Debenture or the other Finance
Documents hereunder, immediately upon receipt of any principal
pre-payment (in full or partial) of such Eligible
-51-
Collateral including, but not limited to, the receipt of any
condemnation and casualty proceeds;
(c) with respect to any Eligible Collateral granted by way of security
to the Security Trustee under the Debenture or the other Finance
Documents, immediately upon receipt of notice or knowledge that
the underlying Encumbered Property has been materially damaged by
waste, fire, earthquake or earth movement, windstorm, flood,
tornado or other casualty, or otherwise damaged so as to affect
adversely the Asset Value of such Eligible Collateral; and
(d) promptly upon receipt of notice or knowledge of (i) any default
related to any Collateral; (ii) any security interest (other than
the security interests created by the Debenture or by the other
Finance Documents) on, or claim asserted against, any of the
Collateral; or (iii) any event or change in circumstances which
could reasonably be expected to have a Material Adverse Effect.
(e) promptly upon any material change in the market value of any or
all of the Borrower's assets;
Each notice pursuant to this Clause shall be accompanied by a statement
of a Responsible Officer of the Borrower setting forth details of the
occurrence referred to therein and stating what action the Borrower has
taken or proposes to take with respect thereto.
19.13 Collateral
The Borrower shall not acquire any Collateral or other assets save in
the manner contemplated by this Agreement and with the consent of the
Agent. Upon acquiring any such Collateral, the Borrower shall not amend
or permit the amendment of any documents or agreements pertaining to
such Collateral without the prior written consent of the Agent and the
Security Trustee.
19.14 Reports
The Borrower shall provide the Agent with a quarterly report, which
report shall include, among other items, a summary of the Borrower's
delinquency and loss experience with respect to the Collateral, plus any
such additional reports relating to the Property underlying the
Collateral as the Borrower may have received or is otherwise entitled to
receive from the Servicer or the Collateral Obligor and as reasonably
requested by the Agent.
19.15 Limitation on security
The Borrower will defend the Collateral against, and will take such
other action as is necessary to remove, any security, security interest
or claim on or to the Collateral, other than the security interests
created under this Agreement, and the Borrower will defend the right,
title and interest of the Security Trustee in and to any of the
Collateral against the claims and demands of all persons whomsoever.
19.16 Lender Exposure
The Lenders' Net Aggregate Exposure shall not be greater than 80% and
the Lenders' Net Exposure shall not be greater than 85%.
-52-
19.17 Servicer; Servicing Tape
The Borrower shall provide to the Agent promptly within ten (10)
Business Days after the end of each month a computer readable file in
the form reasonably requested by the Agent from time to time, on a
loan-by-loan basis and in the aggregate, with respect to the Collateral
serviced hereunder by the Borrower or any Servicer. The Borrower shall
not cause the Collateral to be serviced by any servicer other than a
servicer mutually agreed to by the Agent and the Borrower.
19.18 No Adverse Selection
The Borrower shall not select the Collateral in a manner so as to
adversely affect the Lenders' interests.
19.19 Remittance of Pre-payments
The Borrower shall remit or cause to be remitted, with sufficient detail
to enable the Lender to appropriately identify the Eligible Collateral
to which any amount remitted applies, to the Agent on each Business Day
all principal pre-payments (whether full or partial) that the Borrower
or the Servicer has received during the previous Business Day, in an
amount equal to the sum of the Asset-Specific Loan Balances being
prepaid.
19.20 Specific Covenants of the Borrower
During the term of this Agreement and for so long as any amount is
outstanding under any Finance Documents, the Borrower, unless permitted
by the Finance Documents shall not:
(a) pay dividends or make other distributions to its members out of
profits available for distribution and then only in the manner
permitted by the Finance Documents, its memorandum and articles of
association and by applicable laws;
(b) incur or permit to subsist any Indebtedness whatsoever other than
the Indebtedness of the Borrower pursuant to the Subordinated Loan
Agreement and, with the prior written consent of the Agent, to
hedge its exposure under the Subordinated Loan Agreement with a
third party;
(c) make any loans, grant any credit or give any guarantee or
indemnity to or for the benefit of any person or otherwise
voluntarily assume any liability, whether actual or contingent, in
respect of any obligation of any other person;
(d) be a member of a VAT Group;
(e) surrender any losses to any other company;
(f) have any employees or premises or have any subsidiary undertaking
within the meaning of Regulation 4 of the European Communities
(Companies Group Accounts) Regulation 1992, as amended, of the
Republic of Ireland or become a director of any company;
(g) have an interest in any bank account other than the Borrower Bank
Accounts unless such account or interest is permitted or
contemplated by the Finance Documents;
(h) permit the validity or effectiveness of any of the Security
Trustee's security to be impaired or to be amended, hypothecated,
subordinated, terminated or discharged;
-53-
(i) acquire any interest in real property.
(j) engage in any business or agreements other than:
(i) acquiring, holding, managing and disposing of the assets
of the Borrower comprised in the Eligible Collateral;
(ii) entering into, exercising its rights and performing its
obligations under or enforcing its rights under the
Finance Documents and the other agreements ancillary
thereto or contemplated thereby; or
(iii) performing any act incidental to or necessary in
connection with any of the above;
(k) not permit or consent to any of the following occurring:
(i) its books and records being maintained with or co-mingled
with those of any other person or entity;
(ii) its bank accounts and the debts represented thereby being
co-mingled with those of any other person or entity;
(iii) its assets or revenues being co-mingled with those of any
other person or entity; or
(iv) its business being conducted other than in its own name.
(l) procure that, with respect to itself:
(i) separate financial statements in relation to its financial
affairs are maintained;
(ii) all corporate formalities with respect to its affairs are
observed;
(iii) separate stationery, invoices and cheques are used;
(iv) it always holds itself out as a separate entity; and
(v) any known misunderstandings regarding its separate
identity are corrected as soon as possible.
19.21 Borrower Irish Tax Requirements
The Borrower shall fulfil the Borrower Irish Tax Requirements.
20. EVENTS OF DEFAULT
Each of the events or circumstances set out in this Clause 20 is an
Event of Default.
20.1 Non-payment
(a) The Borrower shall default in the payment of any principal of
or interest on any Loan when due (whether at stated maturity,
upon acceleration or at mandatory or optional pre-payment or
repayment); and
(b) The Borrower shall default in the payment of any other
amount payable by it hereunder or under any Finance
Document or Finance Document after notification by
-54-
the Agent of such default, and such default shall have continued
unremedied for five (5) Business Days.
20.2 Financial covenants
Any of the covenants of the Guarantor contained in the Guarantee
relating to the maintenance of its Tangible Net Worth and the
maintenance of the Ratio of Total Indebtedness to Net Worth has been
breached.
20.3 Other obligations
An Obligor does not comply with any provision of the Finance Documents
(other than those referred to in Clause 20.1 (Non-payment) and Clause
20.2 (Financial covenants); or shall fail to observe or perform any
other covenant or agreement contained in this Agreement or any other
Finance Documents and such failure to observe or perform shall continue
for a period of thirty (30) days (following notice of such default)
unless a shorter cure period is established in any Finance Document, in
which event the shorter cure period shall be applicable.
20.4 Misrepresentation
Any representation or statement made or deemed to be made by an Obligor
in any Finance Documents or any other document delivered by or on behalf
of any Obligor under or in connection with any Finance Document is or
proves to have been incorrect or misleading in any material respect when
made or deemed to be made or furnished (other than the representations
and warranties set forth in Schedule 11 (Representations and Warranties
Re: Eligible Collateral), which shall be considered solely for the
purpose of determining the Asset Value of the Collateral; unless (i) the
Borrower shall have made any such representations and warranties with
knowledge that they were materially false or misleading at the same
time; or (ii) any such representations and warranties have been
determined by the Agent in its sole discretion to be materially false or
misleading on a regular basis).
20.5 Cross default
(a) Any Indebtedness of any Obligor is not paid when due nor
within any originally applicable grace period.
(b) Any Indebtedness of any Obligor is declared to be or
otherwise becomes due and payable prior to its specified
maturity as a result of an event of default (however
described).
(c) Any commitment for any Indebtedness of any Obligor is
cancelled or suspended by a creditor of such Obligor as a
result of an event of default (however described).
(d) Notwithstanding anything contained in this Clause 20.5, other
than Indebtedness that is MS Indebtedness, no Event of
Default will occur under this Clause 20.5 if the aggregate
amount of such Indebtedness falling within paragraphs (a) to
(c) above is less than $5,000,000 (or its equivalent in any
other currency or currencies).
20.6 Insolvency
(a) An Obligor is unable or is deemed to be unable or admits
inability to pay its debts as they fall due or suspends
making payments on any of its debts.
(b) The value of the assets of any Obligor is less than its
liabilities (taking into account contingent and prospective
liabilities).
-55-
(c) A moratorium is declared in respect of any indebtedness of
any Obligor.
(d) The Borrower is unable to pay its debts within the meaning of
section 214 of the Companies ▇▇▇, ▇▇▇▇, as amended, of the
Republic of Ireland.
(e) Any corporate action is taken by the Borrower for the
suspension of its debts generally (or any class of them) or
for a declaration of a moratorium of its debt (or any class
of it).
20.7 Insolvency proceedings
Any corporate action, legal proceedings or other such procedure or step
is taken in relation to:
(a) the suspension of payments, a moratorium of any indebtedness,
winding-up, dissolution, administration, Examinership or
reorganisation (by way of voluntary arrangement, scheme of
arrangement or otherwise) of any Obligor other than a solvent
liquidation or reorganisation of any Obligor;
(b) a composition, compromise, assignment or arrangement with any
creditor of any Obligor;
(c) the appointment of a liquidator, receiver, administrative
receiver, administrator, Examiner, compulsory manager,
trustee in bankruptcy or other similar officer in respect of
any Obligor or any of its assets; or
(d) enforcement of any security interest over any assets of any
Obligor,
or any analogous procedure or step is taken in any jurisdiction.
20.8 Creditors' process
Any expropriation, attachment, sequestration, distress or execution
affects any asset or assets and is not discharged within five (5) days
in respect of the Borrower and twenty-one (21) days in respect of the
Guarantor.
20.9 Unlawfulness
It is or becomes unlawful for an Obligor to perform any of its
obligations under the Finance Documents.
20.10 Repudiation
An Obligor repudiates a Finance Document or evidences an intention to
repudiate a Finance Document.
20.11 Borrowing Base Deficiency
A Borrowing Base Deficiency shall have occurred and the Borrower shall
have failed to timely cure the same in accordance with the provisions of
Clause 8.3 (Mandatory Pre-Payment).
20.12 Other Events of Default
Each of the following events shall constitute an Event of Default
hereunder:
(a) final judgment or judgments for the payment of money in
excess of $5,000,000 (or its equivalent in the currency in
which such judgment is rendered) in the aggregate shall be
rendered against any Obligor by one or more courts,
administrative tribunals or other bodies having jurisdiction
and the same shall not be satisfied, discharged (or
-56-
provision shall not be made for such discharge) or bonded, or a
stay of execution thereof shall not be procured, within
thirty (30) days from the date of entry thereof, and such
Obligor shall not, within said period of thirty (30) days, or
such longer period during which execution of the same shall
have been stayed or bonded, appeal there from and cause the
execution thereof to be stayed during such appeal;
(b) any Finance Document shall for whatever reason be terminated or
cease to be in full force and effect, or the enforceability
thereof shall be contested by any Obligor unless replacements
are entered into by the Finance Parties prior to such events;
(c) the Borrower shall grant, or suffer to exist, any security on
any Collateral except the security contemplated hereby; or the
security contemplated hereby shall cease to be first priority
perfected security on the Collateral in favour of the Security
Trustee or shall be security in favour of any person other than
the Security Trustee;
(d) the discovery by the Agent of a condition or event which
existed at or prior to the execution hereof and which the
Agent, in its sole discretion, determines materially and
adversely effects: (i) the condition (financial or otherwise)
of any Obligor; or (ii) the ability of either any Obligor or
the Finance Parties to fulfil its respective obligations under
the Finance Documents.
(e) any materially adverse change in the Property, business,
financial condition or prospects of any of the Obligors shall
occur, as determined by the Agent in its sole discretion, or
any other condition shall exist which, in the Agent's sole
discretion, constitutes a material impairment of any
Obligor's ability to perform its obligations under any of the
Finance Documents.
20.13 Acceleration
On and at any time after the occurrence of an Event of Default, which is
continuing the Agent may, and shall if so directed by the Majority
Lenders, by notice to the Borrower:
(a) cancel the Total Maximum Credit;
(b) declare that all or part of the Loans, together with accrued
interest, and all other amounts accrued or outstanding under
the Finance Documents be immediately due and payable, whereupon
they shall become immediately due and payable; and/or
(c) declare that all or part of the Loans be payable on demand,
whereupon they shall immediately become payable on demand by
the Agent on the instructions of the Majority Lenders.
20.14 Other Remedies on Event of Default
(a) On and any time after an Event of Default which is continuing,
the Security Trustee may, and shall if so directed by the
Majority Lenders, by notice to the Custodian obtain physical
possession of the Servicing Records and other files of the
Custodian relating to the Collateral and all documents relating
to the Collateral which are then or may thereafter come in to
the possession of the Agent or any third party acting for the
Borrower.
-57-
(b) If an Event of Default shall occur and be continuing, the
Agent may, at its option, enter into one or more Interest
Rate Protection Agreements covering all or a portion of the
Eligible Collateral granted by way of security to the
Security Trustee under the Debenture or the other Finance
Documents, and the Borrower shall be responsible for all
damages, judgments, costs and expenses of any kind which may
be imposed on, incurred by or asserted against the Agent
relating to or arising out of such Interest Rate Protection
Agreements, including without limitation any losses resulting
from such Interest Rate Protection Agreements.
20.15 Proceeds
If an Event of Default shall occur and be continuing, (a) all proceeds
of Collateral received by the Borrower consisting of cash, cheques and
other near-cash items shall be held by the Borrower on trust for the
Security Trustee, segregated from other funds of the Borrower, and shall
forthwith upon receipt by the Borrower be turned over to the Security
Trustee or as the Security Trustee may otherwise direct in the exact
form received by the Borrower (duly endorsed by the Borrower to the
Agent, if required). For purposes hereof, proceeds shall include, but
not be limited to, all principal and interest payments, all prepayments
and payoffs, insurance claims, condemnation awards, sale proceeds, real
estate owned rents and any other income and all other amounts received
with respect to the Collateral.
20.16 No Duty of the Security Trustee
The powers conferred on the Security Trustee hereunder are solely to
protect the Security Trustee's interests in the Collateral and shall not
impose any duty upon it to exercise any such powers. The Security
Trustee shall be accountable only for amounts that it actually receives
as a result of the exercise of such powers, and neither it nor any of
its officers, directors, employees or agents shall be responsible to the
Borrower for any act or failure to act hereunder, except for its or
their own gross negligence or wilful misconduct.
