FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

FCC Proudreed Properties 2005 

a French law debt mutual fund (fonds commun de créances) regulated by articles L. 214−43 

to L. 214−49 of the French Monetary and Financial Code (Code monétaire et financier) (the ‘‘Issuer’’) 

x255,400,000 Class A Floating Rate Notes due 2017, issue price: 100% 

x56,800,000 Class B Floating Rate Notes due 2017, issue price: 100% 

x28,400,000 Class C Floating Rate Notes due 2017, issue price: 100% 

x28,400,000 Class D Floating Rate Notes due 2017, issue price: 100% 

x28,400,000 Class E Floating Rate Notes due 2017, issue price: 100% 

This document constitutes a ‘‘prospectus’’ for the purposes of Directive 2003/71/EC. Application has been made to the Irish Financial Services 

Regulatory Authority, as competent authority under Directive 2003/71/EC, for this prospectus to be approved. Application has been made to the Irish 

Stock Exchange Limited (the ‘‘Irish Stock Exchange’’) for the u255,400,000 Class A Floating Rate Notes due 2017 (the ‘‘Class A Notes’’), the u56,800,000 

Class B Floating Rate Notes due 2017 (the ‘‘Class B Notes’’), the u28,400,000 Class C Floating Rate Notes due 2017 (the ‘‘Class C Notes’’), the 

u28,400,000 Class D Floating Rate Notes due 2017 (the ‘‘Class D Notes’’) and the u 28,400,000 Class E Floating Rate Notes due 2017 (the ‘‘Class E Notes’’ 

and, together with the Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes, the ‘‘Notes’’) to be admitted to the official list. Such 

approval relates only to the Notes which are to be admitted to trading on the regulated market of Irish Stock Exchange or other regulated markets for 

the purposes of Directive 93/22/EC or which are to be offered to the public in any Member State of the European Economic Area. The Notes are 

expected to be issued on or about 2 November 2005 (or such later date as may be agreed by the Issuer, the Joint Lead Managers (as defined below) and 

the Principal Paying Agent (as defined below)) (the ‘‘Closing Date’’). 

The Notes have not been, and will not be, registered under the United States Securities Act of 1933, as amended (the ‘‘Securities Act’’), may not be 

offered or sold in the United States or to US persons, and are subject to United States tax law requirements. The Notes are being offered outside the 

United States by HSBC Bank plc and Société Générale (in their capacities as joint lead managers, the ‘‘Joint Lead Managers’’) in accordance with 

Regulation S under the Securities Act (‘‘Regulation S’’) and may not be offered, sold or delivered within the United States or to, or for the benefit of, 

US persons except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. 

The Notes will be in bearer form delivered in book entry form (en forme dématérialisée) in compliance with article L. 211-4 of the French Monetary and 

Financial Code. No physical document of title will be issued in respect of the Notes. It is expected that the Notes will, upon issue, be entered (‘‘inscrites 

en compte’’) on the Closing Date in the books of Euroclear France, société anonyme (‘‘Euroclear France’’), which shall credit the accounts of the Account 

Holders (as defined in ‘‘Terms and Conditions of the Notes – Form, denomination and title’’ below) including Euroclear Bank S.A./N.V., as operator of 

the Euroclear System (‘‘Euroclear’’) and the depositary bank for Clearstream Banking, société anonyme (‘‘Clearstream, Luxembourg’’). The Notes have 

been accepted for clearance through Euroclear France, Clearstream, Luxembourg and Euroclear. 

Interest on the Notes is payable by reference to successive interest periods (each an ‘‘Interest Period’’). Interest will be payable quarterly in arrear in 

euro on the 18 February, 18 May, 18 August and 18 November (each, an ‘‘Interest Payment Date’’) in each year (subject to adjustment as specified herein 

for non business days and business days which fall into the next calendar month) commencing on the Interest Payment Date falling in February 2006. 

The first Interest Period will commence on (and include) the Closing Date and end on (but exclude) the Interest Payment Date falling in February 2006. 

Each successive Interest Period will commence on (and include) 18 February, 18 May, 18 August and 18 November and end on (but exclude) 18 May, 

18 August, 18 November and 18 February, respectively. The Class A Notes will bear interest at a rate equal to EURIBOR for three month deposits from 

time to time plus 0.23 per cent. per annum, the Class B Notes will bear interest at a rate equal to EURIBOR for three month deposits from time to time 

plus 0.29 per cent. per annum, the Class C Notes will bear interest at a rate equal to EURIBOR for three month deposits from time to time plus 0.33 

per cent. per annum, the Class D Notes will bear interest at a rate equal to EURIBOR for three month deposits from time to time plus 0.52 per cent. 

per annum and the Class E Notes will bear interest at a rate equal to EURIBOR for three month deposits from time to time plus 0.75 per cent. per 

annum, in each case as further described below and as set out in Condition 4(c) of the terms and conditions of the Notes (the ‘‘Conditions’’) as more 

fully set out in the section entitled ‘‘Terms and Conditions of the Notes’’ on page 212 below. In the case of the first Interest Period only, each Class of 

Notes will bear interest at the rate obtained by the linear interpolation of the rate for three month and four month euro deposits in the market plus the 

margin applicable to the relevant class of Notes as described above. 

The Notes will mature on the Interest Payment Date falling on August 2017 unless previously redeemed. The Notes will be subject to mandatory 

redemption and/or optional redemption in whole or in part before such date in the circumstances, and subject to the conditions, described in the 

Conditions. 

If any withholding or deduction for or on account of tax is applicable to the Notes, payment of interest on, and principal and premium (if any) of, the 

Notes will be made subject to any such withholding or deduction without the Issuer being obliged to pay any additional or further amounts as a 

consequence. 

The Notes will be obligations of the Issuer only and will not be guaranteed by, or be the responsibility of, any other person or entity. It should be noted 

in particular, that the Notes will not be obligations of, and will not be guaranteed by, the Management Company, the Custodian, the FCC Servicers, the 

Lenders, the Joint Lead Managers, the Borrowers Account Banks, the Issuer Account Bank, the Cash Manager, the Paying Agents, the Hedging 

Providers, the Liquidity Facility Provider, the Property Manager, the Noteholder Representatives, the Borrowers or the Parent Obligors or any of their 

respective affiliates but the proceeds of the issue of the Notes will be used to finance the purchase of the Receivables. 

It is expected that the Class A Notes will, when issued, be assigned an AAA rating by Fitch Ratings Ltd, (‘‘Fitch’’) and an AAA rating by Standard & 

Poor’s, a division of The McGraw Hill Companies, Inc. (‘‘S&P’’, and together with Fitch, the ‘‘Rating Agencies’’). It is expected that the Class B Notes 

will, when issued, be assigned an AA rating by Fitch and an AAA rating by S&P. It is expected that the Class C Notes will, when issued, be assigned 

an AA rating by Fitch and an AA rating by S&P. It is expected that the Class D Notes will, when issued, be assigned a A rating by Fitch and a A rating 

by S&P. It is expected that the Class E Notes will, when issued, be assigned a BBB rating by Fitch and a BBB+ rating by S&P. A credit rating, however, 

is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating 

organisation. 

For a discussion of certain risks and other factors that should be considered in connection with an investment in the Notes, see the section entitled, ‘‘Risk 

Factors’’ on page 37 below. 

HSBC 

SG CORPORATE & INVESTMENT BANKING 

24 October 2005

The Management Company and the Custodian accept responsibility for the information contained in this 

Offering Circular (other than the information (referred to below). To the best of the knowledge and belief 

of the Management Company and the Custodian (having taken all reasonable care to ensure that such is the 

case), the information (other than the Paris Properties Information, the Proudreed France Information, the 

HSBC Information, the Société Générale Information, the CCF Information, the Savills Information, the 

Atis Real Information and the Mazars & Guerard Information (as defined below)) contained in this 

Offering Circular is in accordance with the facts and does not omit anything likely to affect the import of 

such information. The Management Company and the Custodian accept responsibility accordingly. The 

Issuer has the benefit of warranties from each of the Borrowers and (to a limited extent) their Parent 

Obligors for the information contained in this Offering Circular. 

Each of the Paris Properties Borrowers accepts responsibility for the information in relation to the Paris 

Properties Borrowers, the Parent Obligors of the Paris Properties Borrowers relating to it or its properties, 

the Property Manager and the Property Portfolio of the Paris Properties Borrowers contained in the 

sections headed ‘‘Key Characteristics of the Property Portfolio’’, ‘‘The Borrowers’’ and ‘‘The Property 

Manager’’ and in paragraph 4 on page 241 (together the ‘‘Paris Properties Information’’). To the best of the 

knowledge and belief of each of the Paris Properties Borrowers (having taken all reasonable care to ensure 

that such is the case), the Paris Properties Information is in accordance with the facts and does not omit 

anything likely to affect the import of the Paris Properties Information. The Paris Properties Borrowers 

accept no responsibility for any other information contained in this Offering Circular and has not separately 

verified any such other information. 

Each of the Proudreed France Borrowers accepts responsibility for the information in relation to the 

Proudreed France Borrowers, the Parent Obligors of the Proudreed France Borrowers relating to it or its 

properties, the Property Manager and the Property Portfolio of the Proudreed France Borrowers contained 

in the sections headed ‘‘Key Characteristics of the Property Portfolio’’, ‘‘The Borrowers’’ and ‘‘The Property 

Manager’’ and in paragraph 4 on page 241 (together the ‘‘Proudreed France Information’’). To the best of 

the knowledge and belief of the Proudreed France Borrowers (having taken all reasonable care to ensure 

that such is the case), the Proudreed France Information is in accordance with the facts and does not omit 

anything likely to affect the import of the Proudreed France Information. The Proudreed France Borrowers 

accept no responsibility for any other information contained in this Offering Circular and has not separately 

verified any such other information. 

CCF accepts responsibility for the information in relation to itself contained in the sections headed 

‘‘Transaction Parties—The Lenders’’ and ‘‘The Liquidity Facility Provider’’ on pages 13 and 211 (together 

the ‘‘CCF Information’’). To the best of the knowledge and belief of CCF (having taken all reasonable care 

to ensure that such is the case), the CCF Information is in accordance with the facts and does not omit 

anything likely to affect the import of the CCF Information. CCF accepts no responsibility for any other 

information contained in this Offering Circular and has not separately verified any such other information. 

HSBC Bank plc accepts responsibility for the information in relation to itself contained in the section 

headed ‘‘The Hedging Providers’’ on page 210 (together the ‘‘HSBC Information’’). To the best of the 

knowledge and belief of HSBC Bank plc (having taken all reasonable care to ensure that such is the case), 

the HSBC Information is in accordance with the facts and does not omit anything likely to affect the import 

of the HSBC Information. HSBC Bank plc accepts no responsibility for any other information contained 

in this Offering Circular and has not separately verified any such other information. 

Société Générale accepts responsibility for the information in relation to itself contained in the sections 

headed ‘‘Transaction Parties—The Lenders’’ and ‘‘The Hedging Providers’’ on pages 13 and 210 (together 

the ‘‘Société Générale Information’’). To the best of the knowledge and belief of Société Générale (having 

taken all reasonable care to ensure that such is the case), the Société Générale Information is in accordance 

with the facts and does not omit anything likely to affect the import of the Société Générale Information. 

Société Générale accepts no responsibility for any other information contained in this Offering Circular and 

has not separately verified any such other information. 

Savills accepts responsibility for the information contained in the section entitled ‘‘Valuation Reports’’ on 

pages 96-134 (together the ‘‘Savills Information’’). To the best of the knowledge and belief of Savills (having 

taken all reasonable care to ensure that such is the case), the Savills Information is in accordance with the 

facts and does not omit anything likely to affect the import of the Savills Information. Savills accepts no 

responsibility for any other information contained in this Offering Circular and has not separately verified 

any such other information. 

Atis Real accepts responsibility for the information contained in the section entitled ‘‘Valuation Reports’’ on 

pages 135-136 (together the ‘‘Atis Real Information’’). To the best of the knowledge and belief of Atis Real

(having taken all reasonable care to ensure that such is the case), the Atis Real Information is in accordance 

with the facts and does not omit anything likely to affect the import of the Atis Real Information. Atis Real 

accepts no responsibility for any other information contained in this Offering Circular and has not 

separately verified any such other information. 

Mazars & Guerard accepts responsibility for the information contained in the excerpts from the financial 

reports in the section entitled ‘‘The Borrowers’’, on pages 144-209 (together the ‘‘Mazars & Guerard 

Information’’). To the best of the knowledge and belief of Mazars & Guerard (having taken all reasonable 

care to ensure that such is the case), the Mazars & Guerard Information is in accordance with the facts and 

does not omit anything likely to affect the import of the Mazars & Guerard Information. Mazars & Guerard 

accepts no responsibility for any other information contained in this Offering Circular and has not 

separately verified any such other information. 

No person is, or has been, authorised in connection with the issue and sale of the Notes to give information 

or to make any representation not contained in this Offering Circular and, if given or made, such 

information or representation must not be relied upon as having been authorised by, or on behalf of, the 

Management Company, the Custodian, the Lenders, the Joint Lead Managers, the Issuer Account Bank, the 

Borrowers Account Banks, the Cash Manager, the Paying Agents, the Hedging Providers, the Liquidity 

Facility Provider, the FCC Servicers, the Noteholder Representatives, the Borrowers, the Property Manager 

or the Parent Obligors or any of their respective affiliates. Neither the delivery of this Offering Circular nor 

any sale or allotment made in connection with the offering of any of the Notes shall under any circumstances 

constitute a representation or create any implication that there has been no change in the affairs of the Issuer, 

any Borrower or its Parent Obligor or in the information contained herein since the date hereof, or that the 

information contained herein is correct as at any time subsequent to the date hereof. 

The Notes have not been and will not be registered under the Securities Act, and include Notes in bearer 

form that are subject to US tax law requirements. The Notes may not be offered, sold or delivered within 

the United States or to US persons (as defined in Regulation S under the Securities Act (Regulation S)) 

except in certain transactions permitted by US tax regulations and the Securities Act. For a more complete 

description of restrictions on offers and sales and applicable US tax law requirements, see ‘‘Subscription and 

Sale’’ below. 

Other than the approval of this Offering Circular as a prospectus in accordance with the Listing and 

Admission to Trading Guidelines for Asset-backed Securities of the Irish Stock Exchange, no action has 

been, or will be, taken to permit a public offering of the Notes or the distribution of this Offering Circular 

in any jurisdiction where action for that purpose is required. The distribution of this Offering Circular and 

the offering of the Notes in certain jurisdictions may be restricted by law. Persons into whose possession this 

Offering Circular (or any part hereof) comes are required by the Issuer and the Joint Lead Managers to 

inform themselves about, and to observe, any such restrictions. For a further description of certain 

restrictions on offers and sales of the Notes and the distribution of this Offering Circular, see the section 

entitled, ‘‘Subscription and Sale’’ below. Neither this Offering Circular nor any part hereof constitutes an 

offer of, or an invitation by, or on behalf of, the Issuer or the Joint Lead Managers to subscribe for or 

purchase any of the Notes. Neither this Offering Circular, nor any part hereof, may be used in connection 

with an offer to, or solicitation by, any person in any jurisdiction or in any circumstances in which such offer 

or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. 

Accordingly, the Notes may not be offered or sold, directly or indirectly, and neither this Offering Circular 

nor any part hereof nor any other offering circular, prospectus, form of application, advertisement, other 

offering material or other information may be issued, distributed or published in any country or jurisdiction 

(including France), except in circumstances that will result in compliance with all applicable laws, orders, 

rules and regulations. 

This Offering Circular has not been and will not be submitted for approval by or registration (visa) with the 

French Autorité des Marchés Financiers. Accordingly, each Joint Lead Manager has represented and agreed 

that it has not offered, sold or otherwise transferred and will not offer, sell or otherwise transfer, directly or 

indirectly, the Notes to the public in the Republic of France and has not distributed or caused to be 

distributed and will not cause to be distributed, directly or indirectly, to the public in the Republic of France 

this Offering Circular or any other offering material relating to the Notes. Such offers, sales or other 

transfers and distributions may only be made in the Republic of France to qualified investors (investisseurs 

qualifiés) and/or (in the case of the Class A Notes only) to a restricted circle of investors (cercle restreint 

d’investisseurs), provided that such investors are acting for their own account and/or to persons providing 

portfolio management financial services (personnes fournissant le service d’investissement de gestion de 

portefeuille pour compte de tiers), all as defined and in accordance within Article L. 411-2 of the French 

Monetary and Financial Code and Decree no. 98-880 dated 1 st October, 1998 or to non-French resident

investors. Persons into whose possession this Offering Circular (or any part hereof) comes are required to 

inform themselves about and to observe any such restrictions. In accordance with the provisions of Article 

L.214-44 of the French Monetary and Financial Code, the Units and the Notes issued by the Issuer may not 

be offered or sold by way of solicitation (démarchage) in France. 

All references in this document to ‘‘euro’’ or ‘‘x’’ are to the lawful currency of the Member States of the 

European Union that adopt the single currency in accordance with the Treaty establishing the European 

Community, as amended by the Treaty on European Union. 

The contents of this Offering Circular should not be construed as providing legal, business, accounting or 

tax advice. Each prospective investor should consult its own legal, business, accounting and tax advisers 

prior to making a decision to invest in the Notes. 

In connection with the issue and distribution of the Notes, each of Société Générale and HSBC Bank plc 

as a stabilising manager (the ‘‘Stabilising Managers’’) (or any person acting for a Stabilising Manager) may 

over allot (provided that the aggregate principal amount of Notes allotted does not exceed 105 per cent. of 

the aggregate principal amount of the Notes) or effect transactions with a view to supporting the market 

price of the Notes at a higher level than that which might otherwise prevail. However, there is no assurance 

that a Stabilising Manager (or persons acting on behalf of a Stabilising Manager) will undertake 

stabilisation action. Any stabilisation action may begin on or after the date on which adequate public 

disclosure of the final terms of the offer of the Notes is made and, if begun, may be ended at any time, but 

it must end no later than the earlier of 30 days after the issue date of the Notes and 60 days after the date 

of the allotment of the Notes. Société Générale will act as co-ordinating Stabilising Manager in respect of the 

issue and distribution of the Notes. 

Capitalised terms used in this Offering Circular unless otherwise indicated, have the meanings set out in this 

Offering Circular. A schedule of defined terms used appears at the back of this Offering Circular. Where 

there is a conflict between the definition of a term in the Conditions and the definition of the same term 

elsewhere in this Offering Circular, the definitions in the Conditions shall prevail.

CONTENTS 

SECTION 

PAGE 

PRINCIPAL CHARACTERISTICS OF THE NOTES ................................. 5 

PRINCIPAL CHARACTERISTICS OF THE COMMERCIAL MORTGAGE LOANS . . . 6 

DIAGRAMMATIC OVERVIEW OF PARTIES AND TRANSACTION ................ 10 

TRANSACTION OVERVIEW ..................................................... 11 

TRANSACTION PARTIES ........................................................ 13 

KEY CHARACTERISTICS OF THE PROPERTY PORTFOLIOS ..................... 17 

PRINCIPAL FEATURES OF THE NOTES .......................................... 34 

RISK FACTORS .................................................................. 37 

SUMMARY OF PRINCIPAL DOCUMENTS ........................................ 59 

RESOURCES AVAILABLE TO THE BORROWERS AND THE ISSUER ............. 84 

USE OF PROCEEDS.............................................................. 95 

VALUATION REPORTS .......................................................... 96 

THE BORROWERS .............................................................. 144 

THE PROPERTY MANAGER ..................................................... 209 

THE HEDGING PROVIDERS ..................................................... 210 

THE LIQUIDITY FACILITY PROVIDER .......................................... 211 

TERMS AND CONDITIONS OF THE NOTES ...................................... 212 

TAXATION ...................................................................... 238 

SUBSCRIPTION AND SALE ...................................................... 239 

GENERAL INFORMATION....................................................... 241 

SCHEDULE OF DEFINED TERMS ................................................ 243

PRINCIPAL CHARACTERISTICS OF THE NOTES 

The following is a brief overview of the principal characteristics of the Notes offered under this Offering 

Circular. This information is subject to and is more fully explained in the other sections of this Offering 

Circular. 

Notes 

Class A 

Notes 

Class B 

Notes 

Class C 

Notes 

Class D 

Notes 

Class E 

Notes 

Initial Principal Amount u255,400,000 u56,800,000 u28,400,000 u28,400,000 u28,400,000 

Issue price 100% 100% 100% 100% 100% 

Interest rate EURIBOR + 

0.23 per cent. 

per annum 

EURIBOR + 


per annum 

EURIBOR + 


per annum 

EURIBOR + 


per annum 

EURIBOR + 


per annum 

Expected Maturity Date August 2014 August 2014 August 2014 August 2014 August 2014 

Final Maturity Date August 2017 August 2017 August 2017 August 2017 August 2017 

Principal payments 

Prepayments 

No scheduled amortisation 

Notes may be subject to voluntary and mandatory prepayment on any 

Interest Payment Date as described herein, with prepayments applied to 

the Notes in sequential order starting with the most senior Class of 

Notes. 

Day count 

Actual/360 

Frequency of payment 

Quarterly 

of interest 

Form of Notes 

Bearer 

Denominations u100,000 

Clearing system 

Credit enhancement 

(provided by 

other classes of Notes 

subordinated to the 

relevant class) 

Listing 

ISIN 

Euroclear, Euroclear France and Clearstream, Luxembourg 

Subordination 

of the Class 

B Notes, the 

Class C 

Notes, 

the Class D 

Notes and 

the Class E 

Notes. 

Subordination 

of the Class 

C Notes, the 

Class D 

Notes and 

the 

Class E 

Notes. 

Subordination 

of the Class 

D Notes and 

the Class E 

Notes. 

Irish Stock Exchange 

Subordination 

of the Class 

E Notes. 

FR0010247577 FR0010247585 FR0010247593 FR0010247601 FR0010247619 

Common Code 023298732 023298279 023298406 023298520 023298066 

Expected rating – Fitch AAA AA AA A BBB 

Expected rating – S&P AAA AAA AA A BBB+ 

Nil 

5

PRINCIPAL CHARACTERISTICS OF THE COMMERCIAL 

MORTGAGE LOANS 

The following is a brief overview of the principal characteristics of the Commercial Mortgage Loans. This 

information is subject to and is more fully explained in the other sections of this Offering Circular. 

Commercial Mortgage Loan Agreement 

– Paris Properties Borrowers 

Parties: 

Principal Amount: 

Initial loan to value ratio: 

Société Générale SA (as Lender), SCI du 7 rue 

d’Amiens, SCI Beaulieu Properties, SCI Annapaul, 

SARL Enoville, SARL Les Hauteurs du Loing, 

SARL Immobilière Menelas, SAS IDB Immobilier, 

SARL PPMPP, SCI Paris Provinces Properties (as 

the Borrowers) and SCI Paris Provinces Properties, 

SPCR SAS, SCI Beaulieu Properties, Ringmerit 

Limited, SARL Immobilière Menelas and Paris 

Properties SARL (as Parent Obligors). 

u292,870,973 which will be used for the purpose of 

refinancing a portfolio of mortgage loans, refinancing 

inter-company loans and paying certain expenses. 

70.0 per cent, based on the Valuation Report. 

Commercial Mortgage Loan Agreement – 

Proudreed France Borrowers 

Parties: 

Principal Amount: 

Initial loan to value ratio: 

Common Terms for both Commercial Mortgage 

Loan Agreements 

Interest Rate: 

Loan Interest Periods and Loan Interest 

Payment Dates: 

CCF (as Lender), Proudreed France SARL, SCI 

Dep-Immo-Comm, SCI 2PI (as the Borrowers) and 

Jean-Pierre Raynal, Proudreed Limited and 

Proudreed France SARL (as Parent Obligors). 

u104,529,027 which will be used for the purpose of 

refinancing a portfolio of mortgage loans, refinancing 

inter-company loans and paying certain expenses. 

70.0 per cent, based on the Valuation Report. 

The Issuer Cost of Funds, calculated on the basis of 

the weighted average interest rate payable on the 

Notes that funded the relevant Commercial Mortgage 

Loan after taking into account the hedging 

arrangements put in place by the Issuer under the 

Hedging Agreements. 

Interest will be paid quarterly on the Loan Interest 

Payment Dates falling on 18 February, 18 May, 

18 August and 18 November of each year (or if not 

a Business Day, the next succeeding Business Day 

unless such day falls in the next month, in which case 

it shall be the preceding Business Day). Each Loan 

Interest Period will commence on (and include) an 

Interest Payment Date and end on (but exclude) the 

following Interest Payment Date except that the first 

Loan Interest Period shall commence on (and 

include) the Closing Date and end on (but exclude) 

the Interest Payment Date falling in February 2006 

and the final Loan Interest Period shall commence 

on (and include) the Interest Payment Date falling in 

6

May 2014 and end on (but exclude) the Final 

Repayment Date. 

Final Repayment Date: Loan Interest Payment Date falling in August 2014. 

Voluntary Prepayment: 

Each Borrower is, provided that each other Borrower 

within the same Borrower Group prepays its 

Commercial Mortgage Loan in the same proportion 

subject to certain conditions described in ‘‘Summary 

of the Principal Documents – The Commercial 

Mortgage Loan Agreements – Prepayment of the 

Commercial Mortgage Loans’’, entitled to prepay its 

Commercial Mortgage Loan in whole or in part on 

any Loan Interest Payment Date upon giving not 

less than 45 days prior written notice to the Issuer. 

Amounts prepaid may not be redrawn. 

Mandatory Prepayment: Each Borrower must prepay its Commercial 

Mortgage Loan on the next Interest Payment Date 

(or in certain cases on any date with breakage costs 

equal to interest until the next Loan Interest Payment 

Date) in the circumstances described in ‘‘Summary 

of the Principal Documents – The Commercial 

Mortgage Loan Agreements – Prepayment of the 

Commercial Mortgage Loans’’. 

Financial covenants: 

Each Borrower has undertaken to ensure that the 

ratio of net rental income to interest charges (both 

for an historic calculation period of 12 months and a 

projected calculation period of 3 months) in respect 

of the relevant Borrower Group is not less than 1.2:1. 

If the ratio of net rental income to interest charges in 

respect of a Borrower Group falls below 1.3:1 during 

the First Reference Period or 2.0:1 during the Second 

Reference Period, the monies not required to pay 

interest and other prior ranking expenses of the 

Borrowers in that Borrower Group will no longer be 

distributed to those Borrowers but will instead be 

held in the Cash Trap Account of each relevant 

Borrower. Such monies, together with other monies 

that would otherwise be distributed to the Borrowers 

in the relevant Borrower Group, will be applied in 

mandatory prepayment if such ratio remains below 

1.3:1 for four consecutive quarters or more, until 

both the Historical ICR and the Projected ICR are 

equal to or above 1.3:1 for more than two consecutive 

quarters. If both the Historical ICR and the Projected 

ICR in respect of a Borrower Group are equal to or 

above 1.5:1 for more than four consecutive quarters, 

all amounts then standing to the credit of the Cash 

Trap Account of each Borrower in that Borrower 

Group will be paid into the Borrower Transaction 

Account of each such Borrower and applied in 

accordance with the relevant Obligor Priority of 

Payments except during the Second Reference Period 

where such amounts will be retained in the relevant 

Cash Trap Account. For further details of the 

financial covenants and the operation of the Cash 

Trap Accounts, please see the sections entitled 

‘‘Summary of Principal Documents – Commercial 

7

LTV Ratio: 

Security: 

Insurance: 

Mortgage Loan Agreements – Financial Covenants’’ 

and ‘‘Resources available to the Borrowers and the 

Issuer – Borrower Accounts – Cash Trap Accounts’’ 

below. 

Each Borrower has undertaken to ensure that, during 

the Second Reference Period, the LTV Ratio in 

respect of the relevant Borrower Group is not 

greater than 70 per cent. 

The LTV Ratio will be tested on behalf of each 

Borrower Group on each Loan Calculation Date on 

the basis of the Market Value of the relevant Secured 

Properties as determined in the most recent Valuation 

Reports. 

Failure by a Borrower Group to maintain an LTV 

Ratio at or below 70 per cent. will not give rise to a 

Loan Event of Default but, instead, the monies not 

required to pay interest and other prior ranking 

expenses of the Borrowers in that Borrower Group 

will no longer be distributed to the Borrower but will 

be transferred to the Cash Trap Account provided 

that as long as both the Historical ICR and the 

Projected ICR are both greater than 2.0:1, the amount 

required to be transferred to the Cash Trap Account 

shall be limited to the amount necessary to ensure 

that the LTV Ratio, as recalculated to reflect the 

cash deposit, would be at or below 70 per cent. 

For further details of the LTV Ratio see the section 

entitled ‘‘Summary of Principal Documents – 

Commercial Mortgage Loan Agreements – LTV 

Ratio’’ 

The Lenders will benefit from security interests for 

the obligations of the Borrowers under the 

Commercial Mortgage Loans including inter alia, 

first ranking mortgages over the Property Portfolio 

of the relevant Borrower, a pledge over the shares of 

each Borrower, a charge over each of the Borrower 

Accounts and an assignment of the related rental 

income as more fully described in the section entitled 

‘‘Summary of Principal Documents – The Related 

Rights’’ below. 

Each Borrower has undertaken to maintain insurance 

on all of its properties including its Secured Property 

on a full reinstatement value basis, including not less 

than two years’ loss of rent on all Occupational 

Leases together with third party liability insurance 

and insurance against subsidence and (to the extent 

available) acts of terrorism and to procure, in relation 

to Secured Properties, that the Issuer represented by 

the Management Company is named as loss payee 

on all relevant insurance policies. 

All insurances required under a Commercial 

Mortgage Loan Agreement must be with an 

insurance company or underwriter that has a long 

term credit rating of at least A (or better) by Fitch 

and A (or better) by S&P. 

8

Valuation: 

Transfer of Commercial Mortgage Loans and 

Related Security to the Issuer: 

Each Borrower is required to provide a full Valuation 

Report at least once every three years, and a desktop 

valuation report at least once each year. In addition, 

each affected Borrower is required to provide a full 

Valuation Report following a Loan Event of Default 

or a Potential Loan Event of Default and following 

the occurrence of any event or circumstance which, 

in the reasonable opinion of the FCC Servicer, with 

the approval of the Management Company, may 

lead to a downgrade of the ratings of the Notes. 

On the Closing Date, the Issuer will purchase from 

the Lenders the right to receive principal and interest, 

and the related security, in respect of each 

Commercial Mortgage Loan. 

9

DIAGRAMMATIC OVERVIEW OF PARTIES AND TRANSACTION 

Occupational 

Tenants 

Borrowers Account 

Bank 

10 

Parent 

Obligors 

Parent 

Obligors 

Property 

Manager 

Occupational 

Lease 

Paris Properties 

Borrowers 

Proudreed France 

Proudreed Borrowers France 

Borrowers 

Occupational 

Lease 

Rental 

Income 

Rental 

Income 

Commercial Mortgage 

Loans 

Interest 

Principal 

FCC Servicers 

Issuer Account 

Bank and Cash 

Manager 

Management 

Company 

Issuer 

Liquidity Facility 

Provider 

Note issue 

proceeds 

Interest 

Custodian 

Noteholders 

Hedging Providers 

Occupational 

Tenants 

Borrowers Account 

Bank

TRANSACTION OVERVIEW 

The information in this section does not purport to be complete and is qualified in its entirety by reference 

to the detailed information appearing elsewhere in this Offering Circular. Prospective purchasers of the 

Notes are advised to read carefully, and to rely solely on, the detailed information appearing elsewhere in 

this Offering Circular in making any decision whether or not to invest in any Notes. Capitalised terms used, 

but not defined, in this section can be found elsewhere in this Offering Circular, unless otherwise stated. A 

schedule of defined terms is set out at the end of this Offering Circular. 

Issue of the Notes and advance of the Commercial Mortgage Loans 

On or about the Closing Date Société Générale will provide to each of the Paris Properties Borrowers, 

and CCF will provide to each of the Proudreed France Borrowers, a Commercial Mortgage Loan 

pursuant to the terms of two separate Commercial Mortgage Loan Agreements. The proceeds of each 

Commercial Mortgage Loan will be used in part to refinance existing mortgage loans (the ‘‘Existing 

Loans’’), as well as to finance inter-company loans and to pay certain expenses. 

On the Closing Date, the Issuer will issue the Notes and use the proceeds to purchase from the Lenders 

(in their capacities as Sellers) pursuant to a receivables transfer and servicing agreement entered into 

between the Management Company, acting in the name and on behalf of the Issuer, the Custodian and 

the Lenders the right to receive principal and interest (and related security) (the ‘‘Receivables’’) in respect 

of each Commercial Mortgage Loan. 

The Issuer will use receipts of principal and interest paid to it in respect of the Commercial Mortgage 

Loans together with any Hedging Payments from the Hedging Providers and any drawings from the 

Liquidity Facility to make payments of principal and interest due in respect of the Notes. 

Each Lender, acting in its capacity as FCC Servicer, will continue to perform the servicing and collection 

of amounts due under the Commercial Mortgage Loan in respect of which it was the Lender of record. 

The Lenders (whether in their capacity as Lenders, as FCC Servicers or in any other capacity) will not be 

responsible for and will not guarantee the performance of the obligations of the Obligors under the 

Commercial Mortgage Loans or the performance of the obligations of the Issuer under the Notes. The 

ability of the Issuer to make payments of principal and interest due in respect of the Notes is ultimately 

dependent on the ability of the Borrowers to make payments of principal and interest due in respect of 

the Commercial Mortgage Loans, which is unrelated to the creditworthiness of the Lenders. 

In order to secure its obligations as Borrower under its Commercial Mortgage Loan and the other 

Transaction Documents to which it will be a party each Borrower will transfer (by way of subrogation) 

to the Lenders the existing mortgages and lender’s liens securing its Existing Loans. The Borrowers will 

grant to the Lenders additional security over all of its Property Portfolio, including an assignment of its 

rights to any rental income relating to the properties contained within its Property Portfolio and under 

any insurance policies relating to its Property Portfolio, and security over its bank accounts. The Parent 

Obligors (where applicable) will also grant security over the shares which they hold in the Borrowers. 

Such security interests will be transferred to the Issuer upon the transfer of the Receivables to the Issuer. 

Rental and other income of each of the Borrowers will be collected in a Borrower Transaction Account 

and other charged accounts of each Borrower from which monies may be released to the relevant 

Borrower once prior ranking payments have been made (See ‘‘Resources Available to the Borrowers and 

the Issuer – Borrower Accounts’’). 

Certain of the Borrowers are finance lessees under finance leases entered into with third party finance 

lessors with respect to a limited number of properties that are not included in either of the Property 

Portfolios. Rents due by the relevant Borrowers to the finance lessors will be paid in priority to interest, 

principal and other amounts due by the Borrowers under the Commercial Mortgage Loans (See ‘‘Risk 

Factors – Risks relating to the existing Finance Leases’’). 

Liquidity Facility 

On or before the Closing Date, the Issuer will enter into a 364 day revolving euro liquidity facility 

agreement with the Liquidity Facility Provider. 

If the Management Company (on behalf of the Issuer) determines on any Determination Date that there 

will be a Liquidity Shortfall, the Management Company (on behalf of the Issuer) shall, on the date that 

11

is one Business Day following such Determination Date, deliver a drawdown request under the Liquidity 

Facility requesting a liquidity drawing to be made on the relevant Interest Payment Date. Any amounts 

drawn under the Liquidity Facility shall be repaid in accordance with the relevant Issuer Priority of 

Payments, together with interest thereon, on the next Interest Payment Date on which the Issuer has 

funds in the relevant currency available for the purpose. 

The Liquidity Facility can only be drawn to cover a Liquidity Shortfall if, after such drawing, the 

aggregate of the outstanding liquidity advances does not exceed u26 million (as reduced in proportion to 

reductions in the Principal Amount Outstanding on the Notes). 

Hedging 

The Issuer will hedge the interest rates payable on the Notes through a combination of swaps and interest 

rate caps entered into with the Hedging Providers (each such transaction being a ‘‘Hedging Agreement’’). 

Under each Commercial Mortgage Loan Agreement, the relevant Borrower will be obliged to pay to the 

Issuer, as part of the On-going Facility Fee, an amount equal to any breakage costs arising under such 

Hedging Agreements as a result of the Issuer adjusting its hedging activities to reflect the prepayment of 

the Notes due to a prepayment by that Borrower. For this purpose, the Issuer’s hedging activities shall be 

notionally allocated to each underlying Commercial Mortgage Loan in proportion to the principal 

amounts outstanding per Borrower under its Commercial Mortgage Loan. Alternatively, the Issuer may 

adjust its hedging activities by disposing of the excess hedging arrangements to the company that was the 

Borrower whose repayment of the relevant Commercial Mortgage Loan in full initiated the adjustment 

of such hedging. 

12

TRANSACTION PARTIES 

The Issuer 

FCC Proudreed Properties 2005, a French fonds commun de créances (debt mutual fund) governed by the 

provisions of Articles L. 214-43 to L. 214-49 and Articles R.214-92 to R.214-115 of the French Monetary 

and Financial Code and the Issuer Regulations. The Issuer will not have full legal personality but will be 

represented in its activities by the Management Company. The Issuer will be jointly established on the 

Closing Date by the Custodian and the Management Company. The activities of the Issuer will be 

restricted to acquiring the Receivables arising under the Commercial Mortgage Loans made by the 

Lenders to the Borrowers, issuing the Units and Notes, and to undertaking activities ancillary thereto. 

The Management Company 

Eurotitrisation, a limited liability company (société anonyme) incorporated under, and governed by, the 

laws of France, whose registered office is at 20, rue Chauchat, 75009 Paris, France, registered with the 

Trade and Companies Register (Registre du Commerce et des Sociétés) of Paris under number B 352 458 

368, licensed by, and subject to the supervision and regulation of, the Autorité des Marchés Financiers, as 

a management company of debts mutual funds (société de gestion de fonds communs de créances). On the 

date of this Offering Circular, Eurotitrisation has a share capital of euro 684,000 and its principal 

shareholders are BNP Paribas, IXIS CIB and CALYON. The principal officer of the Management 

Company is Jean-Marc Léger, whose business address is also at 20, rue Chauchat, 75009 Paris, France. For 

further information about the role of the Management Company, see the section entitled ‘‘FCC Proudreed 

Properties 2005 (The Issuer) – Role of the Management Company’’. 

The Custodian 

CCF will be the Custodian of the Issuer. For further information about CCF see the section entitled ‘‘The 

Lenders’’ below. For further information about the role of the Custodian, see the section entitled ‘‘FCC 

Proudreed Properties 2005 (The Issuer) – Role of the Custodian’’. 

The Lenders 

Société Générale 

Société Générale S.A. is a French limited liability company (société anonyme) licensed as a credit 

institution (établissement de crédit) under the French Monetary and Financial Code (formerly law 

No. 84-46 of 24 January 1984 relating to banking activities and the supervision of credit institutions) and 

is registered in France in the Commercial Register under number 552 120 222 RCS Paris. It has its 

registered office at 29 Boulevard Haussman, 75009 Paris and its head office at 17 Cours Valmy, 97972 Paris 

La Defense. For further information in relation to Société Générale see the section entitled ‘‘The Hedging 

Providers – Société Générale’’. 

CCF 

CCF is incorporated under and governed by the laws of France, is licensed as a credit institution 

(établissement de crédit) under the French Monetary and Financial Code (formerly law No. 84-46 of 

24 January 1984 relating to banking activities and the supervision of credit institutions) and is registered 

in France in the Commercial Register under number 775 670 284 RCS Paris. It has its registered and head 

office at 103 avenue des Champs Elysées, 75008 Paris. 

The Borrowers 

(a) The Paris Properties Borrowers 

SCI 7, rue d’Amiens is a French company with unlimited liability (société civile immobilière) and is 

registered in France in the Commercial Register under number 379 418 536 RCS Paris. 

SCI Beaulieu Properties is a French company with unlimited liability (société civile immobilière) and is 


SCI Annapaul is a French company with unlimited liability (société civile immobilière) and is registered 

in France in the Commercial Register under number 380 332 825 RCS Paris. 

13

SARL Enoville is a French limited liability company (société à responsabilité limitée) and is registered in 

France in the Commercial Register under number 429 308 323 RCS Paris. 

SARL Les Hauteurs du Loing is a French limited liability company (société à responsabilité limitée) and 

is registered in France in the Commercial Register under number 408 772 572 RCS Paris. 

SARL Immobilière Menelas is a French limited liability company (société à responsabilité limitée) and is 


SAS IDB Immobilier is a French limited liability company (société par actions simplifiée) and is registered 

in France in the Commercial Register under number 302 181 870 RCS Paris. 

SARL PPMPP is a French limited liability company (société à responsabilité limitée) and is registered in 


SCI Paris Provinces Properties is a French company with unlimited liability (société civile immobilière) 

and is registered in France in the Commercial Register under number 433 741 188 RCS Paris. 

(b) The Proudreed France Borrowers 

SARL Proudreed France is a French limited liability company (société à responsabilité limitée) and is 


SCI DEP-Immo-Comm is a French company with unlimited liability (société civile immobilière) and is 


SCI 2PI is a French company with unlimited liability (société civile immobilière) and is registered in 


The Parent Obligors 

(a) The Paris Properties Parent Obligors 

SCI Paris Provinces Properties, a société civile immobilière incorporated under the laws of France, with 

its registered office at 36, avenue Hoche, 75008 Paris, registered with the Trade and Companies Register 

of Paris under number 433 741 188. 

SPCR SAS, a société par actions simplifée incorporated under the laws of France, with its registered office 

at 36, avenue Hoche, 75008 Paris, registered with the Trade and Companies Register of Paris under 

number 451 608 418. 

SCI Beaulieu Properties, a société civile immobilière incorporated under the laws of France, with its 

registered office at 36, avenue Hoche, 75008 Paris, registered with the Trade and Companies Register of 

Paris under number 444 00 796. 

Ringmerit Limited, a private limited liability company incorporated under the laws of England and Wales, 

with its registered office at 4 Prince George Street, Havant, Hampshire, PO9 1BG registered at 

Companies House under number 4064774. 

SARL Immobilière Menelas, a société à responsabilité limitée incorporated under the laws of France, with 

its registered office at 36, avenue Hoche, 75008 Paris, registered with the Trade and Companies Register 

of Paris under number 434 127 197. 

Paris Properties SARL, a société à responsabilité limitée incorporated under the laws of France, with its 



(b) The Proudreed France Parent Obligors 

Proudreed Limited, a private limited liability company incorporated under the laws of England and 

Wales, with its registered office at 16 Carlton Crescent, Southampton, SO15 2ES, registered at Companies 

House under number 1581476. 

Proudreed France SARL, a société à responsabilité limitée incorporated under the laws of France, with its 



Jean-Pierre Raynal is a French citizen and a resident of France, having his address at 71 Avenue des 

Ternes, 75017, Paris, France. 

14

The Property Manager 

French Investment Portfolio Asset Management (‘‘FIPAM’’) was incorporated on 27 June 2001 

(registered number B 438 302 044) as a limited company (société à responsibilité limitée) under the laws 

of France. The registered office of FIPAM is at 36, avenue Hoche, 75008 Paris. The Property Manager 

provides property management services in relation to the Secured Properties located in France on behalf 

of the Borrowers, including, inter alia, monitoring and inspecting the Secured Properties to ensure that 

they are kept in good repair and that the terms of the Occupational Leases relating thereto are otherwise 

complied with (including the collection of rents from the Occupational Tenants and the allocation of such 

amounts to pay expenses relating to the Secured Properties) pursuant to the terms of separate Property 

Management Agreements with each Borrower. On the Closing Date, the Property Manager will enter into 

a Property Manager Duty of Care Agreement with, inter alios, the Management Company. From the 

Closing Date, the Property Manager will act in accordance with the terms of the Property Management 

Agreements and the Property Manager Duty of Care Agreement. For further details as to the Property 

Manager and the role it performs, see further the sections entitled ‘‘Summary of Principal Documents – 

The Property Management Agreements’’ and ‘‘The Property Manager’’ below. 

The FCC Servicers 

Each of Société Générale and CCF will act as FCC Servicer in respect of the Commercial Mortgage Loans 

originated by them, and in that capacity will continue to perform the servicing of the relevant Commercial 

Mortgage Loan. For further information in relation to Société Générale and CCF, see ‘‘The Lenders’’ 

above. For further details as to the role of the FCC Servicers, see the section entitled ‘‘Summary of 

Principal Documents – The Receivables Transfer and Servicing Agreement − Management of the 

Receivables and Related Rights − Role and Duties of the FCC Servicers’’ below. 

The Noteholder Representative 

Association de Représentation des Masses de Titulaires de Valeurs Mobilières, of Centre Jacques 

Ferronnière, 32, rue du Champ de Tir, B.P. 81236, 44312 Nantes Cedex 3, France, will be the initial 

Noteholder Representative in respect of each Class of Notes. 

Principal Paying Agent 

HSBC Bank plc acting through its office at 8 Canada Square, London, E14 5HQ, United Kingdom, will 

be appointed to act as Principal Paying Agent under the Paying Agency Agreement. 

Irish Paying Agent 

HSBC Institutional Trust Services (Ireland) Limited, acting through its office at HSBC House, Harcourt 

Centre, Harcourt Street, Dublin 2, Ireland, will be appointed to act as paying agent in Ireland under the 

Paying Agency Agreement. 

The Issuer Account Bank and Cash Manager 

CCF will be appointed by the Issuer to operate (acting on the instructions of the Management Company) 

the Issuer Transaction Account, the Mortgage Reserve Accounts and the Liquidity Facility Standby 

Account on behalf of the Issuer and will maintain such accounts and the monies held therein in 

accordance with the Issuer Account Bank and Cash Management Agreement and the Transaction 

Documents. 

The Borrowers Account Banks 

The accounts of the Borrowers will be held with Société Générale and CCF as Borrowers Account Banks. 

The Liquidity Facility Provider 

CCF will, on the Closing Date, provide a euro Liquidity Facility to the Issuer pursuant to the Liquidity 

Facility Agreement. See further the section entitled ‘‘Summary of Principal Documents – The Liquidity 

Facility’’ below for a description of the Liquidity Facility and the section entitled ‘‘The Liquidity Facility 

Provider’’ for a description of the Liquidity Facility Provider. 

The Hedging Providers 

Each of HSBC Bank plc and Société Générale will, on the Closing Date, enter into certain hedging 

arrangements (in the form of swaps and interest rate caps) with the Issuer pursuant to the terms of the 

15

Hedging Agreements. For a description of the Hedging Providers see the section entitled ‘‘The Hedging 

Providers’’ below and for a description of the terms of the various hedging arrangements see further the 

section entitled ‘‘Resources Available to the Borrowers and the Issuer – The Hedging Agreements’’ below. 

Transaction Reporting 

Eurotitrisation will, pursuant to the Issuer Regulations, provide reporting services and will make 

information relating to the transaction available on their website (www.eurotitrisation.fr) for the benefit 

of, among others, the Noteholders. 

16

KEY CHARACTERISTICS OF THE PROPERTY PORTFOLIOS 

Overview 


The Property Portfolio of the Proudreed France Borrowers comprises 35 properties located in France. 

The Property Portfolio of the Proudreed France Borrowers has a net internal area of approximately 

293,945 sq. meters, of which 31,697 sq. meters are currently vacant. 

The properties making up the Property Portfolio of the Proudreed France Borrowers have been valued 

at u149,330,000 by Savills as at 31 May 2005 (34 properties) and Atis Real as at 30 June 2005 (one 

property). The Market Value, together with a description of the methodologies used to derive the values, 

is set out in the Valuation Reports contained in the section entitled ‘‘Valuation Report’’ below. 

For further details as to the risks associated with valuations, please see the section entitled ‘‘Risk Factors 

– reliance on valuation’’ below. 

There are approximately 122 individual Occupational Leases within the Property Portfolio of the 

Proudreed France Borrowers, and the total rent per annum, as at 31 August 2005 was u13,703,301. The 

top five tenants in terms of rental income as at 31 August 2005 accounted for approximately 30.7% of the 

total rental income of the Property Portfolio of the Proudreed France Borrowers. 

Paris Properties Borrowers 

The Property Portfolio of the Paris Properties Borrowers comprises 99 properties located in France. The 

Property Portfolio of the Paris Properties Borrowers has a net internal area of approximately 833,519 sq. 

meters, of which 65,400 sq. meters are currently vacant. 

The properties making up the Property Portfolio of the Paris Properties Borrowers have been valued at 

u418,395,000 by Savills as at 31 May 2005 (98 properties) and August 2005 (one property). The Market 

Value, together with a description of the methodologies used to derive the values, is set out in the 

Valuation Reports contained in the section entitled ‘‘Valuation Report’’ below. 



There are approximately 300 individual Occupational Leases within the Property Portfolio of the Paris 

Properties Borrowers, and the total rent per annum, as at 31 August 2005 was u40,000,701. The top five 

tenants in terms of rental income as at 31 August 2005 accounted for approximately 37.3% of the total 

rental income of the Property Portfolio of the Paris Properties Borrowers. 

Main features of Occupational Leases 

According to the report produced by Orrick, Herrington & Sutcliffe (the ‘‘Orrick Report’’) which was 

based on a sample of 77 Leases representing approximately 66 per cent of total gross income on the 

properties comprised within the combined Property Portfolio of the Proudreed France Borrowers and the 

Paris Properties Borrowers, 97% of the Occupational Leases are commercial leases subject to the 

provisions of Article L 145-1 and seq. of the French commercial Code. Most Occupational Leases provide 

for rents (plus VAT) to be paid by the tenants quarterly in advance and subject to yearly indexation 

pursuant to the variation of the INSEE Construction Cost Index (Indice INSEE du coût de la 

construction). Some Occupational Leases provide for the tenant to be responsible for minor repair, for 

works due to wear and tear, and to contribute to major repair, insurance property tax and management 

of the relevant property through service charges. When any such Occupational Lease expires it could be 

extended for an undetermined period unless the landlord issues a notice to vacate the premises either (i) 

with an offer to renew the Occupational Lease, which, once accepted by the tenant, could result in the 

Occupational Lease being renewed or (ii) without an offer to renew in which case, the landlord may have 

to pay the tenant an eviction indemnity (indemnité d’éviction). See the section entitled ‘‘Risk Factors – 

Release from performance and statutory rights of Occupational Tenants’’. 

