Exhibit 10.1
EXECUTION COPY
up to $150,000,000
FACILITY AGREEMENT
Dated 19 April 2007
for
AHR CAPITAL LIMITED
as Borrower
and
ANTHRACITE CAPITAL INC.
as Sponsor
with
LEHMAN COMMERCIAL PAPER INC., UK BRANCH
acting as Lender
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up to $150,000,000 REVOLVING FACILITY AGREEMENT
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C A D W A L A D E R
265 Strand
London, WC2R 1BH
Tel: +44 (0) 20 7170 8700
Fax: +44 (0) 20 7170 8600
TABLE OF CONTENTS
Page
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1 DEFINITIONS AND INTERPRETATION......................................4
2 THE FACILITY.......................................................35
3 PURPOSE............................................................37
4 CONDITIONS OF UTILISATION..........................................37
5 UTILISATION........................................................41
6 OPTIONAL CURRENCIES................................................43
7 REPAYMENT..........................................................44
8 PREPAYMENT.........................................................44
9 DETERMINATIONS.....................................................46
10 ACCOUNTS OF THE BORROWER...........................................47
11 INTEREST...........................................................50
12 INTEREST PERIODS...................................................52
13 CHANGES TO THE CALCULATION OF INTEREST.............................52
14 FEES...............................................................53
15 TAX GROSS UP AND INDEMNITIES.......................................54
16 INCREASED COSTS....................................................58
17 OTHER INDEMNITIES..................................................59
18 MITIGATION BY THE LENDER...........................................61
19 COSTS AND EXPENSES.................................................62
20 SERVICING..........................................................62
21 GUARANTEE AND INDEMNITY............................................64
22 GENERAL REPRESENTATIONS............................................67
23 ASSET REPRESENTATIONS AND WARRANTIES...............................73
24 INFORMATION UNDERTAKINGS...........................................74
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25 FINANCIAL UNDERTAKINGS.............................................80
26 GENERAL UNDERTAKINGS...............................................80
27 EVENTS OF DEFAULT..................................................87
28 CHANGES TO THE LENDERS.............................................93
29 CHANGES TO THE BORROWERS...........................................95
30 PAYMENT MECHANICS..................................................96
31 SET-OFF............................................................98
32 NOTICES............................................................98
33 CALCULATIONS AND CERTIFICATES.....................................100
34 PARTIAL INVALIDITY................................................101
35 REMEDIES AND WAIVERS..............................................101
36 AMENDMENTS AND WAIVERS............................................101
37 COUNTERPARTS......................................................102
38 GOVERNING LAW.....................................................102
39 ENFORCEMENT.......................................................102
40 LIMITED RECOURSE, ETC.............................................103
Schedule 1
The Original Parties..............................................105
Schedule 2
Eligibility Criteria..............................................106
Schedule 3
Conditions Precedent..............................................111
Schedule 4
Preliminary Due Diligence Package.................................116
Schedule 5
Requests..........................................................119
Annex 1 to Schedule 5
Asset Warranties..................................................124
Annex 2 to Schedule 5
Financed Asset Schedule...........................................151
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Annex 3 to Schedule 5
Asset Conditions Precedent........................................152
Schedule 6
Mandatory Cost Formula............................................157
Schedule 7
Form of Accession Letter..........................................160
Schedule 8
Form of Resignation Letter........................................161
Schedule 9
Form of Compliance Certificate....................................162
Schedule 10
Form of Trust Receipt.............................................165
Schedule 11
Form of Bailee Letter.............................................168
Schedule 12
Form of Closing Data Tape.........................................170
Schedule 13
Form of Redirection Letter........................................174
Schedule 14
Form of Servicer Notice...........................................176
Schedule 15
Form of Investment Manager Report.................................178
SIGNATURES...................................................................1
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THIS AGREEMENT dated 19 April 2007 is made by and between
(1) AHR CAPITAL LIMITED a private limited company incorporated under the
laws of Ireland, registered with the Registrar of Companies in Ireland
under number 398357, with its registered office at Custom House Plaza,
Block 6, IFSC, Dublin 1, Ireland as the original borrower (in this
capacity, the "Original Borrower");
(2) ANTHRACITE CAPITAL INC., a company incorporated under the laws of the
State of Maryland, registered with tax registration number 13-3978906,
with its registered office at Anthracite Capital, Inc., 40 East 52nd
Street, New York, New York 10022, USA (the "Sponsor"); and
(3) LEHMAN COMMERCIAL PAPER INC., UK BRANCH, a corporation incorporated
under the laws of New York operating by and through its United Kingdom
Branch situated at 25 Bank Street, 11th Floor, London, E14 5LE as
lender (in this capacity, the "Lender");
collectively referred to as the "Parties" (or, individually, a "Party").
NOW, THEREFORE, the parties agree as follows:
1 DEFINITIONS AND INTERPRETATION
1.1 Definitions
In this Agreement, unless the context requires otherwise:
"Acceptable Rating" means a long-term debt rating of B or higher by S&P
and/or Fitch and/or B2 or higher by Moody's; provided that if more than
one Rating Agency provides such a rating, the lowest such rating shall
be determinative for purposes of this definition. For the avoidance of
doubt, the Sponsor may at any time request in writing to the Lender
that this definition be amended by; (x) replacing the phrase "B or
higher" with the phrase "B- or higher"; and (y) the phrase "B2 or
higher" with the phrase "B3 or higher" and the Lender may agree to the
foregoing amendments provided that the Lender (acting in its sole but
good faith discretion) shall be entitled to require any consequential
amendments that it considers reasonably necessary be made to the
Finance Documents and the Borrower shall agree to such consequential
amendments.
"Accepted Servicing Practices" means, with respect to any Asset, those
servicing practices of prudent institutions which service assets of the
same type as such Asset in the jurisdiction where the related Mortgaged
Property or Underlying Mortgaged Property is located.
"Accession Letter" means a document substantially in the form set out
in Schedule 7 (Form of Accession Letter) with such amendments as the
Lender may approve or reasonably require.
"Additional Borrower" means a company which becomes an Additional
Borrower in accordance with Clause 29 (Changes to the Borrowers).
"Adjusted Net Income" means for any period and any Person, the Net
Income of such Person and its Subsidiaries determined on a cash basis
for such period without recognising any trading portfolio gains or
losses in general, and specifically without giving effect to:
(a) depreciation and amortisation,
(b) gains or losses that are classified as "extraordinary" in
accordance with Applicable Accounting Principles,
(c) capital gains or losses on sales of real estate,
(d) capital gains or losses with respect to the disposition of
investments in marketable securities,
(e) any provision/benefit for income taxes for such period,
(f) earnings from equity investments and unconsolidated joint ventures
determined in accordance with Applicable Accounting Principles,
(g) losses attributable to the impairment of assets,
(h) incentive fees paid in the form of the issuance of such Person's
ordinary share capital or common stock,
(i) Cash Interest Expense,
(j) income or expense attributable to the ineffectiveness of hedging
transactions, and
(k) interest accretions, whether in favour or against such Person.
Without limiting the foregoing, Net Income shall be determined before
preferred stock dividends and shall include cash distributions from
equity investments and unconsolidated joint ventures.
"Advance" means the principal amount of each loan made or to be made to
the Borrower under the Facility as from time to time reduced by any
repayment or prepayment of such loan.
"Advance Rate" when used in relation to any Asset and its related
Advance, has the meaning given to such term in the related Utilisation
Request which amount shall not exceed the lower of: (a) the Market
Value of the related Asset as of the relevant Utilisation Date
multiplied by Eighty Five per cent. (85%); (b) the then outstanding
principal balance of such Asset; and (c) the Available Commitments.
"Affiliate" means, in relation to a person, a Subsidiary of that
person, a Holding Company of that person or any other Subsidiary of
that Holding Company and in relation to the Borrower or the Sponsor,
shall also be deemed to include any fund or entity that is managed by
the same investment advisor as or other wise controlled by the Borrower
or, as the case may be, the Sponsor or by an Affiliate of such
investment advisor.
"Applicable Accounting Principles" means, in respect of:
(a) the Borrower, accepted accounting principles, standards and
practices as are generally accepted in the accounting profession
in Ireland or, if different, in the country of formation of the
Borrower, from time to time, consistently applied; or
(b) the Sponsor, international financial reporting standards as
promulgated by the International Accounting Standards Boards from
time to time.
"Appraised Value" means in relation to any Mortgaged Property or
Underlying Mortgaged Property the value set forth in a valuation made
in connection with the origination or securitisation of the related
Mortgage Loan or Underlying Loan equal to the value of such Mortgaged
Property or Underlying Mortgaged Property, as applicable.
"Asset Conditions Precedent" when used in relation to any Asset means
all the documents and evidence listed in the related Utilisation
Request, in form and substance satisfactory to the Lender or in the
form stated in such Utilisation Request.
"Asset Covenants" when used in relation to any Asset means any
additional obligations of the Borrower with respect to such Asset, as
set forth in the related Utilisation Request.
"Asset File" has the meaning given to such term in the Document Custody
Agreement and includes all Records and all Asset Finance Documents.
"Asset Finance Documents" means the Debt Finance Documents and the
Securities Finance Documents.
"Asset Prepayment Condition" when used in relation to any Asset means
any additional prepayment condition with respect to such Asset, as set
forth in the related Utilisation Request.
"Asset Warranties" has the meaning given to such term in Clause 23.1
(Scope of Asset Representations and Warranties).
"Assets" means any B-Notes, CMBS, Mezzanine Loans, Whole Loans and/or
(where approved by the Lender acting in good faith) other asset.
"Assignment of Leases and Rents" means the assignment of leases and
rents related to and delivered in connection with each Debt Asset.
"Authorisation" means an authorisation, consent, approval, resolution,
licence, exemption, filing or registration.
"Authorised Signatory" means, in relation to a person, any individual
who is duly authorised (in such manner as is reasonably acceptable to
the Lender) and in respect of whom the Lender has received a
certificate signed by a director or another Authorised Signatory of
such person setting out the name and signature of such individual and
confirming such individual's authority to act.
"Available Commitment" means, in relation to the Lender and any
Advance, the Loan Commitment minus:
(a) the Base Currency Amount of any outstanding Advances; and
(b) the Base Currency Amount of in any Advances that are due to be
made on or before the proposed Utilisation Date of such Advance
(other than such Advance); and
(c) the Asset Value (as defined in the U.S. Facility) of all Purchased
Assets (as defined in the U.S. Facility) from time to time under
the U.S. Facility converted into the Base Currency using the
Lender's Spot Rate of Exchange,
other than the Lender's participation in any Advances that are due to
be repaid or prepaid on or before the proposed Utilisation Date.
"Availability Period" means the period from and including the Closing
Date to and including the close of business in London on the Business
Day falling:
(a) on the Initial Availability Period End Date; or
(b) if the Sponsor delivers an initial Availability Period Extension
Notice pursuant to Clause 2.6 (Availability Period Extension
Option), the date which is 30 days after the Initial Availability
Period End Date (or if such day is not a Business Day, the next
succeeding Business Day) (the "First Extended Availability Period
End Date"); or
(c) if, the Sponsor delivers a second Availability Period Extension
Notice pursuant to Clause 2.6 (Availability Period Extension
Option), the date which is 30 days after the First Extended
Availability Period End Date (or if such day is not a Business
Day, the next succeeding Business Day) (the "Second Extended
Availability Period End Date").
"Availability Period Extension Notice" has the meaning given to such
term in Clause 2.6(a) (Availability Period Extension Option).
"Bailee Letter" means a letter substantially in the form set out in
Schedule 11 (Form of Bailee Letter) issued by counsel or other third
party acceptable to the Lender in its sole and absolute but good faith
discretion to the Document Custodian confirming the such Person's
possession of certain Asset Files for the benefit of the Document
Custodian.
"Balloon Payment" means, for any Asset for which the final principal
payment or final redemption of principal is materially greater than
periodic scheduled or other principal payments due thereunder, which
payment is due on the maturity date (howsoever described) for such
Asset.
"Bank" means HSBC Bank plc (or any other person approved by the Lender
in good faith) acting in its capacity as Bank pursuant to the Control
Account Agreement.
"Base Currency" means US dollars.
"Base Currency Amount" means, in relation to an Advance or Advances,
the amount specified in the Utilisation Request delivered by the
Borrower for that Advance or Advances (or, if the amount requested is
not denominated in the Base Currency, that amount converted into the
Base Currency at the Lender's Spot Rate of Exchange on the date which
is three (3) Business Days before the Utilisation Date or, if later, on
the date the Lender receives the Utilisation Request) adjusted to
reflect any repayment, prepayment, consolidation or division of that
Advance.
"B-Note" means a loan which is secured by a first ranking Mortgage in
respect of Multifamily and/or Commercial Properties situated in one or
more Eligible Jurisdictions which is subordinated to certain other debt
secured by the same Mortgage.
"Book Value" means in respect of any Asset at any time, an amount, as
certified by the Borrower or the Sponsor, equal to the lesser of: (x)
the face or par amount of such Asset; and (y) the price which the
Borrower paid for such Asset plus any additional capital advanced by
the Borrower in respect of such Asset, less, in either case, an amount
equal to the sum of all principal payments paid in respect of such
Asset and realised losses or other write downs recognised relating to
such Asset.
"Borrower" means the Original Borrower or an Additional Borrower unless
it has ceased to be a Borrower in accordance with Clause 29 (Changes to
the Borrowers).
"Borrowing Base" means in relation to the Borrower: on any date of
determination, the lesser of (a) the aggregate of the product of (i)
the Advance Rates applicable to each Eligible Asset and (ii) the lower
of (A) the Market Values of each such Eligible Asset and (B) the total
of the then outstanding principal balances of such Eligible Assets, in
each case, denominated in the Base Currency or converted into the Base
Currency using the Lender's Spot Rate of Exchange and (b) the Loan
Commitments.
"Break Costs" means the amount (if any) by which:
(a) the interest which the Lender should have received for the period
from the date of receipt by it in respect of all or any part of
the Advance or any Unpaid Sum to the last day of the current
Interest Period in respect of the Advance or Unpaid Sum had the
principal amount or Unpaid Sum received been paid on the last day
of that Interest Period;
exceeds:
(b) the amount which the Lender would be able to obtain by placing an
amount equal to the principal amount or Unpaid Sum received by it
on deposit with a leading bank in the Relevant Interbank Market
for a period starting on the Business Day following receipt or
recovery and ending on the last day of the current Interest
Period,
(c) plus any breakage costs due under any hedging arrangements entered
into by the Lender in connection with the Assets or the Advances
arising as a result of the associated prepayment or repayment.
"Business" means, with respect to the Borrower:
(a) the entering into of the Finance Documents to which the Borrower
is party and all other documents referred to therein, and the
holding of the proceeds therefrom and the performance by the
Borrower of its obligations thereunder;
(b) the acquisition of Assets and the ownership and/or sale of, the
exercise of its rights under and the performance of its
obligations in connection with such Assets;
(c) the entering into of the Investment Management Agreement and the
exercise of its rights and performance of its obligations under
such agreements; and/or
(d) activities incidental to any of the foregoing.
"Business Day" means a day (other than a Saturday or Sunday) on which
banks are open for general business in London, Dublin and New York and,
in relation to any amount payable in any Optional Currency, such other
financial centre as the Lender may determine.
"Cash" means in relation to any Person, cash on deposit in any account
maintained by such Person with any depository institution.
"Cash Interest Expense" means for any period and any Person, total
interest expense, both expensed and capitalised, of such Person and its
Subsidiaries for such period with respect to all outstanding recourse
Financial Indebtedness of such Person and its Subsidiaries (including,
without limitation, all commissions, discounts and other fees and
charges owed with respect to letter of credit and bankers' acceptance
financing and net costs under interest rate protection agreements),
determined on a consolidated cash basis, for such period (determined on
a consolidated cash basis), and net of any interest accretions, whether
in favour or against, with respect to debt.
"CDO" means collateralised debt obligations.
"Clearstream" means Clearstream Banking Luxembourg, a societe anonyme
and member of the Deutsche Borse Group, or any successor to its trading
and settlement business.
"Closing Data Tape" means, with respect to any Advance as of any
Utilisation Date, a computer tape or other electronic medium generated
by the Borrower and delivered to the Lender and the Document Custodian,
which provides, with respect to each Eligible Asset that is the subject
of such Advance, each of the data fields set forth in Schedule 12 (Form
of Closing Data Tape) and the information responsive to each such
field, as well as any and all new, modified or updated information with
respect to such Eligible Asset that has been provided to the Lender
prior to the applicable Utilisation Date and as to which the Advance
Rate or any other information set forth in the Utilisation Request for
such Advance has been based, in each case in a format that has
previously been approved by the Lender and is otherwise acceptable to
the Lender.
"Closing Date" means the date on which the Lender confirms in writing
to the Borrower that all of the conditions precedent to this Agreement
have been satisfied (or waived).
"CMBS" means commercial mortgage backed securities.
"Collection Account" means, in relation to the Borrower, the Borrower's
Euro account (and any accounts in respect of any Optional Currencies)
established and maintained by the Borrower with the Bank, subject to
the Security of the Lender to which any sums payable to or recovered by
the Borrower or the Investment Manager on the Assets owned by the
Borrower and financed under this Agreement shall be credited.
"Compliance Certificate" means a certificate, substantially in the form
of Schedule 9 (Form of Compliance Certificate).
"Control Account Agreement" means a control account agreement (in the
form approved by the Lender acting in good faith) between the Lender,
the Borrower, the Investment Manager and the Bank.
"Custodial Delivery Letter" means the notice from the Borrower (which
may be in electronic form) indicating that the Borrower is delivering
an Asset File to the Document Custodian.
"Dangerous Substance" means any substance capable (whether alone or in
combination with any other) of causing pollution, contamination, harm
and/or damage to property or to the Environment, including any waste.
"Debt Asset" means any B-Note, Mezzanine Loan, Whole Loan or, as the
context may require or admit (and where so determined by the Lender in
good faith) Eligible Other Asset.
"Debt Asset Legal Advice" has the meaning given to such term in
Schedule 4 (Preliminary Due Diligence Package).
"Debt Asset Transfer Certificate" means any transfer certificate,
assignment agreement, novation agreement or other documentation
required by the terms and conditions of the Debt Finance Documents and
applicable law to effect, perfect and document a transfer of rights and
obligations from an existing lender under (and as defined in) the Debt
Finance Documents to the Borrower in its capacity as a new lender under
(and as defined in) such Debt Finance Documents.
"Debt Finance Documents" means in respect of any Debt Assets any:
(a) credit agreement entered into between a third party debtor or
borrower (howsoever defined therein) and inter alia the Borrower
in its capacity as lender (howsoever defined therein) which
creates or evidences such Debt Assets;
(b) intercreditor agreement or equivalent arrangement entered into by
the Borrower and other creditors of a third party debtor or
borrower (howsoever defined therein) regulating their respective
debts;
(c) subordination agreement or equivalent arrangement entered into by
the Borrower and other creditors of a third party debtor or
borrower (howsoever defined therein) regulating their respective
debts;
(d) all Mortgages, pledges, guarantees and security agreements
(howsoever described) in favour of (directly or indirectly) the
Borrower (or a trustee for the Borrower) which secure amounts due
to the Borrower under the agreements described above;
(e) asset or loan servicing, property management and cash management
agreements in respect of such Debt Assets;
(f) Hedging Transactions relating to such Debt Assets; and
(g) any transfer certificate, assignment agreement, novation
agreement or other documentation required by the terms and
conditions of the Debt Finance Documents listed above and
applicable law to effect, perfect and document a transfer of
rights and obligations from an existing lender under (and as
defined in) the Debt Finance Documents listed above to the
Borrower in its capacity as a new lender under (and as defined
in) such Debt Finance Documents listed above,
in each case, as the same may from time to time be supplemented,
amended or novated pursuant to the applicable provisions thereof.
"Debt Service Coverage Ratio" means the ratio of Adjusted Net Income to
Cash Interest Expense on recourse Financial Indebtedness outstanding,
it being understood that such determination shall be made on a cash
basis.
"Deed of Charge" means the deeds of charge and assignment governed by
English law and Irish law each dated on or about the date of this
Agreement and each made between the Borrower and the Lender.
"Default" means an Event of Default or any event or circumstance
specified in Clause 27.1 (Events of Default) which would (with the
lapse of time, the expiry of a grace period, the giving of notice, the
making of any determination under the Finance Documents or any
combination of any of the foregoing) be an Event of Default.
"Disposal" (including, with correlative meanings, the terms "Dispose",
"Disposed", "Disposing" and "Disposition") means a sale, transfer,
grant, lease or other disposal, whether voluntary or involuntary.
"Document Custodian" means such Person (approved by the Lender acting
in good faith) as may be appointed to act as document custodian for the
Borrower for the purposes of this Agreement and any successor custodian
under the Document Custody Agreement.
"Document Custody Agreement" means the document custody agreement (in
the form approved by the Lender acting in good faith) and made between
the Borrower, the Lender and the Document Custodian, as the same may be
amended, restated, supplemented or otherwise modified and in effect
from time to time.
"Eligible Assets" means:
(a) any Eligible Debt Assets; and
(b) any Eligible Securities.
"Eligible B-Note" means any B-Note which complies with all of the
Eligibility Criteria which are applicable to B-Notes provided that this
definition shall include any other assets of the Borrower that the
Lender determines in good faith are to be treated as Eligible B-Notes
for the purposes of this Agreement subject to such modifications to the
terms hereof as the Lender may in good faith require in relation to the
same.
"Eligibility Criteria" means, in relation to any B-Note, CMBS,
Mezzanine Loan or Whole Loan, the criteria stated to be applicable to
the same in Schedule 2 (Eligibility Criteria).
"Eligible Currency" means the Base Currency and any Optional Currency.
"Eligible Debt Assets" means Eligible Whole Loans, Eligible B-Notes,
Eligible Mezzanine Loans and (where so determined by the Lender in good
faith) Eligible Other Assets.
"Eligible Institution" means a regulated depository institution the
short term unsecured debt obligations or commercial paper of which are
rated at least A-1 by S&P, P-1 by Moody's, and F-1+ by Fitch in the
case of Letters of Credit for thirty (30) days or less or, in the case
of Letters of Credit for more than thirty (30) days, the long term
unsecured debt obligations of which are rated at least "AA" by Fitch
and S&P and "Aa2" by Moody's.
"Eligible Jurisdiction" means any member state of the European Union
which has adopted the Euro as its currency, Switzerland and/or the
United Kingdom and/or any other jurisdiction approved in writing by the
Lender.
"Eligible Mezzanine Loan" means any Mezzanine Loan which complies with
all of the Eligibility Criteria which are applicable to Mezzanine Loans
provided that this definition shall include any other assets of the
Borrower that the Lender determines in good faith are to be treated as
Eligible Mezzanine Loans for the purposes of this Agreement subject to
such modifications to the terms hereof as the Lender may in good faith
require in relation to the same.
"Eligible Other Assets" means any assets other than Eligible Whole
Loans, Eligible B-Notes, Eligible Mezzanine Loans and Eligible
Securities (which are CMBS) that:
(a) the Borrower, the Investment Manager and the Lender have agreed
in writing may be the subject of a Utilisation made under this
Agreement (including, without limitation, securities based on
credit default swap transactions and credit-linked notes, a
security the returns on which are linked to the credit an/or
price performance of a reference obligation);
(b) comply with such of the Eligibility Criteria (as modified and
supplemented as the Lender may in good faith require) as the
Lender may in good faith require; and
(c) the Lender determines in good faith are to be treated as Assets
for the purposes of this Agreement subject to such modifications
to the terms hereof as the Lender may in good faith require in
relation to such asset,
provided that, notwithstanding any provisions herein to the contrary,
the Eligibility Criteria and Advance Rate for such Eligible Other
Assets shall be as agreed in writing by the Borrower, the Investment
Manager and the Lender (as reflected in the relevant final Utilisation
Request).
"Eligible Security" means any CMBS which complies with all of the
Eligibility Criteria which are applicable to CMBS provided that this
definition shall include any other assets of the Borrower that the
Lender in good faith determines are to be treated as Eligible
Securities for the purposes of this Agreement subject to such
modifications to the terms hereof as the Lender may in good faith
require in relation to the same and (where so determined by the Lender)
Eligible Other Assets.
"Eligible Whole Loan" means any Whole Loan which complies with all of
the Eligibility Criteria which are applicable to Whole Loans provided
that this definition shall include any other assets of the Borrower
that the Lender in good faith determines are to be treated as Eligible
Whole Loans for the purposes of this Agreement subject to such
modifications to the terms hereof as the Lender may in good faith
require in relation to the same.
"Environment" means, without limitation, any of the following media:
(a) land, including surface land, sub-surface strata, sea bed and
river bed and any natural or man-made structures;
(b) water, including coastal and inland waters, surface waters,
ground waters and waters in drains and sewers; and
(c) air, including air within buildings and other man-made or natural
structures above or below ground,
and includes any living organism or system supported by any such media.
"Environmental Law" means all or any international, national or local
civil or criminal law, common law, statutes, statutory instruments,
regulations, directives, statutory guidance and regulatory codes of
practice, orders, decrees, injunctions or judgements which relate to
the Environment or Environmental Matters and:
(a) which are in force or enacted as at the date of this Agreement;
(b) which were in force at an earlier date, are no longer in force,
but under which obligations and liabilities subsist; or
(c) which are in force from time to time after the date of this
Agreement.
"Environmental Matters" means:
(a) pollution or contamination, or the threat of pollution or
contamination, of the Environment;
(b) the generation, manufacture, processing, handling, storage,
distribution, use, treatment, removal, transport, disposal,
emission, release, spillage, deposit and/or discharge of
Dangerous Substances to the extent that they are regulated by any
relevant Environmental Law;
(c) the exposure of any Person to Dangerous Substances;
the creation of any noise, vibration, radiation, common law or
statutory nuisance or other material adverse impact on the Environment.
"Equity Interests" means, with respect to any person, any and all
shares, interests, participations or other equivalents, however
designated, of equity shares or other equity participations, including
partnership interests, whether general or limited, in such person.
"Equity Offering" means any secondary offering of equity interests in
the Sponsor which is arranged on a sole-books basis by Lehman Brothers
International or any Affiliate.
"EURIBOR" means, in relation to any Advance or overdue amount in euro:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of that
Advance or overdue amount) either:
(i) a rate that is interpolated a by the Lender for that
period from one or more Screen Rates for another period,
or
(ii) (if no such interpolated rate is available) the arithmetic
mean of the rates (rounded upward to four decimal places)
as supplied to the Lender at its request, quoted by the
Reference Banks to leading banks in the European interbank
market,
in each case as of 11.00 a.m. on the Quotation Day for the offering of
deposits in euro for a period comparable to the Interest Period for
that Advance or overdue amount.
"Euroclear" means Euroclear Bank N.A./S.V., or any successor to its
trading and settlement business.
"Event of Default" means any event or circumstance specified as such in
Clause 27.1 (Events of Default).
"Extended Availability Period End Date" means the First Extended
Availability Period End Date and/or the Second Extended Availability
Period End Date as the context may require or admit:
"Facility" means the loan facility made available under this Agreement
as described in Clause 2 (The Facility).
"Facility Office" means the office or offices notified by a Lender to
the Lender 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; provided that, unless otherwise
subsequently notified to the Lender in accordance with the foregoing,
the Facility Office of a Lender named on the signature pages hereto
shall be the office or offices specified after its name on the
signature pages hereto.
"Facility Termination Date" means the Initial Facility Termination Date
unless the Availability Period is extended once by the Borrower
pursuant to Clause 2.6 (Availability Period Extension Option) in which
event the Facility Termination Date shall be the First Extended
Availability Period End Date or unless the Availability Period is
extended twice by the Borrower pursuant to Clause 2.6 (Availability
Period Extension Option) in which event the Facility Termination Date
shall be 30 days from the Second Extended Availability Period End Date.
"Finance Documents" means:
(a) this Agreement;
(b) the U.S. Facility;
(c) any Accession Letter;
(d) any Resignation Letter;
(e) any Security Document;
(f) the Investment Management Agreement;
(g) each Utilisation Request;
(h) the Securities Custody Agreement;
(i) the Document Custody Agreement;
(j) any Hedging Agreement where the Hedging Counterparty falls within
paragraph (a) of the definition of Hedging Counterparty; and
(k) any other document designated as such by the Lender, the Borrower
and the Sponsor.
"Finance Lease" means a contract between a lessor and a lessee treated
as a finance lease under Applicable Accounting Principles.
"Finance Party" means the Lender and any the Hedging Counterparties
falling within paragraph (a) of the definition thereof or a Lender.
"Financed Asset Schedule" means with respect to any Advance as of any
date, the schedule (a schedule in the form of Annex 2 to Schedule 5
(Requests)) to the related Utilisation Request.
"Financial Indebtedness" means (without double counting) any
indebtedness for or in respect of:
(a) moneys borrowed (including any overdraft);
(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 Applicable
Accounting Principles, be treated as a finance or capital lease;
(e) receivables sold or discounted (other than any receivables to the
extent they are sold or discounted on a non-recourse basis);
(f) any amount raised under any other transaction (including any
forward sale agreement, deferred purchase agreement, agreement or
option to reacquire an asset 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 on the date of
calculation shall be taken into account);
(h) shares which are expressed to be redeemable or are capable of
being redeemed at the option of the relevant shareholder(s) on or
prior to the Facility Termination Date and all obligations to
purchase, retire or otherwise acquire for value such capital in
respect of transactions which, in each case, have the commercial
effect of a borrowing;
(i) 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; and
(j) the amount of any liability in respect of any guarantee or
indemnity for any of the items referred to in paragraphs (a) to
(i) above but only to the extent that the relevant guarantee or
indemnity would be included in the financial statements of the
relevant entity as a contingent liability under the Applicable
Accounting Principles.
"Fitch" means Fitch Ratings, a wholly owned subsidiary of Fimalac,
S.A., or any successor to its rating agency business.
"Governmental Authority" shall mean any nation or government, any
state, county, municipality or other political subdivision thereof or
any governmental body, agency, authority, department or commission
(including, without limitation, any taxing authority) or any
instrumentality or officer of any of the foregoing (including, without
limitation, any court or tribunal) exercising executive, legislative,
judicial, regulatory or administrative functions of or pertaining to
government and any corporation, partnership or other entity directly or
indirectly owned by or controlled by the foregoing.
"Ground Lease" means a lease for all or any portion of the real
property comprising the Mortgaged Property or Underlying Mortgaged
Property, the lessee's interest in which is held by the Mortgagor or
Underlying Mortgagor in respect of the related Asset.
"Ground Lessee" means the ground lessee under a Ground Lease.
"Hedging Agreement" means each ISDA Master Agreement, together with the
schedule and, where the context admits, the confirmations relating
thereto, and any other currency or interest hedging agreements or
documents which:
(a) are governed by English law; and
(b) may be entered into by the Borrower with a Hedging Counterparty
for the purpose of hedging interest rate liabilities and/or
currency exchange rates,
as amended, supplemented or replaced from time to time.
"Hedging Counterparty" means:
(a) Lehman Commercial Paper Inc, UK Branch and/or any Affiliate of
Lehman Commercial Paper Inc, UK Branch; and
(b) a person which has entered into a Hedging Agreement with the
Borrower for the purpose of hedging interest rate liabilities
and/or currency exchange rates in relation to the Assets, which
at the time it enters into such Hedging Agreement rated at least
A-1 by S&P and Aa3 by Moody's and which has been approved in
writing by the Lender;
provided that, in each such case, such person has signed and delivered
or acceded to an intercreditor deed acceptable to the Lender.
"Hedging Transaction" means any forward contract, futures contract,
swap, option or other financial agreement or arrangement, including,
without limitation, caps, floors, collars and similar agreements,
relating to, or the value of which is dependent upon, interest rates or
currency exchange rates or indices.
"Holding Company" means, in relation to a person, any other person in
respect of which it is a Subsidiary.
"Hotel" means a Mortgaged Property or Underlying Mortgaged Property
owned by the Mortgagor or Underlying Mortgagor or for which the
Mortgagor or Underlying Mortgagor is a Ground Lessee, which constitutes
an operational hotel which is part of an international, national or
regional chain or franchise (determined by the Lender on or prior to
the Utilisation Date in its sole but good faith discretion), including
all land, amenities and improvements, with individual rooms principally
for short-term rental to tenants occupying same.
"IBOR" means LIBOR, EURIBOR or Optional Currency LIBOR (as the context
shall require).
"Income" means with respect to any Eligible Asset at any time any
principal received thereon or in respect thereof and all interest,
premiums, fees, charges, dividends or other distributions thereon,
excluding payments received with respect to any B-Note, Mezzanine Loan
or, where appropriate, Eligible Other Asset which are designated for
payment of any related Senior Debt.
"Industrial Property" means a Mortgaged Property or Underlying
Mortgaged Property owned by the Mortgagor or Underlying Mortgagor or
for which the Mortgagor or Underlying Mortgagor is a Ground Lessee,
which constitutes an operational property, held partially or
principally for lease to industrial tenants in connection with
manufacturing.
"Information" means, with respect to each Debt Asset and each Security,
the documents, reports and written information required to be provided
by or on behalf of the Borrower in connection with a Utilisation under
the Facility, including any Asset Conditions Precedent.
"Initial Availability Period End Date" means the date falling Sixty
(60) days after the anniversary of the date of this Agreement.
"Insolvency" means, with respect to any Person and a particular date,
that on such date:
(a) the present fair market value (or present fair saleable value) of
the assets of such Person is less than the total amount required
to pay the probable liabilities of such Person on such Person's
total existing debts and liabilities (including contingent
liabilities) as they become absolute and matured;
(b) such Person and its Subsidiaries are unable to realise upon its
assets and pay its debts and other liabilities, contingent
obligations and commitments as they mature and become due in the
normal course of business;
(c) such Person is not at such time incurring debts or liabilities
beyond its ability to pay such debts and liabilities as they
mature; or
(d) such Person is not engaged in any business or transaction, and is
not now about to engage in any business or transaction, for which
its property would constitute unreasonably small capital after
giving due consideration to the prevailing practice in the
industry in which the Person is engaged,
and "Insolvent" shall be construed accordingly provided that in
computing the amount of such contingent liabilities at any time, it is
intended that such liabilities will be computed as the amount that, in
the light of all the facts and circumstances existing at such time,
represents the amount that can reasonably be expected to become an
actual or matured liability.
"Intangible Assets Value" means 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).
"Interest Period" means, in relation to each Advance, the period
determined in accordance with Clause 12 (Interest Periods) and, in
relation to an Unpaid Sum, each period determined in accordance with
Clause 11.3 (Default Interest).
"Investment Manager" means Blackrock Financial Management Inc. in its
capacity as manager under the Investment Management Agreement and any
replacement investment manager acceptable to the Lender.
"Investment Manager Report" means a report remitted by the Investment
Manager quarterly, substantially in the form set out in Schedule 15
(Form of Investment Manager Report).
"Investment Management Agreement" means the investment management
agreement between the Borrower and the Investment Manager dated 26
January 2006.
"ISDA" means the International Swaps and Derivatives Association Inc.
"ISDA Master Agreement" means each ISDA pro forma master agreement as
may be published by ISDA from time to time.
"Lender's Spot Rate of Exchange" means the Lender'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.
on the day on which such rate of exchange is to be determined.
"Liabilities" means as of any date of determination, and with respect
to any Person, all amounts which would be included as liabilities on
the balance sheet of such Person at such date, determined in accordance
with Applicable Accounting Principles.
"LIBOR" means, in relation to any Advance or overdue amount in
sterling:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of that
Advance or overdue amount) either:
(i) a rate that is interpolated by the Lender for that period
from one or more Screen Rates for another period, or
(ii) (if no such interpolated rate is available) the arithmetic
mean of the rates (rounded upward to four decimal places) as
supplied to the Lender at its request, quoted by the
Reference Banks to leading banks in the European interbank
market,
in each case as of 11.00 a.m. on the Quotation Day for the offering of
deposits in the currency of that Advance and for a period comparable to
the Interest Period for that Advance or overdue amount.
"Loan Commitment" means the amount in the Base Currency set opposite
the name of the Lender under the heading "Loan Commitment" in Schedule
1 (The Original Parties) being at the date of this Agreement One
Hundred and Fifty Million US dollars ($150,000,000) converted to the
Base Currency at the Lender's Spot Rate of Exchange at the time of
determination of the same to the extent not cancelled, reduced or
transferred by it under this Agreement less the Asset Value (as defined
in the U.S. Facility) of all Purchased Assets (as defined in the U.S.
Facility) from time to time under the U.S. Facility converted into the
Base Currency using the Lender's Spot Rate of Exchange.
"Loan-to-Value Ratio" means with respect to any Asset, the ratio of the
current outstanding related principal amount of such Asset plus any
related Senior Debt to the lesser of: (a) the Appraised Value of the
related Mortgaged Property or Underlying Mortgaged Property at
origination; or (b) if the related Mortgaged Property or Underlying
Mortgaged Property was purchased by the related Mortgagor or Underlying
Mortgagor within twelve (12) months of the origination of such Asset,
the purchase price of the related Mortgaged Property or Underlying
Mortgaged Property.
"Mandatory Cost" means for a Lender the cost of complying with any
reserve asset, liquidity, cash margin or other regulatory requirement
affecting it, expressed as a percentage rate per annum, including any
reserve asset requirements of the European Central Bank, Regulation D
of the U.S. Board of Governors of the Federal Reserve System and, for a
Lender participating through a Facility Office in the United Kingdom,
those calculated by the Lender in accordance with Schedule 6 (Mandatory
Cost Formula).
"Margin" when used in relation to any Asset prior to the Second
Extended Availability Period End Date, means Two Hundred Basis Points
(2.00 per cent) and thereafter Four Hundred and Fifty Basis Points
(4.50 per cent.).
"Margin Stock" has the meaning given to such term in Regulation U of
the U.S. Board of Governors of the Federal Reserve System as in effect
from time to time.
"Market Disruption Event" means:
(a) at or about noon 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 Lender to determine
the applicable IBOR for the relevant currency and Interest
Period; or
(b) on or before close of business in London on the Quotation Day for
the relevant Interest Period, the Lender receives notifications
from a Lender or Lenders (whose participations in an Advance
exceed 50 per cent. of that Advance) that the cost to it of
obtaining matching deposits in the Relevant Interbank Market
would be in excess of the applicable IBOR.
"Market Value" shall mean, as of any date with respect to any Asset,
the price at which such Asset could readily be sold as determined by
the Lender in its good faith discretion.
"Material Adverse Effect" means in relation to the Borrower and/or the
Sponsor, a material adverse effect on: (a) any of the property,
business, operations or financial condition of the Borrower or the
Sponsor and its consolidated Subsidiaries, taken as a whole; (b) the
ability of the Borrower or the Sponsor to perform its respective
obligations under any of the Finance Documents to which it is a party;
(c) the validity or enforceability of any of the Finance Documents; or
(d) the rights and remedies of the Lender under any of the Finance
Documents.
"Mezzanine Loan" means:
(a) a subordinated loan (for the purposes of this part (a) of this
definition, an "Underlying Mezzanine Loan") to certain direct
and/or indirect equity owners of entities that directly or
indirectly own Multifamily and/or Commercial Properties situated
in Eligible Jurisdictions where the Relevant Equity Interests in
such entity are the subject of security for the related
Underlying Mezzanine Loan; or
(b) a loan secured by one or more second ranking Mortgages in respect
of Multifamily and/or Commercial Properties situated in Eligible
Jurisdictions which is subordinated to certain other debt secured
by a first ranking Mortgage (or an equivalent prior ranking
interest) granted to a third party over the same Mortgaged
Property.
"Month" means a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar month,
except that:
(a) if the numerically corresponding day is not a Business Day, that
period shall end on the next Business Day in that calendar month
in which that period is to end if there is one, or if there is
not, on the immediately preceding Business Day; and
(b) if there is no numerically corresponding day in the calendar
month in which that period is to end, that period shall end on
the last Business Day in that calendar month.
The above rules will only apply to the last Month of the Availability
Period or any Interest Period and "monthly" shall be construed
accordingly.
"Moody's" means Moody's Investors Service, Inc., or any of its
Subsidiaries or any successor to its rating agency business.
"Mortgage" means a mortgage, hypothecation, agreement or deed to secure
debt or other instrument, creating a valid and enforceable security
interest on or a first priority ownership interest in an estate in fee
simple or long leasehold estate (or the equivalent thereof in any
relevant jurisdiction) in real property and the improvements thereon,
securing any Debt Asset.
"Mortgaged Property" means the real property securing repayment of the
debt evidenced by any Debt Asset.
"Mortgagor" means the borrower(s), guarantor(s), third party security
provider(s) and/or obligor(s) in respect of any Debt Asset as the
context may require or permit.
"Multifamily" means a Mortgaged Property or Underlying Mortgaged
Property owned by the Mortgagor or Underlying Mortgagor or for which
the Mortgagor or Underlying Mortgagor is a Ground Lessee, which
constitutes a five-or-more family residential property held principally
for lease to residential tenants.