-58-
SECTION 8
CHANGES TO PARTIES
21. CHANGES TO THE LENDERS
21.1 Assignments and transfers by the Lender
A Lender (the "Existing Lender") may not, except as noted in paragraphs
(a) and (b) of this Clause 21.1, and subject to the consent of the
Borrower, assign any of its rights; or transfer by novation any of its
rights and obligations under this Agreement to any other person (the
"New Lender"). Notwithstanding the aforementioned a Lender may without
the consent of the Borrower:
(a) sell participations to one or more persons in or to all or a
portion of its rights and obligations under this Agreement
provided, however, that (i) the Lender's obligations under this
Agreement shall remain unchanged; (ii) the Lender shall remain
solely responsible to the other parties hereto for the
performance of such obligations; and (iii) Borrower shall
continue to deal solely and directly with the Agent in
connection with lender's rights and obligations under and in
respect of this Agreement and Finance Documents. Each
participant or New Lender shall be entitled to the additional
compensation and other rights and protections afforded the
Lender under this Agreement to the same extent as the Lender
would have been entitled to receive them with respect to the
participation sold to such participant; and
(b) assign, transfer or otherwise convey its rights under this
Agreement to an Affiliate (meeting the definition of
Institutional Investor and Institutional Owner), an
Institutional Owner or Institutional Investor any of which is
in the business of making loans similar to the Loans, provided
that such Affiliate, Institutional Investor or Institutional
Owner shall execute and deliver the document required under
Clause 21.2 (Conditions of Assignment or Transfer).
21.2 Conditions of assignment or transfer
(a) The consent of the Borrower required under paragraph (a) of
Clause 21.1 (Assignments and Transfers by the Lender) to an
assignment or transfer must not be unreasonably withheld or
delayed.
(b) An assignment will only be effective on:
(i) receipt by the Agent of written confirmation from the
New Lender (in form and substance satisfactory to the
Agent) that the New Lender will assume the same
obligations to the other Finance Parties as it would
have been under if it was an Initial Lender; and
(ii) performance by the Agent of all necessary "know your
customer" or other similar checks under all applicable
laws and regulations in relation to such assignment to a
New Lender, the completion of which the Agent shall
promptly notify to the Existing Lender and the New
Lender.
(c) A transfer will only be effective if the procedure set out in
Clause 21.4 (Procedure for transfer) is complied with.
-59-
(d) If:
(i) a Lender assigns or transfers any of its rights or
obligations under the Finance Documents or changes its
Facility Office; and
(ii) as a result of circumstances existing at the date the
assignment, transfer or change occurs, the Borrower
would be obliged to make a payment to the New Lender or
a Lender acting through its new Facility Office under
Clause 12 (Tax gross-up and indemnities) or Clause 13
(Increased costs),
then the New Lender or a Lender acting through its new
Facility Office is only entitled to receive payment under
those Clauses to the same extent as the Existing Lender or a
Lender acting through its previous Facility Office would have
been if the assignment, transfer or change had not occurred.
21.3 Limitation of responsibility of Existing Lenders
(a) Unless expressly agreed to the contrary, an Existing Lender
makes no representation or warranty and assumes no
responsibility to the Lender for:
(i) the legality, validity, effectiveness, adequacy or
enforceability of the Finance Documents or any other
documents;
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor of its
obligations under the Finance Documents or any other
documents; or
(iv) the accuracy of any statements (whether written or oral)
made in or in connection with any Finance Document or any
other document,
and any representations or warranties implied by law are excluded.
(b) The Lender confirms to the Existing Lender and the other Finance
Parties that it:
(i) has made (and shall continue to make) its own independent
investigation and assessment of the financial condition and
affairs of each Obligor and its related entities in
connection with its participation in this Agreement and has
not relied exclusively on any information provided to it by
the Existing Lender in connection with any Finance
Document; and
(ii) will continue to make its own independent appraisal of the
creditworthiness of each Obligor and its related entities
whilst any amount is or may be outstanding under the
Finance Documents or any Loan is in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re-transfer from a New Lender of any of the rights
and obligations assigned or transferred under this Clause
21; or
(ii) support any losses directly or indirectly incurred by the
New Lender by reason of the non-performance by any Obligor
of its obligations under the Finance Documents or
otherwise.
-60-
21.4 Procedure for transfer
(a) Subject to the conditions set out in Clause 21.2 (Conditions of
assignment or transfer) a transfer is effected in accordance with
paragraph (c) below when the Agent executes an otherwise duly
completed Transfer Certificate delivered to it by the Existing
Lender and the New Lender. The Transfer Certificate shall be
substantially in the form set out at Schedule 5 to this Agreement
and shall (i) indicate the category of Qualifying Lender that the
person beneficially entitled to interest payable to the New Lender
in respect of an advance under a Finance Document is (the
"Beneficial Owner"); and (ii) in the case of a Beneficial Owner
that is a Qualifying Lender within the meaning of paragraph (d) of
the definition of Qualifying Lender set out in Clause 12.1 above,
be accompanied by a copy of the notification it is required to
make under Section 246(5)(a) of the Irish Taxes Act to the Irish
Revenue Commissioners and the notification it is required to make
under Section 246(5)(a) of the Irish Taxes Act to the relevant
Obligor. The Agent shall, subject to paragraph (b) below, as soon
as reasonably practicable after receipt by it of a duly completed
Transfer Certificate appearing on its face to comply with the
terms of this Agreement and delivered in accordance with the terms
of this Agreement, execute that Transfer Certificate.
(b) The Agent shall only be obliged to execute a Transfer Certificate
delivered to it by the Existing Lender and the New Lender once it
is satisfied it has complied with all necessary "know your
customer" or other similar checks under all applicable laws and
regulations in relation to the transfer to such New Lender.
(c) On the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing
Lender seeks to transfer by novation its rights and
obligations under the Finance Documents the Borrower and
the Existing Lender shall be released from further
obligations towards one another under the Finance Documents
and their respective rights against one another under the
Finance Documents shall be cancelled (being the "Discharged
Rights and Obligations");
(ii) the Borrower and the New Lender shall assume obligations
towards one another and/or acquire rights against one
another which differ from the Discharged Rights and
Obligations only insofar as the Borrower and the New Lender
have assumed and/or acquired the same in place of the
Borrower and the Existing Lender;
(iii) the Agent, the New Lender and other Lenders shall acquire
the same rights and assume the same obligations between
themselves as they would have acquired and assumed had the
New Lender been an Original the Lender with the rights
and/or obligations acquired or assumed by it as a result of
the transfer and to that extent the Agent, and the Existing
Lender shall each be released from further obligations to
each other under the Finance Documents; and
(iv) the New Lender shall become a Party as "the Lender".
-61-
21.5 Copy of Transfer Certificate to the Borrower
The Agent shall, as soon as reasonably practicable after it has executed
a Transfer Certificate, send to the Borrower a copy of that Transfer
Certificate.
21.6 Disclosure of information
Any Lender may disclose to any of its Affiliates and any other person:
(a) to (or through) whom that the Lender assigns or transfers (or may
potentially assign or transfer) all or any of its rights and
obligations under this Agreement;
(b) with (or through) whom that the Lender enters into (or may
potentially enter into) any sub-participation in relation to, or
any other transaction under which payments are to be made by
reference to, this Agreement or any Obligor; or
(c) to whom, and to the extent that, information is required to be
disclosed by any applicable law or regulation,
any information about any Obligor, and the Finance Documents as that the
Lender shall consider appropriate if, in relation to paragraphs (a) and
(b) above, the person to whom the information is to be given has entered
into a Confidentiality Undertaking.
21.7 Use of the Collateral
Notwithstanding anything to the contrary contained herein or in any
Finance Documents, the Security Trustee shall have free and unrestricted
use of all Collateral (subject to the provisions of the Finance
Documents) and, except as provided below, nothing in this Agreement
shall preclude the Security Trustee from engaging in repurchase
transactions with the Collateral or otherwise pledging, repledging,
transferring, hypothecating, or rehypothecating the Collateral, on
terms, and subject to conditions, within the Security Trustee's absolute
discretion. Nothing contained in this Agreement shall oblige the
Security Trustee to segregate any Collateral delivered to the Security
Trustee by the Borrower; provided however, the documents evidencing such
repurchase transaction or pledge or hypothecation shall be consistent
with the terms of this Agreement and the other Finance Documents
including, but not limited to, the rights of the Borrower to have the
Collateral delivered to the Borrower upon repayment of all of the Loans.
22. CHANGES TO THE OBLIGORS
The Borrower may not assign or otherwise transfer any of its rights or
transfer any of its rights or obligations under the Finance Documents.
SECTION 9
THE FINANCE PARTIES
23. ROLE OF THE AGENT
23.1 Appointment of the Agent and the Security Trustee
(a) Each other Finance Party appoints the Agent to act as its agent
under and in connection with the Finance Documents.
(b) Each other Finance Party authorises the Agent to exercise the
rights, powers, authorities and discretions specifically
given to the Agent under or in connection with
-62-
the Finance Documents together with any other incidental rights,
powers, authorities and discretions.
23.2 Duties of the Agent
(a) The Agent shall promptly forward to a Party the original or a copy
of any document which is delivered to the Agent for that Party by
any other Party.
(b) Except where a Finance Document specifically provides otherwise,
the Agent is not obliged to review or check the adequacy, accuracy
or completeness of any document it forwards to another Party.
(c) If the Agent receives notice from a Party referring to this
Agreement, describing a Default and stating that the circumstance
described is a Default, it shall promptly notify the other Finance
Parties.
(d) If the Agent is aware of the non-payment of any principal,
interest, commitment fee or other fee payable to a Finance Party
(other than the Agent) under this Agreement it shall promptly
notify the other Finance Parties.
(e) The Agent's duties under the Finance Documents are solely
mechanical and administrative in nature.
23.3 No fiduciary duties
(a) Except as provided in Clause 23.16 (Deduction from amounts payable
by the Agent) nothing in this Agreement constitutes the Agent as a
trustee or fiduciary of any other person.
(b) The Agent shall not be bound to account to any Lender for any sum
or the profit element of any sum received by it for its own
account.
23.4 Business with Affiliates
The Agent may accept deposits from, lend money to and generally engage
in any kind of banking or other business with any Obligor or any
Affiliate thereof.
23.5 Rights and discretions of the Agent
(a) The Agent may rely on:
(i) any representation, notice or document believed by it to
be genuine, correct and appropriately authorised; and
(ii) any statement made by a director, authorised signatory or
employee of any person regarding any matters which may
reasonably be assumed to be within his knowledge or within
his power to verify.
(b) The Agent may assume (unless it has received notice to the
contrary in its capacity as agent for the Lenders) that:
(i) no Default has occurred (unless it has actual knowledge of
a Default arising under Clause 20.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any
Party or the Majority Lenders has not been exercised; and
-63-
(iii) any notice or request made by the Borrower (other than a
Request for Borrowing) is made on behalf of and with the
consent and knowledge of the Guarantor.
(c) The Agent may engage, pay for and rely on the advice or services
of any lawyers, accountants, surveyors or other experts.
(d) The Agent may act in relation to the Finance Documents through its
personnel and agents.
(e) The Agent may disclose to any other Party any information it
reasonably believes it has received as agent under this Agreement.
(f) Notwithstanding any other provision of any Finance Document to the
contrary, the Agent is not obliged to do or omit to do anything if
it would or might in its reasonable opinion constitute a breach of
any law or regulation or a breach of a fiduciary duty or duty of
confidentiality.
23.6 Majority Lenders' instructions
(a) Unless a contrary indication appears in a Finance Document, the
Agent shall (i) exercise any right, power, authority or discretion
vested in it as the Agent in accordance with any instructions
given to it by the Majority Lenders (or, if so instructed by the
Majority Lenders, refrain from exercising any right, power,
authority or discretion vested in it as the Agent) and (ii) not be
liable for any act (or omission) if it acts (or refrains from
taking any action) in accordance with an instruction of the
Majority Lenders.
(b) Unless a contrary indication appears in a Finance Document, any
instructions given by the Majority Lenders will be binding on all
the Finance Parties.
(c) The Agent may refrain from acting in accordance with the
instructions of the Majority Lenders (or, if appropriate, the
Lenders) until it has received such security as it may require for
any cost, loss or liability (together with any associated VAT)
which it may incur in complying with the instructions.
(d) In the absence of instructions from the Majority Lenders, (or, if
appropriate, the Lenders) the Agent may act (or refrain from
taking action) as it considers to be in the best interest of the
Lenders.
(e) The Agent is not authorised to act on behalf of a Lender (without
first obtaining that Lender's consent) in any legal or arbitration
proceedings relating to any Finance Document.
23.7 Responsibility for documentation
The Agent is not:
(a) responsible for the adequacy, accuracy and/or completeness of any
information (whether oral or written) supplied by the Agent, an
Obligor or any other person given in or in connection with any
Finance Document or the Information Memorandum; or
-64-
(b) responsible for the legality, validity, effectiveness, adequacy or
enforceability of any Finance Document or any other agreement,
arrangement or document entered into, made or executed in
anticipation of or in connection with any Finance Document.
23.8 Exclusion of liability
(a) Without limiting paragraph (b) below (and without prejudice to the
provisions of paragraph (e) of Clause 26.9 (Disruption to Payment
Systems etc.), the Agent will not be liable (including without
limitation, for negligence or any other category of liability
whatsoever) for any action taken by it under or in connection with
any Finance Document, unless directly caused by its gross
negligence or wilful misconduct.
(b) No Party (other than the Agent) may take any proceedings against
any officer, employee or agent of the Agent in respect of any
claim it might have against the Agent or in respect of any act or
omission of any kind by that officer, employee or agent in
relation to any Finance Document and any officer, employee or
agent of the Agent may rely on this Clause subject to Clause 1.3
(Third Party Rights) and the provisions of the Third Parties Act.
(c) The Agent will not be liable for any delay (or any related
consequences) in crediting an account with an amount required
under the Finance Documents to be paid by the Agent if the Agent
has taken all necessary steps as soon as reasonably practicable to
comply with the regulations or operating procedures of any
recognised clearing or settlement system used by the Agent for
that purpose.
(d) Nothing in this Agreement shall oblige the Agent to carry out any
"know your customer" or other checks in relation to any person on
behalf of any Lender and each Lender confirms to the Agent that it
is solely responsible for any such checks it is required to carry
out and that it may not rely on any statement in relation to such
checks made by the Agent.
23.9 Lenders' indemnity to the Agent
Each Lender shall (in proportion to its share of the Total Maximum
Credit or, if the Total Maximum Credit is then zero, to its share of the
Total Maximum Credit immediately prior to their reduction to zero)
indemnify the Agent, within three Business Days of demand, against any
cost, loss or liability (including, without limitation, for negligence
or any other category of liability whatsoever) incurred by the Agent
(otherwise than by reason of the Agent's gross negligence or wilful
misconduct) (or, in the case of any cost, loss or liability pursuant to
Clause 26.9 (Disruption to Payment Systems etc.) notwithstanding the
Agent's negligence, gross negligence, or any other category of liability
whatsoever but not including any claim based on the fraud of the Agent)
in acting as the Agent under the Finance Documents (unless the Agent has
been reimbursed by an Obligor pursuant to a Finance Document).
23.10 Resignation of the Agent
(a) The Agent' may resign and appoint one of its Affiliates acting
through an office in the United Kingdom as successor by giving
notice to the other Finance Parties and the Borrower.
-65-
(b) Alternatively the Agent may resign by giving notice to the other
Finance Parties and the Borrower, in which case the Majority
Lenders (after consultation with the Borrower) may appoint a
successor agent.