Property Portfolio Valuation 

The Market Value, together with a description of the methodologies used to derive the values, is set out 

in the Valuation Report contained in the section entitled ‘‘Valuation Report’’ below. 

17



Certificates of Title 

A Certificate of Title in respect of each property in the Property Portfolio will be given on the Closing 

Date by Etude Notariale S. Durand des Aulnois, C. Pisani, A. Thabeault and E. Dubost Notaires Associés 

(the ‘‘Notary’’). 

The Certificates of Title will address the quality of title of each property in the above Property Portfolios 

as well as matters relating to planning and building permits, and will be issued on the basis of the Notary’s 

review of the title documents supplied by the relevant Borrower and searches and enquiries. 

French notaries are ‘‘officiers ministeriels’’ (officers of the Secretary of Justice). They are independent 

legal experts appointed by the French Secretary of Justice. It is the duty of notaries to investigate title and 

to advise the parties if a problem of title arises. Notaries are personally liable for their professional 

activities. They are liable for any damage caused to their client through negligence committed in their 

professional capacity. In particular, a notary would be held liable for any undisclosed or unidentified 

problem relating to title to property transferred under that notary’s responsibility. In addition, notaries are 

jointly liable for the damages caused to notaries’ clients taken as a whole. Notaries are required to have 

insurance policies covering professional liability with any excess covered by French notaries taken as a 

whole, who are jointly liable. 

The Certificates of Title do not include a review of any Occupational Leases. A separate report on a 

sample of 77 Occupational Leases has been prepared by Orrick, Herrington & Sutcliffe. 

Statistical Analysis 

Unless stated otherwise, (a) all references in the tables below to Market Value, Estimated Rental Value, 

Vacant Possession Value, Net Initial Yield, Reversionary Yield and Net Equivalent Yield of a Property 

Portfolio are to those existing as at 31 May 2005 and June 2005 and August 2005 contained in the Valuation 

Reports, and (b) all references in the tables below to Passing Rent, Square Meters, Occupancy, Year Built, 

Year Refurbished, Total Net Internal Floor Area, Number of Units, Number of Tenants, Property Tenure, 

Ground Rent, Total Vacant Area and Lettable Area of a Property Portfolio are to those existing as at 

31 August 2005. 

Proudreed France 

1. Summary description of the Property Portfolio 

Property Name Property address Type Region 

Passing 

Rent (w) 

ERV (w) 

Market 

Value (w) 

Sq. 

meters 

Occupancy 

Valbonne Pôle de la Peire - 1047 

route des Dolines 

Ormes 

Lieudit Les Sablons 

45, rue de Paradis 

Office 

Warehouse/ 

Distribution 

Sucy en B. ZI du Marais Warehouse/ 

Distribution 

Vitrolles ZAC de l’Anjoly Warehouse/ 

Distribution 

Checy 

Centre commercial de 

Chécy Belles Rives 

Shopping 

Center 

Epône ZI Epône 1 Warehouse/ 

Distribution 

Saint Denis 

Aubagne 

103/105 rue Charles 

Michel 

ZAC du Parc 

Napoléon 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Choisy le R. 114, avenue 

d’Alfortville 

Office 

Vitry 64, rue Charles Heller Warehouse/ 

Distribution 

Provence- 

Alpes-Côte 

d’Azur 

1,061,082 803,550 12,870,000 4,870 100% 

Centre 865,341 914,900 8,890,000 27,684 100% 

East 

Ile-de-France 

Provence- 

Alpes-Côte 

d’Azur 

791,859 722,041 6,660,000 15,134 100% 

739,800 1,000,896 7,440,000 31,278 100% 

Centre 635,094 626,000 6,510,000 3,211 100% 

West 

Ile-de-France 

East 

Ile-de-France 

Provence- 

Alpes-Côte 

d’Azur 

East 

Ile-de-France 

East 

Ile-de-France 

608,852 525,320 6,420,000 11,420 100% 

570,822 763,823 7,410,000 11,843 87% 

549,943 545,854 5,760,000 13,414 100% 

531,616 610,196 5,420,000 7,394 86% 

509,948 469,768 4,840,000 9,034 100% 

18


Passing 

Rent (w) 

ERV (w) 

Market 

Value (w) 

Sq. 

meters 

Occupancy 

Meyzieu 8/10, impasse Monge Warehouse/ 

Distribution 

Rhône-Alpes 497,154 473,715 4,700,000 10,890 100% 

La Pen. sur Huv. Actiparc II Office Provence- 

Alpes-Côte 

d’Azur 

440,357 442,000 3,850,000 4,680 100% 

Creil 344, rue de Galilée Warehouse/ 

Distribution 

Picardie 437,601 437,601 4,190,000 12,288 100% 

Genevilliers 

Salon de Prov. 

50/70, avenue Ch. de 

Gaulle 

ZI du Quintin - rue de 

Canesteu 

Mixed Use 

Warehouse/ 

Distribution 

West 

Ile-de-France 

Provence- 

Alpes-Côte 

d’Azur 

431,734 399,636 3,760,000 8,448 100% 

413,973 411,760 3,770,000 8,958 100% 

Villeneuve La G. 14 Chemin de la Litte Mixed Use West 

379,820 322,675 3,330,000 3,425 100% 

Ile-de-France 

Goincourt 31, rue Juliette 

Névouet 

Retail Picardie 362,913 390,050 3,970,000 7,801 100% 

Orly 

13, chemin des 

Chaudronniers 94310 

Orly 

Warehouse/ 

Distribution 

Creil ZAC Alata Warehouse/ 

Distribution 

Marseille 

ZAC de Saumaty Seon 

- 70 chemin de passet 

Warehouse/ 

Distribution 

East 

Ile-de-France 

360,723 339,294 3,340,000 6,707 100% 

Picardie 355,536 323,500 3,950,000 3,260 100% 

Provence- 

Alpes-Côte 

d’Azur 

Evry 5, rue Jean Mermoz Office South West 

Ile-de-France 

Neuilly Sur 

Marne 

Thiais 

ZI des Chanoux 45, 

rue des frères Lumière 

Zone industrielle Senia 

Sud 23, rue du Puits 

Dixme 94320 Thiais 

Vitry 

44/52, rue Georges 

Sand 

Vitry Rue G. Sand - rue B. 

Albrecht 

Brie Comte 

Robert 

Gonesse 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Industrial 

Warehouse/ 

Distribution 

East 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

250, allée des Pleus Mixed Use East 

Ile-de-France 

16, rue des 

Cressonières 

Warehouse/ 

Distribution 

North West 

Ile-de-France 

Valenciennes 201, av Désendrouins Industrial Nord-Pas-de- 

Calais 

Mitry Mory Rue Isaac Newton Mixed Use East 

Ile-de-France 

La Chap. sur E. Parc d’Activités Erdre Warehouse/ 

Distribution 

St J. de la Lande ZAC de Mivoie Warehouse/ 

Distribution 

Lisses 

7, rue des Mâlines Mixed Use 

91090 Lisses 

Domène 

Parc d’activités du 

Peuplier 

Warehouse/ 

Distribution 

Pays de la 

Loire 

354,192 275,400 2,900,000 4,590 100% 

315,909 319,350 3,320,000 4,184 100% 

299,851 251,648 2,690,000 4,959 100% 

290,773 282,200 2,720,000 5,644 100% 

287,178 250,725 3,220,000 3,343 100% 

258,646 253,350 2,670,000 2,815 100% 

230,728 300,985 2,590,000 3,541 100% 

204,028 184,900 1,920,000 4,300 100% 

191,732 298,575 1,830,000 19,135 100% 

149,650 238,000 1,730,000 2,800 100% 

141,753 136,000 1,560,000 2,100 100% 

Bretagne 139,331 136,240 1,420,000 2,096 100% 

East 

Ile-de-France 

136,089 131,725 1,370,000 2,395 100% 

Rhône-Alpes 122,915 78,910 990,000 1,214 100% 

Saint Denis ZAC du Cornillon Mixed Use East 

36,359 283,000 2,240,000 2,200 0% 

Ile-de-France 

Ormes Parc d’activités Pôle 45 Warehouse/ 

Distribution 

Centre 0 1,129,380 9,080,000 26,890 0% 

Total Proudreed (Total Occupancy rate is based on weighted average) 13,703,301 15,072,966 149,330,000 293,945 89% 

19

2. Tenant Concentration (Top 10 Tenants) 

Tenant Name 

Passing 

Rent (w) 

% of 

total 

Sq. 

meters 

% of 

total 

Property/Properties 

occupied 

Rating (S&P/ 

Fitch) 

NORTEL 1,061,082 7.7% 4,870 1.7% Valbonne B−/NR 

ND LOGISTICS 865,341 6.3% 27,684 9.4% Ormes NR/NR 

SERPIE 791,859 5.8% 15,134 5.1% Sucy en B. NR/NR 

TNT 739,800 5.4% 31,278 10.6% Vitrolles A/NR 

AUCHAN 608,852 4.4% 11,420 3.9% Epône A/NR 

EASYDIS 549,943 4.0% 13,414 4.6% Aubagne NR/NR 

NESTLE 520,154 3.8% 11,120 3.8% Several Properties AAA/AAA 

EXTAND 516,605 3.8% 7,259 2.5% Several Properties NR/NR 

PILKINGTON 509,948 3.7% 9,034 3.1% Evry BBB/NR 

CARREFOUR 451,998 3.3% 6,579 2.2% Several Properties A+/A+ 

Sub Total Top 10 

Tenants 6,615,583 

TOTAL Proudreed 13,703,301 

3. Lease type and length of lease 

Summary of Lease Types 

Lease Type Passing Rent (w) % of Total 

Short Term 18,937 0.14% 

Commercial 6,445,056 47.03% 

Long Term 7,219,487 52.68% 

Other 19,821 0.14% 

Total Proudreed 13,703,301 100% 

Summary of Expiry of Occupational Leases 

Year of expiration 

Number 

of Leases 

Passing 

Rent (w) 

% of total 

Cumulative % 

of Passing Rent 

2005 8 1,367,475 10.0% 10.0% 

2006 5 842,223 6.1% 16.1% 

2007 7 484,856 3.5% 19.7% 

2008 7 398,730 2.9% 22.6% 

2009 9 551,515 4.0% 26.6% 

2010 11 1,048,368 7.7% 34.2% 

2011 24 2,808,991 20.5% 54.7% 

2012 11 768,048 5.6% 60.4% 

2013 21 3,285,870 24.0% 84.3% 

2014 13 1,573,761 11.5% 95.8% 

2015 1 14,749 0.1% 95.9% 

2016 4 553,228 4.0% 100.0% 

2017 0 0 0.0% 100.0% 

2018 1 5,488 0.0% 100.0% 

Total Proudreed 122 13,703,301 100% 

20


Summary of Expiry of Occupational Leases (assuming exercise of first break option) 

Year of break option 

Number 

of Leases 

Passing 

Rent (w) 

% of total 

Cumulative % 


2005 10 1,393,796 10.2% 10.2% 

2006 22 1,836,550 13.4% 23.6% 

2007 33 2,385,224 17.4% 41.0% 

2008 34 3,349,657 24.4% 65.4% 

2009 6 857,139 6.3% 71.7% 

2010 6 1,564,810 11.4% 83.1% 

2011 5 540,751 3.9% 87.0% 

2012 0 0 0.0% 87.0% 

2013 2 1,220,876 8.9% 96.0% 

2014 2 380,378 2.8% 98.7% 

2015 0 0 0.0% 98.7% 

2016 1 168,633 1.2% 100.0% 

2017 0 0 0.0% 100.0% 

2018 1 5,488 0.0% 100.0% 

Total Proudreed 122 13,703,301 100% 

4. Regional Weightings 

Region 

Number of 

Properties 

Aggregate 

Property 

Value (w) 

% by 

Aggregate 

Property 

Value 

Lettable 

Area 

(Sq.meters) 

Passing 

Rent (per 

Sq. meters) 

Passing 

Rent (w) 

Total 

Vacant 

Area 

(Sq. meters) 

East Ile-de-France 13 46,900,000 31.4% 77,809 57 4,454,242 4,807 

West Ile-de-France 3 13,510,000 9.0% 23,293 61 1,420,407 0 

South West Ile-de-France 1 3,320,000 2.2% 4,184 76 315,909 0 

North West Ile-de-France 1 1,920,000 1.3% 4,300 47 204,028 0 

Provence-Alpes-Côte 

d’Azur 6 36,590,000 24.5% 67,790 53 3,559,347 0 

Centre 3 24,480,000 16.4% 57,785 26 1,500,435 26,890 

Picardie 3 12,110,000 8.1% 23,349 50 1,156,049 0 

Rhône-Alpes 2 5,690,000 3.8% 12,104 51 620,070 0 

Nord-Pas-de-Calais 1 1,830,000 1.2% 19,135 10 191,732 0 

Pays de la Loire 1 1,560,000 1.0% 2,100 68 141,753 0 

Bretagne 1 1,420,000 1.0% 2,096 66 139,331 0 

Total Proudreed 35 149,330,000 100% 293,945 51 13,703,301 31,697 

5. Property Size 

From 

Sq. meters 

To 

Sq. meters 

Number of 


Aggregate 

Property 

Value 

(w) 

% by 

Aggregate 

Property 

Value 

Lettable 

Area 

(Sq. meters) 

Passing 

Rent (per 

Sq. meters) 

Passing 

Rent 

(w) 

Total 

Vacant 

Area 

(Sq. meters) 

0 2,500 5 7,580,000 5.10% 10,005 58 576,447 2,200 

2,500 5,000 13 51,550,000 34.50% 49,978 99 4,972,069 0 

5,000 7,500 3 11,480,000 7.70% 19,745 60 1,183,112 1,013 

7,500 10,000 4 16,340,000 10.90% 34,241 50 1,718,569 0 

10,000 25,000 7 36,970,000 24.80% 94,124 39 3,647,963 1,594 

25,000 75,000 3 25,410,000 17.00% 85,852 19 1,605,141 26,890 

Total 35 149,330,000 100.00% 293,945 54 13,703,301 31,697 

21

6. Sectoral Weightings: (Industrial Warehouse, Retail, Office, etc) 

Sector 

Number of 


Aggregate 

Property 

Value (w) 

% by 

Aggregate 

Property 

Value 

Lettable 

Area 

(Sq. meters) 

Passing 

Rent 

(per 

Sq. meters) 

Passing 

Rent 

(w) 

Total 

Vacant 

Area 

(Sq. metres) 

Warehouse/Distribution 21 93,320,000 62.5% 216,518 39 8,513,041 28,484 

Office 4 25,460,000 17.0% 21,128 111 2,348,963 1,013 

Retail and Shopping 

Center 2 10,480,000 7.0% 11,012 91 998,007 0 

Mixed Use 6 15,020,000 10.1% 22,809 60 1,364,380 2,200 

Industrial 2 5,050,000 3.4% 22,478 21 478,909 0 

Retail 1 3,970,000 2.7% 7,801 47 362,913 0 

Shopping Center 1 6,510,000 4.4% 3,211 198 635,094 0 

Total 35 149,330,000 100% 293,945 64 13,703,301 31,697 

7. Details of the Top Five Properties by Passing Rent 

Property Number 1 

Property Name 

Valbonne 

Property Type 

Office 

Region 

Provence-Alpes-Côte d’Azur 

Year Built 1992 

Year Refurbished 

N/A 

Total Net Internal Floor Area (Sq.meters) 4,870 

Occupancy Rate (%) 100% 

Market Value (u) 12,870,000 

Vacant Possession Value (u) 9,220,000 

Current Annual Rent (u) 1,061,082 

ERV (u) 803,550 

Number of Units 1 

Number of Tenants 1 

Initial Yield 8.58% 

Reversionary Yield 6.50% 


Property Name 

Ormes 

Property Type 

Warehouse/Distribution 

Region 

Centre 



N/A 





Current Annual Rent (u) 865,341 

ERV (u) 914,900 





22


Property Name Sucy en B. 

Property Type 


Region 

East Ile-de-France 



N/A 






ERV (u) 722,041 






Property Name 

Vitrolles 

Property Type 


Region 

Provence-Alpes-Côte d’Azur 


Year Refurbished 2006 






ERV (u) 1,000,896 






Property Name 

Checy 

Property Type 

Shopping Center 

Region 

Centre 



N/A 

Total Net Internal Floor Area (Sq.meters) 3 211 





ERV (u) 626,000 



Initial Yield 

N/A 


23

Paris Properties 

1. Summary description of the Property Portfolio 


Passing 

Rent 

(w) 

ERV (w) 

Market 

Value 

(w) 

Sq. 

meters 

Occupancy 

St Quentin Fallavier 

Corbeil 

Antony 

Fleury Les Aubrais 

6, rue de Bretagne 

(38) ZAC de chesnes 

La Noiree 

14/24, rue Emile Zola 

- ZI des Tarterêts 

12/14, avenue François 

Sommer 

ZI de Fleury les 

Aubrais 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Rhône-Alpes 2,212,272 2,086,558 21,910,000 73,253 100% 

South West 

Ile-de-France 

West 

Ile-de-France 

Rueil Malmaison 8, rue Lionel Terray Office West 

Ile-de-France 

Mer 

Chatillon-sur-Seiche 

Chapelle 

d’Armentières 

Marly la Ville 

Saint-Aubin 

Clamart 

Les Ulis 

Zone industrielle du 

Mardeau 

Zac de la Touche 

Tizon (35) 

rue Laennec ( 59) ZI 

de la Chapelle 

d’Armantières 

ZAC de Moimont II, 

rue Eugène Pottier 

Route de l’Orme des 

Merisiers ‘‘Le Thales’’ 

Parc des Algorithmes 

383 av. du Général De 

Gaulle 

6,av de l’océanie ZA 

Courtaboeuf. Le grand 

Vivier SUD 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Office 

Office 

Warehouse/ 

Distribution 

Alfortville 

2 Quai Blanqui /4rue 

de Charenton 

Office 

Raillencourt St. Olle ZI de l’A2 (59) Warehouse/ 

Distribution 

Rosny-sur-Seine 

Villeneuve d’Asq 

Zone d’activités des 

Marceaux 

Rue Ticleni, rue Paul 

Doumer 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

1,900,640 1,741,650 18,990,000 34,833 100% 

1,549,430 1,432,700 14,790,000 27,320 96% 

Centre 1,314,971 1,395,800 12,280,000 39,880 100% 

1,241,909 1,017,450 12,890,000 5,355 100% 

Centre 1,200,895 986,472 11,860,000 21,513 100% 

Bretagne 1,093,723 995,460 11,910,000 16,591 100% 

Nord-Pas-de- 

Calais 

North West 

Ile-de-France 

South West 

Ile-de-France 

West 

Ile-de-France 

South West 

Ile-de-France 

East 

Ile-de-France 

Nord-Pas-de- 

Calais 

West 

Ile-de-France 

Nord-Pas-de- 

Calais 

Massy 2/4, avenue de France Office South West 

Ile-de-France 

Nemours 1, rue Henri Nestlé Warehouse/ 

Distribution 

Argenteuil 11, rue Poulmarch Warehouse/ 

Distribution 

Stains 7, rue d’Amiens Warehouse/ 

Distribution 

Orange , Les 

Crémades Ouest 

Genas 

Orly 

rue du Portugal, rue 

Henri Dunant. Lieudit 

‘‘Chaponnet’’ 

66, rue des frères 

Montgolfier 

rue des quinze Arpent. 

Zone de sénia 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

East 

Ile-de-France 

North West 

Ile-de-France 

East 

Ile-de-France 

Provence- 

Alpes-Côte 

d’Azur 

1,025,913 1,090,000 10,720,000 32,804 100% 

999,065 978,360 10,590,000 21,840 55% 

934,231 839,700 9,730,000 6,220 100% 

933,824 848,205 9,410,000 6,283 100% 

919,210 1,060,065 9,540,000 23,557 100% 

880,314 778,228 7,340,000 6,362 100% 

856,793 890,000 8,210,000 14,060 100% 

727,959 706,160 7,980,000 10,864 100% 

727,035 516,511 7,090,000 12,023 100% 

689,627 486,180 5,790,000 5,332 100% 

670,436 652,080 6,910,000 16,730 100% 

604,012 608,330 5,490,000 10,346 100% 

598,349 499,539 10,640,000 29,133 48% 

565,992 662,740 5,210,000 27,000 100% 

Rhône-Alpes 554,653 605,636 5,680,000 14,183 85% 

East 

Ile-de-France 

523,000 522,232 4,760,000 9,777 100% 

Pessac 3, rue Marcel Dassault Mixed Use Aquitaine 489,718 494,377 5,040,000 4,943 100% 

Vitry-sur-Seine 36,rue Charles Heller Mixed Use East 

486,223 452,130 4,960,000 6,459 100% 

Ile-de-France 

Bonchamp Laval ZI route du Mans, rue 

des Pierres 

Warehouse/ 

Distribution 

Pays de la 

Loire 

478,919 460,000 3,440,000 15,819 100% 

Nemours 

rue Henri Nestlé 

Lieudit ‘‘ Les Plantes’’ 

Warehouse/ 

Distribution 

Droue/Drouette Avenue de l’Europe Warehouse/ 

Distribution 

East 

Ile-de-France 

468,437 436,320 4,460,000 9,696 100% 

Centre 458,876 418,644 4,220,000 11,629 100% 

24


Passing 

Rent 

(w) 

ERV (w) 

Market 

Value 

(w) 

Sq. 

meters 

Occupancy 

Vénissieux Parc du Moulin à Vent Mixed Use Rhône-Alpes 456,444 591,200 4,190,000 5,912 100% 

Portes Les Val. Rue du Commandant Warehouse/ Rhône-Alpes 424,888 321,195 3,290,000 7,023 100% 

Cousteau 

Distribution 

Mitry-Mory Le Vinci 1,rue Becquerel Office East 

Ile-de-France 

402,934 366,090 3,650,000 4,567 98% 

Castelnau Le Lez 

96, Avenue Clément 

Ader 

Warehouse/ 

Distribution 

Languedoc- 

Roussillon 

Chevilly Larue 106 rue du Petit Leroy Office East 

Ile-de-France 

Saint Ouen 

Grisolles 

Aix en Provence 

Villeneuve La G. 

2/8, rue Albert 

Dhalenne 

Lieudit Grisolles les 

Molles 

325, avenue M. de 

Montrichet 

36 av 8 mai 1945 ZI 

des Reniers 

Office 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

St Laurent de M. Immeuble Le Vulcain Warehouse/ 

Distribution 

Trappes Les 

Bruyères 

Sartrouville 

Goussainville 

ZAC des B. av, Le 

Verrier. Les Bruyères 

209/217 rue Léon 

Jouhaux 

44 à 56 rue R.Moinon 

et rue Gaston 

Monmousseau 

Argenteuil 

13/15/17 rue Ambroise 

Croizat 

Sartrouville ZAC des Perriers, 35, 

rue Beauce 

Office 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Retail 

Warehouse/ 

Distribution 

Décines Charp. 61, rue Emile Zola Warehouse/ 

Distribution 

Lesquin (59) 

Trappes 

15 rue des Famards 

59810 Lesquin 

IMMOPARC route 

national 10 

Warehouse/ 

Distribution 

Office 

Villeneuve La G. 33 av 8 mai 1945 Warehouse/ 

Distribution 

Sainte Geneviève des 

Bois 

6, rue de la fosse aux 

Leux 91700 Ste 

Geneviève des Bois 

Warehouse/ 

Distribution 

Torcy 3, route de Noisiel Warehouse/ 

Distribution 

Villepinte ,Bâtiment 

M 

66, rue des Vanesses 

ZAC de Paris II Nord 

Office 

Villiers sur M. ZAC des Luats Warehouse/ 

Distribution 

Trappes 37, avenue Politzer Warehouse/ 

Distribution 

Sainte Catherine Les 

Arras 

Pontault Comb. 

Maurepas 

East 

Ile-de-France 

400,000 300,564 4,480,000 6,534 100% 

395,734 392,640 3,870,000 3,846 100% 

393,112 409,477 4,070,000 3,489 100% 

Midi-Pyrénées 387,646 365,456 3,570,000 6,526 100% 

Provence- 

Alpes-Côte 

d’Azur 

West 

Ile-de-France 

381,566 361,059 3,710,000 8,037 100% 

371,330 327,032 3,450,000 6,121 100% 

Rhône-Alpes 359,555 368,980 3,410,000 9,710 100% 

West 

Ile-de-France 

West 

Ile-de-France 

North West 

Ile-de-France 

North West 

Ile-de-France 

West 

Ile-de-France 

355,154 319,810 3,430,000 4,235 100% 

354,831 329,672 3,360,000 5,684 100% 

326,358 352,406 3,330,000 8,091 83% 

320,379 445,610 4,850,000 8,102 100% 

318,319 520,520 4,820,000 9,295 100% 

Rhône-Alpes 312,787 291,140 2,690,000 8,830 100% 

Rhône-Alpes 311,020 304,127 3,130,000 7,745 100% 

West 

Ile-de-France 

West 

Ile-de-France 

South West 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

West 

Ile-de-France 

162, route de Béthune Retail Nord-Pas-de- 

Calais 

ZI du Parc Saint 

Claude - Route de la 

Libération 

10 et 12 rue Marie 

Curie Zone d’activités 

ded Paris Ouest 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

East 

Ile-de-France 

West 

Ile-de-France 

306,893 357,990 3,310,000 3,525 80% 

301,895 249,110 2,690,000 4,673 100% 

300,150 656,208 6,190,000 14,265 41% 

298,390 260,380 2,730,000 5,540 100% 

293,164 288,060 2,730,000 2,891 100% 

290,641 264,768 2,760,000 5,516 100% 

288,743 255,000 2,720,000 3,400 100% 

283,684 273,250 2,490,000 10,930 100% 

258,205 311,450 3,090,000 5,450 82% 

254,035 457,490 3,720,000 8,318 55% 

Eragny sur Oise Parc des Bellevues Office North West 241,102 280,650 2,980,000 2,700 74% 

Ile-de-France 

Dardilly 

41, Chemin des 

Peupliers 

Office Rhône-Alpes 240,974 225,845 2,370,000 2,657 100% 

Sartrouville 

24/32, rue Jean-Pierre 

Timbaud 

Warehouse/ 

Distribution 

West 

Ile-de-France 

240,896 232,898 2,260,000 5,063 100% 

25


Passing 

Rent 

(w) 

ERV (w) 

Market 

Value 

(w) 

Sq. 

meters 

Occupancy 

Saint Herblain 

Saclay Orsay 

Chapelle 

d’Armentières 

Courcouronnes 

Veneux les Sablons 

Emerainville 

+Polyparc1 2è Tr 

8, avenue Jacques 

Cartier 

4, rue René Razel 

Dom.Technolo. 

rue Laennec ( 59) ZI 

de la Chapelle 

d’Armantières 

14, avenue du Bois de 

l’Epine 

Zone d’activités dez 

Veneux, 15 rue de la 

liberté 

18/24 av Vladimir 

Jankelevitch 

Office 

Office 

Warehouse/ 

Distribution 

Industrial 

Warehouse/ 

Distribution 

Office 

Pays de la 

Loire 

South West 

Ile-de-France 

Nord-Pas-de- 

Calais 

South West 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

Palaiseau Bâti. F 8,voie la Cardon Office South West 

Ile-de-France 

Le Thillay 

ZI Les Glirettes 28 rue 

Maurice Bertheaux 

Warehouse/ 

Distribution 

North West 

Ile-de-France 

Niort 2, rue Robert Tugot Retail Poitou- 

Charentes 

Templemars (59) 14, rue de l’Epinay - 

ZI 

St Pierre en Faucigny Rue des Champs Plans 

(74) 

Warehouse/ 

Distribution 

Warehouse/ 

Distribution 

Nord-Pas-de- 

Calais 

Villepinte 66, rue des Vanesses Office East 

Ile-de-France 

Evreux 

Aix en Provence 

Dardilly 

Tassin la Demi Lune 

St Pierre en Faucigny 

(74) 

ZI d’Evreux 1 rue 

Jacquard 

Zone commerciale de 

la Pidine, 660 rue 

Guillaume du Vair 

16/20, Chemin du 

Jubin 

16, Ch. du Professeur 

Deperet 

Warehouse/ 

Distribution 

Retail 

310 avenue des Aravis Warehouse/ 

Distribution 

238,847 231,950 2,660,000 2,408 100% 

236,079 317,128 2,540,000 2,472 85% 

235,486 555,175 6,180,000 8,703 100% 

232,205 220,000 2,280,000 4,400 100% 

219,154 212,450 2,070,000 8,498 100% 

210,360 214,800 2,270,000 1,816 100% 

203,891 194,580 1,730,000 1,843 100% 

199,298 153,300 1,880,000 3,066 100% 

190,567 200,000 1,800,000 5,000 100% 

188,155 192,500 1,650,000 5,500 100% 

Rhône-Alpes 187,506 182,094 1,730,000 4,716 100% 

Haute- 

Normandie 

Provence- 

Alpes-Côte 

d’Azur 

Aix en Provence Parc Club du Golf Office Provence- 

Alpes-Côte 

d’Azur 

Mitry-Mory Corio 4, rue Henri Becquerel Warehouse/ 

Distribution 

186,457 258,450 2,330,000 3,017 70% 

181,248 177,600 1,940,000 2,220 100% 

181,213 126,034 1,850,000 3,000 100% 



Rhône-Alpes 174,611 172,742 1,550,000 4,829 100% 

East 

Ile-de-France 

163,386 155,365 1,610,000 1,351 100% 

155,818 152,388 1,390,000 3,018 100% 

Emerainville VE, 39 av de l’Europe Office East 

149,912 152,010 1,440,000 1,689 100% 

Ile-de-France 

Marignier (74) ZAC de Pres Paris - 

696 avenue de 

l’industrie 

Industrial Rhône-Alpes 135,014 130,950 1,230,000 2,619 100% 

Emerainville 

+Polyparc 1 

13 av Vladimir 

Jankelevitch 

Office 

East 

Ile-de-France 

132,441 85,459 810,000 1,240 100% 

Warluis (60) Rue de la Gare Mixed Use Picardie 130,369 126,327 940,000 4,843 100% 

Bezons 

29, bd du General Office North West 109,466 117,770 1,180,000 1,416 84% 

Delambre 

Ile-de-France 

Palaiseau Bâti. J 13,voie la Cardon Office South West 

Ile-de-France 

108,464 175,200 1,590,000 1,752 60% 

Emerainville 

+Polyparc 2 

Evry VE 

15 av Vladimir 

Jankelevitch 

8-10 rue Le Bois 

Sauvage Clos du bois 

Guillaume 

Office 

Office 

East 

Ile-de-France 

South West 

Ile-de-France 

99,693 90,800 900,000 908 100% 

57,160 54,000 560,000 450 100% 

Toulouse 

109, avenue de Office Midi-Pyrénées 54,304 53,120 450,000 664 100% 

Lespinet 

Palaiseau Bâti. A 1, voie la Cardon Office South West 

Ile-de-France 

51,700 60,727 480,000 646 73% 

Evry Bois Guillaume 

8-10 rue Le Bois 

Sauvage 

Office 

South West 

Ile-de-France 

41,900 35,750 330,000 325 100% 

26


Passing 

Rent 

(w) 

ERV (w) 

Market 

Value 

(w) 

Sq. 

meters 

Occupancy 

St Pierre en Faucigny 

(74) 

Lotissement Les 

Jourdies 

Evry Bois Guillaume 8/10 

rue du Bois Sauvage 

Emerainville ASE 4, 61 av de 

l’Europe. VE de la 

Malnoue 

Emerainville VE6, 59 av de 

l’Europe 

Emerainville VE 5, 59 bis av de 

l’Europe 

Emerainville ASE 1, Malnoue 65 

bis av de l’Europe 

Industrial Rhône-Alpes 41,486 41,486 350,000 10,533 100% 

Warehouse/ 

Distribution 

Office 

Office 

Office 

Office 

South West 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

East 

Ile-de-France 

Ulis Hightec 6 9 av du Canada Office South West 

Ile-de-France 

Goussainville 

Vaires sur Marne 

(construction) 

5, rue Ambroise 

Croizat 

ZI de la trentaine 

Chemin du corps de 

garde 

Warehouse/ 

Distribution 

Retail 

North West 

Ile-de-France 

East 

Ile-de-France 

Emerainville Villa 41, Bd l’Europe Office East 

Ile-de-France 

Marly la Ville ZI de Moimont Warehouse/ 

Distribution 

North West 

Ile-de-France 

35,750 40,625 410,000 325 100% 

31,856 31,050 290,000 325 100% 

29,279 26,500 270,000 310 100% 

28,723 26,678 270,000 314 100% 

27,300 48,450 250,000 325 100% 

19,544 187,125 1,500,000 2,495 12% 

0 311,310 2,350,000 7,000 0% 

0 0 2,475,000 14,200 100% 

0 27,625 370,000 570 0% 

0 570,000 3,640,000 8,950 0% 

Total Paris Properties (Total Occupancy rate is based on weighted average) 40,000,701 40,587,475 418,395,000 833,519 92% 

2. Tenant Concentration (Top 10 Tenants) 

Tenant Name 

Passing 

Rent (w) 

% of 

total 

Sq. 

meters 

% of 

total 

Property/Properties 

occupied 

Rating (S&P/ 

Fitch) 

ND LOGISTIC 6,381,521 16.0% 181,492 21.8% Several Properties NR/NR 

LOGIDIS 3,280,835 8.2% 86,240 10.3% Several Properties A+/A+ 

GOODYEAR 1,241,909 3.1% 5,355 0.6% Rueil Malmaison B+/B 

Centrale Financière 1,200,895 3.0% 21,513 2.6% Mer BBB+/BBB+ 

VISTEON Systemes 1,093,723 2.7% 16,591 2.0% Chatillon-sur-Seine NR/NR 

MOTOROLA 934,231 2.3% 6,220 0.7% Saint-Aubin BBB+/BBB+ 

Ricoh France 904,134 2.3% 5,782 0.7% Clamart NR/NR 

NOVARCHIVE 727,959 1.8% 10,864 1.3% Rosny-sur-Seine NR/NR 

NOCIBE 727,035 1.8% 12,023 1.4% Villeneuve d’Ascq NR/NR 

BRAND 687,592 1.7% 18,194 2.2% Several Properties NR/NR 

Sub Total Top 10 

Tenants 17,179,833 

TOTAL Paris 

Properties 40,000,701 


Summary of Lease Types 

Lease Type Passing Rent (w) % of Total 

Precarious 84,110 0.21% 

Short Term 0 0.00% 

Commercial 18,588,115 46.47% 

Long Term 20,754,895 51.89% 

Other 573,579 1.43% 

Total Paris Properties 40,000,701 100% 

27


Summary of Expiry of Occupational Leases 

Year of expiration 

Number 

of Leases 

Passing 

Rent (w) 

% of total 

Cumulative % 


2005 21 1,534,853 3.8% 3.8% 

2006 12 2,200,379 5.5% 9.3% 

2007 13 1,473,590 3.7% 13.0% 

2008 15 933,937 2.3% 15.4% 

2009 22 3,878,432 9.7% 25.1% 

2010 20 4,389,478 11.0% 36.0% 

2011 38 5,136,725 12.8% 48.9% 

2012 33 5,844,748 14.6% 63.5% 

2013 71 9,388,676 23.5% 87.0% 

2014 45 3,451,466 8.6% 95.6% 

2015 4 856,886 2.1% 97.7% 

2016 2 727,035 1.8% 99.5% 

2017 2 145,601 0.4% 99.9% 

2018 1 5,993 0.0% 99.9% 

2019 0 0 0.0% 99.9% 

2020 1 32,900 0.1% 100.0% 

Total Paris Properties 300 40,000,701 100% 

Summary of Expiry of Occupational Leases (assuming exercise of first break option) 

Year of break option 

Number 

of Leases 

Passing 

Rent (w) 

% of total 

Cumulative % 


2005 21 1,534,853 3.8% 3.8% 

2006 54 6,960,744 17.4% 21.2% 

2007 81 9,673,067 24.2% 45.4% 

2008 86 7,116,411 17.8% 63.2% 

2009 17 4,647,109 11.6% 74.8% 

2010 16 4,376,557 10.9% 85.8% 

2011 9 1,559,875 3.9% 89.7% 

2012 3 1,277,113 3.2% 92.9% 

2013 8 2,618,386 6.5% 99.4% 

2014 3 64,413 0.2% 99.6% 

2015 0 0 0.0% 99.6% 

2016 0 0 0.0% 99.6% 

2017 1 139,273 0.3% 99.9% 

2018 0 0 0.0% 99.9% 

2019 0 0 0.0% 99.9% 

2020 1 32,900 0.1% 100.0% 

Total Paris Properties 300 40,000,701 100% 

28

4. Regional Weightings 

Region 

Number of 


Aggregate 

Property 

Value (w) 

% by 

Aggregate 

Property 

Value 

Lettable 

Area 

(Sq. meters) 

Passing 

Rent (per 

Sq. meters) 

Passing 

Rent (w) 

Total 

Vacant 

Area 

(Sq. meters) 

East Ile-de-France 26 77,105,000 18.4% 145,686 50 7,229,929 17,772 

West Ile-de-France 13 74,830,000 17.9% 100,136 72 7,245,217 5,474 

South West Ile-de-France 14 61,660,000 14.7% 98,915 58 5,730,551 11,857 

North West Ile-de-France 9 36,290,000 8.7% 71,511 39 2,799,681 28,137 

Rhône-Alpes 14 55,200,000 13.2% 155,292 37 5,766,017 2,160 

Nord-Pas-de-Calais 6 36,340,000 8.7% 84,020 39 3,317,066 0 

Centre 3 28,360,000 6.8% 73,022 41 2,974,742 0 

Provence-Alpes-Côte 

d’Azur 4 12,380,000 3.0% 39,388 33 1,292,157 0 

Bretagne 1 11,910,000 2.8% 16,591 66 1,093,723 0 

Pays de la Loire 2 6,100,000 1.5% 18,227 39 717,765 0 

Aquitaine 1 5,040,000 1.2% 4,943 99 489,718 0 

Languedoc-Roussillon 1 4,480,000 1.1% 6,534 61 400,000 0 

Midi-Pyrénées 2 4,020,000 1.0% 7,190 61 441,949 0 

Haute-Normandie 1 1,940,000 0.5% 2,220 82 181,248 0 

Poitou-Charentes 1 1,800,000 0.4% 5,000 38 190,567 0 

Picardie 1 940,000 0.2% 4,843 27 130,369 0 

Total Paris Properties 99 418,395,000 100% 833,519 53 40,000,701 65,400 

5. Property Size 

From 

Sq. meters 

To 

Sq. meters 

Number of 


Aggregate 

Property 

Value 

(w) 

% by 

Aggregate 

Property 

Value 

Lettable 

Area 

(Sq. meters) 

Passing 

Rent (per 

Sq. meters) 

Passing 

Rent 

(w) 

Total 

Vacant 

Area 

(Sq. meters) 

0 2,500 24 29,620,000 7.1% 29,147 88 2,566,109 4,240 

2,500 5,000 20 52,040,000 12.4% 74,434 71 5,291,912 2,379 

5,000 7,500 19 89,100,000 21.3% 112,880 80 9,028,119 8,036 

7,500 10,000 13 48,670,000 11.6% 113,752 35 4,030,098 14,056 

10,000 25,000 16 104,425,000 25.0% 239,083 41 9,916,897 20,479 

25,000 75,000 7 94,540,000 22.6% 264,223 35 9,167,566 16,210 

Total 99 418,395,000 100.0% 833,519 58 40,000,701 65,400 

6. Sectoral Weightings: (Industrial Warehouse, Retail, Office, etc) 

Sector 

Number of 


Aggregate 

Property 

Value (w) 

% by 

Aggregate 

Property 

Value 

Lettable 

Area 

(Sq. meters) 

Passing 

Rent (per 

Sq. meters) 

Passing 

Rent 

(w) 

Total 

Vacant 

Area 

(Sq. meters) 

Warehouse/Distribution 51 284,770,000 68.1% 665,497 41 27,208,862 58,745 

Office 36 101,170,000 24.2% 87,081 113 9,844,538 6,655 

Mixed Use 4 15,130,000 3.6% 22,157 71 1,562,753 0 

Retail 5 13,465,000 3.2% 41,232 24 975,843 0 

Industrial 3 3,860,000 0.9% 17,552 23 408,705 0 

Total 99 418,395,000 100% 833,519 54 40,000,701 65,400 

29

7. Details of the Top Ten Properties by Passing Rent 


Property Name 

St Quentin Fallavier 

Property Type 


Region 

Rhône-Alpes 



N/A 

Total Net Floor Area (Sq.meters) 73,253 





ERV (u) 2,086,558 






Property Name 

Corbeil 

Property Type 


Region 

South West Ile-de-France 



N/A 

Total Net Floor Area (Sq.meters) 34 833 





ERV (u) 1,741,650 






Property Name 

Antony 

Property Type 


Region 

West Ile-de-France 








ERV (u) 1,432,700 





30


Property Name 

Fleury Les Aubrais 

Property Type 


Region 

Centre 



N/A 






ERV (u) 1,395,800 






Property Name 

Rueil Malmaison 

Property Type 

Office 

Region 

West Ile-de-France 



N/A 






ERV (u) 1,017,450 






Property Name 

Mer 

Property Type 


Region 

Centre 



N/A 






ERV (u) 986,472 





31


Property Name 

Chatillon-sur-Seiche 

Property Type 


Region 

Bretagne 



N/A 






ERV (u) 995,460 






Property Name 

Chapelle d’Armentières 

Property Type 


Region 

Nord-Pas-de-Calais 








ERV (u) 1,090,000 






Property Name 

Marly la Ville 

Property Type 


Region 

North West Ile-de-France 



N/A 






ERV (u) 978,360 





32


Property Name 

Les Ulis 

Property Type 


Region 

South West Ile-de-France 








ERV (u) 1,060,065 





33

PRINCIPAL FEATURES OF THE NOTES 

Below is a summary of the key features of the Notes. The information in this section does not purport to be 

complete and is qualified in its entirety by reference to the provisions of the Issuer Regulations and the 

Conditions of the Notes. 

The Notes 

The Notes will be issued in accordance with the terms of the Issuer Regulations and will be direct, 

unsecured and unconditional obligations of the Issuer. 

Status, Form and Denomination 

As between the Notes, the Class A Notes will rank in priority to the Class B Notes, the Class B Notes will 

rank in priority to the Class C Notes, the Class C Notes will rank in priority to the Class D Notes and the 

Class D Notes will rank in priority to the Class E Notes as to payment of both interest and principal in 

accordance with the applicable Issuer Priority of Payments. The Notes of each Class will rank pari passu 

and rateably among themselves without any preference or priority. 

The Notes will not be obligations or responsibilities of, or guaranteed by, any person or entity other than 

the Issuer. In particular, the Notes will not be obligations or responsibilities of, or guaranteed by the 

Management Company, the Custodian, the Lenders, the Joint Lead Managers, the Hedging Providers, the 

Liquidity Facility Provider, the Cash Manager, the Borrowers Account Banks, the Issuer Account Bank, 

the FCC Servicers, the Paying Agents, the Noteholder Representatives, the Borrowers, the Property 

Manager, the Parent Obligors or any of their respective affiliates. The Notes will not be secured, but 

amounts payable and repayable in respect of the Notes will be funded by the proceeds of the Receivables 

arising from the Commercial Mortgage Loan Agreements with the Borrowers (and the Issuer will benefit 

from the security initially granted in favour of the Lenders by the Borrowers pursuant to each 

Commercial Mortgage Loan Agreement). 

The Noteholders will be entitled to receive payments of interest on their Notes on each Interest Payment 

Date, and will be entitled to receive repayment of principal on the Final Maturity Date. Such entitlement 

will be subordinated to any liabilities ranking in priority to the relevant series of Notes including, inter 

alia, any and all amounts payable on the relevant Interest Payment Date to the Hedging Providers and 

the Liquidity Facility Provider (other than the Hedging Subordinated Amounts and the Liquidity 

Subordinated Amounts), and to the Management Company, the Custodian, the FCC Servicers, the Paying 

Agents, the Issuer Account Bank and the Cash Manager and any Noteholder Representative. 

For a more detailed description of the priority of payments, see further the section entitled ‘‘Resources 

Available to the Borrowers and the Issuer – Available Funds and their Priority of Application’’ below. 

The Notes are French law obligations as referred to in Article R 214-99 of the French Monetary and 

Financial Code and the Issuer Regulations and any other laws and regulations governing fonds communs 

de créances. 

The Issuer Regulations and the Conditions will contain provisions requiring the Management Company 

and each Noteholder Representative to have regard to the interests of the Noteholders. For further details 

as to Noteholder meetings, modifications, waivers and consents by the Management Company and the 

Noteholder Representative, see further the sections entitled ‘‘Terms and Conditions of the Notes’’, 

‘‘Summary of Principal Documents’’ and ‘‘Risk Factors’’ below. 

The Notes will be in the denomination of u100,000. In accordance with the provisions of Article L. 211-4 

of the French Monetary and Financial Code, the Notes will be issued in bearer form (au porteur) and will 

be represented in book-entry (dématérialisée) form. No physical document of title will be issued in respect 

of the Notes. 

Interest 

Interest on the Notes is payable by reference to successive Interest Periods. Interest will be payable 

quarterly in arrear on each Interest Payment Date. Each Interest Period will commence on (and include) 

an Interest Payment Date and end on (but exclude) the immediately succeeding Interest Payment Date. 

The first Interest Period will commence on (and include) the Closing Date and end on (but exclude) the 

Interest Payment Date falling in February 2006. The final Interest Period will commence on (and include) 

the Interest Payment Date falling in May 2017 and end on (but exclude) the Final Maturity Date. 

34

Interest on the Notes will accrue at an annual rate of EURIBOR for three-month euro deposits, plus a 

margin of 0.23 per cent. per annum (in the case of the Class A Notes), 0.29 per cent. per annum (in the 

case of the Class B Notes), 0.33 per cent. per annum (in the case of the Class C Notes), 0.52 per cent. per 

annum (in the case of the Class D Notes) and 0.75 per cent. per annum (in the case of the Class E Notes). 

In the case of the first Interest Period only, each Class of Notes will bear interest at the rate obtained by 

linear interpolation of the rate for three month and four month euro deposits in the market plus the 

margin applicable to the relevant Class of Notes as described above. 

The Noteholders will be entitled to receive payment of interest on their respective Notes on each Interest 

Payment Date as provided in the Conditions and provided that such amounts are paid after payment of 

any liabilities ranking in priority thereto in accordance with the Issuer Pre-Enforcement Priority of 

Payments or Issuer Post-Enforcement Priority of Payments, as applicable (see further the section entitled 

‘‘Resources Available to the Borrowers and the Issuer’’ below). All interest shall be paid outside the United 

States and its possessions. 

A failure by the Issuer to make quarterly payments of amounts of interest due under any Class of Notes 

will constitute a default under the Notes unless such interest arises on the portion of that Class of Notes 

to which a Principal Loss has been allocated and such interest has been deferred in accordance with 

Condition 4(h). 

Withholding Tax 

All payments of principal and interest in respect of the Notes will be made without withholding or 

deduction for or on account of tax unless such withholding or deduction is required by law. If any such 

withholding or deduction is required to be made from payments due in respect of the Notes, neither the 

Issuer nor any Paying Agent nor any other person will be obliged to pay any additional amounts to 

Noteholders or to otherwise compensate Noteholders for the reduction in the amounts they will receive 

as a result of such withholding or deduction. In such circumstances, and in certain other circumstances 

resulting from a withholding or deduction for or on account of tax in the context of the transaction, the 

Issuer will have the option (but not the obligation), to redeem all of the Notes at their Principal Amount 

Outstanding, as more particularly set out in Condition 5 (Redemption, Purchase and Cancellation 

– Optional Redemption for Tax Reasons). 

Expected and Final Redemption 

Unless previously redeemed in full, the Notes are expected to mature at their respective Principal 

Amount Outstanding, together with accrued interest thereon, on the Interest Payment Date falling in 

August 2014, and, at the latest, will mature on the Final Maturity Date. 

Mandatory and Optional Redemption 

In the event of a mandatory or optional repayment or prepayment by a Borrower of all or part of the 

relevant Commercial Mortgage Loan, for whatever reason, before the Final Maturity Date (see further 

‘‘Summary of Principal Documents – The Commercial Mortgage Loan Agreements – Prepayment of the 

Commercial Mortgage Loans’’), the Issuer shall be required to apply any proceeds of such repayment or 

prepayment in redeeming all or part of the Notes on the next following Interest Payment Date (see 

further Condition 5 (Redemption, Purchase and Cancellation – Mandatory Redemption)). 

In addition to the required repayment of the Notes on the Final Maturity Date and any mandatory 

redemption following prepayment of a Commercial Mortgage Loan, the Notes will be subject to optional 

redemption in whole before the Final Maturity Date in certain circumstances as described in Condition 

5(Redemption, Purchase and Cancellation). 