"Multifamily and/or Commercial Properties" means:
(a) Multifamily, Hotel, Office, Industrial and Retail properties;
and/or
(b) any other property type acceptable to the Lender in its good
faith commercial judgment.
"Net Income" means for any period and for any Person and its
consolidated Subsidiaries, the consolidated net income (or loss) of
such Person and its consolidated Subsidiaries for such period as
determined on a consolidated basis in accordance with Applicable
Accounting Principles.
"New Jurisdiction" means any Eligible Jurisdiction other than the
United Kingdom.
"Obligations" means: (a) all of the Borrower's Financial Indebtedness,
its obligation to pay or repay principal, interest and any other
amounts due in respect of any Advances on each Payment Date, and other
monetary obligations and liabilities, that, in all cases, are payable
to the Finance Parties (or their Affiliates) or the Document Custodian
arising under, or in connection with, the Finance Documents, whether
now existing or hereafter arising; (b) any and all sums paid by the
Finance Parties or on behalf of the Finance Parties in order to
preserve any Eligible Asset or their interests therein; (c) in the
event of any proceeding for the collection or enforcement of any of the
Borrower's Financial Indebtedness, obligations or liabilities referred
to in paragraph (a), the reasonable expenses of retaking, holding,
collecting, preparing for sale, selling or otherwise disposing of or
realising on any Eligible Asset, or of any exercise by the Finance
Parties of their rights under the Finance Documents, including, without
limitation, out-of-pocket legal fees and disbursements and court costs;
and (d) all of the Borrower's indemnity obligations to the Finance
Parties or the Document Custodian or both pursuant to the Finance
Documents.
"Offering Circular" means a final offering circular, offering
memorandum or prospectus relating to the issuance and sale of any CMBS
(and any supplements or amendments thereto).
"Office" means a Mortgaged Property or Underlying Mortgaged Property
owned by the Mortgagor or Underlying Mortgagor or for which the
Mortgagor or Underlying Mortgagor is a Ground Lessee, which constitutes
an operational office building, including all land, amenities and
improvements, with individual office space held principally for lease
to commercial tenants and not principally for lease to recreational or
residential tenants.
"Optional Currency" means Euro Sterling or any other currency approved
in writing by the Lender provided that the Parties acknowledge that the
Lender shall be entitled to require currency hedging in respect of such
currencies as a condition of its approval of the same.
"Optional Currency LIBOR" means, in relation to any Advance or overdue
amount in an Optional Currency:
(a) the applicable Screen Rate; or
(b) (if no Screen Rate is available for the Interest Period of that
Advance or overdue amount) either:
(i) a rate that is interpolated by the Lender for that period
from one or more Screen Rates for another period, or
(ii) (if no such interpolated rate is available) the arithmetic
mean of the rates (rounded upward to four decimal places)
as supplied to the Lender at its request, quoted by the
Reference Banks to leading banks in the European interbank
market,
in each case as of 11.00 a.m. on the Quotation Day for the offering of
deposits in such Optional Currency for a period comparable to the
Interest Period for that Advance or overdue amount.
"Participating Member State" means any member state of the European
Community 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" means a party to this Agreement, provided that a reference to
such a party shall not include that party if it has ceased to be a
party under this Agreement.
"Payment Date" means in respect of any Advance, the dates specified as
such in the related Utilisation Request provided that at no time shall
there be more than ten (10) different sets of Payment Dates.
"Permitted Financial Indebtedness" means Financial Indebtedness:
(a) outstanding under or expressly allowed by the Finance Documents;
and/or
(b) that may be incurred by the Borrower under any Permitted Hedging
Transaction; and/or
(c) outstanding under the Four Hundred and Fifty Million pounds
((pound)450,000,000) multi-currency facility agreement dated 27
January 2006 made between the Borrower and the Sponsor; and/or
(d) any other financial indebtedness approved in writing by the
Lender acting in good faith.
"Permitted Hedging Transaction" means any Hedging Transaction entered
into in connection with protection against or benefit from fluctuation
in any rate or price, by the Borrower with a Hedging Counterparty, for
the purpose of hedging the Borrower's interest rate or currency risk
exposure in respect of a specific Asset, provided that:
(a) the Borrower is acting reasonably and not for speculative or
proprietary trading purposes;
(b) the relevant Hedging Transaction is entered into for bona fide
protection against potential losses in relation to interest or
currency rates and the relevant Hedging Transaction does not at
the time that it is entered into (the "relevant time"), and is
not intended to at the relevant time, create the same or a
similar economic benefit for the Borrower as an agreement to
borrow money or raise finance or an agreement which otherwise has
the same commercial effect as a borrowing;
(c) the relevant Hedging Transaction is entered into on terms
(including rates) which could reasonably be regarded as market
standard at the relevant time for a company of comparable
standing to the Borrower; and
(d) other than as approved by the Lender, the Borrower and Hedging
Counterparty have entered into an intercreditor agreement
(acceptable to the Lender) in respect of the relevant Hedging
Transaction and the Hedging Counterparty has agreed to waive: (i)
any right of cross default (other than in respect of the relevant
Asset itself); or (ii) in respect of any other transaction which
is not a Permitted Hedging Transaction, any right of set-off or
netting arrangements whether arising by contract, general terms
and conditions or law that it may have against the Borrower.
"Permitted Investments" means any one or more of the following
obligations or securities having at the time of purchase, or at such
other time as may be specified, the required ratings, if any, provided
for in this definition:
(a) any senior, unsubordinated debt security, investment, commercial
paper, deposit or other debt instrument (including, for the
avoidance of doubt, a money market fund) issued by, or fully and
unconditionally guaranteed by, an Eligible Institution, which:
(i) shall be denominated in the same currency as the Advance
to which the funds used to make the same relates;
(ii) (except in the case of a deposit) is primarily settled
through Euroclear or Clearstream, Luxembourg;
(iii) will have a maturity date falling, or which are
redeemable at par together with accrued unpaid interest,
not later than one Business Day prior to the next
following Payment Date (the "Liquidation Date");
(iv) will be in the form of notes or financial instruments
having a rating from Moody's of "P1", from Fitch of "F1+",
if the maturity date is between one and 12 months, and
"F1" if the maturity date is less than one month, and
"A-1+" from S&P, such notes or financial instruments
having a maturity not exceeding the earlier of the date
falling 30 days after such Liquidation Date and the next
following Liquidation Date; and
(v) provides for principal to be repaid in respect of such
investment which is at least equal to the price paid to
purchase such investment and does not fall to be
determined by reference to any formula or index and is not
subject to any contingency; or
(b) repurchase transactions between the Borrower and Eligible
Institution in respect of which the obligations of the Eligible
Institution to repurchase from the Borrower the underlying debt
securities are senior and unsubordinated and rank pari passu with
other senior and unsubordinated debt obligations of the Eligible
Institution and qualifies for an exemption from United States
withholding tax if the repurchase transaction is with a United
States Eligible Institution,
provided, however, that no instrument shall be a Permitted Investment
if it represents, (1) the right to receive only interest payments with
respect to the underlying debt instrument, (2) the right to receive
both principal and interest payments derived from obligations
underlying such instrument and the principal and interest payments with
respect to such instrument provide a yield to maturity greater than One
Hundred and Twenty (120) per cent. of the yield to maturity at par of
such underlying obligations, (3) an obligation that has a remaining
maturity of greater than three hundred sixty-five (365) days from the
date of acquisition thereof. If an obligation is rated by S&P, then
such obligation must be limited to those instruments that have a
predetermined fixed payment of principal due at maturity that cannot
vary or change and interest thereon may either be fixed or variable and
should be tied to a single interest rate index plus a single fixed
spread (if any) and move proportionately with that index.
"Permitted Security" means:
(a) any Security created pursuant to, arising under or evidenced by
the Security Documents; and
(b) any Security approved by the Lender acting in good faith.
"Person" means an individual, corporation, limited liability company,
partnership, joint tenant or tenant-in-common, trust, unincorporated
organisation or other entity, or a national or local government or any
agency or political subdivision thereof.
"Preliminary Data Tape" means a preliminary version of the Closing Data
Tape, which shall form part of the Preliminary Due Diligence Package.
"Preliminary Due Diligence Package" means the due diligence information
relating to each Asset which shall:
(a) be in such form and substance as the Sponsor and Lender shall
from time to time agree; and
(b) without limitation to the generality of the foregoing, include
all of the information set out in Schedule 4 (Preliminary Due
Diligence Package).
"Prepayment" has the meaning given to such term in Clause 8.3
(Mandatory Repayment -- Asset Value).
"Prepayment Clause" means Clause 8.3 (Mandatory Repayment--Asset
Value).
"Principal Prepayment" means, for any Asset, any amount applied to
reduce the principal or other invested amount of such Asset, other than
a scheduled or regular principal payment or redemption, including (a)
principal prepayments or redemptions from any source and of any nature
whatsoever, (b) net insurance or net compulsory purchase proceeds, to
the extent applied to reduce the principal amount or other invested
amount of the related Asset, and (c) any net proceeds from any sale,
refinancing, liquidation or other disposition of the Mortgaged
Property, Underlying Mortgaged Property or interest relating to such
Asset to the extent applied to reduce the principal amount or the
invested amount of the related Asset.
"Proposed Debt Asset Warranties" has the meaning given to such term in
Clause 4.2 (Further Conditions Precedent).
"Proposed Securities Warranties" has the meaning given to such term in
Clause 4.2 (Further Conditions Precedent).
"Purchase Price" means, in relation to each Asset, the amount actually
paid by the Borrower for the acquisition of such Asset.
"Quarter" means in respect of any Person or group of Persons, each
successive financial period of such Person or group consisting of three
consecutive months ending on or about each Payment Date.
"Quotation Day" means, in relation to any period for which an interest
rate is to be determined:
(a) (if the currency is euro) two TARGET Days before the first day of
that period;
(b) (if the currency is an Optional Currency) such date as the Lender
may choose to reflect market practice for transactions similar to
the Advances in such Optional Currency; and
(c) (if the currency is Sterling) on the first day of that period,
unless market practice differs in the Relevant Interbank Market for a
currency, in which case the Quotation Day for that currency will be
determined by the Lender in accordance with market practice in the
Relevant Interbank Market (and if quotations would normally be given by
leading banks in the Relevant Interbank Market on more than one day,
the Quotation Day will be the last of those days).
"Rating Agencies" means S&P, Fitch and Moody's and "Rating Agency"
means any one of them.
"Records" means all instruments, agreements and other books, records,
and reports and data generated by other media for the storage of
information maintained by the Borrower, the Investment Manager or any
other person or entity with respect to an Asset and includes the credit
files related to each such Asset and any other instruments necessary to
document or service the same.
"Redirection Letter" means, in relation to any Eligible Asset, an
instruction letter substantially in the form set out in Schedule 13
(Form of Redirection Letter) pursuant to which the Borrower has
directed the addressee with respect to the applicable Asset to remit
all amounts on account of each such Asset directly to the Collection
Account.
"Reference Banks" means in relation to any Advance and any interest
rate, such banks as the Lender may select in its absolute discretion to
reflect any "reference banks" (howsoever described) in respect of the
related Asset.
"Relevant Equity Interests" means in respect of any Person:
(a) the holding beneficially of 100 per cent. (100%) of the issued
share capital of any Person (excluding any part of that issued
share capital that carries no right to participate beyond a
specified amount in a distribution of either profits or
capital);
(b) the joint holding beneficially of 100 per cent. (100%) of the
issued share capital of any Person (excluding any part of that
issued share capital that carries no right to participate
beyond a specified amount in a distribution of either profits
or capital), subject to customary buy/sell provisions in the
event of a deadlock on a material decision; or
(c) any other direct or indirect Equity Interests agreed to by the
Lender (with the consent of all the Lenders) in good faith
using its commercially reasonable judgment.
"Relevant Interbank Market" means in relation to euro, the European
interbank market, and, in relation to any other currency, the London
interbank market.
"Repayment Date" means the dates specified in Clause 2.6 (Availability
Period Extension Option) as Repayment Dates.
"Repeating Representations" means each of the representations set out
in Clause 22.2 (Times for making general representations).
"Reporting Date" means the twenty third (23rd) day of January, April,
July and October or, if such day is not a Business Day, the next
succeeding Business Day.
"Reservations" means: (a) the principles that equitable remedies are
remedies which may be granted or refused at the discretion of the
court; (b) the limitation of enforcement by laws relating to
bankruptcy, examinership, insolvency, liquidation, reorganisation,
court schemes, moratoria, administration and other laws generally
affecting the rights of creditors; and (c) any other qualifications as
to matters of general law (but not fact) set out in the legal opinions
referred to in paragraph 4 of Schedule 3 (Conditions Precedent).
"Resignation Letter" means a letter substantially in the form set out
in Schedule 8 (Form of Resignation Letter).
"Retail" means a Mortgaged Property or Underlying Mortgaged Property
owned by the Mortgagor or Underlying Mortgagor or for which the
Mortgagor or Underlying Mortgagor is a Ground Lessee, which constitutes
a full operational retail store, held principally for lease to a
commercial retail tenant within a shopping centre or mall and not
principally for lease to recreational or residential tenants.
"Rollover Advance" means one or more Advances:
(a) to be made on the same day that such maturing Advance or Advances
is or are due to be repaid;
(b) the aggregate amount of which is equal to or less than the
maturing Advance;
(c) in the same currency as the maturing Advance; and
(d) to be made to the Borrower for the purpose of refinancing the
maturing Advance.
"S&P" means Standard & Poor's Corporation Ratings Service, a division
of The McGraw-Hill Companies, Inc., or any successor to its rating
agency business.
"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; and
(c) in relation to any other Optional Currency, such rate as the
Lender may determine to reflect market practice for transactions
similar to those contemplated by the Finance Documents,
displayed on the appropriate page of the Reuters screen (or such other
screen) selected by the Lender (acting reasonably). If the relevant
page is replaced or service ceases to be available, the Lender may
specify another page and/or service displaying the appropriate rate
after consultation with the Sponsor and the Lenders.
"Securities Account" means the Borrower's account established and
maintained with the Securities Custodian subject to Security in favour
of the Lender pursuant to the Security Documents and to which the CMBS
owned from time to time by the Borrower shall be credited.
"Securities Act" means the US Securities Act of 1933, as amended.
"Securities Custodian" means such Person (approved by the Lender acting
in good faith) as may be appointed to act as custodian of CMBS for the
Borrower for the purposes of this Agreement and any successor custodian
under the Securities Custody Agreement].
"Securities Custody Agreement" means the Securities Custody Agreement
(in the form approved by the Lender acting in good faith) made among
the Borrower, the Lender and the Securities Custodian.
"Securities Issuer" means the issuer or guarantor of any CMBS.
"Securities Finance Documents" means in respect of any CMBS:
(a) a Trust Deed;
(b) any agreements creating security for the debt obligations created
or evidenced by such Trust Deed;
(c) any asset or loan servicing management or administration and cash
management agreements;
(d) any loan or other asset sale agreements;
(e) any hedging agreements in respect of such CMBS or their
underlying assets; and
(f) the Offering Circular for such CMBS,
in each case, as the same may from time to time be supplemented,
amended or novated pursuant to the applicable provisions thereof.
"Securities Legal Advice" has the meaning given to such term in
Schedule 4 (Preliminary Due Diligence Package).
"Security" means a mortgage, charge (fixed or floating), standard
security, pledge, lien, assignment for security, hypothecation, right
of set-off, reservation of title or security interest or any other
agreement, trust or arrangement (including, without limitation, a sale
and repurchase agreement) having a similar effect and any agreement to
enter into, create or establish any of the foregoing or the equivalent
of any of the foregoing in any relevant jurisdiction.
"Security Documents" means:
(a) each security document referred to in Schedule 3 (Conditions
Precedent); and
(b) any other document entered into by the Borrower, the Sponsor or
the Investment Manager creating or evidencing any Security for
all or any part of the obligations of the Borrower, the
Investment Manager or any of them under any of the Finance
Documents;
"Servicer Notice" means a notice substantially in the form set out in
Schedule 14 (Form of Servicer Notice).
"Senior Debt" when used in relation to any Asset other than a Whole
Loan, means all amounts owed by (or guaranteed by) the relevant
Mortgagor, Underlying Mortgagor and/or Securities Issuer or any of
their respective Affiliates which are secured by some or all of the
Mortgaged Properties or Underlying Mortgaged Properties and other
assets securing such Asset which amounts rank senior to or pari passu
with such Asset and (where such Asset, falls within paragraph (a) of
the definition of Mezzanine Loan) the Lender's estimate (made in good
faith using its commercial judgment) of the likely total amount due
from such Mortgagor to its tax, trade and other unsecured creditors in
each case, which amount shall be equal on the Utilisation Date for the
related Advance for such Asset to the amount set out in the related
Utilisation Request and thereafter to such amount as the Lender may
determine.
"Shortfall" has the meaning given to such term in Clause 8.3 (Mandatory
Prepayment--Asset Value).
"Shortfall Deadline" has the meaning given to such term in Clause 8.6
(Notice of Shortfalls).
"Subordinated Debt" means, with respect to a Person, Financial
Indebtedness of such Person which is: (a) unsecured; (b) no part of the
principal of such Financial Indebtedness is required to be paid
(whether by way of mandatory sinking fund, mandatory redemption,
mandatory prepayment or otherwise) prior to the date which is one year
following the Facility Termination Date; and (c) the payment of the
principal of and interest on such Financial Indebtedness and other
obligations of such Person in respect of such Financial Indebtedness
are subordinated to the prior payment in full of the principal of and
interest (including post-petition obligations) on the Advances and all
other obligations and liabilities of such Person to Finance Parties
hereunder on terms and conditions and all other terms and conditions of
which are satisfactory in form and substance to the Lender.
"Subsidiary" means in relation to any person, another Person:
(a) which is controlled, directly or indirectly, by the first
mentioned Person;
(b) more than half the issued share capital of which is beneficially
owned, directly or indirectly, by the first mentioned Person;
(c) more than half the voting rights of which are held, directly or
indirectly, by the first mentioned Person; or
(d) which is a Subsidiary of another Subsidiary of the first
mentioned Person,
and for this purpose, a person shall be treated as being controlled by
another if that other person is able to direct the management and
policies of such person and/or to control the composition of its board
of managers (if relevant), board of directors or equivalent body.
"Tangible Net Worth" means, as of a particular date in relation to any
Person: (a) all amounts that would be included under shareholder's or
stockholder's equity on a balance sheet of such Person and its
consolidated Subsidiaries at such date, determined in accordance with
Applicable Accounting Principles; less (b) the sum of: (i) amounts
owing to such Person and its consolidated Subsidiaries from Affiliates;
and (ii) Intangible Assets Value of such Person and its consolidated
Subsidiaries.
"TARGET Day" means any day on which the Trans-European Automated
Real-time Gross Settlement Express Transfer payment system is open for
the settlement of payments in euro.
"Tax" means any tax, levy, impost, duty or other charge or deduction 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" means the Taxes Consolidation Act 1997 of Ireland as
amended.
"Term" means in relation to any Asset, the period ending on the date on
which all principal and other amounts owed by the Mortgagor or any
Securities Issuer under such Asset are required by its terms to be
repaid in full.
"Third Party Servicer" means any servicer of the Eligible Assets or a
portion thereof, other than the Investment Manager who is the primary
servicer, master servicer, special servicer, cash manager or
administrator (howsoever described) of such Eligible Assets.
"Trust Deed" means a trust deed or indenture between a Securities
Issuer and note trustee (however defined therein) providing for the
issuance of any CMBS and as it may from time to time be supplemented,
amended or novated pursuant to the applicable provisions thereof.
"Trust Receipt" means a trust receipt substantially in the form set out
in Schedule 10 (Form of Trust Receipt) issued by the Document Custodian
to the Lender confirming the Document Custodian's possession of certain
Asset Files which are held by the Document Custodian for the benefit of
the Lender or the holder of such trust receipt or a bailment
arrangement with counsel or other third party acceptable to the Lender
in its sole and absolute but good faith discretion.
"Underlying Borrower" means the borrower or obligor, as such term may
be defined in the Asset Finance Documents.
"Underlying Hedge Agreement" means each ISDA Master Agreement, together
with the schedule and, where the context admits, the confirmations
relating thereto, entered into between a Mortgagor and one or more
Underlying Hedge Counterparties in connection with the Mortgagor's
payment obligations under an Asset for the purpose of hedging the
interest rate liabilities of the Mortgagor from time to time, as
amended, supplemented or replaced from time to time.
"Underlying Hedge Counterparties" means a provider of a Hedging
Transaction in relation to either an Asset under an Underlying Hedge
Agreement.
"Underlying Loan" means a loan, note, bond or other debt instrument
secured by a first ranking mortgage in respect of Multifamily and/or
Commercial Properties which secures or otherwise backs the obligations
of any Securities Issuer in relation to any CMBS.
"Underlying Mortgage" means a mortgage, hypothecation, agreement or
deed to secure debt or other instrument, creating a valid and
enforceable Security on or a first priority ownership interest in an
estate in fee simple or long leasehold estate (or the equivalent
thereof in any relevant jurisdiction) in real property and the
improvements thereon, securing any Underlying Loan.
"Underlying Mortgaged Property" means the Multifamily or Commercial
Property over which repayment of the debt evidenced by any Underlying
Loan is secured.
"Underlying Mortgagor" means the borrower(s), guarantor(s), third party
security provider(s) and/or obligor(s) in respect of any Underlying
Loan as the context may require or permit.
"Underwriting Issues" means, with respect to any Assets which the
Borrower proposes to the Lender should be considered for the purposes
hereof as Eligible Assets, all material information that has come to
the Borrower's and or the Sponsor's attention that, based on the making
of reasonable inquiries and the exercise of reasonable care and
diligence under the circumstances, would be considered a materially
"negative" factor (either separately or in the aggregate with other
information) or a material defect in the loan documentation or closing
deliveries (such as any absence of any material Debt Finance Documents
or Securities Finance Documents (as may be relevant)), to a reasonable
institutional mortgage lender in determining whether to originate or
acquire the Asset in question.
"Unfunded Margin Amount" means in relation to any Person, unfunded
eligible collateral under a committed warehouse facility whereby funds
may be drawn by such Person within one (1) Business Day of request
thereof and pursuant to which no event or circumstance shall have
occurred thereunder which would, by terms of the applicable agreement,
prohibit such Person from borrowing or drawing money thereunder.
"Unpaid Sum" means any sum due and payable but unpaid by the Borrower
under the Finance Documents.
"U.S. Facility" means the Master Repurchase Agreement dated on of after
the date of this Agreement between Lehman Commercial Paper Inc., as
Buyer and Anthracite Capital Inc., as Seller as initialled by the
Lender and the Borrower for the purposes of identification.
"Utilisation" means a drawing by the Borrower of an Advance under the
Facility.
"Utilisation Date" means the date of a Utilisation, being the date on
which the relevant Advance is to be made.
"Utilisation Request" means a notice substantially in the form set out
in Schedule 5 (Requests) together with each of the Annexes thereto.
"Valuation" means a valuation in form and substance satisfactory to the
Lender, prepared by and issued by a suitable valuer valuing the
Mortgagor's interests in the relevant Mortgaged Property carried out on
an market value basis as defined in the then current Royal Institution
of Chartered Surveyors Appraisal and Valuation Manual in association
with the Incorporated Society of Valuers and Auctioneers and the
Institute of Revenues Rating and Valuation, Practice Statement 4 (or
its successor) (or its equivalent in any applicable jurisdiction).
"VAT" means value added tax as provided for in the Value Added Tax Act
1994 and any other tax of a similar nature.
"Whole Loan" means a loan: (a) secured by a first ranking Mortgage in
respect of Multifamily and/or Commercial Properties; and (b) which
ranks senior to all other debt secured on such Multifamily and/or
Commercial Properties which in turn is senior to all other debts
secured by the same Mortgage (other than debts which are preferred by
operation of applicable law).
1.2 Construction
Unless a contrary indication appears, any reference in this Agreement
to:
(a) the "Borrower", the "Sponsor", the "Investment Manager", any
"Lender", the "Lender", the "Lender", any "Finance Party", any
"Party" or any other person shall be construed so as to include
their respective successors in title, permitted assigns and
permitted transferees;
(b) a document being "in the agreed terms" or in the "agreed form" or
"in the approved form" means, as the case maybe, on terms, in a
form agreed and/or in a form approved in writing by or on behalf
of the Lender on or before the date of this Agreement;
(c) "assets" includes present and future properties, revenues and
rights of every description;
(d) an "authorisation" includes an authorisation, consent,
approval, resolution, license, exemption, filing, registration
or notarisation;
(e) in the context of an acknowledgement or determination of control,
"control" and "acting in concert" have the meanings given to such
terms in Clause 27.12 (Change of Control);
(f) the "equivalent" of an amount means the equivalent in another
currency of any amount denominated in the Base Currency converted
at the Lender's Spot Rate of Exchange for the purchase of the
Base Currency with such other currency in the London foreign
exchange market at or about 11:00 a.m. on the day of calculation;
(g) 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;
(h) a "financial institution" includes trusts, funds or other
entities which are regularly engaged in, or established for the
purpose of making, purchasing or investing in loans, securities
or other financial assets;
(i) "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;
(j) "know your customer requirements" are the identification checks
that a Finance Party requests in order to meet its obligations
under any applicable law or regulation to identify a person who
is (or is to become) its customer;
(k) a "law" shall be construed as any law (including common or
customary law), statute, constitution, decree, judgment, treaty,
regulation, directive, bye-law, order or any other legislative
measure of any government, supranational, local government,
statutory or regulatory body or court, as extended, applied,
amended or re-enacted and includes any subordinate legislation;
(l) a currency is a reference to the lawful currency for the time
being of the relevant country;
(m) a Default or Event of Default is "outstanding" or "continuing"
if it has not been remedied or waived in writing;
(n) a "regulation" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law but,
if not having the force of law, being of a type with which
persons to which it applies are accustomed to comply) of any
governmental, intergovernmental or supranational body, agency,
department or regulatory, self regulatory or other authority or
organisation;
(o) the word "including" shall not be exclusive and shall mean
"including, without limitation";
(p) a "wholly owned Subsidiary" of a company or corporation shall be
construed as a reference to any company or corporation which has
no other members except that other company or corporation and/or
that other company's or corporation's wholly owned subsidiaries
or persons acting on behalf of that other company or corporation
or its wholly owned subsidiaries;
(q) the "winding-up", "dissolution" or "administration" of a company
or corporation shall be construed so as to include any equivalent
or analogous proceedings under the law of the jurisdiction in
which such company or corporation is incorporated or any
jurisdiction in which such company or corporation carries on
business including the seeking of liquidation, winding-up,
reorganisation, dissolution, administration, arrangement,
adjustment, protection or relief of debtors and including
(without limitation) for the purposes of Irish law, examinership;
(r) a "Clause", a "Sub-clause", a "paragraph" or a "Schedule" is a
reference to a clause, sub-clause or paragraph of, or a schedule
to, this Agreement;
(s) the singular includes the plural and vice versa;
(t) a Finance Document or another document is a reference to that
Finance Document or other document as amended, supplemented or
novated;
(u) unless a contrary indication appears, a time of day is a reference
to London time; and
(v) a reference to a Party will not include that Party if it has
ceased to be a Party to this Agreement.
1.3 Currency symbols and definitions
"$" and "US dollars" denote lawful currency of the United States of
America, "(euro)" "EUR" and "Euro" denote the single currency unit of
the Participating Member States and "(pound)" and "Sterling" denote
lawful currency of the United Kingdom of Great Britain and Northern
Ireland.
1.4 Third Party Rights
A person who is not a Party shall have no right under the Contracts
(Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit
of any term of this Agreement. Notwithstanding any term of any Finance
Document, the consent of any third party is not required for any
variation (including any release or compromise of any liability under)
or termination of that Finance Document. This Clause does not affect
any right or remedy of any person which exists or is available
otherwise than pursuant to that Act.
1.5 Miscellaneous
Unless the contrary intention appears:
(a) a term used in any other Finance Document (other than a Hedging
Agreement) or in any notice given under or in connection with any
Finance Document (other than a Hedging Agreement) has the same
meaning in that Finance Document or notice as in this Agreement;
(b) if there is an inconsistency between this Agreement and any other
Finance Document, this Agreement will prevail;
(c) any obligation of the Borrower under the Finance Documents which
is not a payment obligation remains in force for so long as any
payment obligation (other than indemnities) is or may be
outstanding under the Finance Documents;
(d) the index to and headings in this Agreement do not affect its
interpretation;
(e) any accounting term used in this Agreement shall be construed in
accordance with Applicable Accounting Principles;
(f) each Utilisation Request and all provisions and information
contained therein shall form part of and be construed as being
one and the same as, and read cumulatively with, this Agreement;
and
(g) in the event of a conflict with respect to an Asset between the
provisions of the applicable Utilisation Request and this
Agreement, the provisions of the Utilisation Request shall
prevail.
2 THE FACILITY
2.1 The Facility
Subject to the terms of this Agreement, the Lenders make available to
the Borrower on a several basis a multicurrency revolving loan facility
in a maximum aggregate principal amount not exceeding the Loan
Commitments ($150,000,000 on the date of this Agreement) converted to
the Base Currency at the Lender's Spot Rate of Exchange at the time of
determination of the same.
2.2 Borrowing Base
Utilisations by the Borrower under this Agreement are limited by
reference to the Borrowing Base applicable to the Borrower as provided
in Clause 4 (Conditions of Utilisation) and amounts are required to be
prepaid by the Borrower, to the extent provided in Clause 8
(Prepayment), in certain circumstances set out in the Prepayment
Clauses.
2.3 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) 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
the Borrower shall be a separate and independent debt.
(c) A Finance Party may, except as otherwise stated in the Finance
Documents, separately enforce its rights under the Finance
Documents.
(d) No Finance Party shall be liable to the Borrower or the Sponsor
or any other Person for any diminution in or loss of value,
howsoever caused, of the Assets.
2.4 Servicing
All Eligible Assets shall be serviced by the Investment Manager
pursuant to the Investment Management Agreement subject to the Lender's
rights herein or in the Investment Management Agreement.
2.5 No Liability
No Finance Party shall be liable to the Borrower or any other person
for any diminution in or loss of value, howsoever caused, of the
Assets.
2.6 Availability Period Extension Option
(a) Subject to and in accordance with the terms of this Agreement,
the Borrower may Date deliver up to two notices in writing to the
Lender (an "Availability Period Extension Notice") each
requesting that the term of the Availability Period and the
Facility be extended for an additional 30 days and the Lender
shall consent to such extension, provided that:
(i) immediately prior to and following delivery of an
Availability Period Extension Notice and (on a pro forma
basis) on a future Utilisation Date relating to any
Utilisation Request that has been delivered to the Lender,
no Prepayments are due pursuant to Clause 8 (Prepayment);
(ii) with respect to the delivery of a second Availability
Period Extension Notice, all fees due under Clause 14.1
(Extension Fee) have been paid prior to the effective date
for the same and
(iii) no Event of Default has occurred and is outstanding.
(b) An Availability Period Extension Notice may be delivered at any
time during the period which is not less than Ten (10) days prior
to the Initial Availability Period End Date or the First Extended
Availability Period End Date, as applicable.
(c) An Availability Period Extension Notice given in accordance with
this Clause 2.6 (Availability Period Extension Option) is
irrevocable.
(d) Any failure to deliver an Availability Period Extension Notice
shall be deemed to be a determination by the Borrower and the
Sponsor not to extend the then current Facility Determination
Date.
3 PURPOSE
3.1 Purpose
The Borrower shall apply all amounts borrowed by it under the Facility
solely:
(a) during the Availability Period towards purchasing or refinancing
the Eligible Assets;
(b) discharging the costs and expenses incurred in connection with
the purchasing or refinancing of Eligible Assets; and/or
(c) towards all fees, costs and expenses incurred by it in connection
with the Finance Documents.
3.2 Monitoring
The Lender shall not be bound to monitor or verify the application of
any amount borrowed pursuant to this Agreement.
4 CONDITIONS OF UTILISATION
4.1 Initial Conditions Precedent
The Lender's obligation to make available the Advances pursuant to this
Agreement, other than with respect to Rollover Advances as described in
Clause 4.2 (Further Conditions Precedent), is subject to receipt by the
Lender or its designee (including the Document Custodian) of all of the
documents and other evidence listed in Schedule 3 (Conditions
Precedent) in form and substance satisfactory to the Lender. The Lender
shall notify the Borrower promptly upon being so satisfied.
4.2 Further Conditions Precedent
(a) No Utilisation of the Facility may be borrowed unless:
(i) other than with respect to Rollover Advances, each
Utilisation Request is accompanied by:
(A) the Preliminary Due Diligence Package;
(B) the documents and evidence which the Borrower is
required to deliver pursuant to the Asset
Conditions Precedent;
(C) in relation to any Utilisation Request in respect
of CMBS, a list of: (1) the specific
representations and warranties (in the form set out
in Schedule 5 (Requests) which the Borrower would
propose to make in respect of such CMBS if they
were to be financed hereunder; (2) any specific
disclosures the Borrower would propose to make
against the representations and warranties set out
in (1); (3) any modifications the Borrower would
propose to make against the representations and
warranties set out in (1) to reflect the specific
terms or nature of such CMBS; and (4) any
additional representations and warranties the
Borrower would propose to make to reflect the laws
and practices of the jurisdictions in which the
relevant Underlying Loans, Underlying Mortgages or
Securities Issuers are situate (such
representations and warranties as so modified and
supplemented and subject to such disclosure, being
the "Proposed Securities Asset Warranties"); and
(D) in relation to any Utilisation Request in respect
of Debt Assets, a list of: (1) the specific
representations and warranties (in the form set out
in Schedule 5 (Requests) which the Borrower would
propose to make in respect of such Debt Asset if it
were to be financed hereunder; (2) any specific
disclosures the Borrower would propose to make
against the representations and warranties set out
in (1); (3) any modifications the Borrower would
propose to make against the representations and
warranties set out in (1) to reflect the specific
terms or nature of such Debt Asset; and (4) any
additional representations and warranties the
Borrower would propose to make to reflect the laws
and practices of the jurisdictions in which the
relevant Mortgaged Properties or Mortgagors are
situate (such representations and warranties as so
modified and supplemented and subject to such
disclosures, being the "Proposed Debt Asset
Warranties"),
in relation to any Assets which the Borrower is proposing
to purchase or refinance with the proposed Utilisation;
(ii) the Lender shall have received from the Document Custodian
on each Utilisation Date a Trust Receipt with respect to
each related Asset, dated the Utilisation Date, duly
completed and with exceptions acceptable to the Lender in
its sole but good faith discretion in respect of the
Assets to be financed hereunder on such Business Day;
provided, however, that in the event the Lender has
consented in writing for counsel for the Document
Custodian to hold an Asset File, the Lender shall also
receive a Bailee Letter from such counsel in form and
substance satisfactory to the Lender, as set forth in the
Document Custody Agreement;
(iii) the Lender shall have completed to its satisfaction its
due diligence review of the relevant Assets;
(iv) other than with respect to Rollover Advances, the Lender
has notified the Borrower that the Lender or its designee
(including the Document Custodian or a bailee on its
behalf) has received the Asset Conditions Precedent in
respect of any Assets which the Borrower is proposing to
purchase or refinance with the proposed Utilisation;
(v) the Lender is satisfied that immediately following the
Utilisation, the amount of the proposed Advance (if any)
shall not cause any Prepayment to become due under the
prepayment Clauses (which shall take into account the
Asset which the Borrower is proposing to purchase or
refinance with the proposed Utilisation);
(vi) the Lender has received the Closing Data Tape for the
relevant Assets;
(vii) with respect to each relevant Asset, the Borrower has
delivered or caused to be delivered to the applicable
obligor a Redirection Letter;
(viii) the Borrower shall deliver or cause to be delivered and
released to the Document Custodian the documents set forth
in the Asset File, pertaining to each of the relevant
Assets identified in the Custodial Delivery Letter
delivered therewith;
(ix) with respect to each relevant Asset, the Borrower has
delivered or caused to be delivered to the Facility or its
designee (initially, the Document Custodian) the Custodial
Delivery Letter;
(x) no Event of Default is continuing or would result from the
proposed Utilisation;
(xi) the Lender has obtained internal credit approval with
respect to such Utilisation;
(xii) any intercreditor agreement with respect to any Asset
proposed to be financed under the Facility has been
approved by the Lender in its sole and absolute but good
faith discretion;
(xiii) all fees payable to the Finance Agreement on such date
have been paid in full;
(xiv) the Lender has received evidence (to its reasonable
satisfaction) that payments in respect of the relevant
Asset will not be subject to any withholding or deduction
for or on account of any Tax; and
(xv) where such Utilisation relates to CMBS, the Lender has
received evidence satisfactory to it that such CMBS are
held by the Securities Custodian pursuant to the terms of
the Securities Custody Agreement.
(b) The Lenders will only be obliged to comply with their obligations
under this Agreement in respect of any Utilisation Request if on
the date of such Utilisation Request and on the proposed
Utilisation Date:
(i) the proposed Utilisation Date is on or before the Initial
Availability Period End Date;
(ii) no Event of Default is continuing or would result from the
proposed Utilisation;
(iii) the Repeating Representations to be made by the Borrower
are true, correct and complete;
(iv) the amount of the proposed Utilisation does not exceed the
Available Commitments and, together with any other
Advances to remain outstanding after the proposed
Utilisation Date that the aggregate Advances outstanding
hereunder will not exceed the aggregate Borrowing Base;
(v) each Lender shall have received internal credit approval
with respect to such Utilisation;
(vi) the Borrower has received on or before the related
Utilisation Date cash proceeds in an amount which is at
least equal to the acquisition cost of the related Asset
(less the amount of the related Advance); and
(vii) where such Utilisation relates to an Optional Currency,
arrangements satisfactory to the Lender have been made
pursuant to the Control Account Agreement for the
establishment of bank account arrangements for such
currency.
4.3 Conditions relating to Optional Currencies
If the Lender has received a written request from the Borrower or the
Sponsor for a currency (other than Euro or sterling) to be approved as
an Optional Currency, the Lender will confirm to the Borrower by 10.00
am on the day two (2) Business Days after receipt of such request:
(a) whether or not the Lenders have granted their approval; and
(b) if approval has been granted, the minimum amount (and, if
required, integral multiples) for any Utilisation in that
currency.
4.4 Document Custodian
Pursuant to the Document Custody Agreement, the Document Custodian (or
its counsel approved in writing by the Lender pursuant to the Document
Custody Agreement, subject to delivery of a Bailee Letter acceptable to
the Lender) shall hold the Asset Files as exclusive bailee and agent
for the Lender and shall deliver to the Lender a Trust Receipt with
respect to each Asset to the effect that the Document Custodian has
reviewed such Asset Files in the manner and to the extent required by
the Document Custody Agreement and identifying any deficiencies in such
Asset Files so reviewed.
5 UTILISATION
5.1 Delivery of Utilisation Requests
The Borrower may utilise the Facility by delivering to the Lender a
duly completed Utilisation Request not later than, unless the Lender
otherwise agrees, 11.00 a.m. five (5) Business Days (or such other
period as the parties may agree) before the Quotation Day for the
proposed Advance provided that on at least one (1) Business Day's
advance written notice to Lender, the Borrower may extend such period
by up to two (2) additional Business Days.
5.2 Conditions Precedent
Each Utilisation Request delivered by the Borrower hereunder shall
constitute a certification by the Borrower that all the conditions set
forth in the Finance Documents (including, without limitation, Clause 4
(Conditions of Utilisation)) (both as of the date of such request and
as of the date of the related purchase) have been satisfied.
5.3 Completion of Utilisation Requests
(a) Each Utilisation Request is irrevocable but will not be regarded
as having been duly completed unless:
(i) it has been signed by the Lender and amended as it may in
its absolute discretion require;
(ii) it identifies the currency and the amount of the proposed
Advance, the initial Interest Period for the proposed
Advance and the purpose for which the proceeds of each
proposed Advance are to be used (all of which comply with
the terms of this Agreement);
(iii) it identifies the proposed Utilisation Date and the
proposed Utilisation Date is a Business Day within the
Availability Period applicable to the Facility; and
(iv) duly completed Annexes to such Utilisation Request for the
relevant Assets are attached thereto.
(b) Unless otherwise agreed by the Lender, no more than one
Utilisation Request may be delivered to the Lender on any one
(1) Business Day.
(c) Unless otherwise agreed by the Lender, no more than three
Utilisation Requests may be delivered to the Lender the proposed
Utilisation Dates for which fall within one week.
5.4 Currency and Amount
(a) The currency specified in a Utilisation Request must be the Base
Currency or an Optional Currency which (for the avoidance of
doubt) shall in each case be the same currency as: (x) the
currency in which the Asset or Assets to be financed with such
proposed Advance are denominated in; or (y) the currency provided
by a Hedging Counterparty to the Borrower pursuant to the terms
of a Permitted Hedging Transaction in respect of such Assets.