(c) If the Majority Lenders have not appointed a successor agent in
accordance with paragraph (b) above within thirty (30) days after
notice of resignation was given, the Agent (after consultation
with the Borrower) may appoint a successor agent (acting through
an office in the United Kingdom).
(d) The Agent shall, at its own cost, make available to the successor
agent such documents and records and provide such assistance as
the successor agent may reasonably request for the purposes of
performing its functions as the Agent under the Finance Documents.
(e) The Agent's resignation notice shall only take effect upon the
appointment of a successor.
(f) Upon the appointment of a successor, the retiring Agent shall be
discharged from any further obligation in respect of the Finance
Documents but shall remain entitled to the benefit of this Clause
23. Its successor and each of the other Parties shall have the
same rights and obligations amongst themselves as they would have
had if such successor had been an original Party.
(g) After consultation with the Borrower, the Majority Lenders may, by
notice to the Agent, require it to resign in accordance with
paragraph (b) above. In this event, the Agent shall resign in
accordance with paragraph (b) above.
23.11 Confidentiality
(a) In acting as agent for the Finance Parties, the Agent shall be
regarded as acting through its agency division which shall be
treated as a separate entity from any other of its divisions or
departments.
(b) If information is received by another division or department of
the Agent, it may be treated as confidential to that division or
department and the Agent shall not be deemed to have notice of it.
23.12 Relationship with the Lenders
(a) The Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and acting through its Facility Office unless
it has received not less than five (5) Business Days prior notice
from that Lender to the contrary in accordance with the terms of
this Agreement.
(b) Each Lender shall supply the Agent with any information required
by the Agent in order to calculate the Mandatory Cost in
accordance with Schedule 4 (Mandatory Cost formulae).
23.13 Credit appraisal by the Lenders
Without affecting the responsibility of any Obligor for information
supplied by it or on its behalf in connection with any Finance Document,
each Lender confirms to the Agent that it has been, and will continue
to be, solely responsible for making its own independent appraisal
-66-
and investigation of all risks arising under or in connection with any
Finance Document including but not limited to:
(a) the financial condition, status and nature of each Obligor;
(b) the legality, validity, effectiveness, adequacy or enforceability
of any Finance Document and any other agreement, arrangement or
document entered into, made or executed in anticipation of, under
or in connection with any Finance Document;
(c) whether that Lender has recourse, and the nature and extent of
that recourse, against any Party or any of its respective assets
under or in connection with any Finance Document, the transactions
contemplated by the Finance Documents or any other agreement,
arrangement or document entered into, made or executed in
anticipation of, under or in connection with any Finance Document;
and
(d) the adequacy, accuracy and/or completeness of the Information
Memorandum and any other information provided by the Agent, any
Party or by any other person under or in connection with any
Finance Document, the transactions contemplated by the Finance
Documents or any other agreement, arrangement or document entered
into, made or executed in anticipation of, under or in connection
with any Finance Document.
23.14 Reference Banks
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender
of which it is an Affiliate) ceases to be a Lender, the Agent shall (in
consultation with the Borrower) appoint another Lender or an Affiliate
of a Lender to replace that Reference Bank.
23.15 The Agent's Management Time
Except for any amount to be paid to the Agent in respect of any proposed
or actual syndication of a Loan (which amount shall be paid by the
Lenders) any amount payable to the Agent under Clause 15 (Costs and
expenses) and Clause 23.9 (Lenders' indemnity to the Agent) shall
include the cost of utilising the Agent's management time or other
resources and will be calculated on the basis of such reasonable daily
or hourly rates as the Agent may agree with the Borrower and the
Lenders, and is in addition to any fee paid or payable to the Agent
under Clause 11 (Fees).
23.16 Deduction from amounts payable by the Agent
If any Party owes an amount to the Agent under the Finance Documents the
Agent may, after giving notice to that Party, deduct an amount not
exceeding that amount from any payment to that Party which the Agent
would otherwise be obliged to make under the Finance Documents and apply
the amount deducted in or towards satisfaction of the amount owed. For
the purposes of the Finance Documents that Party shall be regarded as
having received any amount so deducted.
23.17 The Security Trustee as trustee
(a) The Security Trustee declares that it holds all rights, title
and interests in, to and under those Finance Documents to
which it is a party and expressed to be a trustee (acting as
trustee for the Finance Parties), and all proceeds of the
enforcement of such Finance Documents, on trust for the
Finance Parties from time to time. This trust
-67-
shall remain in force even if the Security Trustee (in whatever
capacity) is at any time the sole Finance Party.
(b) The Security Trustee, in its capacity as trustee or otherwise
under any Finance Document is not liable for any failure:
(i) to require the deposit with it of any title deed, any
Finance Document; or any other documents in connection
with any Finance Document;
(ii) in it (or its solicitors) holding any title deed, any
Finance Document or any other documents in connection with
any Finance Document in its own possession or to take any
steps to protect or preserve the same including permitting
the Borrower to retain any such title deeds, any Finance
Documents or any other documents;
(iii) to obtain any licence, consent or other authority for the
execution, delivery, validity, legality, adequacy,
performance, enforceability or admissibility in evidence
of any such Finance Document;
(iv) to effect or ensure registration of or otherwise protect
any of the security created by any such Finance Document
by registering the same under the Land Registration Act
2002 or any other applicable registration laws in any
jurisdiction or otherwise by registering any notice,
caution or other entry prescribed by or pursuant to the
provisions of the said Act or laws;
(v) to take or require the Borrower to take any step to render
the security created or purported to be created by or
pursuant to any such Finance Document effective or to
secure the creation of any ancillary security under the
laws of any jurisdiction;
(vi) to require any further assurances in relation to any such
Finance Document; or
(vii) to insure any asset or require any other person to
maintain any such insurance or be responsible for any loss
which may be suffered by any person as a result of the
lack, or inadequacy or insufficiency, of any such
insurance.
(c) The Security Trustee may accept, without enquiry, any right or
title that the Borrower may (or may purport to) have to any asset
which is the subject of any such Finance Document and shall not be
bound or concerned to investigate or make any enquiry into the
right or title of the Borrower to any such asset or to require the
Borrower to remedy any defect in its right or title to the same.
(d) Save as otherwise provided in the Finance Documents, all
moneys, which under the trusts contained in any Finance
Document are received by the Security Trustee in its capacity
as trustee or otherwise, may be invested in the name of, or
under the control of, the Security Trustee in any investment
for the time being authorised by English law for the investment
by a trustee of trust money or in any other investments which
may be selected by the Security Trustee. Additionally, the same
may be placed on deposit in the name of, or under the control
of, the Security Trustee at such bank or
-68-
institution (including the Security Trustee) and upon such
terms as the Agent may think fit.
(e) Section 1 of the Trustee Act 2000 shall not apply to the duties of
the Security Trustee in relation to the trusts constituted by any
Finance Document. Where there are any inconsistencies between that
Act and the provisions of that Finance Document, the provisions of
that Finance Document shall, to the extent allowed by law, prevail
and, in the case of any inconsistency with that Act, the
provisions of that Finance Document shall constitute a restriction
or exclusion for the purposes of that Act.
(f) The perpetuity period for the trusts in this Agreement is 80
years.
24. CONDUCT OF BUSINESS BY THE FINANCE PARTIES
No provision of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its
affairs (tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit,
relief, remission or repayment available to it or the extent,
order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to
its affairs (tax or otherwise) or any computations in respect of
Tax.
25. SHARING AMONG THE FINANCE PARTIES
25.1 Payments to Finance Parties
If a Finance Party (a "Recovering Finance Party") receives or recovers
any amount from an Obligor other than in accordance with Clause 26
(Payment mechanics) and applies that amount to a payment due under the
Finance Documents then:
(a) the Recovering Finance Party shall, within three (3) Business
Days, notify details of the receipt or recovery, to the Agent;
(b) the Agent shall determine whether the receipt or recovery is in
excess of the amount the Recovering Finance Party would have been
paid had the receipt or recovery been received or made by the
Agent and distributed in accordance with Clause 26 (Payment
mechanics), without taking account of any Tax which would be
imposed on the Agent in relation to the receipt, recovery or
distribution; and
(c) the Recovering Finance Party shall, within three (3) Business Days
of demand by the Agent, pay to the Agent an amount (the "Sharing
Payment") equal to such receipt or recovery less any amount which
the Agent determines may be retained by the Recovering Finance
Party as its share of any payment to be made, in accordance with
the Debenture.
25.2 Redistribution of payments
The Agent shall treat the Sharing Payment as if it had been paid by the
relevant Obligor and distribute it between the Finance Parties (other
than the Recovering Finance Party) in accordance with the Debenture.
-69-
25.3 Recovering Finance Party's rights
(a) On a distribution by the Agent under Clause 25.2 (Redistribution
of payments), the Recovering Finance Party will be subrogated to
the rights of the Finance Parties which have shared in the
redistribution.
(b) If and to the extent that the Recovering Finance Party is not able
to rely on its rights under paragraph (a) above, the relevant
Obligor shall be liable to the Recovering Finance Party for a debt
equal to the Sharing Payment which is immediately due and payable.
25.4 Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering
Finance Party becomes repayable and is repaid by that Recovering Finance
Party, then:
(a) each Finance Party which has received a share of the relevant
Sharing Payment pursuant to Clause 25.2 (Redistribution of
payments) shall, upon request of the Agent, pay to the Agent for
the account of that Recovering Finance Party an amount equal to
the appropriate part of its share of the Sharing Payment (together
with an amount as is necessary to reimburse that Recovering
Finance Party for its proportion of any interest on the Sharing
Payment which that Recovering Finance Party is required to pay);
and
(b) that Recovering Finance Party's rights of subrogation in respect
of any reimbursement shall be cancelled and the relevant Obligor
will be liable to the reimbursing Finance Party for the amount so
reimbursed.
25.5 Exceptions
(a) This Clause 25 shall not apply to the extent that the Recovering
Finance Party would not, after making any payment pursuant to this
Clause, have a valid and enforceable claim against the relevant
Obligor.
(b) A Recovering Finance Party is not obliged to share with any other
Finance Party any amount which the Recovering Finance Party has
received or recovered as a result of taking legal or arbitration
proceedings, if:
(i) it notified that other Finance Party of the legal or
arbitration proceedings; and
(ii) that other Finance Party had an opportunity to participate
in those legal or arbitration proceedings but did not do
so as soon as reasonably practicable having received
notice and did not take separate legal or arbitration
proceedings.
-70-
SECTION 10
ADMINISTRATION
26. PAYMENT MECHANICS
26.1 Payments to the Agent
(a) On each date on which an Obligor or a Lender is required to make a
payment under a Finance Document, that Obligor or the Lender shall
make the same available to the Agent (unless a contrary indication
appears in a Finance Document) for value on the due date at the
time and in such funds specified by the Agent as being customary
at the time for settlement of transactions in the relevant
currency in the place of payment.
(b) Payment shall be made to such account in the principal financial
centre of the country of that currency (or, in relation to euro,
in a principal financial centre in a Participating Member State or
London) with such bank as the Agent specifies.
26.2 Distributions by the Agent
Each payment received by the Agent under the Finance Documents for
another Party shall, subject to Clause 26.3 (Distributions to an
Obligor), Clause 26.4 (Clawback) and Clause 23.16 (Deduction from
amounts payable by the Agent) be made available by the Agent as soon as
practicable after receipt to the Party entitled to receive payment in
accordance with this Agreement (in the case of a Lender, for the account
of its Facility Office), to such account as that Party may notify to the
Agent by not less than five (5) Business Days' notice with a bank in the
principal financial centre of the country of that currency (or, in
relation to euro, in the principal financial centre of a Participating
Member State or London).
26.3 Distributions to an Obligor
The Agent may (with the consent of the Obligor or in accordance with
Clause 27 (Set-off)) apply any amount received by it for that Obligor in
or towards payment (on the date and in the currency and funds of
receipt) of any amount due from that Obligor under the Finance Documents
or in or towards purchase of any amount of any currency to be so
applied.
26.4 Clawback
(a) Where a sum is to be paid to the Agent under the Finance Documents
for another Party, the Agent is not obliged to pay that sum to
that other Party (or to enter into or perform any related exchange
contract) until it has been able to establish to its satisfaction
that it has actually received that sum.
(b) If the Agent pays an amount to another Party and it proves to be
the case that the Agent had not actually received that amount,
then the Party to whom that amount (or the proceeds of any related
exchange contract) was paid by the Agent shall on demand refund
the same to the Agent together with interest on that amount from
the date of payment to the date of receipt by the Agent,
calculated by the Agent to reflect its cost of funds.
26.5 No set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall
be calculated and be made without (and free and clear of any deduction
for) set-off or counterclaim.
-71-
26.6 Business Days
(a) Any payment which is due to be made on a day that is not a
Business Day shall be made on the next Business Day.
(b) During any extension of the due date for payment of any principal
or Unpaid Sum under this Agreement interest is payable on the
principal or Unpaid Sum at the rate payable on the original due
date.
26.7 Currency of account
(a) Subject to paragraphs (b) to (e) below, the Base Currency is the
currency of account and payment for any sum due from an Obligor
under any Finance Document.
(b) A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid
Sum shall be made in the currency in which such Loan or Unpaid Sum
is denominated on the due date.
(c) Each payment of interest shall be made in the currency in which
the sum in respect of which the interest is payable was
denominated when that interest accrued.
(d) Each payment in respect of costs, expenses or Taxes shall be made
in the currency in which the costs, expenses or Taxes are
incurred.
(e) Any amount expressed to be payable in a currency other than the
Base Currency shall be paid in that other currency.
26.8 Change of currency
(a) Unless otherwise prohibited by law, if more than one currency or
currency unit are at the same time recognised by the central bank
of any country as the lawful currency of that country, then:
(i) any reference in the Finance Documents to, and any
obligations arising under the Finance Documents in, the
currency of that country shall be translated into, or paid
in, the currency or currency unit of that country
designated by the Agent (after consultation with the
Borrower); and
(ii) any translation from one currency or currency unit to
another shall be at the official rate of exchange
recognised by the central bank for the conversion of that
currency or currency unit into the other, rounded up or
down by the Agent (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement
will, to the extent the Agent (acting reasonably and after
consultation with the Borrower) specifies to be necessary, be
amended to comply with any generally accepted conventions and
market practice in the Relevant Interbank Market and otherwise to
reflect the change in currency.
26.9 Disruption to Payment Systems etc.
If either the Agent determines (in its discretion) that a Disruption
Event has occurred or the Agent is notified by the Borrower that a
Disruption Event has occurred:
-72-
(a) the Agent may, and shall if requested to do so by the Borrower,
consult with the Borrower with a view to agreeing with the
Borrower such changes to the operation or administration of the
Facility as the Agent may deem necessary in the circumstances;
(b) the Agent shall not be obliged to consult with the Borrower in
relation to any changes mentioned in paragraph (a) if, in its
opinion, it is not practicable to do so in the circumstances and,
in any event, shall have no obligation to agree to such changes;
(c) the Agent may consult with the Finance Parties in relation to any
changes mentioned in paragraph (a) but shall not be obliged to do
so if, in its opinion, it is not practicable to do so in the
circumstances;
(d) any such changes agreed upon by the Agent and the Borrower shall
(whether or not it is finally determined that a Disruption Event
has occurred) be binding upon the Parties as an amendment to (or,
as the case may be, waiver of) the terms of the Finance Documents
notwithstanding the provisions of Clause 32 (Amendments and
Waivers);
(e) the Agent shall not be liable for any damages, costs or losses
whatsoever (including, without limitation for negligence, gross
negligence or any other category of liability whatsoever but not
including any claim based on the fraud of the Agent) arising as a
result of its taking, or failing to take, any actions pursuant to
or in connection with this Clause 26.9; and
(f) the Agent shall notify the Finance Parties of all changes agreed
pursuant to paragraph (d) above.