The obligations of the Issuer in respect of the Notes and in respect of the other Issuer Creditors pursuant 

to the Transaction Documents will rank as to payments of interest and repayment of principal according 

to the relevant Issuer Priority of Payments (as to which, see the section entitled ‘‘Resources Available to 

the Borrowers and Issuer’’ below). Following the service of a Note Enforcement Notice the Notes will 

become immediately due and repayable in accordance with Condition 9 (Note Events of Default). 

Ratings 

It is expected that the Class A Notes will, when issued, be assigned a rating of ‘‘AAA’’ by Fitch and a 

rating of ‘‘AAA’’ by S&P. It is expected that the Class B Notes will, when issued, be assigned a rating of 

35

‘‘AA’’ by Fitch and a rating of ‘‘AAA’’ by S&P. It is expected that the Class C Notes will, when issued, be 

assigned a rating of ‘‘AA’’ by Fitch and a rating of ‘‘AA’’ by S&P. It is expected that the Class D Notes, 

will when issued, be assigned a rating of ‘‘A’’ by Fitch and a rating of ‘‘A’’ by S&P. It is expected that the 

Class E Notes will, when issued, be assigned a rating of ‘‘BBB’’ by Fitch and a rating of ‘‘BBB+’’ by S&P. 

A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, 

suspension or withdrawal at any time by the assigning rating agency. 

Listing 

Application has been made to the Irish Stock Exchange for the Notes to be admitted to listing. 

Transfer Restrictions 

There will be no transfer restrictions in respect of the Notes, subject to applicable laws and regulations. 

However, please see the section entitled ‘‘Subscription and Sale’’ for certain restrictions on the sale of the 

Notes and distribution of information in respect thereof. 

Purchase of Notes 

The Issuer will not be permitted to purchase any Notes. 

Governing Law 

The Notes will be governed by French law. 

36

RISK FACTORS 

The following is a summary of certain aspects of the Notes about which prospective Noteholders should be 

aware. This summary is not intended to be exhaustive and prospective Noteholders should also read the 

detailed information set out elsewhere in this Offering Circular and reach their own views prior to making 

any investment decision. 

1. Risks Relating to the Notes and the Issuer 

Liability under the Notes 

The Notes will be obligations of the Issuer only. The Notes will not be obligations or responsibilities of, 

or guaranteed by, any person or entity other than the Issuer. In particular, the Notes will not be obligations 

or responsibilities of, or guaranteed by, any of the Management Company, the Custodian, the Lenders, the 

Joint Lead Managers, the Borrowers Account Banks, the Issuer Account Bank, the Cash Manager, the 

Paying Agents, the Hedging Providers, the Liquidity Facility Provider, the Property Manager, the FCC 

Servicers, the Noteholder Representatives or any of the Borrowers or the Parent Obligors or any of their 

respective affiliates. Furthermore, no person other than the Issuer will accept any liability whatsoever to 

Noteholders in respect of any failure by the Issuer to pay any amount due under the Notes. 

Limited resources of the Issuer 

The Issuer has been established as a fonds commun de créances and is not carrying on any business other 

than the purchase of the Receivables, the issue of the Units and the Notes and transactions ancillary 

thereto. The ability of the Issuer to meet its obligations under the Notes will be principally dependent on 

the receipt by it of collections in respect of the Receivables (corresponding to payments made by the 

Borrowers under the Commercial Mortgage Loans), the receipt of funds from the Hedging Providers 

under the relevant Hedging Agreements and, in the circumstances described in this Offering Circular, the 

Liquidity Facility Provider. Other than the foregoing, prior to the enforcement of any Obligor Security, 

the Issuer will not have any other significant funds available to it to meet its obligations under the Notes 

and in respect of any payment ranking in priority to, or pari passu with, the Notes. 

Availability of the Liquidity Facility 

If there is a Liquidity Shortfall as determined by the Management Company on any Determination Date, 

the Management Company (on behalf of the Issuer) will request a drawdown of funds under the Liquidity 

Facility (in accordance with the terms of the Liquidity Facility Agreement). The maximum amount 

available to be drawn in aggregate under the Liquidity Facility is u26 million (as reduced in proportion 

to reductions in the Principal Amount Outstanding on the Notes), which may not be sufficient at any given 

time to meet the Issuer’s payment obligations in full. The Liquidity Facility will only be available to 

provide liquidity and will not be a source of credit support for the Notes (please see the section entitled 

‘‘Priorities and conflicts of interest in respect of the Notes’’ below). For further details as to the terms of the 

Liquidity Facility Agreement, see further the section entitled ‘‘Resources Available to the Borrowers and 

the Issuer’’. 

Obligor Security 

Upon the occurrence of a Loan Event of Default under a Commercial Mortgage Loan and following 

enforcement of the relevant Obligor Security, recourse for repayment of the relevant Commercial 

Mortgage Loan will be available only in respect of the Secured Properties comprised within the Property 

Portfolio of the relevant Borrower Group and the shares of the relevant Borrower owned by the Parent 

Obligors, monies within the relevant Borrower Accounts relating to rental income, insurance proceeds 

and proceeds of sale (if any) derived from that Property Portfolio (and any interest earned on them) and 

rent payable by Occupational Tenants of the Secured Properties to the extent notified of the assignment 

thereof. 

Any enforcement under the Obligor Security Documents may not result in immediate realisation of the 

relevant Obligor Security Assets and a significant delay could be experienced in recovery by the Issuer of, 

inter alia, amounts owed under the affected Commercial Mortgage Loan. There can be no assurance that 

the Issuer would recover all amounts secured upon enforcement of the Obligor Security and, accordingly, 

sufficient funds may not be realised or available to make all required payments to the Issuer and, 

accordingly, the Issuer may not have sufficient funds available to make all required payments to the 

relevant Noteholders. 

37

Interest Rate Risks 

Interest on the aggregate principal amount of each of the Commercial Mortgage Loans advanced on the 

Closing Date will accrue at a rate equal to the Issuer Cost of Funds, which is based on the interest rate 

on the Notes that have funded those Commercial Mortgage Loans, after taking account of any interest 

rate swaps or interest rate caps entered into by the Issuer in respect of those Notes. 

In order to address the risk borne by the Borrowers and, ultimately, the Issuer in respect of a mismatch 

between the rental income stream (the amount of which is not based on or correlated to EURIBOR) 

available to the Borrowers for the payment of interest on the Commercial Mortgage Loans and the 

EURIBOR – based component of interest payable on the Notes, the Issuer will enter into certain 

fixed/floating interest rate swap transactions and interest rate caps on or about the Closing Date with the 

Hedging Providers pursuant to the Hedging Agreements. 

All payments under the Hedging Agreements (including any payments due by the Issuer to the Hedging 

Providers on termination of the Hedging Agreements and related costs) other than Hedging Subordinated 

Amounts, will rank in priority to payments due to the Noteholders. 

If a Hedging Provider fails to pay the Issuer any amounts due from it under a Hedging Agreement, or if 

a Hedging Agreement is terminated, then the Issuer may have insufficient funds to make payments due 

under the Notes. 

Nonetheless, if there is a default by a Hedging Provider under a Hedging Agreement or upon the 

insolvency of a Hedging Provider or the occurrence of a Hedging Downgrade Event, it may be necessary 

to terminate the relevant Hedging Agreement. In such circumstances it is not certain that the affected 

Hedging Provider would make or be obliged to make payment of a termination sum sufficient to enable 

the Issuer to induce a suitable replacement Hedging Provider to enter into a replacement hedging 

arrangement such as would enable the Issuer to retain the same risk profile as under the affected Hedging 

Agreement, nor is it certain whether such a replacement hedging arrangement would be available at the 

time of termination of the affected Hedging Agreement. 

For further details on the Hedging Providers and the Hedging Agreements, please see the sections 

entitled ‘‘The Key Transaction Parties’’ above and ‘‘Summary of Principal Documents’’ and ‘‘Resources 

Available to the Borrowers and the Issuer’’, below. 

Absence of Market and Limited Liquidity/Yield and Prepayment Considerations 

Application has been made to the Irish Stock Exchange to list the Notes. There can be no assurance that 

a secondary market in the Notes will develop or, if developed, will be maintained or will provide 

Noteholders with liquidity of investment, or that it will continue for the life of the Notes. The market 

value of the Notes may fluctuate with changes in market perceptions of the risks associated with the 

Notes, supply and demand and other market conditions. 

The yield to maturity of the Notes of each Class will depend on, among other things, the amount and 

timing of payment of principal on the Commercial Mortgage Loans. Such yield may be adversely affected 

by a higher or lower than anticipated rate of prepayments on the Commercial Mortgage Loans. 

The rate of prepayment of Commercial Mortgage Loans cannot be predicted and is influenced by a wide 

variety of economic and other factors, including prevailing interest rates, the buoyancy of the commercial 

property market, the availability of alternative financing and local and regional economic conditions. 

Therefore, no assurances can be given as to the level of prepayment that the Commercial Mortgage Loans 

will experience. 

A prepayment by a Borrower in respect of its Commercial Mortgage Loan will result in an adjustment 

being made to the interest rate applicable to both that Borrower’s and any other Borrower’s Commercial 

Mortgage Loan, to the extent that there remain principal amounts outstanding under such Commercial 

Mortgage Loan following that prepayment. Any increase in the interest rate applicable under a 

Commercial Mortgage Loan may cause an affected Borrower to fail to meet its obligations under the 

relevant Commercial Mortgage Loan Agreement and therefore may result in a shortfall in the monies 

available to be applied by the Issuer in making payments of interest on the Notes as a result of the Issuer 

still being required to pay certain payments prior to any payment of interest on the Notes. The risk of 

default due to interest rate adjustments following prepayment of any of the Commercial Mortgage Loans 

will, in particular, be borne by the holders of the most junior classes of Notes then outstanding. There can 

be no assurance that any Borrower will have funds available to meet any increased interest payments due 

under its Commercial Mortgage Loan, such increased payments not corresponding to any change or 

improvement to its Property Portfolio. 

38

Ratings of the Notes/Rating Affirmations 

The ratings assigned to each Class of Notes by the Rating Agencies address the likelihood of full and 

timely payment to the Noteholders of all payments of interest on each Interest Payment Date and the 

likelihood of receipt of principal due on the Final Maturity Date. There is no assurance that any such 

ratings will continue for any period of time or that they will not be reviewed, revised, suspended or 

withdrawn entirely by the Rating Agencies as a result of changes in or unavailability of information or if, 

in the Rating Agencies’ judgement, circumstances so warrant. 

For the avoidance of doubt and unless the context otherwise requires any references to ‘‘ratings’’ or 

‘‘rating’’ in this Offering Circular are to ratings assigned by the Rating Agencies only. Future events, 

including events affecting the Occupational Tenants and/or any Borrower and/or circumstances relating 

to the Secured Properties and/or the property market generally, could have an adverse impact on the 

ratings of the Notes. A credit rating is not a recommendation to buy, sell or hold securities and may be 

subject to revision, suspension or withdrawal at any time by the assigning Rating Agency. Any such 

revision, suspension or withdrawal may have an effect on the market value of the Notes. 

By acquiring any Note, each Noteholder acknowledges that any ratings affirmation given by a Rating 

Agency and/or any satisfaction of a Ratings Test: 

(a) only addresses the effect of any relevant event, matter or circumstance on the current ratings assigned 

by the relevant Rating Agency to the Notes; 

(b) does not address whether any relevant event, matter or circumstance is permitted by the Transaction 

Documents; and 

(c) does not address whether any relevant event, matter or circumstance is in the best interests of, or 

prejudicial to, some or all of the Noteholders, 

and that no person shall be entitled to assume otherwise. 

There can be no assurance that any changes to the Transaction Documents made pursuant to the 

provisions in a Commercial Mortgage Loan Agreement will be favourable to or in the interests of 

Noteholders. Such changes may be detrimental to Noteholders, despite the ratings of such Notes being 

affirmed in connection with the proposed changes. 

Refinancing Risk at Final Maturity of the Notes 

The ability of the Issuer to redeem the Notes on the Final Maturity Date will, ultimately, be dependent 

on the ability of the Borrowers to repay their Commercial Mortgage Loans in full on or before that date. 

There is no scheduled amortisation of amounts outstanding under their Commercial Mortgage Loans 

during the term of the Notes, the Commercial Mortgage Loans being repayable in full on the Final 

Repayment Date. In order to repay in full their Commercial Mortgage Loans, it will be necessary for the 

Borrowers to raise funds by, for example, selling the Secured Properties belonging to them to third parties 

or raising new finance in an amount at least equal to the Principal Amount Outstanding on their 


As at the Closing Date, the ratio (expressed as a percentage) of the principal amount outstanding on the 

Commercial Mortgage Loans to the Paris Properties Borrowers to the aggregate Market Value of the 

Secured Properties in their combined Property Portfolio as at the date of the relevant Valuation Report 

will be 70 per cent. and the equivalent ratio (also expressed as a percentage) in respect of the Commercial 

Mortgage Loans to the Proudreed France Borrowers and the Secured Properties in their combined 

Property Portfolio as at the date of the relevant Valuation Report will be 70 per cent. A summary of the 

Valuation Report is included in the section entitled ‘‘Valuation Report’’ below. 

Priorities and conflicts of interest in respect of the Notes 

Both prior to, and following, the delivery of a Note Enforcement Notice, payments of interest on the Class 

A Notes will rank ahead of payments of interest on the Class B Notes, which will rank ahead of payments 

of interest on the Class C Notes, which will rank ahead of payments of interest on the Class D Notes, 

which in turn will rank ahead of payments of interest on the Class E Notes. Both prior to, and following, 

the delivery of a Note Enforcement Notice, repayments of principal on the Class A Notes will rank ahead 

of repayments of principal on the Class B Notes, which will rank ahead of repayments of principal on the 

Class C Notes, which will rank ahead of repayments of principal on the Class D Notes, which in turn will 

rank ahead of repayments of principal on the Class E Notes. Repayments of principal and payments of 

interest on the Notes will rank, both prior to and following the issuance of a Note Enforcement Notice, 

39

after among other things, payments of fees, remuneration and expenses of the Management Company and 

the Custodian and their appointees, respectively (if any) and the auditors of the Issuer; the fees and 

expenses of the Paying Agents, the Issuer Account Bank and the Cash Manager; amounts due to the 

Liquidity Facility Provider (other than the Liquidity Subordinated Amounts) and the Hedging Providers 

under the Hedging Agreements (other than the Hedging Subordinated Amounts) and the fees and 

expenses of the FCC Servicers. 

The Management Company is required always to act in the best interest of the Unitholders and the 

Noteholders, although the Issuer Regulations provide that in the event of a conflict between decisions 

made by (i) the Noteholders and the Unitholders, or (ii) between Noteholders of different classes, the 

Management Company shall apply the decisions made by the Noteholders in the case referred to in (i) 

above, or the Noteholders ranking in priority in the case referred to in (ii) above, unless any such decision 

would result in a modification of the financial characteristics of the other Units or Notes. In such a case, 

unless the relevant holders of Units or Notes agree to modify their rights in accordance with the 

provisions of the Issuer Regulations, the Management Company shall not be obliged to carry out such a 

decision. 

Monitoring of compliance with representations, warranties and covenants and the occurrence of a Loan 

Event of Default or Potential Loan Event of Default 

The Issuer is a fonds commun de créances, a form of special purpose vehicle, and therefore will not, nor 

does it possess the resources actively to, monitor whether a Loan Event of Default or a Potential Loan 

Event of Default has occurred, including, for this purpose, the continued accuracy of the respective 

representations and warranties made by the Borrowers and compliance by the Borrowers with their 

respective covenants and undertakings. 

The FCC Servicers will have no obligation under the Issuer Transaction Documents to monitor whether 

a Loan Event of Default or a Potential Loan Event of Default has occurred but will (unless expressly 

informed to the contrary by the relevant Borrower) rely on certificates delivered under the applicable 

Commercial Mortgage Loan Agreement to determine whether a Loan Event of Default or a Potential 

Loan Event of Default has occurred. For further details concerning Loan Events of Default or Potential 

Loan Events of Default, see further the section entitled ‘‘Summary of Principal Documents – The 

Commercial Mortgage Loan Agreements’’ below. 

Each Commercial Mortgage Loan Agreement with a Borrower will require the relevant Borrower (or the 

Borrower’s Agent) to inform the relevant FCC Servicer and the Management Company of the occurrence 

of any Loan Event of Default and Potential Loan Event of Default promptly upon becoming aware of the 

same. In addition, each Borrower is required to confirm in each compliance certificate delivered 

thereunder (each of which will be delivered to, among other recipients, the Management Company) 

whether or not any Loan Event of Default or Potential Loan Event of Default has occurred (and, if one 

has, what action is being or proposed to be taken to remedy it). 

The occurrence of a Loan Event of Default will entitle the relevant FCC Servicer to pursue any of the 

courses of action available to it in respect of the affected Borrower and its Property Portfolio, as set out 

under the sections entitled ‘‘Summary of Principal Documents – The Commercial Mortgage Loan 

Agreements’’ and ‘‘Summary of Principal Documents – The Commercial Mortgage Loan Agreements’’ 

below. 

Direct exercise of rights 

The Management Company has the exclusive right to exercise the Issuer’s rights under or in connection 

with the Transaction Documents, including, without limitation, in relation to the Commercial Mortgage 

Loans. The Noteholders will not have the right to give directions to the Management Company in relation 

to the exercise of its rights or to exercise any such rights directly. See further the section entitled 

‘‘Directions/Instructions of Noteholders’’. 

Early liquidation of the Issuer 

The Issuer Regulations set out a number of circumstances in which the Management Company would be 

entitled or obliged to liquidate the Issuer. These circumstances may occur prior to the Final Maturity 

Date, in which case the Notes may be prepaid in accordance with the mandatory redemption provisions 

of Condition 5(c). It is possible that the funds available to the Issuer following its early liquidation may 

be insufficient to redeem the Notes in full after payment of amounts ranking in priority in the applicable 

Issuer Priority of Payments. 

40

2. Risks relating to the Secured Properties 

Late Payment or Non-Payment of Rent 

If the rental payments due under any Occupational Lease are not paid on the due dates or not paid at all 

and any resultant shortfall is not otherwise compensated for from other resources, a Loan Event of 

Default may occur in relation to a Commercial Mortgage Loan if the relevant Borrower fails to pay 

amounts due pursuant to a Commercial Mortgage Loan on the relevant Loan Interest Payment Date. The 

occurrence of a Loan Event of Default will not automatically trigger a Note Event of Default, as, in the 

event of a Liquidity Shortfall, the Issuer may draw upon the Liquidity Facility. There can be no assurance 

that any Loan Event of Default resulting from the non-payment can be cured or that the Liquidity Facility 

will be of a sufficient amount to prevent a Note Event of Default eventually occurring. 

Title to the Secured Properties 

Certificates of Title in respect of each Secured Property have been prepared by the Notary. The 

Certificates of Title address the quality of title of each Secured Property and have been issued on the basis 

of a review of the title documents and the usual conveyancing searches and enquiries. For further details 

see the section entitled ‘‘Key Characteristics of the Property, Portfolio’’ in respect of the scope of the 

Certificates of Title. 

According to the Certificate of Title with respect to the Secured Property located at Bezons, a writ of 

summons (Assignation à comparaître) to appear before the Tribunal de Grande Instance de Pontoise was 

published at the Land and Mortgage Registry on 29 March 2005 with a view to cancelling the sale dated 

19 March 2004, whereby SCI Beaulieu Properties acquired this Secured Property. The relevant Borrower 

has received an opinion from counsel to the effect that the chances of success of this lawsuit against it are 

extremely weak. 

Insurance and Uninsured Loss 

Each Commercial Mortgage Loan Agreement requires the relevant Borrowers (a) to keep all of the 

Secured Properties insured to full replacement cost including the total costs of demolition and debris 

removal, rebuilding, reinstating and replacing the Secured Property together with architects’, surveyors’ 

and other professional fees, (b) to maintain appropriate and adequate insurance for loss of rent in respect 

of the Occupational Leases due to inability to use the relevant premises because of works or damage to 

the property in an amount covering not less than 2 years’ of interest and finance charges payable under 

the relevant Commercial Mortgage Loan Agreement, (c) to insure with reputable, regulated insurers or 

underwriters that satisfy the Insurer Rating Criteria against loss or damage by fire, lightning, explosion, 

subsidence, aircraft (or articles dropped from them), storm, tempest, flooding, earthquakes, riot and civil 

commotion, terrorism and burst water pipes and water tanks (where such cover is available in the relevant 

insurance market) and (d) to procure such other insurance as would be maintained in accordance with 

sound commercial practice and as is normally maintained by companies carrying on similar businesses is 

maintained with respect to the Secured Properties belonging to it, in each case in accordance with the 

terms set out in the relevant Commercial Mortgage Loan Agreement. 

On the Closing Date, all of the Secured Properties (other than five Secured Properties that are insured 

by the Occupational Tenants or by the syndic de co-propriété) will be insured under a policy with 

Assicurazioni Generali S.p.A., (Generali) that insures London and Cambridge Properties Limited and any 

declared associated and subsidiary companies (including the Borrowers) with a total sum insured of 

u828,302,563 in relation to properties situated in France (including the Secured Properties), expiring on 

31 December 2005, and a further sum of £1,505,932,959 in relation to all properties wherever situated, 

expiring on 31 March 2006. If Generali (or any other insurer replacing Generali) ceases to meet the 

Insurer Rating Criteria, the relevant Borrower is required to put in place replacement insurances with an 

insurance company or underwriter that does meet those criteria and is otherwise acceptable to the 

Management Company (a) if the long-term debt obligations of the relevant insurance company or 

underwriter are rated at or above A− (or its equivalent) by both Fitch and S&P, by the date of expiry of 

the relevant policy, or (b) if the long-term debt obligations of the relevant insurance company or 

underwriter are rated below A− (or its equivalent) by Fitch or S&P or if not rated by both Fitch and S&P, 

by the date which is the earlier of the date of the expiry of the relevant policy and 90 days after the 

relevant downgrading. 

Since the insurance policy with Generali referred to above insures companies and properties other than 

the Borrowers and the Secured Properties, the Borrowers are required to procure that any property that 

is the subject of such insurance policy which is not a Secured Property is insured in accordance with the 

41

same criteria as apply to the Secured Properties so as to try to ensure that any failure to insure or under 

insurance would not adversely affect the ability fully to realise a claim in respect of any of the Secured 

Properties. If, notwithstanding these undertakings by the Borrowers (which the Borrowers are not 

themselves able to control), other properties are insured under the Generali policy on terms that are not 

consistent with the criteria required in respect of the Secured Properties, any claim by a Borrower under 

such policy may not be met in full as Generali will be entitled to reduce claims in proportion to any 

under-insurance across all the properties covered by the policy. 

In respect of the five Secured Properties where the Occupational Tenants or the syndic de co-propriété are 

responsible for insuring such properties, the Borrowers must use all reasonable endeavours to procure 

that the relevant Occupational Tenants or syndic de co-propriété effect insurance comparable to that 

required to be effected by the Borrowers on the terms prescribed by the relevant Occupational Lease. 

Generally, the Occupational Leases grant the parties the option, if the Secured Property is destroyed or 

damaged by an insured risk so as to make the relevant unit wholly unfit for occupation or use, to terminate 

the Occupational Lease if works necessary to make the premises fit for occupation and use have not been 

completed within a certain period (usually the period in respect of which the Obligors have the benefit 

of loss of rent insurance). Typically, the Occupational Tenants are not required to pay the annual rent or 

pay insurance charge or service charge (or a proportion of them) after the date of destruction or damage 

until the reinstatement works have been completed or, (in some but not all Occupational Leases) if earlier, 

the expiry of the period for which loss of rent insurance is maintained. Insurance cover has been taken 

out in respect of the Secured Properties to cover the shortfall of rent whilst such works are being carried 

out for a period which differs for each of the Secured Properties but which is currently not less than two 

years. Under certain Occupational Leases, the landlord and/or the tenant have the right to terminate the 

lease if the premises have not been reinstated within a specific period. 

If reinstatement of the relevant Secured Property does not take place, then the proceeds of any monies 

paid out under the terms of the insurance policy effected in respect of the Secured Property will be paid 

to the relevant Borrower except in certain cases where the Occupational Tenant may be entitled to receive 

certain sums in respect of items which it has installed at its own expense but which have nevertheless 

become part of the premises as a matter of property law. 

Each Borrower must apply all monies received under any insurance policy in the event of total destruction 

of a Secured Property or in the event of partial destruction of a Secured Property resulting in a loss of use 

of 30 per cent. or more of the useable surface area of the relevant Secured Property for a period of at least 

three months towards replacing, restoring or reinstating the relevant Secured Property subject to certain 

conditions (see ‘‘Summary of Principal Documents – The Commercial Mortgage Loan Agreements – 

Prepayment of the Commercial Mortgage Loans’’) or (if not) towards prepayment of the relevant 

Commercial Mortgage Loan (which must in any event be prepaid if reinstatement works have not been 

completed within the earlier of (i) 12 months of receipt of such insurance proceeds and (ii) 24 months of 

the relevant damage or destruction). In the event of partial destruction of a Secured Property resulting 

in a loss of use of less than 30 per cent. of the useable surface area of the relevant Secured Property, or 

if the loss of use lasts for a period of less than three months, the relevant insurance proceeds will be 

released to the relevant Borrower by the Management Company, provided that the Borrower undertakes 

and to complete the necessary repair works in accordance with the conditions set out in the Commercial 

Mortgage Loan Agreement. 

There is a risk that if either the relevant Borrower or the relevant party with the obligation to reinstate 

the relevant Secured Property is unable to reinstate, the proceeds of such insurance due to the relevant 

Borrower, together with the proceeds from the sale of the land, might not be sufficient to permit the 

relevant Borrower to meet its outstanding obligations under the relevant Commercial Mortgage Loan 

Agreement and therefore, ultimately, the Issuer’s ability to make payments under the Notes may be 

adversely affected. 

If a claim is made under an insurance policy, but the relevant insurer fails to make payment in respect of 

that claim, this could prejudice the ability of the relevant Borrower to meet its outstanding obligations 

under the relevant Commercial Mortgage Loan Agreement and therefore, ultimately, the Issuer’s ability 

to make payments under the Notes may be adversely affected. 

The Commercial Mortgage Loan Agreements and Occupational Leases also contain provisions requiring 

the Borrowers to carry or procure the carrying of insurance with respect to the Secured Properties in 

accordance with the specified terms. There are, however, certain types of losses (such as losses resulting 

from war, terrorism (which, in relation to terrorism, within certain limits, is currently covered by the 

42

existing insurances), nuclear radiation, radioactive contamination and heave or settling of structures) 

which may be or become either uninsurable or not insurable at commercially viable rates or which for 

other reasons are not covered, or not required to be covered, by the required insurance policies. In 

addition many of the Occupational Leases require the Obligors to make up any shortfall between 

insurance proceeds and the actual cost of reinstatement. Each Borrower’s ability to meet its obligations 

under the relevant Commercial Mortgage Loan Agreement and therefore, ultimately, the Issuer’s ability 

to make payments under the Notes may be adversely affected if such an uninsured or uninsurable loss 

were to occur, to the extent that such loss is not the responsibility of the Occupational Tenants pursuant 

to the terms of their Occupational Leases. 

Disposals and Same-Day Substitutions of Mortgaged Properties 

Under the terms of the Commercial Mortgage Loan Agreements, each Borrower will be entitled to 

dispose of and/or substitute Secured Properties in certain circumstances. However, there can be no 

assurance that a Borrower will exercise its rights under these provisions in such a way that the pattern or 

number of disposals and/or substitutions will increase the quality and value of its Property Portfolio or its 

income-generating capacity. For example, a Secured Property’s value may decline significantly if it 

requires refurbishment as may the ability of the owner to attract tenants at market rental rates. The risks 

associated with the effect of the disposal and/or same-day substitution of Secured Properties on the value 

and rental income-generating capacity of each Borrower’s Property Portfolio is mitigated by the 

conditions related to disposal and same-day substitutions under the Commercial Mortgage Loan 

Agreements (as to which, see ‘‘Summary of Principal Documents – Commercial Mortgage Loan 

Agreements’’ below). 

Security over the rent and insurance proceeds arising in respect of Secured Properties substituted for 

existing Secured Properties will be in the form of ‘‘Civil Code’’ security assignments (rather than ‘‘Dailly 

law’’ security assignments, which may be transferred, but not granted directly, to a fonds commun de 

créances). In contrast to a ‘‘Dailly law’’ assignment, transfer of title to receivables pursuant to a ‘‘Civil 

Code’’ assignment is not enforceable as against third parties (including a liquidator or other insolvency 

official appointed in respect of a Borrower) until the relevant debtors (in this case, the Occupational 

Tenants and insurance company) are notified by a bailiff (huissier) of the assignment. In order to be 

effective, the notification must take place prior to the commencement of insolvency proceedings. In 

addition, there has been some uncertainty as to whether a ‘‘Civil Code’’ assignment may validly be used 

for security purposes, although a recent decision of the Cour de cassation seems to suggest that it may be 

so used. 

Property Management 

The Property Manager, is experienced in managing retail, industrial and office property and has managed 

the Secured Properties since they were contributed to or acquired by the relevant Borrower. However, 

despite payment of the fees being at competitive market rates, there can be no assurance that the Property 

Manager will continue to act in the future as such. The Property Manager receives a fixed management 

fee for the performance of its services. A management fee (of not more than 3.5% of the aggregate of the 

Gross Rental Income of the relevant Secured Properties and of the gross rental income from the 

properties subject to the Finance Leases) is payable to the Property Manager prior to payments in respect 

of the relevant Commercial Mortgage Loan under the Obligor Pre-Enforcement Priority of Payments. 

The Property Manager has been appointed initially for a term of one year. The appointment of the 

Property Manager will be renewed automatically each year unless three months’ prior notice of 

termination is given by either party. The Property Management Agreements will also contain certain 

termination events which entitle the appointment of the relevant Property Manager to be terminated 

upon notice (including but not limited to): 

(a) any breach by the Property Manager of its obligations under the Transaction Documents which 

would have a material adverse effect on the Market Value of the Secured Properties and which is 

not corrected in accordance with the underlying agreements (including the Property Manager Duty 

of Care Agreement); 

(b) subject to applicable law, the insolvency of the Property Manager; and 

(c) a material adverse change in the Property Manager’s abilities to act as a property manager. 

However, the termination of the appointment of the Property Manager will not be effective until a 

replacement Property Manager (approved by the Management Company and the Rating Agencies) has 

been appointed in accordance with the Property Management Agreement. 

43

Although any successor manager of a Secured Property appointed by a Borrower is required to be 

experienced in managing retail, industrial and office premises, there can be no assurance that there will 

not be a delay in the appointment of a successor, or a variation in the terms of any appointment of a 

successor or that the appointment of any successor manager of a Secured Property would not have an 

adverse effect on the relevant Borrower’s obligations to meet its obligations under the relevant 

Commercial Mortgage Loan Agreement and, therefore, ultimately, the Issuer’s ability to make payment 

under the Notes. 

The net cash flow realised from the Secured Properties may be affected by management decisions. The 

Property Manager will be responsible for property management pursuant to the terms of the applicable 

Property Management Agreement. Although the Property Manager is experienced in managing 

commercial property, there can be no assurance that decisions taken by it in the future will not adversely 

affect the value of or cashflow from the Secured Properties. 

The Property Manager may also operate, manage, acquire or sell properties, which are in the same 

markets as the Secured Properties. In such cases, the interests of the Property Manager or the interests 

of other parties for whom it performs servicing functions (which could include affiliates of the Borrowers) 

may differ from, and compete with, the interests of the Borrowers, and decisions made with respect to 

other real estate assets managed by it or in which it may have an interest may adversely affect the value 

of the Secured Properties. However, the Property Manager Duty of Care Agreement provides that, if in 

the course of providing the services under the Property Management Agreements and the Property 

Manager Duty of Care Agreement, a conflict arises between the interests of the Property Manager on the 

one hand and the interests of the Noteholders on the other, the interests of the Noteholders shall prevail. 

Delegation in respect of leasing etc. 

Except to the limited extent described herein, none of the Management Company, the Custodian, the 

FCC Servicers, any Lender or any Noteholder or any other creditor of any Borrower or the Issuer has any 

right to participate in the management or affairs of any Borrower. In particular, such parties cannot 

supervise the functions relating to the management or operation of the Secured Properties and the leasing 

and re-leasing of the space within the Secured Properties or otherwise. The Issuer will rely upon, inter alia, 

the Property Managers and the other service providers for all asset servicing functions. Failure by any 

such party to perform its obligations could have an adverse effect on a Borrower’s ability to meet its 

obligations under the relevant Commercial Mortgage Loan Agreement and, ultimately, the Issuer’s ability 

to make payments on the Notes. There can be no assurance that, were any such party to resign or its 

appointment be terminated, a suitable replacement service provider could be found, or found in a timely 

manner, and engaged on the same terms applicable to the relevant service provider as at the Closing Date 

or on terms acceptable to the Management Company. 

Dependence on Occupational Tenants – Re-letting risks 

A significant proportion of the Occupational Leases which are in place at the Closing Date and many new 

Occupational Leases granted (or to be granted) in the near future will expire or be determined in 

accordance with their respective contractual terms. There can be no assurance that Occupational Tenants 

will renew their respective Occupational Leases or, if they do not, that new Occupational Tenants of 

equivalent standing will be found to take up replacement Occupational Leases. This is particularly the 

case where a Secured Property requires refurbishment or redevelopment following the expiry of the 

Occupational Lease. Furthermore, even if such renewals are effected or replacement Occupational Leases 

are granted, there can be no assurance (in spite of the covenants given by each Borrower under the 

relevant Commercial Mortgage Loan Agreement in this regard) that such renewals or replacement 

Occupational Leases will be on terms (including rental levels and rent review terms) as favourable to the 

relevant Borrower as those which exist now or before such termination (particularly if there is a change 

in law relating to the terms of the Occupational Leases or some other change that is outside of any 

Borrower’s control), nor that the covenant strength of Occupational Tenants who renew their Occupational 

Leases or new Occupational Tenants who replace them will be the same as, or equivalent to, those now 

existing or existing before such termination. 

The ability of the Borrowers to attract new tenants paying rent levels sufficient to allow them to meet their 

obligations under the Transaction Documents will depend on demand for space at each relevant Secured 

Property and on the regional economy in the relevant Secured Property’s catchment area, which can be 

influenced by a number of factors. Rental levels and the affordability of rents, the size and quality of the 

building, the mix of tenants, the amenities and facilities offered, the convenience, location and local 

environment of the relevant Secured Property, the amount of competing space available, the transport 

44

infrastructure and the age and facilities of the building in comparison to the alternatives are all examples 

of factors which influence tenant demand. 

Similarly, changes to the infrastructure, demographics, planning regulations and economic circumstances 

relating to the surrounding areas on which the relevant Secured Property depends for its tenant base may 

adversely affect the demand for such Secured Property. 

Statutory rights of Occupational Tenants 

The Occupational Tenants, under Occupational Leases entered into in relation to the Secured Properties, 

may be released from the performance of their obligations under the Occupational Leases when external 

unavoidable and unforeseeable events (‘‘force majeure’’ events) make the performance of their 

obligations impossible. 

A number of statutory rights of tenants under the Occupational Leases may affect the net cash flow 

realised from the Secured Property or cause delay in the payment of the rental income. In particular: 

(a) where the Borrower as landlord is in default of its obligations under a Occupational Lease, the tenant 

may have the right under general principles of French law (principe d’exception d’inexécution) to 

withhold its rental payments until the default is cured or to refrain from performing its other 

obligations thereunder; 

(b) a legal right of set-off (droit de compensation légale) could be exercised by a tenant of the Secured 

Property in respect of its rental obligations under the relevant Occupational Lease if a reciprocal debt 

is owed to such tenant by the Borrower as landlord or otherwise; 

(c) a Court may grant time to a tenant in respect of its payment obligations under an Occupational Lease. 

In doing so the Court will take into account the financial standing and needs of the Borrower as 

landlord. Alternatively, the court may reschedule the debts of a tenant (in both cases not in excess of 

two years), treating the extension of time as a matter of procedural law governed by Articles 1244-1, 

1244-2 and 1244-3 of the French Code civil, thus disregarding any provision of an Occupational Lease 

to the contrary; 

(d) a tenant who has legitimately carried out a business (fonds de commerce) at the Secured Property for 

the three years preceding the expiry of the Occupational Lease and who is registered at the French 

trade and company registry acquires, subject to certain administrative conditions, a protected 

leasehold right and is entitled to the renewal of the lease (droit au renouvellement) upon its expiry or 

to compensation for eviction (indemnité d’éviction) should the landlord elect not to renew the 

Occupational Lease. The compensation consists of (i) an amount corresponding to the market value 

of the fonds de commerce, which is determined in accordance with local standard business practices 

and methods based mainly on operating profit and (ii) additional amounts relating to moving costs, 

disruption of business, redundancy of staff, etc. Compensation is not payable, however, if the tenant 

is in serious breach of its obligations under the Occupational Lease. 

The exercise of any such rights may have an adverse effect on the amount of income capable of being 

generated from the Secured Properties, which in turn could adversely affect the ability of the Borrower 

to meet its obligations under the relevant Commercial Mortgage Loan and which in turn may result in the 

receipt by the Noteholders, or the holders of certain classes of Notes, of a principal repayment less than 

the face value of their Notes and the Issuer may be unable to pay interest due on the Notes in full. 

Insolvency risk in respect of Occupational Tenants 

If an Occupational Tenant were to enter into French insolvency proceedings, the relevant Borrower 

would be prohibited from taking any action against the Occupational Tenant for recovery of sums due or 

re-entry to the relevant premises. If an Occupational Tenant were to enter into insolvency proceedings 

regulated other than by French law, the relevant Borrower may also be prohibited from taking similar 

actions if and to the extent that the French courts were to recognise and give effect to such proceedings. 

If the Occupational Tenant is still trading at the premises or has plans to recommence trading with a view 

to the survival of the company as a going concern, it is possible that the court would refuse to grant such 

leave to re-enter to the landlord on the grounds that to do so would frustrate the purpose of the 

administration and, furthermore, that the court would do so notwithstanding the administrator was only 

paying a reduced rent, or even no rent, under the terms of the relevant Occupational Lease. 

Market risks on enforcement 

In the event of enforcement of any Obligor Security, it may be necessary to sell the relevant Secured 

Property. Only the proceeds from enforcement of the security in respect of Secured Properties comprised 

45

within the Property Portfolio relating to a particular Borrower will be available for repayment of its 

Commercial Mortgage Loan. Amounts received in respect of the Secured Properties comprised within the 

relevant Property Portfolio by way of proceeds following a sale could be insufficient to pay amounts due 

under the related Commercial Mortgage Loan, and therefore, ultimately, the Issuer’s ability to make 

payments under the Notes may be adversely affected. 

The liquidation value of any Secured Property may be adversely affected by risks generally incidental to 

interests in real property, including changes in political and economic conditions or in specific market 

sectors, declines in property rental or capital values, changes in rental terms (including tenants’ 

responsibility for service charges), variations in supply of and demand for retail, industrial or (as 

appropriate) office space, competition, the ability of the owner to provide maintenance and control costs, 

prevailing yields and interest rates in France, declines in occupancy rates, changes in governmental rules, 

regulations and fiscal policies, terrorism and other factors which are beyond the control of the Borrowers 

and any other party to the transaction. 

Reliance on Valuation Reports 

There can be no assurance that the valuations set out in the Valuation Report for each of the Secured 

Properties will continue at a level equal to or in excess of such valuations. To the extent that the value of 

each of the Secured Properties fluctuates, there is no assurance that the aggregate of the value of the 

Secured Properties will remain at least equal to or greater than the unpaid principal and accrued interest 

and any other amounts due under the related Commercial Mortgage Loan Agreement. If any Secured 

Property is sold following a Loan Event of Default, there is no assurance that the net proceeds of such 

sale will be sufficient to pay in full all or any amounts due under the relevant Commercial Mortgage Loan 

Agreement. In particular, it should be noted that the Secured Properties, being predominantly light 

industrial properties, are specialised property assets for which, in such circumstances, no ready market 

may exist. Furthermore, the value of the Secured Properties and, consequently, the Borrowers’ ability to 

pay amounts due under the Commercial Mortgage Loan Agreements and (ultimately) the Issuer’s ability 

to make payments under the Notes, are dependent on economic and real estate conditions in France and 

in particular the strength of the industrial sector. 

Environmental risks 

The environmental liability for clean-up costs in respect of any Secured Property under current French 

law is placed primarily on the operator of the activities carried out on such Secured Property. The 

operator is defined as the person who holds an operating permit or declaration receipt and controls the 

activity on a daily basis. However, in the case of warehouses, the authorities generally deliver operating 

permits to the property owner (ie. the owner of the Secured Properties). When no solvent or known 

operator can be found, the owner of the Secured Property may be found liable for the decontamination 

costs. 

A mortgagee who benefits from a mortgage over a contaminated Secured Property is not liable for any 

costs attached to the clean-up of such Secured Property prior to the enforcement of a mortgage. Under 

French law a mortgagee does not take possession of the Secured Property after enforcement of a 

mortgage except in certain limited circumstances (see ‘‘Enforcement of Obligor Security; Insolvency 

Considerations − Secured Properties’’ below); the mortgaged property is sold at court-supervised public 

auction and the mortgagee is repaid out of the proceeds of sale. Consequently, a mortgagee would not 

typically become either an owner or an operator of a property and therefore should not be liable for 

clean-up costs after enforcement of a mortgage. Case law has not yet imposed any liability on a mortgagee 

for any decontamination cost. However, it is possible that the law could change so as to impose liability 

on a mortgagee such as the Issuer. The holders of the Notes may ultimately suffer a loss if such a liability 

arises. 

A Secured Property might be subject to a soil and/or groundwater contamination risk assessment survey, 

if public authorities decide that the site presents hazards to soil and/or groundwater. The French 

contaminated land regime provides for the establishment and constant up-dating by public authorities of 

a list of sites to be subject to risk assessment surveys and imposes on the operator of real estate property 

on this list, or of real estate property otherwise identified as hazardous, an obligation to conduct, at its own 

cost, a soil and/or groundwater risk assessment survey. Depending upon the findings of such survey, 

further surveys, monitoring, or decontamination works may be imposed on the operator at its own cost. 

Such environmental surveys, monitoring, or decontamination costs, if imposed on a Borrower, could 

adversely affect its ability to service its debts. Similarly, if such costs are imposed on an Occupational 

Tenant they might affect its abilities to pay rent to the relevant Borrower, and so adversely affect that 

Borrower’s ability to service its debt. This could also affect the value of the Secured Properties. 

46

In relation to industrial activities, French environmental legislation imposes restrictions on certain 

activities carried out on specific industrial sites and more generally any activities which may affect, inter 

alia, the surrounding area, the environment or public health. A list published by the Ministry of the 

Environment (Nomenclature des installations classées) sets out the activities subject to this environmental 

legislation and whether an activity is subject to prior authorisation by the Préfet (the head of the public 

authority (Préfecture) that administers the relevant département (district) of France) or merely to a 

declaration by the operator or the owner. For instance, covered warehouses as well as the storage of 

flammable products are regulated under French environmental permits. 

The operating conditions for warehouses were strengthened by a ministerial order of 5 August 2002 (as 

published in the French Official Journal on 1 January 2003). As a result of this ministerial order, the 

operator of a warehouse may now face additional compliance costs under French law. 

Failure to obtain or comply with any environmental laws or permits may result in a temporary shutdown 

of business operations at the premises. If the operator does not remedy the situation within the prescribed 

period, the Préfet may, among other things, order the closure of the facility or the temporary or permanent 

prohibition of the carrying out of the business. However, if the business has been in operation for a long 

time, current practice is generally for the DRIRE (technical services of the Préfet) to assist the operator 

in order to help it remedy the situation, rather than impose sanctions. 

Environmental reports produced by Arcadis in June 2005 in relation to Secured Properties representing 

75% of the Market Value of all warehouse, light industrial and mixed use Secured Properties (and 55% 

of the Market Value of the Secured Properties as a whole) did not reveal any material environmental 

issues. The environmental reports produced by Arcadis did not cover office properties. 

The Borrowers will warrant in the Commercial Mortgage Loan Agreements on the Closing Date, in 

respect of each of the Secured Properties, as to environmental matters as summarised in ‘‘Summary of 

Principal Documents – The Commercial Mortgage Loan Agreements – Representations and Warranties’’ 

below. A breach of the environmental representation and warranty contained in a Commercial Mortgage 

Loan Agreement will constitute a Loan Event of Default in respect of the relevant Borrower unless the 

underlying circumstances are remedied within any relevant grace period and save where the breach is 

immaterial. 

Reports 

Apart from the Certificates of Title, the Orrick Report, the Environmental Reports, the excerpts of the 

financial reports of Mazars & Guerard reproduced herein and the Valuation Report reproduced herein, 

no new reports have been prepared specifically for the purpose of this Offering Circular or the 

transactions contemplated herein and none of the Issuer, the Joint Lead Managers, the Management 

Company, the Custodian, the FCC Servicers and the Lenders, the Noteholder Representatives, the 

Hedging Providers and the Liquidity Facility Provider has made any independent investigation of any of 

the matters stated therein except as disclosed in this document. 

Compulsory purchase risks 

Any property in France may at any time be compulsorily acquired by, inter alia, a local or public authority 

or a governmental department in connection with proposed redevelopment or infrastructure projects 

which it believes is in the public interest. Compulsory acquisition occurs by way of expropriation which 

is deemed to be in the public interest. No such compulsory acquisition proposals have been revealed by 

the Certificates of Title prepared by the Notary. However, it is impossible to predict whether any such 

proposals will arise in the future. 

In the absence of exceptional circumstances (such as war), the expropriation proceedings that would apply 

in the case of a property would be the standard expropriation proceedings provided for by the French 

Code de l’expropriation. 

Administrative authorities need to assert the existence of a public interest in order to justify the 

expropriation of a contemplated property. The notion of ‘‘public interest’’ is objectively determined by the 

administrative courts and may not be based purely on the economic interests of a specific local authority. 

The law provides that public interest applies to various projects pertaining to public health, education, 

transport and town planning. 

The decision to deprive a private owner of property may only be taken by the judicial courts (as opposed 

to the administrative courts mentioned in the paragraph above). Such judicial court will also determine 

the amount of the compensation payable to the owner of the relevant property. There is no time limit for 

47

this judicial procedure. The judgment so rendered can be challenged before a court of appeal and then 

the French supreme court (Cour de Cassation). 

The owner of the expropriated property must receive fair compensation for the loss of its property. This 

is compensation for the full direct loss suffered by the relevant owner, including the fair market value of 

the property as at the date of the first judgment relating to the expropriation based on all relevant 

circumstances as at one year prior to the beginning of the preliminary public enquiry. The compensation 

(initially offered by the expropriating authority) may be in kind, i.e. a replacement property. Such 

compensation may also be offered to other occupiers of the property (e.g. tenants). In practice, the 

payment of the compensation due to the relevant owner does not generally occur at the same time as the 

compulsory purchase of the relevant property since both parties need to agree upon the open market 

value of the relevant property. The expropriating authority may not enter into the premises until the 

decision of the judicial courts has been rendered and the compensation due has been paid to the relevant 

owner or placed in escrow for a period of one month. Under French law, the compensation due to the 

relevant owner may never be higher than the actual loss suffered by it but nothing prevents such 

compensation from being lower than the open market value of the relevant property. The compensation 

is determined at the sole discretion of the Courts. 

In the event that only part of the property is expropriated (in accordance with Articles L. 11-1 and L. 

13-10 of the French Code de l’expropriation), the non-expropriated portion of the property may diminish 

in value as a result. In this case, the compensation due to the owner may exceed the value of the 

expropriated portion of the property on its own. In the event that only part of the property is expropriated 

and the judicial court decides in its discretion that the partial expropriation is likely to render the 

remainder of the property ‘‘unusable under normal conditions’’, the owner may request that the whole 

property be acquired (in accordance with Article L. 13-10 of the French Code de l’expropriation). 

In the event that a whole Secured Property is expropriated, both the legal title to the Secured Property 

and the leases related thereto would automatically be terminated. The relevant tenants would then cease 

to make any further rental payments to the Borrower under the relevant leases but would pay 

compensation in lieu of rent until they vacate the premises. Therefore, there is a risk that the amount 

received by way of compensation for the compulsory sale of the Secured Property may be insufficient for 

the Borrower to repay its Commercial Mortgage Loan or any other amounts due with respect to the 

Commercial Mortgage Loan Agreement. In such event, the Noteholders, or the holders of certain classes 

of Notes, may receive by way of principal repayment an amount less than the face value of their Notes 

and the Issuer may be unable to pay in full interest due on the Notes. 

Under the ‘‘direct and ascertainable loss’’ principle, no compensation would be due to the Borrower in 

consideration for the loss in rent resulting from the early termination of the relevant leases related to the 

Borrower by the relevant tenants during the run-up to the actual expropriation. 

Permits, Compliance, Use and Planning 

Absence of Permit 

Construction works may only be carried out pursuant to a building permit (permis de construire) 

(a ‘‘Permit’’). 

According to the Certificates of Title, the Notary was not provided with the relevant Permits, or evidence 

of the existence of the relevant Permits, for two Secured Properties in the portfolio of the Proudreed 

France Borrowers (Valenciennes and Orly/Chaudronniers) and for one Secured Property in the portfolio 

of the Paris Properties Borrowers (Venissieux). 

According to the Certificates of Title, the Notary has been provided with incomplete Permits with respect 

to one Secured Property of the Proudreed France Borrowers (Valbonne) and to four Secured Properties 

of the Paris Properties Borrowers (Argenteuil/Poulmarch, Evreux/Jacquard, Mer, Saint Pierre en 

Faucigny/Aravis). 

Absence of Posting of Permits 

Once a Permit is obtained, it must be published at the relevant town hall and posted at the building site. 