(b) The amount(s) of the proposed Advances specified in a Utilisation
Request shall be:
(i) an amount whose Base Currency Amount is not more than the
Available Commitment;
(ii) if the currency selected is the Base Currency, a minimum
amount of One Million US dollars ($1,000,000) or, if less,
the Available Commitment; or
(iii) if the currency selected is a currency other than the Base
Currency, a minimum amount of One Million US dollars
($1,000,000), in each case converted into the relevant
currency (as specified in the choice of currency in the
relevant Utilisation Request) at the Lender's Spot Rate of
Exchange at 11.00 am on the related Utilisation Date or,
if less, the Available Commitment.
5.5 Drawdown
Notwithstanding that the conditions precedent listed in Clause 4
(Conditions of Utilisation) have been fulfilled, the Lender shall:
(a) review (and the Borrower acknowledges that the Lender has the
right to carry out such review and shall do all acts and things
reasonably necessary to assist such review) each Debt Asset and
each of the Securities proposed to be the subject of an Advance
under the Facility (which review shall, for the avoidance of
doubt and without limitation, include an analysis of the nature
and credit profile of all the Assets financed under the Facility
(if any) at the date of such review) and conduct its own due
diligence investigation (if any) of such Debt Assets and
Securities as the Lender reasonably determines to be appropriate;
(b) make a determination that any Advance under the Facility and in
respect of any such Assets which the Borrower proposes as
Eligible Assets shall or as the case may be, shall not be entered
into, and the Lender shall notify the Sponsor and the Borrower in
writing prior to the proposed Utilisation Date as to its
determination pursuant to this paragraph (b), such determination
to be made in the Lender's sole and absolute but good faith
discretion, for any reason and for no reason;
(c) if, with respect to any Asset, the Lender elects not to make an
Advance in respect of such Asset, it shall respond to any
Utilisation Request delivered to it by the Borrower within the
time frames specified in this Clause, notifying the Borrower of
its election and the Lender shall notify the Borrower of any such
election as soon as reasonably practicable and in any event by no
later than the last day of the applicable notice period for such
Utilisation Request under Clause 5.1 (Delivery of Utilisation
Requests); and
(d) upon completion of its review, the Lender shall in its sole but
good faith discretion determine whether to purchase such Assets,
and consistent with this Agreement, specify the terms for such
proposed Advance, including the applicable currency, Interest
Period, Advance Rate or Advance, the Market Value, the
Utilisation Date and the final form of Utilisation Request for
such Asset and its related Advance signed by the Lender.
6 OPTIONAL CURRENCIES
6.1 Unavailability of a currency
If before 9.30 a.m. on any Quotation Day:
(a) the Lender has received notice from a Lender that, any Optional
Currency requested is not readily available to it in the amount
required; or
(b) a Lender notifies the Lender that compliance with its obligation
to participate in an Advance in a proposed Optional Currency
would contravene a law or regulation applicable to it,
the Lender will give notice to the Borrower to that effect promptly and
in any event no later than 11.00 a.m. on that day. In this event, any
Lender that gives notice pursuant to this Clause 6.1 (Unavailability of
a currency) will be required to participate in an Advance in the Base
Currency (in an amount equal to that Lender's proportion of the Base
Currency Amount and its participation will be treated as a separate
Advance denominated in the Base Currency during that Interest Period.
6.2 Optional Currency equivalents generally
(a) The equivalent in the Base Currency of an Advance or part of an
Advance in an Optional Currency for the purposes of calculating:
(i) whether any limit under this Agreement has been exceeded;
(ii) the amount of an Advance;
(iii) the amount of any repayment of an Advance; or
(iv) the undrawn amount of the Lender's Loan Commitment,
is its Base Currency Amount except to the extent expressly
stated to the contrary in this Agreement.
(b) Where Advances are outstanding in more than one currency, for the
purposes of calculating:
(i) the total aggregate amount of outstanding Advances; or
(ii) any amount received by the Lender under this Agreement,
the Lender will translate all amounts not denominated in the
Base Currency into the Base Currency.
(c) For the purpose of paragraph (b) above:
(i) any Loan denominated in an Optional Currency will be taken
at its Base Currency Amount; and
(ii) the equivalent in the Base Currency will be calculated on
the basis of the Lender's Spot Rate of Exchange at 11.00
am on the date on which the amount is to be calculated.
7 REPAYMENT
(a) The Borrower shall repay each Advance on the last day of its
Interest Period.
(b) Subject to the other terms of this Agreement, any amounts repaid
under paragraph (a) above may be reborrowed.
(c) Without prejudice to the Borrower's obligation to repay the full
amount of each Advance on its due date, on the date of any
Rollover Advance drawn by the Borrower, the amount to be repaid
and the amount to be drawn by the Borrower on such date in the
same currency shall be netted off against each other so that the
amount of cash which the Borrower is actually required to pay or,
as the case may be, the amount of cash which the Lenders are
actually required to lend to the Borrower, shall be the net
amount.
8 PREPAYMENT
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 Advance:
(a) that Lender shall promptly notify the Borrower upon becoming
aware of that event; and
(b) the Borrower shall repay or prepay that Lender's participation in
each Advance made to the Borrower on the last day of the Interest
Period for an Advance occurring after the Lender has notified the
Borrower or, if earlier, the date specified by the Lender in the
notice delivered to the Lender (being no earlier than the last
day of any applicable grace period permitted by law).
8.2 Mandatory Prepayment - Prepayment and Redemption
If any Mortgagor, Underlying Mortgagor, Securities Issuer or other
obligor in respect of a Eligible Asset prepays or redeems the same in
full or part paid, the Borrower shall:
(a) provide the Lender with a copy of a report from the Investment
Manager and/or Third Party Servicer indicating that such Eligible
Asset has been prepaid or redeemed in full or part, as the case
may be;
(b) in the case of a prepayment or redemption, pay to the Lender the
relevant portion of the related Advances within one Business Day
of receipt of such prepayment or redemption proceeds (together
with all other amounts due hereunder in respect of the same
including, without limitation, Break Costs); and
(c) provide the Lender a notice specifying any applicable Eligible
Asset that has been prepaid or redeemed in accordance with the
terms thereof.
8.3 Mandatory Prepayment - Asset Value
If at any time the aggregate Borrowing Base is less than the aggregate
amount of the Advances outstanding hereunder to the Borrower (the
amount of such shortfall, the "Shortfall"), then the Lender may by
notice (in accordance with Clause 8.6 (Notice of Shortfalls)) to the
Borrower require the Borrower to prepay the outstanding Advances in an
amount at least equal to the Shortfall (such requirement, a
"Prepayment") and the Lender shall apply such prepayment to the
outstanding Advances on a weighted average, pro rata basis, with
respect to the financed Assets that gave rise to the Shortfall.
8.4 Mandatory Prepayment - Asset Prepayment Conditions
If an Asset Prepayment Condition occurs with respect to any Asset, the
Borrower shall promptly notify the Lender upon becoming aware of that
event and the Borrower shall prepay the Advance with respect to such
Asset.
8.5 Mandatory Prepayment - Currency Fluctuations
If the aggregate amount of the Advances (converted to US dollars using
the Lender's Spot Rate of Exchange) at any time exceeds the Loan
Commitments (expressed in US dollars), the Borrower shall promptly
prepay such amount of the Advances as may be required to eliminate such
excess.
8.6 Notice of Shortfalls
Notice delivered pursuant to Clause 8.3 (Mandatory Prepayment--Asset
Value), (the "Prepayment Clause") shall be given in accordance with the
terms of Clause 32 (Notices). Any such notice given before 10:00 a.m.
(London time) on a Business Day shall be met, and the related Shortfall
satisfied, no later than 5:00 p.m. (London time) on such Business Day;
notice given after 10:00 a.m. (London time) on a Business Day shall be
met, and the related Shortfall satisfied, no later than 5:00 p.m.
(London time) on the following Business Day (the foregoing time
requirements for satisfaction of a Shortfall are referred to as the
"Shortfall Deadlines").
8.7 Voluntary Prepayment of the Advance
The Borrower may, by giving not less than one (1) Business Days' prior
written notice (or such shorter period as the Lender may agree) to the
Lender, prepay amounts outstanding under the Facility at any time in
whole or in part so long as:
(a) such prepayment is allocated, pro rata, to each Eligible Asset
outstanding under the Facility; and
(b) no Default or Event of Default has occurred or is outstanding.
8.8 Re-borrowing of Prepayments
If at any time following the initial Utilisation Date the Borrower
makes a prepayment of the Advances in accordance with this Clause 8
(Prepayment), the Lenders may, subject to compliance by the Borrower
with the terms of this Agreement, agree to a Utilisation by the
Borrower in accordance with the terms of a duly completed Utilisation
Request which Utilisation shall be in an amount not exceeding the then
Available Commitment.
8.9 Automatic cancellation
The undrawn Commitment of each Lender in relation to the Facility will
be automatically cancelled at the close of business on the last day of
the Availability Period.
8.10 Restrictions
(a) Any notice of prepayment given by any Party under this Clause 8
(Prepayment)) shall be irrevocable and, unless a contrary
indication appears in this Agreement, shall specify the date or
dates upon which the relevant prepayment is to be made and the
amount of that prepayment.
(b) Any prepayment under this Agreement shall be made together with
accrued interest on the amount prepaid and, subject to any Break
Costs payable pursuant to Clause 13.4 (Break Costs).
(c) The Borrower shall not repay or prepay all or any part of the
Advance or cancel all or any part of the Loan Commitment except
at the times and in the manner expressly provided for in this
Agreement.
(d) If the Lender receives a notice under this Clause 8 (Prepayment)
it shall promptly forward a copy of that notice to either the
Borrower or the affected Lender or Lenders, as appropriate.
9 DETERMINATIONS
(a) The Lender shall determine the Borrowing Base, Market Value and
other matters required for the purposes of Clause 8 (Prepayment):
(i) in relation to a proposed Utilisation, on the date of the
related Utilisation Request;
(ii) in relation to any mandatory prepayment pursuant to the
Prepayment Clauses;
(iii) at any other time on a Business Day which is deemed
appropriate or desirable by the Lender in its sole but
good faith discretion; and
(iv) on the occurrence and continuance of any Default.
(b) Promptly following any such determination under paragraph (a)
above, the Lender shall notify the Borrower of such calculations
the Lenders of the Market Value of any Asset or the amount of the
Borrowing Base.
(c) The Lender will provide the Borrower and the Sponsor and the
Lenders with the Lender's calculation of the amounts referred
to in paragraph (a) above, which calculations shall be
conclusive and binding on the parties hereto as to the matters
set out therein; provided that any failure by the Lender to
make the calculations or provide the information under this
Clause 9 (Determinations) shall not affect any obligation of
any Borrower under the Finance Documents.
10 ACCOUNTS OF THE BORROWER
10.1 Collection Account
(a) The Collection Account shall be established by the Bank in
accordance with the terms and conditions of the Control Account
Agreement concurrently with the execution and delivery of this
Agreement by the Borrower and the relevant Finance Parties.
(b) For the purposes of all calculations, determinations and payments
to be made from time to time pursuant to the Finance Documents,
the Collection Account shall (notwithstanding that the same may
be comprised of more than one account) be treated as a single
account and (save where expressly provided to the contrary) any
amounts standing to the credit thereof which are denominated in
an Optional Currency shall be converted to the Base Currency at
the Lender's Spot Rate of Exchange.
(c) The Lender shall have sole signing rights over the Collection
Account.
(d) The Borrower and the Investment Manager shall deposit all Income
derived from the Eligible Assets (as well as any interest
received from the reinvestment of such Income), whether
constituting collections thereon or proceeds of sale thereof, and
any payments in respect of associated Underlying Hedge Agreement,
into the Collection Account within two (2) Business Days of
receipt of the same.
(e) All Income received by the Borrower or the Investment Manager
shall be held in trust for the Lender and once deposited into the
Collection Account shall not be commingled with other property of
the Borrower, the Investment Manager or any of their respective
Affiliates.
(f) Subject to Clause 10.8 (Collections Following Default), Income on
deposit in the Collection Account may at the option and direction
of the Investment Manager be invested in Permitted Investments to
the extent permitted under the Investment Agreement that mature
on or before the next succeeding Payment Date.
10.2 Securities Account
(a) The Securities Account shall be established by the Securities
Custodian in accordance with the terms and conditions of the
Securities Custody Agreement concurrently with the execution and
delivery of this Agreement by the Borrower and the relevant
Finance Parties.
(b) The Lender shall have sole signing rights over the Securities
Account.
(c) The Investment Manager shall deposit all CMBS from time to time
acquired by the Borrower into the Securities Account immediately
on acquisition of the same.
(d) No CMBS may be withdrawn from the Securities Account without the
consent of the Lender.
10.3 Redirection Letters
(a) With respect to each Eligible Asset, the Borrower or the
Investment Manager shall deliver to the relevant parties and the
Bank a Redirection Letter.
(b) Upon the occurrence of an Event of Default, the Lender may
deliver Redirection Letters on behalf of the Borrower and the
Investment Manager to the relevant parties.
(c) The Parties shall comply with the provisions of Clause 20.4
(Third Party Servicers) in relation to Third Party Services.
10.4 Distribution of Income
Neither the Borrower nor the Investment Manager shall withdraw any
Income (or other amounts as referred to in Clause 10.1 (Collection
Account) from the Collection Account other than in accordance with the
terms of this Agreement and the Investment Management Agreement.
10.5 Balloon Payments and Principal Prepayments
Unless an Event of Default shall then be continuing, all Balloon
Payments and Principal Prepayments deposited into the Collection
Account shall, after notice to the Lender and the Bank, be applied by
the Investment Manager on behalf of the Borrower on the date of such
deposit or, if such deposit is made after 3:00 p.m. (London time), on
the following Business Day, as a prepayment to the Lenders in order to
reduce the Advances in respect of the related Eligible Asset by an
amount equal to the lesser of: (a) the amount of such payment; and (b)
the Advance Rate in respect of the related Eligible Asset. The balance
of such Balloon Payments and Principal Prepayments in excess of the
Advances outstanding in respect of the related Eligible Asset shall be
paid to Borrower on such date.
10.6 Release of funds from the Collection Account
Funds deposited in the Collection Account during any Interest Period
(except as provided in Clause 10.5 (Balloon Payments and Principal
Prepayments)) shall be held therein until the next Payment Date unless
such funds relate to an Asset the Advances for which have been fully
repaid or prepaid and the Borrower has elected to pay, and has paid, in
full all Break Costs relating to such repayment or prepayment in which
case, provided that no Default shall have occurred or will result
therefrom, all such excess funds shall be released to the Borrower.
10.7 Priorities of Payments (Pre-Default)
On or before 3:00 p.m. (London time) on the day prior to each Payment
Date, the Borrower shall deliver to the Lender and the Bank details of
any amounts then due to the parties set out in this Clause (other than
the Finance Parties). Subject to the terms of the Control Account
Agreement, on each Payment Date all funds on deposit in the Collection
Account shall be allocated in or towards payment (or provision for
payment) of the following:
(a) first, to the Lender in payment of all costs, fees and expenses
due to them under the Finance Documents;
(b) second, to the Bank, the Document Custodian and the Securities
Custodian their fees pursuant to the Control Account Agreement,
the Document Custody Agreement and the Securities Custody
Agreement, respectively;
(c) third, to any Person falling within paragraph (a) of the
definition of Hedging Counterparty of all amounts due to it under
any Permitted Hedging Transaction entered into by it with the
Borrower;
(d) fourth, to the Lender in payment of any accrued and unpaid
interest on the Advances then outstanding;
(e) fifth, without limiting the rights of the Lenders under Clause 8
(Prepayment) of this Agreement, to the Lender, in the amount of
any unpaid Prepayments to be applied as set forth in the
applicable Prepayment Clauses;
(f) sixth, in the case of any Advance which is then due to be repaid,
in or towards repayment of the same;
(g) seventh, to the payment of all other costs and fees and
Obligations payable to the Finance Parties pursuant to the
Finance Documents (without duplication of those described in
paragraphs (a)-(f) above);
(h) eighth, to any Person falling within paragraph (b) of the
definition of Hedging Counterparty of all amounts due to it under
any Permitted Hedging Transaction entered into by it with the
Borrower;
(i) ninth, to the Sponsor of all amounts due under the guarantee
contained in Clause 21 (Guarantee and indemnity); and
(j) tenth, any remainder shall be paid to the Borrower in full.
10.8 Collections Following Default
The Borrower hereby agrees that, any other term of the Finance
Documents notwithstanding, any sums credited to the Collection Account
may not be paid to or to the order of the Borrower or the Investment
Manager following the occurrence of an Event of Default which is
continuing and the Lender shall, and is irrevocably authorised by the
Borrower to apply any amounts standing to the credit of the Collection
Account in accordance with the provisions of Clause 10.9 (Priorities of
Payments (Post-Default)).
10.9 Priorities of Payments (Post-Default)
Notwithstanding the provisions of Clause 10.7 (Priorities of Payments
(Pre-Default)), if an Event of Default shall have occurred hereunder
and be continuing, all funds in the Collection Account shall be
withdrawn by the Lender and applied:
(a) first, in the same order of priority as set out in Clause 10.7
(Priorities of Payments (Pre-Default)) paragraphs (a) to (e)
above;
(b) second, to reduction of the aggregate principal amount of all
outstanding Advances until reduced to zero;
(c) third, to payment of all costs and fees and any other Obligations
payable to the Finance Parties pursuant to the Finance Documents
(without duplication of those described in paragraphs (a) and (b)
above);
(d) fourth, to any Person falling within paragraph (b) of the
definition of Hedging Counterparty of all amounts due to it under
any Permitted Hedging Transaction entered into by it with the
Borrower;
(e) fifth, to the Sponsor of all amounts due under the guarantee
contained Clause 21 (Guarantee and indemnity); and
(f) sixth, any remainder shall be paid to the Borrower in full.
11 INTEREST
11.1 Calculation of interest
The rate of interest on each Advance for its Interest Period is the
percentage rate per annum which is the aggregate of the applicable:
(a) Margin;
(b) IBOR; and
(c) Mandatory Cost, if any,
in each case for that Interest Period; provided that with respect to
any Advance and its initial Interest Period, the applicable IBOR shall
be the rate for obligations maturing at the next Payment Date for such
Advance.
11.2 Payment of Interest
Except where it is provided to the contrary in this Agreement, the
Borrower shall pay accrued interest on each Advance on the last day of
its Interest Period.
11.3 Default Interest
(a) If the Borrower fails to pay any amount payable by it under this
Agreement or the other Finance Documents on its due date then
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 is the sum of two (2) per cent. per annum and the
rate which would have been payable if the overdue amount had,
during the period of non-payment, constituted the Loan for
successive Interest Periods, each of a duration selected by the
Lender.
(b) If the overdue amount consists of all or part of the Loan made to
the Borrower and became due on a day other than the last day of
an Interest Period relating to such Loan:
(i) the first Interest Period applicable to that overdue
amount shall be of a duration equal to the unexpired
portion of that Interest Period; and
(ii) the rate of interest on that overdue amount for that
Interest Period shall be the sum of one (1) per cent. and
the rate per annum applicable to it immediately before it
became due.
(c) Any interest accruing under this Clause 11.3 (Default Interest)
shall be immediately payable by the Borrower on demand by the
Lender.
(d) 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.
11.4 Notification of Rates of Interest
The Lender shall promptly notify the Borrower of the determination of a
rate of interest under this Agreement.
11.5 Recalculation of interest
Should Clause 15 (Tax Gross up and Indemnities) be unenforceable for
any reason, the rate of interest on each Advance for each period during
which a Tax Deduction is required to be made shall be the percentage
rate per annum which is the aggregate of the applicable:
(a) Margin;
(b) IBOR, as applicable; and
(c) Mandatory Cost, if any,
divided by a factor equal to one (1) minus the amount of the required
Tax Deduction expressed as a multiplier (i.e., ten (10) per cent. will
be expressed as 0.10 and not as 10%).
12 INTEREST PERIODS
12.1 Selection of Interest Periods
(a) Each Advance has one Interest Period only.
(b) The Borrower (or the Sponsor on its behalf) shall in accordance
with paragraph (c) below state the Interest Period for an Advance
in the relevant Utilisation Request for that loan; provided that
the initial Interest Period for each Advance shall end on the
first Payment Date for such Advance following the date such
Advance is made.
(c) Subject to the provisions of this Clause 12 (Interest Periods),
the Interest Period of each Advance (other than the initial
Interest Period for such Advance) shall be a period of three (3)
months ending on a Payment Date for such Advance).
12.2 No overrunning the Facility Termination Date
If an Interest Period for the Advance would otherwise overrun the
Facility Termination Date, it will be shortened so that it ends on the
Facility Termination Date.
12.3 Other adjustments
The Lender and the Sponsor may enter into such other arrangements as
they may agree for the adjustment of Interest Periods.
13 CHANGES TO THE CALCULATION OF INTEREST
13.1 Absence of quotations
Subject to Clause 13.2 (Market disruption), if the applicable IBOR is
to be determined by reference to the Reference Banks but a Reference
Bank does not supply a quotation by noon on the Quotation Day, the
applicable IBOR shall be determined on the basis of the quotations of
the remaining Reference Banks.
13.2 Market disruption
If a Market Disruption Event occurs in relation to an Advance for any
Interest Period, then the rate of interest on each Lender's share of
that Advance for the Interest Period shall be the rate per annum which
is the sum of:
(a) the Margin;
(b) the rate notified to the Lender by that Lender as soon as
practicable and in any event before interest is due to be paid in
respect of that Interest Period, to be that which expresses as a
percentage rate per annum the cost to that Lender of funding its
participation in that Advance from whatever source it may
reasonably select; and
(c) the Mandatory Cost, if any, applicable to that Lender's
participation in the Advance.
13.3 Alternative basis of interest or funding
(a) If a Market Disruption Event occurs and the Lender or the
Borrower so requires, the Lender and the Borrower shall enter
into negotiations (for a period of not more than 30 days) with a
view to agreeing 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 all the Lenders and the
Borrower, be binding on all Parties.
13.4 Break Costs
(a) The Borrower shall, within three (3) Business Days of demand by a
Finance Party, pay to that Finance Party its Break Costs
attributable to all or any part of an Advance or Unpaid Sum being
paid by the Borrower on a day other than the last day of an
Interest Period for that Advance or Unpaid Sum.
(b) Each Lender shall as soon as reasonably practicable after a
demand by the Lender provide a certificate confirming the amount
of its Break Costs for any Interest Period in which they accrue.
14 FEES
14.1 Extension fee
The Sponsor shall pay (or procure that the Borrower pays) to the Lender
in the currency of the Facility an extension fee in an amount equal to
0.25 per cent. of the aggregate Advances outstanding as at the date (if
any) on which a second Availability Period Extension Notice is issued
pursuant to Clause 2.6 (Availability Period Extension Option). Such
extension fee shall be payable on the date which is the of such second
Availability Period Extension Notice (if any).
14.2 Upfront fee
The Sponsor shall pay (or procure that the Borrower pays) to the Lender
on the Closing Date in the currency of the Facility an upfront fee in
an amount equal to 0.25 per cent. of the Loan Commitment as of the
Closing Date.
14.3 Exit fee
To the extent, if any, that the same is not paid under the U.S.
Facility, the Sponsor shall pay (or procure that the Borrower pays) to
the Lender in the currency of the Facility an exit fee in an amount
equal to 2.50 per cent. of the Loan Commitment as of the Closing Date
on the earlier of:
(a) the Facility Termination Date; and
(b) the date (as determined by the lender) on which an Equity
Offering has been completed.
15 TAX GROSS UP AND INDEMNITIES
15.1 Definitions
In this Agreement:
"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 a Lender which is beneficially entitled to
interest payable to that Lender in respect of an advance under a
Finance Document and is:
(a) (i) the holder of a licence for the time being in force granted
under Section 9 of the Irish Central Bank Act 1971 and whose
Facility Office is located in Ireland; or (ii) 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 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 Ireland and whose
Facility Office is located in Ireland provided in each case that
it is carrying on a bona fide banking business in Ireland with
which the interest payment made pursuant to the advance is
connected; or
(b) a:
(i) company (as defined in Section 246 of the Taxes Act) that
is resident for the purposes of tax in a member state of
the European Communities (other than Ireland) or in a
territory with which Ireland has concluded a Treaty
(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) U.S. corporation, provided the U.S. corporation is
incorporated in the U.S. and subject to federal tax in the
U.S. on its worldwide income; or
(iii) U.S. limited liability company, provided the ultimate
recipients of the interest are resident in and under the
laws of a territory with which Ireland has a Treaty or
resident in and under the laws of a member state of the
European Communities (other than Ireland) and the business
conducted through the limited liability company 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 Ireland through an
agency or branch with which the interest payment made
pursuant to the advance is connected; or
(c) a Treaty Lender; or
(d) a body corporate which is resident in Ireland for the purposes of
Irish tax or which carries on a trade in Ireland through a branch
or agency:
(i) which advances money under the Agreement 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
advance 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 Taxes Act, including making the
appropriate notifications thereunder to the Revenue
Commissioners of Ireland and the relevant Lender has not
ceased to be a company to which Section 246(5)(a) applies,
(e) a qualifying company within the meaning of Section 110 of
the 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 an increased payment made by the Borrower to a
Finance Party under Clause 15.2 (Tax gross up) or a payment under
Clause 15.3 (Tax indemnity).
"Treaty Lender" means a Lender which, on the date of a payment
of interest by the Borrower falls due under this Agreement:
(a) is treated as a resident of a Treaty State for the purposes of
the Treaty;
(b) does not carry on a business in the relevant Treaty State through
a permanent establishment with which that Lender's participation
in the advance is effectively connected; and
(c) is otherwise entitled to receive interest payments from such
Borrower without the Borrower being required to make a Tax
Deduction.
"Treaty State" means a jurisdiction having a double taxation agreement
(a "Treaty") with Ireland which makes provision for full exemption from
tax imposed by Ireland on interest.
Unless the contrary indication appears, in this Clause 15 (Tax Gross Up
and Indemnities) a reference to "determines" or "determined" means a
determination made in the absolute discretion of the person making the
determination.
15.2 Tax gross up
(a) The Borrower shall make all payments to be made by it under the
Finance Documents without any Tax Deduction, unless a Tax
Deduction is required by law.
(b) The Borrower shall promptly upon becoming aware that it must make
a Tax Deduction (or that there is any change in the rate or the
basis of a Tax Deduction) notify the Lender accordingly.
Similarly, a Lender shall notify the Borrower on becoming so
aware in respect of a payment payable to that Lender.
(c) If a Tax Deduction is required by law to be made by the Borrower,
the amount of the payment due from that the Borrower 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) The Borrower 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 Ireland from a payment of interest on an
Advance, if on the date on which the payment falls due: (i) the
payment could have been made to the Lender without a Tax
Deduction if it was a Qualifying Lender, but on that date the
Lender is not or has ceased to be a Qualifying Lender other than
as a result of any change after the date of this Agreement in (or
in the interpretation, administration, or application of) any
law, or any published practice or concession of any relevant
taxing authority; or (ii) the Lender is a Treaty Lender and the
Borrower is able to demonstrate that payments could have been
made to that Lender without a Tax Deduction had that Lender
complied with its obligations under paragraph (g) below.
(e) If the Borrower is required to make a Tax Deduction, the Borrower
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
Borrower making that Tax Deduction shall deliver to 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) Any Treaty Lender shall (at the cost and expense of the Borrower)
provide reasonable co-operation in completing any procedural
formalities necessary for the Borrower to obtain authorisation to
make payments without a Tax Deduction.
15.3 Tax indemnity
(a) The Borrower shall indemnify each Protected Party from and
against all losses, liabilities or costs 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.
(b) The Borrower shall within ten (10) Business Days of demand by a
Protected Party, pay to such Protected Party any amounts due from
it under the indemnity contained in paragraph (a) above.
(c) 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 has a taxable presence; 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 or 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 15.2 (Tax gross up); or
(B) would have been compensated for by an increased
payment under Clause 15.2 (Tax gross up) but was not
so compensated solely because one of the exclusions
in Clause 15.2 (Tax gross up) applied.
(d) A Protected Party making, or intending to make a claim under
paragraph (a) above shall promptly notify the Borrower of the
event which will give, or has given, rise to the claim.
(e) A Protected Party shall, on receiving a payment from the Borrower
under this Clause 15.3 (Tax indemnity), notify the Lender.
15.4 Tax Credit
If the Borrower makes a Tax Payment and the relevant Finance Party
(acting in good faith) determines that:
(a) a Tax Credit is attributable either to an increased amount of
which that Tax Payment forms part or to all or part of 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 Borrower 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 made by the Borrower.
15.5 Stamp Taxes
The Sponsor shall indemnify the Finance Parties from and against any
cost, loss or liability the Finance Parties incur in relation to all
stamp duty, registration and other similar Taxes payable in respect of
any Finance Document. The Sponsor shall within three (3) Business Days
of demand pay to any Finance Party any amounts due from it under this
Clause.
15.6 Value Added Tax
(a) All consideration payable under a Finance Document by any
Borrower to the Finance Parties shall be deemed to be exclusive
of any VAT. If VAT is chargeable, the Borrower shall pay to the
Lender (on behalf of the Finance Parties) (in addition to and at
the same time as paying the consideration) an amount equal to the
amount of the VAT (and the Lender shall promptly provide an
appropriate VAT invoice to the Borrower).
(b) Where a Finance Document requires the Borrower to reimburse any
Finance Party for any costs or expenses, the Borrower shall also
at the same time pay and indemnify the relevant Finance Party
against all VAT incurred by the relevant Finance Party in respect
of the costs or expenses to the extent the relevant 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.
15.7 Qualifying Lender
The Lender represents and warrants to the Borrower that, as of the date
hereof, it is a Qualifying Lender and upon receipt of written request
from the Borrower, undertakes to notify the Borrower if it is not a
Qualifying Lender.
16 INCREASED COSTS
16.1 Increased costs
(a) Subject to Clause 16.3 (Exceptions), the Borrower shall indemnify
each Finance Party from and against 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) The Borrower shall within three (3) Business Days of a demand by
the Lender pay for the account of the relevant Finance Party
amounts due from it pursuant to paragraph (a) above.
(c) In this Agreement "Increased Costs" means:
(i) a reduction in the rate of return under a Finance Document
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 a
Finance Party or any of its Affiliates but only to the
extent that it is attributable to that Finance Party
having entered into any Finance Document, its Loan
Commitment and/or funding or performing its obligations
under any Finance Document.
16.2 Increased cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 16.1
(Increased costs) shall notify the Lender of the event giving
rise to the claim, following which the Lender shall promptly
notify the Sponsor.
(b) Each Finance Party shall, as soon as practicable after a demand
by the Lender, provide a certificate confirming the amount of its
Increased Costs.
16.3 Exceptions
(a) Clause 16.1 (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 the Borrower;
(ii) compensated for by Clause 15.3 (Tax indemnity) (or would
have been compensated for under Clause 15.3 (Tax
indemnity) but was not so compensated solely because any
exclusions in paragraph (b) of Clause 15.3 (Tax
indemnity);
(iii) compensated for by the payment of the Mandatory Cost; or
(iv) attributable to the wilful breach by the relevant Finance
Party or its Affiliates of any law or regulation.
(b) In this Clause 16.3 (Exceptions), a reference to a "Tax
Deduction" has the same meaning given to the term in Clause 15.1
(Definitions).
17 OTHER INDEMNITIES
17.1 Currency indemnity
(a) If any sum due from the Borrower 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 the Borrower;
(ii) obtaining or enforcing an order, judgment or award in
relation to any litigation or arbitration proceedings,
the Borrower shall as an independent obligation indemnify each
Finance Party to whom that Sum is due from and 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) The Borrower 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.
17.2 Other indemnities
The Borrower shall indemnify each Finance Party from and against any
cost, loss or liability incurred by that Finance Party as a result of:
(a) the occurrence of any Event of Default, or the giving of notice
under Clause 27.18 (Acceleration);
(b) a failure by the Borrower to pay any amount due under a Finance
Document on its due date; (c) funding, or making arrangements to
fund, its participation in an Advance requested in a Utilisation
Request but not made by reason of the operation of any one or
more of the provisions of this Agreement (other than by reason of
wilful default or gross negligence by that Finance Party alone);
(d) an Advance (or part of an Advance) not being prepaid in
accordance with a notice of prepayment given by the Borrower, and
(e) the Borrower shall within three (3) Business Days of demand pay
to any Finance Party any amounts due from it under this Clause.
17.3 Indemnity to the Lender
The Borrower shall indemnify the Lender from and against any cost, loss
or liability incurred by it (acting reasonably) as a result of:
(a) investigating any event which it reasonably believes is or may be
a Default;
(b) acting or relying on any notice, request or instruction which it
reasonably believes to be genuine, correct and appropriately
authorised;
(c) acting in its capacity as an Lender under this Agreement; and
(d) the Borrower shall within three (3) Business Days of demand pay
to any Finance Party any amounts due from it under this Clause.
17.4 Acquisition indemnity
The Borrower shall indemnify each Finance Party from and against any
loss or liability incurred by that Finance Party in connection with or
arising out of any litigation, arbitration or administrative
proceedings or regulatory enquiry concerning or in connection with or
arising out of the Borrower's or any other person's acquisition,
holding or funding of, or exercise of rights in respect of, the Assets
and/or the grant of any Security by it under the Security Documents to
which it is party. The Borrower shall within three (3) Business Days of
demand pay to any Finance Party any amounts due from it under this
Clause.
18 MITIGATION BY THE LENDER
18.1 Mitigation
(a) Each Finance Party shall, in consultation with the Sponsor, take
all reasonable steps to mitigate any circumstances which arise
and which would result in any amount (or increased amount)
becoming payable under or pursuant to, or cancelled pursuant to,
any of Clause 8.1 (Illegality), Clause 15 (Tax Gross Up and
Indemnities) or Clause 16 (Increased costs) including (but not
limited to) transferring its rights and obligations under the
Finance Documents to another Affiliate or Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of
the Borrower, the Sponsor or the Investment Manager under the
Finance Documents.
18.2 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 18.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause
18.1 (Mitigation) if, in the reasonable opinion of that Finance
Party, to do so might be prejudicial to it.
18.3 Conduct of business by a Finance Party
No term 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 in respect of Tax
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 computation in respect of
Tax.
19 COSTS AND EXPENSES
19.1 Transaction expenses
The Borrower shall promptly on demand pay the Lender the amount of all
pre-agreed costs and expenses (including legal fees and notarial fees)
reasonably incurred by any of them in connection with the negotiation,
preparation, printing, execution and perfection of:
(a) this Agreement and any other documents referred to in this
Agreement; and
(b) any other Finance Documents executed after the date of this
Agreement.
19.2 Transaction Parties
The Borrower shall promptly on demand pay the all fees costs and
expenses due from time to time to the Bank, the Document Custodian, the
Securities Custodian and the Investment Manager.
19.3 Amendment costs
If the Borrower requests an amendment, waiver or consent, the Borrower
shall, within four (4) days of demand, reimburse each Finance Party on
a full indemnity basis for the amount of all reasonable costs and
expenses (including legal and notarial fees) incurred by that Finance
Party in evaluating, negotiating or complying with that request or
requirement.
19.4 Asset due diligence costs
The Borrower shall promptly on demand pay to the Lender the amount of
all costs and expenses (including legal fees) incurred by it in
connection with any review or due diligence investigation that it
conducts in respect of the Assets in respect of which the Borrower has
or proposes to deliver a Utilisation Request in accordance with the
provisions set out in Clause 5.5 (Drawdown).
19.5 Enforcement costs
The Borrower shall, within three (3) Business Days of demand, pay to
each Finance Party the amount of all costs and expenses (including
legal fees) incurred by that Finance Party in connection with the
enforcement of, or the preservation of any rights under, any Finance
Document.
20 SERVICING
20.1 Duties of the Investment Manager
The Borrower and the Lender shall contract with the Investment Manager
to service the Assets pursuant to the Investment Management Agreement,
consistent with the degree of skill and care that Investment Manager
customarily requires with respect to similar assets owned or managed by
it and in accordance with Accepted Servicing Practices. The Investment
Management Agreement shall require, inter alia, that the Investment
Manager: (a) comply with all applicable laws and regulations; (b)
maintain all licenses necessary for it to perform its servicing
responsibilities; and (c) not impair the rights of the Finance Parties
in any Eligible Assets or any payment thereunder. In addition, the
Investment Management Agreement shall require that the Investment
Manager deposit all collections of Income received by it on account of
the Assets in the Collection Account no later than two (2) Business
Days following receipt.
20.2 Effect of Default
During the continuance of any of: (a) a Default or Event of Default
hereunder; or (b) an event of default under the Investment Management
Agreement, the Lender shall have the right to immediately terminate the
Investment Manager's right to service the Assets without payment of any
penalty or termination fee. The Borrower and the Investment Manager
shall cooperate in transferring the servicing of the Assets to a
successor servicer appointed by the Lender in its sole but good faith
discretion.
20.3 Notification of Breach
If the Borrower should discover that, for any reason whatsoever, the
Investment Manager or any entity responsible for managing or servicing
any Assets has failed to perform in all material respects any of the
obligations of such entities with respect to the Assets, or that an
event of default under the Investment Management Agreement has
occurred, the Borrower shall promptly notify the Lender.
20.4 Third Party Servicers
In the event that any Asset is serviced by a Third Party Servicer, the
Borrower shall provide promptly to the Lender a Servicer Notice
addressed to and agreed to by such Third Party Servicer of the related
Assets, advising such Third Party Servicer of such matters as the
Lender may reasonably request, including, without limitation,
recognition by such Third Party Servicer of the Finance Parties'
interest in such Assets and such Third Party Servicer's agreement that
upon receipt of notice of an Event of Default from the Lender and
during the continuance of such Default, it will follow the instructions
of the Lender with respect to the Assets and any related Income with
respect thereto.
20.5 Sub Servicers
The Borrower may employ sub-servicers (including the Investment Manager
or Affiliates thereof or Third Party Servicers) to service the Assets
without the prior written approval of the Lender. If the Assets are
serviced, in whole or in part, by a sub-servicer: (a) the Investment
Manager shall nevertheless remain primarily liable to the Finance
Parties for the servicing of the Assets under the Investment Management
Agreement; and (b) any agreement with a sub-servicer shall entitle the
Lender to terminate such subservicer without fee or penalty in the
event that the Investment Manager is replaced.
21 GUARANTEE AND INDEMNITY
21.1 Guarantee and indemnity
The Sponsor irrevocably and unconditionally:
(a) guarantees to each Finance Party punctual performance by each
Borrower of all that Borrower's obligations under the Finance
Documents;
(b) undertakes with each Finance Party that whenever a Borrower does
not pay any amount when due under or in connection with any
Finance Document, the Sponsor shall immediately on demand pay
that amount as if it were the principal obligor;
(c) indemnifies each Finance Party immediately on demand against any
cost, loss or liability suffered by that Finance Party if any
obligation guaranteed by it is or becomes unenforceable, invalid
or illegal, and the amount of the cost, loss or liability shall
be equal to the amount which that Finance Party would otherwise
have been entitled to recover.
21.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend to the
ultimate balance of sums payable by any Borrower under the Finance
Documents, regardless of any intermediate payment or discharge in whole
or in part.
21.3 Reinstatement
(a) If any discharge (whether in respect of obligations of any
Borrower or any security for those obligations or otherwise) or
arrangement is made in whole or in part on the faith of any
payment, security or other disposition which is avoided or must
be restored in whole or in part on insolvency, liquidation or
otherwise without limitation, the liability of the Sponsor under
this Clause 21 (Guarantee and Indemnity) will continue as if the
discharge or arrangement had not occurred.
(b) Each Finance Party may concede or compromise any claim that any
payment, security or other disposition is liable to avoidance,
reduction or restoration.
21.4 Waiver of defences
The obligations of the Sponsor under this Clause 21 (Guarantee and
Indemnity) will not be affected by any act, omission, matter or thing
which, but for this Clause 21.4, would reduce, release or prejudice any
of its obligations under this Clause 21 (Guarantee and Indemnity)
(without limitation and whether or not known to it or any Finance
Party) including:
(a) any time, waiver or consent granted to, or composition with, any
Borrower or any other person;
(b) the release of any Borrower or any other person under the terms
of any composition or arrangement with any creditor of any
Affiliate of the Borrower or any other person;
(c) the taking, variation, compromise, exchange, renewal or release
of, or refusal or neglect to perfect, take up or enforce, any
rights against, or security over assets of, any Borrower or any
other person or any non-presentation or non-observance of any
formality or other requirement in respect of any instrument or
any failure to realise the full value of any security;
(d) any incapacity or lack of power, authority or legal personality
of or dissolution or change in the members or status of a
Borrower or any other person;
(e) any amendment (however fundamental) or replacement of a Finance
Document or any other document or security;
(f) any unenforceability, illegality or invalidity of any obligation
of any person under any Finance Document or any other document or
security; or
(g) any insolvency or similar proceedings.