27. SET-OFF
In addition to any rights and remedies of the Lender provided by this
Agreement and by law, the Lender shall have the right, without prior
notice to the Borrower, and such notice being expressly waived by the
Borrower to the extent permitted by applicable law, upon any amount
becoming due and payable by the Borrower hereunder (whether at the
stated maturity, by acceleration or otherwise) to set-off and
appropriate and apply against such amount any and all deposits of the
Borrower (general or special, time or demand, provisional or final), in
any currency, and any other credits, indebtedness or claims, in any
currency, in each case whether direct or indirect, absolute or
contingent, matured or unmatured, at any time held or owing by the
Lender or any Affiliate thereof to or for the credit or the account of
the Borrower. The Lender agrees promptly to notify the Borrower after
any such set-off and application made by the Lender provided that the
failure to give such notice shall not affect the validity of such
set-off and application.
28. NOTICES
28.1 Communications in writing
Any communication to be made under or in connection with the Finance
Documents shall be made in writing and, unless otherwise stated, may be
made by fax or letter.
-73-
28.2 Addresses
The address and fax number (and the department or officer, if any, for
whose attention the communication is to be made) of each Party for any
communication or document to be made or delivered under or in connection
with the Finance Documents is:
(a) in the case of the Borrower, that identified with its name below;
(b) in the case of each Lender, that notified in writing to the Agent
on or prior to the date on which it becomes a Party;
(c) in the case of the Initial Lender, that identified with its name
below; and
(d) in the case of the Agent, that identified with its name below,
or any substitute address or fax number or department or officer as the
Party may notify to the Agent (or the Agent may notify to the other
Parties, if a change is made by the Agent) by not less than five (5)
Business Days' notice.
28.3 Delivery
(a) Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents will
only be effective:
(i) if by way of fax, when received in legible form; or
(ii) if by way of letter, when it has been left at the relevant
address or five (5) Business Days after being deposited in
the post postage prepaid in an envelope addressed to it at
that address,
and, if a particular department or officer is specified as
part of its address details provided under Clause 28.2
(Addresses), if addressed to that department or officer.
(b) Any communication or document to be made or delivered to the Agent
will be effective only when actually received by the Agent and
then only if it is expressly marked for the attention of the
department or officer identified with the Agent's signature below
(or any substitute department or officer as the Agent shall
specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Agent.
(d) Any communication or document made or delivered to the Borrower in
accordance with this Clause will be deemed to have been made or
delivered to the Guarantor.
28.4 Notification of address and fax number
Promptly upon receipt of notification of an address and fax number or
change of address or fax number pursuant to Clause 28.2 (Addresses) or
changing its own address or fax number, the Agent shall notify the other
Parties.
-74-
28.5 Electronic communication
(a) Any communication to be made between the Agent and a Lender under
or in connection with the Finance Documents may be made by
electronic mail or other electronic means, if the Agent and the
relevant Lender:
(i) agree that, unless and until notified to the contrary,
this is to be an accepted form of communication;
(ii) notify each other in writing of their electronic mail
address and/or any other information required to enable
the sending and receipt of information by that means; and
(iii) notify each other of any change to their address or any
other such information supplied by them.
(b) Any electronic communication made between the Agent and a Lender
will be effective only when actually received in readable form and
in the case of any electronic communication made by a Lender to
the Agent only if it is addressed in such a manner as the Agent
shall specify for this purpose.
28.6 English language
(a) Any notice given under or in connection with any Finance Document
must be in English.
(b) All other documents provided under or in connection with any
Finance Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Agent,
accompanied by a certified English translation and, in
this case, the English translation will prevail unless the
document is a constitutional, statutory or other official
document.
29. CALCULATIONS AND CERTIFICATES
29.1 Accounts
In any litigation or arbitration proceedings arising out of or in
connection with a Finance Document, the entries made in the accounts
maintained by a Finance Party are prima facie evidence of the matters to
which they relate.
29.2 Certificates and Determinations
Any certification or determination by a Finance Party of a rate or
amount under any Finance Document is, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
29.3 Day count convention
Any interest, commission or fee accruing under a Finance Document will
accrue from day to day and is calculated on the basis of the actual
number of days elapsed and a year of 360 days or, in any case where the
practice in the Relevant Interbank Market differs, in accordance with
that market practice.
-75-
30. PARTIAL INVALIDITY
If, at any time, any provision of the Finance Documents is or becomes
illegal, invalid or unenforceable in any respect under any law of any
jurisdiction, neither the legality, validity or enforceability of the
remaining provisions nor the legality, validity or enforceability of
such provision under the law of any other jurisdiction will in any way
be affected or impaired.
31. REMEDIES AND WAIVERS
No failure to exercise, nor any delay in exercising, on the part of any
Finance Party, any right or remedy under the Finance Documents shall
operate as a waiver, nor shall any single or partial exercise of any
right or remedy prevent any further or other exercise or the exercise of
any other right or remedy. The rights and remedies provided in this
Agreement are cumulative and not exclusive of any rights or remedies
provided by law.
32. AMENDMENTS AND WAIVERS
32.1 Required consents
(a) Subject to Clause 32.2 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the
Majority Lenders and the Obligors and any such amendment or waiver
will be binding on all Parties.
(b) The Agent may effect, on behalf of any Finance Party, any
amendment or waiver permitted by this Clause.
32.2 Exceptions
(a) An amendment or waiver that has the effect of changing or which
relates to:
(i) the definition of "Majority Lenders" in Clause 1.1
(Definitions);
(ii) an extension to the date of payment of any amount under
the Finance Documents;
(iii) a reduction in the amount of any payment of principal,
interest, fees or commission payable;
(iv) an increase in or an extension of any Loan;
(v) a change to the Borrower or the Guarantor;
(vi) any provision which expressly requires the consent of all
Lenders; or
(vii) Clause 24 (Conduct of Business by the Finance Parties),
Clause 21 (Changes to the Lenders) or this Clause 32.
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations
of the Agent may not be effected without the consent of the Agent.
33. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts, and
this has the same effect as if the signatures on the counterparts were
on a single copy of the Finance Document.
-76-
33.1 Servicing
(a) The Borrower covenants to maintain or cause the servicing of the
Collateral to be maintained in conformity with accepted and
prudent servicing practices in the industry for the same type of
collateral as the Collateral and in a manner at least equal in
quality to the servicing the Borrower provides for mortgage loans,
mezzanine loans and equity interests which it owns. In the event
that the preceding language is interpreted as constituting one or
more servicing contracts, each such servicing contract shall
terminate automatically upon the earliest of (i) an Event of
Default; or (ii) the transfer of servicing approved by the
Borrower.
(b) If the Collateral is serviced by the Borrower, (i) the Borrower
agrees and acknowledges that the Security Trustee is the assignee
by way of security of all servicing records, including but not
limited to any and all servicing agreements, files, documents,
records, data bases, computer tapes, copies of computer tapes,
proof of insurance coverage, insurance policies, appraisals, other
closing documentation, payment history records, and any other
records relating to or evidencing the servicing of Collateral (the
"Servicing Records"). The Borrower covenants to safeguard such
Servicing Records and to deliver them promptly to the Lender or
its designee (including the Custodian) at the Security Trustee's
request.
(c) If the Collateral is serviced by a third party servicer (such
third party servicer, "the Servicer"), the Borrower (i) shall
provide a copy of the servicing agreement to the Security Trustee
and the Agent, which shall be in form and substance acceptable to
the Agent, together with all addendums thereto (collectively, the
"Servicing Agreement"); and (ii) shall provide a Servicer Notice
to the Servicer substantially in the form of Schedule 16 (Servicer
Notice) (a "Servicer Notice") and shall cause the Servicer to
acknowledge and agree to the same. Any successor or assignee of a
Servicer shall be approved in writing by the Agent and shall
acknowledge and agree to a Servicer Notice prior to such
successor's assumption of servicing obligations with respect to
any or all of the Collateral.
(d) If the servicer of the Collateral is the Borrower or the Servicer
is an Affiliate of the Borrower, the Borrower shall provide to the
Agent and the Security Trustee a letter from the Borrower or the
Servicer, as the case may be, to the effect that upon the
occurrence and during the continuance of an Event of Default, the
Security Trustee may terminate any Servicing Agreement and in any
event transfer servicing to the Security Trustee's designee, at no
cost or expense to the Security Trustee, it being agreed that the
Borrower will pay any and all fees required to terminate the
Servicing Agreement and to effectuate the transfer of servicing to
the designee of the Security Trustee.
(e) In the event the Borrower or its Affiliate is servicing the
Collateral, the Borrower shall permit the Security Trustee and the
Agent, upon advance written notice to the Borrower (unless a
Default or Event of Default shall have occurred and be continuing,
in which case no notice shall be required), from time to time to
inspect the Borrower's or its Affiliate's servicing facilities, as
the case may be, for the purpose of satisfying the Security
Trustee and the Agent that the Borrower or its Affiliate, as the
case may be, has the ability to service the Collateral as provided
in this Agreement.
-77-
(f) Irrespective of whether the Servicer is the Borrower or a third
party servicer, the Borrower undertakes to procure that any monies
received in respect of or derived from the Collateral will be paid
forthwith into a Borrower Bank Account.
33.2 Periodic Due Diligence Review
The Borrower acknowledges that the Agent and the Security Trustee has
the right to perform continuing due diligence reviews (a "Due Diligence
Review") with respect to the Collateral and the manner in which they
were originated, for the purposes of verifying compliance with the
representations, warranties and specifications made hereunder, or
otherwise, and the Borrower agrees that upon reasonable (but no less
than five (5) Business Days) prior notice to the Borrower (unless a
Default or Event of Default shall have occurred and be continuing, in
which case no notice shall be required), the Agent and the Security
Trustee or its authorised representatives will be permitted during
normal business hours to examine, inspect, and make copies and extracts
of, the Collateral Files and any and all documents, records, agreements,
instruments or information relating to such Collateral in the possession
or under the control of the Borrower and/or the Custodian. The Borrower
also shall make available to the Agent and the Security Trustee a
knowledgeable financial or accounting officer for the purpose of
answering questions respecting the Collateral Files and the Collateral.
Without limiting the generality of the foregoing, the Borrower
acknowledges that the Lenders may make the Loans to the Borrower based
solely upon the information provided by the Borrower to the Agent and
the representations, warranties and covenants contained herein, and that
the Agent, at its option, has the right at any time to conduct a partial
or complete due diligence review on some or all of the Collateral Files
securing the Secured Obligations, including without limitation ordering
new credit reports and new Appraisals from a valuer and in a form each
reasonably acceptable to the Borrower on the related Encumbered
Properties and otherwise re-generating the information used to originate
such Eligible Collateral. The Agent may underwrite the Eligible
Collateral itself or engage a mutually agreed upon third party
underwriter to perform such underwriting. The Borrower agrees to
cooperate with the Agent and any third party underwriter in connection
with such underwriting, including, but not limited to, providing the
Agent and any third party underwriter with access to any and all
documents, records, agreements, instruments or information relating to
the Eligible Collateral in the possession, or under the control, of the
Borrower. The Borrower further agrees that the Borrower shall reimburse
the Agent and the Security Trustee for any and all out-of-pocket costs
and expenses incurred by the Agent and the Security Trustee in
connection with the their respective activities pursuant to this Clause
33.2. Provided that the Borrower shall not reimburse the Agent in
respect of any Due Diligence Review carried out in respect of the
origination of any item of Collateral, sourced or provided by MS & Co.
33.3 Disclaimers
Each determination by the Agent of the Asset Value of one or more items
of Eligible Collateral or the communication to the Borrower of any other
information pertaining to Asset Value under this Agreement shall be
subject to the following disclaimers:
(a) the Agent has assumed and relied upon, with the Borrower's consent
and without independent verification, the accuracy and
completeness of the information provided by the Borrower and
reviewed by the Agent. The Agent has not made any independent
inquiry of any aspect of the subject items of Eligible Collateral
or collateral underlying such item of Eligible Collateral or of
the other assets or
-78-
liabilities or creditworthiness of any Collateral Obligor. The
Agent's view is based on economic, market and other conditions as
in effect on, and the information made available to the Agent as
at, the date of any such determination or communication of
information, and such view may change at any time without prior
notice to the Borrower.
(b) Asset Value determinations and other information provided to the
Borrower constitute a statement of the Agent's view of the value
of one or more assets at a particular point in time and neither
(i) constitute a bid for a particular trade, (ii) indicate a
willingness on the part of the Agent or any Affiliate thereof to
make such a bid, nor (iii) reflect a valuation for substantially
similar assets at the same or another point in time, or for the
same assets at another point in time.
(c) Asset Value determinations and other information provided to the
Borrower do not necessarily reflect the Agent's internal
bookkeeping or theoretical model-based valuations of the subject
items of Eligible Collateral or substantially similar assets.
(d) Asset Value determinations and other information provided to the
Borrower may vary significantly from valuation determinations and
other information which may be obtained from other sources.
(e) Asset Value determinations and other information provided to the
Borrower are provided for information purposes only in furtherance
of the provisions of this Agreement, and are not an offer to enter
into, transfer and assign, or terminate any transaction.
(f) Asset Value determinations and other information provided to the
Borrower are communicated to the Borrower solely for its use and
may not be relied upon by any other person and may not be
disclosed or referred to publicly or to any third party without
the prior written consent of the Agent, which consent the Agent
may withhold or delay in its sole and absolute discretion.
(g) the Agent makes no representations or warranties with respect to
any Asset Value determinations or other information provided to
the Borrower, the Agent nor the Lender shall be liable for any
incidental or consequential damages arising out of any inaccuracy
in such valuation determinations and other information provided to
the Borrower, including as a result of any act of gross negligence
or breach of any warranty.
(h) Valuation indications and other information provided to the
Borrower in connection with Clause 5 (Procedure for Loans) are
only indicative of the Asset Value of the subject item of Eligible
Collateral submitted to the Agent for consideration thereunder,
and may change without notice to the Borrower prior to, or
subsequent to, the pledge by the Borrower of such item of Eligible
Collateral pursuant to Clause 5 (Procedure for Loans). No
indication is provided as to the Agent's expectation of the future
value of such item of Eligible Collateral.
(i) Valuation indications and other information provided to the
Borrower in connection Clause 5 (Procedure for Loans) are to be
used by the Borrower for the sole purpose
-79-
of determining whether to proceed in accordance with Clause 5
(Procedure for Loans) and for no other purpose.
34. ENTIRE AGREEMENT
This Agreement and any document referred to in this Agreement constitute
the entire agreement and understanding between the parties relating to
the subject matter of this Agreement and supersede any previous
agreements between the Parties relating to the subject matter of this
Agreement.
-80-
SECTION 11
GOVERNING LAW AND ENFORCEMENT
35. GOVERNING LAW
This Agreement is governed by English law.