If no objection has been filed by any interested third party within 60 days of the later of the publication 

of a Permit at the relevant town hall and the posting of the Permit at the building site, the Permit becomes 

definitive and cannot (in most cases) be challenged. 

48

In most cases, the information contained in the Certificates of Title does not establish whether the Permits 

are definitive. As a result, they could in theory be challenged by an interested third-party (such as a 

neighbouring property owner), although an action challenging a permit after the building is completed is 

rare in practice. 

Absence/incompleteness of compliance certificate 

After works are completed on a property in accordance with the relevant Permit to the satisfaction of the 

local authority, a compliance certificate (certificat de conformité) is delivered. 

According to the Certificates of Title, the Notary has not been provided with the compliance certificates 

or evidence of the existence of the relevant compliance certificate, with respect to nine Secured Properties 

of the Proudreed France Borrowers and 11 Secured Properties of the Paris Property Borrowers. The 

Certificates of Title indicate that the compliance certificates issued with respect to 17 Secured Properties 

in the portfolio of the Paris Property Borrowers and nine Secured Properties in the portfolio of the 

Proudreed France Borrowers do not cover all the works mentioned in the Certificates of Title as having 

been carried out on the relevant Secured Properties, or are not clear as to whether all compliance 

certificates (or evidence of their existence) regarding the works carried out in the Secured Properties have 

been provided. 

A compliance certificate is not compulsory, but in the absence of a compliance certificate, the Borrower 

has the burden of proving that the works complied with the relevant Permit in the event of a dispute. 

Consequences of absence/incompleteness of Permits and compliance certificates 

As a result of the missing or incomplete information concerning the Permits and compliance certificates 

in relation to the Secured Properties referred to above, it is not possible to determine whether the 

buildings on those Secured Properties were built pursuant to, and in compliance with, valid building 

Permits. If no building Permit was issued at the time the relevant buildings were built, or if the building 

works were notcarried out in accordance with the terms of the Permit, the relevant local authority and/or 

an interested third party (such as a neighbouring property owner) could (among other things) require the 

building to be demolished. 

In relation to seven of the eight Secured Properties where Permits are missing or incomplete, the 

Certificates of Title indicate that the relevant building works were undertaken more than 10 years prior 

to the Closing Date (which is in most cases the statutory limitation period for commencing legal action). 

Furthermore, compliance certificates have been obtained for all Permits issued with respect to works 

completed during the 10 years prior to the Closing Date except with respect to seven Secured Properties 

in the Property Portfolio of the Proudreed France Borrowers and four Secured Properties in the Property 

Portfolio of the Paris Properties Borrowers. Even if the period for taking legal action has expired, 

however, the relevant local authority could refuse to deliver a new building permit in the future (for 

example, for the purpose of extending the building or re-building if the building is destroyed or damaged) 

unless the original Permit is produced and/or any non-compliance is remedied to the satisfaction of the 

local authority, or the issue is otherwise addressed to the satisfaction of the local authority. 

The fact that the Notary has not been provided with certain Permits, or evidence of the existence of the 

relevant Permits, does not mean that the Permits have not been obtained. Nor does the absence a 

compliance certificate mean that the relevant building works have not been carried out in accordance with 

the relevant Permit. The Borrowers have represented that, based on the due diligence carried out at the 

time of acquisition, they believe that the absence of or incompleteness of the Permits in relation to the 

Secured Properties referred to above has no other cause than the original Permits having been lost or the 

inability to obtain copies from the relevant authorities. Furthermore, the Borrowers have represented that 

they are not aware of any matter which would suggest that the works carried out on those Secured 

Properties in relation to which the compliance certificates are incomplete were not performed in 

accordance with the corresponding Permits. 

Partial unauthorised use 

According to the Certificate of Title with respect to the Secured Property located at Alfortville, no 

building permit authorising the change of authorised use (affectation) has been issued in respect of that 

Secured Property. The current legal authorised use is light industrial activity although one third of its 

surface area is currently leased as office space. According to the Certificate of Title, a double tax for 

creation of offices may be due by the Borrower owning this Secured Property on the grounds that the 

change of use has not been subject to prior authorisation. Furthermore, according to the Certificate of 

Title, the local authority could require that the premises revert to light industrial activity. 

49

Risks relating to Planning – Right of First Refusal 

The Certificates of Title confirm that most of the Secured Properties are situated in a pre-emption zone 

where the local authority holds a right of first refusal (droit de préemption urbain) upon a sale of the 

Secured Property. This right of first refusal only applies to direct asset sales. 

The right of first refusal may be exercised by the local authority within a two-month period following the 

mandatory filing of the offer for sale of the Secured Property and for a different price than the offered 

price. The local authority must inform the seller if it chooses to exercise its right of first refusal, in which 

case the Seller may choose not to proceed with the sale or may request a judicial determination of the 

acquisition price. 

Risks relating to the existing Finance Leases 

Eighteen Finance Leases have been entered into between 4 of the Borrowers (Paris Provinces Properties 

SCI, Proudreed France SARL, IDB Immobilier SAS and Beaulieu Properties SCI), as finance lessees and 

third-party finance lessors with respect to properties that are not included in the Property Portfolio. In 

accordance with standard market practice, none of the Finance Leases contain provisions limiting the 

recourse of the finance lessors against the finance lessees or their respective assets. Therefore, as an 

unsecured creditor, each finance lessor benefits from a general right of recourse (droit de gage général) 

against all the assets of the relevant finance lessee (in addition to the title which each finance lessor retains 

over its property until the finance lessee exercises its purchase option). In addition, with respect to two 

Borrowers (Beaulieu Properties SCI and Paris Provinces Properties SCI), the general right of recourse of 

the finance lessor is not limited to the assets of the lessees and could extend to Paris Properties SARL by 

reason of the unlimited liability nature of the lessees’ corporate form. Under French law, an SCI is an 

unlimited liability company (although such liability is not joint and several) such that a creditor may, in 

addition to the assets of the company, have recourse to the assets of the shareholders of the company. 

All Finance Leases provide the finance lessor with an automatic termination right following any breach 

by the finance lessee of its obligations under the Finance Lease (including, among other things, non 

payment of rent or failing to deliver a compliance certificate). Following notice to the finance lessee of a 

breach, the finance lessor may: (i) cancel the Finance Lease; and (ii) require repayment of all or part of 

the outstanding non-amortised amount of the capital invested by the finance lessor at the date of 

termination, and/or the payment of a penalty by the finance lessee to the finance lessor. 

To reduce the risk of a breach under the Finance Leases and to prevent the finance lessors from pursuing 

the rights described above, all rents due to the finance lessors will rank in priority to the payment of 

interest and principal under the Commercial Mortgage Loans in the relevant Obligor Priority of 

Payments, and each relevant Borrower will create a cash reserve which will be credited to its Finance 

Lease Reserve Account (see the section entitled ‘‘Borrowers Finance Lease Reserve Account’’). Currently, 

the annual rental income on the properties subject to the Finance Leases in respect of each Borrower 

Group exceeds the annual amounts payable under the relevant Finance Leases. The relevant Borrowers 

will represent and warrant on the Closing Date that there is no breach under the Finance Leases. 

The Finance Leases provide the finance lessees with the option to purchase the relevant property. Each 

Obligor that is a lessee under a Finance Lease will convenant, under the relevant Commercial Mortgage 

Loan Agreement, not to exercise a purchase option under a Finance Lease unless (i) it certifies to the 

Management Company that it is solvent and has immediately available funds to pay the purchase price 

and all related costs in full and (ii) the price is financed by means of a subordinated, intra-group loan to 

the relevant Obligor or out of funds standing to the credit of the relevant Borrower Junior Expenses 

Account. 

Prior Operating Histories 

Each of the Borrowers was formed for the purposes of acquiring (or refinancing the acquisition of) and 

holding its properties (including the related Secured Property). Each Borrower will represent that it has 

no material or contingent liabilities except for those arising under the related Commercial Mortgage 

Loans and as otherwise permitted by the related Commercial Mortgage Loan Agreement. Other than 

IDB Immobilier SAS (formed in 1974), all of the Borrowers were formed during or after 1990. 

Accordingly, although each Borrower will represent, among other things, that to its knowledge, as at the 

Closing Date, it has no actual or contingent liability relating to any of its past activities other than the 

purchase, financing, ownership or operation of the Secured Properties currently owned by it which, alone 

or together with any other liabilities, may have a material adverse effect on the ability of the relevant 

50

Borrower to perform its payment obligations under the Transaction Documents, each Borrower has been 

operating its respective Secured Property for a substantial time prior to the granting of the related 

Commercial Mortgage Loan and, therefore, has a substantial operating history. The existence of such 

prior operating history creates a risk for such Borrowers that there may exist certain claims in connection 

with such prior operations that have not yet been made against such Borrower. An insolvency of any 

Borrower as a result of claims in connection with prior operations could adversely affect the Issuer’s 

ability to make all payments due on the Notes (see ‘‘Insolvency of the Borrowers; Enforcement of the 

Obligor Security’’ below). 

3. Legal and regulatory considerations relating to the transaction structure 

Insolvency Considerations 

The Borrowers and the other parties to the Transaction Documents which are incorporated under the 

laws of France are subject to the provisions of French insolvency legislation. French insolvency legislation 

generally favours the continuation of a business and protection of employment rights over payment of 

creditors. 

As at the date of this Offering Circular a law reforming French insolvency proceedings has been adopted 

by the French parliament (Loi no. 2005-845 du 26 juillet 2005 de sauvegarde des entreprises), which will 

come into force on 1 January 2006 (the ‘‘Reformed Insolvency Law’’). The description of French 

insolvency law that follows is made subject to the effect of the Reformed Insolvency Law. 

A company’s directors are required to petition for bankruptcy within 15 days of the company’s insolvency 

(état de cessation des paiements), i.e. when the debtor is unable to meet its liabilities due and payable out 

of its immediately available assets (cash available or assets which may be quickly turned into cash). 

Failure to do so subjects the directors to civil liability. A company’s creditor(s) may also file a bankruptcy 

petition if the company is insolvent. The date on which the debtor is deemed to be insolvent is the date 

on which the bankruptcy proceedings commence (jugement d’ouverture). However, in the order 

commencing judicial reorganisation or liquidation proceedings or in a subsequent order, a court may 

order that the date of ‘‘cessation des paiements’’ be deemed to be an earlier date of up to 18 months prior 

to the court order commencing proceedings. In the case of a judicial reorganisation, an administrator 

appointed by the court investigates the affairs of the debtor during an initial observation period (période 

d’observation) and makes proposals for its reorganisation, sale or liquidation. In the case of a court order 

setting out a judicial liquidation, a liquidator is principally in charge of collecting all of the debtor’s assets 

and satisfying its creditors to the extent of available funds. 

The importance of the date of cessation des paiements is that it marks the beginning of the suspect period 

(période suspecte). Certain transactions made during the suspect period may be void or voidable. 

Void transactions include transactions or payments entered into during the suspect period which 

constitute voluntary preferences for the benefit of certain creditors to the detriment of other creditors. 

These include transfers of assets for no or nominal consideration (à titre gratuit), contracts under which 

the obligations of the debtor significantly exceed those of the other party, payments of debts not due at 

the time of payment, payments-in-kind, security granted for debts previously incurred and provisional 

measures unless the writ of attachment or seizure predates the date of suspension of payment. 

Voidable transactions include transactions or payments made when due after the date of suspension of 

payments if the party dealing with the debtor knew or should have known that it had suspended payment 

of its debts. 

As a general rule, creditors domiciled in France whose debts arose prior to the commencement of 

bankruptcy proceedings must file a claim with the creditors’ representative within two months of the 

publication of the court order in the Bulletin Obligatoire des Annonces Civiles et Commerciales; this 

period is extended to four months for creditors domiciled outside France. Creditors who have not 

submitted their claims during this period are barred from receiving distributions made in connection with 

the bankruptcy proceedings and their unasserted claims will be extinguished. 

During the observation period, the debtor is prohibited from paying debts outstanding prior to the 

bankruptcy proceedings, subject to certain exceptions such as set-off of closely (reciprocal) connected 

debts or when the court has authorised the administrator to sue for a debt secured by a retention right on 

an asset of the borrower, such asset being necessary to carry out the activity (Article L.621-24 of the 

French Commercial Code). During this period, creditors may not pursue any legal action against the 

debtor with respect to any claim arising prior to the commencement of the observation period if the 

objective of the legal action is: 

51

(a) to obtain an order for, or payment of, a sum of money by the debtor to the creditor; 

(b) to set aside a contract for non-payment of amounts owed by the debtor; or 

(c) to enforce the creditor’s rights against any asset of the debtor (including pursuant to any security 

arrangements). 

Contractual provisions such as those contained in the Commercial Mortgage Loan Agreement that would 

accelerate the payment of the relevant Borrower’s obligations upon the occurrence of a bankruptcy event 

are not enforceable under French law. 

An administrator may renounce or set aside ongoing contracts (including the Occupational Leases). The 

administrator can be required to decide, within a maximum of two months following the start of the 

observation period, whether to continue the performance of the relevant agreement or to allow the 

agreement to be terminated. If the administrator elects to continue an agreement, the administrator must 

ensure that the tenant fully performs its contractual obligations arising after such election is made. It is 

however possible that the administrator could elect to terminate the Occupational Leases in these 

circumstances. 

French bankruptcy law assigns priority to the payment of certain creditors, including the French treasury, 

employees, secured creditors and post-petition creditors (see ‘‘Enforcement of Obligor Security’’ above ). 

If the court orders a judicial reorganisation, it can prohibit the sale of an asset that it deems to be essential 

to the continued business of the debtor (including the Property Portfolio) and postpone the payment of 

debts owed by the debtor. 

In a judicial liquidation of an Obligor, the judicial liquidator would realise the Secured Property (in the 

case of a Borrower) on account of the creditors. He would use, to that effect, powers given to him by 

insolvency legislation including that of selling the Secured Property or the shares (as relevant) by private 

treaty (vente de gré à gré) pursuant to article L.622-18 of the French Commercial Code or organising a 

speedy sale at auction. The aim of the procedure is to maximise the revenue accruing from the sale of the 

assets. 

In a judicial liquidation, all the debts of the insolvent Borrower would be accelerated, the Borrower’s 

assets would be sold by the liquidator, and the proceeds would be distributed to the creditors according 

to their respective ranking (preferred, secured or unsecured). Preferred claims (i.e. legal costs of the 

liquidator, certain employees’ wages, certain taxes and all unpaid sums arising from the continuation of 

the activity of the companies during the observation period) will rank ahead of secured creditors. Unless 

the liquidator has remained inactive for more than three months, secured creditors such as the Issuer may 

not enforce the security themselves. 

The time between the beginning of the insolvency procedure and the distribution of the proceeds to the 

creditors could be shorter than between a call by the Issuer under its security and the final distribution of 

the proceeds after a court sale and a procedure for the allocation of the price. This is due not only to the 

fact that auction sales at the insistence of a creditor are relatively slow, but also to the fact that in an 

insolvency, the various ranking of creditors are determined more quickly than in the procedure which 

follows an auction sale. 

The judicial liquidation procedure is controlled by the judicial liquidator and the insolvency court and not 

by the creditors of the company. A mortgagee can propose a prospective purchaser to the liquidator or 

he can offer to co operate (including via paid advertisement, for instance) in the advertisement of the sale 

or in the search of prospective purchasers in order to expedite the process of enforcement and distribution 

of the liquidation proceeds. 

At the end of the observation period, should the court rule out liquidation of the debtor, then it would 

adopt one of the two following recovery plans: 

(a) a continuation plan (plan de continuation), under which an insolvent company would continue as an 

individual entity and such plan may provide for delayed payments. The Obligor Security would 

continue to secure the rescheduled indebtedness but could only be enforced in the event that the 

Obligor defaults in the payment of any of the debts as rescheduled. Upon failure by the debtor to 

comply with its obligations under the continuation plan, any creditor may request the termination of 

the plan. Such termination would result in the commencement of liquidation proceedings and would 

not permit a direct enforcement by the Management Company; or 

52

(b) an assignment plan (plan de cession), under which the business and assets (including the Secured 

Property(ies) or the shares) of the Obligor would be assigned to a third party in consideration for a 

price, which given the nature of the companies, should not be significantly less than the value of the 

Secured Property(ies) or the shares (as relevant) since there would be no employees which would 

need to be taken over by an assignee and thereby justify a price lower than the value of the Secured 

Property(ies) or the shares (as relevant). The proceeds of sale would (after satisfaction of preferred 

claims) be applied toward the discharge of the obligations to the Issuer together with legal costs. 

Extension of Insolvency of an Obligor 

Directors and officers (dirigeants de fait ou de droit) of an insolvent company may be held personally 

liable for the debts of the company in case of mismanagement of the company’s business (faute de gestion) 

if they have used the company’s credit and assets in their own interest or have been found guilty of other 

serious acts of fraud or mismanagement. Depending on the level of mismanagement and the procedure 

chosen, the directors may be obliged to pay all or part of the company’s debt, as a result of separate 

proceedings against them (action en comblement de passif), or by way of an extension of the insolvency 

proceedings to their personal assets in the proceedings against the debtor. 

A court can also extend the insolvency of one entity in a group of companies to others in the same group 

or to the whole group if the court finds that the assets and liabilities of the group have been managed as 

a single unit. The French supreme court (Court de cassation) has established case-law for two types of 

situations which would entitle a court to extend bankruptcy proceedings of one company to another, even 

when the second company is not insolvent: (i) the comingling of assets and liabilities between the 

companies (confusion des patrimonies) and (ii) the fictitious nature of the companies (fictivité). The 

comingling of assets and liabilities between companies may result from a mixing (imbrication) of assets 

and liabilities resulting from a general disorder in their respective accounts, which renders the 

determination of the companies’ respective assets and liabilities impossible or form financial or business 

relationships between the relevant companies not at arms’ length conditions, such as transfers of assets by 

one company to another without proper or any consideration. In practice, there are no precise criteria by 

which a court may characterise the merging of assets and liabilities of two companies. 

Certain decisions have emphasised that bankruptcy proceedings of a company may only be extended to 

another company when the degree of inter-relationship of the aggregate assets and liabilities of the 

relevant companies means they are so inextricably linked that only a professional adviser could ascertain 

the actual respective asset/liability situation of the relevant companies. In this respect, it should be noted 

that French courts usually take into account both the accounting and the legal aspects of the 

inter-relationship between the companies. 

The bankruptcy proceedings of a company may also be extended where there are unusual transfers of 

assets from one company in favour of another if it could be argued that the two companies in reality form 

a single entity. This would be the case, for example, where a company is set up using the assets of another 

company in order for the company to shield, for example, its real estate assets from its creditors or where 

a company pays, without receiving an apparent corporate benefit, the debts of another company. 

There is no precise legal definition of the concept of what amounts to the fictitious nature of a company. 

It has been held to apply where a separate legal entity exists in form only. The company does not have 

autonomy and does not in practice exist as an independent legal entity despite the existence of an 

independent legal structure and its creation results from a fraudulent intent. Thus, a French court would 

be entitled to extend the bankruptcy of a company to another company on the basis of the fictitious nature 

of the company if, for example, the business executives were the same, the companies’ names were nearly 

identical, the companies’ registered offices were located in the same place, the companies had the same 

activities and/or interests or the letter-head of the companies was identical. As far as real estate 

transactions are concerned, the merging of assets and liabilities between companies (confusion des 

patrimonies) and the fictitious nature of a company (fictivité) may be merged issues. However, the 

existence of one or more of these elements is not sufficient to systematically establish the fictitious nature 

of a company, the establishment of which depends mainly on the facts, and is considered on a case by case 

basis. 

Enforcement of the Obligor Security 

Enforcement of Obligor Security 

Enforcement in respect of the assets of the Obligors can be by two routes: (a) an enforcement of the 

Mortgages and other security granted by the Borrowers and (b) enforcement of the Shares Pledges 

granted by the Parent Obligors. 

53

Secured Properties 

The Secured Properties will be mortgaged in favour of the Issuer when the Issuer acquires from the 

Lenders the Receivables and the Related Security pursuant to the Receivables Transfer and Servicing 

Agreement. The principal terms of the Mortgages and the Receivables Transfer and Servicing Agreement 

are set out in ‘‘Summary of Principal Documents’’. Under French law the only method of enforcing a 

mortgage is to sell the properties at public auction. 

The first step to enforcing a mortgage under French law is to deliver an enforcement notice to the debtor 

ordering it to pay its debt (commandement de payer) byahuissier (bailiff) (article 673 of the French 

Ancien Code de Procédure Civile). Article 673 only applies when the Secured Property is to be sold by the 

mortgagor to a third party (article 2169 of the French Code Civil). If the debtor does not pay its debts, 

this notice must be filed at the Land Registry (Bureau de la Conservation des Hypothèques) for the district 

in which the Secured Property subject to the enforcement is situated. Pursuant to article 688 of the French 

Ancien Code de Procédure Civile, the next step is to instruct local legal counsel to draft the terms of the 

sale approved by the court (cahier des charges), including a minimum sale price for the Secured Property. 

The minimum price is determined by the mortgagee. 

Finally, a number of notices would need to be published prior to the sale (such as the legal notice of the 

sale, advertisements of the sale and notifying other creditors to inform them of the terms of sale). The 

buyer of a Secured Property would have to pay French registration tax (at the rate of 4.99 per cent. plus 

notary fees on the purchase price or, in exceptional cases, French VAT at the rate of 19.6 per cent. plus 

a 1 per cent. fee (approximately) and notary fees). 

Until the day of public auction, the Issuer (represented by the relevant FCC Servicer, acting under the 

authority of the Management Company) may sell the Secured Property out of court if the debtor consents 

to the price and grants a discharge of the foreclosure notice. 

If no bid were made at the public auction, the enforcing creditor would be declared to be the highest 

bidder and would be obliged to purchase the Secured Property at the minimum sale price specified in the 

terms of the sale. 

Any interested party may re open the auction by offering to purchase the Secured Property for a sum 10 

per cent. higher than the highest bid within 10 days of the sale by auction. 

The Issuer, as mortgagee, would be paid out of the proceeds only after full satisfaction of a minimal 

number of preferred claims, if any, such as Court fees, certain ‘‘super preferred’’ (super privilégié) and 

‘‘preferred’’ tax and social security claims for wages and (in the case of insolvency) claims arising out of 

the continuation of the activity of the insolvent company (Article L.621 32 of the French Commercial 

Code). There should not be any social security claims for wages as all of the Borrowers covenant in the 

Commercial Mortgage Loan Agreements not to have any employees. 

Certain limited ‘‘technical’’ liens (privileges spéciaux) provided for in article 2103 of the French Code Civil, 

such as those in favour of architects and builders who have worked on the building, could rank in priority 

to the Issuer. 

The enforcement procedures would need to be repeated in every district in which Secured Properties 

subject to enforcement are situated. 

Shares Pledges 

Under each Shares Pledge, the Issuer (represented by the relevant FCC Servicer, acting under the 

authority of the Management Company) may, pursuant to article 2078 of the French Code Civil, ask the 

Court for the Pledged Shares to be transferred to it (attribution judiciaire) in satisfaction of the obligations 

of the relevant Borrower to the Issuer. An order for the Pledged Shares to be transferred to the Issuer 

would be granted by the Court subject to, among other things, verifying that (i) the secured debt is due 

and payable, (ii) the pledge is valid and enforceable and (iii) an expert appointed by the Court has valued 

the shares. In the case where the value of the shares is higher than the amount of the secured debt the 

Issuer would, subject to being indemnified to its satisfaction, pay a consideration for the difference (or 

would limit its claims to the relevant percentage of the pledged shares). 

Upon the Issuer becoming the sole or majority shareholder of the Borrowers it could take steps to 

dissolve the companies and to proceed with the realisation of their assets and the discharge of their 

obligations. 

The enforcement procedure would take approximately two years and could take a further one to two 

years if appealed by another creditor. 

54

Realising shares in this manner has the disadvantage that the Issuer acquires shares in a company which 

may be indebted to third parties (although, inter alia, due to the limited activities which the Borrowers will 

covenant to engage in, the Borrowers covenanting not to have any employees, and the insurance which 

each Borrowers will undertake to procure, the number of third party creditors should be limited). The 

transfer of the Pledged Shares to the Issuer would operate to discharge the obligations of the Borrower 


Alternatively, the Issuer (represented by the relevant FCC Servicer, acting under the authority of the 

Management Company) may ask for a mandatory court auction (vente forcée) of the shares. Following the 

service, by a bailiff (huissier), of a notice to the Borrower and the relevant Parent Obligor (and upon 

failure to pay within 8 days of such notice) the mandatory auction would be initiated and the proceeds 

thereof would be applied in satisfaction of the obligations of the Borrower to the Issuer. 

Insurance Claims 

Under each Mortgage, the Issuer will be entitled to the proceeds payable under the insurance policies 

related to each Secured Property covering loss or damage to such Secured Property (but not loss of rent), 

pursuant to a delegation (délégation) under Article L.121 13 of the French Code des Assurances. The 

Issuer (represented by the relevant FCC Servicer, acting under the authority of the Management 

Company) will be vested with a direct action against the insurance company for the payment of the 

relevant insurance proceeds. Such right depends upon the notary (before which the Mortgages will be 

executed) (i) notifying the relevant insurance company of each Borrower of the Issuer’s benefit under the 

relevant insurance policy, and (ii) registering the Mortgages. In the absence of such notification and 

registration, a payment by the relevant insurance company of the relevant insurance proceeds to the 

Borrower and not to the Issuer would be considered as a valid and bona fide payment since the insurance 

company could claim that it was not aware of the mortgage. The Notary has agreed to perform such 

formalities immediately after the Closing Date. Where the mortgages are unregistered, the notary could 

notify the insurance company of each Mortgage but the insurance company will not, in these 

circumstances, be obliged to pay the insurance proceeds to the Issuer as the unregistered mortgage is not 

enforceable (opposable) against any third parties and therefore against the insurance company. The 

registration of any unregistered Mortgages will be carried out if either the Historical ICR or the Projected 

ICR is less than 1.75:1 on any Loan Calculation Date or upon the occurrence of a Loan Event of Default 

(see section entitled ‘‘No initial Registration of Additional Mortgages’’). 

Rental Income 

Under Dailly law assignments, each Borrower has assigned, by way of security, certain rentals proceeds 

in respect of the Secured Properties. So long as no Loan Event of Default or Potential Loan Event of 

Default has occurred, no notice of assignment will be given to the Occupational Tenants. Until the tenants 

are properly notified of such assignment, such tenants could continue to validly discharge their debts by 

paying the relevant Borrower. Assuming that notice of such assignment is given to the tenants in a proper 

form and such notice instructs the tenants to pay to the Issuer any amount due by it under the relevant 

lease contract, the Issuer can collect the relevant monies from the tenant. 

There is some debate as to the proper interpretation of recent French case law in relation to the 

assignments of receivables coming into existence after the commencement of insolvency proceedings. As 

a result, it is not clear whether the rights of the Issuer, as beneficiary of a Dailly law assignment of rental 

income, would be enforceable against an insolvency official or third party creditor of the relevant 

Borrower in the event of insolvency proceedings affecting that Borrower. 

Borrower Accounts 

Each Borrower will grant a pledge over its bank accounts to secure the Borrower’s obligations under the 

relevant Commercial Mortgage Loan Agreement (each, an ‘‘Account Pledge’’). 

Under each Account Pledge, the Issuer (represented by the relevant FCC Servicer, acting under the 

authority of the Management Company) may, pursuant to article 2078 of the French Code Civil, ask the 

Court for the account balances to be transferred to it (attribution judiciaire) in satisfaction of the 

obligations of the relevant Borrower to the Issuer. An order for the relevant account balances to be 

transferred to the Issuer (to the extent of the secured debt) would be granted by the Court subject to, 

among other things, verifying that the secured debt is due and payable and that the pledge is valid and 

enforceable. 

Cash Pledges (Gage-espèces) 

Each Borrower will deposit (by way of gage-espèces) into the relevant Mortgage Reserve Account an 

amount sufficient to cover the costs of procuring the full registration of the Additional Mortgages, as 

55

described under ‘‘Obligor Security (real estate security)’’, as security for all obligations of the Borrowers 

in the same Borrower Group.A cash pledge (gage-espèces) is created by the pledgor by actual delivery of 

cash to the pledgee. 

A cash pledge (gage-espèces) does not fall within the scope of any specific legal regime and no specific 

formalities in respect of perfection are required. Although the characterisation of a cash pledge 

(gage-espèces) as a pledge instead of a transfer of ownership is debated among French legal scholars, the 

validity of a cash pledge (at least when cash is held directly by the pledgee) has been confirmed by French 

case-law. 

Enforcement of a cash pledge (gage-espèces) usually takes place by simple set-off. Such set-off can be 

exercised even if insolvency proceedings have been commenced against the pledgor, provided the security 

interest has not been constituted during the suspect period (période suspecte) (see ‘‘Insolvency 

considerations’’ below). 

Subrogation 

In keeping with common French real estate loan refinancing practice, subrogation has been chosen as the 

method for transferring to the Lenders the benefit of existing real estate security interests (mortgages and 

lender’s liens (privilèges du prêteur de deniers)) securing the Borrowers’ existing loans. Subrogation is a 

mechanism provided for by Article 1250 of the French Civil Code, whereby a new creditor that pays a 

debtor’s existing creditor (or provides the debtor with the funds to repay the existing creditor) is 

substituted in lieu of the existing creditor in respect of its rights and security interests against the 

borrower. The advantage of subrogation is that the existing security interests are maintained and 

transferred with their existing ranking being preserved, up to the amount of the repaid debt, without the 

need to take and register new mortgages on the refinanced assets, thus allowing a significant saving on 

otherwise considerable mortgage registration duties. 

Certain recent decisions of the Cour de Cassation (the French Supreme Court) have introduced some 

uncertainty into the law of subrogation, by holding that a new creditor could not claim interest from the 

debtor at the rate applicable to the subrogated debt (or such other rate as may have been agreed between 

the debtor and the creditor), but instead only at the taux légal (the legal interest rate used for late payment 

interest when not contractually agreed (amounting to 2.05% p.a. in 2005)), as from the date of the 

subrogation. Whilst not limiting the right of the debtor and the new creditor to agree on the rate of 

interest in respect of the subrogated debt going forward (as is the case in connection with the Commercial 

Mortgage Loan Agreements), such case law suggests that the new creditor may not be secured as to 

interest by the existing mortgage, which secured the pre-subrogation interest payment obligation. 

In order to mitigate this risk, additional mortgages will be granted, covering an amount calculated as 

interest on the portion of the Commercial Mortgage Loans refinancing the Borrowers’ existing mortgage 

loans at an estimated rate over a period of 3 years, such additional mortgages to be registered on or 

shortly after the Closing Date only as to the portion thereof representing the difference between 

estimated interest on the Commercial Mortgage Loans and interest thereon at the taux légal. 

No initial registration of Additional Mortgages 

Additional mortgages will be granted by each Borrower over the Secured Property it owns as at the 

Closing Date. However, the additional mortgages will not be registered on the Closing Date (except as to 

a limited amount), with the remainder to be registered if either the Historical ICR or the Projected ICR 

in respect of the relevant Borrower Group is less than 1.75:1 on any Loan Calculation Date or upon the 

occurrence of a Loan Event of Default (each an ‘‘Additional Mortgage’’). 

Prior to registration of the relevant Additional Mortgages in favour of the Issuer, although the Additional 

Mortgages will create a valid security interest, they will not provide the Issuer with priority against claims 

made by other third-party creditors against the Properties owned by the Borrowers if such third-party 

claims are secured by prior-ranking security. For example, even if the Borrowers comply with their 

undertaking not to create any security interest over the Properties, a third party may register a hypothèque 

légale or a hypothèque judiciaire prior to the registration of an Additional Mortgage, in which case, any 

such hypothèque légale or hypothèque judiciaire will rank ahead of the Additional Mortgage. 

To expedite the registration of unregistered (formalisées et non inscrites) Additional Mortgages should 

any of the aforementioned events occur, the Borrowers will be obliged on the Closing Date to fund a 

mortgage reserve in the form of cash pledged to the Issuer in the amount necessary to effect the full 

registration of the Additional Mortgages which will be held in an account of the Issuer. 

56

Insolvency of the Issuer 

The Issuer is neither subject to the provisions of the French Commercial Code relating to bankruptcy and 

insolvency proceedings, nor to the provisions of the French Monetary and Financial Code relating to 

credit institutions (établissements de crédit), investment companies (entreprises d’investissement) or 

investment funds (organismes de placement collectif en valeurs mobilières) and its liquidation may only be 

effected in accordance with the French Monetary and Financial Code and the Issuer Regulations (see 

‘‘The Issuer’’). 

Change of law 

The structure of the issue of the Notes is based on French law and French tax, regulatory and 

administrative practice in effect as at the date of this Offering Circular having due regard to the expected 

tax treatment of all relevant entities under such law and practice. No assurance can be given as to the 

impact of any possible change to French law and French tax, regulatory or administrative practice after 

the date of this Offering Circular. 

Changes to the Basel Capital Accord (Basel II) 

In June 2004, the Basel Committee on Banking Supervision (the ‘‘Committee’’) published Basel II, which 

will replace the 1988 Capital Accord and contains a new set of standards for determining the minimum 

capital requirements for banking organisations and places enhanced emphasis on market discipline and 

sensitivity to risk. It is the intention of the Committee that, for the most part, the new framework will be 

available for implementation by member jurisdictions by the end of 2006. However, for more advanced 

approaches to risk measurement, implementation will not occur until the end of 2007. In addition a capital 

floor may be imposed on some banks until 2009. In order for the new framework to be put into effect for 

credit and financial institutions in Europe it will need to be implemented via an EU Capital Adequacy 

Directive, proposals for which have been presented by the European Commission. Basel II may, amongst 

other things, affect the risk-weighting of the Notes in respect of certain investors if those investors are 

regulated in a manner which will be affected by the new framework. Consequently, prospective purchasers 

should consult their own advisers as to the consequences of, and the effect on them of, the implementation 

of Basel II. 

4. Risks relating to Taxation 

French corporate income status of the Borrowers 

The Borrowers have different corporate forms. They consist of sociétés à responsabilité limité (each, an 

‘‘SARL’’), sociétés par actions simplifiées (each, an ‘‘SAS’’) and sociétés civiles immobilières (each, an 

‘‘SCI’’). 

Each Borrower that is an SARL or an SAS is liable to French corporate income tax. 

Under French tax law, an SCI is deemed to be a transparent entity, subject to certain exceptions which do 

not apply to the Borrowers. Accordingly, the shareholders of a Borrower that is incorporated as an SCI 

include their share of the profits or losses realised by that Borrower in their taxable income and are 

directly liable vis-à-vis the French tax authorities for the payment of French income tax due on those 

taxable profits, if any. 

Interest paid by the Borrowers to the Issuer 

Pursuant to current French tax legislation, interest paid by the Borrowers to the Issuer on the Commercial 

Mortgage Loans is not subject to withholding tax in France. 

French corporate income status of the Issuer 

The Issuer is exempt from French corporate income tax on income (including interest income) realised 

within the framework of its legal purpose. 

Withholding Tax in respect of the Notes and the Hedging Agreements 

In the event that withholding taxes are imposed in respect of payments to Noteholders of amounts due 

pursuant to the Notes (as to which see the section entitled ‘‘Taxation’’ below), neither the Issuer nor any 

Paying Agent nor any other person will be obliged to pay any additional amounts to Noteholders or to 

otherwise compensate Noteholders for the reduction in the amounts which they will receive as a result of 

such withholding or deduction. If such a withholding or deduction is required to be made, the Issuer will 

have the option (but not the obligation, unless the Borrowers have exercised their rights to prepay the 

Commercial Mortgage Loans in such circumstances and in certain circumstances subject to the consent of 

the Borrowers) of redeeming all outstanding Notes in full at their Principal Amount Outstanding 

57

(together with accrued interest). For the avoidance of doubt, Noteholders will not have the right to 

require the Issuer to redeem the Notes in these circumstances. 

If the Issuer or a Hedging Provider is obliged to pay such an increased amount as a result of its being 

obliged to make such a withholding or deduction, it may terminate the transactions under the Hedging 

Agreements (subject to the relevant Hedging Provider’s obligation to use its reasonable endeavours to 

transfer its rights and obligations under the Hedging Agreement to a third party Hedging Provider such 

that payments made by and to that third party Hedging Provider under the Hedging Agreements can be 

made without any withholding or deduction for or on account of tax and, in a case where the Issuer wishes 

to exercise its right to terminate the transactions under the Hedging Agreements, subject to the Ratings 

Test being satisfied notwithstanding such termination). Any such increased amounts as may be payable by 

the Issuer shall form part of the Hedging Subordinated Amounts, the payment of the On-going Facility 

Fee in respect of which will rank junior to payments under the relevant Commercial Mortgage Loan in 

the Obligor Priority of Payments. If a transaction under the Hedging Agreement is terminated, the Issuer 

may be unable to meet its obligations under the Notes, with the result that the Noteholders may not 

receive all of the payments of principal and interest due to them in respect of the Notes. 

European Union Directive on the Taxation of Savings Income 

On 3 June 2003, the Council of the European Union adopted a new directive regarding the taxation of 

savings income (2003/48/EC) (the ‘‘Directive’’). The Directive is applicable to interest payments made as 

from 1 July 2005. 

Under the Directive, each Member State will be required to provide to the tax authorities of another 

Member State, inter alia, details of payments of interest within the meaning of the Directive (interest, 

products, premiums or other debt income made by a paying agent established in the first Member State 

to or for the benefit of an individual resident (or certain residual entities) in that other Member State (the 

‘‘Disclosure of Information Method’’). In this way, the term ‘‘paying agent’’ is defined widely and includes 

in particular any economic operator who is responsible for making interest payments, within the meaning 

of the Directive, for the benefit of individuals (or certain residual entities). 

However, throughout a transitional period (the ‘‘Transitional Period’’), Austria, Belgium and Luxembourg, 

instead of using the Disclosure of Information Method used by other Member States, would withhold an 

amount on interest payments. The rate of such withholding tax will equal 15% during the first three years, 

20% during the subsequent three years and 35% until the end of the Transitional Period. The Transitional 

Period has commenced on 1 July 2005 and is to terminate if and when the European Union enters into 

agreements on exchange of information upon request, with several jurisdictions (including the United 

States, Switzerland, Liechtenstein, San Marino, Monaco and Andorra). 

The Directive was implemented into French law by the Amended Finance Law for 2003 dated 30/12/2003, 

by the administrative guidelines (Instruction 5 I-03-05 published 08/12/2005), by the Decree # 2005-330 

dated 6 April 2005 (section 242 ter of the Code Général des Impôts(CGI)), and by the Decree # 2005-132 

dated 15 February 2005 (sections 49 I ter, 49 I quater, 49 I quinquies, 49 I sexies of annex III to the CGI). 

These provisions impose on paying agents based in France an obligation to report to the French tax 

authorities, certain information with respect to interest payments made to beneficial owners domiciled in 

another Member State (or certain territories), including, among other things, the identity and address of 

the beneficial owner and a detailed list of the different categories of interests (within the meaning of the 

Directive) paid to that beneficial owner. These reporting obligations have entered into force with respect 

to interest payments made on or after 1 July 2005. The paying agents have nevertheless been required to 

identify the beneficial owners of such payments as from 1 January 2004. 

The attention of Noteholders is drawn to Condition 8 (Taxation). 

The Issuer believes that the risks described above are the principal risks inherent in the transaction for 

Noteholders, but the inability of the Issuer to pay interest, principal or other amounts on or in connection 

with the Notes may occur for other reasons and the Issuer does not represent that the above statements 

regarding the risks of holding the Notes are exhaustive. Although the Issuer believes that the various 

structural elements described in this document mitigate some of these risks for Noteholders, there can be no 

assurance that these measures will be sufficient to ensure payment to Noteholders of interest, principal or any 

other amounts on or in connection with the Notes on a timely basis or at all. 

58

SUMMARY OF PRINCIPAL DOCUMENTS 

Below is a summary of the key features of the principal Transaction Documents. The information in this 

section does not purport to be complete and is qualified in its entirety by reference to the detailed 

information appearing elsewhere in this Offering Circular. Prospective purchasers of the Notes are advised 

to read carefully and to rely, in addition, on the detailed information appearing elsewhere in this Offering 

Circular in making any decision whether or not to invest in any Notes. 

1. The Commercial Mortgage Loan Agreements 

Each Paris Properties Borrower and the relevant Parent Obligors entered into a Commercial Mortgage 

Loan Agreement on 21 October 2005 with Société Générale. Each Proudreed France Borrower and the 

relevant Parent Obligors entered into a Commercial Mortgage Loan Agreement on 21 October 2005 with 

CCF. 

Pursuant to the terms of each Commercial Mortgage Loan Agreement, the Lenders have agreed subject 

to the satisfaction of certain conditions precedent, to advance a loan to the Borrowers on the Closing 

Date. 

The proceeds from each Commercial Mortgage Loan will be used by each Borrower on the Closing Date 

for the purpose stated in ‘‘Principal Characteristics of the Commercial Mortgage Loans’’ above. 

Limited Joint and Several Liability of the Obligors 

Without prejudice to its own obligations under the relevant Commercial Mortgage Loan Agreement and 

the other Transaction Documents, each Borrower will be jointly and severally liable for all the obligations 

of the other Borrowers within the same Borrower Group under the Transaction Documents. The liability 

of each Borrower in respect of the obligations of other Borrowers within the same Borrower Group will 

be limited, at any time, to the lesser of (a) an amount equal to the then-current principal amount 

outstanding of the relevant Borrower under the relevant Commercial Mortgage Loan Agreement and (b) 

the net asset value of the relevant Borrower, after taking into account its then-current principal amount 

outstanding under the relevant Commercial Mortgage Loan Agreement. 

Interest on the Commercial Mortgage Loans 

The rate of interest on each Commercial Mortgage Loan in respect of any Loan Interest Period will be 

the rate determined by the Management Company to be the applicable Issuer Cost of Funds in respect 

of that Commercial Mortgage Loan and that Loan Interest Period. 

The rate of interest on each Commercial Mortgage Loan will be re-calculated following any prepayment 

of the Notes. 

Pursuant to the terms of each Commercial Mortgage Loan Agreement, interest will be paid by each 

Borrower quarterly in arrear on each Loan Interest Payment Date. 

Repayment of the Commercial Mortgage Loans 

Subject to any early prepayment of a Commercial Mortgage Loan in accordance with the terms of the 

relevant Commercial Mortgage Loan Agreement, the Commercial Mortgage Loans will be repaid in full 

on the Interest Payment Date falling in August 2014. 

(a) Each Borrower shall (or, in the case of paragraphs (vi), (vii) and (viii) below, may), if applicable 

upon giving the requisite prior written notice (as specified below) to, inter alios, the relevant FCC 

Servicer and the Management Company, prepay its Commercial Mortgage Loan: 

(i) in part on any Loan Interest Payment Date, if (A) any interest in any Secured Property is 

disposed of whether as a result of a compulsory purchase or as a result of an Elected Disposal 

as permitted pursuant to and in accordance with the terms of the relevant Commercial 

Mortgage Loan Agreement without a Secured Property being substituted on the same day by 

that Borrower, or (B) all or any of the shares of a Borrower are disposed of, the Prepayment 

Amount being calculated in accordance with the terms of that Commercial Mortgage Loan 

Agreement and as further described below, provided that, (1) if an Elected Disposal occurs 

on a date other than a Loan Interest Payment Date, prepayment must be made on the date 

on which title to the relevant Secured Property is transferred to the Purchaser or, if earlier, the 

date on which sale proceeds are received by the Borrower and (2) if a disposal of shares 

occurs on a date other than a Loan Interest Payment Date, prepayment must be made on the 

59

date on which sale proceeds are received by the relevant Parent Obligor, in each case together 

with breakage costs in an amount equal to interest on the prepaid amount for the period until 

the next Interest Payment Date. For further details as to permitted disposals of Secured 

Properties, see the sub-section entitled ‘‘Disposals of assets and Secured Properties’’ below; 

(ii) 

(iii) 

(iv) 

in part (A) on any Loan Interest Payment Date if any insurance proceeds are received in 

respect of any damage or destruction of a Secured Property or (B) on the first Loan Interest 

Payment Date falling at least six months after the occurrence of any damage to or destruction 

of a Secured Property if insurance proceeds for the reinstatement of that Secured Property 

are not received by that time. The Prepayment Amount will be calculated in accordance with 

the terms of the relevant Commercial Mortgage Loan Agreement and as further described 

below, provided that no prepayment shall be required if the relevant Borrower has notified 

the relevant FCC Servicer, before receipt of any insurance proceeds, that it intends (or, in the 

case of co-owned property, that the co-owners intend) to proceed as soon as possible with 

repairs or reinstatement works, provided that (1) no Loan Event of Default or Potential Loan 

Event of Default has occurred and is continuing and the Historical ICR and the Projected 

ICR in respect of the relevant Borrower Group are both greater than or equal to 1.3:1 at that 

time, (2) all authorisations necessary for such works are obtained in sufficient time so that 

completion of such works can occur within the earlier of (A) 12 months from the date of 

receipt of the insurance proceeds and (B) 24 months from the date of the occurrence of the 

damage or destruction (or such lesser period for which the relevant Secured Property benefits 

from insurance for loss of rent) and (3) such works are completed within the period referred 

to in (2) above (provided that if, in respect of any Secured Property, any of the above time 

periods are (or are likely to be) exceeded, the relevant Borrower shall be entitled to request 

an extension to such time periods from (and subject to the satisfaction of any conditions set 

by) the relevant FCC Servicer); 

in whole but not in part, upon receipt of not less than 45 and not more than 60 days prior 

written notice from the relevant FCC Servicer (acting on the instructions of the Management 

Company) or the relevant Borrower, as the case may be, or such shorter period expiring on 

the latest date permitted by law, if it becomes unlawful for the Issuer (or, as applicable, the 

relevant Borrower) to permit advances made pursuant to the applicable Commercial 

Mortgage Loan Agreement to remain outstanding; 

in whole or in part (depending on the principal amount of the relevant Commercial Mortgage 

Loan then outstanding) on any Loan Interest Payment Date if: 

(A) 

(B) 

on the relevant Loan Calculation Date immediately preceding such Loan Interest 

Payment Date, either the Historical ICR or the Projected ICR (or both) in respect of 

the relevant Borrower Group is below 1.3:1 and either the Historical ICR or the 

Projected ICR (or both) in respect of the relevant Borrower Group was below 1.3:1 on 

each of the three immediately preceding Loan Calculation Dates, in an amount equal 

to the sum of (1) the balance then credited to the Cash Trap Accounts of the Borrowers 

in that Borrower Group and (2) the balance standing to the credit of the relevant 

Borrower Transaction Account following payment or provision in full of items (a) 

through (j) of the Obligor Pre-Enforcement Priority of Payments; or 

on the immediately preceding Loan Interest Payment Date a prepayment was made in 

respect of the relevant Commercial Mortgage Loan pursuant to either sub-paragraph 

(A) above or this sub-paragraph (B) (unless both on the Loan Calculation Date in 

respect of the current Loan Interest Payment Date and on the two Loan Calculation 

Dates immediately preceding such Loan Calculation Date both the Historical ICR and 

the Projected ICR in respect of the relevant Borrower Group are/were equal to or 

above 1.3:1) in an amount equal to the balance then standing to the credit of the 

relevant Borrower Transaction Account following payment or provision in full of items 

(a) through (j) of the Obligor Pre-Enforcement Priority of Payments; 

(v) 

in whole upon receipt of notice from the relevant FCC Servicer acting upon the written 

instructions of the Management Company that the Issuer intends to redeem the Notes 

pursuant to and subject to Condition 5(d) (Optional Redemption for Tax Reasons) and in 

accordance with the terms of the relevant Commercial Mortgage Loan Agreement; 

60

(vi) upon giving not less than 45 nor more than 60 days prior written notice, in whole but not in 

part in the event of any withholding or deduction for or on account of tax being required to 

be made from payments due under the relevant Commercial Mortgage Loan; 

(vii) on a Loan Interest Payment Date and upon giving not less than 45 nor more than 60 days 

prior written notice, in whole or in part (and if in part, in an aggregate minimum amount, 

taking into account all other prepayments made by the other Borrowers in the same Borrower 

Group on that date, of u50,000,000, or any multiple of u5,000,000 above u50,000,000), using 

amounts credited to the Borrower Junior Expenses Account, provided that each other 

Borrower within the same Borrower Group simultaneously prepays its loans in the same 

proportion; or 

(viii) on a Loan Interest Payment Date and upon giving not less than 45 nor more than 60 days 

prior written notice, in whole but not in part if the principal amount outstanding of its 

Commercial Mortgage Loan is less than u50,000,000, using amounts credited to the Borrower 

Junior Expenses Account. 

The Management Company on behalf of the Issuer shall, in accordance with the Issuer Pre-Enforcement 

Priority of Payments or the Issuer Post-Enforcement Priority of Payments, as applicable, apply the 

proceeds from the prepayment of the Commercial Mortgage Loans that it receives by way of prepayment 

from the Borrowers towards the prepayment of the Notes, with the prepayment being applied 

sequentially starting with the highest ranking Class of Notes. 