21.5 Immediate recourse
The Sponsor waives any right it may have of first requiring any Finance
Party (or any trustee or agent on its behalf) to proceed against or
enforce any other rights or security or claim payment from any person
before claiming from it under this Clause 21 (Guarantee and Indemnity).
This waiver applies irrespective of any law or any provision of a
Finance Document to the contrary.
21.6 Appropriations
Until all amounts which may be or become payable by the Borrowers under
or in connection with the Finance Documents have been irrevocably paid
in full, each Finance Party (or any trustee or agent on its behalf)
may:
(a) without affecting the liability of the Sponsor under this Clause
21 (Guarantee and Indemnity), refrain from applying or enforcing
any other moneys, security or rights held or received by that
Finance Party (or any trustee or agent on its behalf) in respect
of those amounts, or apply and enforce the same in such manner
and order as it sees fit (whether against those amounts or
otherwise) and the Sponsor shall not be entitled to the benefit
of the same; and
(b) hold in an interest-bearing suspense account any moneys received
from the Sponsor or on account of the Sponsor's liability under
this Clause 21 (Guarantee and Indemnity).
21.7 Deferral of Sponsor's rights
Until all amounts which may be or become payable by the Borrowers under
or in connection with the Finance Documents have been irrevocably paid
in full and unless the Lender otherwise directs, the Sponsor will not,
after a claim has been made or by virtue of any payment or performance
by it of its obligations under the Finance Documents:
(a) be subrogated to any rights, security or moneys held, received or
receivable by any Finance Party (or any trustee or agent on its
behalf);
(b) receive or be entitled to any right of contribution or indemnity
in respect of any payment made or moneys received on account of
the Sponsor's liability under this Clause 21 (Guarantee and
Indemnity);
(c) claim, rank, prove or vote as a creditor of any Borrower or its
estate in competition with any Finance Party (or trustee or agent
on its behalf);
(d) take the benefit (in whole or in part and whether by way of
subrogation or otherwise) of any rights of the Finance Parties
under the Finance Documents or of any other guarantee or security
taken pursuant to, or in connection with, the Finance Documents
by any Finance Party; or
(e) receive, claim or have, the benefit of any payment, distribution
or security from or on account of any Borrower, or exercise any
right of set-off as against any Borrower.
The Sponsor shall hold in trust (or to the extent not recognised in the
relevant jurisdiction hold segregated from its other assets) for and
immediately pay or transfer to the Lender for the Finance Parties any
payment or distribution or benefit of security received by it contrary
to this Clause 21.7 or in accordance with any directions given by the
Lender under this Clause 21.7.
21.8 Additional security
(a) This guarantee is in addition to and is not in any way prejudiced
by any other guarantee or security now or subsequently held by
any Finance Party.
(b) For the avoidance of doubt, (save as expressly provided in this
Clause 21.8 (Additional security) nothing in this Clause 21.8
(Limitation on Sponsor guarantee and limited recourse) shall
extinguish or be deemed to extinguish any claim against the
Sponsor in any circumstances to the extent such extinguishment
would limit or impair any rights or remedies of the Finance
Parties (or any of them) in respect of the Borrowers (or any of
their assets under Clause 21 (Guarantee and indemnity) or
otherwise under the Finance Documents or applicable law.
22 GENERAL REPRESENTATIONS
22.1 Borrower and Sponsor Representations
Each of the Borrower and the Sponsor (or, if the representation or
warranty so states, either the Borrower or the Sponsor) makes the
representations and warranties set out in this Clause 22.1 (Borrower
and Sponsor Representations) in respect of themselves to each Finance
Party.
(a) Status
(i) The Sponsor is a company, duly incorporated and validly
existing under the laws of the State of Maryland.
(ii) The Borrower is a private limited company, duly
incorporated and validly existing under the laws of
Ireland.
(iii) Each of the Borrower and the Sponsor have the power to own
their respective assets and carry on their businesses as
they are being conducted.
(iv) No:
(A) corporate action, legal proceeding or other
procedure or step described in Clause 27.7
(Insolvency Proceedings); or
(B) creditors' process described in Clause 27.9
(Creditors' Process),
has been taken or (to the best of its knowledge and
belief) threatened against it and none of the
circumstances described in Clause 27.6 (Insolvency)
applies to it.
(b) Binding Obligations
The obligations expressed to be assumed by each of the Borrower
and the Sponsor in each Finance Document to which the Borrower
or, as the case may be, the Sponsor are parties are their legal
and valid obligations and (subject to the Reservations) binding
on them and enforceable against them in accordance with the terms
thereof.
(c) Non-Conflict with Other Obligations
The entry by each of the Borrower and the Sponsor into and
performance by either of them of, and the transactions
contemplated by, the Finance Documents do not and will not
conflict with:
(i) any law or regulation applicable to them respectively;
(ii) their respective constitutional documents;
(iii) any agreement, mortgage, bond or other instrument or
treaty to which any of them is party or which is binding
upon them or any of their respective assets, to an extent
or in a manner that has or could reasonably be expected to
result in a Material Adverse Effect.
(d) Power and Authority
Each of the Borrower and the Sponsor has the power to enter
into, perform and deliver, and has taken all necessary action
to authorise their entry into, performance and delivery of,
the Finance Documents and the transactions contemplated by the
Finance Documents.
(e) Validity and Admissibility in Evidence
All Authorisations required or desirable:
(i) to enable the Borrower and/or the Sponsor lawfully to
enter into, exercise their respective rights and comply
with their respective obligations under the Finance
Documents to which the Borrower or, as the case may be,
the Sponsor are parties;
(ii) to ensure that the obligations expressed to be assumed by
the Borrower and/or the Sponsor in the Finance Documents
to which they are parties are legal, valid and binding and
enforceable; and
(iii) to make the Finance Documents to which the Borrower and/or
the Sponsor are parties admissible in evidence in their
respective jurisdictions of incorporation,
have been obtained or effected and are in full force and effect
save where the lack of the same would not be reasonably likely to
have a Material Adverse Effect.
(f) Deduction of Tax
The Borrower is not required under the law of its jurisdiction of
incorporation to make any deduction for or on account of Tax from
any payment it may make under any Finance Document to a
Qualifying Lender.
(g) No Filing or Stamp Taxes
Under the law of the jurisdiction of incorporation of the
Borrower or the Sponsor 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 provided
however, that no breach of this Clause shall occur by reason of
the failure of the Lender (or its advisers) to do any act or
thing in respect of any such filing, recording or enrolment.
(h) No Default
No Event of Default has occurred and is continuing or might
reasonably be expected to result from the making of the
Utilisation.
(i) No misleading information
(i) The financial information with respect to the Borrower and
the Sponsor supplied to the Lender by each such entity or
on its behalf has been prepared on the basis of recent
historical information and on the basis of reasonable
assumptions.
(ii) To the best of the knowledge and belief of the Borrower
and the Sponsor, no information has been given or withheld
that results in the information supplied to the Lender
relating to such entities or their businesses and
operations being untrue or misleading in any material
respect.
(j) No Proceedings Pending or Threatened
No litigation, arbitration or administrative proceedings of or
before any court, arbitral body or agency which:
(i) questions or challenges the enforceability of the Finance
Documents (or the transactions contemplated thereby);
(ii) makes a claim or claims in aggregate amount greater than
Five Million US dollars ($5,000,000); or
(iii) would have a Material Adverse Effect has (to the best of
its knowledge and belief) been started or threatened
against the Borrower, the Sponsor, their respective
Subsidiaries, the Assets.
(k) Constitutional Documents
The constitutional documents of each of the Borrower and the
Sponsor (as referred to in Schedule 3 (Conditions Precedent))
have not been amended (unless with the prior written consent of
the Lender).
(l) No other liabilities
The Borrower has no liabilities other than the Permitted
Financial Indebtedness and any amounts that may be agreed to from
time to time by the Sponsor and the Lender.
(m) Ownership
(i) All of the issued share capital of the Borrower is legally
and beneficially owned by Anthracite Capital Inc.
(ii) Subject to the interest of the Lender therein pursuant to
the Security Documents, the Borrower is the sole legal and
beneficial owner of the Assets free and clear of all
Security.
(n) Finance Documents
(i) No circumstances exist whereby any of the Finance
Documents would be or could reasonably be expected to be
rendered or adjudged to be void and unenforceable or
capable of rescission or revocation.
(ii) Neither the Borrower nor the Sponsor is in breach of any
of their obligations under any of the Finance Documents.
(iii) Neither the Borrower nor the Sponsor is aware that any
counterparty to a Finance Document is in breach of any of
their obligations under that Finance Document.
(iv) There is no material dispute between any of the parties to
the Finance Documents.
(v) No Material Adverse Effect has occurred or is
continuing.
(o) No Business or Property in the United States of America
(i) The Borrower does not:
(A) employ any employees in the United States of
America;
(B) maintain bank or similar accounts in the United
Sta238 tes of America; or
(C) hold property in the United States of America.
(ii) The Borrower carries on business solely outside, and its
principal places of business, property and assets (other
than ownership of CMBS and bank accounts and custody
arrangements associated therewith) are located outside of
the United States of America.
(p) Private and commercial acts
The execution of the Finance Documents by each of the Borrower
and the Sponsor constitutes, and their exercise of their rights
and performance of their obligations hereunder will constitute,
private and commercial acts done and performed for private and
commercial purposes.
(q) Anti-money laundering
At all times throughout the term of the Facility, to the best
knowledge of each of the Borrower and the Sponsor none of the
funds of the Borrower or the Sponsor payable in respect of the
Facility shall be derived from any unlawful activity.
(r) Governing law and enforcement
In respect of the Borrower and the Sponsor, in any proceedings
taken in their respective jurisdiction of incorporation in
relation to the Finance Documents to which they are parties,
subject to the Reservations:
(i) the choice of English law as the governing law of this
Agreement and the choice of English or Irish law as the
governing law of the other Finance Documents to which they
is parties (as stated in the relevant Finance Document)
will be recognised and enforced; and
(ii) any judgment obtained in England or Irish (as the case may
be) will be recognised and enforced in England or, as the
case may be, Irish.
(s) Security and Financial Indebtedness
(i) Except for Permitted Security, no Security exists on the
undertaking, property or assets, present or future, of the
Borrower.
(ii) Except for Permitted Financial Indebtedness, the Borrower
has no Financial Indebtedness.
(t) Patriot Act
Each of the Borrower and the Sponsor is in compliance, in all
material respects, with the: (i) the Trading with the Enemy Act,
as amended, and each of the foreign assets control regulations of
the United States Treasury Department (31 CFR, Subtitle B,
Chapter V, as amended) and any other applicable enabling
legislation or executive order relating thereto; and (ii) the
Uniting and Strengthening America by Providing Appropriate Tools
Required to Intercept and Obstruct Terrorism (USA Patriot Act of
2001). To the best of the knowledge of the Borrower and the
Sponsor, no part of the proceeds of the Advance will be used,
directly or indirectly, for any payments to any governmental
official or employee, political party, official of a political
party, candidate for political office, or anyone else acting in
an official capacity, in order to obtain, retain or direct
business or obtain any improper advantage, in violation of the
United States Foreign Corrupt Practices Act of 1977, as amended.
(u) True and Complete Disclosure
The information, reports, financial statements, exhibits and
schedules furnished in writing by or on behalf of the Borrower
and the Sponsor to the Lender 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 and are not
misleading. All written information furnished after the date
hereof by or on behalf the Borrower to the Lender in connection
with this Agreement and the other Finance Documents and the
transactions contemplated hereby (other than with respect to the
Assets in which it has an Eligible Interest) and thereby will be
true, complete and accurate in all material respects, 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 the Borrower that would reasonably be expected to
result in 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 Lender for use in connection with the
transactions contemplated hereby or thereby.
(v) Securities activities and margin regulations
(i) None of the Borrower, the Sponsor or any Subsidiaries is
engaged principally or as one of its important activities
in the business of extending credit for the purpose of
purchasing or carrying any Margin Stock.
(ii) No part of the proceeds of any Advance will be used for
any purpose which violates the provisions of Regulations
T, U or X of the U.S. Board of Governors of the Federal
Reserve System.
(w) US governmental regulation
None of the Borrower, the Sponsor or any of their respective
Subsidiaries is subject to regulation under the U.S. Public
Utility Holding Company Act of 1935, the U.S. Federal Power
Act, the U.S. Interstate Commerce Act or the U.S. Investment
Company Act of 1940 or under any other U.S. federal or state
statute or regulation which may limit such Person's ability to
incur Financial Indebtedness or which may otherwise render all
or any portion of its respective obligations under the Finance
Documents unenforceable.
(x) Taxes
(i) All tax returns of the Borrower have been filed and all
related tax obligations have been satisfied.
(ii) The Borrower is not part of any group with any other
company or group of companies for the purpose of Section 8
of the Value Added Tax Act 1972 of Ireland, as amended.
(iii) The Borrower is a qualifying company within the meaning of
Section 110 of the Taxes Act.
(y) Use of Advance Proceeds
Advance proceeds will not be used for purchasing or carrying
any margin stock, repurchasing the stock of the Sponsor or
funding any dividends being distributed by the Sponsor.
(z) Adverse Selection
The Borrower has not intentionally selected the Assets in a
manner so as to adversely affect the interests of the Finance
Parties.
(aa) Agreements
The Borrower is not a party to any agreement or instrument or
subject to any restriction materially and adversely affecting its
business, operations, assets or financial condition, except as
disclosed in the financial statements described delivered to the
Lender pursuant to the terms of this Agreement. The Borrower is
not in default in the performance, observance or fulfilment of
any of the obligations, covenants or conditions contained in any
agreement or instrument which default could have a material
adverse effect on the business, operations, properties, or
financial condition of the Borrower as a whole. No holder of any
indebtedness of the Borrower or of any of its Affiliates has
given notice of any asserted default thereunder.
(bb) No Reliance
The Borrower has made its own independent decisions to enter into
the Finance Documents and to borrow each Advance and as to
whether such borrowing is appropriate and proper for it based
upon its own judgment and upon advice from such advisors
(including without limitation, legal counsel and accountants) as
it has deemed necessary. The Borrower is not is relying upon any
advice from the Finance Parties as to any aspect of the
transactions contemplated by the Finance Documents, including
without limitation, the legal, accounting or tax treatment of the
same.
22.2 Times for making general representations
(a) The representations set out in this Clause 22 (General
Representations) are made by the Borrower and the Sponsor in
respect of themselves on the date of this Agreement.
(b) Each representation is deemed to be made by each of the Borrower
(and, where appropriate, the Sponsor) in respect of themselves on
the date of each Utilisation Request and each Utilisation Date
(including each Utilisation Date with respect to a Rollover
Advance) and on each date on which any Advance is outstanding
hereunder.
(c) Unless a representation is expressed to be given in relation to
circumstances on a specific date, when a representation is
repeated, it is applied to the circumstances existing at the time
of repetition.
23 ASSET REPRESENTATIONS AND WARRANTIES
23.1 Scope of Asset Representations and Warranties
On receipt of a Utilisation Request for any Asset, the Borrower wishes
to be the subject of an Advance hereunder, the Lender shall review the
Proposed Debt Asset Warranties or, as the case may be the Proposed
Securities Warranties for the same and shall notify the Borrower and
the Sponsor in writing of:
(a) any additional representations and warranties contained in this
Clause 23 (Asset Representations and Warranties);
(b) any modifications to any proposed disclosure against such
representations and warranties;
(c) any modifications to the terms of such representations and
warranties; and
(d) any additional representations and warranties required to reflect
any Debt Asset Legal Advice or Securities Legal Advice relevant
to such Assets,
that it requires to be made in relation to such Asset for such Asset to
be financed hereunder. Such Proposed Debt Asset Warranties or Proposed
Securities Warranties as so supplemented and modified and as so
disclosed against being, as set out in the related Utilisation Request,
being the "Asset Warranties" for such financed Asset.
23.2 Asset representations and warranties
The Borrower makes to each Finance Party the Asset Warranties for each
Asset financed hereunder.
23.3 Times for making Asset representations and warranties
(a) The Asset Warranties are deemed to be made by the Borrower (by
reference to the facts and circumstances then existing save to
the extent expressly stated otherwise) on the dates specified in
the related Utilisation Request, each Utilisation Date and on
each date on which any Advance is outstanding hereunder.
(b) When a representation is repeated it is applied to the
circumstances existing at the time of the repetition save to the
extent expressly stated therein.
24 INFORMATION UNDERTAKINGS
The undertakings in this Clause 24 (Information Undertakings) remain in
force from the date of this Agreement for so long as any amount is
outstanding under the Finance Documents or any Loan Commitment remains
in effect.
24.1 Financial statements
The Borrower shall supply to the Lender in sufficient copies for all
the Lenders:
(a) as soon as the same become available, but in any event within
Ninety (90) days after the end of each of its financial years the
consolidated audited financial statements for the financial year
of the Sponsor and the Borrower; and
(b) as soon as the same become available, but in any event within
Forty Five (45) days after the end of financial quarter, the
consolidated unaudited financial statements for that quarter of
the Sponsor and the Borrower.
24.2 Compliance Certificate
(a) The Borrower shall supply to the Lender a duly completed
Compliance Certificate with each set of financial statements
delivered pursuant to Clause 24.1 (Financial statements) setting
out, inter alia, (in reasonable detail) computations as to
compliance with Clause 25 (Financial Undertakings) as at the date
as at which those financial statements were drawn up.
(b) Each Compliance Certificate shall be signed by two Authorised
Signatories of the Borrower.
24.3 Requirements as to financial statements
(a) Each set of financial statements delivered by the Borrower
pursuant to Clause 24.1 (Financial statements) shall be certified
in the Compliance Certificate as having been prepared in
accordance with the Applicable Accounting Principles and (if
audited) presenting a true and fair view of or (if unaudited)
fairly presenting the relevant Person's financial condition as at
the date to which they were drawn up, subject to normal year end
adjustments and shall not be qualified in any respect.
(b) The Borrower shall procure that:
(i) each set of financial statements supplied under this
Agreement are prepared in accordance with Applicable
Accounting Principles consistently applied (provided that
in the case of unaudited financial statements, these will
not include normal year-end adjustments and footnotes
which would not normally be expected to be included in
unaudited financial statements), and gives (if audited) a
true and fair view of, or (if unaudited) fairly presents:
(x) the financial condition (consolidated or otherwise) of
the relevant Person or group of Persons as at the date to
which those financial statements were drawn up; and (y)
the results of operations of the relevant person or group
of persons during the period covered;
(ii) each such set of audited financial statements includes a
profit and loss account, balance sheet, cash flow
statement and directors and auditors report thereon, and
is accompanied by a report of the relevant Person's chief
financial officer or chief executive officer explaining
the main financial issues arising during that period and
any material changes against the comparable period in the
previous financial year; and
(iii) each such set of quarterly financial statements includes a
profit and loss account, balance sheet, cash flow
statement and management commentary, to be in such form as
the Lender may reasonably require.
24.4 Change in basis of preparation of financial statements
The Borrower shall notify the Lender of any change to the basis on
which the financial statements referred to in Clause 24.1 (Financial
statements) are prepared. If requested by the Lender the Borrower shall
supply to the Lender:
(a) a full description of any change notified under this Clause 24.4
(Change in basis of preparation of financial statements); and
(b) sufficient information to enable the Finance Parties to make a
proper comparison between the financial position shown by the set
of financial statements prepared on the changed basis and its
most recent audited consolidated financial statements delivered
to the Lender under this Agreement.
If required by the Lender, the Borrower will either procure that the
auditors appointed in respect of any of the Borrower or the Sponsor
(which shall be a firm of independent public accountants of
international standing) (at the cost of the Borrower or the Sponsor, as
applicable) confirm to the Lender that the description and information
supplied by the Sponsor in respect of any of the Borrower or the
Sponsor under this Clause 24.4 (Change in basis of preparation of
financial statements) fairly represents the change in the basis on
which the consolidated financial statements are prepared or if the
auditors refuse or fail to provide such confirmation on demand
indemnify the Lender against any costs or expenses incurred by it in
seeking such confirmation from another firm of independent public
accountants of international standing.
24.5 Information - Assets
The Borrower and the Investment Manager shall, to the extent received
or prepared by it, promptly supply to the Lender:
(a) the rent roll, operating statement and aging of accounts
receivable and accounts payable for the Underlying Mortgaged
Property on a quarterly basis;
(b) upon written request by the Lender, copies of any reports as to
the status of each Asset, including to the extent available, any
report detailing projections of the Borrower or of the protective
advances with respect to such Assets, any report describing the
Borrower's internal risk rating and/or any report detailing
surveillance of such Assets;
(c) a schedule setting forth hedge positions and contingent
liabilities with respect to each Asset, including (but not
limited to) guarantees, future funding obligations and contingent
funding obligations;
(d) monthly servicing and remittance reports with respect to each
Asset;
(e) copies of all notices, certificates and waiver requests
(including, without limitation, notices of defaults, breaches,
potential defaults or potential breaches) and any material
financial information that is not otherwise required to be
provided by the Borrower hereunder; and
(f) notice of the occurrence of any Event of Default hereunder or
default or breach by the Borrower of any obligation under any
Finance Document.
24.6 Information - the Investment Management Agreement
The Borrower shall supply to the Lender (in sufficient copies for all
the Lenders, if the Lender so requests) promptly upon receipt, copies
of any notices given or received under the Investment Management
Agreement.
24.7 Information - the Investment Manager
Upon the occurrence of any of the following: (a) the occurrence and
continuation of an Event of Default; (b) each Reporting Date; and (c)
upon the request of the Lender, the Borrower shall cause the Investment
Manager to provide to the Lender, electronically, in a format mutually
to the Lender, by no later than the Reporting Date, the Investment
Manager Report.
24.8 Information -- miscellaneous
The Borrower shall supply to the Lender (in sufficient copies for all
the Lenders, if the Lender so requests):
(a) all documents dispatched by the Borrower to its shareholders (or
any class of them) or its creditors generally as soon as
practicable after they are dispatched to the extent not otherwise
provided to a Finance Party;
(b) promptly after becoming aware of them, the details of any
litigation, arbitration or administrative proceedings which are
current, threatened or pending against itself: (i) in which the
amount involved exceeds Ten Thousand US dollars ($10,000) and is
not covered by insurance, in which injunctive or similar relief
is sought, or which, would reasonably be expected to have a
Material Adverse Effect; and (ii) any litigation or proceeding
that is pending or threatened in connection with any of the
Asses, which, if adversely determined, would reasonably be
expected to have a Material Adverse Effect
(c) promptly and in any event within five (5) Business Days, such
further information regarding the financial condition, assets,
business, operations and prospects of the Borrower as any Finance
Party or the Lender may reasonably request;
(d) promptly and in any event within two (2) Business Days after
becoming aware of the same, information regarding any event of
default or other similar event in respect of any Asset or any
material change in the credit quality of any Asset or the
obligors in respect thereof;
(e) promptly and in any event within two (2) Business Days after
receiving the same, any notice, report or other communication
received by any Borrower from any obligor in connection with each
Asset; and
(f) upon the occurrence of any of the following: (i) the occurrence
and continuation of an Event of Default; (ii) the fifth Business
Day of each month; or (iii) upon the request of the Lender, the
Borrower shall cause the Investment Manager to provide to the
Lender, electronically, in a format mutually acceptable to the
Lender and the Borrower, by no later than the Reporting Date, the
Investment Manager Report.
24.9 Notification of Default
(a) The Borrower and the Sponsor shall notify the Lender of any
Default (describing in reasonable detail what the Default is, its
causes (so far as known to the Borrower) and the steps, if any,
being taken or proposed to be taken to remedy it) promptly upon
becoming aware of its occurrence.
(b) Promptly upon a request by the Lender, the Borrower shall supply
to the Lender a certificate signed by two of its members or
senior officers on its behalf certifying that no Default by it is
continuing (or if a Default is continuing, specifying the Default
and the steps, if any, being taken to remedy it).
24.10 Notification of changes to investment advisor and servicer
The Borrower and the Sponsor shall notify the Lender promptly and in
any event within ten (10) days upon the Investment Management Agreement
being terminated or revoked or any provision thereof being waived or
amended or the Investment Manager being in default thereof.
24.11 Records
(a) The Borrower shall collect and maintain or cause to be collected
and maintained all Records relating to the Assets in accordance
with industry custom and practice for assets similar to the
Assets and all such Records shall be in the Document Custodian's
possession unless the Lender otherwise approves. The Borrower
will not allow any such papers, records or files that are an
original or an only copy to leave the Document Custodian's
possession, except for individual items removed in connection
with servicing a specific Asset, in which event the Borrower will
obtain or cause to be obtained a receipt from a financially
responsible person for any such paper, record or file. The
Borrower or the Investment Manager will maintain all such Records
not in the possession of the Document Custodian in good and
complete condition in accordance with industry practices for
assets similar to the Assets and preserve them against loss.
(b) For so long as the Finance Parties have an interest in any Asset,
the Borrower will hold or cause to be held all related Records on
trust for the Finance Parties. The Borrower shall notify, or
cause to be notified, every other party holding any such Records
of the interests of the Finance Parties created by the Finance
Documents.
24.12 Books
The Borrower shall keep or cause to be kept in reasonable detail books
and records of account of its assets and business and shall clearly
reflect therein the interests of the Finance Parties in the Assets.
24.13 Periodic Due Diligence Review
The Borrower acknowledges that the Lender has the right at the cost and
expenses of the Borrower to perform continuing due diligence reviews
with respect to the Assets, for 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 three (3) Business Days) prior notice unless an Event of Default
shall have occurred and be continuing, in which case no notice is
required, to the Borrower, the Lender or its authorised representatives
will be permitted during normal business hours to examine, inspect, and
make copies and extracts of any and all documents, records, agreements,
instruments or information relating to the Assets.
24.14 Investigations
If an Event of Default is continuing or if the Lender believes in good
faith and on reasonable grounds that any financial statements or
calculations provided by the Borrower in respect of itself or the
Sponsor are inaccurate or incomplete in any material respect the Lender
may, following consultation with the Borrower as to the scope of the
investigation and its cost:
(a) instruct a firm of accountants selected by the Lender to carry
out an investigation into the affairs of the Borrower or the
Sponsor and/or the financial performance of the Borrower or the
Sponsor and/or the accounting and other reporting procedures and
standards of the Borrower, or the Sponsor as applicable; and/or
(b) instigate such other investigations and commission such other
reports (including, without limitation, legal and valuation
reports) as the Lender shall reasonably require into the affairs
of the Borrower or the Sponsor, as applicable,
in each case to the extent that the Lender considers them to be
relevant to that Event of Default or the circumstances giving rise to
that Event of Default or establishing the accuracy of such financial
statements and/or calculations. The expense of any such investigation
shall be borne by the Borrower.
24.15 Know your customer requirements
(a) The Borrower and the Sponsor shall promptly upon the request of
the Lender or any Lender promptly upon the request of the Lender
supply, or procure the supply of, such documentation and other
evidence as is reasonably requested by the Lender (for itself or
on behalf of any Lender) or any Lender (for itself) in order for
the Lender or such Lender to carry out and be satisfied with the
results of all necessary "know your customer" or other checks in
relation to any Person that it is required to carry out pursuant
to the transactions contemplated in the Finance Documents
including, without limitation, any "know your customer" or other
checks required to be performed by the Borrower or the Sponsor in
relation to any Mortgage, Underlying Borrower or Underlying
Mortgagor.
(b) The Borrower and the Sponsor shall, by not less than ten (10)
Business Days' written notice to the Lender, notify the Lender
(which shall promptly notify the Lenders) of its intention to
request that a company becomes an Additional Borrower pursuant to
Clause 29 (Changes to the Borrowers).
(c) Following the giving of any notice pursuant to paragraph (b)
above, the Borrower and the Sponsor shall promptly upon the
request of the Lender or any Lender supply, or procure the supply
of, such documentation and other evidence as is reasonably
requested by the Lender (for itself or on behalf of any Lender)
or any Lender (for itself) in order for the Lender or such Lender
to carry out and be satisfied with the results of all necessary
"know your customer" or other checks in relation to any person
that it is required to carry out in relation to the accession of
such company to this Agreement as an Additional Borrower.
25 FINANCIAL UNDERTAKINGS
25.1 Tangible Net Worth
The Sponsor as at the end of each fiscal quarter shall maintain an
Tangible Net Worth of at least the sum of: (a): Four Hundred Million US
dollars ($400,000,000); plus (b) an amount equal to Seventy Five per
cent. (75%) of any the proceeds of any Equity Offering.
25.2 Indebtedness
The ratio of Financial Indebtedness (excluding non-recourse
Indebtedness) of the Sponsor and all of its Subsidiaries to the
Tangible Net Worth of the Sponsor shall not exceed 3:1.
25.3 Debt Service Coverage Ratio
The Sponsor shall maintain a Debt Service Coverage Ratio of no less
than 1.20:1.
25.4 Maintenance of Liquidity
The Sponsor shall ensure that, as of the end of each fiscal quarter,
the sum of its: (a) Cash, (b) unencumbered and unpledged marketable
securities and (c) Unfunded Margin Amount shall not be not less than
Ten Million US dollars ($10,000,000).
26 GENERAL UNDERTAKINGS
The undertakings in this Clause 26 (General Undertakings) remain in
force from the date of this Agreement for so long as any amount is
outstanding under the Finance Documents or the Loan Commitment is in
force.
26.1 Authorisations
Each of the Borrower and the Sponsor shall promptly obtain, comply with
and do all that is necessary to maintain in full force and effect any
Authorisation required under any law or regulation of the jurisdiction
of incorporation of such Person to enable it to perform its respective
obligations under the Finance Documents and to ensure the legality,
validity, enforceability or admissibility in evidence in its respective
jurisdictions of incorporation of any Finance Document.
26.2 Compliance with Laws
Each of the Borrower and the Sponsor shall comply in all respects with
all laws to which they may be subject, if failure so to comply would
materially impair their ability to perform their obligations under the
Finance Documents.
26.3 Purpose
The Borrower shall ensure that any Advance made to it is used solely
for the purposes as set out in Clause 3.1 (Purpose).
26.4 Taxes
(a) Each of the Borrower and the Sponsor shall pay and discharge all
Taxes and governmental charges payable or assessed upon them
prior to the date on which the same became overdue except where a
genuine bona fide dispute exists or arises and for which adequate
reserves are maintained.
(b) The Borrower will not:
(i) prejudice its status as a qualifying company within the
meaning of Section 110 of the Taxes Act; or
(ii) apply to become party of any group for the purpose of
Section 8 of the Value Added Tax Act 1972 of Ireland, as
amended, with any other company or group of companies, or
any such act, regulation, order, statutory instrument or
directive which may from time to time re-enact, replace,
amend, modify, vary, codify, consolidate or repeal such
act.
26.5 Preservation of Corporate Existence
Each of the Borrower and the Sponsor shall do or cause to be done all
things necessary on their part to preserve and keep in full force and
effect their corporate existence.
26.6 Dividends
The Borrower shall not pay any dividend or make any other distribution
to its shareholders or issue any further shares if an Event of Default
has occurred and is continuing.
26.7 Material Change in Business
The Borrower shall not make any material change in the nature of its
business as carried on at the date hereof. There shall be no material
change in the senior management of the Borrower.
26.8 Merger
The Borrower shall not enter into any amalgamation, reorganisation,
demerger, merger or corporate reconstruction without the prior written
consent of the Lender.
26.9 SPV Covenants
(a) No Borrower (other than AHR Capital Limited) shall:
(i) redeem, repurchase, defease, retire or repay any of its
share capital, or resolve to do so; or
(ii) issue any investments to any Person.
(b) The Borrower shall not incur any Financial Indebtedness and has
not made and will not make loans to any person or hold evidence
of Financial Indebtedness issued by any other person or entity
other than Permitted Financial Indebtedness.
(c) The Borrower shall maintain its records, its books of account and
bank accounts separate and apart from those of its
shareholder(s), partners, principals and Affiliates, and shall
maintain such books and records in the ordinary course of its
business.
(d) The Borrowers (other than AHR Capital Limited) shall:
(i) get in and realise its book and other debts and monetary
claims (including all payments and other income in respect
of the Assets in which it has an Eligible Interest) in the
ordinary and usual course of its business on behalf of the
Lender and the Lender;
(ii) not deal with its book and other debts and monetary claims
(including all payments and other income due in respect of
the Assets in which it has an Eligible Interest) otherwise
than by getting in and realising the same and making
payment thereof into a Collection Account; and
(iii) not factor or discount any of its book and other debts and
monetary claims (including all payments and other income
due in respect of the Assets in which it has an Eligible
Interest) or enter into any agreement for such factoring
or discounting.
(e) AHR Capital Limited shall:
(i) get in and realise all payments and other income in
respect of the Assets in which it has an Eligible Interest
and in respect of which Advances are outstanding hereunder
in the ordinary and usual course of its business on behalf
of the Lender and the Lender;
(ii) not deal with its rights in respect of payments and other
income due in respect of the Assets in which it has an
Eligible Interest and in respect of which Advances are
outstanding hereunder otherwise than by getting in and
realising the same and making payment thereof into a
Collection Account; and
(iii) not factor or discount any of its rights to payments and
other income due in respect of the Assets in which it has
an Eligible Interest and in respect of which Advances are
outstanding hereunder or enter into any agreement for such
factoring or discounting.
(f) No Borrower (other than AHR Capital Limited) shall have any
employees nor shall it own, rent, lease or be in possession of
any buildings, real property or equipment.
(g) The Borrower shall pay and discharge as the same shall become due
and payable all of its respective obligations and liabilities
unless, in each case: (i) the same are being contested in good
faith by appropriate proceedings and adequate reserves in
accordance with Applicable Accounting Principles are being
maintained by it with respect thereto; or (ii) the failure to so
pay or discharge would not, individually or in the aggregate,
result in a Material Adverse Effect.
(h) The Borrower shall ensure that its payment obligations under the
Finance Documents rank at least pari passu with all its other
present and future unsecured and unsubordinated payment
obligations, except for obligations mandatorily preferred by law
applying to companies generally.
(i) No Borrower (other than AHR Capital Limited) shall create, assume
or incur, directly or indirectly, any Security on any of its
assets (including, without limitation, the Assets) other than
Permitted Security.
(j) AHR Capital Limited shall not create, assume or incur, directly
or indirectly, any Security on any of the Assets in respect of
which Advances hereunder are outstanding other than Permitted
Security.
(k) The Borrower shall not dispose of any of its rights, title or
interest in respect of the Assets save as provided in the Finance
Documents provided that subject to prepayment of the related
Advance in accordance with the provisions of Clause 9
(Prepayment), nothing in the finance documents shall prevent the
transfer by the Borrower of any Asset to an Affiliate in
connection with arranging a CDO of the same.
(l) The Borrower shall not, without the prior written consent of the
Lender:
(i) amend its memorandum or articles of association or other
organisational or constitutional documents; or
(ii) consent to any amendment, variation, supplement,
restatement or novation of the Assets,
in any way which could affect materially and adversely the
interest of the Lenders under the Finance Documents in any
respect.
(m) No Borrower (other than AHR Capital Limited) shall enter into any
agreement with any shareholders in such Borrower or any of its
respective Affiliates.
26.10 Separate identity
(a) The Borrower shall correct any known misunderstandings regarding
the separate identity of the Borrower from any member, general
partner, principal or Affiliate thereof or any other Person.
(b) The Borrower shall not fail to hold itself out to the public as a
legal entity separate and distinct from any other Person, fail to
conduct its business solely in its own name, mislead others as to
the identity with which such other party is transacting business;
or fail to pay its own liabilities out of its funds.
(c) The Borrower shall not hold itself out as or be considered as a
department or division of: (i) the shareholder(s); (ii) any
general partner, principal, member or Affiliate of the Borrower;
(iii) any Affiliate of a general partner, principal or member of
the Borrower; or (iv) any other Person.
(d) No Borrower (other than AHR Capital Limited) shall have its
assets listed on the accounts or financial statement of any other
entity; or co-mingle its assets with those of any other person or
entity.
(e) AHR Capital Limited shall not have any Assets in respect of which
any Advances hereunder are outstanding listed on the accounts or
financial statement of any other entity; or co-mingle such Assets
with those of any other person or entity.
(f) The Borrower shall allocate fairly and reasonably any overhead
for shared office space.
26.11 Independent Director
The Borrower shall at all times cause there to be not more than five
members of its board of directors of which at least one duly appointed
member of the Borrower's board of directors shall be an independent
director (an "Independent Director"), which shall not have been at the
time of initial appointment or at any time while serving as an
Independent Director, and shall not have been at any time during the
preceding five years: (i) a shareholder, member of the board of
managers (other than as an Independent Director), officer, employee,
partner, attorney or counsel of the Borrower or any Affiliate of the
Borrower; (ii) a customer, supplier or other Person who derives any of
its purchases or revenues from its activities with the Borrower or any
Affiliate of the Borrower; (iii) a Person or other entity controlling
or under common control with any such stockholder, partner, customer,
supplier or other Person; or (iv) a member of the immediate family of
any such stockholder, member of the board of managers, officer,
employee, partner, customer, supplier or other Person. As used in this
paragraph (a), the term "control" means the possession, directly or
indirectly, of the power to direct or cause the direction of the
management, policies or activities of a Person, whether through
ownership of voting securities, by contract or otherwise, provided
that, for the avoidance of doubt, nothing in this Clause 0 (Independent
Director) shall prevent the Independent Director of the Borrower from
acting as Independent Director of any Holding Company or Subsidiary of
the Borrower.
26.12 Borrower's Assets
(a) The Borrower shall not (and shall not permit the Investment
Manager to) take any action which would directly or indirectly
impair or adversely affect its' rights or title in, to or under,
the Assets.
(b) The Borrower shall (and shall procure that the Investment Manager
shall) enforce diligently the Borrower's rights and remedies set
forth in the Asset Finance Documents and the Securities Finance
Documents in relation to the Eligible Assets.
(c) The Borrower shall (and shall procure that the Investment Manager
shall):
(i) exercise all voting and other rights and powers vested in
a holder of the Assets in a manner which is not materially
prejudicial to the interests of the Finance Parties;
(ii) defend its right, title and interest in and to the Assets
and take such other action as is necessary to remove any
Security claims and demands of all Persons thereon or
thereto; and
(iii) not accept any rights whether in addition to, in
substitution of, as a conversion of, or in exchange for
any Asset including any sums of money or property so paid
or distributed in respect of such Assets which shall be
credited to the Collection Account.
(d) The Borrower shall (and shall procure that the Investment Manager
shall) perform all of its obligations in full and in a timely
fashion in respect of the Assets.
(e) Except as specifically provided to the contrary herein, the
Borrower covenants and agrees that it has not and will not (and
that it will not permit the Investment Manager to), without the
prior written consent of the Lender, modify, amend, terminate,
change or supplement the terms of any Asset (or the related Asset
Finance Documents) in any manner adverse to the interests of the
Lender or any Lender.
(f) The Borrower shall take (and shall procure that the Investment
Manager shall take) all actions necessary or desirable to ensure
that no withholdings for tax or other deduction is made from any
Income due or received from any Eligible Asset.
(g) The Borrower shall take (and shall procure that the Investment
Manager shall take) all actions necessary or desirable to ensure
that it meets all applicable legal, regulatory and contractual
requirements that may apply in respect of any Eligible Asset for
it to be the owner, "lender of record", holder, bearer or
investor (howsoever described).
26.13 Accounts
The Borrower shall not open or maintain an account in respect of any
Asset which is the subject of any outstanding Advance hereunder or to
which any monies received in respect of such Asset are credited or
deposited with any bank or financial institution other than the Lender,
an Eligible Institution or the Securities Custodian and ensure that any
such account is subject to Security under the Security Documents.
26.14 Undertakings in relation to security
(a) The Borrower and the Sponsor shall ensure that any Security
Document in respect of any Asset which in each case is governed
by the law of a New Jurisdiction which the Borrower purports to
deliver to the Lender as an Eligible Asset after the date of this
Agreement shall be satisfactory in all respects to the Lender
and, in this respect, the Borrower and the Sponsor shall deliver
such legal opinions in form and substance, and from counsel,
satisfactory in each case to the Lender prior to delivery of such
Assets.
(b) The Borrower and the Sponsor shall, at their own expense, take
all such action as the Lender may reasonably require for the
purpose of perfecting or protecting the Finance Parties' rights
under and preserving the Security intended to be created or
evidenced by any of the Security Documents to which they are
parties, and following the making of any declaration pursuant to
Clause 27.18 (Acceleration) for facilitating the realisation of
any such Security or any part thereof.
26.15 Written Approval
For the avoidance of doubt, and notwithstanding any other provision of
this Agreement, in the event the Borrower is required to obtain any
approval or consent from the Lenders, such approval must be in writing.