36. ENFORCEMENT
36.1 Limited Recourse
(a) Neither the Security Trustee or any Secured Party or any of the
other parties hereto (nor any person acting on their behalf) shall
be entitled at any time to institute against the Borrower, or join
in any institution against the Borrower, of any bankruptcy,
administration, monitoring, reorganisation, controlled management,
arrangement, insolvency, examinership, winding up or liquidation
proceedings or similar insolvency proceedings under any applicable
bankruptcy or similar law in connection with any obligation of the
Borrower under any Finance Document, save for lodging claims and
exercising voting and all other rights available to creditors in
the liquidation, winding-up, examinership or other insolvency or
reorganisation proceedings of the Borrower which is initiated by
another party or taking proceedings to obtain a declaration or
judgment as to the obligation of the Borrower and provided that
the Security Trustee or any Secured Party or any of the other
parties hereto may appoint a receiver pursuant to the Law of
Property Act, 1925 or the Conveyancing and Law of Property Act,
1881 of Ireland (as applicable) over any of the Borrower's assets
if entitled to do so in accordance with and pursuant to this
Debenture.
(b) The Security Trustee each of the Secured Parties and the other
parties hereto hereby agree that they shall have recourse in
respect of any claim against the Borrower only to the assets of
the Borrower (provided always that this clause 36.1(b) shall in no
way restrict or diminish the rights of a Finance Party under the
Guarantee which shall remain in full force and effect
notwithstanding that the recourse against the Borrower hereunder
is so limited). In furtherance of the foregoing sentence, no
recourse shall be had for the payment or performance of any
obligation or liability hereunder or under any Finance Document or
any claim based thereon against any director, officer or
independent contractor of the Borrower except in the case of gross
negligence or fraud on the part of such a person or in the event
of statutory liability arising as a result of breach of law by
that person.
36.2 Jurisdiction
(a) The courts of England have non-exclusive jurisdiction to settle
any dispute arising out of or in connection with this Agreement
(including a dispute regarding the existence, validity or
termination of this Agreement) (a "Dispute").
(b) The Parties agree that the courts of England are the most
appropriate and convenient courts to settle Disputes and
accordingly no Party will argue to the contrary.
(c) This Clause 36.12 is for the benefit of the Finance Parties only.
As a result, no Finance Party shall be prevented from taking
proceedings relating to a Dispute in any
-81-
other courts with jurisdiction. To the extent allowed by law, the
Finance Parties may take concurrent proceedings in any number of
jurisdictions.
36.3 Service of process
Without prejudice to any other mode of service allowed under any
relevant law, each Obligor (other than an Obligor incorporated in
England and Wales):
(a) irrevocably appoints Dechert LLP, (Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇)
counsel to the Borrower and Guarantor as its agent for service of
process in relation to any proceedings before the English courts
in connection with any Finance Document; and
(b) agrees that failure by an agent for service of process to notify
the relevant Obligor of the process will not invalidate the
proceedings concerned.
THIS AGREEMENT HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING OF THIS
AGREEMENT.
-82-
SCHEDULE 1
THE ORIGINAL PARTIES
Part I
The Obligors
Name of Borrower Registration number (or equivalent, if any)
AHR CAPITAL MS LIMITED 411989 (IRELAND)
Name of Guarantor Registration number (or equivalent, if any)
ANTHRACITE CAPITAL, INC. N/A
-83-
Part II
The Initial Lender
Name of Initial Lender Maximum Credit
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK $300,000,000
-84-
SCHEDULE 2
CONDITIONS PRECEDENT
Part I
Conditions precedent to First Loan under this Agreement
1. Obligors
(a) The Finance Documents, duly executed and delivered by each
relevant Obligor.
(b) A copy of the constitutional documents of each Obligor.
(c) A copy of a resolution of the board of directors of each Obligor:
(i) approving the terms of, and the transactions contemplated
by, the Finance Documents to which it is a party and
resolving that it execute the Finance Documents to which it
is a party;
(ii) authorising a specified person or persons to execute the
Finance Documents to which it is a party on its behalf; and
(iii) authorising a specified person or persons, on its behalf,
to sign and/or despatch all documents and notices
(including, if relevant, any Request for Borrowing) to be
signed and/or despatched by it under or in connection with
the Finance Documents to which it is a party.
(d) A specimen of the signature of each person authorised by the
resolution referred to in paragraph (b) above.
(e) A certificate of each Obligor (signed by an officer of each
Obligor) confirming that borrowing or guaranteeing, as
appropriate, the Total Maximum Credit would not cause any
borrowing, guaranteeing or similar limit binding on such Obligor
to be exceeded.
(f) A certificate of an authorised signatory of each relevant Obligor
certifying that each copy document relating to it specified in
this Schedule 2 is correct, complete and in full force and effect
as at a date no earlier than the date of this Agreement.
2. Legal opinions
(a) A legal opinion of Dechert LLP, legal advisers to the Borrower in
England, substantially in the form distributed prior to signing
this Agreement.
(b) If an Obligor is incorporated in a jurisdiction other than England
and Wales, a legal opinion of the legal advisers to such Obligor
in the relevant jurisdiction, substantially in the form
distributed prior to signing this Agreement.
-85-
3. Other documents and evidence
(a) Evidence that any agent for service of process referred to in
Clause 36.3 (Service of Process), if not an Obligor, and Clause 32
(Service of Process) of the Debenture has accepted its
appointment.
(b) A copy of any other Authorisation or other document, opinion or
assurance which the Agent considers to be necessary or desirable
(if it has notified the Borrower accordingly) in connection with
the entry into and performance of the transactions contemplated by
any Finance Document or for the validity and enforceability of any
Finance Document.
(c) Evidence that the fees, costs and expenses then due from the
Borrower pursuant to Clause 11 (Fees) and Clause 15 (Costs and
expenses) have been paid or will be paid by the first Funding
Date.
(d) A Trust Receipt, substantially in the form of Schedule 2 of the
Custodial Agreement, dated the Funding Date, from the Custodian,
duly completed, with a Collateral Schedule and Exception Report
attached thereto;
(e) Any Servicing Agreement, certified as a true, correct and complete
copy of the original, together with a fully executed Servicer
Notice and, if the Servicer is the Borrower or an Affiliate of the
Borrower, the letter of the applicable Servicer consenting to
termination of such Servicing Agreement upon the occurrence and
during the continuance of an Event of Default;
(f) Any documents required to be filed, registered or recorded in
order to create, in favour of the Security Trustee, a perfected,
first priority security interest in the Collateral, subject to no
security interest other than those created under the Finance
Documents, shall have been properly prepared and executed for
filing, registration or recording in each office in each
jurisdiction in which such filings, registrations and
recordation's are required to perfect such first priority security
interest;
(g) Evidence of payment of the Commitment Fee as contemplated by
Clause 11.1 (Commitment Fee); and
(h) Copies certified by the Borrower of all consents, licenses and
approvals, if any, required in connection with the execution,
delivery and performance by the Borrower of, and the validity and
enforceability of, the Finance Documents, which consents, licenses
and approvals shall be in full force and effect;
Part II
Conditions precedent to all Loans
(a) Both immediately prior to the execution of Finance Documents,
making of a Loan and also after giving effect thereto and to the
intended use thereof, the representations and warranties made by
the Borrower in this Agreement and the Schedules thereto and
elsewhere in each of the Finance Documents shall be true, correct
and complete on and as of the date of the making of such Loan in
all material respects with the same force and effect as if made on
and as of such date (or, if any such representation
-86-
or warranty is expressly stated to have been made as of a specific
date, as of such specific date) subject to exceptions thereto
shown on a schedule delivered with the certificate referenced in
the following sentence; provided, however, that the Lender shall
have the absolute right to deny the funding of a Loan as a result
of any disclosure in such certificate rendering any such
representations and warranties untrue or incorrect in any material
respect. The Agent shall have received an officer's certificate
signed by a Responsible Officer of the Borrower certifying as to
the truth, accuracy and completeness of the above, which
certificate shall specifically include a statement that the
Borrower is in compliance with all governmental licenses and
authorisations and is qualified to do business and in good
standing in all required jurisdictions;
(b) The aggregate outstanding principal amount of the proposed Loan
together with each other Loan shall not exceed the Borrowing Base;
(c) Subject to the Agent's right to perform one or more Due Diligence
Reviews pursuant to Clause 33.2 (Periodic Due Diligence Review),
the Agent shall have completed its due diligence review of the
Collateral Documents for the proposed Loan and such other
documents, records, agreements, instruments, encumbered properties
or information relating to the Eligible Collateral as the Agent in
its good faith discretion deems appropriate to review and such
review shall be satisfactory to the Agent in its sole good faith
discretion;
(d) The Agent shall have received from the Custodian a Collateral
Schedule and Exception Report with such Exceptions (as defined in
the Custodial Agreement) as are acceptable to the Agent in its
good faith discretion in respect of Eligible Collateral to be
pledged hereunder on such Business Day;
(e) The Lender shall have received a note of all fees and expenses of
counsel to the Agent and the Lenders as contemplated by Clause 15
(Costs and Expenses) which amount, at the Agent and the Lenders'
option, may be netted from any Loan advanced under this Agreement;
(f) None of the following shall have occurred and/or be continuing:
(i) an event or events shall have occurred resulting in the
effective absence of a comparable "lending market" for
financing debt obligations secured by mortgage loans or
securities or an event or events shall have occurred
resulting in the Lenders not being able to finance any
Collateral Loans through the "lending market" with
traditional counterparties at rates which would have been
reasonable prior to the occurrence of such event or events;
or
(ii) an event or events shall have occurred resulting in the
effective absence of a "securities market" for securities
backed by mortgage loans or an event or events shall have
occurred resulting in the Lender not being able to sell
securities backed by mortgage loans at prices which would
have been reasonable prior to such event or events.
-87-
(g) Any Interest Rate Protection Agreements are maintained with ▇▇▇▇▇▇
▇▇▇▇▇▇▇ Capital Services, Inc. and have been assigned to the
Security Trustee by way of security.
(h) A copy of any other Authorisation or other document, opinion or
assurance which the Agent considers to be necessary or desirable
(if it has notified the Borrower accordingly) in connection with
the entry into and performance of the transactions contemplated by
any Finance Document or for the validity and enforceability of any
Finance Document.
The Request for Borrowing by the Borrower hereunder shall constitute a
certification by the Borrower that all the conditions set forth in this Part II
of Schedule 2 (other than sub-clause (f)) have been satisfied (both as of the
date of such notice, request or confirmation and as of the date of such
borrowing).
Part III
Additional Requirements
(a) The Borrower and the Agent recognise and agree that the categories
of collateral and defined herein as categories of assets which may
be submitted by the Borrower to the Agent for review by the Agent
as Eligible Collateral hereunder are general in nature and that
the full scope of such Collateral categories may be unknown.
Consequently, the appropriate requirements are not fully known for
(i) the documents to be provided by the Borrower for underwriting
and due diligence review by the Agent and (ii) submittals by the
Borrower in order to create and perfect a first priority security
interest in favour of the Security Trustee in the Collateral.
Therefore, the Borrower and the Agent agree that, as a further
condition precedent to funding a Loan in respect of any Collateral
hereunder, the Borrower shall have made such additional
representations and warranties and have delivered to the Agent all
information and documents determined by the Agent in good faith to
be required for its underwriting and examination of such
Collateral and for the granting and perfection of a first priority
security interest therein in favour of the Security Trustee.
(b) Without limiting the generality of the foregoing of Part III (a),
the Borrower shall execute and deliver all documents necessary for
the granting of a first priority security interest in any
Collateral in favour of the Security Trustee determined by the
Agent to be Eligible Collateral hereunder, including without
limitation (i) all instruments evidencing Indebtedness payable to
the Borrower or pledged to the Borrower as security for such
Indebtedness, (ii) all instruments granting or perfecting a
security interest for the benefit of the Borrower or pledged to
the Borrower as security for Indebtedness held by Borrower
(including, without limitation, collateral assignments, pledge
agreements), (iii) all instruments evidencing an interest in an
entity otherwise held by the Borrower as security for Indebtedness
held by Borrower, (iv) all instruments guaranteeing the repayment
of indebtedness owed to the Borrower or held by the Borrower and
(v) all agreements among holders of debt or equity interests
providing for a priority among such parties of interests in
related assets forming the basis of an item of Collateral.
-88-
Part IV
Conditions Precedent to the Amendment and Restatement
(a) This amended and restated facility agreement duly executed and
delivered by each relevant Obligor.
(b) A copy of the constitutional documents of the Borrower.
(c) A copy of a resolution of the board of directors of the Borrower:
(i) approving the terms of, and the transactions contemplated
by, the Finance Documents to which it is a party and
resolving that it execute the Finance Documents to which it
is a party;
(ii) authorising a specified person or persons to execute the
Finance Documents to which it is a party on its behalf; and
(iii) authorising a specified person or persons, on its behalf,
to sign and/or despatch all documents and notices
(including, if relevant, any Request for Borrowing) to be
signed and/or despatched by it under or in connection with
the Finance Documents to which it is a party.
(d) A specimen of the signature of each person authorised by the
resolution referred to in paragraph (b) above.
(e) A certificate of the Borrower (signed by an officer of the
Borrower) confirming that borrowing the Total Maximum Credit would
not cause any borrowing, guaranteeing or similar limit binding on
the Borrower be exceeded.
(f) A certificate of an authorised signatory of the Borrower
certifying that each copy document relating to it specified in
this Part IV of Schedule 2 is correct, complete and in full force
and effect as at a date no earlier than the date of this
Agreement.
(g) A legal opinion of ▇▇▇▇▇▇▇▇▇▇▇ and ▇▇▇▇▇▇▇▇ ▇▇▇▇▇▇▇ ▇▇▇▇▇ ▇▇▇▇▇
LLP, legal advisers to the Borrower in England, substantially in
the form distributed prior to signing this Agreement.
(h) A legal opinion of ▇▇▇▇▇▇ ▇▇▇, legal advisers to the Borrower in
Ireland in the form distributed prior to signing this Agreement.
(i) Evidence that the fees, costs and expenses then due from the
Borrower pursuant to Clause 1.7 (Further Commitment Fee) and
Clause 15 (Costs and expenses) have been paid or will be paid by
the first Funding Date.
(j) Copies certified by the Borrower of all consents, licenses and
approvals, if any, required in connection with the execution,
delivery and performance by the Borrower of, and the validity and
enforceability of, the Finance Documents, which consents, licenses
and approvals shall be in full force and effect.
(k) A copy of any other Authorisation or other document, opinion or
assurance which the Agent considers to be necessary or desirable
(if it has notified the Borrower accordingly) in connection with
the entry into and performance of the transactions
-89-
contemplated by any Finance Document or for the validity and
enforceability of any Finance Document.