A Borrower may only prepay its Commercial Mortgage Loan on a Loan Interest Payment Date (or, in the 

case of prepayment as a result of illegality or as a result of an Elected Disposal or a disposal of shares, 

on such other date as is required pursuant to the terms of the relevant Commercial Mortgage Loan 

Agreement) if upon any such prepayment: 

(a) in the case of any prepayment in part but not in full in accordance with paragraphs (i) or (ii) above, 

the Borrower and the other Borrowers in the same Borrower Group pay the relevant amounts 

specified in the definition of the Prepayment Amount below; 

(b) in the case of the prepayment in full but not in part in the circumstances described in paragraphs 

(iii) or (vi) above, the relevant Borrower prepays its share in the then aggregate principal amount 

outstanding of the relevant Commercial Mortgage Loan; 

(c) in the case of a prepayment in accordance with paragraphs (v) above, all of the Borrowers prepay 

the then aggregate principal amount outstanding of the Commercial Mortgage Loans; 

(d) in the case of a prepayment in accordance with paragraphs (iv), (vii) or (viii) above, the relevant 

Borrower or Borrowers, as the case may be, prepay the amount required or elected to be prepaid 

in accordance with such paragraph, as the case may be (provided that, in relation to paragraph (vii), 

the amount shall be allocated between all Borrowers of the same Borrower Group on a pro rata 

basis); 

(e) the relevant Borrower or Borrowers, as the case may be, pay all accrued and unpaid interest then 

outstanding on the Commercial Mortgage Loan; and 

(f) the relevant Borrower or Borrowers, as the case may be, pay any other amounts then due and 

payable under the relevant Commercial Mortgage Loan Agreement, including any amounts owing 

by way of On-going Facility Fee. 

For the purposes of each Commercial Mortgage Loan Agreement, in the case of any prepayment in 

accordance with paragraphs (i) or (ii) above, the ‘‘Prepayment Amount’’ shall correspond to: 

(a) in respect of the Borrower whose Secured Property (or Secured Properties) was (or were) the 

subject of the relevant disposal or insurance claim, the Allocated Loan Amount in respect of the 

relevant Secured Property or Secured Properties and 

(b) in respect of each Borrower in the same Borrower Group (including, except if the affected Secured 

Property is its only Secured Property at the time or the prepayment is due to a disposal of shares, 

the prepaying Borrower), its pro rata share of the product of the aforementioned Allocated Loan 

Amount and the Overamortisation Percentage. 

61

Facility Fees 

Pursuant to the terms of each Commercial Mortgage Loan Agreement and in consideration of the 

Commercial Mortgage Loans being made available, each Borrower will pay to the Issuer: 

(a) on the Closing Date, its proportionate share of an amount equal to all the fees, costs and expenses 

incurred by the Issuer (together with any VAT) on or before the Closing Date in connection with 

the issue of the Notes, the purchase of the Commercial Mortgage Loans and the negotiation, 

preparation and execution of each Issuer Transaction Document (the ‘‘Initial Facility Fee’’); and 

(b) on each Loan Interest Payment Date, a further fee in an amount equal to the aggregate of (i) its 

proportionate share of such amounts as are then necessary to enable the Issuer to pay or provide 

for all amounts (other than any payments of interest on, and repayments of principal in respect of, 

the Notes that are due to be paid on the next Interest Payment Date) falling due in accordance with 

the terms of the Issuer Transaction Documents to be paid or provided for by the Issuer on or shortly 

after such date (together with any VAT), (ii) such amounts as are then necessary to enable the 

Issuer to pay any breakage costs under the Hedging Agreements arising as a result of the Issuer 

adjusting its hedging activities to reflect a prepayment by that particular Borrower and (iii) such 

amounts as are then necessary to enable the Issuer to pay any amounts owing to the Liquidity 

Facility Provider by reason of that particular Borrower failing to make or being late in making a 

payment under its Commercial Mortgage Loan (the ‘‘On-going Facility Fee’’ and together with the 

Initial Facility Fee, the ‘‘Issuer Facility Fees’’), provided the aforementioned amounts relating to 

breakage costs will be payable on the date of prepayment where a prepayment resulting from an 

Elected Disposal of a Secured Property (or the sale of all or any shares of a Borrower) occurs on 

a date other than a Loan Interest Payment Date. 

Each Borrower’s proportionate share of such fees shall be based on their respective share in the principal 

amount outstanding on the Commercial Mortgage Loans. 

Withholding tax 

All payments made to the Issuer under a Commercial Mortgage Loan Agreement will be made free and 

clear of, and without withholding or deduction for, any tax unless such withholding or deduction is 

required by law. If any such withholding or deduction is so required, the amount of the payment due to 

the Issuer will be increased to the extent necessary to ensure that, after that withholding or deduction has 

been made, the amount ultimately received by the Issuer is equal to the amount that it would have 

received had that withholding or deduction not been required to be made. 

Representations and Warranties 

No independent investigation with respect to the matters warranted in any Commercial Mortgage Loan 

Agreement will be made by the Lenders, the Issuer, the Management Company, the Custodian, the FCC 

Servicers, the Issuer Account Bank, any Noteholder Representative, the Joint Lead Managers, the 

Hedging Providers, the Liquidity Facility Provider or the Borrowers Account Banks. In relation to such 

matters, the above parties will rely entirely on the Certificates of Title, the Orrick Report, the 

Environmental Reports, the excerpts of the financial reports of Mazars & Guerard and the Valuation 

Report and the representations and warranties to be given by the relevant Borrower and/or the relevant 

Obligor, if applicable, pursuant to the terms of the relevant Commercial Mortgage Loan Agreement. 

These include representations and warranties, which may be limited by certain materiality qualifications 

and/or subject to the contents of the Certificates of Title in certain circumstances, as to the following and 

other matters to be given by each Borrower in relation to it and its assets and (only in certain cases) by 

the relevant Parent Obligors: 

• due incorporation, establishment, ownership and power and authority; 

• the relevant Borrower being the absolute owner of each Secured Property and having full 

ownership; 

• no security interest existing over all or any of the relevant Borrower’s present or future revenues or 

assets other than certain permitted security interests; 

• each of the Transaction Documents to which it is a party constituting its legal, valid and binding 

obligations and being enforceable in accordance with their terms (subject to certain customary 

reservations); 

• no Loan Event of Default or Potential Loan Event of Default in respect of the relevant Commercial 

Mortgage Loan having occurred and continuing; 

62

• the relevant Borrower’s compliance with all applicable environmental laws and environmental 

licences relating to and material to any of the Secured Properties in its Property Portfolio; 

• ensuring all necessary governmental and other consents, approvals, licences, registrations, filings, 

payments of duties or taxes, notarisations required and other approvals and authorisations 

necessary to own its property and assets and for the conduct of its business substantially as it has 

been conducted with effect from the Closing Date, the absence of which would have a Material 

Adverse Effect, have been or when required will be obtained, are in full force and effect and, so far 

as it is aware, have not been revoked or otherwise terminated and their terms and conditions have 

been complied with; 

• no conflict existing between the Transaction Documents to which it is a party and applicable laws, 

regulations and its constitutional documents; 

• no material adverse change in its financial condition since the date on which the final version of the 

Information was produced or distributed, as the case may be; 

• other than as disclosed to the Lenders on the Closing Date , no litigation, arbitration, administrative 

proceedings or governmental or regulatory investigations or proceedings or disputes being current 

or to its knowledge threatened or pending which, if adversely determined against it would be 

reasonably expected to have a Material Adverse Effect; 

• no compulsory purchase orders relating to any Secured Property in its Property Portfolio; 

• no deduction or withholding for or on account of any tax being required to be made from any 

payment it may make under the Transaction Documents; 

• the accuracy of the information provided to the Notary who prepared the Certificates of Title 

relating to the Secured Properties in the relevant Borrower’s Property Portfolio, the environmental 

consultants who prepared the relevant Environmental Report, the Valuers who prepared the 

relevant Valuation Report and the insurance brokers who arranged the Insurance Policy; 

• its most recent audited financial statements (to the extent that such financial statements have been 

prepared) having been prepared in accordance with generally accepted accounting principles in the 

country of its incorporation and giving a true and fair view of the financial condition of the 

company; and 

• it is able to pay its debts as and when they fall due and that it is solvent; 

• to its knowledge, as at the Closing Date, it having no actual or contingent liability relating to any 

of its past activities other than the purchase, financing, ownership or operation of the Secured 

Properties currently owned by it which, alone or together with any other liabilities, may have a 

Material Adverse Effect. 

Certain of the above representations and warranties will also be repeated on each Loan Interest Payment 

Date, by reference to the facts and circumstances then existing. 

Information Covenants 

Each of the Borrowers covenants, with respect to itself and its assets, that it shall: 

• obtain and provide to each FCC Servicer , at the cost of the Borrower, upon it becoming available, 

a copy of any Valuation Report prepared in respect of its Secured Properties together with a 

summary of any such report to be provided to the Rating Agencies provided that a full Valuation 

Report shall be provided in respect of each Secured Property at least once every three years and 

that a desktop Valuation Report shall be provided in respect of each Secured Property at least once 

each year; 

• provide, through the Borrowers’ Agent, to each FCC Servicer, on each Information Date, a 

quarterly certificate (each, a ‘‘Quarterly Operating Report’’) specifying: 

• the tenancy schedule for each Secured Property in its Property Portfolio showing, inter alia, 

the Occupational Tenants, the relevant units occupied, the vacant units, the total rent payable, 

the total rent billed and the amount of rent (if any) which is in arrears, the lease start date and 

end date, any early termination options, the next rent review date, the rent review basis, the 

Estimated Rental Value of the Secured Property and identifying the changes from the last 

tenancy schedule provided; 

63

• details of the Property Manager fees and any sub-contractor fees; 

• any change in the identity of the Property Manager and any sub-contractor appointed in respect of 

any Secured Property in its Property Portfolio; 

• details of the amount of any service charge shortfall, in excess of u22,000 per annum in respect of 

any Secured Property in its Property Portfolio; 

• details of any steps being taken to recover any due but unpaid rental income under any 

Occupational Lease, where such due but unpaid rental income exceeds u37,500; 

• a copy of the relevant extract of the minutes of any meeting held with the Property Manager with 

respect to any Secured Property in its Property Portfolio since the most recent Quarterly Operating 

Report (or, in the case of the first Quarterly Operating Report, since the Closing Date); 

• a summary of any rent reviews and lease renewals in progress or agreed with respect to any Secured 

Property in its Property Portfolio since the most recent Quarterly Operating Report; 

• copies of all material correspondence with insurance brokers and insurers handling the insurance of 

any Secured Property in its Property Portfolio, in respect of claims or liabilities where the potential 

liabilities or claims exceed u250,000; 

• details of any potential Occupational Tenant of any Secured Property in its Property Portfolio if the 

value of the annual rent is in excess of u 50,000 and any potential buyer of any Secured Property 

in its Property Portfolio; 

• details of any proposed Minor Development the cost (excluding VAT) of which is estimated to be, 

when aggregated with the cost (excluding VAT) of all other Minor Developments completed or 

being undertaken by the relevant Borrower and/or any other Borrowers in the same Borrower 

Group in excess of 10 per cent. of the applicable Reference Amount in respect of any Reference 

Year; 

• details of any proposed Development the cost (excluding VAT) of which is estimated to be in excess 

of the greater of u250,000 and 10 per cent. of the Estimated Rental Value of the relevant Secured 

Property; 

• details of situations where it has become entitled to serve any notice on any former tenant of any 

Occupational Lease; 

• the aggregate amount of due but outstanding payments relating to Secured Properties within the 

relevant Borrower’s Property Portfolio. 

• if a Loan Event of Default or a Potential Loan Event of Default has occurred and is continuing, 

obtain a full Valuation Report of the Secured Properties at the cost of the Borrower, from an 

Approved Valuer appointed by the relevant FCC Servicer; 

• forward to the each FCC Servicer on an annual basis written confirmation from the relevant insurer 

or underwriter (or any broker acting for the relevant Borrower in connection with such insurance) 

of the coverage provided by any Insurance Policy; 

• supply to inter alios, each FCC Servicer, ongoing updated financial statements and certain other 

information with respect to itself; 

• in the event that an Information Meeting is held, if requested and subject to appropriate reasonable 

prior notice, send one or more representatives to that Information Meeting, provided that it shall 

not be required to send any representatives to more than one meeting per calendar year. 

Financial Covenants 

Pursuant to the terms of the relevant Commercial Mortgage Loan Agreement, each Borrower covenants 

and undertakes to ensure that, from and including the Closing Date, in respect of each Historical 

Calculation Period or each Forward-Looking Calculation Period, as the case may be, neither the 

Historical ICR nor the Projected ICR in respect of the relevant Borrower Group is less than 1.2:1. 

The Financial Covenants will be tested by or on behalf of each Borrower Group on each Loan Calculation 

Date (and the results will be notified to the Management Company by the relevant FCC Servicer), 

commencing on the Loan Calculation Date falling in February 2006, by reference to the financial 

information delivered by the relevant Borrower. 

64

A breach of a Financial Covenant may be remedied by the deposit of an amount into the Borrower 

Transaction Account which is sufficient to generate an amount of income which, if such income had been 

available on the first day of the Historical Calculation Period, or Forward-Looking Calculation Period, by 

reference to which either the Historical ICR or Projected ICR in respect of the relevant Borrower Group, 

respectively, was calculated, in each case as would have ensured that such breach would not have occurred 

had the Financial Covenants been calculated as if such remedy had been implemented on the first day of 

the relevant Historical Calculation Period or Forward-Looking Calculation Period, as the case may be. If 

not so remedied, a breach of a Financial Covenant will be capable of constituting a Loan Event of Default 

in respect of the relevant Commercial Mortgage Loan. 

In addition, any breach of a Financial Covenant may be remedied through any remedial action which the 

Rating Agencies confirm to the Management Company and the relevant FCC Servicer would not lead to 

a downgrade of the then-current rating applicable to the Notes. 

LTV Ratio 

Pursuant to the terms of each Commercial Mortgage Loan Agreement, each Borrower will covenant and 

undertake to ensure that, during the Second Reference Period, the LTV Ratio in respect of the relevant 

Borrower Group is not greater than 70 per cent. 

The LTV Ratio will be tested by or on behalf of each Borrower Group on each Loan Calculation Date 

during the Second Reference Period commencing on the Loan Calculation Date falling in August 2012 

on the basis of the market value of the relevant Secured Property as determined in the most recent 

Valuation Reports. 

If, on a Loan Calculation Date during the Second Reference Period, the LTV Ratio is greater than 70%, 

each of the Borrowers in that Borrower Group will be required in accordance with (j) of the Obligor 

Pre-Enforcement Priority of Payments to deposit all sums then standing to the credit of the Borrower 

Transaction Account of each such Borrower (after deducting amounts necessary to pay items (a) to (i) of 

the Obligor Pre-Enforcement Priority of Payments) into the Cash Trap Account of each such Borrower 

on the immediately following Loan Interest Payment Date, provided that if, in respect of a Loan 

Calculation Date during the Second Reference Period, the LTV Ratio is greater than 70% but both the 

Historical ICR and the Projected ICR are greater than 2.0:1, the amount required to be deposited into the 

Cash Trap Account shall be limited to the amount required to bring the LTV Ratio, once the deposit has 

been made, to a level less than 70%. 

Failure by a Borrower Group to maintain its LTV Ratio at or below 70 per cent. during the Second 

Reference Period does not constitute a Loan Event of Default. 

General Covenants 

Pursuant to the terms of each Commercial Mortgage Loan Agreement, the Borrowers will give certain 

covenants (which may be limited in certain circumstances by certain materiality qualifications) including, 

without limitation: 

• to procure that an Occupational Tenant keeps and maintains, in good and substantial repair and 

condition, the Secured Properties and, upon the failure by a tenant to do so and to the extent that 

it is legally possible for the Borrower to do so, to keep and maintain, in good and substantial repair 

and condition, the Secured Properties; 

• to take such steps as are appropriate and permitted by law to ensure that the relevant Occupational 

Tenant complies, or if the Occupational Tenant does not or is unable to comply, to itself comply, 

with material aspects of laws and regulations relating to or affecting the Secured Properties 

(including in relation to planning laws and regulations) and to take (and to procure to the extent 

legally possible, that the relevant tenants take) all necessary steps to remove any Dangerous 

Substances from the Secured Property, other than Dangerous Substances stored or used by 

Occupational Tenants in compliance with Environmental Laws; 

• to ensure that all new Occupational Leases are entered into on terms which in all circumstances a 

reasonably prudent owner of commercial property of the type owned by the relevant Borrower 

(having regard to, inter alia, the Secured Property, the market conditions at the time and the 

interests of good estate management) would accept and to maintain the value of the Secured 

Properties (in particular, resulting from rent payable under the new Occupational Lease, the 

committed term of the new Occupational Lease, the quality of the new Occupational Tenants and 

65

taking into account any rent guarantees or surety given on account of rent) (by reference to all 

Secured Properties belonging to the relevant Borrower Group as a whole) and, except in the case 

of a replacement Occupational Lease entered into following a surrender of an existing Occupational 

Lease, having regard to the market conditions as at such time); 

• to ensure that all rent reviews carried out for an Occupational Lease existing in respect of a Secured 

Property are carried out on arm’s length terms and to maintain the quality, rental income and value 

of the Secured Properties by reference to the Secured Properties of the relevant Borrower Group 

taken as a whole; 

• to maintain insurance and/or procure that the relevant Occupational Tenants maintain insurance in 

respect of all its properties (including Secured Properties) in accordance with the terms of the 

Transaction Documents; 

• to notify the relevant FCC Servicer of any occurrence of a Loan Event of Default or Potential Loan 

Event of Default; 

• if the Property Manager breaches or fails to observe or perform any material obligation or 

undertaking under the Property Management Agreement or if there is a change in the shareholding 

structure of the Property Manager such that Ringmerit Limited and Proudreed France SARL no 

longer hold at least 75 per cent. of the shares and voting rights of the Property Manager (unless each 

of the Rating Agencies has confirmed that such change of control will not have an adverse effect on 

the ratings of the Notes), then, if the Management Company so requires, the Borrower shall as soon 

as reasonably practicable and, in any event, within 60 days of such date appoint a replacement 

Property Manager satisfactory to the Management Company and the Rating Agencies on 

substantially the same terms; 

• not to acquire any assets or subsidiaries or business unless in accordance with and pursuant to the 

terms of the Transaction Documents (which permit, in particular, Same-Day Substitution Disposals 

and the exercise by the relevant Borrowers of their purchase options under the Finance Leases); 

• not to make any substantial change to the general nature of its business from that carried on at the 

Closing Date; 

• not to allow any amounts owed to creditors other than creditors in respect of the Transaction 

Documents to exceed, in aggregate, u50,000 (or u100,000 for Proudreed France SARL, SARL 

PPMPP and SCI Paris Provinces Properties) to remain outstanding for a period of greater than 

30 days, except for any claims contested in good faith; 

• not to enter into any amalgamation, demerger, merger or corporate reconstruction or make any 

alterations to its group structure without the prior written consent of the Management Company 

unless each of the Rating Agencies has confirmed that such amalgamation, demerger, merger or 

corporate reconstruction will not have an adverse effect on the rating of the Notes; 

• not to carry out and/or agree to any development, extension, refurbishment and/or alterations to a 

Secured Property (each a ‘‘Development’’) unless (a) the proposed Development is permitted by 

the terms of the relevant Occupational Lease and the Transaction Documents, (b) if the proposed 

Development is a Minor Development, the sum of (i) the cost of the proposed Development (as 

reasonably estimated and documented by the Borrowers’ Agent) that will be incurred during any 

Reference Year and (ii) the cost already incurred or that will be incurred (in the case of the latter, 

as reasonably estimated and documented by the Borrowers’ Agent) during any Reference Year in 

respect of all other Minor Developments completed or being undertaken by the relevant Borrower 

and/or any other Borrowers in the same Borrower Group will not exceed 10 per cent. of the 

applicable Reference Amount, (c) if the proposed Development is a Major Development, it is a 

Permitted Development and the relevant Borrower has issued and delivered a certificate to the 

FCC Servicer confirming the same and (d) if the estimated cost of the proposed Development (as 

reasonably estimated and documented by the Borrowers’ Agent) is in excess of u2,000,000, each of 

the Rating Agencies have confirmed in writing (addressed or copied) to the Management Company 

that the rating of the existing Notes will not be downgraded, placed on ‘‘credit watch’’ with negative 

implications or withdrawn as a result of the proposed Development, provided that the requirements 

set out in (b) will not apply to any proposed Minor Development in respect of a damaged or 

66

destroyed Secured Property to be financed from insurance proceeds received in respect of the 

relevant Secured Property and applied in accordance with the terms of the relevant Commercial 

Mortgage Loan Agreement, the requirements in (d) will not apply to the proposed Development 

of the Secured Property located at Vaires-sur-Marne, and all references to ‘‘cost’’ are to cost 

excluding VAT; 

• not to create (or agree to create) or permit to subsist any Encumbrance (unless arising by operation 

of law) or enter into any arrangement having a similar effect to an Encumbrance (whether by way 

of finance lease, or otherwise) whatsoever over all or any of its present or future revenues or assets 

(including any uncalled capital) or its undertaking of which it is the legal owner or has an interest, 

other than a Permitted Encumbrance or save as provided for in the Obligor Security Documents (if 

applicable to it); 

• not make or permit any sale, transfer, lease, parting with possession, sharing of occupation or other 

disposal whatsoever other than by way of a Permitted Disposal or an Occupational Lease that is a 

Permitted Occupational Lease; 

• not to terminate any Occupational Lease or consent to or permit an amendment, assignment, 

assignation or surrender of an Occupational Lease, save to the extent such Occupational Lease 

imposes an obligation not to unreasonably withhold consent to the same or does not permit the 

refusal of the same provided that each Borrower shall be permitted within any 12 month period to 

permit the surrender of Occupational Leases up to an aggregate Estimated Rental Value of 

5 per cent. of the total Estimated Rental Value of all the Secured Properties belonging to the 

relevant Borrower Group as at the Closing Date. Where an Occupational Lease is so surrendered 

and a replacement Occupational Lease with an Occupational Tenant of similar quality to the 

original Occupational Tenant is entered into contemporaneously with such surrender by the 

Borrower in respect of the same portion of the affected Secured Property, such surrendered 

Occupational Lease shall not count towards such 5 per cent. limit if such replacement Occupational 

Lease, inter alia, (i) is substantially the same terms as the original Occupational Lease (in particular 

as to term and type of lease) and (ii) does not reduce the aggregate Gross Rental Income receivable 

in respect of the Secured Properties belonging to the Borrower and is entered into such as to be in 

accordance with the preceding paragraph; 

• not to enter into any contract, transaction or other arrangement, save as permitted by the 


• not to incur any additional financial indebtedness unless such indebtedness is in accordance with the 

terms of the Transaction Documents; and 

• not to employ any person or persons or set up a pension fund in respect of any such person or 

persons. 

Loan Events of Default 

Each Commercial Mortgage Loan Agreement contains events (each, a ‘‘Loan Event of Default’’) that 

may lead to a default and acceleration of any amounts outstanding under that Commercial Mortgage 

Loan Agreement (but not the other Commercial Mortgage Loan Agreement) which are as follows: 

(a) 

(b) 

(c) 

any Obligor fails to pay on the due date any amount payable pursuant to the Transaction 

Documents unless its failure to pay is caused by an administrative or technical error and payment 

is made within three Business Days of its due date (or in the case of interest, costs and expenses, 

payment is made within five Business Days of its due date; 

either of the Historical ICR or the Projected ICR is less than 1.2:1 on any Loan Calculation Date 

and the remedial actions required to be taken as a result in accordance with the terms of the 

Commercial Mortgage Loan Agreement have not been taken within 10 Business Days of the 

relevant Loan Calculation Date; 

any Obligor or the Borrowers’ Agent fails to comply with any of the obligations applicable to it 

under the Financing Documents (other than those referred to in (a) and (b) above) and such non 

compliance, if capable of remedy, is not remedied promptly and in any event within 10 Business 

Days of the earlier of (i) the date on which the relevant Obligor (or, as the case may be the 

Borrowers’ Agent) ought reasonably to have been aware of its failure to comply with such 

obligation and (ii) the date it was notified of its failure to comply with such obligation; 

67

(d) any Obligor or the Borrowers’ Agent fails to comply with any of the obligations applicable to it 

under the Transaction Documents (other than the Financing Documents) and such failure (1) does 

not constitute a Loan Event of Default under any other clause describing Loan Events of Default 

and (2) could be reasonably expected to have a Material Adverse Effect; 

(e) any representation, warranty or statement made or deemed to be made by an Obligor or the 

Borrowers’ Agent in the Transaction Documents or any other document delivered by or on behalf 

of any Obligor or the Borrowers’ Agent under or in connection with any Transaction Document is 

or shall prove to have been incorrect or misleading in any respect when made or deemed to be 

made; 

(f) (i) any Financial Indebtedness of any of the Borrowers is not paid when due nor within any 

originally applicable grace period and the obligation to pay is not being disputed in good faith; 

(ii) any Financial Indebtedness of any of the corporate Obligors is declared to be or otherwise 

becomes due and payable or is placed on demand prior to its specified maturity as a result of 

an event of default (however described); 

(iii) any commitment for any Financial Indebtedness of any of the Borrowers is cancelled or 

suspended by a creditor of any of the Borrowers as a result of an event of default (however 

described unless such commitment has been repudiated by the relevant creditor); 

(iv) any creditor of any of the Borrowers becomes entitled to declare any Financial Indebtedness 

of any of the Borrowers due and payable prior to its specified maturity as a result of an event 

of default (however described); 

(v) an event of default howsoever described occurs under any documents relating to Financial 

Indebtedness of a Borrower unless that Financial Indebtedness is discharged or that event of 

default is cured or remedied within any originally applicable grace period; 

(vi) paragraphs (i) to (v) above shall not apply except in respect of any Financial Indebtedness 

which in aggregate is equal to or in excess of u50,000 (or u100,000 in respect of each of 

Proudreed France SARL, SARL PPMPP and SCI Paris Provinces Properties) in respect of any 

Borrower and u500,000 in respect of any corporate Parent Obligor that is not also a Borrower 

(or u100,000 in respect of SPCR SAS); 

(vii) any Encumbrance securing Financial Indebtedness of a Borrower over an asset of that 

Borrower becomes enforceable and is enforced or steps are taken to enforce the same; 

(g) (i) a corporate Obligor is unable or admits inability to pay its debts as they fall due or is deemed 

to be insolvent, suspends making payments on any of its debts, or, for reasons of existing or 

anticipated financial difficulties, commences negotiations with one or more of its creditors with 

a view to rescheduling or readjusting any of its indebtedness; 

(ii) a corporate Obligor is in a cessation des paiements situation or becomes insolvent under any 

applicable law relating to insolvency; 

(iii) the value of the assets of any of the corporate Obligors is less than its liabilities (taking into 

account contingent and prospective liabilities at such time as they fall due and also taking into 

account any indemnity express or implied, which the relevant Obligor has the benefit of in 

respect of such liabilities); 

(iv) a moratorium is declared in respect of any indebtedness of a corporate Obligor; 

(h) any corporate action, legal proceedings or other procedure or step is taken (or, in each case, any 

analogous procedure is taken in any jurisdiction) in relation to: 

(i) the suspension of payments, a moratorium of any indebtedness, winding up, dissolution, 

administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or 

otherwise) of any corporate Obligor; 

(ii) a composition, assignment or arrangement by reason of financial difficulties, is entered into 

with any creditor of any corporate Obligor; 

(iii) the appointment of a liquidator, receiver, administrator or other similar officer in respect of 

any corporate Obligors or any of their assets; 

(iv) enforcement of any Security over any assets of any corporate Obligors; 

68

(i) 

(j) 

(k) 

(l) 

(m) 

(n) 

(o) 

(p) 

any Transaction Document and any related document thereto is not or ceases to be, in whole or in 

part, valid, binding on or enforceable against an Obligor or, in the case of any Obligor Security 

Document, effective to create the security intended to be created by it save for those claims which 

are preferred solely by any bankruptcy, insolvency or other similar laws of general application to 

preferential creditors; 

the Property Manager breaches or fails to observe or perform any material obligation or 

undertaking under the Property Management Agreement or there is a change in the shareholding 

structure of the Property Manager such that Ringmerit Limited and Proudreed France SARL no 

longer hold 75 per cent. or more of the shares and voting rights of the Property Manager (unless 

each of the Rating Agencies has confirmed that such change of control will not have an adverse 

effect on the rating of the Notes) and the Property Manager is not replaced by a person (and on 

terms) satisfactory to the Management Company and the Rating Agencies within 60 days; 

it is or shall become unlawful for an Obligor to perform any of its obligations under the Transaction 

Documents or any consent required to enable an Obligor to perform its obligations under a 

Transaction Document ceases to have effect or if the relevant Obligor has not applied to renew such 

consent or, having made such application, such consent has not been received within 14 days of it 

originally ceasing to have effect, in each case where an absence or expiry of such consent could 

reasonably be expected to have a Material Adverse Effect; 

any Obligor challenges or expresses its intention to challenge any of the Transaction Documents to 

which it is a party; 

any licence, authority, permit, consent, agreement or contract of any Obligor and being material to 

its activities from time to time is terminated, withheld or modified such as could have a Material 

Adverse Effect; 

in the opinion of the relevant FCC Servicer (based upon the reports, opinions and/or advice of its 

advisers) at any time after the Closing Date: 

(i) 

(ii) 

there is a material risk of the Issuer incurring liability under Environmental Law arising 

directly or indirectly in connection with the Transaction Documents such as could have a 

Material Adverse Effect; or 

any Obligor does not comply with any regulations or law applicable to its business, or with 

Environmental Law or Environmental Approvals relating to the Secured Properties where 

such non compliance could, in the reasonable opinion of the relevant FCC Servicer, have a 

Material Adverse Effect; 

any Obligor security: 

(i) 

is not created on the Closing Date or, in the case of Obligor Security in relation to Same-Day 

Substitution Disposals, on the day of such substitution; 

(ii) is not enforceable against third parties on the Closing Date (or (i) in relation to Level 1 

Additional Mortgages, within one month of the Closing Date, (ii) in relation to Level 2 

Additional Mortgages and Level 3 Additional Mortgages, on the date on which they are 

registered by or on behalf of the relevant FCC Servicer in accordance with the terms of the 

Commercial Mortgage Loan Agreement and (iii) in relation to any assignment of rents by way 

of security in connection with a Same-Day Substitution Disposal, on the date on which notice 

of such assignment is served by a court bailiff (huissier) on behalf of the relevant FCC Servicer 

in accordance with the terms of the Commercial Mortgage Loan Agreement); or 

(iii) 

(iv) 

is not or ceases to be valid or enforceable against third parties (on the applicable date in 

accordance with the terms of the Commercial Mortgage Loan Agreement, or does not rank as 

agreed; or 

is or becomes void in whole or in part (otherwise than pursuant to a release of such security 

in accordance with the terms of the Commercial Mortgage Loan Agreement) or is or becomes 

unenforceable against third parties; 

any of the enforcement proceedings provided for in French law no. 91-650 of 9 July 1991, or 

expropriation (except in the case of a CPO Disposal), attachment sequestration, distress or 

execution affects any asset or assets of any corporate Obligor having an aggregate value of u50,000 

69

(or u100,000 for Proudreed France SARL, SARL PPMPP or SCI Paris Provinces Properties) in 

respect of any Borrower and u500,000 in respect of any corporate Parent Obligor that is not also a 

Borrower (or u100,000 in respect of SPCR SAS) and is not contested in good faith and released 

within 30 days or (ii) any such proceeding affects any Secured Property; 

(q) any circumstance or event occurs or arises which could reasonably be expected to have a Material 

Adverse Effect; 

(r) any Obligor party to a Finance Lease fails to comply or expresses its intention not to comply with 

any material provision of any Finance Lease to which it is a party or has made a withdrawal from 

the Finance Lease Reserve Account in accordance with the provisions of the Commercial Mortgage 

Loan Agreement and has not, within 3 Business Days, credited to the Finance Lease Reserve 

Account an amount equal to or greater than the Finance Lease Reserve for the relevant Reference 

Period; and 

(s) the shareholding structure of a Borrower changes otherwise than pursuant to a share transfer to 

another Obligor (other than Jean-Pierre Raynal) or, in the case of shares held by Proudreed France 

SARL only, to a third party (provided that the Rating Agencies have confirmed that such a transfer 

will not have an adverse effect on the ratings assigned to the Notes), provided that in the case of 

any such transfer the relevant shares are immediately pledged in favour of the Issuer, represented 

by the Management Company, on the same terms as on the Closing Date. 

However, if (i) the Loan Events of Default that have occurred fall within the categories mentioned in 

paragraphs (c), (d), (e), (i), (k) (o), (p) and (q) above, (ii) certain only (but not all) of the Borrowers are 

affected thereby (provided that the aggregate Market Value of their Secured Properties does not exceed 

10% of the aggregate Market Value of the Secured Properties of the relevant Borrower Group as a whole) 

and (iii) no other Loan Event of Default other than those referred to in (i) above has occurred and is 

continuing, the acceleration of the relevant Commercial Mortgage Loan will be limited to the affected 

Borrowers, provided that (a) the affected Borrowers repay in full their portion of the relevant 

Commercial Mortgage Loan and (b) the other Borrowers within the same Borrower Group (rateably 

among themselves) prepay their portion of the Commercial Mortgage Loan up to an amount equal to the 

product of the aggregate principal amount outstanding of the portion of the relevant Commercial 

Mortgage Loan of the affected Borrowers and the Overamortisation Percentage. 

Disposals of assets and Secured Properties 

Each Borrower shall be entitled to dispose of any asset and of any Secured Property provided that: 

(a) the relevant Disposal Property is to be disposed of as a CPO Disposal in connection with a 

compulsory purchase order in respect of that Disposal Property; or 

(b) the relevant Disposal Property is to be disposed of as an Elected Disposal; or 

(c) the relevant Disposal Property is to be disposed of as a Same Day Substitution Disposal made in 

accordance with and pursuant to the sub-section entitled ‘‘Same Day Substitution of the Secured 

Properties’’ below; or 

(d) the relevant asset or Disposal Property is to be disposed of as a Minor Disposal, 

(each of a CPO Disposal, an Elected Disposal, a Same-Day Substitution Disposal and a Minor Disposal 

being a ‘‘Permitted Disposal’’) and provided further that the following conditions are satisfied: 

(i) (except in the case of a disposal under paragraph (a) or (b) of the definition of Minor Disposal 

or a disposal under paragraph (c) of such definition for a value (on an after tax basis) of less 

than u75,000 per annum) an appropriate legal representative of the relevant Borrower has 

certified in writing to the relevant FCC Servicer (aa) that the relevant disposal is a Permitted 

Disposal and (bb) the type of Permitted Disposal. 

In the case of an Elected Disposal or a CPO Disposal only, such legal representative must 

make such certification at least thirty-five and no more than sixty days prior to the date of the 

proposed Elected Disposal or CPO Disposal, as the case may be. In the case of a Same-Day 

Substitution Disposal only, such legal representative must make such certifications at least 

thirty days prior to the date of the proposed substitution. In the case of a Minor Disposal of 

a Disposal Property only, such legal representative must make such certifications at least ten 

days prior to the date of the proposed Minor Disposal; 

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(ii) in the case of a Minor Disposal, or an Elected Disposal , no Loan Event of Default or Potential 

Loan Event of Default has occurred and is continuing (or which has not been waived) at the 

time of the relevant disposal or will occur as a result of such disposal, but provided that the 

non-satisfaction of the condition set out in this paragraph (ii) will not in and of itself prohibit 

the relevant Borrower from proceeding with the proposed disposal if (a) no Loan Enforcement 

Notice has been given as at the effective date of the disposal, (b) simultaneously with 

completion of a Minor Disposal or an Elected Disposal, that Borrower prepays its Commercial 

Mortgage Loan by an amount equal to the Allocated Loan Amount of the Disposal Property, 

(c) simultaneously with completion of a Minor Disposal or an Elected Disposal, each of the 

Borrowers (including that Borrower, unless the Disposal Property is its sole Secured Property) 

prepays the relevant Commercial Mortgage Loan in an amount equal to its pro rata share of 

the product of the Allocated Loan Amount of the Disposal Property and the Overamortisation 

Percentage, (d) all other amounts payable upon the aforementioned prepayments (including 

breakage costs) are paid simultaneously with completion of the disposal and (e) such 

prepayments, or any disposal giving rise to such prepayments, would cure a Loan Event of 

Default or Potential Loan Event of Default; 

(iii) in the case of an Elected Disposal, the proposed disposal is a transaction which is on arm’s 

length commercial terms and the full amount of the consideration payable in respect of such 

Elected Disposal will be paid in cash immediately upon completion of such disposal; 

(iv) in the case of an Elected Disposal, the Net Cash Proceeds (together with any equity 

contribution made in cash, provided that the Borrower is not aware of financial difficulties 

affecting the person making the equity contribution) will not be less than the aggregate of (a) 

the Allocated Loan Amount of the Disposal Property and (b) the product of that Allocated 

Loan Amount and the Overamortisation Percentage; 

(v) in the case of any Elected Disposal or Same-Day Substitution Disposal, the Borrower shall 

have procured in its own favour a release from all of the Borrower’s liabilities (whether 

existing or future) to Occupational Tenants arising out of any documentation between it and 

the Occupational Tenants relating to the relevant Disposal Property or, to the extent unable 

to procure such a release by reason of applicable law, an indemnity from the purchaser in 

respect of such liabilities; and 

(vi) in the case of Same-Day Substitution Disposals all Substitution Criteria are satisfied. 

The relevant FCC Servicer must notify the relevant Borrowers’ Agent and the Property Manager no later 

than five Business Days before the proposed Disposal Date whether the relevant conditions set out above 

have been satisfied. Subject to delivery of such a notice to the effect that such conditions have been 

satisfied, the relevant FCC Servicer with the consent of the Management Company will be required to 

release all the Encumbrances granted in respect of the relevant Disposal Property and all related 

Occupational Leases at the relevant time on the relevant Disposal Date. 

Upon completion of a Permitted Disposal that is an Elected Disposal, the relevant Borrower shall (after 

having made the relevant mandatory prepayment of the Commercial Mortgage Loan in accordance with 

the terms thereof and after having paid any related accrued interest and other amounts) ensure that the 

balance of the corresponding Gross Cash Proceeds are transferred into the Borrower Transaction 

Account and the related Disposal Expenses shall be paid from such account in accordance with the 

applicable Obligor Priority of Payments. 

Upon completion of a Permitted Disposal that is a CPO, the relevant Borrower (together with, in respect 

of the amount corresponding to the product of the Overamortisation Percentage and the relevant 

Allocated Loan Amount, the other Borrowers of the same Borrower Group) shall be obliged, as of the 

immediately following Loan Interest Payment Date, to repay the Commercial Mortgage Loan in amount 

equal to the relevant Prepayment Amount, and shall transfer the corresponding Gross Cash Proceeds 

upon receipt to its Borrower Transaction Account. On such immediately following Loan Interest Payment 

Date (after having made the relevant mandatory prepayment of the Commercial Mortgage Loan in 

accordance with the terms thereof and after having paid any related accrued interest and other amounts) 

the Borrower may pay any related Disposal Expenses (to the extent not already paid) out of its Borrower 

Transaction Account in accordance with the applicable Obligor Priority of Payments. 

Upon completion of a Permitted Disposal that is a Minor Disposal, the relevant Borrower shall ensure 

that the balance of the corresponding Gross Cash Proceeds are transferred into the Borrower Transaction 

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Account and the related Disposal Expenses (if any) shall be paid from such account in accordance with 

the applicable Obligor Priority of Payments. 

Same-Day Substitution of the Secured Properties 

If the relevant Borrower elects to effect a Same Day Substitution Disposal of a Secured Property, the 

Borrower shall identify a property which is available to be substituted on the same day for the relevant 

Secured Property and give notice of it to the relevant FCC Servicer. 

A Same-Day Substitution Disposal shall only be permitted if the following criteria (the Substitution 

Criteria) are satisfied, and if so satisfied, the relevant FCC Servicer shall permit the Same-Day 

Substitution Disposal: 

(a) a certificate is provided by the relevant Borrower to the relevant FCC Servicer confirming that: 

(i) the Investment Value (on arm’s length terms) of the Incoming Property, at the relevant time is 

at least the same as the Investment Value (calculated on an arm’s length basis) of the Outgoing 

Property; 

(ii) the relevant Borrower has complied with the Due Diligence Criteria and has acted in a manner 

which would be adopted by a reasonably prudent purchaser of property of a similar type to the 

relevant property to be acquired; 

(iii) all stamp duty, stamp duty land tax or similar transfer or registration tax and any irrecoverable 

VAT and all other related costs and expenses (if any) which are or might reasonably be 

expected to be or become payable by the relevant Borrower in connection with such Incoming 

Property and/or substitution will be paid or provided for in cash on the date of substitution by 

or on behalf of the Borrower (provided that if a satisfactory tax opinion in relation to any such 

stamp duty, stamp duty land tax or similar transfer or registration tax is delivered to the 

relevant FCC Servicer then no provision needs to be made); and 

(iv) all costs in connection with the Same-Day Substitution Disposal have been provided for in the 

relevant Borrower Junior Expenses Account and will be paid on their due date by or on behalf 

of the relevant Borrower; 

(v) the Incoming Property is a property within at least one of the industrial, retail or office sectors; 

(b) a copy of all reviews and reports completed as part of the Due Diligence Criteria is delivered to the 

relevant FCC Servicer which is in an agreed form and which the relevant FCC Servicer may rely on 

as delivered by the Property Manager or the relevant Borrower; 

(c) the proposed acquisition and holding structure of such Incoming Property is in a form and substance 

that is acceptable to the relevant FCC Servicer with the consent of the Management Company 

(acting reasonably); 

(d) the Incoming Property is located in Metropolitan France; 

(e) a notarised deed granting the relevant Issuer a first-rank mortgage (hypothèque conventionnelle) 

over the Incoming Property (with ancillary costs set at 7% of the secured debt and a delegation of 

insurance proceeds under article 1.121-13 of the Insurance Code) is validly entered into on the date 

of the substitution, as is an assignment by way of security (under articles 1689 et seq. of the Civil 

Code) transferring to the relevant Issuer title to the present and future claims of the relevant 

Borrower against the tenants or other occupants of the Incoming Property and its present and 

future claims (to the extent assignable) under all insurance policies relating to the Incoming 

Property; 

(f) a copy of the most recent Valuation Report for such Incoming Property which (A) is addressed and 

delivered to the relevant FCC Servicer such Valuation Report to be prepared by an Approved 

Valuer appointed by the Property Manager with the consent of the relevant FCC Servicer (B) was 

issued no more than one month prior to the date of the relevant Borrower’s certificate (or such 

longer period as may be agreed in writing by the relevant FCC Servicer) and (C) confirms that the 

reports (if any) on environmental and (if required in the opinion of the Approved Valuer) structural 

due diligence carried out in respect of such property, and any deficiencies in the title to such 

property (in each case of which the Approved Valuer has been notified prior to the date of such 

Valuation Report), have been taken into account by the Approved Valuers in reaching their 

determination of the Market Value of such property; 

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(g) (i) a certificate issued by the statutory auditors of the relevant Borrower, if applicable, in form 

and substance similar to the initial statutory auditor’s letters issued on or prior to the Closing 

Date, and (ii) certificates issued by both the relevant Borrower’s and the relevant Parent 

Obligors’ legal representatives (or, if the relevant Parent Obligor is not a body corporate, by 

that person) are provided to the relevant FCC Servicer on the date of substitution in respect 

of the relevant Incoming Property confirming that on the date on which the relevant Borrower 

grants the security referred to in paragraph (d) above, it is solvent and not in a state of 

cessation des paiements and, in relation to the certificate referred to in (ii) above, that it has 

no knowledge of any circumstance that might lead to such a situation within 18 months from 

the date of the substitution, that the relevant Borrower has taken all necessary action to 

authorise its entry into, performance and delivery of the security documents mentioned in 

paragraph (iv) above and that ‘‘Phase I’’ environmental searches in respect of such property 

were carried out without leading to recommendations made by the relevant environmental 

consultant for any further investigations which accord with principles of good estate 

management practice applicable to a property of a type similar to the Incoming Property; 

(h) a notarial report in relation to the Incoming Property dated no earlier than one week prior to the 

substitution date (or such earlier date as may be agreed between the relevant FCC Servicer and the 

relevant Borrower) and in the form of the reports issued by the Notary to the Issuer on the Closing 

Date; 

(i) a legal opinion (addressed to the Management Company, copied to the Custodian and to the 

relevant FCC Servicer,) from an Approved Firm confirming: (i) that the security interests created 

in respect of such Incoming Property as referred to in (d) above is legal, valid, binding and 

enforceable under its governing law and that no further steps (other than those steps which such 

Approved Firm undertakes to carry out within any applicable time limits, which shall include 

submitting necessary applications for registration within appropriate priority periods) are required 

to be taken for the attachment and perfection of such security under such law; (ii) that the relevant 

Borrower has the capacity to enter into and has duly authorised the execution and entry into of the 

document creating such security interests; and (iii) as to such other matters as the Management 

Company shall reasonably request in line with usual market practices; 

(j) (i) the aggregate Initial Valuation of all Secured Properties in respect of the relevant Borrower 

Group which are the subject of a Same Day Substitution Disposal does not exceed, in any 

consecutive 12 month period beginning on and including, a Loan Interest Payment Date and 

ending on, but excluding, the Loan Interest Payment Date falling in the same month in the 

following calendar year, 5 per cent. of the lesser of the aggregate Initial Valuation and the 

aggregate Market Value of all Secured Properties in respect of the relevant Borrower Group 

taken as at the start of such period; 

(ii) the aggregate Initial Valuation of all Secured Properties in respect of the relevant Borrower 

Group which are the subject of a Same Day Substitution Disposal, from and including the 

Closing Date, does not exceed 15 per cent. of the aggregate Initial Valuation of all Secured 

Properties in respect of the relevant Borrower Group taken as at the Closing Date; and 

(iii) each of the Rating Agencies have confirmed in writing (addressed or copied) to the 

Management Company that the rating of the existing Notes will not be downgraded, placed 

on ‘‘credit watch’’ with negative implications or withdrawn as a result of the proposed 

substitution; 

(k) immediately prior to such substitution and immediately after such substitution no Loan Event of 

Default or Potential Loan Event of Default has occurred and is continuing; and 

(l) (i) the Historical ICR and the Projected ICR in respect of the relevant Borrower Group as at the 

Loan Calculation Date immediately prior to such substitution were equal to or greater than 

1.2:1; 

(ii) based upon the relevant Borrower’s records in respect of the Incoming Property, the Historical 

ICR would have been equal to or greater than the level of Historical ICR as at such Loan 

Calculation Date had such Incoming Property been included in the calculations of Historical 

ICR on such date; and 

(iii) the Projected ICR in respect of the relevant Borrower Group will not be reduced below the 

level of Projected ICR in respect of the relevant Borrower Group as at such Loan Calculation 

Date as a result of the proposed substitution; 

73

The ‘‘Due Diligence Criteria’’ referred to above shall consist of the following: 

(a) a review of full tenancy schedules for each proposed Incoming Property including, inter alia, the 

name of each Occupational Tenant, the relevant unit occupied, the total rent payable, the rent per 

square meter, the lease start date and end date, any early termination options, the next rent review 

date, the rent renewal basis and the estimated rental value of each unit so far as they are available; 

(b) a review of the last three years of rental income for each current Occupational Tenant so far as they 

are available; 

(c) a review of the last two years of financial statements and projected budget for each proposed 

Incoming Property, including a review of how the rental income and service charges are treated if 

available; 

(d) a review of the tax charges in relation to each proposed Incoming Property, including reviewing 

copies of current tax statements and details of payments being made by instalments plus 

confirmation that the local authority will be notified on completion and issue refunds for 

overpayment if available; 

(e) a review of accounting information, including details of Occupational Tenants paying by standing 

order/bank transfer, any cash handling on site and details of periodic charges if any; 

(f) a review of all insurance policies, including details of any claims outstanding and pending, details of 

insurers and policy numbers for the last five years, if available, and details of apportionment of 

premium and method of recovery; and 

(g) if relevant, a review of the environmental, structural, mechanical and engineering reports and fire 

certificates in place in respect of the relevant property at the relevant time. 

Governing law 

Each Commercial Mortgage Loan Agreement will be governed by French law. 

2. The Related Rights 

Notarised mortgage deeds 

Notarised mortgage deeds (the ‘‘Notarised Deeds’’) will be entered into on the Closing Date between the 

Lenders and the Borrowers with the participation of the Borrowers’ existing bank lenders whose loans are 

to be refinanced by the Commercial Mortgage Loans (respectively, the ‘‘Existing Lenders’’ and the 

‘‘Existing Loans’’), for the purpose of: 

(a) notarising the Commercial Mortgage Loan Agreements (dépôt au rang des minutes avec 

reconnaissance d’écriture et de signatures); 

(b) subrogating the Lenders to the rights of the Existing Lenders in respect of the Existing Loans, and 

in particular transferring to the Lenders the mortgages (hypothèques conventionnelles) and lender’s 

liens (privilèges du prêteur de deniers) existing over the Secured Properties and securing the Existing 

Loans; 

(c) granting to the Lenders additional mortgages (hypothèques conventionnelles) over the Borrowers’ 

Secured Properties as security for the Borrowers’ obligations as borrowers in respect of the 

Commercial Mortgage Loans (as to which see ‘‘Obligor Security’’ below); and 

(d) releasing the other existing security interests securing the Existing Loans, to be replaced by the 

other security interests created pursuant to the Commercial Mortgage Loan Agreements (as to 

which see ‘‘Obligor Security’’ below). 