26.16 Maintenance of insurance
The Borrower and the Sponsor shall procure that the Investment Manager
shall maintain insurance coverage with respect to employee errors,
omissions, dishonesty, forgery, theft, disappearance and destruction,
robbery and safe burglary, property (other than money and securities)
and computer fraud in an aggregate amount in an amount acceptable to
the Investment Manager's regulators. The Borrower shall maintain
insurance coverage with respect to employee errors, omissions,
dishonesty, forgery, theft, disappearance and destruction, robbery and
safe burglary, property (other than money and securities) and computer
fraud in connection with the Advances and the Assets in an amount as
would be customary for a prudent company similarly situated.
26.17 Affiliate transactions
The Borrower may not enter into any transaction with any Affiliate
except for:
(a) transactions not otherwise prohibited by the Finance Documents;
(b) transactions in the ordinary course of the Borrower's business;
and
(c) transactions upon fair and reasonable terms no less favourable to
the Borrower, as the case may be, than it would obtain in a
comparable arm's length transaction with a Person which is not an
Affiliate.
26.18 Centre of Main Interests
The Borrower shall not cause or allow its registered office or Centre
of Main Interests to be in or maintain a substantial Establishment in
any jurisdiction other than its jurisdiction of incorporation, where:
"Centre of Main Interests" means the "centre of main interests" of a
Person for the purposes of Council Regulation (EC) No 1346/2000 of 29th
May, 2000.
"Establishment" means any place of operations where a Person carries on
non-transitory economic activity with human means and goods.
26.19 Management Fees
Neither the Borrower not the Sponsor shall enter into any arrangement
for the payment of, or pay, management, advisory or similar fees,
except management and advisory fees payable to the Investment Manager
pursuant to the Investment Management Agreement as it may be amended,
provided that such fees are not increased in excess of the amounts
permitted by Clause 26.20 (Modification of Certain Agreements) or
management fees to its corporate services provider paid in the ordinary
course of business; provided, that in any event no such fees may be
paid (but may accrue) during the continuance of an Event of Default.
26.20 Modification of Certain Agreements
Without the prior written consent of the Lender, neither the Borrower
nor the Sponsor shall consent to any increase in any fees payable under
the Investment Management Agreement in excess of Five per cent. (5%)
per annum of the gross value of the assets held by Borrower from time
to time.
27 EVENTS OF DEFAULT
27.1 Events of Default
Each of the events or circumstances set out in this Clause 27.1 (Events
of Default) in relation to the Borrower or, where specified, the
Sponsor, as applicable, is an Event of Default (whether or not caused
by any reason whatsoever outside the control of the Borrower or the
Sponsor, as applicable, or any other person).
27.2 Non-payment
The Borrower does not pay on the due date any amount payable by it to
any Finance Party pursuant to a Finance Document at the place and in
the currency in which it is expressed to be payable unless the
non-payment relates to payment or reimbursement of expenses of the
Lender pursuant to the Finance Documents and payment is made within
Five (5) Business Days after written notice from the Lender thereof.
27.3 Other obligations
(a) The Borrower or, as appropriate, the Sponsor does not comply with
any of the provisions of Clause 24.2 (Compliance Certificate),
Clause 24.12 (Books), Clause 24.13 (Periodic Due Diligence
Review), Clause 25 (Financial Undertakings), Clause 26.1
(Authorisations), Clause 26.2 (Compliance with Laws), Clause 26.5
(Preservation of Corporate Existence), Clause 26.7 (Material
Change in Business), Clause 26.9 (SPV Covenants), Clause 26.10
(Separate Identity), Clause 26.11 (Independent Director) or
Clause 26.12 (Borrower's Assets).
(b) The Borrower, the Sponsor or the Investment Manager do not comply
with any of their respective obligations under the Finance
Documents.
(c) No Event of Default under paragraph (b) above will occur if the
failure to comply:
(i) is capable of remedy; and
(ii) is remedied within Five (5) Business Days.
(d) No Event of Default under paragraph (b) above in respect of any
failure to by the Investment Manager to comply with its
obligations under the Investment Management Agreement will occur
unless such failure is in respect of a monetary obligation of the
Investment Manager thereunder.
27.4 Misrepresentation
Any representation, warranty or statement made or deemed to be made by
the Borrower or the Sponsor to the Finance Parties (or any of them) in
the Finance Documents or any certificate, financial statement, budget,
certificate, notice or other document referred to in the Finance
Documents delivered by or on behalf of the Borrower or the Sponsor
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 (other than the Asset Warranties, which shall be
considered solely for the purpose of determining the Market Value of
the related Assets; unless: (a) the Borrower or the Sponsor, shall have
made any such representations and warranties with actual knowledge that
they were materially false or misleading at the time made; or (b) any
such representations and warranties have been determined in good faith
by the Borrower or the Sponsor in its sole discretion to be materially
false or misleading on a regular basis).
27.5 Cross Default
(a) Any Financial Indebtedness of the Borrower or the Sponsor:
(i) is not paid when due or within any applicable grace
period; or
(ii) is permitted to be declared to be or otherwise becomes due
and payable prior to its specified maturity as a result of
an event of default (howsoever described),
provided that, in the case of the Sponsor, no Event of Default
will occur under this Clause unless such Financial Indebtedness
is at least Fifteen Million US dollars ($15,000,000).
(b) Any of the following occurs in respect of the Finance Documents:
(i) any Financial Indebtedness of the Borrower or the Sponsor
is not paid when due (after the expiry of any originally
applicable grace period);
(ii) any Financial Indebtedness of the Borrower or the Sponsor
is permitted to be, declared to be or otherwise becomes
due and payable prior to its specified maturity as a
result of an event of default (however described) or any
event having the same effect; and/or
(iii) any commitment for or underwriting of any of Financial
Indebtedness of the Borrower of the Sponsor is cancelled
or suspended as a result of an event of default (however
described) or any event having the same effect,
provided that, in the case of the Sponsor, no Event of Default
will occur under this Clause unless such Financial Indebtedness
is at least Fifteen Million US dollars ($15,000,000).
(c) Any Event of Default (as defined in the U.S. Facility) occurs and
is continuing.
27.6 Insolvency
Any of the following occurs in respect of the Borrower, the Sponsor or
the Investment Manager:
(a) it is, or is deemed for the purposes of any law to be Insolvent;
(b) it admits its inability to pay its debts as they fall due;
(c) it suspends making payments on any of its debts or announces an
intention to do so;
(d) by reason of actual or anticipated financial difficulties, it
begins negotiations with one or more of its creditors with a view
to the readjustment or rescheduling of any of its indebtedness or
liabilities;
(e) a moratorium is declared in respect of any of its indebtedness
(and, if such a moratorium occurs, the ending of such moratorium
will not remedy any Event of Default caused by such moratorium
and, notwithstanding any other term of the Finance Documents,
that Event of Default will continue to be outstanding unless and
until it is expressly waived by the Lender); or
(f) the value of its assets is less than its liabilities (taking into
account contingent and prospective liabilities).
(g) under Irish, Maryland or English law it enters into a composition
with creditors or controlled management, or it suspends payments.
27.7 Insolvency proceedings
Any of the following occurs in respect of the Borrower, the Sponsor
or the Investment Manager:
(a) any step is taken (including petition, proposal or convening a
meeting) with a view to a composition, assignment or arrangement
with any class of creditors or with its creditors generally;
(b) a meeting of it (or its directors) is convened for the purpose of
considering any resolution for (or petition for) its winding-up,
administration, other insolvency proceeding or dissolution or any
such resolution is passed;
(c) any person files in a court of competent jurisdiction or other
competent forum a petition for its winding-up, administration,
other insolvency proceeding or dissolution;
(d) an order by a court of competent jurisdiction or other competent
forum for its winding-up, administration or dissolution is made;
(e) any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver,
administrator or similar officer is appointed in respect of it or
any of its assets;
(f) its directors, shareholders or other officers request the
appointment of, or give notice of their intention to appoint, a
liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator,
examiner, provisional examiner or similar officer; or
(g) any other analogous step or procedure is taken in any
jurisdiction.
27.8 Appointment of receivers and managers
(a) Any liquidator, trustee in bankruptcy, judicial custodian,
compulsory manager, receiver, administrative receiver,
administrator or the like is appointed in respect of the
Borrower, the Sponsor or the Investment Manager or any material
part of their respective assets; or
(b) The directors of the Borrower, the Sponsor or the Investment
Manager requests the appointment of a liquidator, trustee in
bankruptcy, judicial custodian, compulsory manager, receiver,
administrative receiver, administrator or the like in respect of
such Person or any material part of their respective assets; or
(c) Any other steps are taken to enforce any Security over any
material part of the assets of the Borrower, the Sponsor or the
Investment Manager.
27.9 Creditors' Process
Any expropriation, attachment, sequestration, distress or execution
affects any asset or assets of the Borrower or the Sponsor and its
Affiliates which:
(a) in the case of the Borrower has aggregate value exceeding Ten
Thousand US dollars ($10,000) and is not discharged within five
(5) Business Days; and
(b) in the case of the Sponsor and its Affiliates, has aggregate
value exceeding: (i) Five Million US dollars ($5,000,000); or
(ii) Ten Million US dollars ($10,000,000), if the Sponsor has a
Tangible Net Worth of less than Four Hundred Million US dollars
($400,000,000); of (iii) Twenty Million US dollars ($20,000,000),
if the Sponsor has a Tangible Net Worth of greater than or equal
to than Four Hundred Million US dollars ($400,000,000) and, in
each case, the same is not discharged within five (5) Business
Days.
27.10 Cessation of Business
The Borrower or the Sponsor suspends, ceases or threatens to suspend or
cease to carry on all or a substantial part of their respective
businesses.
27.11 Effectiveness of Finance Documents; Security
(a) It is or becomes unlawful for the Borrower, the Sponsor or the
Investment Manager perform any of its material obligations under
the Finance Documents.
(b) Any Finance Document is invalid or not effective or binding or is
alleged by the Borrower, the Sponsor or the Investment Manager to
be invalid or ineffective or not binding for any reason and
replacements are not entered into by the relevant Finance Parties
acting in good faith upon notice of such issue.
(c) A Security Document does not create the Security it purports to
create (or such security is not fully perfected and with the
ranking and priority it is expressed to have) in each case in any
respect considered by the Lender to be adverse, in any material
respect to the interests of the Finance Parties under the Finance
Documents.
(d) The Borrower, the Sponsor or the Investment Manager repudiates a
Finance Document or evidences an intention to repudiate a Finance
Document.
27.12 Change of Control
If after the date of this Agreement a Change of Control (as defined in
the U.S. Facility occurs in relation to the Sponsor.
27.13 Litigation
Judgment is given in any litigation involving the Borrower, the Sponsor
or the Investment Manager where the uninsured exposure of or cost:
(a) in the case of the Borrower (when aggregated with any other
uninsured litigation exposure or cost to the Borrower at such
time) exceeds in aggregate One Hundred Thousand US dollars
($100,000) or its equivalent;
(b) in the case of the Sponsor or the Investment Manager (when
aggregated with all such other uninsured litigation exposure or
cost in respect of the Sponsor and the Investment Manager at such
time) exceeds in aggregate Five Million US dollars ($5,000,000)
or its equivalent.
27.14 Assignment
Assignment or attempted assignment by the Borrower or Sponsor assigns
or attempts to assign or otherwise transfer this Agreement or any
rights hereunder without first obtaining the specific written consent
of the Lender, or the granting by the Borrower or the Sponsor of any
Security on any Asset to any person other than the Lender.
27.15 Government Action
Any Governmental Authority or any person, agency or entity acting or
purporting to act under governmental authority shall have taken any
action to condemn, seize or appropriate, or to assume custody or
control of, all or any substantial part of the property of the
Borrower, the Sponsor or any Affiliate thereof, or shall have taken any
action to displace the management of Borrower, the Sponsor or any
Affiliate thereof or to curtail its authority in the conduct of the
business of the Borrower, the Sponsor or any Affiliate thereof, or
takes any action in the nature of enforcement to remove, limit or
restrict the approval of Borrower, the Sponsor or any Affiliate thereof
as an owner, issuer, buyer or a seller/servicer of any Assets or
securities backed thereby, and such action provided for in this Clause
shall not have been discontinued or stayed within Thirty (30) days; or
27.16 Inability to Perform.
An officer of Borrower or the Sponsor shall admit its inability to, or
its intention not to, perform any of its obligation hereunder.
27.17 Audit Qualification
The auditors of the Sponsor or the Borrower qualify their report on any
audited consolidated accounts of the Sponsor or, as the case may be,
the Borrower.
27.18 Acceleration
If an Event of Default is outstanding, the Lender may by notice to the
Borrower do all or any of the following in addition and without
prejudice to any other rights or remedies which it or any other Finance
Party may have under this Agreement or any of the other Finance
Documents:
(a) declare that an Event of Default has occurred and that it is
continuing; and/or
(b) cancel some or all of the Loan Commitments whereby they shall
immediately be cancelled; and/or
(c) declare that all or part of the Advances, together with accrued
interest, and all other amounts accrued or outstanding under the
Finance Documents (other than any Hedging Agreement, the terms of
which will control in respect of such Hedging Agreement) be:
(i) immediately due and payable, whereupon they shall become
immediately due and payable; and/or
(ii) payable on demand by the Lender (and if any such demand is
subsequently made those amounts, together with accrued
interest and all other amounts accrued under this
Agreement, shall be immediately due and payable); and/or
(d) exercise, or direct the Lender to exercise, all or any of its or
as the case may be, the Lender's rights, remedies, powers or
discretions in respect of the Borrower under any of the Finance
Documents to which the Borrower is party.
27.19 Rights upon Default
If an Event of Default is outstanding, the Lender may by notice to the
Borrower do all or any of the following in addition and without
prejudice to any other rights or remedies which it or any other Finance
Party may have under this Agreement or any of the other Finance
Documents:
(a) require the Borrower to immediately deliver to the Lender of all
Records and files of the Borrower relating to the Eligible Assets
and all documents relating to the Eligible Assets (including,
without limitation, any legal, credit or servicing files with
respect to the Eligible Assets) which are then or may thereafter
come in to the possession of the Borrower or any third party
acting for Borrower (including, without limitation, by presenting
a Trust Receipt to the Document Custodian); and/or
(b) direct all servicers then servicing any Eligible Assets to remit
all collections thereon to the Lender; and/or
(c) terminate any one or all of the servicers then servicing any
Eligible Assets with or without cause.
28 CHANGES TO THE LENDERS
28.1 Sub-participation
A Lender may without the consent of the Borrower or the Sponsor
sub-participate or sub-contract its obligations under this Agreement.
28.2 Security
The Lender may, without the consent of the Borrower or the Sponsor at
any time charge or create a Security in all or any portion of its
rights under any Finance Document to secure obligations of such Lender,
including without limitation: (i) any charge or creation of a security
interest to secure obligations to a Federal Reserve Bank; and (ii) in
the case of any Lender that is a fund, any charge or creation of a
security interest of all or any portion of such Lender's rights under
any Finance Document to any holders of obligations owed, or securities
issued, by such Lender as security for such obligations or securities,
or to any trustee for, or any other representative of, such holders;
provided that no such charge or creation of a Security shall:
(a) release a Lender from any of its obligations hereunder or
substitute any such chargor or holder of the benefit of such
Security for such Lender as a party hereto; or
(b) require any payments to be made by the Borrower or the Sponsor
other than as required by the relevant Finance Document. A copy
of any notice of charge or creation of security interest as
envisaged in this paragraph shall be delivered to the Lender and
the Lender shall not be obliged to take any action in regard to
such notice unless instructed to do so by the relevant Lender
which has given such security.
28.3 Disclosure of information
(a) Each Finance Party shall keep confidential any information
supplied to it by or on behalf of the Borrower or the Sponsor in
connection with the Finance Documents. However, a Finance Party
is entitled to disclose information:
(i) which is or becomes publicly available, other than as a
result of a breach by that Finance Party of this Clause;
(ii) if required or, in the Finance Party's absolute
discretion, desirable in connection with any legal or
arbitration proceedings provided that such Finance Party
shall use all reasonable endeavours to notify the Borrower
in writing of its intention to disclose information under
this sub-paragraph (ii) prior to such disclosure, failing
which it shall notify the Borrower in writing promptly
following such disclosure;
(iii) if required to do so under any law or regulation;
(iv) to a governmental, banking, taxation or other regulatory
authority;
(v) to its professional advisers;
(vi) to the extent allowed under paragraph (b) below; or (vii)
with the prior written agreement of the Borrower.
(b) A Finance Party may disclose to an Affiliate or any person with
whom it may enter, or has entered into, any kind of transfer,
participation or other agreement (including without limitation a
transaction under which payments are to be made by reference to
any of the Finance Document in relation to this Agreement (a
"participant"):
(i) a copy of any Finance Document; and
(ii) any information which that Finance Party has acquired
under or in connection with any Finance Document.
(c) This Clause supersedes any previous confidentiality undertaking
given by a Finance Party in connection with this Agreement prior
to it becoming a Party.
28.4 Hedging Counterparty
(a) An Affiliate of a Lender or another person which falls within
paragraph (b) of the definition of Hedging Counterparty and which
becomes a Hedging Counterparty shall accede to this Agreement.
(b) Where this Agreement or any other Finance Document imposes an
obligation on a Hedging Counterparty and the relevant Hedging
Counterparty is an Affiliate of a Lender and is not a party to
that document, the relevant Lender shall ensure that the
obligation is performed by its Affiliate.
29 CHANGES TO THE BORROWERS
29.1 Assignment and transfers by the Borrower
No Borrower may assign any of its rights or transfer any of its rights
or obligations under the Finance Documents.
29.2 Additional Borrowers
(a) Subject to compliance with the provisions of paragraphs (b) and
(c) of Clause 24.15 (Know your customer requirements), the
Sponsor may request that a company become an Additional Borrower.
That company shall become an Additional Borrower if:
(i) the Lender approves the addition of such company;
(ii) the Sponsor delivers to the Lender a duly completed and
executed Accession Letter;
(iii) the Sponsor confirms that no Default is continuing or
would occur as a result of that company becoming an
Additional Borrower; and
(iv) the Lender has received all of the documents and other
evidence listed in Part II of Schedule 3 (Conditions
Precedent) in relation to that Additional Borrower, each
in form and substance satisfactory to the Lender.
(b) The Lender shall notify the Sponsor and the Lenders promptly upon
being satisfied that it has received (in form and substance
satisfactory to it) all the documents and other evidence listed
in Part II of Schedule 3 (Conditions Precedent).
29.3 Resignation of a Borrower
(a) In this Clause, "Resignation Request" means a letter in the form
of Schedule 8 (Form of Resignation Letter), with such amendments
as the Lender may approve or reasonably require.
(b) The Sponsor may request that a Borrower ceases to be a Borrower
by giving to the Lender a duly completed Resignation Request.
(c) The Lender shall accept a Resignation Request and notify the
Sponsor and the Lenders of its acceptance if:
(i) it is not aware that a Default is outstanding or would
result from the acceptance of the Resignation Request; and
(ii) no amount owed by that Borrower under this Agreement is
still outstanding.
(d) The Borrower will cease to be a Borrower when the Lender gives
the notification referred to in paragraph (c) above and the
Resignation has been countersigned by the Lender.
(e) A Borrower may also cease to be a Borrower in any other manner
approved by the Lender.
29.4 Repetition of Representations
Delivery of an Accession Letter constitutes confirmation by the
relevant acceding company that the Repeating Representations are true
and correct in relation to it as at the date of delivery as if made by
reference to the facts and circumstances then existing.
30 PAYMENT MECHANICS
30.1 Partial payments
(a) If the Lender receives a payment insufficient to discharge all
the amounts then due and payable by the Borrower under the
Finance Documents, the Lender shall apply that payment towards
the obligations of the Borrower under the Finance Documents in
the following order:
(i) first, in or towards payment pro rata to the entitlement
of the Lender of any unpaid fees, costs, expenses and
indemnities of the Lender under the Finance Documents;
(ii) secondly, in or towards payment to the entitlement of the
Lender of any accrued interest, fee (if any is agreed to
between the parties in writing) or indemnity due but
unpaid under this Agreement;
(iii) thirdly, in or towards payment to the entitlement of the
Lender of any principal amount due but unpaid under this
Agreement; and
(iv) fourthly, in or towards payment to the entitlement of the
Lender of any other sum due but unpaid under the Finance
Documents.
(b) This Clause 30.1 (Partial payments) will override any
appropriation made by the Borrower.
30.2 No set-off by Borrower
All payments to be made by the Borrower under the Finance Documents
shall be calculated and be made without (and free and clear of any
deduction for) set-off or counterclaim.
30.3 Business Days
(a) Any payment under the Finance Documents which is due to be made
on a day that is not a Business Day shall be made on the next
Business Day in the same calendar month (if there is one) or the
preceding Business Day (if there is not).
(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.
30.4 Currency of account
(a) Unless a Finance Document specifies that payments under it are to
be made in a different manner, the currency of each amount
payable under the Finance Documents is determined under this
Clause 30.4 (Currency of account).
(b) Subject to paragraphs (c) to (f) below, the Base Currency is the
currency of account and payment for any sum due from the Borrower
under any Finance Document other than a Hedging Agreement.
(c) A payment or repayment of an Advance or Unpaid Sum or a part of
an Advance or Unpaid Sum shall be made in the currency in which
that Advance or Unpaid Sum is denominated on its due date.
(d) 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.
(e) Each payment in respect of costs, expenses, Taxes and the like
shall be made in the currency in which the costs, expenses or
Taxes are incurred.
(f) Any amount (other than of principal and/or interest) calculated
by reference to or payable in respect of any other amount shall
be payable in the currency in which that other amount is
denominated at the time of payment.
30.5 Timing of payments
If a Finance Document does not provide for when a particular payment is
due, that payment will be due immediately on demand from the Finance
Parties.
30.6 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 Lender (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 Lender (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement
will, to the extent the Lender (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.
(c) This provision does not apply to any payments under a Hedging
Agreement.
30.7 Place
Unless a Finance Document specifies that payments under it are to be
made in another manner, all payments by a Party (other than the Lender)
under the Finance Documents shall be made to the Lender to its account
at such office or bank:
(a) in the principal financial centre of the country of the relevant
currency; or
(b) in the case of Euro, in the principal financial centre of a
Participating Member State or London,
as it may notify to that Party for this purpose by not less than five
(5) Business Days' prior notice.
30.8 Funds
Payments under the Finance Documents to the Lender shall be made for
value on the due date at such times and in such funds as the Lender may
specify to the Party concerned as being customary at the time for the
settlement of transactions in the relevant currency in the place for
payment.
31 SET-OFF
A Finance Party may set off any matured obligation owed to it by the
Borrower under the Finance Documents (to the extent beneficially owned
by that Finance Party) against any obligation (whether or not matured)
owed by that Finance Party to the Borrower, regardless of the place of
payment, booking branch or currency of either obligation. If the
obligations are in different currencies, the Finance Party may convert
either obligation at a market rate of exchange in its usual course of
business for the purpose of the set-off.
32 NOTICES
32.1 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.
32.2 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,
copied to the Sponsor;
(b) in the case of each Lender or any Additional Borrower, that
notified in writing to the Lender on or prior to the date on
which it becomes a Party;
(c) in the case of the Lender, that identified with its name below;
(d) in the case of the Lender, that identified with its name below;
and
(e) in the case of a Hedging Agreement and any party, that given in
the Hedging Agreement,
or any substitute address, fax number or department or officer as the
Party may notify to the Lender (or the Lender may notify to the other
Parties, if a change is made by the Lender) and the other party (in the
case of a Hedging Agreement) by not less than five (5) Business Days'
notice.
32.3 Delivery
(a) Any communication or document made or delivered by one person to
another under or in connection with the Finance Documents (other
than a Hedging Agreement) 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 a correctly addressed
envelope;
and, if a particular department or officer is specified as
part of its address details provided under Clause 32.2
(Addresses), if addressed to that department or officer.
(b) A communication given under paragraph (a) above but received on a
non-working day or after business hours in the place of receipt
will only be deemed to be given on the next working day in that
place.
(c) Any communication or document to be made or delivered to the
Lender will be effective only when actually received by the
Lender and then only if it is expressly marked for the attention
of the department or officer identified with the Lender's
signature below (or any substitute department or officer as the
Lender shall specify for this purpose).
32.4 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 32.2 (Addresses) or
changing its own address or fax number, the Lender shall notify the
other Parties.
32.5 Borrower
(a) Each Borrower irrevocably appoints the Sponsor to act as its
agent:
(i) to give and receive all communications under the Finance
Documents;
(ii) to supply all information concerning itself to any
Finance Party; and
(iii) to sign all documents under or in connection with the
Finance Documents.
(b) Any communication given to the Sponsor in connection with a
Finance Document will be deemed to have been given also to the
Borrower.
(c) The Lender and any Hedging Counterparty may assume that any
communication made by the Sponsor is made with the consent of the
Borrower.
32.6 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 Lender,
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.
33 CALCULATIONS AND CERTIFICATES
33.1 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.
33.2 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.
33.3 Day count convention
Any interest, commission or fee accruing under a Finance Document other
than a Hedging Agreement 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 as determined
by the Lender.
34 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.
35 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.
36 AMENDMENTS AND WAIVERS
36.1 Required consents
(a) Subject to Clause 16.3 (Exceptions) any term of the Finance
Documents may be amended or waived only with the consent of the
Lender, the Borrower and the Sponsor and any such amendment or
waiver will be binding on all Parties. Any such amendment or
waiver may only be in writing and specifically.
(b) The Lender may effect, on behalf of any Finance Party, any
amendment or waiver permitted by this Clause.
(c) The Lender shall promptly notify the other Parties of any
amendments or waiver effected by it under paragraph (b) above.
(d) Where any right, power or discretion of the Lenders (or any of
them) under this Agreement falls to be made or exercised or has
been requested by any Borrower in accordance with the terms of
this Agreement, the relevant Lenders shall use all reasonable
efforts to notify the Lender of its decision on the same within
any time limit or period requested by the Lender (acting
reasonably) for the same.
36.2 Amendment to correct Manifest Error
The Lender may agree with the Borrower any amendment to or the
modification of the provisions of any of the Finance Documents or any
schedule thereto, which is necessary to correct a manifest error and
the Borrower and the Finance Parties will be bound by any such
amendment or modification.
36.3 Amendment by Lender
Unless the provisions of any Security Document expressly provide
otherwise, the Lender may amend the terms of, waive any of the
requirements of, or grant consents under, any of the Security
Documents, any such amendment, waiver or consent being binding on all
the parties to this Agreement; provided that no waiver or amendment may
impose any new or additional obligations on any person without the
consent of that person
37 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.
38 GOVERNING LAW
This Agreement is governed by English law.
39 ENFORCEMENT
39.1 Jurisdiction
(a) The courts of England have exclusive jurisdiction to settle any
dispute arising out of or in connection with the Finance
Documents (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 39 (Enforcement) 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 other courts
with jurisdiction. To the extent allowed by law, the Finance
Parties may take concurrent proceedings in any number of
jurisdictions.
39.2 Service of process
Without prejudice to any other mode of service allowed under any
relevant law, the Borrower:
(a) irrevocably appoints BlackRock Group Limited at its registered
office for the time being in England (which as of the date hereof
is 33 King William Street London EC4R 9AS England) 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 a process agent to notify the Borrower of
the process will not invalidate the proceedings concerned.
39.3 Waiver of Immunity
Each of the Borrower and the Sponsor waives generally all immunity it
or its assets or revenues may otherwise have in any jurisdiction,
including immunity in respect of:
(a) the giving of any relief by way of injunction or order for
specific performance or for the recovery of assets or revenues;
and
(b) the issue of any process against its assets or revenues for the
enforcement of a judgment or, in an action in rem, for the
arrest, detention or sale of any of its assets and revenues.
39.4 Waiver of trial by jury
Each Party waives any right it may have to a jury trial of any claim or
cause of action in connection with or arising out of any Finance
Document or any transaction contemplated by any Finance Document. This
Agreement may be filed as a written consent to trial by court.
40 LIMITED RECOURSE, ETC.
40.1 Definitions
For the purpose of this Clause 40 (Limited Recourse, etc.) the
following definition shall apply:
"Directors" means the directors of the Borrower who are employees of
Citco Corporate Services (Ireland) Limited as shall be appointed from
time to time as directors of the Borrower and shall include the
employer of the directors, the shareholders of the employer, it's
shareholders and agents (if any). For the avoidance of doubt and for
the purposes of this provision only, neither the Sponsor, nor any of
its Subsidiaries or Affiliates shall be deemed to be a "Director" of
the Borrower.
40.2 Limited Recourse
Each of the parties acknowledges and agrees that:
(a) subject to sub-clauses (b) and (c) below, the Lender shall not
take or initiate any insolvency or bankruptcy proceedings
(including, without limitation, examinership) or issue any
petition for the winding-up of the Borrower. If any such
winding-up, insolvency or bankruptcy proceedings of the Borrower
shall commence, the Lender may exercise any right and take any
action available to any creditor in any such circumstances;
(b) the Lender may enforce the Security Documents in accordance with
the provisions thereof and such enforcement may include, without
limitation, the appointment by it of a receiver to all or any
part of the assets over which Security is taken thereby; and
(c) the Lender's recourse in respect of the Secured Obligations or
any claim against the Borrower relating to or in connection with
the Finance Documents is limited to the assets over which
Security is taken pursuant to the Security Documents and the
sums, proceeds, receivables and all other rights relating,
appertaining or attaching thereto or deriving therefrom. In such
regard, the Lender may take all or any such action with respect
to such assets to seek to maximize its return upon enforcement.
For the avoidance of doubt, this provision shall only limit the
liability of the Borrower for the discharge of the Secured
Obligations and any claim against the Borrower in respect of or
in connection with the Finance Documents, and shall not limit or
restrict in any way the accrual of interest on any unpaid amount,
or, other than in respect of the Borrower, derogate from or
otherwise limit the right of recovery, realization or application
by the Lender on any unpaid amount or pursuant to any of the
Finance Documents; provided, however that nothing contained in
this sub-clause (c) shall limit the rights of the Lender to bring
or commence any action, claim or proceeding (or take any other
action) as it may see fit for the sole purpose of enabling it to
claim against the Sponsor for the full amount of any loss it may
incur hereunder.
(d) For the avoidance of doubt, save as expressly prohibited in this
Clause 40 (Limited Recourse, etc.), nothing in this Clause 40
(Limited Recourse, etc.) shall extinguish or be deemed to
extinguish the right of the Lender to contact and hold meetings
with any other creditor of the Borrower.
40.3 No Personal Liability
Absent fraud, negligence, willful or misleading misconduct, deliberate
action or omission designed to mislead, avoid, reduce or mitigate
liability, or breach of statutory duty, no personal liability shall
attach to the Directors and the Lender shall not take or initiate any
proceedings or issue any petition against the Directors in connection
with the Finance Documents.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
Schedule 1
The Original Parties
Name of Lender Loan Commitment Loan Commitment
- --------------------------------------- ------------------ ------------------
Lehman Commercial Paper Inc., UK Branch $150,000,000 $150,000,000
Jurisdiction of organisation and
Registration number (or equivalent, if
Name of Sponsor any)
- --------------------------------------- --------------------------------------
State of Maryland, tax
Anthracite Capital Inc. registration number 13-3978906
Jurisdiction of organisation and
Registration number (or equivalent, if
Name of Sponsor any)
- --------------------------------------- --------------------------------------
AHR Capital Limited Ireland, 398357
Schedule 2
Eligibility Criteria
1 In this Schedule 2 (Eligibility Criteria) unless the context otherwise
requires:
"Asset Term" means an Asset, the period commencing on the date of
determination of whether such Asset qualifies to be an Eligible Debt
Asset and ending on the date on which all principal and other amounts
owed by the Securities Issuer, Mortgagor or Underlying Mortgagor under
such Asset are required by its terms to be repaid in full, as may be
extended pursuant to any option or right any person may have to extend
such period.
"Closed Asset" means in relation to any Asset in respect of
which: (a) appropriate original executed Asset Finance Documents or
Securities Finance Documents (as appropriate) have been delivered to
the Borrower; and (b) funds have been disbursed to the Mortgagor or
Underlying Mortgagor in respect of the same, in each case prior to the
related Utilisation Date.
"Distressed Debt" means a Debt Asset in respect of which:
(a) there has occurred and is continuing a default with respect to
the payment of interest or principal, which payment default
entitles the holders thereof, with notice or passage of time or
both, to accelerate the maturity of all or a portion of the
principal amount of such obligation, but only until such default
has been cured provided that such Debt Asset will not constitute
"Distressed Debt" unless and until such default has continued for
the lesser of five (5) Business Days and the expiration of any
applicable grace period if the lenders or facility agent
(howsoever defined in the relevant Debt Finance Documents) has
certified to the Lender that such default has resulted from
non-credit related causes;
(b) any bankruptcy, insolvency, receivership or moratorium proceeding
has been initiated in connection with the Mortgagor in respect of
such Debt Asset and, except in the case of voluntary proceedings,
such proceeding remains unstayed and undismissed for sixty days;
(c) such Debt Asset is or becomes rated "D" or "SD" by a Rating
Agency; or
(d) the Borrower and/or the Lender is aware (based on publicly
available information) that the Mortgagor thereof is in default
as to payment of principal and/or interest on another material
obligation, save for obligations constituting trade debts which
the applicable Mortgagor is disputing in good faith, (and if such
default has not been cured within any applicable grace period),
but only if one of the following conditions is satisfied:
(i) such other obligation is a full recourse obligation and is
senior to, or pari passu with the Debt Asset in right of
payment; or
(ii) all of the following conditions are satisfied:
(A) such other obligation is a secured obligation
secured by the same collateral as the Debt Asset (or
any part thereof);
(B) the security interest securing the other obligation
is senior to or pari passu with the security
interest securing the Debt Asset; and
(C) the other obligation is senior to or pari passu with
the Debt Asset in right of payment.
"Eligible Interest" means, in relation to any Asset:
(a) 100 per cent. (100%) of the Borrower's unencumbered ownership of
any note or debt instrument issued to the Borrower on a secured
basis by any company or entity which itself has a 100 per cent.
(100%) legal direct interest (as lender of record, if applicable)
and beneficial interest (which interests, for the avoidance of
doubt, refer to the lender's participation in the relevant debt
instrument and shall not be construed as a requirement that the
lender hold the entire loan facility which is made available to a
borrower) under the relevant Asset Finance Documents; or
(b) 100 per cent. (100%) of the Borrower's unencumbered ownership of
any note or debt instrument issued to the Borrower on a secured
basis by any company or entity which itself has a 100 per cent.
(100%) legal direct interest and beneficial interest (which
interests, for the avoidance of doubt, refer to the securities
held by the investor and shall not be construed as a requirement
that the investor hold the entire class of securities) under the
relevant Asset Finance Documents; or
(c) 100 per cent. (100%) of the Borrower's unencumbered legal direct
interest (as lender of record, if applicable) and beneficial
interest (which interests, for the avoidance of doubt, refer to
the lender's participation in the relevant debt instrument and
shall not be construed as a requirement that the lender hold the
entire loan facility which is made available to a borrower) under
the relevant Asset Finance Documents; or
(d) 100 per cent. (100%) of the Borrower's unencumbered legal direct
interest and beneficial interest (which interests, for the
avoidance of doubt, refer to the securities held by the investor
and shall not be construed as a requirement that the investor
hold the entire class of securities) under the relevant Asset
Finance Documents; or
(e) a Participation (in the case of any Debt Asset only),
in the relevant loan or security comprising such Debt Asset or
Security or such lesser interest in the same that has been approved by
the Lender (acting reasonably) in writing.
"NPL" means any loan which is more than:
(a) with respect to which the related obligor is Insolvent under any
applicable laws;
(b) with respect to which any enforcement action has been taken in
relation to the related Mortgaged Property or Underlying
Mortgaged Property;
(c) with respect to any loan that pays on a monthly basis, twenty
nine (29) days overdue or which has been more than twenty nine
(29) days overdue at any time in the two (2) year period
preceding the date on which the same falls to be considered; or
(d) with respect to any loan that pays on a quarterly basis, eighty
nine (89) days overdue or which has been more than eighty nine
(89) days overdue at any time in the two (2) year period
preceding the date on which the same fails to be considered,
or (in the case of (c) or (d), the actual net cash flow from the
Mortgaged Property or Underlying Mortgaged Property (including rent or
business interruption insurance or proceeds held by, or which benefits,
the holder of the same) is insufficient to pay debt service.
"Participation" means an interest in any Debt Asset acquired indirectly
by the Borrower by way of participation or sub-participation from any
bank or financial institution the long term, unsecured and
unsubordinated debt rating of which is at least AA- or higher by S&P,
or which is otherwise acceptable to the Lender.
"Performing Asset" means an Asset in relation to which: (a) no payment
due thereunder has been made other than on the due date therefor; (b)
the actual net cash flow derived from the related Mortgaged Property or
Underlying Mortgaged Property is sufficient to meet all payments due on
such Asset (and any related Senior Debt) or such Asset benefits from
reserve funds or structural features acceptable to the Lender which
overcome such insufficiency.
2 The Eligibility Criteria for a B-Note, CMBS, Mezzanine Loan and Whole
Loan shall be that:
(a) such B-Note, CMBS, Mezzanine Loan or Whole Loan is a Closed
Asset;
(b) such B-Note, CMBS, Mezzanine Loan or Whole Loan has been a
Performing Asset for a period of at least twelve (12) months
ending on the Utilisation Date for the same;
(c) the Asset Warranties for such CMBS, Mezzanine Loan or Whole Loan
are and continue to be true and accurate in all material
respects;
(d) the Borrower holds or will hold an Eligible Interest in such
B-Note, CMBS, Mezzanine Loan or Whole Loan;
(e) the Purchase Price for such CMBS, Mezzanine Loan or Whole Loan
does not exceed: (A) the lesser of: (1) the Book Value thereof;
or (2) the Market Values thereof multiplied by (B) the applicable
Purchase Price Percentage;
(f) such B-Note, CMBS, Mezzanine Loan or Whole Loan is denominated in
an Eligible Currency;
(g) such B-Note, CMBS, Mezzanine Loan or Whole Loan on the date of
its delivery to the Lender pursuant to the terms of this
Agreement has an Asset Term not exceeding ten years;
(h) all funds borrowed under such B-Note, CMBS, Mezzanine Loan or
Whole Loan have been unconditionally disbursed to the relevant
Mortgagor, Underlying Mortgagor or Securities Issuer prior to the
relevant Utilisation Date;
(i) such B-Note, CMBS, Mezzanine Loan or Whole Loan is capable of
being sold, assigned or participated to and by the Borrower and
the Lender and other entities that are regularly engaged in or
established for the purpose of making, purchasing or investing in
loans, securities or other financial assets;
(j) such B-Note, CMBS, Mezzanine Loan or Whole Loan is directly
secured by (or indirectly secured by security over the Relevant
Equity Interests in an entity which in turn is the owner of)
Multifamily and/or Commercial Properties which are located in
countries which are Eligible Jurisdictions;
(k) such B-Note, CMBS, Mezzanine Loan or Whole Loan is not an NPL or
Distressed Debt and the Mortgage(s) or Underlying Mortgage(s) for
which is or are not NPLs or Distressed Debt;
(l) payments in respect of such B-Note, CMBS, Mezzanine Loan or Whole
Loan are not subject to any withholding or deduction for or on
account of any Tax; and
(m) the specific Eligibility Criteria set out separately below for
B-Notes, CMBS, Mezzanine Loans and Whole Loans are met.
3 The specific additional Eligibility Criteria for a B-Note, Mezzanine
Loan or Whole Loan shall be that:
(a) such B-Note, Mezzanine Loan or Whole Loan does, or will, not
require the Borrower to: (i) perform any obligations; or (ii) pay
any amount other than the purchase price under or in connection
with such B-Note, Mezzanine Loan or Whole Loan, unless in either
case such failure to perform or pay could not reasonably be
expected to have an adverse effect on the Market Value of such
B-Note, Mezzanine Loan or Whole Loan;
(b) such B-Note has a Loan-to-Value Ratio of 90 per cent. or less;
and
(c) such Mezzanine Loan has a Loan-to-Value Ratio of 90 per cent. or
less; and
(d) such Whole Loan has a Loan-to-Value Ratio of 90 per cent. or
less; and
(e) the Mortgagor in respect of such B-Note, Mezzanine Loan or Whole
Loan has entered into an Underlying Hedge Agreement acceptable to
the Lender.