-90-
SCHEDULE 3
REQUEST FOR BORROWING
Request for Borrowing under the Multi Currency Revolving Facility, dated 20 July
2007 (the "Agreement"), among AHR Capital MS Limited, the ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Mortgage Servicing Ltd.
the Agent: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK
the Borrower: AHR CAPITAL MS LIMITED
Requested Fund Date: _____________________________
Transmission Date: _____________________________
Transmission Time: _____________________________
Type of Funding: Table-Funded:________________
Non-Table-Funded:____________
Property Name: _____________________________
Location: _____________________________
Type of Eligible Collateral:
[B Note] [Mezzanine Loan]
[Mortgage Loan]
[Preferred Equity Interests] See Attached
Eligible Collateral to be Pledged: ------------
Unpaid Principal Balance: (pound)/(euro)/(Y)___________
Occupancy: _____________________________
Interest Rate: Fixed_______________________%
Floating____________________%
- Adjustment Period(s):______
Current Rate________________%
Original Amortisation Term: _____________________________
Current Amortisation Term: _____________________________
Maturity Date: _____________________________
Security Position: _____________________________
Acquisition Cost: _____________________________
Property Type: _____________________________
Number of Units/Square Ft.: _____________________________
Original Principal Loan Amount: (pound)/(euro)/(Y)___________
Acquisition/Origination Date: _____________________________
Payment Status: _____________________________
Underwritable Cash Flow: _____________________________
Paid Through Date: _____________________________
Advance Rate: _____________________________
Spread: _____________________________
Type of Optional Currency: _____________________________
Requested Wire Amount: (pound)/(euro)/(Y)___________
Wire Instructions: See attached
Bank Account: _____________________________
Requested by: _____________________________
AHR CAPITAL MS LIMITED _____________________________
-91-
By:________________________________
Name:
Title:
-92-
SCHEDULE 4
MANDATORY COST FORMULAE
1. The Mandatory Cost is an addition to the interest rate to compensate
Lenders for the cost of compliance with (a) the requirements of the Bank
of England and/or the Financial Services Authority (or, in either case,
any other authority which replaces all or any of its functions) or (b)
the requirements of the European Central Bank.
2. On the first day of each Interest Period (or as soon as possible
thereafter) the Agent shall calculate, as a percentage rate, a rate (the
"Additional Cost Rate") for each Lender, in accordance with the
paragraphs set out below. The Mandatory Cost will be calculated by the
Agent as a weighted average of the Lenders' Additional Cost Rates
(weighted in proportion to the percentage participation of each Lender
in the relevant Loan) and will be expressed as a percentage rate per
annum.
3. The Additional Cost Rate for any Lender lending from a Facility Office
in a Participating Member State will be the percentage notified by that
the Lender to the Agent. This percentage will be certified by that the
Lender in its notice to the Agent to be its reasonable determination of
the cost (expressed as a percentage of that the Lender's participation
in all Loans made from that Facility Office) of complying with the
minimum reserve requirements of the European Central Bank in respect of
loans made from that Facility Office.
4. The Additional Cost Rate for any Lender lending from a Facility Office
in the United Kingdom will be calculated by the Agent as follows:
(a) in relation to a sterling Loan:
AB + C(B-D) + E x 0.01
---------------------- per cent. per annum
100-(A+C)
(b) in relation to a Loan in any currency other than sterling:
E x 0.01
---------- per cent. per annum
300
Where:
A is the percentage of Eligible Liabilities (assuming these to be
in excess of any stated minimum) which that the Lender is from
time to time required to maintain as an interest free cash ratio
deposit with the Bank of England to comply with cash ratio
requirements.
B is the percentage rate of interest (excluding the Margin and the
Mandatory Cost and, if the Loan is an Unpaid Sum, the additional
rate of interest specified in paragraph (a) of Clause 9.3
(Default interest)) payable for the relevant Interest Period on
the Loan.
C is the percentage (if any) of Eligible Liabilities which that the
Lender is required from time to time to maintain as interest
bearing Special Deposits with the Bank of England.
D is the percentage rate per annum payable by the Bank of England
to the Agent on interest bearing Special Deposits.
-93-
E is designed to compensate Lenders for amounts payable under the
Fees Rules and is calculated by the Agent as being the average of
the most recent rates of charge supplied by the Reference Banks
to the Agent pursuant to paragraph 7 below and expressed in
pounds per (pound)1,000,000.
5. For the purposes of this Schedule:
(a) "Eligible Liabilities" and "Special Deposits" have the meanings
given to them from time to time under or pursuant to the Bank of
England Act 1998 or (as may be appropriate) by the Bank of
England;
(b) "Fees Rules" means the rules on periodic fees contained in the FSA
Supervision Manual or such other law or regulation as may be in
force from time to time in respect of the payment of fees for the
acceptance of deposits;
(c) "Fee Tariffs" means the fee tariffs specified in the Fees Rules
under the activity group A.1 Deposit acceptors (ignoring any
minimum fee or zero rated fee required pursuant to the Fees Rules
but taking into account any applicable discount rate); and
(d) "Tariff Base" has the meaning given to it in, and will be
calculated in accordance with, the Fees Rules.
6. In application of the above formulae, A, B, C and D will be included in
the formulae as percentages (i.e. 5 per cent. will be included in the
formula as 5 and not as 0.05). A negative result obtained by subtracting
D from B shall be taken as zero. The resulting figures shall be rounded
to four decimal places.
7. If requested by the Agent, each Reference Bank shall, as soon as
practicable after publication by the Financial Services Authority,
supply to the Agent, the rate of charge payable by that Reference Bank
to the Financial Services Authority pursuant to the Fees Rules in
respect of the relevant financial year of the Financial Services
Authority (calculated for this purpose by that Reference Bank as being
the average of the Fee Tariffs applicable to that Reference Bank for
that financial year) and expressed in pounds per (pound)1,000,000 of the
Tariff Base of that Reference Bank.
8. Each Lender shall supply any information required by the Agent for the
purpose of calculating its Additional Cost Rate. In particular, but
without limitation, each Lender shall supply the following information
on or prior to the date on which it becomes a Lender:
(a) the jurisdiction of its Facility Office; and
(b) any other information that the Agent may reasonably require for
such purpose.
Each Lender shall promptly notify the Agent of any change to the
information provided by it pursuant to this paragraph.
9. The percentages of each Lender for the purpose of A and C above and
the rates of charge of each Reference Bank for the purpose of E above
shall be determined by the Agent Based upon the information supplied
to it pursuant to paragraphs 7 and 8 above and on the assumption
that, unless a Lender notifies the Agent to the contrary, each
Lender's obligations in relation to cash
-94-
ratio deposits and Special Deposits are the same as those of a
typical bank from its jurisdiction of incorporation with a
Facility Office in the same jurisdiction as its Facility Office.
10. The Agent shall have no liability to any person if such determination
results in an Additional Cost Rate which over or under compensates any
Lender and shall be entitled to assume that the information provided by
any Lender or Reference Bank pursuant to paragraphs 3, 7 and 8 above is
true and correct in all respects.
11. The Agent shall distribute the additional amounts received as a result
of the Mandatory Cost to the Lenders on the basis of the Additional Cost
Rate for each Lender based on the information provided by each Lender
and each Reference Bank pursuant to paragraphs 3, 7 and 8 above.
12. Any determination by the Agent pursuant to this Schedule in relation to
a formula, the Mandatory Cost, an Additional Cost Rate or any amount
payable to a Lender shall, in the absence of manifest error, be
conclusive and binding on all Parties.
13. The Agent may from time to time, after consultation with the Borrower
and the Lenders, determine and notify to all Parties any amendments
which are required to be made to this Schedule in order to comply with
any change in law, regulation or any requirements from time to time
imposed by the Bank of England, the Financial Services Authority or the
European Central Bank (or, in any case, any other authority which
replaces all or any of its functions) and any such determination shall,
in the absence of manifest error, be conclusive and binding on all
Parties.
-95-
SCHEDULE 5
FORM OF TRANSFER CERTIFICATE
To: [ ] as the Agent
From: [The Existing Lender] (the "Existing Lender") and
[The New Lender] (the "New Lender")
Dated:
[the Borrower] - [ ] Facility Agreement
dated [ ] (the "Agreement")
1. We refer to the Agreement. This is a Transfer Certificate. Terms
defined in the Agreement have the same meaning in this Transfer
Certificate unless given a different meaning in this Transfer
Certificate.
2. We refer to Clause 21.4 (Procedure for transfer):
(a) The Existing Lender and The New Lender agree to The Existing
Lender transferring to The New Lender by novation all or part of
The Existing Lender's Maximum Credit rights and obligations
referred to in the Schedule in accordance with Clause 21.4
(Procedure for transfer).
(b) The proposed Transfer Date is [ ].
(c) The Facility Office and address, fax number and attention details
for notices of The New Lender for the purposes of Clause 28.2
(Addresses) are set out in the Schedule.
3. The New Lender expressly acknowledges the limitations on The Existing
Lender's obligations set out in paragraph (c) of Clause 21.3
(Limitation of responsibility of Existing Lenders).
4. The New Lender hereby represents and warrants as of the date of this
Transfer Certificate that the person beneficially entitled to interest
payable to that New Lender in respect of an advance under a Finance
Document falls within paragraph [o] of the definition of Qualifying
Lender set out in Clause 12.1 (Definitions) of the Agreement (and
insofar as the New Lender is a Qualifying Lender by virtue of paragraph
(d) of that definition, the notifications referred to in sub-paragraph
(iii) of paragraph (d) of that definition, or copies of them as
appropriate, are attached to this Transfer Certificate).
[4/5] This Transfer Certificate may be executed in any number of counterparts
and this has the same effect as if the signatures on the counterparts
were on a single copy of this Transfer Certificate.
[5/6] This Transfer Certificate is governed by English law.
THE SCHEDULE
Maximum Credit/rights and obligations to be transferred
[insert relevant details]
[Facility Office address, fax number and attention details
for notices and account details for payments,]
-96-
[Existing Lender] [New Lender]
By: By:
This Transfer Certificate is accepted by the Agent and the Transfer Date
is confirmed as [ ].
[the Agent]
By:
-97-
SCHEDULE 6
[RESERVED]
-98-
SCHEDULE 7
[RESERVED]
-99-
SCHEDULE 8
LMA FORM OF CONFIDENTIALITY UNDERTAKING
CONFIDENTIALITY UNDERTAKING
THIS MASTER CONFIDENTIALITY UNDERTAKING is dated [o] and made between:
(1) [o]; and
(2) [o].
Either party (in this capacity the "Purchaser") may from time to time consider
acquiring an interest from the other party (in this capacity the "Seller") in
certain Agreements (each an "Acquisition"). In consideration of the Seller
agreeing to make available to the Purchaser certain information in relation to
each Acquisition it is agreed as follows:
1. Confidentiality Undertaking
The Purchaser undertakes in relation to each Acquisition made or to be
made by it (a) to keep the Confidential Information which the Seller
supplies to the Purchaser in relation to that Acquisition confidential
and not to disclose it to anyone except as provided for by paragraph 2
below and to ensure that the Confidential Information which the Seller
supplies to the Purchaser in relation to that Acquisition is protected
with security measures and a degree of care that would apply to the
Purchaser's own confidential information, (b) to use the Confidential
Information which the Seller supplies to the Purchaser in relation to
that Acquisition only for the Permitted Purpose, (c) to use all
reasonable endeavours to ensure that any person to whom the Purchaser
passes any Confidential Information which the Seller supplies to the
Purchaser in relation to that Acquisition (unless disclosed under
paragraph 2(c) below) acknowledges and complies with the provisions of
this undertaking as if that person were also a party to it, and (d) not
to make enquiries of any member of the relevant Group or any of their
officers, directors, employees or professional advisers relating
directly or indirectly to that Acquisition.
2. Permitted Disclosure
The Purchaser may disclose Confidential Information which the Seller
supplies to the Purchaser in relation to each Acquisition made or to be
made by it:
(a) to members of the Purchaser Group and their officers, directors,
employees and professional advisers to the extent necessary for
the Permitted Purpose and to any auditors of members of the
Purchaser Group;
(b) subject to the requirements of the relevant Agreement, to any
person to (or through) whom the Purchaser assigns or transfers (or
may potentially assign or transfer) all or any of the rights,
benefits and obligations which the Purchaser may acquire under
that Agreement or with (or through) whom the Purchaser enters into
(or may potentially enter into) any sub-participation in relation
to, or any other transaction under which payments are to be made
by reference to, that Agreement or the relevant Borrower or
-100-
any member of the relevant Group in each case so long as that
person has delivered an undertaking to the Purchaser in equivalent
form to this undertaking; and
(c) (i) where requested or required by any court of competent
jurisdiction or any competent judicial, governmental, supervisory
or regulatory body, (ii) where required by the rules of any stock
exchange on which the shares or other securities of any member of
the Purchaser Group are listed or (iii) where required by the laws
or regulations of any country with jurisdiction over the affairs
of any member of the Purchaser Group.
3. Notification of Required or Unauthorised Disclosure
The Purchaser agrees in relation to each Acquisition made or to be made
by it (to the extent permitted by law) to inform the Seller of the full
circumstances of any disclosure under paragraph 2 (c) or upon becoming
aware that any Confidential Information relating to that Acquisition has
been disclosed in breach of this undertaking.
4. Return of Copies
If the Seller so requests in writing, the Purchaser shall return all
Confidential Information supplied by the Seller to the Purchaser in
relation to any Acquisition made or to be made by the Purchaser and in
respect of which the Seller has made such a request and destroy or
permanently erase all copies of such Confidential Information made by
the Purchaser and use all reasonable endeavours to ensure that anyone to
whom the Purchaser has supplied any such Confidential Information
destroys or permanently erases such Confidential Information and any
copies made by them, in each case save to the extent that the Purchaser
or the recipients are required to retain any such Confidential
Information by any applicable law, rule or regulation or by any
competent judicial, governmental, supervisory or regulatory body or in
accordance with internal policy, or where the Confidential Information
has been disclosed under paragraph 2 (c) above.
5. Continuing Obligations
The obligations in this undertaking are continuing and, in particular,
shall survive the termination of any discussions or negotiations between
the Seller and the Purchaser in relation to each Acquisition made or to
be made by it. Notwithstanding the previous sentence, the obligations in
this undertaking shall cease in relation to that Acquisition only (a) if
the Purchaser becomes a party to or otherwise acquires (by assignment or
sub-participation) an interest, direct or indirect, in the Agreement
which was the subject of that Acquisition or (b) twelve months after the
Purchaser has returned all Confidential Information supplied to it by
the Seller in relation to that Acquisition and destroyed or permanently
erased all copies of such Confidential Information made by the Purchaser
(other than any such Confidential Information or copies which have been
disclosed under paragraph 2 above (other than sub-paragraph 2(a)) or
which, pursuant to paragraph 4 above, are not required to be returned or
destroyed).
-101-
6. No Representation; Consequences of Breach, etc
The Purchaser acknowledges and agrees that, in relation to each
Acquisition made or to be made by it:
(a) neither the Seller, nor any member of the Group the subject of
that Acquisition nor any of the Seller's or the Group's respective
officers, employees or advisers (each a "Relevant Person") (i)
make any representation or warranty, express or implied, as to, or
assume any responsibility for, the accuracy, reliability or
completeness of any of the Confidential Information supplied by
the Seller to the Purchaser in relation to that Acquisition or any
other information supplied by the Seller or the assumptions on
which it is based or (ii) shall be under any obligation to update
or correct any inaccuracy in the Confidential Information supplied
by the Seller to the Purchaser in relation to that Acquisition or
any other information supplied by the Seller or be otherwise
liable to the Purchaser or any other person in respect of the
Confidential Information supplied by the Seller to the Purchaser
in relation to that Acquisition or any such information; and
(b) the Seller or members of the Group the subject of that Acquisition
may be irreparably harmed by the breach of the terms of this
undertaking and damages may not be an adequate remedy; each
Relevant Person may be granted an injunction or specific
performance for any threatened or actual breach of the provisions
of this undertaking by the Purchaser.
