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
--------------------------------------------------------------------------------
up to $150,000,000 REVOLVING FACILITY AGREEMENT
--------------------------------------------------------------------------------
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
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TABLE OF CONTENTS
Page
----
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
-i-
<PAGE>
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
-ii-
<PAGE>
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
-iii-
<PAGE>
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
&