4 The specific additional Eligibility Criteria for CMBS shall be that:
(a) such CMBS is rated no lower than B by at least one Rating Agency;
(b) such CMBS bears interest at a floating rate (or which bears
interest (or any equivalent thereto) on any other basis and which
is the subject of a Permitted Hedging Transaction, on terms
acceptable to the Lender, which converts such interest (or
equivalent) to a floating rate);
(c) such CMBS was issued to fund the purchase by the relevant
Securities Issuer of unsubordinated loans secured over
Multifamily and/or Commercial Properties, amounts owing under
such loans or CMBS which are themselves secured by such loans,
which purchase was effected by way of a true sale;
(d) such CMBS is listed on a recognised stock exchange on which
similar securities are commonly listed;
(e) such CMBS is rated with an Acceptable Rating and has not been
placed on credit watch where any downgrade that could reasonably
be expected to occur as a result of review would be likely to
result in such securities not having an Acceptable Rating;
(f) such CMBS is settled in book-entry form through the facilities of
Clearstream and/or Euroclear and/or DTC against payment therefor
in immediately available funds;
(g) such CMBS is not an Equity Interest;
(h) such CMBS is not a direct investment in real estate, real estate
funds or trusts in respect of real estate;
(i) such CMBS is not a CDO; and
(j) such CMBS is not primarily backed by a derivative instrument
relating to or referencing real estate or any loan relating to
real estate including without limitation any total return swap or
credit default swap.
Schedule 3
Conditions Precedent
Part I
Conditions precedent to initial Utilisation
Original Borrowers
1 Corporate Authorisations
(a) A copy of the constitutional documents of the Borrower and the
Sponsor, which in the case of:
(i) the Borrower shall include:
(A) a copy of the certificate of incorporation and any
certificate of incorporation on change of name of
the Borrower; and
(B) memorandum and articles of association of the
Borrower; and
(ii) the Sponsor shall include:
(A) a copy of the certificate of incorporation and any
certificate of incorporation on change of name of
the Sponsor; and
(B) memorandum and articles of association of the
Sponsor; and
(b) A copy of a resolution of the board of directors of each of the
Borrower and the Sponsor:
(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 (in
addition to any validly granted power of attorney required
to authorise the same); and
(iii) authorising a specified person or persons, on its behalf,
to sign and/or despatch all documents and notices to be
signed and/or despatched by it under or in connection with
the Finance Documents to which it is a party (in addition
to any validly granted power of attorney required to
authorise the same).
(c) A specimen of the signature of each person authorised by the
resolution or appointed under each power of attorney referred to
in paragraph (b) above.
(d) A certificate signed by an Authorised Signatory of the Borrower
confirming that borrowing the Loan Commitments would not cause
any borrowing or similar limit binding on it to be exceeded.
(e) A certificate of an Authorised Signatory of each of the Borrower
and the Sponsor certifying that each copy document relating to it
specified in this paragraph 1 (Corporate Authorisations) is
correct, complete and in full force and effect as at a date no
earlier than the date of this Agreement.
2 Security and Security Documents
An executed copy of each of the following documents:
2.1 ENGLISH LAW
(a) The Deed of Charge between the Borrower and the Lender.
(i) Notice of Charge over the Collection Account in the form
of Schedule 2 to the Deed of Charge, executed by the
Borrower.
(ii) Acknowledgement of Charge over the Collection Account
executed by the Bank in the form of Schedule 3 to the Deed
of Charge.
(iii) Notice of Assignment to Counterparties in the form of
Schedule 4 to the Deed of Charge, executed by the
Borrower, together with written acknowledgement thereof by
each counterparty.
(iv) A blank transfer certificate in respect of each financed
Debt Asset substantially in the form (if any) scheduled to
the relevant Debt Finance Documents, duly executed by the
Borrower.
(v) A blank form of transfer document (if any) in respect of
each financed Security substantially in the form (if any)
required pursuant to the relevant Securities Finance
Documents, duly executed by the Borrower.
(b) The Securities Custody Agreement between the Borrower, the
Securities Custodian and the Lender.
2.2 IRISH LAW
Debenture between the Borrower and the Lender.
(a) Notice of charge to Securities Custodian in the form scheduled to
the Debenture executed by the Borrower and Lender.
(b) Acknowledgement of charge executed by the Securities Custodian in
the form scheduled to the Debenture.
3 Other Finance Documents
An executed copy of each of the following documents in the agreed form:
(a) this Agreement;
(b) the Control Account Agreement;
(c) the Securities Custody Agreement;
(d) the Document Custody Agreement; and
(e) the Investment Management Agreement.
4 Legal opinions
(a) A legal opinion of Cadwalader, Wickersham & Taft LLP, legal
advisers to the Lender in England.
(b) A legal opinion of Arthur Cox, legal advisers to the Borrower in
Ireland.
(c) A legal opinion of counsel to the Sponsor in the State of
Maryland.
5 Financial statements
A copy, certified by an Authorised Signatory of the Sponsor of the most
recent quarterly unaudited consolidated and consolidating management
accounts of the Sponsor.
6 Other documents and evidence
6.1 Evidence that any process agent referred to in Clause 39.2 (Service of
process) has accepted its appointment.
6.2 Evidence that the fees, costs and expenses then due from the Sponsor
pursuant to Clause 14 (Fees) and Clause 19 (Costs and Expenses) have
been paid or will be paid by the first Utilisation Date.
6.3 Evidence that the Borrower has received on before the initial
Utilisation cash proceeds in the amount of the purchase price of the
related Asset less the amount of the related Advance.
6.4 A copy certified by an Authorised Signatory of the Sponsor of any other
Authorisation or other document, opinion or assurance which the Lender
considers to be necessary or desirable (if it has notified the Sponsor
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.
6.5 Written confirmation that the engagement letter entered into between
the Lender and the Sponsor remains in full force and effect.
Part II
Conditions Precedent required to be delivered by an Additional Borrower
1 An Accession Letter, duly executed by the Additional Borrower.
2 Any other Security Documents required by Clause 26.14 (Undertakings in
relation to security) by the date of accession of such Additional
Borrower.
3 A copy of the constitutional documents of the Additional Borrower.
4 A copy of a resolution of the board of directors of the Additional
Borrower:
(a) approving the terms of, and the transactions contemplated by, the
Accession Letter and the Finance Documents and resolving that it
execute the Accession Letter;
(b) authorising a specified person or persons to execute the
Accession Letter on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign
and/or despatch all other documents and notices to be signed
and/or despatched by it under or in connection with the Finance
Documents.
5 A specimen of the signature of each person authorised by the resolution
or appointed under each power of attorney referred to in paragraph 4
above.
6 A certificate signed by an Authorised Signatory of the Additional
Borrower confirming that borrowing the Loan Commitments would not cause
any borrowing or similar limit binding on it to be exceeded.
7 A certificate of an authorised signatory of the Additional Borrower
certifying that each copy document listed in this Part II of Schedule 3
is correct, complete and in full force and effect as at a date no
earlier than the date of the Accession Letter.
8 A copy of any other Authorisation or other document, opinion or
assurance which the Lender considers to be necessary or desirable in
connection with the entry into and performance of the transactions
contemplated by the Accession Letter or for the validity and
enforceability of any Finance Document.
9 If available, the latest audited financial statements of the Additional
Borrower.
10 A legal opinion of Cadwalader, Wickersham & Taft LLP, legal advisers to
the Lender in England.
11 If the Additional Borrower is incorporated in a jurisdiction other than
England and Wales, a legal opinion of the legal advisers to the Lender
in the jurisdiction in which the Additional Borrower is incorporated.
12 If the proposed Additional Borrower is incorporated in a jurisdiction
other than England and Wales, evidence that the process agent specified
in Clause 39.2 (Service of process), if not a Borrower, has accepted
its appointment in relation to the proposed Additional Borrower.
13 If required under applicable law, a copy of a resolution of the
Additional Borrower's directors approving the entering into, and the
terms and conditions of, this Agreement, in particular, in relation to
any Additional Borrower incorporated in Jersey, the other security to
be provided by such Additional Borrower for the purpose of securing the
prompt and complete satisfaction of all present and future conditional
and unconditional claims of the Finance Parties arising from time to
time out of the Finance Documents.
Schedule 4
Preliminary Due Diligence Package
1 With respect to each Debt Asset (without duplication):
(a) a memorandum addressed to the Lender summarising the debt
structure, the parties thereto, the principal agreements therefor
(and any material terms thereof) and setting out a diagram of the
capital structure thereof (including a description of any
Underwriting Issues);
(b) the Information, to the extent available and/or applicable;
(c) in the event that the Sponsor or any of its Affiliates is a party
to any Debt Finance Documents, the Sponsor's specific
confirmation of this fact and full details of the capacity in
which the Sponsor or any of its Affiliates is acting;
(d) the current rent roll, if applicable;
(e) the cash flow pro-forma, plus historical information, in respect
of the relevant Mortgagor and Mortgaged Properties for a period
which is the longer of: (i) two payment periods under the terms
of the related Debt Asset; and (ii) one year, if available;
(f) a description of the relevant mortgaged Multifamily and/or
Commercial Properties and the ownership structure of the
Mortgagor and the Sponsor (including, without limitation, the
board of directors, if applicable);
(g) a term sheet outlining the transaction generally;
(h) the Sponsor's and Borrower's relationship with the Mortgagor or
any affiliate thereof, if any;
(i) the documents evidencing such Debt Assets, or current drafts
thereof, including, without limitation the Debt Finance
Documents, the underlying Mortgagor's organisational documents
and legal opinions delivered with respect to such Debt Assets, as
applicable;
(j) the insurance documentation relating to the relevant Mortgaged
Properties;
(k) any third party reports, to the extent available and applicable,
including:
(i) Phase I environmental reports (including asbestos and lead
paint reports) and Phase II or other follow-up
environmental report if recommended in Phase I;
(ii) engineering and structural reports;
(iii) current valuation;
(iv) operations and maintenance plan with respect to asbestos
containing materials;
(v) where such Debt Asset relates to Mortgaged Properties or
Mortgagors situated in jurisdictions in respect of which
the Lender has not already received the same, a memorandum
of advice, from reputable legal counsel in such
jurisdiction(s) ("Debt Asset Legal Advice") who have
reviewed the terms of the related Utilisation Request
addressed to the Lender, setting out any recommendations
such counsel may have as to any additional matters as to
which prudent commercial lenders secured against assets
similar to the Debt Assets would require representations
and warranties to reflect the laws or practices of such
jurisdiction (setting out counsel's proposed wording for
the same);
(l) a Debt Asset Transfer Certificate transferring such Debt Assets
to the Borrower duly executed by the Borrower, the facility agent
(howsoever defined in the Debt Finance Documents) and any other
party required by the terms of the relevant Debt Finance
Documents to execute the same;
(m) to the extent not listed above, any other information with
respect to such Sponsor's Debt Assets requested by the Lender and
which is in the Sponsor's possession or which can be obtained by
the Sponsor without unreasonable effort or expense; and
(n) the Preliminary Data Tape for such Debt Asset.
2 With respect to each of the CMBS:
(a) a memorandum addressed to the Lender summarising the debt
structure, the parties thereto, the principal agreements therefor
(and any material terms thereof) and setting out a diagram of the
capital structure thereof and the shareholding (if any) and
contractual relationships between the principal parties thereto
(if the same is other than a bilateral loan and security (held by
an agent, trustee or otherwise)) with respect to each of the
largest twenty underlying loans (or such other number as the
Lender and the Sponsor shall agree to) constituting collateral
for such CMBS;
(b) the Securities Finance Documents and any other attachments and
supplements, to the extent available to the Sponsor;
(c) in the event that the Sponsor or any of their Affiliates is a
party to any Securities Finance Documents the Sponsor's specific
confirmation of this fact and full details of the capacity in
which the Sponsor or any of its Affiliates is acting;
(d) the pre-sale report (if any) prepared by the Rating Agencies in
connection with the issuance of the CMBS, to the extent available
to the Sponsor;
(e) a remittance report in respect of the relevant Securities Issuer,
the CMBS and (to the extent the same are available to the holders
of such CMBS) the Underlying Mortgages and the Underlying
Mortgaged Properties and for the most recent period which is the
longer of: (i) two payment periods under the terms of such CMBS;
and (ii) one year and which is in the Sponsor's possession;
(f) quarterly remittance reports in the Sponsor's possession;
(g) accounting reports delivered with respect to each of the CMBS in
the Sponsor's possession;
(h) legal opinions delivered with respect to the CMBS in the
Sponsor's possession;
(i) evidence that either Clearstream, Euroclear and/or DTC (as is
relevant) has received and is holding such CMBS;
(j) to the extent not listed above, any other information with
respect to each of the CMBS reasonably requested by the Lender
and which is in the Sponsor's possession or which can be obtained
without unreasonable effort or expense;
(k) where such Security relates to Underlying Loans, Underlying
Mortgages or Securities Issuers situated in jurisdictions in
respect of which the Lender has not already received the same, a
memorandum of advice from reputable legal counsel in such
jurisdiction(s) ("Securities Legal Advice") who have reviewed the
terms of the related Utilisation Request addressed to the Lender,
setting out any recommendations such counsel may have as to any
additional matters as to which prudent commercial lenders secured
against assets similar to the relevant CMBS would require
representations and warranties to reflect the laws or practices
of such jurisdiction (setting out counsel's proposed wording for
the same); and
(l) the Preliminary Data Tape for such CMBS.
Schedule 5
Requests
Utilisation Request
From: Anthracite Capital Inc. on behalf of AHR Capital Limited
To: Lehman Commercial Paper Inc., UK Branch, as Lender
Attention: Brian Gross & Julian Wheeler
Dated: [o]
Dear Sirs
AHR Capital Limited
Up to $150,000,000 Facility Agreement
dated 19 April 2007 (the "Agreement")
Dear Sirs
1 We refer to the Agreement. Terms defined in the Agreement have the same
meaning in this Utilisation Request unless given a different meaning in
this Utilisation Request.
2 This document when signed by the Lender will constitute a Utilisation
Request for the purposes of the Agreement.
3 This Utilisation Request and all provisions and information contained
herein shall form part of and be construed as being one and the same
as, and read cumulatively with, the Agreement. As provided in the
Agreement, in the event of a conflict with respect to the Asset between
the provisions of this Utilisation Request and the Finance Documents,
the provisions of the Utilisation Request shall prevail.
4 We wish to borrow an Advance on the following terms:
Asset: [o]
Utilisation Date: [o] (or, if that is not a
Business Day, the next
Business Day)
Currency of Advance [o]
Amount: (euro)[o] or, if less, the
Available Commitment
Interest Period: [o]
Payment Dates: [o],[o],[o] and [o]
Market Value: [o]
Loan-to-Value Ratio: [o]
Advance Rate: [o]
Senior Debt: (euro)/(pound) [o]
Asset Representations
and Warranties: See Annex 3
[*** ADD ANY ASSET REPS,
ACCOUNTING FOR LOCAL LAW AND
THE NATURE OF THE ASSET***]
Asset Conditions Precedent: See Annex 3
[*** ADD ANY ADDITIONAL
ASSET CONDITIONS PRECEDENT
WITH RESPECT TO THE ASSET***]
Asset Covenants: [*** ADD HERE ANY
ADDITIONAL COVENANTS WITH
RESPECT TO THE ASSET***]
Asset Prepayment Conditions: [*** ADD HERE ANY
ADDITIONAL PREPAYMENT
CONDITIONS WITH RESPECT TO
THE ASSET***]
5 We attach as Annex 1 hereto the Asset Warranties for the Asset to be
the subject of such Advance.
6 [We attach as Annex 1 hereto the Asset Warranties and as Annex 3 hereto
the Asset Conditions Precedent, in each case, for the Asset to be the
subject of such Advance.]
7 The Asset(s) listed on the Financed Asset Schedule attached hereto as
Annex 3 and as classified below in accordance with the Agreement are
the subject matter of the proposed Advance:
- ------------------------------------------------------------------------------------------
[B-Notes] [Whole Loans] [Mezzanine Loans] [CMBS] [Other Assets] Total
- ------------------------------------------------------------------------------------------
[Industrial:]
- ------------------------------------------------------------------------------------------
Number of
Assets
- ------------------------------------------------------------------------------------------
Original
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Current
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Anticipated
Market Value
- ------------------------------------------------------------------------------------------
Advance Rate
- ------------------------------------------------------------------------------------------
[Retail:]
- ------------------------------------------------------------------------------------------
Number of
Assets
- ------------------------------------------------------------------------------------------
Original
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Current
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Anticipated
Market Value
- ------------------------------------------------------------------------------------------
Advance Rate
- ------------------------------------------------------------------------------------------
[Office:]
- ------------------------------------------------------------------------------------------
Number of
Assets
- ------------------------------------------------------------------------------------------
Original
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Current
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Anticipated
Market Value
- ------------------------------------------------------------------------------------------
Advance Rate
- ------------------------------------------------------------------------------------------
[Hotel:]
- ------------------------------------------------------------------------------------------
Number
of Assets
- ------------------------------------------------------------------------------------------
Original
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Current
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Anticipated
Market Value
- ------------------------------------------------------------------------------------------
Advance Rate
- ------------------------------------------------------------------------------------------
[Multifamily:]
- ------------------------------------------------------------------------------------------
Number
of Assets
- ------------------------------------------------------------------------------------------
Original
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Current
Unpaid
Principal
Balance
- ------------------------------------------------------------------------------------------
Anticipated
Market Value
- ------------------------------------------------------------------------------------------
Advance Rate
- ------------------------------------------------------------------------------------------
8 In connection with this Utilisation Request, the undersigned hereby
certifies that:
(a) each of the conditions precedent set forth in the Finance
Documents has been satisfied as of the date hereof, or will be
satisfied at least one (1) Business Day prior to the proposed
Utilisation Date;
(b) it has provided to the Lender or its designee, the Preliminary
Due Diligence Package relating to each Asset described herein,
and with respect to each Asset, a Preliminary Data Tape; and
(c) each such Asset will (subject to Lender approval of the same)
will at least one Business Day prior to the proposed Utilisation
Date satisfy all of the Eligibility Criteria applicable to it.
9 No Default has occurred and is continuing;
10 To our knowledge, none of the events described in Clause 26.12(e)
(Borrower's Assets) of the Agreement has occurred;
11 The Borrower is in compliance with Clause 26.9 (SPV Covenants) of the
Agreement;
12 The Asset Warranties are true and correct;
13 We have all necessary Authorisations required by applicable law to act
in its required capacities in relation to its business;
14 The attached certifications and calculations are true, correct and
complete as of the date hereof;
15 The Sponsor is in compliance with the tests set out in Clause 25
(Financial Undertakings);
16 The Sponsor has not suspended or discontinued its business or commenced
or become subject to any Insolvency;
17 The Sponsor is in compliance with all laws, regulations and agreements
binding on it and its assets; and
18 This Utilisation Request is irrevocable.
[If the statements in this certificate cannot be made without qualification,
then specify the nature and existence of the circumstances causing such
statement to be untrue and the action which the Borrowers are taking or propose
to take with respect thereto.]
For and on behalf of the Borrower
By:
----------------------------------
Name:
Title: Authorised Signatory
Approved and agreed for and on behalf of the Lender
By:
----------------------------------
Name:
Title: Authorised Signatory
Annex 1 to Schedule 5
Asset Warranties
Comments
- -----------------------------------------------------------------------------------------------------------------------------------
1 ELIGIBLE DEBT ASSET REPRESENTATIONS
The Borrower and the Sponsor makes to each Finance Party the
representations and warranties set out in this Clause 1.
1.1 Eligibility [ ] Yes [ ] N/A
Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset is an Eligible Asset.
1.2 Information [ ] Yes [ ] N/A
(a) The information set forth in the Preliminary Due Diligence
Package is, so far as the Borrower or, as the case may be the
Sponsor is aware (having made all reasonable enquiries) complete,
true and correct in all material respects as of the
relevant closing date and is a complete and accurate list of all
those documents which are relevant for the purposes of B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset.
(b) Each and any Asset File delivered by or on behalf of the Borrower [ ] Yes [ ] N/A
to the Document Custodian is full and complete without omission
or defect in any material respect.
(c) So far as the Borrower and the Sponsor are aware, full and proper [ ] Yes [ ] N/A
accounts, books and records showing clearly all transactions,
payments, receipts, proceedings and notices relating to such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset have been kept
since the origination of the same, and such records are, so far
as the Borrower and the Sponsor are aware, complete, accurate and
up to date in all material respects.
1.3 Nature [ ] Yes [ ] N/A
Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset is a performing Asset secured
on Multi-family and/or Commercial Property.
1.4 Ownership
(a) The Borrower will on acquisition of the same have an Eligible [ ] Yes [ ] N/A
Interest in such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset (other than
in the case of a B-Note, any senior loan secured by the Mortgage
for the same).
(b) The Borrower had good title to such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset.
(c) The Borrower or the security trustee to such B-Note, Mezzanine [ ] Yes [ ] N/A
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset is the legal owner (subject to necessary
registrations or recordings under the laws of the jurisdiction of
the relevant Mortgaged 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 Mortgaged Property is
subject), claims and equities (including, without limitation,
rights of set-off or counterclaim).
(d) The Borrower has full right, power and authority to transfer and [ ] Yes [ ] N/A
assign such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset.
(e) Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset has not been cancelled,
satisfied or rescinded in whole or part nor has any instrument
been executed that would effect a cancellation, satisfaction or
rescission thereof.
(f) Neither the Borrower nor the Sponsor has received and is not [ ] Yes [ ] N/A
aware of any written notice of any encumbrance materially and
adversely affecting its title to such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset.
(g) The Borrower or the security trustee to the relevant B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset has a good title to each Mortgage at
law and all things necessary to perfect the Borrower's or the
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset'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
(h) Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset 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 Lender without
restriction and no consent from any related Mortgagor is required
to any such assignment.
(i) The entry into by the Borrower of this Agreement (and the [ ] Yes [ ] N/A
agreements contemplated hereby) in relation to such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset does not require the Borrower to
obtain any approval, consent, authorisation or order of
or registration or filing with or notice to, any court or
governmental or regulatory agency or body that has not been
obtained.
(j) The assignment of such B-Note, Mezzanine Loan, Whole Loan or [ ] Yes [ ] N/A
(where the Lender so designates the same) Eligible Other Asset
constitutes the legal, valid and binding assignment of same from
the seller thereof to or for the benefit of Borrower.
(k) Neither the Borrower nor the Sponsor is aware of any litigation [ ] Yes [ ] N/A
or claim calling into question in any way the Borrower's title to
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset or any security
therefor.
1.5 Payment Record [ ] Yes [ ] N/A
No scheduled payment of principal and interest under such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset is thirty days or more past due beyond any
applicable grace period, and such B-Note, Mezzanine Loan, Whole Loan or
(where the Lender so designates the same) Eligible Other Asset was not
thirty days or more delinquent in the twelve-Month period immediately
preceding the Utilisation Date relating to the first financing thereof
through Advances made available under this Agreement.
1.6 Compliance with law [ ] Yes [ ] N/A
Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset complies in all material
respects with (or is exempt from) all requirements of applicable law
relating to such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset.
1.7 Mortgages
The Mortgages related to and delivered in connection with such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset constitute valid and, subject to the Reservations,
enforceable first priority mortgages upon the related Mortgaged
Property prior to all other security interests and/or other
encumbrances, except for:
(a) matters to which like properties are commonly subject; [ ] Yes [ ] N/A
(b) any other matters expressly agreed by the Lender; [ ] Yes [ ] N/A
(c) in the case of any B-Notes, the senior loan secured by the [ ] Yes [ ] N/A
Mortgages for the same;
(d) in the case of any Mezzanine Loans, any other Financial [ ] Yes [ ] N/A
Indebtedness permitted by the terms thereof;
(e) in the case of any B-Notes and any Mezzanine Loans, the rights [ ] Yes [ ] N/A
(if any) of any third party creditor secured by, in the case of
any B-Note, the same Mortgage or, in the case of any Mezzanine
Loan, a first ranking Mortgage over the relevant Multifamily
and/or Commercial Property, in each case pursuant to the
terms of an intercreditor agreement entered into by the relevant
Mortgagor, the terms of which are customary for comparable
B-Notes, Mezzanine Loans, Whole Loans or (where the Lender so
designates the same) Eligible Other Assets in the relevant
jurisdictions,
provided that none of which matters referred to in clauses (a) to (e)
(inclusive) materially interferes with the security intended to be
provided by such Mortgage or the marketability or current use of the
Mortgaged Property or the current ability of the Mortgaged Property to
generate operating income sufficient to service the B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same) Eligible
Other Assets or, as the case may be, or CMBS or (where the Lender so
designates the same) Eligible Other Asset or (where the Lender so
designates the same) Eligible Other Asset (items (a) to (e) (inclusive)
being the "Permitted Encumbrances").
1.8 Leases
To the knowledge of the Borrower and the Sponsor there has been no [ ] Yes [ ] N/A
written notice of any default that has not been remedied or
forfeiture of any occupational lease granted in respect of the
Mortgaged Property securing such B-Note, Mezzanine Loan, Whole Loan or
(where the Lender so designates the same) Eligible Other Asset.
1.9 Assignment of Leases and Rents
(a) The Assignment of Leases and Rents related to and delivered in [ ] Yes [ ] N/A
connection with such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset
establishes and creates a valid, subsisting and, subject to the
Reservations, enforceable first priority perfected Security in
the related Mortgagor's interest in all leases, sub-leases,
licenses or other agreements pursuant to which any person is
entitled to occupy, use or possess all or any portion of the
related Mortgaged Property, and each assignor thereunder has the
full right to assign the same.
(b) Each such Assignment of Leases and Rents constitutes a legal, [ ] Yes [ ] N/A
valid and binding assignment, sufficient to convey (subject to
the Reservations) to the assignee named therein all of the
assignor's right, title and interest in, to and under such
Assignment of Leases and Rents.
(c) The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset provide that the related Mortgagor and any additional
guarantor shall be liable to the lender for losses incurred due
to the misapplication or misappropriation of rents collected in
advance or received by the related Mortgagor after the occurrence
of an event of default and not paid to the holder of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset or applied to the Mortgaged Property
in the ordinary course of business, misapplication or conversion
by the Mortgagor of insurance proceeds or any compensation
received following a compulsory purchase order or breach of the
environmental covenants in the related Debt Finance Documents
1.10 Mortgage status; Waivers and modifications
(a) No Mortgage has been satisfied, cancelled, rescinded or [ ] Yes [ ] N/A
subordinated in whole or in material part, and, except for
releases requested under the terms and conditions of the related
Debt Finance Documents, the related Mortgaged Property has not
been released from such Mortgage, in whole or in material part,
nor has any instrument been executed that would effect any such
satisfaction, cancellation, subordination, rescission or release
except for any partial re-conveyances of portions of the related
Mortgaged Property that do not materially adversely affect the
value of such Mortgaged Property.
(b) No Mortgage provides for or permits, without the prior written [ ] Yes [ ] N/A
consent of the holder of the Mortgage, the related Mortgaged
Property to secure any other promissory note or obligation except
as expressly described in such Mortgage.
1.11 Chattels [ ] Yes [ ] N/A
Valid and enforceable first priority security interests have been
granted in all items of personal property located on the Mortgaged
Property for such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset that either: (a)
are reasonably necessary to operate such Mortgaged Property; or (b) are
(as indicated in the valuation obtained in connection with the
origination of such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset) material to the
value of the Mortgaged Property (other than any personal property
subject to a purchase money security interest or a sale and leaseback
financing arrangement permitted under the terms of the related Debt
Finance Documents or any other personal property leases applicable to
such personal property).
1.12 Registrations and Filings [ ] Yes [ ] N/A
(a) Each relevant Mortgage has been delivered for registration
against each related Mortgagor according to the system for
registration under the law of the jurisdiction in which the
relevant Mortgaged Property is located.
(b) So far as the Borrower and the Sponsor are aware, all [ ] Yes [ ] N/A
applicable Mortgage 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 such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset for payment upon
recordation of the relevant documents.
(c) The Borrower and the Sponsor have fully and validly perfected [ ] Yes [ ] N/A
all security interests created or intended to be created
pursuant to the Debt Asset Documents relating to such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Asset.
1.13 Condition of the Mortgaged Properties
(a) Each related Mortgaged Property for such B-Note, Mezzanine [ ] Yes [ ] N/A
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset is, to the knowledge of the Borrower,
free and clear of any that would materially and adversely
affect its value as security for such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Asset (normal wear and tear
excepted).
(b) The Borrower has received no notice of any pending or [ ] Yes [ ] N/A
threatened steps to effect the compulsory purchase of all or
any material portion of any Mortgaged Property securing such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset.
(c) To the knowledge of the Borrower (based on valuations [ ] Yes [ ] N/A
obtained in connection with the origination of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Assets to the extent received) as of
the date of the origination of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset, no such valuation disclosed any matter
or thing that would materially and adversely affect the value
or marketability of the related Mortgaged Property.
1.14 Title
The original lender (or an agent therefor) under such B-Note, Mezzanine [ ] Yes [ ] N/A
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset, obtained from lawyers appointed by it or with its
consent a report on title which showed no adverse entries, or, if such
report did reveal any adverse entry, such entry would not have caused a
reasonably prudent lender of money secured on commercial property to
decline to proceed with the related advance on its agreed terms.
1.15 Diligence
To the best of the knowledge of the Borrower and the Sponsor, (a) [ ] Yes [ ] N/A
neither the Borrower nor the Sponsor is aware of any facts which would
cause a reasonably prudent lender of money secured on commercial
property to decline to proceed with such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
on its agreed terms; and (b) it is not aware of any matter or thing
affecting the title of the underlying borrower to the Mortgaged
Property or any other part of the security for such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same) Eligible
Other Asset which would cause a reasonably prudent lender of money
secured on commercial property to decline to proceed making such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Asset on its agreed terms.
1.16 Value
(a) Neither the Borrower nor the Sponsor is aware (from any [ ] Yes [ ] N/A
information received by it in the course of acquiring and
administering such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset without
further inquiry) of any circumstances giving rise to a material
reduction in the value of the Mortgaged Property since the
funding date of such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset other
than market forces affecting the values of properties comparable
to the Mortgaged Property in the area where the Mortgaged
Property is located.
(b) Neither the Borrower nor the Sponsor is aware of any monetary [ ] Yes [ ] N/A
default, breach or violation under such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset or any other default, breach or violation that
materially and adversely affects the value of the Mortgaged
Property, such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset 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 related
Mortgagor under any of the related Debt Asset Finance 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 Mortgaged Property, such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset or any security therefor.
1.17 No further advances/no partly paid Assets
(a) Except as disclosed in writing to Lender, the proceeds of such [ ] Yes [ ] N/A
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset have been fully
disbursed and there is no obligation for future advances with
respect thereto.
(b) With respect to such B-Note, Mezzanine Loan, Whole Loan or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset, any and
all requirements as to completion of any on-site or off-site
improvement and as to disbursements of any funds escrowed for
such purpose that were to have been complied with on or before
the Utilisation Date for the same have been complied with, or any
such funds so escrowed have not been released.
(c) Neither the Borrower nor any of its Affiliates has any obligation [ ] Yes [ ] N/A
to make any capital contributions to any Mortgagor under such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset.
(d) Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset contains no obligation
to make any further advances which remains to be performed and no
part of any advance pursuant to such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset has been retained by the Borrower pending compliance
by the Borrower with any other condition.
1.18 Debt Finance Documents
(a) The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset have been duly and properly executed by the parties
thereto.
(b) The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset constitute 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).
(c) To the extent applicable, the Debt Finance Documents for such [ ] Yes [ ] N/A
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset together with
applicable law, contain customary and enforceable provisions for
comparable mortgaged properties similarly situated such as would
be expected to render the rights and remedies of the lender
thereunder adequate for the practical realisation against the
related Mortgaged Property of the principal benefits of the
security intended to be provided thereby.
(d) To the knowledge of the Borrower and the Sponsor, all [ ] Yes [ ] N/A
representations and warranties in the Debt Finance Documents for
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset are true and correct in
all material respects and there has been no adverse change with
respect to the such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset, the
relevant Mortgagor, the relevant Mortgaged Property or the owner
of the relevant Mortgaged Property that would render any such
representation or warranty not true or correct in any material
respect.
(e) Neither the Borrower nor the Sponsor has received any notice of [ ] Yes [ ] N/A
any event of default under such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset 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.
(f) Save as included in the Information, neither the Borrower nor the [ ] Yes [ ] N/A
Sponsor is party to any document, instrument or agreement, and
there is no document, that by its terms modifies or affects the
rights and obligations of any holder of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset and neither the Borrower nor the Sponsor has
consented to any material change or waiver to any term or
provision of any such document, instrument or agreement and no
such change or waiver exists.
(g) The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset require the related Mortgagor to provide the holder of such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset with certain financial
information at the times required under the related Debt Finance
Documents.
(h) Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset is governed by the law
of the jurisdiction in which the relevant Mortgaged Property is
located.
(i) So far as the Borrower and the Sponsor are aware, in respect of [ ] Yes [ ] N/A
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset, 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 such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset (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
Lender so that the Lender receives a net amount equal to the full
amount it would have received had the payment not been subject to
tax.
1.19 Security trusts
To the extent applicable, if any Mortgage or other security constituted
in the Debt Finance Documents for such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
is held on trust for the lenders and/or related parties:
(a) a trustee, duly qualified under applicable law to serve as such, [ ] Yes [ ] N/A
is properly designated and serving as such; and
(b) no fees or expenses other than customary are payable to such [ ] Yes [ ] N/A
trustee by the Borrower except in connection with a trustee's
sale after default by the related Mortgagor or in connection with
any full or partial release of the related Mortgaged Property or
related security for the related B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset.
1.20 Environmental conditions
So far as the Borrower and the Sponsor are aware (in each case, after [ ] Yes [ ] N/A
making reasonable enquiries to ensure the same):
(a) an environmental site assessment (or an update of a previous
assessment) was performed with respect to each Mortgaged Property
in connection with the origination of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset, a report of each such assessment (an
"Environmental Report") has been delivered or made available to
the Lender;
(b) there is no material and adverse environmental condition or [ ] Yes [ ] N/A
circumstance affecting any such Mortgaged Property;
(c) there is no material violation of any applicable Environmental [ ] Yes [ ] N/A
Law with respect to any such Mortgaged Property;
(d) each Mortgage contains customary terms requiring the related [ ] Yes [ ] N/A
Mortgagor to comply with all applicable Environmental Laws;
(e) where any such Environmental Report disclosed the existence of a
material and adverse environmental condition or circumstance
affecting any such Mortgaged Property:
(i) a party not related to the Mortgagor was identified as the [ ] Yes [ ] N/A
responsible party for such condition or circumstance;
(ii) the related Mortgagor was required either to provide [ ] Yes [ ] N/A
additional security and/or to obtain an operations and
maintenance plan; or
(iii) the related Mortgagor provided evidence that applicable [ ] Yes [ ] N/A
governmental authorities would not take any action, or
require the taking of any action, in respect of such
condition or circumstance; and
(f) the Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset contain provisions pursuant to which the related borrower
or a principal of such borrower has agreed to indemnify the
mortgagee for damages resulting from violations of any applicable
Environmental Laws.
1.21 Planning Law [ ] Yes [ ] N/A
There are no material violations of any applicable planning laws or
regulations, building codes or land laws applicable to any Mortgaged
Property related to such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset or the use and
occupancy thereof which would have a material adverse effect on the
value, operation or net operating income of such Mortgaged Property.
The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset
require the related Mortgaged Property to comply with all applicable
laws and regulations.
1.22 Status of the Debt Finance Documents
The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole Loan [ ] Yes [ ] N/A
or (where the Lender so designates the same) Eligible Other
Asset that were executed by or on behalf of the related Mortgagor are
the valid and binding obligations of such Mortgagor(s) (subject to any
non-recourse provisions contained therein), (subject to the
Reservations).
1.23 Insurance
To the best of the knowledge of the Borrower and the Sponsor: [ ] Yes [ ] N/A
(a) each Mortgaged Property securing such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset is, and is required pursuant to the related Debt
Finance Documents to be, covered by insurance (including, without
limitation with respect to fire and extended perils insurance) on
the relevant Mortgaged Property and plant and machinery thereon
(including fixtures and improvements) at least equal to the
lesser of the replacement cost of improvements located on such
Mortgaged Property, with no deduction for depreciation, or the
outstanding principal balance of such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset and in any event, the amount necessary to avoid the
operation of any co-insurance provisions;
(b) each Mortgaged Property securing such B-Note, Mezzanine Loan, [ ] Yes [ ] N/A
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset is covered by a buildings insurance policy against
those risks usually covered by a reasonably prudent mortgagee of
a property of the same nature and in a comparable location;
(c) the relevant insurance policy for any Mortgaged Property securing [ ] Yes [ ] N/A
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset provides cover in
respect of at least three years loss of rent;
(d) each Mortgaged Property securing such B-Note, Mezzanine Loan, [ ] Yes [ ] N/A
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset is covered by comprehensive general liability
insurance against claims for personal and bodily injury, death or
property damage occurring on, in or about the related Mortgaged
Property, in an amount usually covered by a reasonably prudent
mortgagee of a property of the same nature and in a comparable
location;
(e) either the Borrower nor the Sponsor has received and (so far as [ ] Yes [ ] N/A
the Borrower is aware) nor has any other lender (or agent or
trustee therefor) in respect of such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset (each, a "Mortgagee") received written notice that
any such insurance policy is about to lapse on account of failure
by the relevant entity maintaining such insurance to pay the
relevant premiums;
(f) such insurance policy contains a standard mortgagee clause that [ ] Yes [ ] N/A
names the Mortgagee in respect of such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset as an additional insured and that requires at least
thirty days' (in the case of termination or cancellation other
than for non-payment of premiums) and at least ten (10) days (in
the case of termination or cancellation for non-payment of
premiums) prior notice to the holder of the related Mortgage, and
no such notice has been received, including any notice of
non-payment of premiums, that has not been cured;
(g) each Mortgage securing such B-Note, Mezzanine Loan, Whole Loan or [ ] Yes [ ] N/A
(where the Lender so designates the same) Eligible Other Asset
obliges the related Mortgagor to maintain all such insurance and,
upon such Mortgagor's failure to do so, authorises the holder of
the Mortgage to maintain such insurance at the related
Mortgagor's cost and expense and to seek reimbursement therefor
from such Mortgagor;
(h) the Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset provides that casualty insurance proceeds will be applied
either to the restoration or repair of the related Mortgaged
Property or to the reduction or defeasance of the principal
amount of such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset;
(i) each insurance policy referred to in this Clause is in full force [ ] Yes [ ] N/A
and effect with respect to the related Mortgaged Property; and
all insurance coverage required under such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset, which insurance covers such risks and is in
such amounts as are customarily acceptable to prudent commercial
and multifamily mortgage lending institutions lending on the
security of property comparable to the related Mortgaged Property
in the jurisdiction in which such Mortgaged Property is located;
(j) all premiums due and payable in respect of each insurance policy [ ] Yes [ ] N/A
referred to in this Clause have been paid; and no notice of
termination or cancellation with respect to any such insurance
policy has been received by the Borrower;
(k) except for certain amounts not greater than amounts which would [ ] Yes [ ] N/A
be considered prudent by an institutional commercial and/or
multifamily mortgage lender with respect to a similar B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset and which are set forth in the related
Debt Finance Documents for such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset, any insurance proceeds in respect of a casualty loss, will
be applied either: (i) to the repair or restoration of all or
part of the related Mortgaged Property; or (ii) the reduction of
the outstanding principal balance of such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset, subject in either case to requirements with respect
to leases at the related Mortgaged Property and to other
exceptions customarily provided for by prudent institutional
lenders for similar loans;
(l) each Mortgaged Property securing such B-Note, Mezzanine Loan, [ ] Yes [ ] N/A
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset is covered by comprehensive general liability
insurance against claims for personal and bodily injury, death or
property damage occurring on, in or about such Mortgaged
Property, in an amount customarily required by prudent
institutional lenders; and
(m) the Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset requires that the related Mortgagor maintain insurance as
described above or permits the mortgagee to require insurance as
described in this Clause, and permits the mortgagee to purchase
such insurance at the Mortgagor's expense if Mortgagor fails to
do so.
1.24 Taxes
There are no delinquent or unpaid taxes or assessments (including [ ] Yes [ ] N/A
assessments payable in future instalments), or other
outstanding charges affecting any Mortgaged Property securing such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Asset which are or may become secured against
such Mortgaged Property or payable out of the proceeds thereof (in
either case) at a priority equal to or higher than the related
Mortgage.
For purposes of this paragraph 1.24, real property taxes and
assessments shall not be considered unpaid until the date on which
interest and/or penalties would be first payable thereon.
1.25 Mortgagor Bankruptcy/Insolvency [ ] Yes [ ] N/A
Neither the Borrower nor the Sponsor have received any notice of the
bankruptcy, liquidation, receivership, administration moratorium or a
winding up or administrative order or dissolution (or the equivalent
thereof in any relevant jurisdiction) of any Mortgagor or in relation
to such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset.
1.26 Mortgagor
(a) The owners of each Mortgaged Property securing such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset were duly organised and validly
existing and, as of the time of the origination of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset with requisite power and authority to
own its assets and to transact the business in which it is now
engaged, and such Mortgaged Properties constitute the sole assets
of the owner of such Mortgaged Property.