Obligor Security (mortgage security) 

Pursuant to each Commercial Mortgage Loan Agreement and the related Notarised Deeds, the following 

security interests shall be transferred by means of subrogation to or, as the case may be, granted for the 

benefit of, the Lenders on the Closing Date and shall be assigned, on such date, by the Lenders to the 

Issuer together with the Receivables: 

(a) the mortgages (hypothèques conventionnelles) and lender’s liens (privilèges du prêteur de deniers) 

existing over the Secured Properties of each Borrower and securing the Existing Loans of that 

Borrower, which will be transferred by means of subrogation to the relevant Lender as security for 

all obligations of that Borrower (as borrower and not as guarantor of any other Borrower) to that 

Lender in respect of the relevant Commercial Mortgage Loan; and 

74

(b) 

additional mortgages (hypothèques conventionnelles) over the Secured Properties of each Borrower, 

to be granted by that Borrower to the relevant Lender as security for all obligations of that 

Borrower (as borrower and not as guarantor of any other Borrower) to that Lender in respect of 

the relevant Commercial Mortgage Loan, for a principal amount equal to the aggregate of: 

(i) 

(ii) 

(iii) 

an amount representing the excess of (x) estimated interest (at the rate provided for under the 

Commercial Mortgage Loan) on the portion of the Commercial Mortgage Loan made 

available to that Borrower to repay the principal outstanding under that Borrower’s Existing 

Loans over a period of 3 years over (y) the amount of interest defined in (ii) below, on that 

same portion of the Commercial Mortgage Loan for a period of three years (the ‘‘Level 1 

Additional Mortgages’’); 

an additional amount representing interest at the 2005 legal rate of interest (taux legal) over 

a period of 3 years on the portion of the Commercial Mortgage Loan made available to that 

Borrower to repay the principal outstanding under that Borrower’s Existing Loans (the 

‘‘Level 2 Additional Mortgages’’); and 

the amount by which the Commercial Mortgage Loan made available to the Borrower 

exceeds the portion thereof used to repay that Borrower’s Existing Loans (plus ancillary costs 

set at 7%) (‘‘Level 3 Additional Mortgages’’) 

(collectively the ‘‘Additional Mortgages’’). 

In order to save on otherwise significant mortgage registration costs, the Notary will be requested to 

register only the Level 1 Additional Mortgages, the balance to be registered at the request of the relevant 

FCC Servicer if on any Loan Calculation Date either the Historical ICR or the Projected ICR in respect 

of the relevant Borrower Group is less than 1.75:1. 

As security for all its obligations to the relevant Lender in respect of the relevant Commercial Mortgage 

Loan, including its obligation to reimburse the relevant Lender for the costs of procuring the full 

registration of the Additional Mortgages, each Borrower will on the Closing Date deposit in the Mortgage 

Reserve Account the estimated amount of such costs (taking into account the increase in the rate of the 

land registration tax (taxe de publicité foncière) to 0.715% from 1 January 2006), such deposit being in the 

form of a pledge of cash (gage-espèces). 

Obligor Security (other security) 

Pursuant to each Commercial Mortgage Loan Agreement (and, insofar as relates to the item mentioned 

in paragraph (c) below, the related Notarised Deeds), the following other security interests shall be 

granted by each Borrower for the benefit of the relevant Lender on the Closing Date and shall be 

assigned, on such date, by the relevant Lender to the Issuer together with the Receivables: 

(a) 

(b) 

(c) 

(d) 

a first ranking fixed charge over its Borrower Accounts (nantissement de comptes), as security for 

the Obligor Secured Obligations of that Borrower; 

a Dailly law assignment by way of security (cession de créances professionelles à titre de garantie) of 

all its rights to and in all net rental income (including all its rights under any guarantee of net rental 

income contained in or relating to any Occupational Leases and any rental deposits made in 

connection therewith) derived from the Secured Properties belonging to it, as security for all 

obligations of that Borrower (as borrower and not as guarantor of any other Borrower) to the 

relevant Lender in respect of the relevant Commercial Mortgage Loan; 

a delegation (délégation) under article L.121-13 of the Insurance Code of the benefit of all Insurance 

Policies in respect of its Secured Properties to the extent that such Insurance Policies that may be 

the subject of the said provision of the Insurance Code, as security for all obligations of that 

Borrower (as borrower and not as guarantor of any other Borrower) to the relevant Lender in 

respect of the relevant Commercial Mortgage Loan; 

a Dailly law assignment by way of security (cession de créances professionelles à titre de garantie) of 

all proceeds receivable by the Borrowers under the Insurance Policies and of all related rights in 

respect of those Insurance Policies (in each case, to the extent assignable and excluding those the 

benefit of which is transferred by means of the ‘‘délégation’’ mentioned in paragraph (iii) above), 

as security for all obligations of that Borrower (as borrower and not as guarantor of any other 

Borrower) to the relevant Lender in respect of the relevant Commercial Mortgage Loan; 

75

(e) a deposit (by way of gage-espèces) into the Mortgage Reserve Account of the amount necessary to 

cover the costs of procuring the full registration of the Additional Mortgages, as described above 

under ‘‘Obligor Security (real estate security)’’, as security for all obligations of the Borrowers in the 

same Borrower Group to the relevant Lender in respect of the relevant Commercial Mortgage 

Loan. 

(f) in relation to a given Commercial Mortgage Loan, the relevant Borrowers will also be jointly and 

severally liable (solidaires) to the relevant Lender. 

The délégation and Dailly law assignment mentioned respectively in paragraphs (c) and (d) above are to 

be notified to the relevant assigned debtors on or about the Closing Date. The Dailly law assignment 

mentioned in paragraph (b) above may be notified to the relevant assigned debtors at any time following 

the occurrence of a Loan Event of Default. 

Parent Obligor Security 

Pursuant to each Commercial Mortgage Loan Agreement, each Parent Obligor will pledge all of the 

shares it owns in any Borrower to the relevant Lender as security for all of the obligations under the 

relevant Commercial Mortgage Loan of each Borrower of which it is a shareholder. 

Prohibition against assignments 

Each Commercial Mortgage Loan Agreement shall provide that the Borrowers are prohibited from 

assigning or purporting to assign to any person other than the relevant Lender the rights, title, interest or 

benefit of any Borrower Account, any Transaction Document to which it is a party, any Occupational 

Lease or any rights arising thereunder (including as to net rental income) or any Insurance Policy. 

Benefit of the Security Interests transferred to the Issuer 

Pursuant to the provisions of article L.214.43 of the French Monetary and Financial Code and the 

Receivables Transfer and Servicing Agreement, upon the purchase by the Issuer of the Receivables from 

each of the Lenders on the Closing Date, the benefit of the Obligor Security shall transfer from each of 

the Lenders to the Issuer without further formalities (de plein droit). 

Enforceability of the charges 

Each Commercial Mortgage Loan Agreement shall provide that each security shall become enforceable 

upon the delivery of a Loan Enforcement Notice by the relevant FCC Servicer, except as mentioned 

above in relation to the notification of Dailly law assignments. 

Each Commercial Mortage Loan Agreement and related Notarised Deed will provide that the proceeds 

of enforcement of any Obligor Security will be applied in accordance with the relevant Obligor 

Post-Enforcement Priority of Payments. 

Modifications, consents or waivers 

The Receivables Transfer and Servicing Agreement will provide that the Lenders (including in their 

capacity as FCC Servicers) may not make any modification to, or grant any other waiver in respect of any 

breach or proposed breach of any Obligor Transaction Document unless they have obtained the prior 

written consent of the Management Company and have given prior notification to the Rating Agencies. 

Enforcement action 

The relevant FCC Servicer, acting on the written instructions of the Management Company where 

necessary, may take enforcement action against any Obligor, in accordance with the terms of the 

Receivables Transfer and Servicing Agreement. See the section entitled ‘‘Receivables Transfer and 

Servicing Agreement’’ below. 

Governing law 

The Obligor Security Documents will be governed by French law. 

3. Issuer Regulations 

The Management Company and the Custodian will enter into regulations (the Issuer Regulations), which 

relates to the creation and operation of the Issuer, and in particular to: 

(a) the assets transferred to the Issuer and the manner in which they are to be administered; and 

(b) the nature of the Notes and Units issued in respect of the Issuer’s assets. 

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4. The Issuer Account Bank and Cash Management Agreement 

Pursuant to the Issuer Account Bank and Cash Management Agreement with the Issuer Account Bank 

with whom the Issuer’s accounts are to be held, CCF will be appointed as Issuer Account Bank and Cash 

Manager. The Issuer Account Bank will provide the Management Company and the Custodian with 

banking and custody services relating to the Issuer Accounts. The Cash Manager will be appointed, as 

agent of the Issuer to (i) act as cash manager in respect of amounts standing from time to time to the credit 

of the Issuer Accounts; (ii) invest monies standing to the credit from time to time of the Issuer Accounts 

in Eligible Investments. In the Issuer Account Bank and Cash Management Agreement, the Issuer 

Account Bank will waive all rights of set-off in relation to the Issuer Accounts subject to that agreement. 

The Issuer will pay to the Cash Manager and Issuer Account Bank an agreed fee (inclusive of any 

applicable VAT). Payment of the fees due to the Cash Manager and the Issuer Account Bank by the 

Issuer will rank senior to payments in respect of the Notes. 

The Cash Manager may sub-contract or delegate the performance of any of its obligations and shall 

forthwith upon appointment of such sub-agent, sub-contractor or delegate give written notice of such 

appointment to the Management Company and the Custodian. The Issuer Account Bank will give certain 

representations, including that it satisfies the Ratings Criteria. The Cash Manager will covenant, among 

other things, that it will make available from time to time all resources that are necessary and desirable 

to enable it to fulfil its obligations under the Issuer Account Bank and Cash Management Agreement. 

The Issuer may not withdraw any monies from the Issuer Accounts otherwise than in accordance with the 

provisions of the Issuer Account Bank and Cash Management Agreement. 

The Issuer Account Bank and Cash Management Agreement contains provisions, inter alia, for the 

transfers of amounts between, and withdrawal of funds from, the relevant Issuer Accounts. 

Details concerning the Issuer Accounts, the Issuer Pre-Enforcement Priority of Payments and the Issuer 

Post-Enforcement Priority of Payments are described further in the section entitled ‘‘Resources Available 

to the Borrowers and the Issuer’’ below. 

Under the Issuer Account Bank and Cash Management Agreement, all accounts established and/or 

maintained pursuant to the Issuer Account Bank and Cash Management Agreement must be maintained 

with a bank that has a rating of at least ‘‘F-1’’ by Fitch and ‘‘A-1+’’ by S&P, in each case in respect of its 

short-term debt obligations (the ‘‘Rating Criteria’’). 

If at any time the Issuer Account Bank ceases to satisfy the Rating Criteria then as soon as reasonably 

practicable and in any event within 30 days of such time, the Management Company and the Issuer 

Account Bank will procure the transfer of the relevant accounts to another bank or banks approved by 

the Management Company and the Custodian, that satisfies the Rating Criteria. 

In addition, the appointment of the Issuer Account Bank may be terminated by the Management 

Company and the Custodian by giving not fewer than thirty (30) days’ prior written notice of their 

intention to do so to the Issuer Account Bank, provided that no such termination shall take effect until 

a new account bank has been duly appointed. The appointment of the Cash Manager may also be 

terminated by the Issuer following certain events including a failure by the relevant Cash Manager to 

perform its duties under the Issuer Account Bank and Cash Management Agreement and an insolvencyrelated 

event in relation to the Cash Manager. In the event that the appointment of the Issuer Account 

Bank or Cash Manager is terminated pursuant to the provisions of the Issuer Account Bank and Cash 

Manager Agreement, the appointment of the Cash Manager or Issuer Account Bank, as applicable, shall 

also terminate. 

The Issuer shall appoint a replacement Cash Manager or Issuer Account Bank in the event that the 

appointment of the Cash Manager or Issuer Account Bank is terminated. The termination of the 

appointment of the Cash Manager or Issuer Account Bank shall not be effective until a replacement has 

been appointed. 

The Issuer Account Bank and Cash Management Agreement is governed by French law. 

5. The Property Management Agreements 

Each Borrower and FIPAM have entered into a separate Property Management Agreement pursuant to 

which FIPAM will be appointed as the Property Manager in relation to the Secured Properties owned by 

the relevant Borrower. 

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Pursuant to the terms of the Property Management Agreements, the Property Manager will be 

responsible for, inter alia: 

(a) the collection of rental income on behalf of the relevant Borrower; 

(b) monitoring the repair and maintenance of the Secured Property and monitoring the payment and 

administration of associated third party costs and expenses; 

(c) advising each relevant Borrower in relation to leased property and overseeing the negotiation and 

completion of existing and new leases; 

(d) providing all information (as reasonably required) on a timely basis, including the information 

required to be contained in the Quarterly Operating Reports (as described in ‘‘Summary of 

Principal Documents – The Commercial Mortgage Loan Agreements – Information Covenants’’); 

(e) complying with all applicable laws and regulations in all material respects; and 

(f) maintaining all licenses, approvals and authorisations necessary to act in its capacity as Property 

Manager. 

The Property Manager has been appointed initially for a term of one year. The appointment of the 

Property Manager will be renewed automatically each year unless three months’ prior notice of 

termination is given by either party. The Property Management Agreements will also contain certain 

termination events which entitle the appointment of the relevant Property Manager to be terminated 

upon notice (including but not limited to): 

(a) any breach by the Property Manager of its obligations under the Transaction Documents which 

would have a material adverse effect on the Market Value of the Secured Properties and which is 

not corrected in accordance with the underlying agreements (including the Property Manager Duty 

of Care Agreement); 

(b) subject to applicable law, the insolvency of the Property Manager; and 

(c) a material adverse change in the Property Manager’s abilities to act as a property manager. 

However, the termination of the appointment of the Property Manager will not be effective until a 

replacement Property Manager (approved by the Management Company and the Rating Agencies) has 

been appointed in accordance with the Property Management Agreement. 

The Property Manager will assist the Borrowers to produce the Quarterly Operating Report detailing the 

performance of the Secured Properties that it manages. 

The Property Management Agreement will be governed by French law. 

6. The Property Manager Duty of Care Agreement 

On 21 October 2005, the Property Manager, each Borrower and the Management Company and the 

relevant FCC Servicer entered into a Property Manager Duty of Care Agreement pursuant to which, inter 

alia the Property Manager will provide for the benefit of certain limited covenants and representations 

and warranties to be given to the Issuer, represented by the Management Company, and to the relevant 

FCC Servicer, and confirm that in the performance of its duties under the Property Management 

Agreement to which it is a party it owes a contractual duty of care to the Issuer, represented by the 

Management Company. 

Pursuant to the terms of the Property Manager Duty of Care Agreement, the Property Manager 

undertakes, inter alia: 

(a) to collect rental income on behalf of the relevant Borrower and to direct the tenants to pay rental 

income directly into the relevant Borrower Transaction Account (held with a bank with a rating of 

at least A1+/F1); 

(b) to maintain systems sufficient to identify all the cash-flows and collateral applicable to the relevant 

Commercial Mortgage Loans; 

(c) to notify the Management Company and the relevant FCC Servicer within 10 Business Days of any 

uncured payment default exceeding in any individual lease’s case u25,000 per quarter for two 

consecutive quarters, or significant tenant default in any case when the cumulative uncured payment 

default exceeds u37,500 per quarter. 

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Certain termination events will each entitle the appointment of the Property Manager to be terminated 

upon notice (including but not limited to, recurrent breach of financial covenants by the Borrower in the 

relevant Commercial Loan Agreement). 

The Property Manager Duty of Care Agreement will be governed by French Law. 

7. The Receivables Transfer and Servicing Agreement 

Transfer Price 

Pursuant to the Receivables Transfer and Servicing Agreement, each Lender will transfer the Receivables 

in respect of the Commercial Mortgage Loan advanced by it to the Issuer against payment of a transfer 

price of u104,529,027, for the Receivables to be transferred on the Closing Date by CCF, and a transfer 

price of u292,870,973, for the Receivables to be transferred on the Closing Date by Société Générale. 

Representations and Warranties 

Each Lender (in its capacity as Seller of the Receivables and Related Rights in respect of the Commercial 

Mortgage Loan advanced by it) will, pursuant to the Receivables Transfer and Servicing Agreement, 

make certain representations and warranties to the Issuer, in relation to the Receivables and Related 

Rights to be assigned by it to the Issuer on the Closing Date. In particular, each Seller will represent and 

warrant that the Receivables and Related Rights shall comply with certain eligibility criteria, including 

that each Receivable (and the attached Related Rights) exists, that each Receivable results from either 

of the Commercial Mortgage Loan Agreements and consists of all principal, interest, indemnities, costs 

and other amounts due from each Borrower to each Seller under the relevant Commercial Mortgage 

Loan Agreement, that each Receivable is denominated and payable in Euros, that the Seller is the sole 

owner of the relevant Receivables, to which, prior to the Closing Date, it has full and unrestricted title, 

that each Receivable is free and clear of any right that could be exercised by third parties against the 

relevant Seller or the Issuer and that each Receivable may be validly transferred to the Issuer in 

accordance with the relevant provisions of the Receivables Transfer and Servicing Agreement and is not 

subject to restrictions on transferability. 

Related Rights 

The following Related Rights shall be automatically transferred to the Issuer together with the 

Receivables transferred by each Seller to the Issuer on the Closing Date: 

(a) the Mortgages, whether registered or unregistered (formalisées et inscrites or formalisées et non 

inscrites); 

(b) the Shares Pledges; 

(c) the Dailly Assignments; 

(d) the Borrower Accounts Pledges; 

(e) the cash collateral constituted pursuant to each Commercial Mortgage Loan Agreement to be 

transferred by each Lender to the relevant Mortgage Reserve Account on the Closing Date; and 

(f) the Insurance Assignments. 

Servicing of the Receivables and Related Rights – Role and Duties of the FCC Servicers 

Each Seller, acting in its capacity as FCC Servicer, will continue to perform the servicing of the 

Receivables originated by it and sold to the Issuer. 

Each FCC Servicer will undertake to ensure that there is devoted to the performance of its obligations 

under the Receivables Transfer and Servicing Agreement at least the same amount of time, attention, 

level of skill, care and diligence, as would be devoted if it were acting solely for its own entire benefit. 

Each FCC Servicer may, subject to the prior written consent of the Management Company (not to be 

unreasonably withheld) sub-contract or delegate any part of the services to be provided by it under the 

Receivables Transfer and Servicing Agreement to any third party provided that, among other things, the 

appointment of such third party shall not in any way discharge or exempt the relevant FCC Servicer from 

any liabilities or obligations under the Receivables Transfer and Servicing Agreement, the Issuer shall 

have no liability to the appointed third party, such third party accepts in substance the rights and 

obligations of the relevant FCC Servicer in respect of the servicing of the Receivables transferred to the 

Issuer, and the Rating Agencies have confirmed that the appointment of any such third party would not 

79

negatively affect the credit quality of the Notes. The foregoing conditions shall not apply to the 

appointment by any FCC Servicer of any affiliate of the FCC Servicer, or of any lawyer, bailiff, valuer, 

estate agent, property management agent or other agent appointed by such FCC Servicer in the ordinary 

course of business who would be acceptable to a reasonably prudent lender. 

Subject to obtaining a specific mandate (mandat spécial) from the Management Company, where 

necessary, each FCC Servicer shall take all such steps as are necessary or desirable in order to compel the 

Borrowers to perform their obligations and duties in connection with the Receivables and initiate all such 

proceedings that are necessary in order to preserve and, if necessary, enforce (execution forcée), the 

Related Rights. In particular, each relevant FCC Servicer: 

(a) may instruct the Notary to register the Mortgages that are not registered (formalisées et non 

inscrites) and may, as applicable, enforce the Mortgages; 

(b) in accordance with the provisions of each Commercial Mortgage Loan Agreement and the 

Borrower Accounts Pledges, may authorise the Borrowers Account Banks to release funds credited 

to the Cash Trap Accounts so that those funds may be applied towards repayment of the relevant 

Commercial Mortgage Loan or, in certain circumstances, so that those funds may be transferred to 

the relevant Borrower Transaction Account in each case in accordance with the provisions of each 

Commercial Mortgage Loan Agreement; 

(c) shall notify the Borrowers Account Banks if a Loan Event of Default has occurred and is 

continuing, so that following such notification the Borrowers Account Banks will not be permitted 

to make any payment out of the other Borrower Accounts, unless in accordance with the provisions 

of each Commercial Mortgage Loan Agreement; 

(d) shall upon the occurrence of a Loan Event of Default notify the relevant debtors of the assignment 

of their debts in accordance with the provisions of the Dailly Assignments; and 

(e) upon the occurrence of a Loan Event of Default and non-payment by any Borrower of any amount 

due under the Commercial Mortgage Loans, shall enforce the rights of the Issuer under the relevant 

Shares Pledges, whether by way of a compulsory sale of the shares (vente forcée) of such Borrower 

(or of any other Borrower of which the relevant Parent Obligor is a shareholder) or by way of a 

request to the competent court for ownership of those shares to be transferred to it (attribution 

judiciaire), pursuant to the relevant Commercial Mortgage Loan Agreement. 

Each FCC Servicer shall release (donner mainlevée) the Related Rights upon repayment in full of the 

sums secured by such Related Rights or as otherwise permitted by the relevant Commercial Mortgage 

Loan Agreement. 

If a FCC Servicer receives any money arising from the enforcement of the Receivables and of the attached 

Related Rights, such FCC Servicer shall forthwith upon receipt thereof pay the same into the Issuer 

Transaction Account. 

Each FCC Servicer shall conduct all communications and dealings with the Obligors, in relation to all 

matters concerning the Receivables, the Commercial Mortgage Loan Agreements or the Related Rights 

of such Obligor, as the case may be, including, without limitation, the giving of any notices, consents or 

approvals of behalf of the Issuer, provided that each FCC Servicer shall notify (and consult) the 

Management Company in writing, and, in the case of items (b), (c) and (d) below, in advance, of: 

(a) any information relating to any matter that becomes known to each FCC Servicer and which is a 

breach of the obligations or duties of a Borrower in connection with the Receivables and the 

Related Rights; 

(b) any proposed waiver or amendment in connection with the Receivables and the Related Rights; 

(c) any proposed declaration that a Loan Event of Default or Potential Loan Event of Default has 

occurred and/or that all or part of the sums due under the Receivables be immediately due and 

payable; or 

(d) any proposed action to be taken to release or enforce certain Related Rights in accordance with 

each Commercial Mortgage Loan Agreement. 

Each FCC Servicer undertakes not to amend the terms of the Receivables or of any of the Related Rights 

granted in connection with the Commercial Mortgage Loan unless (i) it is in writing and signed by or on 

behalf of each of the parties to the relevant Commercial Mortgage Loan Agreement, (ii) prior written 

80

consent of the Management Company to such modification has been obtained and (iii) prior notification 

is made to the Rating Agencies of such modification. 

Each FCC Servicer shall calculate the payment of principal and interest and all other amounts paid and/or 

payable by each Borrower under the Receivables to the Issuer Accounts, and communicate such amounts 

to the relevant Borrowers and/or the Borrowers’ Agent in accordance with the provisions of each 

Commercial Mortgage Loan Agreement. Without prejudice to the foregoing, on each Loan Calculation 

Date and otherwise as required by the Management Company and the Custodian from time to time, each 

FCC Servicer will calculate, on the basis of information provided by the Management Company, the 

following amounts in relation to the relevant Commercial Mortgage Loan: 

(a) the outstanding principal amount of the relevant Commercial Mortgage Loan as at the relevant 

Loan Interest Payment Date; 

(b) the amount of principal payments to be received on the relevant Loan Interest Payment Date under 

the relevant Commercial Mortgage Loan as a result of the repayment in full or in part of such 

Commercial Mortgage Loan pursuant to the provisions of the relevant Commercial Mortgage Loan 

Agreement and/or payments received or recovered by or on behalf of the Issuer as a result of 

enforcement procedures in respect of the Receivables and/or Related Rights; 

(c) the margin and the rate of interest applicable to the Receivables in respect of the following Loan 

Interest Period which shall be the Issuer Cost of Funds in respect of such Loan Interest Period; 

(d) the interest amount payable under the Receivables in respect of the relevant Loan Interest Payment 

Date; 

(e) the amounts payable by any Borrower pursuant to an indemnity provisions of the relevant 

Commercial Mortgage Loan Agreement, including (without limitation) the amount of any late 

payment interest and breakage costs; and 

(f) the amounts of On-Going Facility Fee and any other fees payable by the Obligors under each 

Commercial Mortgage Loan Agreement on the relevant Loan Interest Payment Date or during the 

following Loan Interest Period. 

On each Loan Calculation Date, each FCC Servicer shall verify the calculation of the Historical ICR, the 

Projected ICR and the LTV Ratio in respect of the relevant Borrower Group submitted by the Borrowers 

in accordance with the provisions of each Commercial Mortgage Loan Agreement and, in the event that 

any Borrower fails to submit a calculation of such ratios in respect of a given Information Date, calculate 

such ratios as at the relevant Loan Calculation Date based on the information set out in the relevant 

Quarterly Operating Report. 

In respect of any Information Date, each FCC Servicer shall, on the basis of the relevant Quarterly 

Operating Report, prepare a Servicing Report to be delivered to the Management Company by no later 

than the Loan Calculation Date immediately following such Information Date. 

In consideration for all services performed by the FCC Servicers under the Receivables Transfer and 

Servicing Agreement, the Issuer shall pay a fee quarterly to each FCC Servicer subject to and in 

accordance with the relevant Issuer Priority of Payments. 

The Management Company, acting on behalf of the Issuer, may terminate the appointment of any FCC 

Servicer and shall be entitled to appoint any substitute FCC Servicer, in order to service and collect the 

relevant Receivables and the Related Rights if: 

(a) the relevant FCC Servicer has defaulted on its obligations in a manner which has a material adverse 

effect on the interests of the Unitholders or the Noteholders and (except where, in the opinion of 

the Management Company, such default is incapable of remedy, in which case no such continuation 

and/or notice as is hereinafter mentioned shall be required) such default continues unremedied for 

a period of 30 days after receipt by the FCC Servicer of written notice from the Management 

Company requiring the same to be remedied; or 

(b) the relevant FCC Servicer ceases to carry on the whole of its business or such a substantial part 

thereof as would, in the reasonable opinion of the Management Company, be likely to materially 

and adversely affect its ability to perform its duties under this Agreement; or 

(c) it becomes unlawful under the laws of France for a FCC Servicer to perform any material part of 

its duties under this Agreement, 

81

provided however that no such termination shall take effect prior to the appointment of a substitute FCC 

Servicer in accordance with, and satisfying the requirements of the Receivables Transfer and Servicing 

Agreement, summarised below. 

The Management Company (or any person appointed by it) shall be entitled to substitute another entity, 

in relation to any FCC Servicer’s rights and obligations under the Receivables Transfer and Servicing 

Agreement, such appointment to be effective on the date of termination of the Receivables Transfer and 

Servicing Agreement, provided that: 

(a) the substitute FCC Servicer shall be a credit institution; 

(b) the substitute FCC Servicer accepts in substance the rights and obligations of the FCC Servicer in 

respect of the management and of the servicing of the Receivables (including the Related Rights), 

and enters into an agreement substantially similar to the terms of the Receivables Transfer and 

Servicing Agreement with the Issuer; 

(c) the substitute FCC Servicer irrevocably waives all rights of contractual recourse (responsabilité 

contractuelle), of any form, nature, and on any ground whatsoever, which it may have against the 

Issuer; 

(d) the Rating Agencies have been given prior notice of such substitution and have confirmed that the 

substitution shall not result in the downgrading or withdrawal of any of the ratings then assigned by 

any of the Rating Agencies to any of the Notes, unless such substitution is to limit or avoid the 

downgrading or avoid the withdrawal of all the ratings then assigned by the Rating Agencies to all 

the Notes; 

(e) the Custodian has given its prior consent to such a substitution, such consent not to be unreasonably 

withheld; 

(f) the Management Company has given prior notice of such substitution to the relevant Borrowers by 

ordinary letter (lettre simple); and 

(g) such substitution shall comply with all applicable laws and regulations. 

Any FCC Servicer may terminate its appointment under the Receivables Transfer and Servicing 

Agreement upon the expiry of not less than 2 months’ notice of termination given to the Management 

Company and the Custodian, provided that a substitute FCC Servicer shall be appointed by the 

Management Company and the Custodian, such appointment to be effective on the date of resignation of 

the appointment of the initial FCC Servicer, and that substitution is done subject to and in accordance 

with the conditions described in paragraphs (a) through (g) above. 

If not otherwise terminated, the appointment of each FCC Servicer shall automatically (de plein droit) 

terminate on the Issuer Liquidation Date. 

The Receivables Transfer and Servicing Agreement will be governed by French Law. 

8. The Liquidity Facility Agreement 

Under the terms of the Liquidity Facility Agreement, the Liquidity Facility Provider will provide the 

Issuer a 364 day committed revolving euro liquidity facility (the ‘‘Liquidity Facility’’) to permit drawings 

to be made in an aggregate of up to u26 million (the ‘‘Liquidity Facility Maximum Amount’’)onany 

Interest Payment Date, in circumstances where there is a shortfall between the amounts which will be 

received by the Issuer on or before such Interest Payment Date in respect of the related Interest Period 

and the Issuer’s senior expenses (being those set out in (a) to (c) of the Issuer’s Pre-Enforcement Priority 

of Payments as set out in the section entitled ‘‘Resources available to the Borrowers and the Issuer – Issuer 

Pre-Enforcement Priority of Payments’’) and interest on each Class of Notes, other than any interest due 

on any portion of the Notes to which any Principal Loss has been allocated in accordance with Condition 

5(f) (Note Principal Payments, Principal Amount Outstanding and Pool Factor) (a‘‘Liquidity Shortfall’’) 

on any Determination Date. Drawings under the Liquidity Facility may be requested for so long as a Note 

Enforcement Notice has not been served, certain other events have not occurred in respect of the Issuer 

and various warranties of the Issuer therein remain true in all material respects. 

The Liquidity Facility Maximum Amount will reduce in proportion to prepayments of principal on the 

Notes. 

For further details relating to the Liquidity Facility please see the section entitled ‘‘Resources available to 

the Borrowers and the Issuer – The Liquidity Facility’’ below. 

82

The Liquidity Facility Agreement will be governed by French Law. 

9. The Hedging Agreements 

On the Closing Date, the Issuer will enter into fixed/floating interest rate swap transactions and interest 

rate caps with the Hedging Providers, each under an International Swaps and Derivatives Association Inc. 

1992 Master Agreement (Multicurrency-Cross Border Version) in order to address certain risks arising as 

a result of the Borrowers paying to the Issuer a fixed rate of interest on the Commercial Mortgage Loans 

and the Issuer paying a floating rate of interest under the Notes. 

The Hedging Agreements further provide that in the event that a ‘‘Hedging Downgrade Event’’, (as 

defined in the Hedging Agreements but equating to the relevant Hedging Provider ceasing to have a short 

term debt rating of at least A-1 by S&P and a combined short-term rating of at least F1 and long-term 

rating of at least A by Fitch) has occurred, the relevant Hedging Provider will be required within 30 days, 

at its own expense, to do one of the following: 

(a) to procure another person who satisfies the requisite ratings criteria to become a co-obligor or to 

guarantee the obligations of the Hedging Provider; 

(b) to transfer its obligations under the Hedging Agreements to a replacement hedging provider who 

satisfies the requisite ratings criteria; 

(c) to provide collateral to secure its obligations under the relevant Hedging Agreement in an amount 

sufficient to satisfy the then-current requirements of the Rating Agencies, such collateral to be 

provided in accordance with the relevant Hedging Credit Support Document and to be credited to 

the ‘‘swap collateral ledger’’ of the Issuer Transaction Account; or 

(d) to take such other action as it may agree with the relevant Rating Agency. 

If the relevant Hedging Provider fails to do so, the Issuer will in such circumstances be entitled (but not 

obliged) to terminate the relevant Hedging Agreement. 

Each Hedging Agreement will be governed by English law. 

For a further description of the Hedging Providers, see the section entitled ‘‘The Key Transaction Parties’’ 

above. For a further description of the Hedging Agreements, see the section entitled ‘‘Resources Available 

to the Borrowers and the Issuer’’ below. 

10. Transaction Reporting 

Pursuant to the Issuer Regulations, the Management Company will agree, (but subject always to any 

confidentiality restrictions imposed by applicable law), to organise an annual information meeting for 

Noteholders and Unitholders to review the operational and financial performance of the Issuer and each 

Borrower during the previous year. 

11. Subordination of Intercompany Liabilities 

The Obligors of each Borrower Group will enter into a Subordination Agreement with the Lenders and 

the Management Company, representing the Issuer, on the Closing Date pursuant to which the Obligors 

will agree that all intercompany debt and other liabilities of one Obligor to another in the same Borrower 

Group shall be subordinated to the payment in full of all amounts owing under the relevant Commercial 

Mortgage Loan Agreement. 

Each Subordination Agreement will be governed by French law. 

83

RESOURCES AVAILABLE TO THE BORROWERS AND THE ISSUER 

Below is a summary of the resources available to the Borrowers and the Issuer to enable them to meet their 

payment obligations in respect of the Commercial Mortgage Loans and the Notes, respectively. The 

information in this section does not purport to be complete and is qualified in its entirety by reference to the 

detailed information appearing in the relevant Transaction Documents and summarised elsewhere in this 

Offering Circular. Prospective purchasers of the Notes are advised to read carefully and to rely, in addition, 

on the detailed information appearing elsewhere in this Offering Circular in making any decision whether 

or not to invest in any Notes. 

1. Borrower Accounts 

The description of the operation of each Borrower Transaction Account, Borrower Junior Expenses 

Account, Cash Trap Account and Finance Lease Reserve Account (all such accounts, being, in respect of 

each Borrower, the ‘‘Borrower Accounts’’) in this section will only apply prior to the enforcement of the 

relevant Obligor Security. Following the enforcement of the relevant Obligor Security, the relevant 

Borrower Accounts will operate in accordance with the instructions of the Management Company. 

Each Borrower Account shall be subject to a pledge in favour of the Lenders and, upon transfer of the 

Receivables to the Issuer, in favour of the Issuer. 

The Borrower Transaction Account 

As at the Closing Date, each Borrower will have instructed the Property Manager to ensure that all 

amounts received by way of rental and service charge income, all proceeds of disposals of Secured 

Properties, all amounts payable under Insurance Policies and/or guarantees are paid into the relevant 

account in the name of the Borrower maintained with the relevant Borrowers Account Bank (each such 

account being, in respect of the relevant Borrower, the ‘‘Borrower Transaction Account’’). Pursuant to the 

terms of the relevant Commercial Mortgage Loan Agreement, the Borrower and the Property Manager 

will covenant that they will ensure that, for so long as the relevant Commercial Mortgage Loan remains 

outstanding, all amounts received will be paid into the relevant Borrower Transaction Account. On the 

Closing Date each Borrower will pay, from the proceeds of its Commercial Mortgage Loan, into the 

relevant Borrower Transaction Account an amount sufficient to enable it to make payments in respect of 

any costs and taxes expected to become due and payable by that Borrower in the period from the Closing 

Date to the first Loan Interest Payment Date. 

The Borrower Transaction Account may also be credited with amounts transferred from the credit of the 

Cash Trap Account under certain specific conditions (see the paragraph entitled ‘‘Cash Trap Account’’ 

below), or the Finance Lease Reserve Account (see the paragraph entitled ‘‘Finance Lease Reserve 

Account’’ below). 

Pursuant to each Commercial Mortgage Loan Agreement, monies standing to the credit of a Borrower 

Transaction Account may not be used for any purpose other than: 

(a) making payments due on each Loan Interest Payment Date in accordance with the relevant 

Commercial Mortgage Loan Agreement; 

(b) making payments in respect of any costs, taxes and any other amounts payable for which provision 

has been made on a preceding Loan Interest Payment Date or, if there is no such preceding Loan 

Interest Payment Date, on the Closing Date in accordance with the relevant Commercial Mortgage 

Loan Agreement; and 

(c) making voluntary or mandatory prepayments where the relevant Commercial Mortgage Loan 

Agreement requires or allows such prepayments to be made on such other date which is not a Loan 

Interest Payment Date. 

Borrower Junior Expenses Account 

As at the Closing Date, each Borrower shall deposit in such account an amount sufficient to cover the 

estimated Expected Junior Expenses to be paid in respect of the Reference Period starting on the Closing 

Date. On each subsequent Loan Interest Payment Date, such Expected Junior Expenses shall be provided 

for by transferring the relevant amount from the Borrower Transaction Account in accordance with the 

applicable Obligor Priority of Payments or by any other means if the amount standing to the credit of the 

Borrower Junior Expenses Account is insufficient to meet such Junior Expenses. The Borrower Junior 

Expenses Account may also be credited with amounts required to pay Permitted Development costs or 

to make voluntary prepayments. 

84

Pursuant to each Commercial Mortgage Loan Agreement, monies standing to the credit of a Borrower 

Junior Expenses Account may not be used for any purpose other than making payments in respect of 

Junior Expenses and Permitted Development costs and to prepay any amounts due under the 

Commercial Mortgage Loan Agreement in accordance with subparagraphs (a)(vi), (vii) and (viii) of the 

sub-section entitled ‘‘Prepayment of the Commercial Mortgage Loans’’ (see ‘‘Summary of the Principal 

Documents – Commercial Mortgage Loan’’). 

Cash Trap Account 

If, on a Loan Calculation Date in respect of a Loan Interest Payment Date, either the Historical ICR or 

the Projected ICR (or both) in respect of a Borrower Group is below 1.3:1 in respect of a Loan 

Calculation Date during the First Reference Period, or below 2.0:1 in respect of a Loan Calculation Date 

during the Second Reference Period, or the LTV Ratio is greater than 70 per cent. in respect of a Loan 

Calculation Date during the Second Reference Period, each of the Borrowers in that Borrower Group will 

be required in accordance with (j) of the Obligor Pre-Enforcement Priority of Payments to deposit all 

sums then standing to the credit of the Borrower Transaction Account of each such Borrower (after 

deducting amounts necessary to pay items (a) to (i) of the Obligor Pre-Enforcement Priority of Payments) 

into the Cash Trap Account of each such Borrower on such Loan Interest Payment Date (a ‘‘Cash Trap 

Deposit’’), provided that if, in respect of a Loan Calculation Date during the Second Reference Period, 

if the LTV Ratio is greater than 70 per cent. but both the Historical ICR and the Projected ICR are 

greater than 2.0:1, the amount required to be deposited into the Cash Trap Account shall be limited to 

the amount required to bring the LTV Ratio, once the deposit has been made, to a level less than 70 per 

cent. 

If a Borrower would be required on a Loan Interest Payment Date to make a Cash Trap Deposit in 

accordance with the preceding paragraph, and Cash Trap Deposits have already been made on each of the 

three preceding Loan Interest Payment Dates and, on the relevant Loan Calculation Date in respect of 

that Loan Interest Payment Date, either the Historical ICR or the Projected ICR (or both) in respect of 

a Borrower Group is below 1.3:1, each of the Borrowers in that Borrower Group will no longer be 

required to deposit any sums into the Cash Trap Account of each such Borrower, but instead all sums then 

standing to the credit of the Cash Trap Account of each such Borrower, together with all sums then 

standing to the credit of the Borrower Transaction Account of each such Borrower (after deducting 

amounts necessary to pay items (a) to (i) of the Obligor Pre-Enforcement Priority of payments) shall be 

allocated in prepayment under the relevant Commercial Mortgage Loan on the relevant Loan Interest 

Payment Date. 

If, on the relevant Loan Calculation Date in respect of a subsequent Loan Interest Payment Date, both 

the Historical ICR and the Projected ICR in respect of a Borrower Group are equal to or greater than 

1.5:1 and were equal to or greater than 1.5:1 on each of the four immediately preceding Loan Calculation 

Dates and no Event of Default is then outstanding, all amounts then standing to the credit of the Cash 

Trap Account of each such Borrower will be transferred to the relevant Borrower Transaction Account 

of each such Borrower on such Loan Interest Payment Date. Where such Loan Calculation Date falls in 

the Second Reference Period, all amounts standing to the credit of the Cash Trap Account of each 

relevant Borrower will be retained in that Cash Trap Account. 

Amounts standing to the credit of each Cash Trap Account will not be taken into account in calculating 

the Historical ICR or Projected ICR. 

Finance Lease Reserve Account 

Each of Proudreed France SARL, PPP SCI, IDB Immobilier SAS and Beaulieu Properties SCI only shall 

open in their name a Finance Lease Reserve Account. 

As at the Closing Date and on any Loan Interest Payment Date, as applicable, each relevant Borrower 

shall ensure that monies standing to the credit of its Finance Lease Reserve Account are at least equal 

to an estimate of the amounts payable under the Finance Leases entered into by such Borrower and to 

be paid during the Reference Period starting on such Loan Interest Payment Date (the Finance Lease 

Reserve), by debiting its Borrower Transaction Account in accordance with the applicable Obligor Priority 

of Payments. 

Pursuant to each Commercial Mortgage Loan Agreement, a Finance Lease Reserve Account may only 

be debited on each Loan Interest Payment Date in order to adjust the amount of the Finance Lease 

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Reserve. Furthermore, in the event that, on any Loan Interest Payment Date, the amounts standing to the 

credit of the Borrower Transaction Account prove insufficient to pay all amounts set out in the relevant 

Obligor Priority of Payments, the relevant Borrower shall be entitled to transfer the relevant amounts 

standing to the credit of the Finance Lease Reserve Account for transfer into the Borrower Transaction 

Account. 

2. Obligor Priorities of Payments 

Obligor Pre-Enforcement Priority of Payments 

Prior to the serving of a Loan Enforcement Notice, on each Loan Interest Payment Date, monies then 

standing to the credit of the relevant Borrower Transaction Account shall be applied by each Borrower 

in accordance with the following Obligor Pre-Enforcement Priority of Payments, in each case only to the 

extent that preceding items have been paid in full: 

(a) first, in making provision for an amount equal to the Finance Lease Reserve for the Reference Period 

commencing on that Loan Interest Payment Date to be retained on the Borrower Transaction 

Account and, if applicable, in or towards satisfaction of any rents under the Finance Leases and, if 

applicable, in or towards transfer to the Finance Lease Reserve Account of all amounts required in 

order that, once such transfer is made, the amount standing to the Credit of the Finance Lease 

Reserve Account shall be at least equal to the Finance Lease Reserve in respect of the Reference 

Period starting on such Interest Payment Date; 

(b) second, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of: 

(i) any amounts to be paid or provided for by the Borrower in respect of French corporation tax or 

taxes of an equivalent nature; 

(ii) any amounts for which the Borrower is required to account to a French tax authority (including 

any VAT); 

(c) third, in or towards satisfaction of the relevant Borrower’s share of amounts described in subparagraphs 

(a) and (b)(i) of the definition of On-going Facility Fee, after deducting from such 

On-going Facility Fee an amount equal to the interest allocated to that Borrower which is standing 

to the credit of the Issuer Transaction Account and the relevant Mortgage Reserve Account on the 

relevant Loan Interest Payment Date; 

(d) fourth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of: 

(i) the relevant Borrower’s share of any amounts payable to the Issuer by way of On-going Facility 

Fee under the Commercial Mortgage Loan Agreement in respect of amounts described in 

sub-paragraphs (b)(ii), (iii), (iv) and (v) and sub-paragraphs (c), (d) and (h) of the definition of 

On-going Facility Fee, after deducting from such On-going Facility Fee an amount equal to the 

interest allocated to that Borrower which is standing to the credit of the Issuer Transaction 

Account and the relevant Mortgage Reserve Account on the relevant Loan Interest Payment 

Date, to the extent not already deducted in respect of item (c) above; 

(ii) the relevant Borrower’s share of any fees or charges payable to the Borrowers Account Bank; 

(iii) the relevant Borrower’s share of any amounts payable by or on behalf of the Borrower to the 

Approved Valuers in respect of any Valuation Report, as prepared from time to time in respect 

of its Property Portfolio in accordance with the Commercial Mortgage Loan Agreement; 

(e) fifth, in or towards satisfaction of any breakage costs payable by the Borrower to the Management 

Company under any Transaction Document; 

(f) sixth, in or towards satisfaction of the relevant Borrower’s share of any amount due and payable to 

the Issuer by way of On-going Facility Fee under the relevant Commercial Mortgage Loan 

Agreement in respect of the amount described in sub-paragraphs (e) and (i) of the definition of 

On-going Facility Fee, after deducting from such On-going Facility Fee an amount equal to the 

interest allocated to that Borrower which is standing to the credit of the Issuer Transaction Account 

and the relevant Mortgage Reserve Account on the relevant Loan Interest Payment Date, to the 

extent not already deducted in respect of items (c) and (d) above; 

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(g) seventh, in or towards satisfaction of all amounts of interest due and payable to the Issuer in respect 

of the Commercial Mortgage Loan together with, if applicable, the amounts payable by the relevant 

Borrower to the Issuer by way of indemnity if the Commercial Mortgage Loan is repayed in full prior 

to the date on which the Notes are redeemed in full; 

(h) eighth, in or towards satisfaction, of any mandatory prepayment or voluntary prepayment to be made 

by it under the relevant Commercial Mortgage Loan (to the extent not paid out of funds standing to 

the credit of the Borrower Junior Expenses Account); 

(i) ninth, pro rata and pari passu to their respective amounts, in retention on the Borrower Transaction 

Account of (i) a provision for Expected Operating Costs in respect of the Reference Period 

commencing on that Loan Interest Payment Date, including amounts payable to the Property 

Manager in respect of fees and other amounts pursuant to the Property Management Agreement, 

and, as the case may be, to pay any amount payable by the Borrower on that Loan Interest Payment 

Date in respect of Operating Costs and (ii) a provision for any amounts to be paid by the Borrower 

in respect of French corporation tax and any amounts for which the Borrower is required to account 

to a French tax authority (including any VAT), in each case in respect of the Reference Period 

commencing on that Loan Interest Payment Date; 

(j) tenth, if, on the immediately preceding Loan Calculation Date, 

(i) either the Historical ICR or the Projected ICR in respect of the relevant Borrower Group is less 

than 1.3:1 in respect of a Loan Calculation Date during the First Reference Period, or 2.0:1 in 

respect of a Loan Calculation Date occuring during the Second Reference Period (and in this 

latter case, irrespective of whether the LTV Ratio is greater or less than 70 per cent.), all 

remaining sums standing to the credit of the Borrower Transaction Account are to be deposited 

into the Cash Trap Account of the relevant Borrower; or 

(ii) in respect of a Loan Calculation Date during the Second Reference Period, both the Historical 

ICR and the Projected ICR in respect of the relevant Borrower Group are greater than 2.0:1 and 

the LTV Ratio is higher than 70 per cent., all remaining sums standing to the credit of the 

relevant Borrower Transaction Account are: 

(1) to be deposited into the Cash Trap Account of the relevant Borrower to the extent required 

to bring the LTV Ratio, once the deposit has been made, to a level less than 70 per cent.; 

and, in respect as to the balance, 

(2) to be applied toward payment of the following amounts: 

(aa) first, any amounts due and payable by the relevant Borrower to the Issuer by way of 

On-going Facility Fee under the relevant Commercial Mortgage Loan Agreement in respect 

of amounts described in sub-paragraph (f) of the definition of On-going Facility Fee; and 

(bb) second, any amounts due and payable by the Borrower to the Issuer by way of 

On-going Facility Fee under the Commercial Mortgage Loan Agreement in respect of 

amounts described in sub-paragraph (g) of the definition of On-going Facility Fee; and 

(iii) the Historical ICR and the Projected ICR in respect of the relevant Borrower Group are greater 

than 1.3:1 in respect of a Loan Calculation Date during the First Reference Period, or both are 

higher than 2.0:1 during the Second Reference Period (provided further that in this latter case, 

the LTV Ratio is less than 70 per cent.), all remaining sums standing to the credit of the relevant 

Borrower Transaction Account are to be applied toward payment of the following amounts: 

(aa) first, any amounts due and payable by the relevant Borrower to the Issuer by way of 

On-going Facility Fee under the relevant Commercial Mortgage Loan Agreement in respect 

of amounts described in sub-paragraph (f) of the definition of On-going Facility Fee; and 

(bb) second, any amounts due and payable by the Borrower to the Issuer by way of 

On-going Facility Fee under the Commercial Mortgage Loan Agreement in respect of 

amounts described in sub-paragraph (g) of the definition of On-going Facility Fee; 

(k) eleventh, as applicable, toward payment of any amounts payable under its joint and several (solidaire) 

undertaking in respect of another Borrower in the same Borrower Group under the relevant 


Provided that no Loan Event of Default or Potential Loan Event of Default has occurred and is 

continuing, any amount standing to the credit of the relevant Borrower Transaction Account following the 

payments and provisions described above may be transferred by the relevant Borrower into its Borrower 

Junior Expenses Account. 

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Obligor Post-Enforcement Priorities of Payments 

Upon delivery of a Loan Enforcement Notice, all monies received into a Borrower’s Accounts together 

with any gross sale proceeds derived from the sale of Secured Properties within the Borrower’s Property 

Portfolio or otherwise from the enforcement of any of the Obligor Security will be applied by the FCC 

Servicer, on behalf of the Management Company in accordance with the following Obligor Post- 

Enforcement Priority of Payments, in each case only to the extent that the preceding items have been paid 

in full:. 