7. No Waiver; Amendments, etc
This undertaking sets out the full extent of the Purchaser's obligations
of confidentiality owed to the Seller in relation to the information the
subject of this undertaking. No failure or delay in exercising any
right, power or privilege hereunder will operate as a waiver thereof nor
will any single or partial exercise of any right, power or privilege
preclude any further exercise thereof or the exercise of any other
right, power or privileges hereunder. The terms of this undertaking and
the obligations of the Purchaser hereunder may only be amended or
modified by written agreement between the parties.
8. Inside Information
The Purchaser acknowledges that some or all of the Confidential
Information is or may be price-sensitive information and that the use of
such information may be regulated or prohibited by applicable
legislation relating to insider dealing and the Purchaser undertakes not
to use any Confidential Information for any unlawful purpose.
9. Nature of Undertakings
The undertakings given by the Purchaser in this undertaking are given to
the Seller and the relevant Borrower and each other member of the
relevant Group.
10. Third Party Rights
(a) Subject to this paragraph 10 and to paragraphs 6 and 9, a person
who is not a party to this undertaking has no right under the
Contracts (Rights of Third Parties) Act 1999 (the "Third Parties
Act") to enforce or to enjoy the benefit of any term of this
undertaking.
-102-
(b) The Relevant Persons may enjoy the benefit of the terms of
paragraphs 6 and 9 subject to and in accordance with this
paragraph 10 and the provisions of the Third Parties Act.
(c) The parties to this undertaking do not require the consent of the
Relevant Persons to rescind or vary this undertaking at any time.
11. Governing Law and Jurisdiction
(a) This undertaking is governed by English Law.
(b) The parties submit to the non-exclusive jurisdiction of the
English courts.
12. Definitions
In this undertaking terms defined in the relevant Agreement (as defined
below) shall, unless the context otherwise requires, have the same
meaning and:
"Agreement" means any credit agreement in which the Seller has an
interest and which requires the Seller to obtain from the Purchaser an
undertaking in or substantially in the form of this undertaking as a
condition to permitting disclosure by the Seller of certain information
to the Purchaser.
"Borrower" means, in relation to each Acquisition, the principal company
party to the relevant Agreement;
"Confidential Information" means, in relation to each Acquisition, any
information relating to the relevant Borrower, the relevant Group, the
relevant Agreement and/or that Acquisition provided to the Purchaser by
the Seller or any of its affiliates or advisers, in whatever form, and
includes information given orally and any document, electronic file or
any other way of representing or recording information which contains or
is derived or copied from such information but excludes information that
(a) is or becomes public knowledge other than as a direct or indirect
result of any breach of this undertaking by the Purchaser or (b) is
known by the Purchaser before the date the information is disclosed to
the Purchaser by the Seller or any of its affiliates or advisers or is
lawfully obtained by the Purchaser thereafter, other than from a source
which is connected with the relevant Group and which, in either case, as
far as the Purchaser is aware, has not been obtained in violation of,
and is not otherwise subject to, any obligation of confidentiality;
"Group" means, in relation to each Acquisition, the relevant Borrower
and each of its holding companies and subsidiaries and each subsidiary
of each of its holding companies (as each such term is defined in the
Companies Act 1985);
"Permitted Purpose" means, in relation to each Acquisition, considering
and evaluating whether to enter into that Acquisition; and
"Purchaser Group" means, in relation to each Acquisition, the Purchaser,
each of the Purchaser's holding companies and subsidiaries and each
subsidiary of each of the Purchasers holding companies (as each such
term is defined in the Companies Act 1985).
THIS UNDERTAKING HAS BEEN ENTERED INTO ON THE DATE STATED AT THE BEGINNING
OF THIS UNDERTAKING
-103-
SIGNATURES
[o]
By:
[o]
By:
-104-
SCHEDULE 9
[RESERVED]
-105-
SCHEDULE 10
PRICING MATRIX
MATRIX: B-NOTES AND MEZZANINE LOANS
LTV ADVANCE RATE INTEREST SPREAD
>71%, but <75% 65% 1.30 %
70% 1.40 %
75% 1.50 %
55% 1.50 %
60% 1.55 %
>76%, but <80% 65% 1.60 %
70% 1.70 %
50% 1.60 %
>81%, but <85% 60% 1.75 %
65% 1.85 %
70% 1.90 %
55% 1.90 %
>86%, but <90% 60% 2.00 %
65% 2.15 %
FIRST MORTGAGE LOANS 90% 0.75 %
CMBS
RATING
▇▇▇▇▇'▇ S&P
Baa2 BBB 85% 0.45 %
92% 0.50 %
Baa3 BBB- 85% 0.50 %
90% 0.60 %
Ba1 BB+ 80% 0.70 %
85% 0.75 %
Ba2 BB 75% 0.80 %
85% 0.90 %
Ba3 BB- 65% 1.00 %
80% 1.25 %
B1 B+ 50% 1.10 %
55% 1.25 %
-106-
B2 B 50% 1.20 %
55% 1.35 %
-107-
SCHEDULE 11
REPRESENTATIONS AND WARRANTIES RE: ELIGIBLE COLLATERAL
MORTGAGE LOAN REPRESENTATIONS AND WARRANTIES
--------------------------------------------
With respect to each Mortgage Loan, the Borrower represents and warrants on the
Funding Date of the relevant Mortgage Loan as follows, other than as set forth
in the exception report provided to the Agent in accordance with the Facility:
1. The information set forth in the Preliminary Due Diligence Package is,
so far as the Borrower is aware (having made all reasonable enquiries)
complete, true and correct in all material respects as of the relevant
Funding Date and is a complete and accurate list of all those documents
which are relevant for the purposes of the Mortgage Loan.
2. Each Mortgage Loan is a whole loan or a sub-participation interest in a
loan or a senior ranking interest in a loan. The Borrower has good title
to, and is the sole owner of each Mortgage Loan. The Borrower has full
right, power and authority to transfer and assign each of the Mortgage
Loans.
3. No scheduled payment of principal and interest under any Mortgage Loan
is 30 days or more past due beyond any applicable grace period, and, so
far as the Borrower is aware, no Mortgage Loan was 30 days or more
delinquent in the twelve-month period immediately preceding the Funding
Date of the relevant Mortgage Loan.
4. Each and any Custodial Identification Certificate delivered by or on
behalf of the Borrower to the Custodian is full and complete without
omission or defect in any material respect
5. Each Mortgage Loan constitutes a valid and binding obligation of, and is
enforceable against, the underlying borrower(s) (subject to any
non-recourse provisions in any of the origination documents and except
as any enforcement may be limited by any other laws relating to or
affecting the rights of creditors generally or by general principles of
equity);
6. The Borrower or the Security Trustee in respect of the relevant Mortgage
Loan has a good title to each Mortgage at law and all things necessary
to perfect the Borrower's or the security trustee in respect of the
relevant Mortgage Loan's title to each Mortgage have been or will be
duly completed within the appropriate time or are in the process of
being completed without undue delay.
7. The Borrower or the security trustee in respect of the relevant Mortgage
Loan is the legal owner (subject to necessary registrations or
recordings under the laws of the jurisdiction of the relevant Property)
and the Borrower is the beneficial owner of the rights of the mortgagee
and chargee under the Mortgages, free and clear of all encumbrances,
overriding interests (other than those to which each Property is
subject), claims and equities (including, without limitation, rights of
set-off or counterclaim).
8. The Borrower has not received and is not aware of any written notice of
any encumbrance materially and adversely affecting its title to a
Mortgage Loan.
-108-
9. So far as the Borrower is aware (having made all reasonable enquiries),
no Mortgage Loan has been waived, altered or modified in any material
respect since such Mortgage Loan was entered into except as set out in
the relevant loan documentation.
10. So far as the Borrower is aware, full and proper accounts, books and
records showing clearly all transactions, payments, receipts,
proceedings and notices relating to each Mortgage Loan have been kept
since the origination of the Mortgage Loan, and such records are, so far
as the Borrower is aware, complete, accurate and up to date in all
material respects.
11. No Mortgage Loan contains any obligation to make any further advances
which remains to be performed and no part of any advance pursuant to a
Mortgage Loan has been retained by the Borrower pending compliance by
the Borrower with any other condition.
12. The Borrower has not received any notice of the bankruptcy, liquidation,
receivership, Examinership or administration of any underlying borrower
or mortgagor.
13. Each Mortgage Loan is governed by the law of the jurisdiction in which
the relevant Property is located.
14. Each relevant Mortgage has been delivered for registration against the
underlying borrower(s) and mortgagor(s) according to the system for
registration under the law of the jurisdiction in which the relevant
Property is located.
15. The Borrower has not received any notice of any event of default under
the Mortgage Loans or Mortgages which has not been remedied, cured or
waived or of any event of default which with the giving of notice and/or
the expiration of any applicable grace period and/or making of any
determination, would constitute such a default, breach or violation.
16. No Mortgage Loan has been discharged, terminated, redeemed, cancelled,
rescinded or repudiated.
17. So far as the Borrower is aware, pursuant to the terms of each Mortgage
Loan, no underlying borrower or mortgagor is entitled to exercise any
right of set-off or counterclaim against the Borrower in respect of any
amount that is payable under a Mortgage Loan.
18. Each of the Mortgage Loans and (where the security is held under a
security trust) the beneficial interest in the relevant security trust
may be validly assigned both to the Borrower and by the Borrower to the
Security Trustee without restriction and no consent from the underlying
borrower or any mortgagor is required to any such assignment.
19. So far as the Borrower is aware, all applicable Mortgages recording
taxes and other filing fees have been paid in full or deposited with the
issuer of the title insurance policy issued in connection with the
Mortgage Loan for payment upon recordation of the relevant documents.
20. So far as the Borrower is aware, in respect of each Mortgage Loan,
the relevant mortgagor is required to make all payments without any
deduction for or on account of taxes, except if required to do so by
law. If any tax must be deducted from amounts paid or payable under a
Mortgage Loan (save where such obligation arises as a result of
voluntary action on the part of the Lender) then the relevant
mortgagor is obliged to pay additional amounts to the relevant
-109-
Lender so that such Lender receives a net amount equal to the full
amount it would have received had the payment not been subject to tax.
21. So far as the Borrower is aware, no Mortgage Loan is
cross-collateralised or cross-defaulted with any loan other than one or
more other Mortgage Loans.
22. So far as the Borrower is aware, none of the Mortgage Loans permits the
related Property to be encumbered by any lien or other security interest
junior to or of equal priority with the security of the related Mortgage
without the prior written consent of the holder thereof or the
satisfaction of debt service coverage or similar criteria specified
therein. To the Borrower's knowledge, none of the relevant Properties is
encumbered by any mortgage, charge, lien or other security interest
junior to the security of the related Mortgage.
23. So far as the Borrower is aware, the related Mortgage Loan documents
require the related underlying borrower to furnish to the mortgagee at
least annually an operating statement with respect to the related
Property.
24. The Borrower also makes the representations set out below in the section
entitled Property-Related Representations and Warranties.
B LOAN REPRESENTATIONS AND WARRANTIES
-------------------------------------
With respect to each B Note (which expression shall also be deemed to include
any other subordinated note, such as a C or D note), the Borrower represents and
warrants on each Funding Date of the relevant B Note as follows, other than as
set forth on the exception report provided to Lender in accordance with the
Facility:
1. The information set forth in the Preliminary Due Diligence Package is,
so far as the Borrower is aware (having made all reasonable enquiries),
complete, true and correct in all material respects and is a complete
and accurate list of all those documents which are relevant for the
purposes of the B Note.
2. The Borrower has not received any notice of any material default,
breach, violation or event of acceleration under the documents
evidencing or securing the B Note, in any such case to the extent the
same materially and adversely affects the value of the B Note and the
related underlying real property.
3. There is no valid claim of set-off, defence or counterclaim to such B
Note.
4. The lockbox administrator, if any, is not an affiliate of the underlying
borrower.
5. The B Note documents have been duly and properly executed by the parties
thereto, and each is the legal, valid and binding obligation of the
parties thereto, enforceable in accordance with its terms, except as
such enforcement may be limited by bankruptcy, insolvency,
reorganisation, receivership, moratorium or other laws relating to or
affecting the rights of creditors generally and by general principles of
equity (regardless of whether such enforcement is considered in a
proceeding in equity or at law). The B Note is not usurious. The
Borrower has fully and validly perfected all security interests created
or intended to be created pursuant to the B Note documents.
-110-
6. The terms of the related B Note documents have not been impaired,
waived, altered or modified in any material respect (other than by a
written instrument which is included in the Custodial Identification
Certificate).
7. The assignment or other transfer of the B Note constitutes the legal,
valid and binding assignment or transfer as the case may be of such B
Note from the existing B Note holder to or for the benefit of the
Borrower. No consent or approval by any third party is required for any
such assignment or transfer of such B Note, for the Lender's exercise of
any rights or remedies under the assignment of B Note, or for the
Lender's sale or other disposition of such B Note if the Lender acquires
title thereto, other than consents and approvals which have been
obtained. No third party (including underlying real property owner and
underlying real property mortgagee) holds any "right of first refusal,"
"right of first negotiation," "right of first offer," purchase option,
or other similar rights of any kind on account of the occurrence of any
of the foregoing. No other material impediment exists to any such
transfer.
8. To the Borrower's knowledge, all representations and warranties in the B
Note documents and in the underlying documents for the performing
commercial B Note secured by a first ranking mortgage on commercial
property to which such B Note relates are true and correct in all
material respects.
9. To the extent required under applicable law as of the Funding Date, each
party to the B Note documents was authorised to do business in the
jurisdiction in which the related underlying real property is located at
all times when it held the B Note to the extent necessary to ensure the
validity and enforceability of such B Note.
10. So far as the Borrower is aware, no party to the B Note documents has
advanced funds on account of any default under the B Note or under the
underlying real property mortgage documents.
11. The servicing and collection practices used by the underlying borrower
for the B Note have, so far as the Borrower is aware, complied with
applicable law in all material respects and are consistent with those
employed by prudent servicers of comparable B Notes.
12. To the Borrower's actual knowledge, none of the following parties is a
debtor in any bankruptcy or insolvency proceeding: the underlying
borrower; underlying real property owner; or underlying real property
mortgagee.
13. No B Note contains any obligation to make any further advances which
remains to be performed by the Borrower and no part of any advance
pursuant to a B Note has been retained by the Borrower pending
compliance by the underlying borrower with any other condition.
14. The outstanding principal balance of the B Notes is: (TO BE DETERMINED
ON EACH FUNDING DATE)
15. Interest is currently charged on the B Notes at a rate, determined in
accordance with the terms of the Facility, equal to (TO BE DETERMINED ON
EACH FUNDING DATE).
16. Scheduled payments of principal and interest on the B Notes have been
made through (TO BE DETERMINED ON EACH FUNDING DATE).
-111-
17. The Borrower also makes the representations set out below in the section
entitled Property-Related Representations and Warranties.