(b) The owner of each Mortgaged Property securing such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset has good and marketable title to such
Mortgaged Property and such owner has not received any written
notice regarding any material violation of any easement,
restrictive covenant or similar instrument affecting the
Mortgaged Property.
1.27 Leasehold Title
Each Mortgaged Property securing such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other Asset
consists of the related Mortgagor's freehold estate or, if such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset is secured in whole or in part by the interest of
a Mortgagor under a Ground Lease, by the related Mortgagor's interest
in the Ground Lease. With respect to any B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
secured by a Ground Lease:
(a) such Ground Lease has been duly registered; such Ground Lease [ ] Yes [ ] N/A
permits the current use of the Mortgaged Property and permits the
interest of the lessee thereunder to be encumbered by the related
Mortgage and does not restrict the use of the related Mortgaged
Property by such lessee, its successors or assigns in a manner
that would adversely affect the security provided by the related
Mortgage by limiting in any way its current use; and there has
been no material change in the payment terms of such Ground Lease
since the origination or acquisition of the related Utilisation
Loan, with the exception of material changes reflected in written
documents that are a part of the related Mortgage File;
(b) the lessee's interest in such Ground Lease is not subject to any
Security, liens or encumbrances superior to, or of equal priority
with, the related Mortgage;
(c) such Ground Lease is in full force and effect, and neither the [ ] Yes [ ] N/A
Borrower nor the Sponsor has received any notice that an event of
default has occurred thereunder, and, to the knowledge of the
Borrower and the Sponsor, there exists no condition that, but for
the passage of time or the giving of notice, or both, would
result in a breach of covenant under the terms of such Ground
Lease;
(d) such Ground Lease has an original term (including any extension [ ] Yes [ ] N/A
options set forth therein) which extends not less than twenty
years beyond the stated maturity date of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset;
(e) under the terms of such Ground Lease, any estoppel or consent [ ] Yes [ ] N/A
letter received by the Mortgagee from the Lessor and the related
Mortgage, taken together, any related insurance proceeds will be
applied either to the repair or restoration of all or part of the
related Mortgaged Property, with the mortgagee having the right
to hold and disburse such proceeds as the repair or restoration
progresses (except in such cases where a provision entitling
another party to hold and disburse such proceeds would not be
viewed as commercially unreasonable by a prudent commercial
mortgage lender for conduit programs), or to the payment or
defeasance of the outstanding principal balance of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset together with any accrued interest
thereon;
(f) such Ground Lease does not impose any restrictions on subletting [ ] Yes [ ] N/A
which would be viewed as commercially unreasonable by prudent
commercial mortgage lenders in the lending area where the
Mortgaged Property is located;
(g) such Ground Lease may not be amended, modified, cancelled or [ ] Yes [ ] N/A
terminated without the prior written consent of the Borrower in
its capacity as lender under the Debt Finance Documents for such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset and any such action
without such consent is not binding on the Borrower in its
capacity as lender under such Debt Finance Documents, its
successors or assigns, except termination or cancellation if (i)
an event of default occurs under the Ground Lease, (ii) notice
thereof is provided to the Borrower in its capacity as lender
under such Debt Finance Documents and (iii) such default is
curable by the Borrower in its capacity as lender under such Debt
Finance Documents provided in the Ground Lease but remains
uncured beyond the applicable cure period;
(h) upon the enforcement of any related Senior Debt the Mortgagor's [ ] Yes [ ] N/A
interest in such Ground Lease is assignable to the Mortgagee
under the leasehold estate and its assigns without the consent of
the lessor thereunder (or, if any such consent is required, it
has been obtained prior to the date on which the Borrower
purchases an Eligible Interest in such Senior Debt) (or
acceptance of a deed in lieu thereof);
(i) the Ground Lease or ancillary agreement between the lessor and [ ] Yes [ ] N/A
the lessee requires the lessor to give notice of any default by
the lessee to the Mortgagee. The Ground Lease or ancillary
agreement further provides that no notice given is effective
against the Mortgagee unless a copy has been given to the
Mortgagee in a manner described in the Ground Lease or ancillary
agreement;
(j) a Mortgagee is permitted a reasonable opportunity (including, [ ] Yes [ ] N/A
here necessary, sufficient time to gain possession of the
interest of the lessee under the Ground Lease) to cure any
curable default under such Ground Lease before the lessor
thereunder may terminate such Ground Lease;
(k) the ground lessor under such Ground Lease is required to enter [ ] Yes [ ] N/A
into a new lease upon termination of the Ground Lease for any
reason, including the rejection of the Ground Lease in
bankruptcy;
(l) such Ground Lease does not contain any provision whereby it may [ ] Yes [ ] N/A
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; and
(m) if applicable, the lessor under such Ground Lease consented to [ ] Yes [ ] N/A
and acknowledged that: (i) such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset is permitted/approved; (ii) any enforcement of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset and related change in ownership of the
Ground Lessee will not require the consent of the lessor under
such Ground Lease or constitute a default under such Ground
Lease; (iii) copies of default notices would be sent to the
lenders (or their agent) in respect of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset; and (iv) it would accept cure from the
lenders (or their agent) in respect of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset on behalf of the related ground lessee.
1.28 Advancement of funds to the Borrower
So far as the Borrower and the Sponsor are aware no holder of such [ ] Yes [ ] N/A
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Asset has advanced funds or induced, solicited
or received any advance of funds from a party other than the owner of
the related Mortgaged Property, directly or indirectly, for the
payment of any amount required by such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset.
1.29 Cross-collateralisation; Cross-default
So far as the Borrower and the Sponsor are aware, such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset is not cross-collateralised or cross-defaulted
with any loan or security other than one or more other B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates
the same) Eligible Other Assets.
1.30 Releases of Mortgaged Property
The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset do
not require the mortgagee to release all or any material portion of the
related Mortgaged Property from the related Mortgage except upon
payment in full or defeasance of all amounts due under such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset other then such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset, the
Information for which indicates that the relevant mortgagee are
required to grant releases of portions of the related Mortgaged
Properties upon:
(a) the satisfaction of certain legal and underwriting requirements; [ ] Yes [ ] N/A
and
(b) except where the portion of the Mortgaged Property permitted to
be released was not considered by the Borrower to be material in
the underwriting of such B-Note, Mezzanine Loan, Whole Loan or
(where the Lender so designates the same) Eligible Other Assets;
either
(i) the payment of a release price set forth therein and [ ] Yes [ ] N/A
prepayment consideration in connection therewith; or
(ii) the partial defeasance of such B-Note, Mezzanine Loan, [ ] Yes [ ] N/A
Whole Loan or (where the Lender so designates the same)
Eligible Other Asset.
1.31 Acceleration Rights [ ] Yes [ ] N/A
The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset
contain provisions for the acceleration of the payment of the unpaid
principal balance of such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset if, without
complying with the requirements of the related Debt Finance Documents,
(a) the related Mortgaged Property, or any controlling interest in the
related Mortgagor, is directly transferred or sold in a mortgagor,
issuance of non-controlling new equity interests, transfers among
existing members, partners or shareholders in such Mortgagor or an
Affiliate thereof, transfers among affiliated Mortgagors with respect
to B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Assets which are
cross-collateralised or cross-defaulted with other mortgage loans or
multi-property B-Note, Mezzanine Loan, Whole Loan or (where the Lender
so designates the same) Eligible Other Assets or transfers of a similar
nature (such as pledges of ownership interests that do not result in a
change of control) or a substitution or release of collateral), or (b)
the related Mortgaged Property or controlling interest in the borrower
is encumbered in connection with subordinate financing by a mortgage,
charge or other security interest against the related Mortgaged
Property, other than any existing permitted additional debt. The Debt
Finance Documents for such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset require the
borrower to pay all reasonable costs incurred by the Mortgagor with
respect to any transfer, assumption or encumbrance requiring lender's
approval.
1.32 Approval Rights
Pursuant to the terms of the Debt Finance Documents for such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset: (a) no material terms of any related Mortgage may
be waived, cancelled, subordinated or modified in any material respect
and no material portion of such B-Note, Mezzanine Loan, Whole Loan or
(where the Lender so designates the same) Eligible Other Asset or the
Mortgaged Property may be released without the consent of the holder of
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset, except to the extent such
release is permitted under the terms of the related Debt Finance
Documents; (b) no material action may be taken by the owner of the
related Mortgaged Property with respect to such Mortgaged Property
without the consent of the holder of such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset;
(c) the holder of such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset is entitled to
approve the budget of the owner of the related Mortgaged Property as it
relates to such Mortgaged Property; and (d) the consent of the holder
of such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset is required prior to the
owner of the related Mortgaged Property incurring any additional
indebtedness.
1.33 No equity participation or contingent interest [ ] Yes [ ] N/A
Except as disclosed to the Lender, such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
contains no equity participation by the lender, does not provide for
negative amortisation and does not provide for any contingent or
additional interest in the form of participation in the cash flow of
the related Mortgaged Property.
1.34 Inspections [ ] Yes [ ] N/A
The Borrower (or if the Borrower is not the originator, to the
knowledge of the Borrower, the originator of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same) Eligible
Other Asset) has inspected or caused to be inspected each related
Mortgaged Property in connection with the origination of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset during the twelve (12) month period prior to the
related origination date.
1.35 Subordinated interests
(a) So far as the Borrower and the Sponsor are aware such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset does not permit the related Mortgaged
Property, to be encumbered by any security interest subordinate
to or of equal priority with the related Mortgage without the
prior written consent of the holder thereof.
(b) To knowledge of the Borrower and the Sponsor, none of the [ ] Yes [ ] N/A
Mortgaged Properties securing such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset is encumbered by any security interest which is subordinate
to or of equal priority with the related Mortgage.
1.36 Actions concerning B-Notes, Mezzanine Loans, Whole Loans or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Assets
To the knowledge of the Borrower, there are no actions, suits or
proceedings pending or threatened before any court, administrative
agency or arbitrator concerning such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset or
any related Mortgagor or Mortgaged Property: (a) that might adversely
affect title to such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset; (b) the validity
or enforceability of the related Mortgage which could reasonably be
expected to materially and adversely affect such Mortgagor's ability to
pay principal, interest or any other amounts due under such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset or the security intended to be provided by the
related Debt Finance Documents that might materially and adversely
affect the value of the Mortgaged Property as security for such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset or the use for which the premises were intended;
or (c) which could reasonably be expected to materially and adversely
affect such Mortgagor's ability to pay principal, interest or any other
amounts due under such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset or the security
intended to be provided by the related Debt Finance Documents.
1.37 Origination and Servicing
(a) The origination (or acquisition), servicing and collection [ ] Yes [ ] N/A
practices used by the Borrower in respect of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset have been in all respects legal,
proper and prudent and have met customary industry standards for
origination (or acquisition) servicing of commercial property
loans (similar to the B-Notes, Mezzanine Loans, Whole Loans or
(where the Lender so designates the same) Eligible Other Assets)
for conduit programs.
(b) So far as the Borrower and the Sponsor are aware, the originator [ ] Yes [ ] N/A
of such B-Note, Mezzanine Loan, Whole Loan or (where the Lender
so designates the same) Eligible Other Asset was authorised to do
business in the jurisdiction in which the related Mortgaged
Property is located at all times when it originated and held such
B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset.
(c) So far as the Borrower and the Sponsor are aware, with respect to [ ] Yes [ ] N/A
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset, to the extent required
under applicable law as of the date of origination, and necessary
for the enforceability or collectibility of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset, the originator of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset had all necessary and desirable
consents, licenses and authorisations to do business in the
jurisdiction in which the related Mortgaged Property is located
at all times when it originated and held such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset.
1.38 Licenses and permits [ ] Yes [ ] N/A
To the knowledge of the Borrower, as of the date of origination or
acquisition of such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset, the related
Mortgagor and all other material parties thereto were in possession of
all material licenses, permits and consents required by applicable law
for the ownership and operation of the related Mortgaged Property it
was then operated.
1.39 Non-Recourse Exceptions [ ] Yes [ ] N/A
The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset
provide that such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset constitutes the
limited recourse obligations of the related obligor thereon except that
the related obligor and an additional guarantor accepts responsibility
for any loss incurred due to fraud on the part of the related Mortgagor
and/or other intentional misrepresentation.
1.40 Single purpose entity [ ] Yes [ ] N/A
The Mortgagor on such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset was, as of the
origination of such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset a Special Purpose
Vehicle. For this purpose, a "Special Purpose Vehicle" shall mean an
entity, other than an individual, whose organisational documents
provide substantially to the effect that it was formed or organised
solely for the purpose of owning and operating one or more related
Mortgaged Properties securing such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset and
prohibit it from engaging in any business unrelated to such Mortgaged
Property or Properties or, and whose organisational documents further
provide, or which entity represented in the related Debt Finance
Documents, substantially to the effect that it does not have any assets
other than those related to its interest in and operation of such
Mortgaged Property or Properties, or any indebtedness other than as
permitted by the related Mortgage or the other related Debt Finance
Documents, that it has its own books and records and accounts separate
and apart from any other person, and that it holds itself out as a
legal entity, separate and apart from any other person.
1.41 Operating or financial statement [ ] Yes [ ] N/A
So far as the Borrower and the Sponsor are aware, the related Debt
Finance Documents for such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset require the
related Mortgagor to furnish to the mortgagee at least annually an
operating statement with respect to the related Mortgaged Property.
1.42 No offsets, defences or counterclaims [ ] Yes [ ] N/A
So far as the Borrower and the Sponsor are aware such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same) Eligible
Other Asset is not subject to reduction (other than by virtue of a
permitted pre-payment) or disallowance for any reason, including
without limitation, any setoff, right of recoupment, defence,
counterclaim or impairment of any kind.
1.43 Lockboxes [ ] Yes [ ] N/A
The person administering the rent collection account for such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset in respect of the related Mortgaged Property, if
any, is not an Affiliate of the Borrower.
1.44 Waivers and modifications
(a) The Borrower has not waived (or consented to any waiver of) any [ ] Yes [ ] N/A
material default, breach, violation or event of acceleration
under such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset and pursuant
to the terms of the related Debt Finance Documents.
(b) No Person or party other than the holder of such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset (or a trustee or servicer on its
behalf) may declare any event of default or accelerate the
related indebtedness under such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset.
(c) The terms of the related Debt Finance Documents for such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset have not been impaired, waived,
altered or modified in any material respect.
(d) Except as included in the Information, the Borrower is not a [ ] Yes [ ] N/A
party to any document, instrument or agreement, and there is no
document, that by its terms modifies or affects the rights and
obligations of any holder of such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other
Asset.
1.45 No advances of funds [ ] Yes [ ] N/A
No party to the Debt Finance Documents for such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible Other
Asset has advanced funds on account of any default under such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset.
1.46 Transferability
(a) Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset is freely transferable.
(b) The Debt Finance Documents for such B-Note, Mezzanine Loan, Whole [ ] Yes [ ] N/A
Loan or (where the Lender so designates the same) Eligible Other
Asset contain no provision limiting the right or ability of the
Borrower to assign, transfer and convey such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same)
Eligible Other Asset to any other Person, except, however, for
customary intercreditor restrictions limiting assignees to
"qualified transferees".
(c) No consent or approval by any person is required in connection [ ] Yes [ ] N/A
with the Borrower's acquisition of such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset, or the entry into by the Borrower of this Agreement
(or any agreements contemplated hereby), for the Borrower or any
purchaser's, assignee's, participant's or sub-participant's
exercise of any rights or remedies in respect of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset or for the Lender's sale, creation of
security or other disposition of such B-Note, Mezzanine Loan,
Whole Loan or (where the Lender so designates the same) Eligible
Other Asset in accordance with the terms of the Finance
Documents.
(d) No third party holds any "right of first refusal", "right of [ ] Yes [ ] N/A
first negotiation", "right of first offer", purchase option, or
other similar rights of any kind in respect of such B-Note,
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset, and no other impediment exists to any
such transfer or exercise of rights or remedies in respect of
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset.
1.47 Usury
Such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset and the interest and other
payments contracted for complied as of the date of origination with, or
is exempt from, applicable laws, regulations and other requirements Yes
N/A pertaining to usury.
1.48 Reserves
All reserves, funds, escrows and deposits required pursuant to the Debt [ ] Yes [ ] N/A
Finance Documents for such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset have been so
funded and deposited, are in the possession, or under the control, of
an agent of trustee for the holders of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same) Eligible
Other Asset and there are no deficiencies in connection therewith.
1.49 Valuation
(a) A valuation of the each Mortgaged Property securing such B-Note, [ ] Yes [ ] N/A
Mezzanine Loan, Whole Loan or (where the Lender so designates the
same) Eligible Other Asset was conducted within 12 months of the
origination of such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset, which
valuation is signed by a qualified valuer who had no interest,
direct or indirect, in such Mortgaged Property or in any loan
made on the security thereof; and whose compensation is not
affected by the approval or disapproval of the related Mortgage
Loan.
(b) None of the material improvements which were included for the [ ] Yes [ ] N/A
purposes of determining the Valuation of the Mortgaged Property
securing such B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset at the time
of the origination of such B-Note, Mezzanine Loan, Whole Loan or
(where the Lender so designates the same) Eligible Other Asset
lies outside of the boundaries of such property (except Mortgaged
Properties which are legal non-conforming uses), to an extent
which would have a material adverse affect on the value of such
Mortgaged Property or related Mortgagor's use and operation of
such Mortgaged Property and no improvements on adjoining
properties encroached upon such Mortgaged Property to any
material and adverse extent.
1.50 Affiliate Transactions [ ] Yes [ ] N/A
The Mortgagor under such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset is not an
Affiliate of the Borrower. Except as disclosed in the Information: (a)
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset has been originated by the
Borrower; and/or (b) such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset has not been
acquired from an Affiliate other than a direct parent of the Borrower.
1.51 Related Debt [ ] Yes [ ] N/A
No default or event of default has occurred under any agreement
pertaining to any security or other interest that ranks pari passu with
or senior to the interests of the holder of such B-Note, Mezzanine
Loan, Whole Loan or (where the Lender so designates the same) Eligible
Other Asset in respect of the related Mortgaged Property and there is
no provision in any such agreement which would provide for any increase
in the principal amount of any such interest.
1.52 No Fraud [ ] Yes [ ] N/A
No fraudulent acts were committed by the Borrower in connection with
its acquisition or origination of such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
nor were any fraudulent acts committed by any person in connection with
the origination of such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset.
1.53 Liabilities [ ] Yes [ ] N/A
The Borrower has not received written notice of any outstanding
liabilities, obligations, losses, damages, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of
such B-Note, Mezzanine Loan, Whole Loan or (where the Lender so
designates the same) Eligible Other Asset is or may become liable.
1.54 Title [ ] Yes [ ] N/A
The Mortgagor (or an Affiliate) for such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
has title in the fee simple interest in the related Mortgaged
Property.
1.55 Encumbrances [ ] Yes [ ] N/A
Each Mortgaged Property securing such B-Note, Mezzanine Loan, Whole
Loan or (where the Lender so designates the same) Eligible Other Asset
is not encumbered, and none of the related Debt Finance Documents
permits such Mortgaged Property to be encumbered subsequent to the
Utilisation Date of the related Advance made hereunder without the
prior written consent of the holder thereof, by any security interest
securing the payment of money junior to or of equal priority with, or
superior to, the security interest of the related Mortgage.
1.56 Utilities [ ] Yes [ ] N/A
The Mortgaged Property securing such B-Note, Mezzanine Loan, Whole Loan
or (where the Lender so designates the same) Eligible Other Asset is
served by public utilities, water and sewer (or septic facilities) and
otherwise appropriate for the use in which such Mortgaged Property is
currently being utilised.
1.57 Asset Specific [ ] Yes [ ] N/A
[***Insert any representations and warranties required by reason of the
nature of a particular B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other
Asset or the relevant legal systems***]
2 ELIGIBLE WHOLE LOANS REPRESENTATIONS
The Borrower and the Sponsor makes to each Finance Party the
representations and warranties set out in this Clause 2.
2.1 Nature [ ] Yes [ ] N/A
Such Whole Loan is a whole loan and contains no equity participation by
the lender or shared appreciation feature and does not provide for any
contingent or additional interest in the form of participation in the
cash flow of the related Mortgaged Property or provide for negative
amortisation. The Borrower holds no preferred equity interest.
2.2 Asset Specific [ ] Yes [ ] N/A
[***Insert any representations and warranties required by reason of the
nature of a particular Whole Loan or the relevant legal systems***]
3 ELIGIBLE B-NOTE REPRESENTATIONS
The Borrower and the Sponsor makes to each Finance Party the
representations and warranties set out in this Clause 3.
3.1 Nature [ ] Yes [ ] N/A
Such B-Note is a subordinated tranche of a whole loan and contains no
equity participation by the lender or shared appreciation feature and
does not provide for any contingent or additional interest in the form
of participation in the cash flow of the related Mortgaged Property or
provide for negative amortisation. The Borrower holds no preferred
equity interest.
3.2 Senior Debt
There is no: (a) monetary default, breach or violation with respect to [ ] Yes [ ] N/A
such B-Note, the related Mortgage Loan or any other obligation of the
owner of the related Mortgaged Property; (b) material non-monetary
default, breach or violation with respect to such B-Note the related
Mortgage Loan or any other obligation of the owner of the
related Mortgaged Property; or (c) event to the Borrower's knowledge,
which, with the passage of time or with notice and the expiration of
any grace or cure period, would constitute a default, breach, violation
or event of acceleration.
3.3 Asset Specific [ ] Yes [ ] N/A
[***Insert any representations and warranties required by reason of the
nature of a particular B-Note or the relevant legal systems***]
4 ELIGIBLE MEZZANINE LOAN REPRESENTATIONS
The Borrower and the Sponsor makes to each Finance Party the
representations and warranties set out in this Clause 4.
4.1 Nature [ ] Yes [ ] N/A
Such Mezzanine Loan is whole loan secured on the equity and contains no
equity participation by the lender or shared appreciation feature and
does not provide for any contingent or additional interest in the form
of participation in the cash flow of the related Mortgaged Property or
provide for negative amortisation. The Borrower holds no preferred
equity interest.
4.2 Equity pledges [ ] Yes [ ] N/A
The pledge of ownership interests securing such Mezzanine Loan relates
(directly or indirectly) to 100 per cent. of the controlling equity or
ownership interests in the related Mortgagor (so that there are
(subject to the Reservations) no direct or indirect equity or ownership
interests in relevant underlying real property owner or in any
constituent entity) and has (subject to the Reservations) been fully
perfected in favour of the Borrower as mezzanine lender.
4.3 Senior Debt
There is no: (a) monetary default, breach or violation with respect to [ ] Yes [ ] N/A
such Mezzanine Loan, the related Mortgage Loan or any other obligation
of the owner of the related Mortgaged Property; (b) material
non-monetary default, breach or violation with respect to such
Mezzanine Loan the related Mortgage Loan or any other
obligation of the owner of the related Mortgaged Property; or (c) event
to the Borrower's knowledge, which, with the passage of time or with
notice and the expiration of any grace or cure period, would constitute
a default, breach, violation or event of acceleration.
4.4 Duly Issued
All of the shares which secure such Mezzanine Loan have been duly and [ ] Yes [ ] N/A
validly issued and are fully paid-up.
4.5 Asset Specific [ ] Yes [ ] N/A
[***Insert any representations and warranties required by reason of the
nature of a particular Mezzanine Loan or the relevant legal systems***]
5 ELIGIBLE SECURITIES REPRESENTATIONS
The Borrower and the Sponsor makes to each Finance Party the
representations and warranties set out in this Clause 5.
5.1 Information [ ] Yes [ ] N/A
The information set forth in the Preliminary Due Diligence Package is,
so far as the Borrower or, as the case may be, the Sponsor is aware
(having made all reasonable enquiries) complete, true and correct in
all material respects as of the relevant closing date and is a complete
and accurate list of all those documents which are relevant for the
purposes of such CMBS or (where the Lender so designates the same)
Eligible Other Asset.
5.2 Eligibility [ ] Yes [ ] N/A
Such CMBS or (where the Lender so designates the same) Eligible Other
Asset or (where the Lender so designates the same) Eligible Other Asset
are Eligible Assets.
5.3 Nature
Such CMBS or (where the Lender so designates the same) Eligible Other [ ] Yes [ ] N/A
Asset or (where the Lender so designates the same) Eligible Other Asset
are owned by the Borrower is performing Assets secured by one or more
Underlying Loans backed by Multi-family and/or Commercial Property. Yes
N/A
5.4 Ownership
(a) Following any the making of any Advance on the Utilisation Date [ ] Yes [ ] N/A
for the financing of such CMBS or (where the Lender so designates
the same) Eligible Other Asset or (where the Lender so designates
the same) Eligible Other Asset, the Borrower had good title to,
and was the sole owner of an Eligible Interest in such CMBS or
(where the Lender so designates the same) Eligible Other Asset or
(where the Lender so designates the same) Eligible Other Asset
free and clear of any and all security interests and/or other
encumbrances.
(b) The Borrower has full right, power and authority to transfer and [ ] Yes [ ] N/A
assign such CMBS or (where the Lender so designates the same)
Eligible Other Asset.
(c) The Borrower has full right, power and authority to transfer and [ ] Yes [ ] N/A
assign such CMBS or (where the Lender so designates the same)
Eligible Other Asset.
(d) The Borrower has full right, power and authority to sell and [ ] Yes [ ] N/A
assign such CMBS or (where the Lender so designates the same)
Eligible Other Asset or (where the Lender so designates the same)
Eligible Other Asset and such CMBS or (where the Lender so
designates the same) Eligible Other Asset or (where the Lender so
designates the same) Eligible Other Asset have not been
cancelled, satisfied or rescinded in whole or part nor has any
instrument been executed that would effect a cancellation,
satisfaction or rescission thereof.
(e) The entry into by the Borrower of this Agreement (and the [ ] Yes [ ] N/A
agreements contemplated hereby) in relation to such CMBS or
(where the Lender so designates the same) Eligible Other Asset or
(where the Lender so designates the same) Eligible Other Asset
does not require the Borrower to obtain any approval, consent,
authorisation or order of or registration or filing with or
notice to, any court or governmental or regulatory agency or body
that has not been obtained.
5.5 Payment Record
(a) No scheduled payment of principal and interest under such CMBS or [ ] Yes [ ] N/A
(where the Lender so designates the same) Eligible Other Asset is
thirty days or more beyond any applicable grace period, and such
CMBS or (where the Lender so designates the same) Eligible Other
Asset were not thirty days or more delinquent in the twelve-Month
period immediately preceding the Utilisation Date relating to the
first financing thereof through Advances made available under
this Agreement.
(b) Except as including in the Information, (i) no interest [ ] Yes [ ] N/A
shortfalls have occurred and no realised losses have been applied
to such CMBS or (where the Lender so designates the same)
Eligible Other Asset or otherwise incurred with respect to any
mortgage loan related to such CMBS or (where the Lender so
designates the same) Eligible Other Asset nor any class of
securities issued under the same governing documents as such CMBS
or (where the Lender so designates the same) Eligible Other
Asset, and (ii) the Borrower is not aware of any circumstances
that could have a material adverse effect on such CMBS or (where
the Lender so designates the same) Eligible Other Asset.
5.6 Compliance with law
Such CMBS or (where the Lender so designates the same) Eligible Other [ ] Yes [ ] N/A
Asset comply in all material respects with (or is exempt from) all
requirements of applicable law relating to such CMBS or (where the
Lender so designates the same) Eligible Other Asset.
5.7 Title [ ] Yes [ ] N/A
To the best knowledge of the Borrower, in relation to such CMBS or
(where the Lender so designates the same) Eligible Other Asset, the
related Securities Issuer is the sole legal and beneficial owner of the
Underlying Loans and the Underlying Mortgages relating thereto.
5.8 No partly paid CMBS or (where the Lender so designates the same) [ ] Yes [ ] N/A
Eligible Other Asset
Such CMBS or (where the Lender so designates the same) Eligible Other
Asset are fully paid and subscribed for and the terms thereof do not
require the holder thereof to pay or advance any additional or further
sums by way of deferred purchase price, calls or otherwise.
5.9 Securities Finance Documents provisions
(a) To the extent applicable, the Securities Finance Documents for [ ] Yes [ ] N/A
such CMBS or (where the Lender so designates the same) Eligible
Other Asset together with applicable law, contain customary and
enforceable provisions for comparable securities (subject to the
Reservations) such as would be expected to render the rights and
remedies of the holder thereof adequate for the practical
realisation against the related Underlying Loans and related
Underlying Mortgages of the principal benefits of the security
intended to be provided thereby.
(b) The Securities Finance Documents for such CMBS or (where the
Lender so designates the same) Eligible Other Asset contain:
(i) enforceable representations and warranties relating to, [ ] Yes [ ] N/A
inter alia, the Underlying Loans, the Underlying
Mortgages, the Underlying Mortgaged Property and the
Underlying Mortgagors related thereto similar to those
applicable to comparable securities;
(ii) without limitation to the generality of the foregoing, [ ] Yes [ ] N/A
representations and warranties as to the title of the
relevant Mortgagors to the relevant Mortgaged Properties,
the financial terms of the related Underlying Loans, the
priority, perfection and enforceability of the Underlying
Loans and the Underlying Mortgages, the underwriting and
due diligence process carried out by the originator of the
Underlying Loans and the Underlying Mortgages, the value,
insurance cover in place in respect of and environmental
condition of the Underlying Properties and the performance
since origination of the Underlying Loans;
(iii) no material exceptions to or disclosure against any of the [ ] Yes [ ] N/A
abovementioned representations and warranties;
(iv) an obligation on the part of the originator of the related [ ] Yes [ ] N/A
Underlying Loans to repurchase the same for their full
principal amount outstanding in the event of a material
breach of the abovementioned representations and
warranties; and
(v) save as included in the Information, neither the Borrower [ ] Yes [ ] N/A
nor the Sponsor is party to any document, instrument or
agreement, and there is no document, that by its terms
modifies or affects the rights and obligations of any
holder of such CMBS or (where the Lender so designates the
same) Eligible Other Asset and neither the Borrower nor
the Sponsor has consented to any material change or waiver
to any term or provision of any such document, instrument
or agreement and no such change or waiver exists.
5.10 All payments of principal interest and other sums due to the Borrower [ ] Yes [ ] N/A
in respect of such CMBS or (where the Lender so designates the same)
Eligible Other Asset are made to it under the related Securities
Finance Document without any deduction or withholding for or on account
of Tax.
5.11 Security trusts
To the best knowledge of the Borrower, to the extent applicable, if any
Underlying Loan or Underlying Mortgage or other Security constituted in
the Securities Finance Documents for such CMBS or (where the Lender so
designates the same) Eligible Other Asset is held on trust for the
investors and/or related parties:
(a) a trustee, duly qualified under applicable law to serve as such, [ ] Yes [ ] N/A
is properly designated and serving as such; and
(b) no fees or expenses other than those which are customary are [ ] Yes [ ] N/A
payable to such trustee by the relevant Securities Issuer except
in connection with a trustee's sale after default by the related
Securities Issuer or in connection with any full or partial
release of the related Underlying Loans, Underlying Mortgages or
related Security for the related CMBS or (where the Lender so
designates the same) Eligible Other Asset.
5.12 Status of the Securities Finance Documents
(a) Each Securities Finance Document that was executed by or on [ ] Yes [ ] N/A
behalf of the related Securities Issuer is the valid and binding
obligation of such Securities Issuer (subject to any non-recourse
provisions contained therein), (subject to the Reservations).
(b) Such CMBS or (where the Lender so designates the same) Eligible [ ] Yes [ ] N/A
Other Asset have been to the best knowledge of the Borrower
validly issued and are fully paid and non-assessable and not
subject to pre-emptive rights.
(c) As of the date of its issuance such CMBS or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset complied in all
material respects with (or is exempt from) all requirements of
applicable law relating to such securities.
5.13 Securities Issuer Bankruptcy/Insolvency [ ] Yes [ ] N/A
The Borrower has not received any notice of the bankruptcy,
liquidation, receivership, administration moratorium or a winding up or
administrative order or dissolution (or the equivalent thereof in any
relevant jurisdiction) of any the related Securities Issuer.
5.14 Securities Issuer
(a) The Securities Issuer for such CMBS or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset is duly organised and
validly existing and, as of the time of the origination of the
related security with requisite power and authority to own its
assets and to transact the business in which it is now engaged,
and the related Underlying Mortgaged Properties constitute the
sole assets of such Securities Issuer.
(b) The Securities Issuer for such CMBS or (where the Lender so [ ] Yes [ ] N/A
designates the same) Eligible Other Asset has good and marketable
title to the related Underlying Loans.
5.15 Advancement of funds to the Borrower [ ] Yes [ ] N/A
No holder of such CMBS or (where the Lender so designates the same)
Eligible Other Asset has advanced funds or induced, solicited or
knowingly received any advance of funds from a party other than the
owner of the related Underlying Loan or Underlying Mortgage, directly
or indirectly, for the payment of any amount required by such CMBS or
(where the Lender so designates the same) Eligible Other Asset except
as permitted pursuant to the terms and conditions of the related
Securities Finance Documents.
5.16 Cross-collateralisation; Cross-default [ ] Yes [ ] N/A
Except as disclosed to the Lender in writing, the CMBS or (where the
Lender so designates the same) Eligible Other Asset are not
cross-collateralised or cross-defaulted with any loan or security other
than one or more other CMBS or (where the Lender so designates the
same) Eligible Other Asset (other than securities issued by the same
Securities Issuer in respect of the same Underlying Loans).
5.17 No material default
There is no:
(a) monetary default, breach or violation in existence with respect
to such CMBS or (where the Lender so designates the same)
Eligible Other Asset or any Securities Finance Document relating
to the same;
(b) material non-monetary default, breach or violation with respect
to such CMBS or (where the Lender so designates the same)
Eligible Other Asset or any Securities Finance Document relating
to the same; or
(c) event which with the giving of notice or passage of time would
constitute a default, breach, violation or event of acceleration
under such CMBS or (where the Lender so designates the same)
Eligible Other Asset or any CMBS or (where the Lender so
designates the same) Eligible Other Asset Finance Document
relating to the same.
5.18 Subordinated interests
(a) To the best knowledge of the Borrower, such CMBS or (where the [ ] Yes [ ] N/A
Lender so designates the same) Eligible Other Asset do not permit
the related Underlying Loans or Underlying Mortgages to be
encumbered by any security interest subordinate to or of equal
priority with the related Underlying Mortgage without the prior
written consent of the holder thereof.
(b) To knowledge of the Borrower, none of Underlying Loans or [ ] Yes [ ] N/A
Underlying Mortgages backing such CMBS or (where the Lender so
designates the same) Eligible Other Asset is encumbered by any
security interest which is subordinate to the related Underlying
Mortgage.
5.19 Actions concerning CMBS or (where the Lender so designates the same) [ ] Yes [ ] N/A
Eligible Other Asset
To the knowledge of the Borrower, there are no actions, suits or
proceedings pending or threatened before any court, administrative
agency or arbitrator concerning such CMBS or (where the Lender so
designates the same) Eligible Other Asset or the related Securities
Issuer or Underlying Mortgages that might: (a) adversely affect title
to such CMBS or (where the Lender so designates the same) Eligible
Other Asset or the validity or enforceability of the related or
Underlying Mortgages; (b) that might materially and adversely affect
the ` of the Underlying Loans or Underlying Mortgages as security for
such CMBS or (where the Lender so designates the same) Eligible Other
Asset or the use for which the premises were intended; or (c) which
could reasonably be expected to materially and adversely affect such
Securities Issuer's ability to pay principal, interest or any other
amounts due under such CMBS or (where the Lender so designates the
same) Eligible Other Asset or the security intended to be provided by
the related Securities Finance Documents.
5.20 Servicing [ ] Yes [ ] N/A
No "servicing transfer event" (howsoever defined) or other event which
would lead to the special servicing or enforcement of any related
Underlying Loan or Underlying Mortgage is currently outstanding in
relation to such CMBS or (where the Lender so designates the same)
Eligible Other Asset.
5.21 Licenses and permits [ ] Yes [ ] N/A
To the knowledge of the Borrower, as of the date of origination or
acquisition of such CMBS or (where the Lender so designates the same)
Eligible Other Asset, the related Securities Issuer and all other
material parties thereto were in possession of all material licenses,
permits and consents required by applicable law for the issue of and
consummation of the transactions contemplated by such CMBS or (where
the Lender so designates the same) Eligible Other Asset.
5.22 Non-Recourse Exceptions [ ] Yes [ ] N/A
To the best knowledge of the Borrower, the Securities Finance Documents
for such CMBS or (where the Lender so designates the same) Eligible
Other Asset provide that such CMBS or (where the Lender so designates
the same) Eligible Other Asset constitutes the limited recourse
obligations of the related obligor thereon.
5.23 Single purpose entity [ ] Yes [ ] N/A
The Securities Issuer for such CMBS or (where the Lender so designates
the same) Eligible Other Asset, was to the best knowledge of the
Borrower, as of the issue of such CMBS or (where the Lender so
designates the same) Eligible Other Asset, a Special Purpose Vehicle.
For this purpose, a "Special Purpose Vehicle" shall mean an entity,
other than an individual, whose organisational documents (or covenants
given by it) provide substantially to the effect that it was formed or
organised solely for the purpose of owning the related Underlying Loans
and Underlying Mortgages and issuing such CMBS or (where the Lender so
designates the same) Eligible Other Asset and prohibit it from engaging
in any business unrelated to the issue of such CMBS or (where the
Lender so designates the same) Eligible Other Asset, and whose
organisational documents (or covenants given by it) further provide, or
which entity represented in the related Securities Finance Documents,
substantially to the effect that it does not have any assets other than
those related to its interest in and the related Underlying Loans and
Underlying Mortgages and issuing such CMBS or (where the Lender so
designates the same) Eligible Other Asset, or any indebtedness other
than as permitted by such CMBS or (where the Lender so designates the
same) Eligible Other Asset, that it has its own books and records and
accounts separate and apart from any other person, and that it holds
itself out as a legal entity, separate and apart from any other person.
5.24 No offsets, defences or counterclaims [ ] Yes [ ] N/A
Such CMBS or (where the Lender so designates the same) Eligible Other
Asset are not subject to reduction (other than by virtue of a permitted
pre-payment) or disallowance for any reason, including without
limitation, any setoff, right of recoupment, defence, counterclaim or
impairment of any kind.
5.25 No advances of funds [ ] Yes [ ] N/A
No party to the Securities Finance Documents for such CMBS or (where
the Lender so designates the same) Eligible Other Asset has advanced
funds on account of any default under such CMBS or (where the Lender so
designates the same) Eligible Other Asset or any related Underlying
Loan or Underlying Mortgage
5.26 Liquidity and servicer advances
(a) No liquidity advances or servicer advances (in each case, [ ] Yes [ ] N/A
howsoever described) have been made directly or indirectly in
relation to such CMBS or (where the Lender so designates the
same) Eligible Other Asset or any related Underlying Loan.
(b) There is no material inaccuracy in any servicer report or trustee [ ] Yes [ ] N/A
report delivered to it (and, in turn, delivered pursuant to the
terms of the Finance Documents) in connection with such CMBS or
(where the Lender so designates the same) Eligible Other Asset.
5.27 Waivers and modifications
(a) The Borrower has not waived (or consented to any waiver of) any [ ] Yes [ ] N/A
material default, breach, violation or event of acceleration
under such CMBS or (where the Lender so designates the same)
Eligible Other Asset and/or the related Securities Finance
Documents.
(b) No Person or party other than the holder of such CMBS or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset (or a
trustee or servicer on its behalf) may declare any event of
default or accelerate the related indebtedness under such CMBS or
(where the Lender so designates the same) Eligible Other Asset.
(c) The terms of the related Securities Finance Documents have not [ ] Yes [ ] N/A
been impaired, waived, altered or modified in any material
respect.
(d) Except as included in the Information, there is no document, [ ] Yes [ ] N/A
instrument or agreement that by its terms modifies or affects the
rights and obligations of any holder of such CMBS or (where the
Lender so designates the same) Eligible Other Asset the terms of
the related servicing agreement or any other agreement relating
to such CMBS or (where the Lender so designates the same)
Eligible Other Asset, and since issuance, there has been no
material change or waiver to any form or provision of any such
document, instrument or agreement.
5.28 Sequential Trigger [ ] Yes [ ] N/A
No event (or series of events) has occurred (to the best of the
Borrower's knowledge and belief) which would result in distributions of
principal on such CMBS or (where the Lender so designates the same)
Eligible Other Asset no longer being made on a pari passu basis with
other CMBS secured on the same Underlying Loans but instead being
subordinated to such other CMBS.
5.29 Securities Act of 1933 as amended [ ] Yes [ ] N/A
As of the date of its issuance, such CMBS or (where the Lender so
designates the same) Eligible Other Asset complied in all material
respects with, or was exempt from any registration requirements of the
Securities Act of 1933, as amended.