(a) first, on each Loan Interest Payment Date on or following the delivery of the Loan Enforcement 

Notice in making provision for an amount equal to the Finance Lease Reserve for the Reference 

Period commencing on that Loan Interest Payment Date to be retained on the Borrower Transaction 

Account and, if applicable, in or towards satisfaction of any rents under the Finance Leases and, if 

applicable, in or towards transfer to the Finance Lease Reserve Account of all amounts required in 

order that once such transfer is made, the amount standing to the credit of the Finance Lease Reserve 

Account shall be at least equal to the Finance Lease Reserve in respect of the Reference Period 

starting on such Loan Interest Payment Date; 

(b) second, in or towards satisfaction of the relevant Borrower’s share of amounts described in 

sub-paragraph (b)(iv) of the definition of On-going Facility Fee in relation to the enforcement of the 

security granted in respect of the relevant Borrower’s Property Portfolio after deducting from such 

On-going Facility Fee an amount equal to the interest allocated to that Borrower which is standing 

to the credit of the Issuer Transaction Account and the relevant Mortgage Reserve Account on the 

relevant Loan Interest Payment Date; 

(c) third, in or towards satisfaction of any amounts payable by the Borrower to the Issuer by way of 

On-going Facility Fee under the Commercial Mortgage Loan Agreement in respect of amounts 

described in sub-paragraphs (a) and (b)(i) of the definition of On-going Facility Fee after deducting 

from such On-going Facility Fee an amount equal to the interest allocated to that Borrower which is 

standing to the credit of the Issuer Transaction Account and the relevant Mortgage Reserve Account 

on the relevant Loan Interest Payment Date, to the extent not already deducted in respect of item (b) 

above; 


respect of: 

(i) the relevant Borrower’s share of any amounts payable to the Issuer by way of On-going Facility 

Fee under the Commercial Mortgage Loan Agreement, in respect of amounts described in 

sub-paragraphs (b)(ii), (iii) and (v) and sub-paragraphs (c), (d) and (h) of the definition of 

On-going Facility Fee after deducting from such On-going Facility Fee an amount equal to the 

interest allocated to that Borrower which is standing to the credit of the Issuer Transaction 

Account and the relevant Mortgage Reserve Account on the relevant Loan Interest Payment 

Date, to the extent not already deducted in respect of items (b) and (c) above; and 

(ii) the relevant Borrower’s share of any fees and charges payable to the Borrowers Account Bank; 

(e) fifth, in or towards satisfaction of the relevant Borrower’s share of any breakage costs payable to the 

Management Company under any Transaction Document; 

(f) sixth, in or towards satisfaction of the relevant Borrower’s share of any amounts payable to the Issuer 

by way of On-going Facility Fee under the Commercial Mortgage Loan Agreement in respect of 

amounts described in sub-paragraphs (e) and (i) of the definition of On-going Facility Fee after 

deducting from such On-going Facility Fee an amount equal to the interest allocated to that Borrower 

which is standing to the credit of the Issuer Transaction Account and the relevant Mortgage Reserve 

Account on the relevant Loan Interest Payment Date, to the extent not already deducted in respect 

of items (b), (c) and (d) above; 

(g) seventh, in or towards satisfaction, of interest due on the Commercial Mortgage Loan; 

(h) eighth, in or towards satisfaction of principal due on the Commercial Mortgage Loan; 

(i) ninth, in or towards satisfaction pro rata and pari passu, according to the respective amounts due in 

respect of the relevant Borrower’s share of any amounts payable to the Issuer by way of On-going 

Facility Fee under the Commercial Mortgage Loan Agreement in respect of amounts described in 

sub-paragraph (f) of the definition of On-going Facility Fee; 

88

(j) tenth, in or towards satisfaction pro rata and pari passu, according to the respective amounts due in 

respect of the relevant Borrower’s share of any amounts payable to the Issuer by way of On-going 

Facility Fee under the Commercial Mortgage Loan Agreement in respect of amounts described in 

sub-paragraph (g) of the definition of On-going Facility Fee; 

(k) eleventh, in or towards satisfaction of any amounts for which the Borrower is required to account to 

a French tax authority (including any VAT); and 

(l) twelfth, as applicable, toward payment of any amounts payable under its joint and several (solidaire) 

undertaking in respect of another Borrower under the Commercial Mortgage Loan. 

Any amount standing to the credit of the Borrower Transaction Account following the payments and 

provisions described above may be transferred by the relevant Borrower into its Borrower Junior 

Expenses Account. 

3. Monies available to the Issuer 

Prior to a Note Enforcement Notice being served, the Management Company will determine the monies 

which the Issuer has available to it to enable it to perform its obligations under or in respect of the Notes 

on each Interest Payment Date which will comprise: 

(a) monies received by the Issuer from the Borrowers under the Commercial Mortgage Loan 

Agreements; 

(b) money received from the Hedging Providers under the Hedging Agreement; 

(c) the earnings and proceeds from the making of Eligible Investments; and 

(d) all other amounts standing to the credit of the Issuer Transaction Account. 

The Management Company will also determine the extent of any Liquidity Shortfall (to which extent it 

will provide a notice of drawdown to the Liquidity Facility Provider pursuant to the Liquidity Facility 

Agreement). 

Issuer Accounts 

As at the Closing Date, the Custodian acting on behalf of the Issuer will have established the Issuer 

Transaction Account, the Mortgage Reserve Accounts and the Liquidity Facility Standby Account to be 

managed by the Cash Manager pursuant to the Issuer Account Bank and Cash Management Agreement. 

The Issuer Accounts will be held with the Issuer Account Bank. 

The description of the operation of the Issuer Transaction Account in this section will only apply prior to 

the issuance of Note Enforcement Notice and any amounts standing to the credit of the Liquidity Facility 

Standby Account will not be available to the Issuer Creditors generally (but only as security in respect of 

the obligations to the Liquidity Facility Provider) and will be repaid to the Liquidity Facility Provider (as 

described in ‘‘The Liquidity Facility’’ below). 

Pursuant to the Issuer Account Bank and Cash Management Agreement, any amounts held in the Issuer 

Transaction Account may be invested from time to time in Eligible Investments by the Cash Manager (or 

any delegate thereof) on behalf of the Issuer. 

Mortgage Reserve Account 

To expedite the registration of unregistered (formalisé non-inscrit) Additional Mortgages, the Borrowers 

will be obliged on the Closing Date to fund a mortgage reserve in the form of cash pledged to the Issuer 

in the amount necessary to effect the registration of the unregistered Additional Mortgages. 

Pursuant to the Issuer Account Bank and Cash Management Agreement, monies standing to the credit 

of the Mortgage Reserve Accounts shall be applied towards payment of registration costs of the 

unregistered Additional Mortgages in circumstances where the relevant Borrowers, having become 

obliged to pay such costs, have failed to do so. The monies standing to the credit of the Mortgage Reserve 

Accounts may also be applied toward payment of the relevant Borrowers’ obligations under the 

Commercial Mortgage Loan Agreement. The monies standing to the credit of the Mortgage Reserve 

Accounts will be returned to the relevant Borrowers on the Final Maturity Date provided that all amounts 

owing under the relevant Commercial Mortgage Loan Agreement have been paid in full. 

Issuer Pre Enforcement Priority of Payments 

Prior to service of a Note Enforcement Notice, amounts standing to the credit of the Issuer Transaction 

Account other than any amounts credited to the ‘‘swap collateral ledger’’ of the Issuer Transaction 

89

Account following the occurrence of a Hedging Downgrade Event in respect of that Hedging Provider 

(which are to be applied in returning collateral to, or in satisfaction of amounts owing by, the relevant 

Hedging Provider in accordance with the relevant Hedging Agreement and the relevant Hedging Credit 

Support Document) will be applied by the Management Company on behalf of the Issuer in accordance 

with the following Issuer Pre-Enforcement Priority of Payments on each Interest Payment Date, in each 

case only to the extent that preceding items have been paid in full and the relevant payment does not 

cause the Issuer Transaction Account to become overdrawn: 

(a) first, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any Fees and Expenses payable to the Management Company, the Custodian, any 

Noteholder Representative and their respective appointees, respectively, and/or in connection with 

any Meetings of the Noteholders, and to the auditors of the Issuer, in each case under the provisions 

of the Issuer Regulations or the other Transaction Documents as applicable; 

(b) second, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of: 

(i) any amounts payable by the Issuer in respect of the Issuer’s operating expenses incurred in the 

course of the Issuer’s business (other than as provided elsewhere in this priority of payments) 

that have become due and payable, including: 

(1) any amounts payable by the Issuer to third parties in respect of the establishment, 

maintenance and good standing of the Issuer or otherwise payable for the on going 

existence or maintenance of its business and which are not otherwise specified or provided 

for in items (a) to (q) (inclusive); 

(2) any amounts payable by the Issuer in respect of any Fees and Expenses of the Paying 

Agents incurred under the provisions of the Paying Agency Agreement; 

(3) any amounts payable by the Issuer in respect of any Fees and Expenses of the Issuer 

Account Bank and the Cash Manager, respectively, under the Issuer Account Bank and 

Cash Management Agreement; and 

(4) any amounts payable by the Issuer in respect of any Fees and Expenses of the FCC 

Servicers under the Receivables Transfer and Servicing Agreement; 

(ii) any amounts payable by the Issuer to the Rating Agencies in respect of any Fees and Expenses 

and the Irish Stock Exchange in respect of any fees that, in each case, they may reasonably incur 

on an ongoing basis in connection with the rating or listing of the Notes, as the case may be; and 

(iii) any amounts payable to the Liquidity Facility Provider under the Liquidity Facility Agreement 

(including, for the avoidance of doubt, following any Liquidity Facility Standby Drawing) other 

than the Liquidity Subordinated Amounts; 

(c) third, in or towards satisfaction of any amounts payable to the Hedging Providers under the Hedging 

Agreements including Hedging Termination Payments in respect of the Hedging Agreement but 

excluding any Hedging Subordinated Amounts; 


respect of any interest payable (including any deferred interest payable, such interest having been 

deferred upon allocation of a Principal Loss) in respect of the Class A Notes; 

(e) fifth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any interest payable in respect of the Class B Notes; 

(f) sixth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any interest payable (including any deferred interest payable) in respect of the Class C 

Notes; 

(g) seventh, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any interest payable (including any deferred interest payable) in respect of the Class D 

Notes; 

(h) eighth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any interest payable (including any deferred interest payable) in respect of the Class E 

Notes; 

(i) ninth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class A Notes; 

90

(j) tenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class B Notes; 

(k) eleventh, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any principal payable in respect of the Class C Notes; 

(l) twelfth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class D Notes; 

(m) thirteenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any principal payable in respect of the Class E Notes; 

(n) fourteenth, in or towards satisfaction of any amounts payable to the Liquidity Facility Provider under 

the Liquidity Facility Agreement in respect of Liquidity Subordinated Amounts; 

(o) fifteenth, in or towards satisfaction of any amounts payable in respect of amounts due to the Hedging 

Providers under the Hedging Agreements in respect of Hedging Subordinated Amounts; 

(p) sixteenth, in or towards satisfaction of any amounts due to the Borrowers under the Commercial 

Mortgage Loan Agreements; and 

(q) seventeenth, on the Issuer Liquidation Date only, in or towards repayment of the Units, and in or 

towards payment of the liquidation surplus (if any), in each case to the Unitholders. 

Issuer Post-Enforcement Priority of Payments 

All monies received by the Issuer following the delivery of a Note Enforcement Notice, other than (i) 

amounts standing to the credit of the Liquidity Standby Facility Account (which are to be paid directly 

and only to the Liquidity Facility Provider) and (ii) any amounts standing to the credit of the ‘‘swap 

collateral ledger’’ of the Issuer Transaction Account representing amounts attributable to assets 

transferred as collateral by a Hedging Provider following the occurrence of a Hedging Downgrade Event 

in respect of that Hedging Provider (which are to be applied only in returning collateral to, or in 

satisfaction of amounts owing by, the relevant Hedging Provider in accordance with the relevant Hedging 

Agreement and the relevant Hedging Credit Support Document) will be applied in accordance with the 

Issuer Post-Enforcement Priority of Payments, in each case only to the extent that preceding items have 

been paid in full and the relevant payment does not cause the Issuer Transaction Account to become 

overdrawn: 

(a) first, in or towards satisfaction, pari passu and pro rata according to the respective amounts thereof, 

of any amounts payable by the Issuer in respect of any Fees and Expenses of the FCC Servicers in 

accordance with the Receivables Transfer and Servicing Agreement; 

(b) second, in or towards satisfaction, pari passu and pro rata according to the respective amounts thereof, 

of the amounts due in respect of any Fees and Expenses payable to the Management Company, the 

Custodian, any Noteholder Representative and their respective appointees (if any), and/or in 

connection with any Meeting of the Noteholders and the auditors of the Issuer appointed under the 

provisions of the Issuer Regulations, and any other amounts payable to any of them under any of the 

other Transaction Documents, together with interest thereon as provided for therein; 

(c) third, in or towards satisfaction, pro rata and pari passu, according to the respective amounts due in 

respect of: 

(i) any amounts payable by the Issuer in respect of any Fees and Expenses of the Paying Agents 

incurred under the provisions of the Paying Agency Agreement; and 

(ii) any amounts payable by the Issuer in respect of any Fees and Expenses of the Issuer Account 

Bank and the Cash Manager under the Issuer Account Bank and Cash Management Agreement; 

and 

(iii) any amounts payable by the Issuer in respect of any Fees and Expenses of any third parties in 

respect of the establishment, maintenance and good standing of the Issuer or otherwise payable 

for the ongoing existence or maintenance of its business; and 

(iv) any amounts payable to the Liquidity Facility Provider under the Liquidity Facility Agreement 

other than the Liquidity Subordinated Amounts; 

(d) fourth, in or towards satisfaction of any amounts payable to the Hedging Providers under the 

Hedging Agreements including Hedging Termination Payments but excluding any Hedging Subordinated 

Amounts; 

91

(e) fifth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any interest payable (including any deferred interest payable, such as interest having been 

deferred upon allocation of a Principal Loss) in respect of the Class A Notes; 

(f) sixth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class A Notes; 

(g) seventh, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any interest payable (including any deferred interest payable) in respect of the Class B 

Notes; 

(h) eighth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class B Notes; 

(i) 

ninth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any interest payable (including any deferred interest payable) in respect of the Class C 

Notes; 

(j) tenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class C Notes; 

(k) eleventh, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any interest payable (including any deferred interest payable) in respect of the Class D 

Notes; 

(l) twelfth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due in 

respect of any principal payable in respect of the Class D Notes; 

(m) thirteenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any interest payable (including any deferred interest payable) in respect of the Class E 

Notes; 

(n) fourteenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any principal payable in respect of the Class E Notes; 

(o) fifteenth, in or towards satisfaction of any amounts payable to the Liquidity Facility Provider under 

the Liquidity Facility Agreement in respect of Liquidity Subordinated Amounts; 

(p) sixteenth, in or towards satisfaction of any amounts payable in respect of amounts due to the Hedging 

Providers under the Hedging Agreements in respect of Hedging Subordinated Amounts; 

(q) seventeenth, in or towards satisfaction of any amounts due to the Borrowers under the Commercial 

Mortgage Loan Agreements; and 

(r) eighteenth, on the Issuer Liquidation Date only, in or towards repayment of the Units, and in or 

towards payment of the liquidation surplus (if any), in each case to the Unitholders. 

4. The Liquidity Facility 

The Issuer Regulations will provide that the Issuer shall maintain, save as described below, a liquidity 

facility provided by a bank with the Liquidity Requisite Ratings on terms acceptable to the Rating 

Agencies. 

The maximum amount available for drawdown under the Liquidity Facility will be equal to u26 million 

(the ‘‘Liquidity Facility Maximum Amount’’). The Liquidity Facility Maximum Amount will reduce in 

proportion to prepayments of principal on the Notes. 

The Issuer will pay a commitment fee to the Liquidity Facility Provider that will rank senior to the Notes 

in the Issuer Priority of Payments. 

Under the terms of the Liquidity Facility Agreement entered into on 21 October 2005, the Issuer may 

request the Liquidity Facility Provider to provide the Issuer with Advances up to the Liquidity Facility 

Maximum Amount less any outstanding Advances (the ‘‘Available Commitment’’) on or before each 

Interest Payment Date in circumstances where the Issuer will have a Liquidity Shortfall on any Interest 

Payment Date as calculated by the Management Company on the immediately preceding Determination 

Date. Drawings under the Liquidity Facility may be requested for so long as a Note Enforcement Notice 

has not been served, certain other events have not occurred in respect of the Issuer and various warranties 

of the Issuer remain true in all material respects. 

92

The interest rate on Liquidity Drawings under the Liquidity Facility Agreement will be the sum of the 

EURIBOR interbank offered rate for euro deposits for the appropriate period plus a specified margin 

(plus, as applicable, any permitted additions to the interest rate to compensate the Liquidity Facility 

Provider for the cost of regulatory compliance from time to time, pursuant to the terms of the Liquidity 

Facility Agreement). Interest will accrue on each Liquidity Drawing under the Liquidity Facility from the 

date of the drawing to but excluding the next succeeding Interest Payment Date. The Issuer will be 

obliged to repay the outstanding balance of any drawings together with interest thereon on each Interest 

Payment Date in accordance with the relevant Issuer Priority of Payments. Amounts repaid may, subject 

to certain conditions, be redrawn. 

Provided that the Liquidity Facility Provider meets certain requirements, if any amounts are required to 

be deducted or withheld for or on account of Tax from any payment made by the Issuer to the Liquidity 

Facility Provider under the Liquidity Facility Agreement, the amount of any payment due from the Issuer 

to the Liquidity Facility Provider will be increased to the extent necessary to ensure that, after such 

deduction or withholding has been made, the amount received by the Liquidity Facility Provider is equal 

to the amount that it would have received had no such withholding or deduction been required to be 

made. Such increased amounts will form part of the Liquidity Subordinated Amounts, payments of the 

On-going Facility Fee in respect of which will rank junior to the payments under the Commercial 

Mortgage Loans in the Obligor Priority of Payments. 

The Liquidity Facility will be for a term of 364 days, renewable at the option of the parties. The Liquidity 

Facility Agreement will provide that (a) if the Liquidity Facility Provider declines to renew the 

commitment period of the Liquidity Facility and/or (b) the Liquidity Facility Provider’s short term 

unsecured, unsubordinated and unguaranteed debt obligations cease to be rated at least A-1+ by S&P and 

F1 by Fitch (the ‘‘Liquidity Requisite Ratings’’) (each a ‘‘Liquidity Event’’), then, by no later than 5 

Business Days prior to the expiry of the then current commitment period or 30 Business Days of the 

relevant downgrade, as the case may be, the Liquidity Facility Provider shall assign, novate or transfer its 

rights and obligations to another liquidity facility provider that has the Liquidity Requisite Ratings and 

meets certain other criteria or other arrangements shall be made for the Issuer to enter into a new 

liquidity facility with a replacement party that, amongst other things, has the Liquidity Requisite Ratings. 

If any one of such steps is not completed within the required time, the Liquidity Facility Provider will 

advance a drawing (a ‘‘Liquidity Facility Standby Drawing’’) of the total commitment under the Liquidity 

Facility Agreement then available for drawing under the Liquidity Facility and the Liquidity Facility 

Provider shall pay such Liquidity Facility Standby Drawing into a designated bank account of the Issuer 

(the ‘‘Liquidity Facility Standby Account’’) maintained with the Liquidity Facility Provider (for so long 

as it satisfies the Rating Criteria) or the Issuer Account Bank or (subject to the written approval of the 

Liquidity Facility Provider, such approval not to be unreasonably delayed or withheld) any other bank, 

the short-term, unsecured, unsubordinated and unguaranteed debt obligations of which satisfy the Rating 

Criteria (the ‘‘Standby Deposit’’). 

The rate of interest applicable to a Liquidity Facility Standby Drawing shall be an amount equal to the 

interest rate on Liquidity Drawings under the Liquidity Facility Agreement. The Issuer will receive 

interest on the amount of any Standby Deposit at a rate equal to the then prevailing rate for deposits at 

the Issuer Account Bank, such interest to be credited to the Issuer Transaction Account. 

Interest accrued in respect of Liquidity Facility Drawings will be paid in accordance with the relevant 

Issuer Priority of Payments. 

Amounts standing to the credit of the Liquidity Facility Standby Account, will, subject to the terms of the 

Liquidity Facility Agreement (including the conditions described above as to availability of Drawings), be 

available to the Issuer by way of Liquidity Drawing in the event of there being a Liquidity Shortfall. Such 

a Liquidity Drawing will accrue interest and be repayable as described above, except that, until the 

Liquidity Facility Provider is replaced or the Liquidity Event that gave rise to the Liquidity Facility 

Standby Drawing is remedied, repayment will be made into the Liquidity Facility Standby Account. Any 

costs incurred in obtaining a replacement liquidity facility or in utilising the Liquidity Facility will be 

borne by the Issuer and charged to the Borrowers through the On-going Facility Fee. 

The Management Company and the Custodian have undertaken not to make any modification to the 

Issuer Priority of Payments which may adversely affect the ranking of any amounts payable to the 

Liquidity Facility Provider under the Liquidity Facility Agreement (including any Fees and Expenses due 

to the Liquidity Facility Provider), without the Liquidity Facility Provider’s prior consent. Failure to 

comply with this obligation will constitute a Liquidity Facility Event of Default. 

93

On delivery of a Note Enforcement Notice, all indebtedness outstanding to the Liquidity Facility Provider 

under the Liquidity Facility Agreement (other than the Liquidity Subordinated Amounts) will rank in 

priority to repayments of principal and payments of interest under the Notes and amounts then standing 

to the credit of the Liquidity Facility Standby Account, which represent the Liquidity Facility Standby 

Drawing will not be available to the Issuer (but will instead be repaid to the Liquidity Facility Provider). 

While the foregoing is a description of the Liquidity Facility Agreement entered into on the Closing Date, 

it is possible that in the future it will only be possible to renew or replace it on terms which differ from 

those described above. 

5. The Hedging Agreements 

For a further description of the Hedging Providers, see the section entitled ‘‘The Hedging Providers’’ 

below. 

The Hedging Agreements may be terminated in whole or in part in certain limited circumstances, some 

of which are more particularly described below. Any such termination may oblige the Issuer or the 

Hedging Providers to make a termination payment. Any payment due to the Hedging Provider(s) from 

a replacement Hedging Provider or following termination of the Hedging Agreement will be paid to the 

Hedging Provider(s) and will not be made available to the Issuer Creditors. 

If any Commercial Mortgage Loan and the corresponding Notes, are prepaid in part or in full other than 

in accordance with their stated maturity, a corresponding proportion of the notional amount of the 

swap(s) and or cap(s) made pursuant to the Hedging Agreements will terminate or the notional amount 

of the swap(s) and/or cap(s) will be reduced in such other way as to reflect a corresponding reduction in 

such notional amount, in each case as more specifically set out in the Hedging Agreements. 

If the Issuer does not satisfy its payment obligations under a Hedging Agreement, this will constitute a 

default by the Issuer thereunder and will entitle the relevant Hedging Provider to terminate the relevant 

Hedging Agreement. 

Upon the service of a Note Enforcement Notice, the Hedging Providers will have the right to terminate 

the Hedging Agreements. 

The Issuer’s obligations to the Hedging Providers under the Hedging Agreements (other than in respect 

of the Hedging Subordinated Amounts) will rank ahead of the Notes. 

The Management Company and the Custodian have undertaken not to make any modification to the 

Issuer Priority of Payments which may adversely affect the ranking of any amounts payable to the 

Hedging Providers under the Hedging Agreements (including any Fees and Expenses due to the Hedging 

Providers), without the prior consent of the Hedging Providers. Failure to comply with this obligation will 

constitute an Event of Default under each Hedging Agreement. 

All payments to be made by either party under the Hedging Agreement are to be made without 

withholding or deduction for or on account of any Tax unless such withholding or deduction is required 

by applicable law (as modified by the practice of any relevant Tax Authority). Each of the Issuer and the 

Hedging Providers will represent, on entering into the Hedging Agreements, that it is not obliged to make 

any such deduction or withholding under current taxation law and practice. If, as a result of a change in 

law (or the application or official interpretation thereof), one party is required to make such a withholding 

or deduction from any payment to be made to the other party under a Hedging Agreement, the party 

making that payment will not be obliged to pay additional amounts to the other party in respect of the 

amounts so required to be withheld or deducted. If such additional amounts are payable by the Issuer they 

will form part of the Hedging Subordinated Amounts, payments of the On-going Facility Fee in respect 

of which will rank junior to payments under the Commercial Mortgage Loans in the Obligor Priority of 

Payments. The party making an increased payment will have the right to terminate the relevant Hedging 

Agreement (subject, in the case of the Hedging Providers only, to the Hedging Provider’s obligation to use 

reasonable efforts (provided that such efforts shall not cause significant economic hardship to the relevant 

Hedging Provider) to transfer its rights and obligations under the relevant Hedging Agreement to another 

of its offices or affiliates or a suitably rated third party such that payments made by or to that office or 

affiliate or third party under the relevant Hedging Agreement can be made without any withholding or 

deduction for or on account of Tax). 

94

USE OF PROCEEDS 

The gross proceeds from the issue of the Notes will be u397,400,000. 

On the Closing Date, the Issuer will apply the proceeds of the issue of the Notes (and the Units) to acquire 

the Receivables from the Lenders. On the Closing Date, each Borrower will pay an Initial Facility Fee to 

the Issuer which will be an amount equal to all fees, commissions, costs and expenses properly and 

reasonably incurred by the Issuer on or before the Closing Date in connection with the issue of the Notes 

(and the Units) and the negotiation, preparation and execution of the Transaction Documents relating 

thereto (including those fees and commissions payable to the Joint Lead Managers and detailed in the 

section entitled ‘‘Subscription and Sale’’ below) and any up-front payments due in respect of any Hedging 

Agreement. 

95

VALUATION REPORTS 

22 septembre 2005 

PROUDREED 

36 avenue Hoche 

75008 Paris 

Stephane Peybernes 

E: speybernes@savills.fr 

DL:33144517300 

F:33144517301 

Savills SA 

55 boulevard Haussmann 

F-75008 Paris 

savills.com 

For the attention of Thierry Franc˛ois 

Dear Sir, 

Following the instruction letter from FIPAM dated 15 th May 2005, we confirm that we have completed the 

valuation as at 31 st May 2005 of the subject portfolios which we summarise in the schedules attached. The 

total combined net value of the portfolios was u554.58 million. Since the valuation, an additional property 

in Nemours has been included in the portfolio for a net market value of u6.91 million. 

Yours faithfully, 

Stephane Peybernes 

Director 

Offices in Europe, Asia, Australasia, Africa. Strategic alliance with Trammell Crow Company in the USA and Canada 

Société Anonyme au Capital de 2,400,000 u Cartes Professionnelles Transactions Immobilières et Fonds de Commerce No T 0365 

Préfecture de Police de Paris Gestion Immobilière No G 0566 Caisse de Garantie de la FNAIM 89 rue La Boétie 75008 Paris No Adhérent 00102 

R.C. 662045517 B Paris N° SIRET 662045517 00031 APE 703 A N° TVA FR65662045517 

96

15 June 2005 

Proudreed France Sarl & Paris Properties Sarl 

c/o Proudreed 


75008 Paris 

HSBC Bank plc 

(in its capacity as Joint Lead Manager and Hedging Provider) 

Level 3 

8 Canada Square 

London E14 5HQ 


(in its capacity as Joint Lead Manager, FCC Servicer and Hedging Provider) 

Tour S.G 

17 Cours Valmy 

97972 Paris La Défense 

Eurotitrisation 

(in its capacity as Management Company) 

20 Rue Chauchat 

75009 Paris 

CCF 

(in its capacity as Custodian, Liquidity Facility Provider and FCC Servicer) 

103, Avenue des Champs-Elysées 

75008 Paris 

Dear Sirs, 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 

PPMPP PORTFOLIO 

In accordance with the letter of instruction dated 15 May 2005 received from Proudreed France Sarl and 

Paris Properties Sarl, a copy of which is attached to this certificate, we have prepared updated valuations 

of the 34 properties in the above portfolio in order to provide you with our opinion of their market value 

as at 31 May 2005. In accordance with your instructions, the properties have not been revisited and have 

therefore been re-valued on a desk-top basis. 

We assume that no material changes have occurred to either the properties or their surroundings since our 

last inspections, other than those indicated to us by you. We reserve the right to amend our valuation 

should this assumption prove to be incorrect. 

The valuations have been prepared for your internal purposes but may be required for secured lending. 

This report and valuations can be disclosed in the Offering Circular. 

Offices in Europe, Asia, Australasia, Africa. Strategic alliance with Trammell Crow Company in the USA and Canada. 

Société Anonyme au Capital de 450.000 u Cartes Professionnelles Transactions Immobilières et Fonds de Commerce No T 0365 

Préfecture de Police de Paris Gestion Immobilière No G 0566 Caisse de Garantie de la FNAIM 89 rue La Boétie 75008 Paris No Adhére nt 00102 


97

We attach schedule of values, divided into three Appendices as requested, upon which the properties in 

this portfolio are identified. A summary report, tenancy schedule and valuation sheets for each property 

are also attached. 

We confirm that we are able to comply with the applicable listing rule of the relevant stock exchange and 

listing authority, whether it is in London, Luxembourg or Dublin. We also confirm that the valuations have 

been carried out by a competent Independent Valuer and that Savills has no conflict of interest in advising 

the addressees of the report. We also confirm that Savills has sufficient professional indemnity insurance 

on a per claim basis in respect of the services herewith provided. 

The report and valuation have been prepared in accordance with the latest edition of the RICS ‘‘Red 

Book’’, the Appraisal and Valuation Standards (5th Edition). We refer you to the documents entitled 

‘‘Valuation Procedure and Assumptions’’ and ‘‘Specific Valuation Assumptions’’ attached to this 

certificate for details of the basis of our valuation, the work we have undertaken and the general 

assumptions upon which it has been prepared. 

You have requested that valuations be prepared upon the following basis: 

Market Value 

Market value means ‘‘the estimated amount for which a property should exchange on the date of 

valuation between a willing buyer and a willing seller in an arm’s-length transaction after proper 

marketing wherein the parties had each acted knowledgably, prudently and without compulsion’’. 

Market Value with Vacant Possession 

As for market value, but assuming that the property is vacant at the valuation date. 

Reinstatement Cost 

This is an estimate of the cost of current reinstatement cost of the property in its current form, including 

costs of clearance, demolition and professional fees, but excluding VAT. 

We would underline that this indication of reinstatement cost for insurance purposes is given as a 

guideline only, since a formal estimate can only be given by a qualified Quantity Surveyor or equivalent 

person with sufficient current experience of construction costs. As the property has not been inspected by 

a Quantity Surveyor, the estimates of replacement cost are provided without liability 

Valuation 

A schedule of individual net market values as at 31 May 2005 is attached. The sum of the individual 

property values should not be considered as our opinion of the value of the portfolio if sold as a whole. 

No allowance has been made in our valuation for the costs of realisation, any liability for tax which might 

arise in the event of disposal or deemed disposal or for the existence of any mortgage or similar financial 

encumbrance over the property. 

98

Finally, we would ask that neither the whole nor any part of this report or any reference thereto may be 

included in any document, circular or statement without our prior approval of the form and context in 

which it will appear, save that we agree to this report being included in the Offering Circular. Such 

publication of/or reference to this report will not be permitted unless it contains a sufficient 

contemporaneous reference to any departure from the Statements of Asset Valuation Practice and 

Guidance Notes published by the Royal Institution of Chartered Surveyors or the incorporation of the 

special assumptions referred to herein. 

This valuation is provided for the stated purposes and is for the use only of the party to whom it is 

addressed and no responsibility is accepted to any other party. 

We remain at your disposal should you have any queries regarding this valuation or the attached report. 


Sara Lucas MRICS 

Director 

Savills 

99





75008 Paris 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 

PPP PORTFOLIO 















100










Book’’, the Appraisal and Valuation Standards (5 th Edition). We refer you to the documents entitled 





Market Value 












a Quantity Surveyor, the estimates of replacement cost are provided without liability. 

Valuation 






101













Director 

Savills 

102





75008 Paris 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 

BEAULIEU PORTFOLIO 















103















Market Value 













Valuation 






104













Director 

Savills 

105





75008 Paris 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 

MENELAS PORTFOLIO 















106















Market Value 













Valuation 






107













Director 

Savills 

108





75008 Paris 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 

Dear Sirs, 

IDB PORTFOLIO 















109















Market Value 













Valuation 






110

Finally, we would ask that neither the whole nor any part of this report or any refe rence thereto may be 












Director 

Savills 

111





75008 Paris 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 

HDL PORTFOLIO 


















112












Market Value 













Valuation 













113






Director 

Savills 

114





75008 Paris 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 

ENOVILLE PORTFOLIO 



of the property the above portfolio in order to provide you with our opinion of its market value as at 

31 May 2005. In accordance with your instructions, the property has not been revisited and has therefore 

been re-valued on a desk-top basis. 

We assume that no material changes have occurred to either the property or its surroundings since our last 

inspection, other than those indicated to us by you. We reserve the right to amend our valuation should 

this assumption prove to be incorrect. 

The valuation has been prepared for your internal purposes but may be required for secured lending. This 

report and valuation can be disclosed in the Offering Circular. 

We attach schedule of values, divided into three Appendices as requested, upon which the property in this 

portfolio is identified. A summary report, tenancy schedule and valuation sheets are also attached. 





115







Book’’, the Appraisal and Valuation Standards (5 th Edition). We refer you to the document entitled 

‘‘Valuation Procedure and Assumptions’’ attached to this certificate for details of the basis of our 

valuation, the work we have undertaken and the general assumptions upon which it has been prepared. 


Market Value 













Valuation 













116






Director 

Savills 

117





75008 Paris 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 

RUE D’AMIENS PORTFOLIO 



of the property the above portfolio in order to provide you with our opinion of its market value as at 

31 May 2005. In accordance with your instructions, the property has not been revisited and has therefore 

been re-valued on a desk-top basis. 

We assume that no material changes have occurred to either the property or its surroundings since our last 

inspection, other than those indicated to us by you. We reserve the right to amend our valuation should 

this assumption prove to be incorrect. 

The valuation has been prepared for your internal purposes but may be required for secured lending. This 

report and valuation can be disclosed in the Offering Circular. 

We attach schedule of values, divided into three Appendices as requested, upon which the property in this 

portfolio is identified. A summary report, tenancy schedule and valuation sheets are also attached. 





118







Book’’, the Appraisal and Valuation Standards (5 th Edition). We refer you to the document entitled 

‘‘Valuation Procedure and Assumptions’’ attached to this certificate for details of the basis of our 

valuation, the work we have undertaken and the general assumptions upon which it has been prepared. 

You have requested that valuation be prepared upon the following basis: 

Market Value 













Valuation 













119






Director 

Savills 

120





75008 Paris 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 

PROUDREED PORTFOLIO 


















121












Market Value 













Valuation 













122






Director 

Savills 

123





75008 Paris 


75008 Paris 

T: +33 (1) 44 51 73 00 

F: +33 (1) 44 51 73 01 

savills.com 



Level 3 





Tour S.G 






75009 Paris 

CCF 



75008 Paris 

Dear Sirs, 

2PI PORTFOLIO 


















124












Market Value 













Valuation 













125



We remain at your disposal should you have any queries regarding this valuation or the attached reports. 



Director 

Savills 

126

VALUATION PROCEDURE AND ASSUMPTIONS 

Surveys and enquiries upon which all of our valuations are based are carried out by general practice 

surveyors making appropriate investigations having regard to the purpose of the valuation. Our work is 

on the basis set out below, unless specifically varied by our report: 

1. Condition and pollution hazards 

Unless specifically instructed to carry out a structural survey, test of service installations, site 

investigation or environmental survey, our valuations assume: 

i) That no materials have been used in the construction of the buildings which are deleterious, 

hazardous or likely to give rise to structural defects. 

ii) That all relevant statutory requirements have been complied with. 

iii) That the site is physically capable of development or redevelopment, when appropriate, and that 

no special or unusual costs will be incurred in providing foundations and infrastructure. 

iv) That the property is not adversely affected by any form of pollution. 

We do however reflect the general condition of the premises evident from our inspection and any 

defects of which we are made aware as summarised in our report. 

2. Tenure and tenancies 

We rely upon information supplied as to the property, tenure, tenancies, permitted uses and related 

matters. We assume such information to be accurate, up-to-date and complete. We assume that your 

solicitors are able to confirm the accuracy of these details as set out in our report, and that the interest 

being valued is in all respects good and marketable. We would welcome the opportunity to consider 

your solicitor’s report on title and to advise whether or not this affects our valuation. 

We do not examine the title documents and, therefore, assume that apart from any matters 

mentioned in our report, the interest is not subject to any onerous restrictions, to the payment of any 

unusual outgoings or to any charges, easements or rights of way. We assume that any outstanding 

requirements of repairing covenants will be met. 

3. Planning and highway enquiries 

We make only oral enquiries of the local planning and highway authorities and the information 

obtained is assumed to be correct. No formal searches are instigated. Except where stated to the 

contrary, we are informed that there are no local authority planning or highway proposals that might 

involve the use of compulsory purchase powers or otherwise directly affect the property. 

4. Floor areas 

The floor areas shown are those with which we have been supplied by the Managing Agents and 

which we assume to be correct. 

5. Plant and machinery 

We include in our valuations those items of plant and machinery normally considered to be part of 

the building service installations and which would pass with the property on a sale or letting. We 

exclude all items of process plant and machinery and equipment, together with their special 

foundations and supports, furniture and furnishings, vehicles, stock and loose tools, and tenants 

fixtures and fittings. 

No detailed inspection or tests have been carried out by us on any of the services or items of 

equipment, therefore no warranty can be given with regard to their serviceability, efficiency, safety or 

adequacy for their purpose. 

6. Development properties 

For properties in course of development, we reflect the stage reached in construction and the costs 

already incurred and those remaining to be spent at the date of valuation. We have regard to the 

contractual liabilities of the parties involved in the development and any cost estimates which have 

been prepared by the professional advisers to the project. 

127

For recently completed developments we take no account of any retentions, nor do we make 

allowance for any outstanding development costs, fees, or other expenditure for which there may be 

a liability. 

7. Valuation date 

Property values may change substantially over a relatively short period. If you wish to dispose of this 

property or part thereof, or to accept a charge over it as security for a loan after the valuation date, 

we strongly advise a further consultation with us. 

8. Costs of realisation 

No allowance is made in our valuations for the costs of realisation, any liability for tax which might 

arise in the event of disposal or for any mortgage or similar financial encumbrance over the property. 

Our valuations exclude VAT. 

9. Confidentiality 

The Valuation and Report is for the stated purposes and for the sole and exclusive use of the 

addressee and any subsidiary company thereof to whom it is addressed and for their professional 

advisors, plus any person or institution whose identity has been previously communicated in writing 

to Savills Commercial Ltd as having an interest in the Valuation. The Valuation may not be relied 

upon by any third party without the express and written authorisation of Savills Commercial Ltd and 

no responsibility shall be accepted to any such third party whatsoever. 

10. Exclusions 

We have excluded from our consideration any special purchaser who, due to special interest or 

circumstances, may wish to purchase the property or the business. 

Whilst we have had regard to the general effects of taxation on market value, we have not taken into 

account any liability for tax which may arise on a disposal, whether actual or national, and neither 

have me made any deduction for Capital Gains Tax, Value Added Tax or any other tax liability. 

The Valuation figure in this report is exclusive of VAT. We have not undertaken any enquiries to 

ascertain whether or not a sale of the property would attract VAT. 

128

SPECIFIC VALUATION ASSUMPTIONS 

Planning Permission 

We have assumed that the buildings have the necessary planning permissions even where these have not 

yet been made available. 

For buildings that are more than 10 years old for which a valid planning permission has not been obtained, 

it is likely that most legal actions would now be time barred, provided that it can be shown that the local 

authority was aware of the construction at the time it occurred. 

Autorisations d’Exploiter 

In the case of those warehouse buildings requiring a specific autorisation d’exploiter, we have assumed that 

the property has a valid authorisation for its current use. It is stated in the report where these documents 

have been provided in the past, but no new updated documents have been provided for the purposes of 

the current valuation. 

We also assume and that in the event of the tenant’s departure, the existing autorisation, if held by the 

tenant, can and will be transferred to the landlord at no cost and without any compliance works being 

required. 

Access and Information 

The valuations have been based entirely upon information provided by Proudreed, which essentially 

consists of tenancy schedules, together with information gathered at the time of the original valuations of 

the properties. 

None of the properties has been visited since the date of the last inspection stated in the report. We 

therefore assume that there have been no material changes to the properties or their surroundings which 

might have an impact on value, other than those known to us through other work, or through details 

provided by Proudreed. 

We note that the property at Castelnau has never been inspected by Savills and that the value of this 

property is therefore based entirely upon the information provided to us by Proudreed which we assume 

to be complete and correct. 

Lease Details 

At the time of the original valuations prepared by Savills for there properties, the occupational leases 

were read and summarised. In the case of large lettings, we have usually been provided with copies of new 

leases signed since that original valuation date. However, we have not seen copies of all the occupation 

leases now in place and have therefore relied upon the tenancy schedules provided by Proudreed (and the 

accompanying notes) which we assume to be complete and accurate. 

Floor areas 

The properties have not been measured by Savills. We have assumed that the floor areas provided in the 

tenancy schedule are correct unless we were provided with measured areas at the time of our original 

valuation, in which case the measured areas have been adopted for the purposes of estimating market rent 

and vacant possession value in particular. 

Capital Expenditure 

Since the properties have not been exhaustively inspected since the time of our original valuations, we are 

only able to comment on the general state of repair evident from the last revisit of the building (the date 

of which is stated in the report). We are therefore unable to comments on wants of repair at the valuation 

date, unless we have been specifically advised of these by Proudreed, and have therefore made no 

deduction for immediate capital expenditure unless provided with a budget. 

Any such deductions are specifically referred to in the valuation section of the reports. 

129

Schedule of Values – Appendix 1 

130 

Fund Ref Property 

Net Market 

Value 

31/5/05 Market rent 

Capitalisation 

Rate 

Gross 

Initial 

Yield 

Net 

Initial 

Yield 

Reversion 

yield 

Vacant 

Possession 

Value 

Reinstatement 

cost 

2PI 30 THIAIS 23 rue du Puits Dixme 2,720,000u 282,200u 10.00% 10.10% 10.10% 10.10% 2,060,000u 2,540,000u 

PPMPP 78 CHEVILLY LARUE Rue du Petit Leroy 3,870,000u 392,640u 9.50% 9.65% 9.65% 10.03% 3,260,000u 3,300,000u 

PPMPP 79 EMERAINVILLE ASE 4 Malnoue 61 av Europe 290,000u 31,050u 10.00% 10.20% 10.20% 10.20% 240,000u 350,000u 

PPMPP 80 EMERAINVILLE Polyparc 2 900,000u 90,800u 9.85% 10.41% 10.41% 10.41% 710,000u 1,020,000u 

PPMPP 81 EMERAINVILLE Polyparc 1, 2ème tranche 2,270,000u 214,800u 9.75% 7.59% 7.05% 10.29% 1,730,000u 2,790,000u 

PPMPP 82 EMERAINVILLE Polyparc 1 810,000u 85,460u 9.75% 10.32% 10.32% 10.32% 660,000u 1,300,000u 

PPMPP 83 EMERAINVILLE VE 39 av de l’Europe 1,440,000u 152,010u 10.00% 9.69% 9.69% 10.83% 1,150,000u 1,780,000u 

PPMPP 87 EVRY BOIS GUILLAUME -Rue du Bois Sauvage 410,000u 40,625u 9.50% 9.69% 9.69% 9.69% 330,000u 370,000u 

PPMPP 88 EVRY - VE à Evry 560,000u 54,000u 9.50% 9.69% 9.69% 9.69% 450,000u 640,000u 

PPMPP 92 TRAPPES Les Bruyeres Av Le Verrier 3,430,000u 319,810u 9.50% 9.69% 9.69% 9.69% 2,590,000u 4,060,000u 

PPMPP 94 LES ULIS Hightec 6-9avCanada 1,500,000u 187,125u 9.25% 9.09% -4.32% 9.09% 1,460,000u 3,890,000u 

PPMPP 96 MER ZI du Mardeau 11,860,000u 986,472u 9.50% 9.93% 9.93% 8.15% 8,180,000u 10,240,000u 

PPMPP 98 MITRY Le Vinci 1 rue Becquerel 3,650,000u 366,090u 9.75% 9.51% 9.10% 10.85% 2,660,000u 4,900,000u 

PPMPP 100 PALAISEAU Parc Gutenberg Bâtiment F 1,730,000u 194,580u 9.85% 9.18% 8.83% 10.75% 1,550,000u 2,060,000u 

PPMPP 101 PALAISEAU Parc Gutenberg Bâtiment A 480,000u 60,728u 10.35% 0.00% -2.53% 11.91% 480,000u 810,000u 

PPMPP 102 PALAISEAU Parc Gutenberg Bâtiment J 1,590,000u 175,200u 9.85% 6.42% 5.60% 10.57% 1,350,000u 2,150,000u 

PPMPP 103 ROSNY S SEINE ZA des Marceaux 7,980,000u 706,160u 9.00% 9.00% 9.00% 9.00% 6,100,000u 5,260,000u 

PPMPP 104 SACLAY ARIANE 4 rue R Razel 2,540,000u 279,480u 9.50% 8.70% 8.28% 11.53% 2,290,000u 2,630,000u 

PPMPP 105 ST PIERRE DU PERAY Rue Tellier 280,000u 26,600u 9.50% 9.69% 9.69% 9.69% 220,000u 320,000u 

PPMPP 106 VITRY S SEINE 36 rue C Heller 4,960,000u 452,130u 9.35% 9.35% 9.35% 9.35% 3,800,000u 6,760,000u 

PPMPP 107 VILLEPINTE Epillets Bât L 2,330,000u 258,450u 9.00% 6.63% 3.71% 11.02% 1,910,000u 3,160,000u 

PPMPP 108 VILLEPINTE Aralias Bât M 2,730,000u 288,060u 8.75% 7.84% 7.31% 8.99% 2,490,000u 3,060,000u 

PPMPP 109 TRAPPES IMMOPARC RN10 3,310,000u 357,990u 9.50% 8.74% 7.93% 10.76% 2,690,000u 3,710,000u 

Beaulieu 113 DROUE S DROUETTE Av Europe 4,220,000u 418,644u 10.25% 10.25% 10.25% 10.25% 3,120,000u 6,090,000u 

Beaulieu 115 GENAS 5,680,000u 605,636u 10.00% 6.76% 6.08% 10.80% 4,490,000u 7,430,000u 

Beaulieu 119 SARTROUVILLE Léon Jouhaux 3,360,000u 329,672u 9.75% 9.95% 9.95% 9.95% 2,500,000u 2,720,000u 

Beaulieu 129 STE GENEVIEVE DES BOIS 6,190,000u 656,208u 9.25% 4.23% 2.70% 10.13% 5,130,000u 7,620,000u 

Menelas 131 BONCHAMP Rue des Pierres 3,440,000u 460,000u 11.00% 0.00% -2.60% 14.33% 3,030,000u 8,020,000u 

Menelas 132 CHAPELLE D’ARMENTIERES Rue Laennec 10,720,000u 1,090,000u 9.00% 9.09% 9.09% 9.09% 8,860,000u 18,040,000u 

Menelas 134 LES ULIS Courtaboeuf Av Océanie 9,540,000u 1,060,065u 9.00% 9.09% 9.09% 9.09% 8,740,000u 13,510,000u 

Menelas 135 MARLY LA VILLE -ZI Moimont 3,640,000u 570,000u 11.00% 0.00% -3.42% 14.76% 3,640,000u 5,560,000u 

Menelas 136 RAILLENCOURT ZI de l’A2 8,210,000u 890,000u 9.75% 9.85% 9.85% 9.85% 6,340,000u 8,830,000u 

Hauteurs du Loing 137 MAUREPAS 10-12 Marie Curie 3,720,000u 457,490u 10.00% 6.09% 4.29% 11.66% 3,110,000u 4,980,000u 

Hauteurs du Loing 138 NEMOURS Rue H Nestlé 4,460,000u 436,320u 9.75% 9.90% 9.90% 9.90% 3,000,000u 5,670,000u 

Hauteurs du Loing 139 SAINT AUBIN Route de l’Orme 9,730,000u 839,700u 8.85% 8.85% 8.85% 8.85% 7,410,000u 10,370,000u 

Enoville 141 VILLENEUVE D’ASCQ Rue P Doumer 7,090,000u 516,511u 8.50% 10.06% 10.06% 7.07% 5,030,000u 6,080,000u 

IDB 143 ISLE D’ABEAU- 6 rue Bretagne 21,910,000u 2,086,558u 9.35% 9.53% 9.53% 9.53% 15,730,000u 33,850,000u 

IDB 144 Orly rue des 15 arpents 4,760,000u 522,232u 10.15% 10.36% 10.36% 10.36% 3,880,000u 4,300,000u 

PPP Castelnau le lez, 400 av Marcel Dassault 4,480,000u 300,564u 8.75% 8.75% 8.75% 8.75% 2,830,000u 3,070,000u 

Total 172,790,000w 17,242,061w 

Beaulieu Nemours, 1 rue Henri Nestlé* 6,910,000u 652,080u 9.15% 9.15% 9.15% 9.15% 8,170,000u 

1 Sprinkler renovation works of around u 1 million not taken into account in valuation 

* These properties have been purchased since 30th June 2005 and have been included in this list 

** We have been advised from proudreed that this property had been sold and is not included in the list

Appendix 2 – Schedule of Values 

131 


Net Market 

Value 



Rate 

Gross 

Initial 

Yield 

Net 

Initial 

Yield 

Reversion 

yield 

Vacant 

Possession 

Value 

Reinstatement 

cost 

Proudreed 1 AUBAGNE Parc Napollon 5,760,000u 545,854u 9.00% 9.00% 9.00% 9.00% 4,920,000u 5,960,000u 

Proudreed 2 CHAPELLE SUR ERDRE 1,560,000u 136,000u 8.90% 8.90% 8.90% 8.90% 1,260,000u 1,690,000u 

Proudreed 3 CHOISY LE ROI Av Alfortville 5,420,000u 610,196u 9.75% 7.66% 6.51% 11.19% 4,260,000u 7,080,000u 