MEZZANINE LOAN REPRESENTATIONS AND WARRANTIES
---------------------------------------------
With respect to each Mezzanine Loan the Borrower represents and warrants at the
Funding Date of the relevant Mezzanine Loan as follows, other than as set forth
in the exception report provided to the Lender in accordance with the Facility:
1. Pursuant to the terms of the Mezzanine Loan agreement, the underlying
borrower is not entitled to exercise any right of set-off (except to the
extent permitted by law) or counterclaim against the relevant lender in
respect of any amount that is payable under the Mezzanine Loan.
2. The Borrower is not aware (from any information received by it in the
course of administering the Mezzanine Loan without further inquiry) of
any circumstances giving rise to a material reduction in the value of
the Property since the funding date of the Mezzanine Loan other than
market forces affecting the values of properties comparable to the
Property in the area where the Property is located.
3. To the best of the Borrower's knowledge, (a) the Borrower is not aware
of any facts which would cause a reasonably prudent lender of money
secured on commercial property to decline to proceed with the Mezzanine
Loan on its agreed terms; and (b) it is not aware of any matter or thing
affecting the title of the underlying borrower to the Property or any
other part of the security for the Mezzanine Loan which would cause a
reasonably prudent lender of money secured on commercial property to
decline to proceed making the Mezzanine Loan on its agreed terms.
4. The Borrower has not received written notice of (and the Borrower is not
aware of) the bankruptcy, liquidation, receivership, Examinership,
administration or a winding up or administrative order or dissolution
made against the underlying borrower.
5. Since the date of the Borrower's acquisition of the beneficial interest
in the Mezzanine Loan, no amount of principal or interest due from the
underlying borrower has, at any time, been more than 14 days overdue at
the date hereof.
6. The Borrower is not aware of any monetary default, breach or violation
under the Mezzanine Loan or any other default, breach or violation that
materially and adversely affects the value of the Property, the
Mezzanine Loan or any of the security therefor which has not been
remedied, cured or waived (but only in a case where a reasonably prudent
lender of money secured on commercial property would grant such a
waiver) or of any outstanding default, breach or violation by the
underlying borrower under any of the Mezzanine Loan documents or of any
outstanding event which with the giving of notice or lapse of any
applicable grace period would constitute such a default, breach or
violation that materially and adversely affects the value of the
Property, the Mezzanine Loan or any security therefor.
7. The Borrower is not aware of any litigation or claim calling into
question in any way the Borrower's title to the Mezzanine Loan or any
security therefor.
8. To the Borrower's knowledge there has been no written notice of any
default that has not been remedied or forfeiture of any occupational
lease granted in respect of the Property.
-112-
9. During the period of the Borrower's beneficial ownership and, to the
Borrower's knowledge since origination, none of the provisions of the
Mezzanine Loan or any of the Mezzanine Loan documents have been waived,
altered or modified in any material respect except as set out in the
Custodial Identification Certificate.
10. As at the date the Mezzanine Loan closed, (a) any requisite consent of
the landlord under the ground lease of the Property, and any required
notice to the landlord of, the creation of the lender's security over
the Property has been obtained or given and placed with the title deeds,
(b) to the best of the Borrower's knowledge there are no defaults under
such ground lease and (c) such ground lease does not contain any
provision whereby it may be forfeited on insolvency or liquidation of
the lessee or on any other ground except breach of covenant of the
tenant's obligations or the non-payment of rent by the lessee.
11. The Custodial Identification Certificate is complete and accurate in all
material respects.
12. So far as the Borrower is aware, the Mezzanine Loan has been serviced
since the date of origination in accordance with applicable laws and
generally accepted servicing practices for similar commercial mortgage
loans.
13. To the best of the Borrower's knowledge, each of the Mezzanine Loan
documents is the valid and binding obligation of the underlying
borrower, enforceable in accordance with its terms, except as such
enforcement may be limited by (a) insolvency, reorganisation, fraudulent
conveyance, moratorium, redemption or other similar laws affecting the
enforcement of creditors' rights generally and (b) general equity
principles.
14. The Mezzanine Loan carries a right to payment of principal in an amount
not less than the Base Currency Amount.
15. Interest is currently charged on the Mezzanine Loan at such a rate as
may be determined in accordance with the provisions of the Mezzanine
Loan documents.
16. As of the date the Mezzanine Loan closed, the Mezzanine Loan contains no
obligation to make any further advances which remains to be performed by
the lender and no part of any advance pursuant to the Mezzanine Loan has
been retained by the lender pending compliance by the relevant
underlying borrower or any other party with any other conditions.
17. The Borrower also makes the representations set out below in the section
entitled Property-Related Representations and Warranties.
PROPERTY-RELATED REPRESENTATIONS AND WARRANTIES
-----------------------------------------------
With respect to each item of Eligible Collateral, the Borrower represents and
warrants on the Funding Date of the relevant Eligible Collateral as follows,
other than as set forth in the exception report provided to the Lender in
accordance with the Facility:
1. Each Property is situated within the European Union.
2. Each Property constitutes commercial (including retail, office,
industrial, self storage, hospitality or other commercial uses) or
multifamily residential properties.
-113-
3. To the Borrower's knowledge, in relation to each Property situated in
England and Wales, title to which is registered, the title has been
registered in the appropriate Land Registry with title absolute in the
case of freehold property or absolute or good leasehold title in the
case of leasehold property or, where registration in the appropriate
Land Registry is pending, an application for registration with such
title has been delivered to the appropriate Land Registry or an
application for registration with such title will be delivered within
the priority period conferred by an official search conducted against
the relevant title at the appropriate Land Registry before completion of
the purchase of the Property or (in the case of land previously
unregistered) within two months of completion of the acquisition of the
same.
4. To the Borrower's knowledge, in relation to each Property situated in
Scotland, title has been registered or recorded at the Registers of
Scotland (with no exclusion of keeper's indemnity in relation to
Property registered in the Land Register of Scotland) or where
registration or recording at the Registers of Scotland is pending, an
application for registration or recording of such title has been
delivered to the Registers of Scotland.
5. Other than any such deeds which have been lodged at the Land Registry or
at the registers applicable to the jurisdiction within which the
Property is situated, all title deeds to the Properties, the legal
charges, the charge certificates, and the files relating to the relevant
item of Eligible Collateral are held by or to the order of the Borrower
or the security trustee for such item of Eligible Collateral.
6. In respect of the Mortgage Loans, the certificates of title produced by
the solicitors acting for the relevant mortgagor state that each
relevant Property was, as at the date of the relevant Mortgage held by
the mortgagor, free from any encumbrance which would materially
adversely affect such title.
7. So far as the Borrower is aware, no building or other improvement on any
Property has been affected in any material manner or suffered any
material loss as a result of any fire, wind, explosion, accident, riot,
war, or act of God or the public enemy, and each Property is free of any
material damage that would affect materially and adversely the value of
the Property as security for the relevant item of Eligible Collateral
and is in good repair. The Borrower has neither received notice, nor is
otherwise aware, of any proceedings pending for the total condemnation
of any Property or a partial condemnation of any portion material to the
Borrower's ability to perform its obligations under the relevant item of
Eligible Collateral.
8. No Property in England and Wales comprises unregistered land.
9. To the best of the Borrower's knowledge after using reasonable
endeavours to ensure the same:
(i) each Property is covered by a buildings insurance policy
maintained by the mortgagor of the Property or another person with
an interest in the relevant Property in an amount which is equal
to or greater than the reinstatement value of such Property and
the interest of the security trustee to such item of Eligible
Collateral or the Borrower has been noted or is in the course of
being noted on each policy or otherwise included by the insurers
under a "general interest noted" provision in the relevant policy;
(ii) each Property and plant and machinery therein (including
fixtures and fitting improvements) is covered against those
risks usually covered in transactions
-114-
involving property to which the Borrower is a party of the
same nature and in a comparable location; and
(iii) in the case of each Property the relevant buildings insurance
policy provides cover in respect of at least three years' loss of
revenue.
(iv) all premiums on the policies have been paid and the Borrower has
not received written notice that any buildings insurance policy is
about to lapse on account of failure by the relevant entity
maintaining such insurance to pay the relevant premiums.
10. So far as the Borrower is aware (having made all reasonable enquiries),
each Property was subject to one or more environmental site assessments
(or an update of a previously conducted assessment), in connection with
the origination of the relevant item of Eligible Collateral; and the
Borrower, having made no independent inquiry, has no knowledge of any
material and adverse environmental conditions or circumstances affecting
such Property. The Borrower has not taken any action with respect to
such item of Eligible Collateral or the related Property that could
subject the Lender, or its successors and assigns in respect of the
relevant item of Eligible Collateral, to any liability under
environmental legislation and the Borrower has not received any actual
notice of a material breach of any environmental law with respect to the
related Property that was not disclosed in the related report. In
respect of the Mortgage Loans, the related Mortgage or loan documents in
the Custodial Identification Certificate requires the mortgagor to
comply with all applicable environmental laws and regulations.
11. The Borrower has not received written notice of any default, or
forfeiture or irritancy of any occupational lease granted in respect of
a Property or of the insolvency of any tenant of a Property which would,
in any case, render the relevant Property unacceptable as security for
the Eligible Collateral.
12. Each Property is, to the Borrower's knowledge, free and clear of any
damage that would materially and adversely affect its value as security
for the related item of Eligible Collateral (normal wear and tear
excepted).
13. To the knowledge of the Borrower, there are no claims, actions, suits or
proceedings pending or threatened before any court, administrative
agency or arbitrator concerning any item of Eligible Collateral (or the
related mortgagor) or Property that might adversely affect title to that
item of Eligible Collateral (or the validity or enforceability of the
related security) or that might materially and adversely affect the
value of the Property as security for the item of Eligible Collateral or
the use for which the premises were intended.
-115-
SCHEDULE 12
FORM OF CUSTODIAL AGREEMENT
-116-
SCHEDULE 13
FORM OF OPINIONS COUNSEL TO BORROWER
-117-
SCHEDULE 14
[RESERVED]
-118-
SCHEDULE 15
[RESERVED]
-119-
SCHEDULE 16
SERVICER NOTICE
FORM OF SERVICER NOTICE
[o] 20[o]
[Insert Servicer address]
Re: Multicurrency Revolving Facility Agreement dated [o] 2007 (the "Loan
Agreement"), amongst, inter alia, AHR Capital MS Limited (the "Borrower")
and ▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Bank (the "Agent")
Dear Sirs/Madam:
[ ] (the "Servicer") is servicing certain collateral for the Borrower
pursuant to [a] certain Servicing Agreement(s) between the Servicer and the
Borrower as amended and supplemented by the related Addendum(s) thereto among
the Servicer, the Borrower and the Agent (collectively, the "Servicing
Agreement"). Pursuant to the Loan Agreement, the Servicer is hereby notified
that the Borrower has granted a security interest to Security Trustee in
respect of certain collateral which is serviced by the Servicer.
Upon receipt of a notice of Default or Event of Default (as each such term is
defined in the Loan Agreement) from the Agent in which the Agent shall
identify the collateral which is pledged to the Security Trustee under the
Debenture (the "Pledged Collateral"), the Servicer shall segregate all
amounts collected on account of such Pledged Collateral, hold them on trust
for the sole and exclusive benefit of the Security Trustee, and remit such
collections in accordance with the Security Trustee's written instructions.
Following such notice of Default or Event of Default, the Servicer shall
comply only with the instructions of the Security Trustee with respect to the
Pledged Collateral without the further consent of the Borrower or any other
party, and shall deliver to the Security Trustee any information with respect
to the Pledged Collateral reasonably requested by the Security Trustee.
Notwithstanding any contrary information or direction which may be delivered
to the Servicer by the Borrower, the Servicer may conclusively rely on any
information, direction or notice of a Default or an Event of Default
delivered by the Agent, and the Borrower shall indemnify and hold the
Servicer harmless for any and all claims asserted against the Servicer for
any actions taken in good faith by the Servicer in connection with the
delivery of such information or notice of Default or Event of Default.
No provision of this letter may be amended, countermanded or otherwise
modified without the prior written consent of Lender.
Please acknowledge receipt and your agreement to the terms of this
instruction letter by signing in the signature block below and forwarding an
executed copy to the Agent promptly upon receipt. Any notices to the Agent
should be delivered to the following address: 1221 Avenue of the Americas,
-120-
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇; Attention: ▇▇. ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇, Telephone:
(▇▇▇) ▇▇▇ ▇▇▇▇ Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
Yours faithfully,
AHR CAPITAL MS LIMITED
By its duly authorised attorney: ............................
Name:
Title:
ACKNOWLEDGED AND AGREED:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE SERVICING LTD
(as Security Trustee)
By: ................................
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Facsimile: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
AND
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK
(as Agent)
By:
Name: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Title:
Telephone: (▇▇▇) ▇▇▇-▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇-▇▇▇▇
-121-
SIGNATURES
SIGNED, SEALED AND DELIVERED by ) /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
the duly authorised attorney of ) /s/ ▇▇▇▇▇▇▇ ▇▇▇▇
AHR Capital MS Limited )
in the presence of )
Signature of witness /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
/s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Name of witness ▇▇▇▇▇ ▇▇▇▇▇▇
▇▇▇▇▇ ▇▇▇▇▇▇
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇ ▇▇,
▇▇ ▇▇▇▇▇
Address of witness
AHR Capital MS Limited
Customs ▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇ ▇
▇▇▇▇, ▇▇▇▇▇▇ ▇, ▇▇▇▇▇▇▇
Fax: + ▇▇▇ ▇ ▇▇▇ ▇▇▇▇
Attention: The Directors
THE AGENT AND THE INITIAL LENDER
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ BANK
By: /s/ ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇ - Authorized Signatory
▇▇▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇▇▇▇,
▇▇▇▇▇ ▇▇
▇▇▇▇ ▇▇▇▇▇▇ ▇▇▇▇,
▇▇▇▇ ▇▇▇▇▇
c/o SPG Warehouse Group
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇▇ ▇▇▇▇▇▇▇▇▇
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
with a copy to:
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ Law Division
▇▇▇▇ ▇▇▇▇▇▇ ▇▇ ▇▇▇▇▇▇▇▇, ▇▇▇ ▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: Su Sun Bai, Esq.
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
-122-
with a copy to:
▇▇▇▇▇▇▇▇ Chance US LLP
▇▇ ▇▇▇▇ ▇▇▇▇ ▇▇▇▇▇▇
▇▇▇ ▇▇▇▇, ▇▇▇ ▇▇▇▇ ▇▇▇▇▇
Attention: ▇▇▇▇▇ ▇. ▇▇▇▇▇, Esq.
Telephone: (▇▇▇) ▇▇▇ ▇▇▇▇
Facsimile: (▇▇▇) ▇▇▇ ▇▇▇▇
THE SECURITY TRUSTEE
▇▇▇▇▇▇ ▇▇▇▇▇▇▇ MORTGAGE SERVICING LTD.
By: /s/ ▇▇▇▇▇ ▇▇▇▇▇▇
Address: ▇▇ ▇▇▇▇▇ ▇▇▇▇▇▇, ▇▇▇▇▇▇ ▇▇▇▇▇, ▇▇▇▇▇▇, ▇▇ ▇▇▇ ▇▇▇
Fax: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Telephone: ▇▇▇ ▇▇▇ ▇▇▇ ▇▇▇▇
Attention: ▇▇▇▇▇ ▇▇▇▇▇▇
-123-