5.30 Real Estate Mortgage Investment Conduits [ ] Yes [ ] N/A
Such CMBS or (where the Lender so designates the same) Eligible Other
Asset consist of debt instruments backed by ownership interests in one
or more Underlying Loans which in turn are secured by one or more first
priority mortgages over Commercial and/or Multifamily Properties.
5.31 Underlying Mortgager's credit standing [ ] Yes [ ] N/A
There are no circumstances or conditions with respect to such CMBS or
(where the Lender so designates the same) Eligible Other Asset, the
related Underlying Mortgaged Property or the related Underlying
Mortgagor's credit standing that can reasonably be expected to cause
private institutional investors to regard such CMBS or (where the
Lender so designates the same) Eligible Other Asset as an unacceptable
investment or adversely affect the value or marketability of such CMBS
or (where the Lender so designates the same) Eligible Other Asset.
5.32 Transferability
(a) Such CMBS or (where the Lender so designates the same) Eligible [ ] Yes [ ] N/A
Other Asset are freely transferable.
(b) The Securities Finance Documents for such CMBS or (where the [ ] Yes [ ] N/A
Lender so designates the same) Eligible Other Asset contain no
provision limiting the right or ability of the Borrower to
assign, transfer and convey such CMBS or (where the Lender so
designates the same) Eligible Other Asset to any other Person,
except, however, for customary intercreditor restrictions
limiting assignees to "qualified transferees".
(c) Other than consents and approvals obtained as of the related [ ] Yes [ ] N/A
Utilisation Date, no consent or approval by any person is
required in connection with the Borrower's acquisition of such
CMBS or (where the Lender so designates the same) Eligible Other
Asset, or the entry into by the Borrower of this Agreement (or
any agreements contemplated hereby), for the Borrower or any
purchaser's, assignee's, participant's or sub-participant's
exercise of any rights or remedies in respect of such CMBS or
(where the Lender so designates the same) Eligible Other Asset or
for the Lender's sale, creation of security or other disposition
of such CMBS or (where the Lender so designates the same)
Eligible Other Asset in accordance with the terms of the Finance
Documents.
(d) No third party holds any "right of first refusal", "right of [ ] Yes [ ] N/A
first negotiation", "right of first offer", purchase option, or
other similar rights of any kind in respect of such CMBS or
(where the Lender so designates the same) Eligible Other Asset,
and no other impediment exists to any such transfer or exercise
of rights or remedies in respect of such CMBS or (where the
Lender so designates the same) Eligible Other Asset.
5.33 Usury
Such CMBS (or where the Lender so designates the same) Eligible Other [ ] Yes [ ] N/A
Asset and the interest and other payments contracted for complied as of
the date of origination with, or is exempt from, applicable laws,
regulations and other requirements pertaining to usury.
5.34 Reserves
All reserves, funds, escrows and deposits required pursuant to the [ ] Yes [ ] N/A
Securities Finance Documents for such CMBS or (where the Lender so
designates the same) Eligible Other Asset have been so funded and
deposited, are in the possession, or under the control, of an agent of
trustee for the holders of such CMBS or (where the Lender so designates
the same) Eligible Other Asset and there are no deficiencies in
connection therewith.
5.35 Affiliate Transactions [ ] Yes [ ] N/A
Such CMBS or (where the Lender so designates the same) Eligible Other
Asset have not been acquired from an Affiliate other than a direct
parent of the Borrower.
5.36 Related Debt [ ] Yes [ ] N/A
No default or event of default has occurred under any agreement
pertaining to any security or other interest that ranks pari passu with
or senior to the interests of the holder of such CMBS or (where
the Lender so designates the same) Eligible Other Asset in respect of
the related Underlying Mortgage Loans and there is no provision in any
such agreement which would provide for any increase in the principal
amount of any such interest.
5.37 No Fraud [ ] Yes [ ] N/A
No fraudulent acts were committed by the Borrower in connection with
its acquisition or origination of such CMBS or (where the
Lender so designates the same) Eligible Other Asset nor were any
fraudulent acts committed by any person in connection with the
origination of such CMBS or (where the Lender so designates the same)
Eligible Other Asset.
5.38 Liabilities [ ] Yes [ ] N/A
The Borrower has not received written notice of any outstanding
liabilities, obligations, losses, damages, actions, judgments, suits,
costs, expenses or disbursements of any kind for which the holder of
such CMBS or (where the Lender so designates the same) Eligible Other
Asset is or may become liable.
5.39 Asset Specific [ ] Yes [ ] N/A
[***Insert any representations and warranties required by reason of the
nature of a particular Security or the relevant legal systems***]
For the purposes of each of Clause 1 (Eligible Debt Asset Representations),
Clause 2 (Eligible Whole Loans Representations), Clause 3 (Eligible B-Note
Representations), Clause 4 (Eligible Mezzanine Loan Representations) and Clause
5 (Eligible Securities or Representations) "Reservations" means:
(a) the principles that equitable remedies are remedies which may be
granted or refused at the discretion of the court;
(b) the limitation of enforcement by laws relating to bankruptcy,
insolvency, liquidation, reorganisation, court schemes,
moratoria, administration and other laws generally affecting the
rights of creditors; and
(c) the time barring of claims under any applicable limitation acts;
and
any legal principle similar to those set out in paragraphs (a) to (c)
(inclusive) above under any relevant jurisdiction other than England and which
are brought to the attention of the Lender.
Annex 2 to Schedule 5
Financed Asset Schedule(1)
Original Current
Principal Principal
Amount Amount
Proposed of of Anticipated Requested Requested
Property Name of Utilisation Asset Asset Eligible Eligible Market Advance Utilisation
Asset Number Name Borrower Date Class Type Asset Asset Value Rate Date
- ------------ -------- ------- --------- ------ ----- --------- --------- ----------- ---------- -----------
- ------------------------
(1) Any Financed Asset Schedule attached electronically to any Utilisation
Request shall be attached as a "pdf" file.
Annex 3 to Schedule 5
Asset Conditions Precedent
Eligible Securities or (where the Lender so designates the same) Eligible Other
Asset
Comments
- -----------------------------------------------------------------------------------------------------------------------------------
(a) Eligible Securities or (where the Lender so designates the same)
Eligible Other Asset
(b) A copy, certified by an Authorised Signatory of the Sponsor as a [ ] Yes [ ] N/A
true, correct and complete copy of the documents delivered to the
Borrower and any ancillary documents required to be delivered to
the Borrower under such Securities Finance Documents (which
documents may be delivered in electronic mail or "e-mail" format,
or by disk); provided, however, that to the extent any of the
foregoing documents are not available on the date of delivery of
a Utilisation Request, the Sponsor shall be required to deliver
or cause to be delivered such documents promptly after the
Utilisation Date (but in no event more than five Business Days
after receipt thereof).
(c) A Redirection Letter from the Borrower to the trustee under the [ ] Yes [ ] N/A
Securities Finance Documents, instructing the trustee to remit
all sums required to be remitted to the holder of such CMBS or
(where the Lender so designates the same) Eligible Other Asset
under the Securities Finance Documents to the Collection Account.
(d) Copies of all distribution statements, if any, delivered to the [ ] Yes [ ] N/A
Borrower pursuant to the Securities Finance Documents during the
three-Month period immediately preceding the relevant Utilisation
Date.
(e) From time to time, the Borrower shall forward to the Lender [ ] Yes [ ] N/A
additional original documents or additional documents evidencing
any assumption, modification, consolidation or extension of any
CMBS or (where the Lender so designates the same) Eligible Other
Asset approved in accordance with the terms of this Agreement
promptly when they are received. (Condition Subsequent).
(f) A Trust Receipt (and where appropriate a Bailee Letter) from the [ ] Yes [ ] N/A
Document Custodian in respect of such CMBS or (where the Lender
so designates the same) Eligible Other Asset.
(g) A copy of the Closing Data Tape for such CMBS or (where the [ ] Yes [ ] N/A
Lender so designates the same) Eligible Other Asset.
(h) [***Insert any other documents/conditions necessitated by the [ ] Yes [ ] N/A
nature of the Asset or the relevant legal systems***]
(i) Eligible Mezzanine Loans
(j) A copy, certified by an Authorised Signatory of the Sponsor as a [ ] Yes [ ] N/A
true, correct and complete copy of the document delivered to the
Borrower and any ancillary documents required to be delivered to
the Borrower under such Debt Finance Documents (which documents
may be delivered in electronic mail or "e-mail" format, or by
disk); provided, however, that to the extent any of the foregoing
documents are not available on the date of delivery of a
Utilisation Request, the Sponsor shall be required to deliver or
cause to be delivered such documents promptly after the
Utilisation Date (but in no event more than five Business Days
after receipt thereof).
(k) A certificate signed by an Authorised Signatory of the Sponsor [ ] Yes [ ] N/A
stating that the documents required to be delivered by the
Borrower hereunder have been delivered to the Lender and copies
of opinions of counsel, if any have been delivered with respect
to the foregoing, have been delivered to the Lender to the extent
reasonably requested by the Lender.
(l) An Redirection Letter from the Sponsor to the Underlying Borrower [ ] Yes [ ] N/A
(or the agent for the lenders) under the Debt Finance Documents,
instructing the [trustee] [facility agent] to remit all sums
required to be remitted to the holder of such Mezzanine Loans
under the Debt Finance Documents to one or more specified
Collection Accounts.
(m) A copy, certified by an Authorised Signatory of the Sponsor, of [ ] Yes [ ] N/A
each Debt Asset Transfer Certificate transferring such Mezzanine
Loan to the Borrower, duly executed by the Borrower, the facility
agent (howsoever defined in the relevant Debt Finance Documents)
and any other necessary parties (if any) under the Debt Finance
Documents.
(n) Copies of all documents relating to the formation and [ ] Yes [ ] N/A
organisation of the Mortgagor in respect of such Mezzanine Loan,
together with all consents and resolutions delivered in
connection with such Mortgagor's obtaining the Mezzanine Loan.
(o) The original certificates representing the pledged equity [ ] Yes [ ] N/A
interests (if any).
(p) Assignment of any management agreements, agreements among equity [ ] Yes [ ] N/A
interest holders or other material contracts.
(q) Evidence (which may be certificate signed by an Authorised [ ] Yes [ ] N/A
Signatory confirming such circumstances) that the pledged
ownership interests have been transferred to, or otherwise made
subject to a first priority security interest in favour of, the
applicable Borrower.
(r) From time to time, the Borrower shall forward to the Lender [ ] Yes [ ] N/A
additional original documents or additional documents evidencing
any assumption, modification, consolidation or extension of a
Mezzanine Loan approved in accordance with the terms of this
Agreement promptly when they are received. (Condition
Subsequent).
(s) A Trust Receipt (and where appropriate a Bailee Letter) from the [ ] Yes [ ] N/A
Document Custodian in respect of such Mezzanine Loan.
(t) A copy of the Closing Data Tape for such Mezzanine Loan. [ ] Yes [ ] N/A
(u) [***Insert any other documents/conditions necessitated by the [ ] Yes [ ] N/A
nature of the Asset or the relevant legal systems***]
(v) Eligible B-Notes
(w) A copy, certified by an Authorised Signatory of the Sponsor as a [ ] Yes [ ] N/A
true, correct and complete copy of the document delivered to the
Borrower and any ancillary documents required to be delivered to
the Borrower under such Debt Finance Documents (which documents
may be delivered in electronic mail or "e-mail" format, or by
disk); provided, however, that to the extent any of the foregoing
documents are not available on the date of delivery of a
Utilisation Request, the Sponsor shall be required to deliver or
cause to be delivered such documents promptly after the
Utilisation Date (but in no event more than five Business Days
after receipt thereof).
(x) A certificate signed by an Authorised Signatory of the Sponsor [ ] Yes [ ] N/A
stating that the documents required to be delivered by the
Borrower hereunder have been delivered to the Lender and copies
of opinions of counsel, if any have been delivered with respect
to the foregoing, have been delivered to the Lender to the extent
reasonably requested by the Lender.
(y) A Redirection Letter from the Sponsor to the Underlying Borrower [ ] Yes [ ] N/A
(or the agent for the lenders) under the Debt Finance Documents,
instructing the trustee to remit all sums required to be remitted
to the holder of such B-Notes under the Debt Finance Documents to
one or more specified Collection Accounts.
(z) From time to time, the Borrower shall forward to the Lender [ ] Yes [ ] N/A
additional original documents or additional documents evidencing
any assumption, modification, consolidation or extension of an
B-Note approved in accordance with the terms of this Agreement
promptly when they are received. (Condition Subsequent).
(aa) A copy of the Mortgage with evidence that such original has been [ ] Yes [ ] N/A
submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property
is located.
(bb) A copy of all assumption, modification, consolidation or [ ] Yes [ ] N/A
extension agreements with evidence, to the extent applicable,
that such originals have each been submitted for recordation in
the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.
(cc) A copy of the assignment of leases and rents, if any, with [ ] Yes [ ] N/A
evidence that the original has been submitted for recordation in
the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.
(dd) A copy of all intervening assignments of assignment of leases and [ ] Yes [ ] N/A
rents, if any, or copies thereof, with evidence of recording
thereon.
(ee) A Trust Receipt (and where appropriate a Bailee Letter) from the [ ] Yes [ ] N/A
Document Custodian in respect of such B-Note.
(ff) A copy of the Closing Data Tape for such B-Note. [ ] Yes [ ] N/A
(gg) [***Insert any other documents/conditions necessitated by the [ ] Yes [ ] N/A
nature of the Asset or the relevant legal systems***]
(hh) Eligible Whole Loans
(ii) A copy, certified by an Authorised Signatory of the Sponsor as a [ ] Yes [ ] N/A
true, correct and complete copy of the document delivered to the
Borrower and any ancillary documents required to be delivered to
the Borrower under such Debt Finance Documents (which documents
may be delivered in electronic mail or "e-mail" format, or by
disk); provided, however, that to the extent any of the foregoing
documents are not available on the date of delivery of a
Utilisation Request, the Sponsor shall be required to deliver or
cause to be delivered such documents promptly after the
Utilisation Date (but in no event more than five Business Days
after receipt thereof).
(jj) A certificate signed by an Authorised Signatory of the Sponsor [ ] Yes [ ] N/A
stating that the documents required to be delivered by the
Borrower hereunder have been delivered to the Lender and copies
of opinions of counsel, if any have been delivered with respect
to the foregoing, have been delivered to the Lender to the extent
reasonably requested by the Lender.
(kk) A Redirection letter from the Borrower to the Underlying Borrower [ ] Yes [ ] N/A
(or the agent for the lenders) under the Debt Finance Documents,
instructing the [trustee] [facility agent] to remit all sums
required to be remitted to the holder of such Whole Loans under
the Debt Finance Documents to a Collection Account.
(ll) From time to time, the Borrower shall forward to the Lender [ ] Yes [ ] N/A
additional original documents or additional documents evidencing
any assumption, modification, consolidation or extension of an
Whole Loan approved in accordance with the terms of this
Agreement promptly when they are received. (Condition Subsequent)
(mm) A copy of the Mortgage with evidence that such original has been [ ] Yes [ ] N/A
submitted for recordation in the appropriate governmental
recording office of the jurisdiction where the Mortgaged Property
is located.
(nn) A copy of all assumption, modification, consolidation or [ ] Yes [ ] N/A
extension agreements with evidence, to the extent applicable,
that such originals have each been submitted for recordation in
the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.
(oo) A copy of the assignment of leases and rents, if any, with [ ] Yes [ ] N/A
evidence that the original has been submitted for recordation in
the appropriate governmental recording office of the jurisdiction
where the Mortgaged Property is located.
(pp) A copy of all intervening assignments of assignment of leases and [ ] Yes [ ] N/A
rents, if any, or copies thereof, with evidence of recording
thereon.
(qq) A Trust Receipt (and where appropriate a Bailee Letter) from the [ ] Yes [ ] N/A
Document Custodian in respect of such Whole Loan.
(rr) A copy of the Closing Data Tape for such Whole Loan. [ ] Yes [ ] N/A
(ss) [***Insert any other documents/conditions necessitated by the [ ] Yes [ ] N/A
nature of the Asset or the relevant legal systems***]
(tt) Any other documents or instruments necessary in the reasonable [ ] Yes [ ] N/A
opinion of the Lender to create and perfect in favour of the
Lender a valid perfected first priority security interest in such
Whole Loans.
(uu) Other Eligible Assets
(vv) Such documents, certificates, letters, opinions and other matters
as the Lender may specify in relation to such Other Eligible
Asset.
(ww) Other documents and evidence
(xx) A copy, certified by an Authorised Signatory of the Sponsor of:
(yy) (to the extent the same has been obtained at any time in [ ] Yes [ ] N/A
connection with such B-Note, Mezzanine Loan, Whole Loan or (where
the Lender so designates the same) Eligible Other Asset) in
respect of each B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset and (to the
extent that the same are available to holders of the same) each
of the CMBS or (where the Lender so designates the same) Eligible
Other Asset shall have received a "Phase 1" (and, if necessary,
"Phase 2") environmental report, an asbestos survey, if
applicable, and an engineering report, each in form reasonably
satisfactory to the Lender, by an engineer or environmental
consultant reasonably approved by the Lender;
(zz) in respect of each B-Note, Mezzanine Loan, Whole Loan or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset and (to
the extent that the same are available to holders of the same)
each of the CMBS or (where the Lender so designates the same)
Eligible Other Asset either a Valuation (or a draft thereof). If
the Lender receives only a draft Valuation prior to the related
Utilisation Date, the Borrower shall deliver the final Valuation
on or before thirty (30) days after such Utilisation Date;
(aaa) in respect of each B-Note, Mezzanine Loan, Whole Loan or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset and (to
the extent that the same are available to holders of the same)
each of the CMBS or (where the Lender so designates the same)
Eligible Other Asset shall have received certificates or other
evidence of insurance demonstrating insurance coverage in respect
of the Mortgaged Property of types, in amounts, with insurers and
otherwise in compliance with the terms, provisions and conditions
set forth in the Debt Finance Documents. Such certificates or
other evidence shall indicate that the Borrower 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 policies required to be maintained
under the Debt Finance Loan Documents;
(bbb) in respect of each B-Note, Mezzanine Loan, Whole Loan or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset and (to
the extent that the same are available to holders of the same)
each of the CMBS or (where the Lender so designates the same)
Eligible Other Asset shall have received all surveys of the
Mortgaged Property that are in the possession of the Borrower;
(ccc) in respect of each B-Note, Mezzanine Loan, Whole Loan or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset, the
Lender or its counsel shall have received, as reasonably
requested by the Lender, satisfactory reports of all corporate,
title, security, litigation and tax searches which are customary
in the relevant jurisdiction(s) acceptable to the Lender with
respect to the B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Assets, Mortgaged
Property and Mortgagor, such searches to be conducted in each
location the Lender shall reasonably designate;
(ddd) in respect of each B-Note, Mezzanine Loan, Whole Loan or (where [ ] Yes [ ] N/A
the Lender so designates the same) Eligible Other Asset, the
Lender or its counsel shall have received, as reasonably
requested by the Lender, satisfactory reports of each attorney's
certificate or report of title (or any equivalent thereto) in
each case to the extent that the same are customary in the
relevant jurisdiction(s) acceptable to the Lender with respect to
the B-Notes, Mezzanine Loans, Whole Loans or (where the Lender so
designates the same) Eligible Other Assets, Mortgaged Property,
Borrower and Mortgagor;
(eee) copies of all legal opinions in the Borrower's possession with [ ] Yes [ ] N/A
respect to the B-Note, Mezzanine Loan, Whole Loan or (where the
Lender so designates the same) Eligible Other Asset or the CMBS
or (where the Lender so designates the same) Eligible Other Asset
which shall be in form and substance reasonably satisfactory to
the Lender;
(fff) in respect of each of the CMBS or (where the Lender so designates [ ] Yes [ ] N/A
the same) Eligible Other Asset, the Lender shall have received a
copy of the offering circular (or equivalent thereto) for the
same (with all attachments thereto including any CD ROMs) and
copies of all investor reports, rating agency reports and other
information, reports and documents then available to holders of
such CMBS or (where the Lender so designates the same) Eligible
Other Asset;
(ggg) Certified copy of each transfer certificate transferring any [ ] Yes [ ] N/A
B-Notes, Mezzanine Loans, Whole Loans or (where the Lender so
designates the same) Eligible Other Assets to the Borrower and in
respect of which Interest is created by or pursuant to any
Security Document; and
(hhh) a copy certified by an Authorised Signatory of the Sponsor of any [ ] Yes [ ] N/A
other Authorisation or other document, opinion or assurance which
the Agent considers to be necessary or desirable 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.
Schedule 6
Mandatory Cost Formula
1 The Mandatory Cost is an addition to the interest rate in relation to
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 Lender 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
Lender as a weighted average of the Lenders' Additional Cost Rates
(weighted in proportion to the percentage participation of each Lender
in the relevant Advance) 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
Lender to the Lender. The Mandatory Cost will be calculated by the
Lender as a weighted average of the Lenders' Additional Cost Rates
(weighted in proportion to the percentage participation of each Lender
in the relevant Advance) and will be expressed as a percentage rate per
annum.
4 The Additional Cost Rate for any Lender lending from a Facility Office
in the United Kingdom will be calculated by the Lender as follows:
(a) in relation to a sterling Advance:
AB+C(B-D)+Ex0.01 per cent. per annum
----------------
100-(A+C)
in relation to an Advance 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 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) payable for the
relevant Interest Period on the Advance.
(C) is the percentage (if any) of Eligible Liabilities
which that 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 Lender on interest bearing Special
Deposits.
(E) is designed to compensate Lenders for amounts
payable under the Fees Rules and is calculated by
the Lender as being the average of the most recent
rates of charge supplied by the Reference Banks to
the Lender 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 such term, and will be
calculated in accordance with, the Fees Rules.
6 In application of the above Formula, A, B, C and D will be included in
the Formula 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 Lender, each Reference Lender shall, as soon as
practicable after publication by the Financial Services Authority,
supply to the Lender, the rate of charge payable by that Reference
Lender 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 Lender as
being the average of the Fee Tariffs applicable to that Reference
Lender for that financial year) and expressed in pounds per
(pound)1,000,000 of the Tariff Base of that Reference Lender.
8 Each Lender shall supply any information required by the Lender 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 Lender may reasonably require for
such purpose.
9 Each Lender shall promptly notify the Lender of any change to the
information provided by it pursuant to this paragraph.
10 The percentages of each Lender for the purpose of A and C above and the
rates of charge of each Reference Lender for the purpose of E above
shall be determined by the Lender based upon the information supplied
to it pursuant to paragraphs 7 and 8 above and on the assumption that,
unless a Lender notifies the Lender to the contrary, each Lender's
obligations in relation to cash 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.
11 The Lender 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 Lender pursuant to paragraphs 3, 7 and 8 above
is true and correct in all respects.
12 The Lender 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 Lender pursuant to paragraphs 3, 7 and 8
above.
13 Any determination by the Lender 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.
14 The Lender 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.
Schedule 7
Form of Accession Letter
To: Lehman Commercial Paper Inc., UK Branch as Lender
From: [Company] and Anthracite Capital Inc.
Dated: [date]
Up to $150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
1 We refer to the Agreement. This is an Accession Letter. Words and
expressions defined in the Agreement have the same meaning in this
Accession Letter unless given a different meaning in this Accession
Letter.
2 [o] agrees to become an Additional Borrower and to be bound by the
terms of the Agreement as an Additional Borrower pursuant to Clause
29.2 (Additional Borrowers) of the Agreement.
3 [o]'s administrative details are as follows:
Address:
Fax No:
Attention:
4 This Accession Letter will be effective only when countersigned by the
Lender.
5 This Accession Letter is governed by English law.
6 This Accession Letter is entered into by way of deed.
Lehman Commercial Paper Inc., UK Branch [Company]
By: By:
Its: Its:
ACKNOWLEDGED AND AGREED:
Lehman Commercial Paper Inc., UK Branch
By:
Its:
Schedule 8
Form of Resignation Letter
To: [Lender] as Lender
From: [Borrower] and Anthracite Capital Inc.
Dated: [date]
Anthracite Capital Inc.
Up to $150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
1 We refer to the Agreement. This is a Resignation Letter. Terms defined
in the Agreement have the same meaning in this Resignation Letter
unless given a different meaning in this Resignation Letter.
2 Pursuant to Clause 29.3 (Resignation of a Borrower), we request that
[resigning Borrower] be released from its obligations as a Borrower
under the Agreement.
3 We confirm that:
(a) no Default is continuing or would result from the acceptance of
this request; and
(b) no amount owed by that Borrower under this Agreement is still
outstanding.
4 This Resignation Letter will be effective only when countersigned by
the Lender.
5 This Resignation Letter is governed by English law.
Anthracite Capital Inc. [Resigning Borrower]
By: By:
Its: Its:
ACKNOWLEDGED AND AGREED:
Lehman Commercial Paper Inc., UK Branch
By:
Its:
Schedule 9
Form of Compliance Certificate
To: Lehman Commercial Paper Inc., UK Branch as Lender
From: AHR Capital Limited and Anthracite Capital Inc.
Dated: [date]
Dear Sirs,
AHR Capital Limited
Anthracite Capital Inc.
Up to $150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
1 We refer to the Agreement. This is a Compliance Certificate. Terms
defined in the Agreement have the same meaning when used in this
Compliance Certificate unless given a different meaning in this
Compliance Certificate.
2 We confirm that the Sponsor has maintained an Tangible Net Worth of at
least the sum of: (a): Four Hundred Million US dollars ($400,000,000);
plus (b) an amount equal to Seventy Five per cent. (75%) of any the
proceeds of any Equity Offering. A detailed summary of the calculation
of the Sponsor's Tangible Net Worth is attached hereto:
3 We confirm that the ratio of Financial Indebtedness (excluding
non-recourse Indebtedness) of the Sponsor plus the Financial
Indebtedness of its Subsidiaries to the Tangible Net Worth of the
Sponsor has not exceeded 3:1. A calculation of the Sponsor's actual
Financial Indebtedness to Tangible Net Worth is attached hereto.
4 We confirm that the Debt Service Coverage Ratio of the Sponsor is at
least 1.20:1. A calculation of the Sponsor's Debt Service Coverage
Ratio is attached hereto.
5 We confirm that the sum of the Sponsor's: (a) Cash; plus (b)
unencumbered and unpledged marketable securities; plus (c) Unfunded
Margin Amount is not less than Ten Million US dollars ($10,000,000). A
calculation of the same is attached hereto
6 We confirm that the Sponsor has maintained, for the Borrower, insurance
in an amount acceptable to the Investment Manager's regulators. The
actual amount of such coverage is (euro)[o].
7 We confirm that the financial statements attached hereto are accurate
and complete, accurately reflect the financial condition of relevant
Person, and do not omit any material fact as of the date(s) thereof.
8 We confirm that the Borrower has observed or performed in all material
respects all of its covenants and other agreements, and satisfied every
condition, contained in the Agreement and the other Finance Agreements
to be observed, performed and satisfied by it. [If a covenant or other
agreement or condition has not been complied with, the Borrower shall
describe such lack of compliance and provide the date of any related
waiver thereof.]
9 We confirm that the Borrower is not currently under investigation or,
to best of Borrower's knowledge, no investigation by any federal, state
or local government agency is threatened. The Borrower has not been the
subject of any government investigation which has resulted in the
voluntary or involuntary suspension of a license, a cease and desist
order, or such other action as could adversely impact the Borrower's
business. [If so, the Borrower shall describe the situation in
reasonable detail and describe the action that the Borrower has taken
or proposes to take in connection therewith.]
10 We confirm that no Default is outstanding. [If any Default has occurred
and is continuing, the Borrower shall describe the same in reasonable
detail and describe the action the Borrower has taken or proposes to
take with respect thereto, and if such Default has been expressly
waived by the Lender in writing, the Borrower shall describe the
Default and provide the date of the related waiver.]
11 We confirm that the Repeating Representations are true and correct.
Signed:
By:
-----------------------
Authorised Signatory
By:
-----------------------
Authorised Signatory
Schedule 10
Form of Trust Receipt
To: Lehman Commercial Paper Inc., UK Branch (the "Lender")
From: [Wells Fargo]
Dated: [date]
Dear Sirs,
[Wells Fargo]
$150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
We hereby certify that the above named person is the holder of this Trust
Receipt. Pursuant to the Document Custody Agreement, the holder is entitled to
[possession of the Asset Files/the benefit of the Bailee Letter in respect of
the Asset File] evidenced by this Trust Receipt; provided, however, that in the
event that the holder requests [release of an Asset File from the possession of
the Document Custodian/to become the direct addressee of any Bailee Letter in
respect of an Asset File], the related [Asset/Bailee Letter] shall no longer be
subject to or entitled to the benefits of the Document Custody Agreement.
Capitalised terms used herein and not otherwise defined shall have the meanings
set forth in the Document Custody Agreement dated [o] made between
ourselves and the Lender (the "Document Custody Agreement").
In accordance with the provisions of the Document Custody Agreement, the
undersigned, as the Document Custodian, hereby certifies that as to each Asset
listed in the attached Financed Asset Schedule, it has:
(a) received written confirmation from reputable counsel engaged in the
origination or acquisition of the relevant Asset confirming that such
counsel has reviewed the Asset File and has determined that:
(i) all documents delivered on the date hereof in respect of such
Asset are listed on the attached inventory list and have been
delivered into the possession of the Document Custodian; and
(ii) the documents in the Asset File have been reviewed by such
counsel and have been executed and appear regular on their
face and relate to such Asset; or
(b) it has received a Bailee Letter in respect such Asset in which the
Baillee certifies the matters referred to in paragraph (a)(i) and (ii)
above).
The Document Custodian makes no representations as to: (i) the validity,
legality, enforceability, genuineness or due authorisation of any of the Asset
Finance Documents with respect to the Assets identified on the related Financed
Asset Schedule; or (ii) the collectibility, insurability, effectiveness or
suitability of any such Asset. The Document Custodian has not conducted an
independent review of the Asset Files other than as specifically outlined in the
Document Custody Agreement.
Any transfer of this Trust Receipt may be registered upon presentation of this
Trust Receipt: (a) by the holder duly endorsed by the holder hereof or his duly
authorised attorney; or (b) by the transferee hereof together with appropriate
evidence of such transfer, at the office of the Document Custodian.
The Asset Files may be inspected by the holder hereof at the office of the
Document Custodian during normal business hours.
This Trust Receipt shall not be valid for any purpose unless duly executed below
by manual signature.
Signed:
By:
---------------------------
Authorised Signatory
By:
---------------------------
Authorised Signatory
Schedule 11
Form of Bailee Letter
To: Lehman Commercial Paper Inc., UK Branch (the "Lender")
and: [Wells Fargo]
From: [Name of Bailee]
Dated: [date]
Dear Sirs,
[Name of Bailee]
$150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
We hereby certify that that as to each Asset listed in the attached Financed
Asset Schedule, it has reviewed the Asset File and have determined that: (a) all
documents delivered on the date hereof in respect of such Asset are listed on
the attached inventory list and are in our possession; and (b) the documents in
the Asset File have been reviewed by us and have been executed and appear
regular on their face and relate to such Asset. We make no representations as
to: (i) the validity, legality, enforceability, genuineness or due authorisation
of any of the Asset Finance Documents with respect to the Assets identified on
the related Financed Asset Schedule; or (ii) the collectibility, insurability,
effectiveness or suitability of any such Asset. We have not conducted an
independent review of the Asset Files other than as specifically outlined in the
Document Custody Agreement.
The Asset Files may be inspected at our office during normal business hours.
Signed:
By:
---------------------------
Authorised Signatory
Schedule 12
Form of Closing Data Tape
1. Asset Number
2. Project Name
3. Master Category
4. Legal Entity
5. SBU
6. Deal
7. Seller
8. Property Address
9. City
10. Country
11. Property Type
12. Year Built
13. No of Properties
14. Year Renovated
15. Occupancy
16. Date Occupancy
17. Units/Pads/Rooms
18. NRSF
19. Appraisal Value
20. Appraisal Date
21. Cross Collateralised
22. Cross-Defaulted(2)
_________________________
(2) With other loans (excluding Underlying Loans).
23. Original Balance
24. Current Balance (at cut-off)
25. Current Participated Balance (at cut-off)
26. Position in Capital Structure
27. First Mortgage Balance Collateral
28. Subordinate Balance Collateral
29. Closed
30. Funding Date
31. First Pay Date
32. Rate
33. Spread Index
34. Quarterly Debt Service
35. Asset Type
36. Interest Rate Cap
37. Additional Financing Indicator
38. Remaining I/O Terms (months)
39. Interest Rate At Cut-off
40. Interest Accrual Method Code
41. Prepayment Terms Description
42. First Rate Adjustment Date
43. First Payment Adjustment Date
44. Lifetime Rate Floor
45. Periodic Rate Increase Limit
46. Periodic Rate Decrease Limit
47. Payment Frequency
48. Negative Amortisation Allowed (Y/N)
49. Maturity Date At Cut-off
50. Last Extended Maturity Date
51. Exit Fee
52. Ownership Interest
53. Ground Lease (Y/S/N)
54. Cross-Collateralised Asset Grouping
55. Security Priority
56. Asset Structure Code
57. Senior Debt Amount at Cut-off
58. Senior Debt Type Code
59. Senior Debt Fully Extended Maturity Date
60. Senior Debt Periodic P&I Payment at Cut-off
61. Senior Debt Fixed or Floating
62. Senior Debt Margin (if floating)
63. Senior Debt Rate (if fixed)
64. Subordinate Debt
65. Junior Debt Amount at Cut-off
66. Junior Debt Type Code
67. Junior Debt Fully Extended Maturity Date
68. Junior Debt Periodic P&I Payment at Cut-off
69. Junior Debt Fixed or Floating
70. Junior Debt Margin (if floating)
71. Junior Debt Rate (if fixed)
72. Loan Purpose SPE
73. Lockbox
74. Escrows
75. Actual NOI
76. Actual NOI Period (e.g. t-12 ended 4-30-04 etc)
77. UW NOI
78. UW date based on
79. UW Resv
80. UW NCF
81. UW NDSC
82. Lockout Expiration Date
83. Original Term
84. Amort Term
85. Rem Term
86. Rem Am Term
87. CLTV (Combined LTV all debt)
88. BLTV (Senior debt LTV)
89. McCracken Rate
90. McCracken PI
91. Investment Management/Servicing Fee
92. Credit Score
93. Remaining Funding Obligations
94. Remaining Funding Obligations - Amount
95. Recourse Loan
96. Recourse to:
97. Recourse Provider Net Worth
98. Recourse Provider Debt Service Coverage Ratio
99. Recourse Provider Net Worth to Financial Indebtedness Ratio
100. Recourse Provider Liquidity
101. Loan Revised//Amended YorN
102. Property or loan transferred YorN
103. Transfer Date (if applicable)
Schedule 13
Form of Redirection Letter
To: [Name of Lender/Servicer/Paying Agent]
From: AHR Capital Limited and Anthracite Capital Inc.
Dated: [date]
Re: Irrevocable Notice of Redirection of Payments of [Name of Asset]
Dear Sirs,
AHR Capital Limited
Anthracite Capital Inc.
$150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
1 Please be advised that AHR Capital Limited (the "Borrower") currently
owns a (euro)[o] interest in the [Name of Asset] (the "Asset").
2 The Borrower has entered into a loan facility with Lehman Commercial
Paper Inc, UK Branch (the "Lender") pursuant to the Agreement.
3 The Borrower has charged [all/(euro)[o]] of its interest in the
Asset to the Lender under the Agreement.
4 From and after the date hereof, you are hereby authorised and directed
to remit all payments for the[(euro)[o] portion of]/[the entire
interest] in the Asset to the following wire instructions:
Bank Name: [o]
Sort Code: [o]
Account No.: [o]
Account Name: [o]
Attention: [o]
5 Notwithstanding anything herein to the contrary, this Redirection
Letter shall only apply to the above-referenced portion of the Asset
held by AHR Capital Limited, and not to any other portion of the Asset
held by affiliates of AHR Capital Limited.
6 This Redirection Letter is irrevocable absent the prior written consent
of the Lender.
Signed:
By:
-----------------------
Authorised Signatory
By:
-----------------------
Authorised Signatory
- ------------------------------------
* With other loans (excluding Underlying Loans, in the case of any Mezzanine
Loan, Subsidiary Loan or Minority Loan).
Schedule 14
Form of Servicer Notice
To: [Name of Third Party Servicer]
From: Blackrock Financial Management Inc. and AHR Capital Limited
Dated: [date]
Dear Sirs,
Blackrock Financial Management Inc.
AHR Capital Limited
$150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
Defined terms used herein but not otherwise defined herein shall have the
meanings given in the Agreement.
We understand that you are servicing [Name of Asset (or Underlying Loans backing
Asset)] (the "Asset") for the benefit, inter alia, of AHR Capital Limited (the
"Borrower"). We are writing to inform you that pursuant to the Borrower has
changed its interest in the Asset to Lehman Commercial Paper Inc., UK Branch as
lender under the Agreement (the "Lender").
By your acknowledgement of this letter, you agree that upon receipt of a notice
to such effect from the Lender in which the Security shall identify the Assets
over which it holds security pursuant to the Agreement, you shall segregate all
amounts collected on account of such Assets, hold them in trust for the sole and
exclusive benefit of the Lender, and remit such collections in accordance with
the Lender's written instructions. Following such notice, you shall follow the
instructions of the Lender with respect to the Assets, and shall deliver to the
Lender any information with respect to the Assets reasonably requested by the
Lender.
Notwithstanding any contrary information which may be delivered to you by the
Borrower, you may conclusively rely on any information or notice delivered by
the Lender, and the Borrower shall indemnify and hold you harmless for any and
all claims asserted against you for any actions taken in good faith by you in
Please acknowledge receipt of this instruction letter by signing in the
signature block below and forwarding an executed copy to the Lender promptly
upon receipt. Any notices to the Lender should be delivered to the following
addresses: 25 Bank Street, 11th Floor, London, E14 5LE Attention: Julian
Wheeler; Telephone: +44 20 710 24756; Facsimile: +44 20 710 24756.
Signed:
By:
-----------------------
Authorised Signatory
By:
-----------------------
Authorised Signatory
Acknowledged
Signed:
By:
-----------------------
Authorised Signatory
By:
-----------------------
Authorised Signatory
Schedule 15
Form of Investment Manager Report
$150,000,000 Facility Agreement dated 19 April 2007 (the "Agreement")
Defined terms used herein but not otherwise defined herein shall have the
meanings given in the Agreement.
1 Asset Number
2 Position
3 Borrower Name
4 UPB
5 Late Charge Balance
6 Next Payment Date
7 Current DSCR March 31, 2007
8 Identified Problems with Investment Manager's Inspections
9 Tenant Occupying > 25% has vacated
10 Borrower, or affiliate, subject to Insolvency
11 If Yes to Insolvency, provide details
12 Maturity Date
13 Asset subject to Litigation
14 Interest Reserves Balance
15 Subject to Significant Covenant Violation
16 Material Defaults
17 Material Damage to Property
18 Borrower is 30 days or more Delinquent on Payment
19 Minimum Escrow Pmts/Balances have not been remitted or maintained
20 Criteria Requiring creation of springing Lockbox has occurred
21 Comments
SIGNATURES
BORROWER
AHR CAPITAL LIMITED
By: /s/ Richard Shea By:
--------------------- -------------------
Name: Richard Shea Name:
Title: Authorised Signatory Title: Authorised Signatory
Notice Details: With a copy to:
Address: Custom House Plaza Address: Anthracite Capital Inc.
Block 6 40 East 52nd Street
IFSC New York
Dublin 1 New York 10022
Ireland USA
Fax No: Fax No: +(212) 810-5579
Tel No.: Tel No.: +(212) 810-8758
Attention: The Directors Attention: Mr Richard Shea
SPONSOR
ANTHRACITE CAPITAL INC.
By: /s/ Richard Shea By:
--------------------- -------------------
Name: Richard Shea Name:
Title: Authorised Signatory Title: Authorised Signatory
Notice Details:
Address: Anthracite Capital Inc.
40 East 52nd Street
New York
New York 10022
USA
Fax No: +(212) 810-5579
Tel No.: +(212) 810-8758
Attention: Mr Richard Shea
LENDER
LEHMAN COMMERCIAL PAPER INC., UK BRANCH
By: /s/ Julian Wheeler By:
--------------------- -------------------
Name: Julian Wheeler Name:
Title: Authorised Signatory Title: Authorised Signatory
Notice Details: With a copy to:
Address: Lehman Commercial Address: Lehman Commercial
Paper Inc, UK Branch Paper Inc
25 Bank Street, 11th Floor 399 Park Avenue, 8th Floor
London, E14 5LE New York, NY 10022
USA
Fax No: + 44 20 710 24756 Fax No: + 646-758-5331
Tel No.: + 44 20 710 24756 Tel No.: + 212-526-4625
Attention: Julian Wheeler Attention: Brian Gross