Proudreed 4 CREIL 4,190,000u 437,601u 9.85% 9.85% 9.85% 9.85% 3,250,000u 5,150,000u 

Proudreed 5 EVRY Av J Mermoz Courcouronnes 3,320,000u 319,350u 8.75% 8.97% 8.97% 8.97% 2,800,000u 4,680,000u 

Proudreed 6 DOMENE Av Berges 990,000u 78,910u 9.25% 12.17% 12.17% 16.53% 670,000u 860,000u 

Proudreed 7 GENNEVILLIERS Av Charles de Gaulle 3,760,000u 399,636u 10.50% 10.83% 10.83% 10.83% 2,640,000u 6,490,000u 

Proudreed 8 GONESSE Rue des Cressonières 1,920,000u 184,900u 10.00% 10.00% 10.00% 10.00% 1,350,000u 2,000,000u 

Proudreed 9 LA PENNE SUR HUVEAUNE 3,850,000u 442,000u 9.75% 10.20% 10.03% 10.76% 3,120,000u 4,560,000u 

Proudreed 10 MEYZIEU Impasse Monge 4,700,000u 473,715u 9.75% 9.54% 9.54% 9.54% 3,580,000u 5,190,000u 

Proudreed 11 MARSEILLE Chemin de Passet 2,900,000u 275,400u 9.50% 14.08% 14.08% 11.52% 2,260,000u 3,240,000u 

Proudreed 13 SAINT DENIS - Charles Michels 7,410,000u 763,823u 9.25% 7.88% 7.63% 9.65% 6,200,000u 5,710,000u 

Proudreed 14 SAINT DENIS - Cornillon 2,240,000u 283,000u 10.00% 0.00% -2.09% 11.93% 2,200,000u 2,540,000u 

Proudreed 15 SALON DE PROVENCE Rue Canesteu 3,770,000u 411,760u 9.60% 10.45% 10.45% 11.11% 3,090,000u 4,700,000u 

Proudreed 16 ST JACQUES DE LA LANDE 1,420,000u 136,240u 9.25% 9.25% 9.25% 9.25% 1,150,000u 1,810,000u 

Proudreed 17 SUCY EN BRIE Rue de la Scierie 6,660,000u 722,041u 11.00% 11.22% 11.22% 11.22% 5,250,000u 8,400,000u 

Proudreed 18 VALBONNE Route des Dolines 12,870,000u 803,550u 8.00% 8.58% 8.58% 6.50% 9,220,000u 8,860,000u 

Proudreed 19 VILLENEUVE LA G. Chemin de la Litte 3,330,000u 322,675u 9.75% 10.76% 10.76% 9.27% 2,660,000u 3,030,000u 

Proudreed 20 VITROLLES 7,440,000u 1,000,896u 8.80% 8.98% 8.98% 8.98% 8,030,000u 13,320,000u 

Proudreed 21 VITRY - 44-52 rue G Sand 3,220,000u 250,725u 8.75% 8.75% 8.75% 8.75% 2,360,000u 2,620,000u 

Proudreed 22 VITRY- Rue Albrecht-G Sand 2,670,000u 253,350u 9.00% 8.99% 8.99% 8.99% 2,190,000u 2,700,000u 

Proudreed 23 VITRY - 64 rue Charles Heller 4,840,000u 469,768u 9.50% 9.67% 9.67% 9.67% 3,620,000u 4,490,000u 

2PI 29 ORLY 13, chemin des Chaudronniers 3,340,000u 339,294u 9.75% 9.95% 9.95% 9.95% 2,740,000u 3,000,000u 

2PI MITRY MORY Rue Isaac Newton 1,730,000u 238,000u 8.15% 8.15% 8.15% 8.15% 2,040,000u 2,100,000u 

2PI BRIE COMTE ROBERT, ZAC du Tuboeuf 2,590,000u 300,985u 8.40% 8.40% 8.40% 8.40% 2,510,000u 2,480,000u 

PPP 46 AIX Veritas Club du Golf 1,610,000u 155,365u 9.50% 9.60% 9.60% 9.60% 1,280,000u 2,280,000u 

PPP 47 ALFORTVILLE Rue Charenton 7,340,000u 778,227u 9.50% 10.60% 10.53% 10.91% 5,570,000u 9,610,000u 

PPP 48 AIX EN PROVENCE Les Mille 3,710,000u 361,059u 9.60% 9.70% 9.70% 9.70% 2,910,000u 3,800,000u 

PPP 49 ANTONY Rue F Sommer 14,790,000u 1,432,700u 9.25% 9.87% 9.74% 10.18% 10,680,000u 14,000,000u 

PPP 50 ARGENTEUIL Rue Poulmarch 5,490,000u 608,330u 9.50% 10.38% 10.38% 9.56% 4,780,000u 4,960,000u 

PPP 52 CORBEIL ESSONNE Rue E Zola 18,990,000u 1,741,650u 9.35% 9.44% 9.44% 9.44% 13,510,000u 15,220,000u 

PPP 53 DARDILLY Peupliers 2,370,000u 225,845u 9.50% 9.60% 9.60% 9.60% 1,790,000u 4,140,000u 

PPP 54 ERAGNY Parc des Bellevues 2,980,000u 280,650u 9.25% 7.63% 6.98% 9.93% 2,340,000u 3,440,000u 

PPP 55 DECINES CHARPIEU Rue E Zola 2,690,000u 291,140u 10.25% 10.57% 10.57% 10.57% 2,090,000u 4,740,000u 

PPP 56 DARDILLY Jubin 1,850,000u 169,754u 9.00% 9.09% 9.09% 9.09% 1,480,000u 2,730,000u


132 


Net Market 

Value 



Rate 

Gross 

Initial 

Yield 

Net 

Initial 

Yield 

Reversion 

yield 

Vacant 

Possession 

Value 

Reinstatement 

cost 

PPP 57 EVRY Courcouronnes Bois Epine 2,280,000u 220,000u 9.50% 9.60% 9.60% 9.60% 1,770,000u 3,970,000u 

PPP 58 GOUSSAINVILLE-5 rue A Croizat 2,350,000u 311,310u 10.75% 0.00% -2.23% 12.52% 2,350,000u 5,300,000u 

PPP 59 LE THILLAY Rue M Bertheaux 1,880,000u 153,300u 10.00% 10.00% 10.00% 10.00% 1,170,000u 1,390,000u 

PPP 60 MASSY Av de France 5,790,000u 486,182u 9.85% 9.04% 8.56% 10.24% 3,780,000u 7,720,000u 

PPP 61 PESSAC Rue M Dassault 5,040,000u 494,377u 9.00% 9.18% 9.18% 9.18% 4,000,000u 7,710,000u 

PPP 62 PONTAULT COMBAULT Route Libération 3,090,000u 311,450u 9.25% 7.88% 7.43% 9.66% 2,530,000u 2,900,000u 

PPP 63 PORTES LES VALENCE Cousteau 3,290,000u 321,195u 9.50% 12.19% 12.19% 12.19% 2,660,000u 3,490,000u 

PPP 64 RUEIL Rue L Terray 12,890,000u 1,017,450u 9.00% 9.09% 9.09% 9.09% 10,060,000u 10,440,000u 

PPP 65 SAINT HERBLAIN Rue J Cartier 2,660,000u 231,950u 8.50% 8.56% 8.56% 8.56% 2,410,000u 3,760,000u 

PPP 66 SAINT LAURENT DE MURE - RN6 3,410,000u 368,980u 9.75% 9.95% 9.95% 9.95% 2,800,000u 4,990,000u 

PPP 67 SAINT OUEN Parc Dhalenne 4,070,000u 409,477u 9.00% 9.12% 9.12% 9.12% 3,450,000u 3,760,000u 

PPP 68 SARTROUVILLE Rue JP Timbaud 2,260,000u 232,898u 9.65% 9.95% 9.95% 9.95% 1,810,000u 3,750,000u 

PPP 69 TASSIN Pr Deperet 1,820,000u 166,600u 9.00% 9.18% 9.18% 9.18% 1,430,000u 2,380,000u 

PPP 70 TORCY 3 route de Noisiel 2,730,000u 260,380u 10.00% 10.31% 10.31% 10.31% 1,990,000u 4,110,000u 

PPP 71 TOULOUSE Av Lespinet 450,000u 53,120u 9.25% 11.48% 11.48% 11.48% 430,000u 950,000u 

PPP 72 TRAPPES Av Politzer 2,720,000u 255,000u 9.80% 10.00% 10.00% 10.00% 1,870,000u 2,530,000u 

PPP 73 VENISSIEUX Rue G Lévy 4,190,000u 591,200u 9.85% 10.05% 10.05% 10.28% 4,010,000u 6,280,000u 

PPP 74 VILLENEUVE LA G. 33 av 8 Mai 45 2,690,000u 249,110u 10.10% 10.20% 10.20% 10.20% 1,910,000u 2,580,000u 

PPP 75 VILLENEUVE LA G. 36 av 8 Mai 45 3,450,000u 327,032u 9.75% 10.15% 10.15% 10.15% 2,590,000u 2,810,000u 

PPP 76 VILLIERS S MARNE ZAC des Luats 2,760,000u 264,768u 9.75% 9.95% 9.95% 9.95% 2,080,000u 3,100,000u 

PPMPP EMERAINVILLE ASE 1 Malnoue 250,000u 27,625u 10.25% 10.35% 10.35% 10.35% 210,000u 420,000u 

PPMPP 84 EMERAINVILLE Villa 41 - bld Europe 370,000u 48,450u 10.50% 0.00% -2.92% 12.41% 370,000u 590,000u 

PPMPP 85 EMERAINVILLE Villa V5 - 59bis av Europe 270,000u 26,678u 10.00% 10.20% 10.20% 10.20% 200,000u 390,000u 

PPMPP 86 EMERAINVILLE Villa V6 - 59 av Europe 270,000u 26,500u 10.00% 10.20% 10.20% 10.20% 200,000u 370,000u 

PPMPP 89 EVRY 8-10 rue du Bois Sauvage 330,000u 35,750u 10.00% 10.35% 10.35% 10.35% 270,000u 340,000u 

Beaulieu 122 St Pierre en Faucigny - Les Jourdies 350,000u 41,486u 11.00% 11.28% 10.26% 11.28% 320,000u - 

Beaulieu 124 WARLUIS 3-ZIRoute d’Allonne Rue de la Gare 550,000u 75,492u 10.00% 10.51% 10.51% 10.51% 450,000u 1,800,000u 

Beaulieu 125 WARLUIS 2 - Rue de la Gare 130,000u 15,125u 11.00% 12.50% 12.50% 12.50% 100,000u 280,000u 

Beaulieu 126 WARLUIS - Rue de la Gare 260,000u 27,000u 11.00% 12.50% 12.50% 12.50% 190,000u 470,000u 

Rue d’Amiens 140 STAINS Rue d’Amiens 10,640,000u 499,540u 9.85% 5.13% 3.95% 11.03% 8,680,000u 13,210,000u 

246,960,000w 23,793,813w


133 


Net Market 

Value 

31/5/05 Notes 

Market 

rent 


Rate 

Gross 

Initial 

Yield 

Net 

Initial 

Yield 

Reversion 

yield 

Vacant 

Possession 

Value 

Reinstatement 

cost 

Proudreed 12 ORMES-SARAN 9,080,000u 1 1,129,380u 10.00% 0.00% -2.79% 11.74% 9,080,000u 10,580,000u 

2PI 24 CREIL ZAC du Parc Alata 3,950,000u 323,500u 7.90% 8.12% 8.12% 7.72% 2,980,000u 3,220,000u 

2PI EPONE 6,420,000u 525,320u 8.50% 8.93% 8.93% 8.22% 4,540,000u 5,190,000u 

2PI 25 GOINCOURT 31, rue Juliette Névouet 3,970,000u 390,050u 8.50% 8.63% 8.63% 8.63% 3,480,000u 3,990,000u 

2PI 26 LISSES 7, rue des Mâlines 91090 Lisses 1,370,000u 131,725u 9.25% 9.34% 9.34% 9.34% 1,110,000u 1,200,000u 

2PI 27 ORMES 45 rue de Paradis 8,890,000u 914,900u 9.00% 9.18% 9.18% 9.18% 6,540,000u 10,580,000u 

2PI 28 NEUILLY, 45 rue des Frères Lumière 2,690,000u 251,648u 10.00% 10.10% 10.10% 10.50% 1,880,000u 3,040,000u 

2PI 31 VALENCIENNES 201 av Desandrouins 1,830,000u 298,575u 9.75% 8.67% 8.67% 9.86% 1,270,000u 8,440,000u 

PPP 51 ARGENTEUIL Sainthimat Rue A Croizat 4,850,000u 445,610u 9.00% 6.17% 6.17% 10.25% 4,500,000u 2,300,000u 

PPMPP 77 CHATILLON S SEICHE Touche Tizon 11,910,000u 995,460u 9.00% 9.00% 9.00% 9.00% 8,890,000u 5,660,000u 

PPMPP 90 FLEURY LES AUBRAIS 12,280,000u 1,395,800u 9.85% 10.10% 10.10% 10.10% 9,550,000u 16,530,000u 

PPMPP 91 GOUSSAINVILLE Rue R Moinon 3,330,000u 352,406u 10.00% 9.24% 8.67% 10.45% 2,480,000u 3,560,000u 

PPMPP 93 GRISOLLES Les Molles 3,570,000u 365,456u 10.00% 10.26% 10.26% 10.26% 2,610,000u 4,110,000u 

PPMPP 95 MARLY LA VILLE 10,590,000u 978,360u 9.00% 4.71% 4.71% 8.72% 8,000,000u 9,140,000u 

PPMPP 97 MITRY Corio 4 rue Becquerel 1,390,000u 152,388u 9.25% 10.06% 9.96% 10.52% 1,100,000u 1,820,000u 

PPMPP 99 ORANGE Les Crémades 5,210,000u 662,740u 10.00% 10.26% 10.26% 10.26% 4,150,000u 10,320,000u 

Beaulieu 110 AIX EN PROVENCE 660 rue Guillaume du Vair 1,850,000u 126,034u 9.25% 9.25% 9.25% 9.25% 1,100,000u 1,850,000u 

Beaulieu 111 BEZONS av du Général Delambre 1,180,000u 117,770u 9.85% 8.73% 8.36% 10.16% 900,000u 1,330,000u 

Beaulieu 112 CLAMART 383, avenue du Général de Gaulle 9,410,000u 848,205u 8.75% 8.97% 8.97% 8.51% 7,360,000u 9,330,000u 

Beaulieu 114 EVREUX 1 rue Jacquard 1,940,000u 177,600u 9.00% 9.20% 9.20% 8.62% 1,510,000u 1,100,000u 

Beaulieu 116 LESQUIN - 15 rue des Famards 3,130,000u 304,127u 10.00% 9.05% 9.05% 9.96% 2,450,000u 3,320,000u 

Beaulieu 117 Marignier - ZAC des Pres paris - 696 avenue de l’industrie 1,230,000u 130,950u 10.00% 10.00% 10.00% 10.00% 920,000u 1,410,000u 

Beaulieu 118 NIORT 2 rue Robert Turgot 1,800,000u 200,000u 10.00% 10.00% 10.00% 10.00% 1,450,000u 2,760,000u 

Beaulieu 120 SARTROUVILLE Perriers Rue de la Beauce 4,820,000u 520,520u 9.65% 5.21% 4.11% 10.34% 4,110,000u 5,550,000 u 

Beaulieu 121 St Pierre en Faucigny - 310 avenue des Aravis Lance SA 1,550,000u 172,742u 10.25% 10.25% 10.25% 10.25% 1,160,000u 2,410,000u 

Beaulieu 123 St Pierre en Faucigny - Rue des Champs Plans Lance Ind 1,730,000u 182,094u 10.25% 10.25% 10.25% 10.25% 1,260,000u 2,580,000u 

Beaulieu 127 VENEUX LES SABLONS Rue Liberté 2,070,000u 2 212,450u 11.00% 9.99% 9.99% 11.36% 1,260,000u 3,620,000u 

Beaulieu 128 TEMPLEMARS 14 rue de l’Epinoy 1,650,000u 192,500u 10.75% 10.75% 10.75% 10.75% 1,390,000u 2,560,000u 

Beaulieu 130 STE CATHERINE LES ARRAS 162, route de Béthune 2,490,000u 273,250u 10.75% 10.75% 10.75% 10.75% 1,740,000u 5,580,000u 

Menelas 133 LA CHAPELLE D’AREMENTIERES - Rue Laennec 6,180,000u 3 555,175u 8.75% 3.68% 3.68% 9.21% 5,020,000u 5,920,000u 

Total 132,360,000w 13,326,735w 

Notes 

1 Assumes conformity works completed 

2 Additional rent of 30,000 u per annum payable from mid 2006 in return for works to roof (cost of works not deducted) 

3 Lease on extension assumed to commence 1 November 2005

Appendix 4 

Net Market 

Fund Ref Property Value 31/5/05 Market rent Cap Rate 5/05 

PPP 12 VAIRES 2,475,000u 

Vacant 

Possession Value 

Reinstatement cost 

Note 

Value of site with CDEC and assuming the proposed project to Santhimat 

134

File handled by: Robert BRUNIER, property valuer 

01.47.59.21.31 - Fax : 01.47.59.17.01 - E-mail : robert.brunier.@atisreal.com 

Address : 32, rue Jacques Ibert - 92300 LEVALLOIS 

Proudreed France SARL & Properties Sarl. c/o 

FIPAM 

36, avenue Hoche 

75008 PARIS 


(In its capacity as Joint Lead Manager, 

and Hedging Provider) 

Level 3 


LONDON E14 5HQ 


(In its capacity as Joint Lead Manager, FCC Servicer 

and Hedging Provider) 

Tour S. G17 Cours Valmy 

97972 PARIS LA DEFENSE 

EUROTITRISATION 

(In its capacity as Management Company) 

20 rue Chauchat 

75009 PARIS 

CCF 

(In its capacity as Custodian Liquidity Facility 

Provider and FCC Servicer) 

103, avenue des Champs Elysées 

75008 PARIS 

Levallois, September 28th, 2005 

Dear Sirs, 

Following the mission letter from FIPAM dated 2nd June 2005, we hereby certify that we carried out the 

valuation on 30 June 2005 of a commercial property located in Checy owned by Dep Immo Com. 

We have been informed that it was in the purpose of the securitisation of a real estate portfolio. 

Atisreal Expertise 

32 rue Jacques Ibert - 92309 Levallois cedex - France 

Tél : +33 (0)1 47 59 17 00 Fax : +33 (0)1 47 59 17 01 

www.atisreal-expertise.fr 

Siège social: 

5 avenue Kléber - 75116 Paris - France 

Atisreal Expertise - Société par Actions Simplifiée au capital de 58 978,80 euros 

SIREN 327 657 169 RCS Paris - APE 70.3 A 

N o Identification TVA : FR 00 327 657 169 

135

We are in the opinion that the values are as follows: 

Estimated rental value : w 626 048 

Vacant possession value : w 5 390 000 

Net market value : w 6 510 000 

At your disposal for any further information you require, we are, 


Robert BRUNIER – MRICS 

Property Valuer 

Atisreal Expertise 

32 rue Jacques Ibert - 92309 Levallois cedex - France 

Tél : +33 (0)1 47 59 17 00 Fax: + 33 (0)1 47 59 17 01 

www.atisreal-expertise.fr 

Siège social: 

5 avenue Kléber - 75116 Paris - France 

Atisreal Expertise - Société par Actions Simplifiée au capital de 58978,80 euros 

SIREN 327 657 169 RCS Paris - APE 70.3 A 

N o Identification TVA : FR 00 327 657 169 

136

FCC PROUDREED PROPERTIES 2005 

(THE ISSUER) 

Introduction 

The Issuer is a ‘‘debt mutual fund’’ (fonds commun de creances) to be established in France by the 

Management Company and the Custodian jointly on the Closing Date with the name FCC Proudreed 

Properties 2005. The FCC is established pursuant to and governed by the provisions of articles L.214-43 

to L.214-49 and articles R.214-92 to R.214-115 of the French Monetary and Financial Code, the Issuer 

Regulations and the other relevant Transaction Documents. The Issuer is a co-ownership entity 

(copropriété), and has been established for the special purpose of acquiring, on the Closing Date, the 

Receivables from the Lenders and issuing the Notes. The Issuer does not have a separate legal personality. 

The legal provisions relating to joint ownership (indivision) together with Article 1871 to 1873 of the 

French Code civil do not apply to the Issuer. The Issuer will be validly substituted for the co-owners with 

respect to any transaction made in the name and on behalf of the co-owners of the Issuer. 

Capitalisation and Indebtedness 

As at the date of this Offering Circular, the Issuer has no share capital or outstanding loan capital. 

The following Notes and Units will be issued by the Issuer on the Closing Date: 

u255,400,000 Class A Floating Rate Notes due 2017; 

u56,800,000 Class B Floating Rate Notes due 2017; 

u28,400,000 Class C Floating Rate Notes due 2017; 

u28,400,000 Class D Floating Rate Notes due 2017; and 

u28,400,000 Class E Floating Rate Notes due 2017; 

u300 Units due 2017. 

Representation by the Management Company 

Pursuant to Article L.214-48-I of the French Monetary and Financial Code, only the Management 

Company may enforce the rights of the Issuer against third parties, including the Borrowers. Accordingly, 

the Noteholders shall have no recourse whatsoever against the Borrowers. For a description of the 

Management Company, see the section entitled ‘‘Description of Principal Transaction Parties – the 

Management Company’’. 

Issuer Regulations 

The Custodian and the Management Company will on the Closing Date enter into the Issuer Regulations 

which provide for, among other things, the general operating rules of the Issuer including those governing 

the creation, operation and liquidation of the Issuer and the respective duties and obligations of each of 

the Management Company and the Custodian. The Issuer Regulations also make provision for the 

characteristics of the receivables which may be purchased by the Issuer and the characteristics of the Units 

and the Notes issued for the purpose of financing the purchase of such receivables, the priorities in the 

allocation of assets and the credit enhancement and hedging mechanisms which may be set up in relation 


Limited Recourse 

The proceeds of the issue of the Notes will be applied by the Management Company, acting in the name 

and on behalf of the Issuer, to acquire the Receivables from the Lenders. The Noteholders have no direct 

recourse, whatsoever, to the relevant Borrower for the Receivables purchased by the Issuer. 

Pursuant to the provisions of the Issuer Regulations, the Management Company has expressly and 

irrevocably undertaken, upon the conclusion of any agreement, in the name and on behalf of the Issuer 

and with any third party, to ensure that such third party expressly and irrevocably waives all contractual 

claims or actions against the Issuer. 

137

Assets of the Issuer 

Receivables and Related Rights 

(a) The assets of the Issuer shall include the Receivables (including the attached Related Rights) 

purchased on the Closing Date by the Issuer from the Lenders. 

Cash 

(b) The assets of the Issuer will include cash, which may be invested by the Cash Manager in Eligible 

Investments, from time to time, in accordance with the investment rules set out in the Issuer 

Regulations. 

Other 

(c) The assets of the Issuer shall also include any other sums or other assets transferred to the Issuer 

further to its commitments under the Hedging Agreements; and sums or other assets form which the 

Issuer might benefit in any way whatsoever in accordance with the Issuer Regulations and the other 

Issuer Transaction Documents (in particular upon the enforcement of any Obligor Security by the 

Issuer). 

Role of the Management Company 

The Management Company will part icipate, jointly with the Custodian, in the establishment of the Issuer. 

It represents the Issuer vis–à–vis third parties and in any legal proceedings, whether as plaintiff or 

defendant, and is responsible for the management and operation of the Issuer. Subject to supervision by 

the Custodian, the Management Company shall take all steps, which it deems necessary or desirable to 

protect the Issuer’s rights in, to and under the Receivables. It shall be bound to act at all times in the best 

interest of the holders of the Notes and the Units. 

The responsibilities of the Management Company are set out in the Issuer Regulations. These 

responsibilities include, inter alia: 

(a) ensuring, in light of the information provided to it for this purpose by any relevant party as 

referenced hereunder, that the Sellers and the FCC Servicers comply with their obligations towards 

the Issuer and the Management Company under the provisions of the Receivables Transfer and 

Servicing Agreement; 

(b) verifying that the amounts of the sums received by the Issuer are in conformity with the amounts to 

be paid to the Issuer under the Issuer Regulations and, if relevant, to exercise the rights of the Issuer 

under the Receivables and the Transaction Documents to which the Issuer is a party; 

(c) ensuring that the Custodian has opened the Issuer Accounts with the Issuer Account Bank, in 

accordance with the provisions of the Issuer Regulations; 

(d) transmitting to the Custodian all relevant information in order for the Custodian to credit or debit 

the relevant Issuer Account, in accordance with the provisions of the Issuer Regulations; 

(e) allocating and distributing the sums received by the Issuer in accordance with, and subject to, the 

relevant Issuer Priority of Payments; 

(f) calculating the amount of principal and interest due to the Noteholders and Unitholders, together 

with any amount due to any third party, in accordance with the provisions of the Issuer Regulations; 

(g) entering into and renewing, together with the Custodian, any agreements necessary for the creation 

and operation of the Issuer and, in particular, the agreements relating to the appointment and 

intervention of such others organs or entities and supervising the performance of such agreements as 

well as the performance of the Issuer Regulations; 

(h) appointing the statutory auditor of the Issuer with the prior approval of the Autorité des marchés 

financiers, and providing for a substitute statutory auditor if required, under the same terms and 

conditions; 

(i) preparing, under the supervision of the Custodian if required, all documents required by the 

applicable provisions of the French Monetary and Financial Code relating to a debt mutual fund 

(fonds communs de créances), and, more generally, any other applicable French law, for the 

information, as applicable, of the Autorité des marchés financiers, the Banque de France and any other 

supervisory authority and the Noteholders and Unitholders. In particular, the Management Company 

shall provide the Noteholders and Unitholders with the documents containing periodical information 

pursuant to the Issuer Regulations; 

138

(j) deciding whether to liquidate the Issuer subject to the conditions of legal and regulatory provisions 

in force and of the Issuer Regulations; 

(k) substituting, if applicable, a new entity for the entities providing services to the Issuer, including any 

FCC Servicer, subject to the conditions of any applicable law in force on the date of such substitution, 

of the agreements relating to such entity, and of the Issuer Regulations; 

(l) notifying the Issuer Account Bank of the termination of the appointment of any FCC Servicer. 

The Management Company shall not make any due diligence as to the compliance of the representations 

and warranties made by each Seller under the Receivables Transfer and Servicing Agreement and shall 

not be subject to such obligation; as a consequence, the Management Company shall solely rely on the 

representations and warranties made by each Seller in the Receivables Transfer and Servicing Agreement. 

The Management Company may, in certain conditions, sub-contract or delegate all or part of its duties or 

may appoint a third party to exercise all or part of those duties but cannot thereby exempt itself from 

liabilities in respect thereof under the Issuer Regulations. The management of the Issuer may be 

transferred, at the request of the Management Company or, in certain circumstances, at the request of the 

Custodian, to another management company which manages fonds communs de créances and is duly 

approved by the Autorités des Marchés Financiers (‘‘AMF’’), provided that: (i) such transfer shall have 

been notified by the Management Company or, as the case may be, by the Custodian to the AMF, prior 

to such transfer, (ii) such transfer shall be based on serious grounds (including without limitation a wilful 

misconduct, negligence or fraud of the Management Company) if this substitution is requested by the 

Custodian, (iii) such transfer is made in compliance with the then current and applicable provisions of the 

laws and regulations in force, and (iv) the choice of the substitute management company shall not reduce 

the level of security offered to the Noteholders and Unitholders or shall limit the extent of such reduction. 

The Management Company will receive a fee, payable on each Interest Payment Date, subject to and in 


Role of the Custodian 

The Custodian is CCF. The Custodian shall act as custodian of the assets of the Issuer and, in particular, 

the Custodian shall ensure, under its own liability, the custody of the Transfer Documents (Actes de 

cession de créances) evidencing the assignment of the Receivables to the Issuer and the moneys standing 

from time to time in the Issuer Accounts and shall operate and maintain the register of Units. 

According to Article L.214-48 II and Article R.214-111 of the French Monetary and Financial Code, the 

Custodian responsible for the custody of the Issuer’s assets; however, in accordance with and subject to 

the provisions of Article R.214-111 of the French Monetary and Financial Code, each FCC Servicer shall 

keep the originals of the Commercial Mortgage Loan Agreement in respect of which it was the Lender 

of record and the other relevant Obligor Transaction Documents, together with all other agreements, 

correspondence, records and other information and documents delivered to it in connection with the 

Commercial Mortgage Loans and the Related Security, other than the Transfer Documents, which shall 

be kept under the direct custody of the Custodian. 

The Custodian shall be responsible for ensuring the compliance (régularité) of the decisions of the 

Management Company with any applicable French laws and regulations and in accordance with the Issuer 

Regulations. In particular, it shall be responsible for supervising the Management Company in the 

preparation of the financial information as provided for in the Issuer Regulations, and when required by 

the legal provisions and regulations in force, for supervising the information published by the 

Management Company. 

The Custodian may, in certain conditions, delegate all or part of its duties to a third party, provided 

however, that the Custodian shall remain liable to the Issuer and the holder of Notes and Units for the 

performance of its duties regardless of any such delegation. 

At any time, the Custodian may substitute itself with any duly authorised credit institution, upon prior 

notice to the Management Company and to the AMF, provided that: (i) such transfer shall have been 

notified by the Management Company or, as the case may be, by the Custodian to the AMF, prior to such 

transfer, (ii) such transfer shall be based on serious grounds (including without limitation a wilful 

misconduct, negligence or fraud of the Custodian) if this substitution is requested by the Management 

Company, (iii) such transfer is made in compliance with the then current and applicable provisions of the 

laws and regulations in force, and (iv) the choice of the substitute credit institution shall not reduce the 

level of security offered to the Noteholders and Unitholders or shall limit the extent of such reduction. 

139

The Custodian will receive a fee, payable on each Interest Payment Date, subject to and in accordance 

with the relevant Issuer Priority of Payments. 

Role of the statutory auditor 

Mazars & Guerard, whose registered office is at Le Vinci 4 allée de l’Arche 92075 La Défense, France, 

has been appointed as statutory auditor (commissaire aux comptes) in order to certify the annual report 

of the Issuer in accordance with article L.214-48-VI° of the Monetary and Financial Code, and shall be 

responsible for carrying out certain other duties as set out in the Issuer Regulations. The accounts of the 

Issuer will be prepared and published in French. A translation in English will be made available to the 

Management Company, the Unitholders and the Noteholders for information purposes only in order to 

assist understanding of the original French version of the accounts. In the event of any discrepancy 

between the original French version of the accounts and the English translation, the original French 

version will prevail. The translator shall not be responsible for any discrepancies between the original 

French version of the accounts and the English translation. 

The statutory auditor will receive a fee, payable on each Interest Payment Date, subject to and in 


Fees and Expenses of the Issuer 

In accordance with the Issuer Regulations, the Issuer will, on each Interest Payment Date, pay the Fees 

and Expenses of the Management Company, the Custodian, each FCC Servicer, the Paying Agent, the 

Issuer Account Bank and Cash Manager, its statutory auditor and any other relevant third parties, in each 

case together with any applicable VAT, subject to and in accordance with the relevant Issuer Priority of 

Payments. 

Accounting and financial information 

Annual information: 

Within four (4) months following the end of each financial year, the Management Company shall compile 

an annual report containing the following information: 

(a) the inventory of the Issuer’s assets, which shall include: 

(i) the inventory of the portfolio of Receivables; and 

(ii) the amount of the cash standing to the credit of the Issuer Accounts; 

(b) the annual financial statements of the Issuer, which shall include: 

(i) the balance sheet; 

(ii) the income statement; and 

(iii) the annex, specifying the accounting methods used and, if any, a detailed statement of the Issuer’s 

liabilities and the guarantees given to the Issuer; 

(c) a management report including: 

(i) the amount of Fees and Expenses and remuneration paid by the Issuer; 

(ii) the liquidity ratio as being the ratio (expressed as a percentage) between: (1) the amount of 

unallocated moneys standing from time to time to the credit of the Issuer’s bank accounts, and 

(2) the Issuer’s assets; 

(iii) a description of the operations of the Issuer; and 

(iv) information relating to the outstanding Receivables and the outstanding Notes and Units; 

(d) information on any amendments made to the Issuer Regulations; and 

(e) any event(s) which may have an effect on the outstanding Notes and/or Units issued by the Issuer. 

The statutory auditor of the Issuer shall certify the accuracy of the information contained in the annual 

activity report. 

140

Delivery of documents 

A copy of the documents referred to in the section above may be obtained from the Management 

Company by the Noteholders or Unitholders and any Transaction Party upon request. 

The Management Company shall be responsible for communicating to the Noteholders, the Unitholders, 

the Noteholder Representatives the Custodian the Rating Agencies, the Paying Agents, the Cash 

Manager, the FCC Servicer, the Issuer Account Bank, the Hedging Providers, the Liquidity Facility 

Providers and, through the Paying Agents, the Irish Stock Exchange, copies of all reports in its possession, 

together with any other information in its possession required by any of the foregoing in respect of the 

Receivables. 

Quarterly Information – Investor Report 

On or before the Business Day immediately preceding each Interest Payment Date, the Management 

Company shall provide the FCC Servicer, the Custodian, the Cash Manager, the Paying Agents, the 

Liquidity Facility Provider and the Hedging Providers with an Investor Report setting out, among other 

things: 

• details of interest, Pool Factor and principal paid and payable on each class of Notes; 

• details of the Commercial Mortgage Loans (including any covenant testing); 

• the latest Market Value of the Property Portfolios (based upon the most recent Valuation Report); 

• details of each Property Portfolio by reference to property type and region; 

• details of the top 10 Occupational Tenants (by rental income generated) for each Property Portfolio; 

• details of any disposals and substitutions in respect of each Property Portfolio; 

• total Gross Rental Income and the Estimated Rental Value for each Property Portfolio; and 

• details of any proposed Development the cost (excluding VAT) of which is estimated to be in excess 

of the greater of u250,000 and 10 per cent. of the Estimated Rental Value of the relevant Secured 

Property. 

Custodian’s supervision 

In order to allow the Custodian to perform its supervisory duties in accordance with the applicable laws 

and regulations and the provisions of the Issuer Regulations, the Management Company shall deliver the 

draft of the documents referred to in above, by no later than fifteen (15) calendar days prior to the 

scheduled date on which such documents shall be issued, together with such information which have been 

necessary for the purposes of the issuance of the same, that the Custodian may reasonably request. 

The Units of the Issuer 

On the Closing Date, the Issuer shall issue two (2) Units of the same class with a nominal value of u 150 

(one hundred and fifty euros) each, for an issue price equal to 100% (hundred per cent) of the nominal 

value of each Unit. There shall be no other issue of Units after the Closing Date. 

The Units will be: 

(i) financial instruments (instruments financiers) within the meaning of Article L.211-1 of the French 

Monetary and Financial Code; and 

(ii) transferable securities (valeurs mobilières) within the meaning of Article L.211-2 of the French 

Monetary and Financial Code. 

In accordance with the provisions of Article L.211-4 of the French Monetary and Financial Code the Units 

are issued in dematerialised form (book entry form). No physical documents of title will be issued in 

respect of the Units. 

The Units will rank pari passu and rateably among themselves without any preference or priority; as 

between the Notes and the Units, the Notes will rank in priority to the Units, in accordance with the 

provisions of the French Monetary and Financial Code and the Issuer Regulations (in particular, the 

Issuer Priority of Payments). 

None of the Units shall be listed on any recognised French or foreign stock exchange or traded on any 

French or foreign securities market (whether regulated (réglementé) within the meaning of Articles L.421-1 

141

et seq. of the French Monetary and Financial Code or over the counter) or accepted for clearance through 

any recognised French or foreign clearing system. The Units shall not be rated. 

Ownership of the Units will be established by book entry in the register of the relevant Unitholders 

maintained by the Custodian for the purposes thereof, in accordance with Article L.211-4 of the French 


The Unitholders are co-owners (co-propriétaires) of the Issuer’s assets and shall only be liable for the 

debts of the Issuer to the extent of the assets of the Issuer and pro rata their respective share therein. 

The Unitholders have the rights attributed to shareholders by Articles L.225-230 and L.225-233 of the 

French Commercial Code. Consequently, in accordance with Articles L.225-230 and L.225-233 of the 

French Commercial Code, the Unitholders are entitled to request the dismissal of the statutory auditor 

of the Issuer. The Unitholders shall not take part in the management of the Issuer. 

By subscribing or purchasing any Unit, a Unitholder shall automatically and without any formalities (de 

plein droit et sans qu’il soit besoin d’autre formalité) be bound by the provisions of the Issuer Regulations. 

The Unitholders shall not be entitled to demand the repurchase of their Units by the Issuer. 

The Unitholders shall have no direct right of action or recourse, under any circumstances whatsoever, 

against the Borrowers. Moreover, the Unitholders irrevocably waive all rights of contractual recourse 

(responsabilité contractuelle), of any form, nature, and on any ground whatsoever, which they may have 

against the Issuer. 

After the Final Maturity Date, any part of the nominal value of the Units which may remain unpaid will 

be automatically cancelled (de plein droit), so that the Unitholders, after such date, shall have no right to 

assert a claim in this respect against the Issuer, regardless of the amounts which may remain unpaid after 

the Final Maturity Date (abandon de créance). 

The Units shall not bear interest. 

The Units shall amortise in full on the Issuer Liquidation Date, in accordance with the applicable Issuer 

Priority of Payments. 

The Management Company shall always act in the best interest of the Unitholders and the Noteholders. 

Notwithstanding the foregoing, 

(a) if the Noteholders or Unitholders give a unanimous written notice to the Management Company 

(whether at their own initiative or at the initiative of the Management Company), whereby the 

Noteholders or Unitholders inform the Management Company that making a decision (or refraining 

from making the same) or performing an action or a specific procedure (or refraining from 

performing the same) would be in their best interests, then the Management Company shall be 

entitled (but shall in no circumstances be bound), vis-à-vis the Noteholders or Unitholders, to 

consider such decision as being in their best interest and to act in accordance with their interests as 

expressed by them under such notice; and 

(b) in the event that the Management Company seeks from the Noteholders or Unitholders their views 

in relation to a specific situation and that the Noteholders or Unitholders do not express such views, 

the Management Company shall nevertheless act in their best interests, as provided for by the French 

Monetary and Financial Code and the other applicable laws and regulations and shall not construe 

the lack of action from the Noteholders or Unitholders as an expression of their interests, whether 

positive, negative or other. 

The Management Company shall act in accordance with the decisions made as applicable by the 

Noteholders or the Unitholders, pursuant to the provisions of these Issuer Regulations. In the event of 

a conflict between the decisions made by (i) the Noteholders and the Unitholders, or (ii) between 

Noteholders of different classes, the Management Company shall apply the decisions made by the 

Noteholders in the case referred to in (i) above, or the Noteholders ranking in priority in the case referred 

to in (ii) above, unless any such decision would result in a modification of the financial characteristics of 

the other Notes or Units. In such a case, and unless the relevant holders of Notes or Units agree to modify 

their rights in accordance with the provisions of the Issuer Regulations, the Management Company shall 

not be obliged to perform such decision and should not be held liable therefore. 

142

Liquidation of the Issuer 

Liquidation Procedures 

Pursuant to Article L. 214-49 of the French Monetary and Financial Code, the Management Company 

shall liquidate the Issuer no later than six months following the last Receivable held by the Issuer being 

extinguished (the ‘‘Issuer Liquidation Date’’). 

The Management Company may declare the liquidation of the Issuer in the case of the occurrence of any 

of the following events as provided under Article R.214-107 of the French Monetary and Financial Code: 

(a) the liquidation of the Issuer is in the interest of the Unitholders and Noteholders; 

(b) the aggregate principal outstanding amount of the unmatured Receivables (créances non échues) 

transferred to the Issuer falls below ten per cent of the maximum aggregate principal outstanding 

amount of the unmatured Receivables acquired by the Issuer since the Closing Date; or 

(c) the Units and Notes issued by the Issuer are held by only one holder and the liquidation is requested 

by such holder. 

Clean-up offer and repurchase price of the Receivables: 

Upon the occurrence of any of the liquidation events referred to above, the Management Company shall 

immediately notify in writing the Sellers, with a copy to the Custodian, of the occurrence of such 

liquidation event and use its best endeavours to assign the remaining outstanding Receivables to a credit 

institution or such other entity authorised by the French law and regulations to acquire the Receivables, 

provided that the repurchase price applicable to the retransfer of the Receivables is equal to the market 

value of such Receivables, and that such repurchase price shall in any event be sufficient so as to allow 

the Management Company to pay all principal and interest amounts due and payable in respect of the 

outstanding Notes and Units together with the payment of all amounts due under the Liquidity Facility 

Agreement and the Hedging Agreements, after the payment of all liabilities of the Issuer ranking higher 

in the relevant Issuer Priority of Payments, failing which such retransfer of the Receivables shall not take 

place. 

The Management Company shall liquidate the Issuer upon the assignment of the Receivables; such 

liquidation is not conditional upon the payment in full of all of the creditors’ debts against the Issuer, 

except in respect of the Noteholders and Unitholders. 

The Management Company shall be responsible for the Issuer’s liquidation procedure. For this purpose, 

it shall be vested with the broadest powers: (i) to sell the Issuer’s assets, (ii) to pay any outstanding Fees 

and Expenses, (iii) to pay any of the Issuer’s creditors in accordance with the relevant Issuer Priority of 

Payments, and (iv) to distribute any residual monies. 

The statutory auditor of the Issuer and the Custodian shall continue to exercise their functions until the 

completion of the Issuer’s liquidation procedure. 

Any liquidation surplus shall be paid to the Unitholders in accordance with the relevant Issuer Priority 

of Payments. 

143

THE BORROWERS 

The Paris Properties Borrowers 

Les Hauteurs du Loing S.a.r.l. 

Introduction 

Les Hauteurs du Loing S.a.r.l. (‘‘Les Hauteurs du Loing’’) was incorporated in Paris on 9 September 1996 

(registered number 408 772 572) as a limited company under the laws of France. The registered office of 

Les Hauteurs du Loing is at 36 avenue Hoche, 75008 Paris. The authorised share capital of Les Hauteurs 

du Loing is u324,000, divided into 6,750 ordinary shares of u48 each, 6,749 of which are fully paid up and 

are held by Paris Properties and 1 of which is fully paid up and is held by SPCR. 

Principal Activities 

The principal objects of Les Hauteurs du Loing are set out in Article 2 of its Articles of Incorporation, 

which provides that the objects of the company include, inter alia: 

– the purchase, either for consideration or by means of contribution of all or part of commercial or 

industrial properties, developed or undeveloped, and any other properties of an equivalent nature, as 

well as the financing and refinancing by all means of such transactions; 

– the construction, fitting-out, administration, management and renting as well as the execution of any 

agreement relating thereto; 

– the purchase, subscription, possession and transfer of shares in any existing or future company whose 

activity is dedicated to the purchase, ownership, use, administration and management, by means of 

renting the properties or otherwise, of properties to be built on plots of land which have been 

purchased beforehand, or of any other property the company may own. The purchase or subscription 

of shares of any company whose main object is to facilitate directly or indirectly the possession of 

commercial or industrial properties, whether already built or to be built, with a view to renting such 

properties; 

– any transactions (whether property related or not) which directly or indirectly further the aims of one 

of the above mentioned objects, or are useful or necessary for the management of the assets of the 

company or which may facilitate the above objects, and namely: 

• borrowing or more generally raising funds, by itself or with other companies (whether the 

company is liable on a several basis or on a joint and several basis with the other companies 

pursuant to such transactions); 

• granting any security interest (‘‘sûreté réelle’’) or guarantee (‘‘sûreté personnelle’’) or entering into 

any agreement whose effect or object is to guarantee the performance of the obligations (such as 

the mortgages, liens, pledges, assignment of receivables) and in particular granting such security 

interest or guarantee (or entering into such acts) in order to guarantee the performance by a third 

party of its obligations; 

– and generally all transactions (whether financial, commercial, industrial, non-commercial, real estate 

or other) directly or indirectly attached to the above-mentioned object or any similar or related 

objects and pursuing, in any case, the achievement of such transactions. 

Les Hauteurs du Loing has not engaged, since its incorporation, in any activities other than those 

described in its corporate purpose and those incidental thereto and registration as a private limited 

company under the laws of France, the authorisation of the documents and matters referred to or 

contemplated in this document to which it is or will be a party (including but not limited to the 

Commercial Mortgage Loan Agreement and the granting of security for repayment of the Commercial 

Mortgage Loan Agreement) and matters which are incidental or ancillary to the foregoing. Other than as 

described in the foregoing sentence, Les Hauteurs du Loing has not, since its incorporation, engaged in 

any activities. 

144

Manager 

The manager of Les Hauteurs du Loing and its business address and other principal activities are: 

Name Business Address Other Principal Activities 

Mr. Jean-Pierre Raynal 


Manager of Les Hauteurs du 

75008 Paris 

Loing S.a.r.l. 

Les Hauteurs du Loing has no employees. 

Capitalisation and Indebtedness Statement 

It is estimated that the capitalisation of Les Hauteurs du Loing on or about the Closing Date will be as 

follows: 

Share Capital: 

Authorised and issued: 

6,750 ordinary shares of u48 each, 6,749 of which are fully paid up and are held by Paris Properties and 

1 of which is fully paid up and is held by SPCR. 

Loan Capital: 

Commercial Mortgage Loan Agreement (to be advanced on or about the Closing Date) 

u12,537,000 

Save for the foregoing, at the date of this document, Les Hauteurs du Loing has no borrowings or 

indebtedness in the nature of borrowings (including loan capital issued, or created but unissued), term 

loans, liabilities under acceptances or acceptance credits, mortgages, charges or guarantees or other 

contingent liabilities. All loan capital is secured over the assets of Les Hauteurs du Loing. 

Annapaul S.C.I. 

Introduction 

Annapaul SCI (‘‘Annapaul’’) was incorporated in Paris on 7 January 1991 (registered number 380 332 825) 

as a private company with limited liability under the laws of France. The registered office of Annapaul is 

at 36 avenue Hoche, 75008 Paris. The authorised share capital of Annapaul is u45,734.71, divided into 300 

ordinary shares of u152.44 each, 299 of which are fully paid up and are held by SCI Beaulieu Properties 

and 1 of which is fully paid up and is held by SPCR. 


The principal objects of Annapaul are set out in Article 2 of its Articles of Incorporation, which provides 

that the objects of the company include, inter alia: 









purchased beforehand, or of any other property the company may own. 

– the purchase or subscription of shares of any company whose main object is to facilitate directly or 

indirectly the possession of commercial or industrial properties, whether already built or to be built, 

with a view to renting such properties; 




145









– and generally all transactions (whether financial, commercial, industrial, non-commercial, property or 

capital) directly or indirectly concerning the above-mentioned object or any similar or related objects 

and which, in any case, directly or indirectly further the expansion or achievement of such goals, with 

the exception of those transactions pursuant to which the company may lose its status as a civil 

company. 

Annapaul has not engaged, since its incorporation, in any activities other than those described in its 

corporate purpose and those incendental thereto and registration as a private limited company under the 

laws of France, the authorisation of the documents and matters referred to or contemplated in this 

document to which it is or will be a party (including but not limited to the Commercial Mortgage Loan 

Agreement and the granting of security for repayment of the Commercial Mortgage Loan Agreement) 

and matters which are incidental or ancillary to the foregoing. Other than as described in the foregoing 

sentence, Annapaul has not, since its incorporation, engaged in any activities. 

Manager 

The manager of Annapaul and its business address and other principal activities are: 




Manager of Annapaul SCI 

75008 Paris 

Annapaul has no employees. 


It is estimated that the capitalisation of Annapaul on or about the Closing Date will be as follows: 



300 ordinary shares of u152.44 each, 299 of which are fully paid up and are held by SCI Beaulieu 

Properties and 1 of which is fully paid up and is held by SPCR. 

Loan Capital: 

Commercial Mortgage Loan Agreement (to be advanced on or about the Closing Date) u1,211,000 

Save for the foregoing, at the date of this document, Annapaul has no borrowings or indebtedness in the 

nature of borrowings (including loan capital issued, or created but unissued), term loans, liabilities under 

acceptances or acceptance credits, mortgages, charges or guarantees or other contingent liabilities. All 

loan capital is secured over the assets of Annapaul. 

Beaulieu Properties S.C.I. 

Introduction 

Beaulieu Properties S.C.I. (‘‘Beaulieu Properties’’) was incorporated in Paris on 13 November 2002 

(registered number 444 100 796) as a private company with limited liability under the laws of France. The 

registered office of Beaulieu Properties is at 36 avenue Hoche, 75008 Paris. The authorised share capital 

of Beaulieu Properties is u1,000, divided into 100 ordinary shares of u10 each, 99 of which are fully paid 

up and are held by Paris Properties and 1 of which is fully paid up and is held by SPCR. 


The principal objects of Beaulieu Properties are set out in Article 2 of its Articles of Incorporation, which 

provides that the objects of the company include, inter alia: 

146




























company. 

Beaulieu Properties has not engaged, since its incorporation, in any activities other than those described 

in its corporate purpose and those incidental thereto and registration as a private limited company under 

the laws of France, the authorisation of the documents and matters referred to or contemplated in this 




sentence, Beaulieu Properties has not, since its incorporation, engaged in any activities. 

Manager (‘‘Gérant’’) 

The manager of Beaulieu Properties and its business address and other principal activities are: 


Mr. Jean-PierreRaynal 


Manager of Beaulieu Properties 

75008 Paris 

S.C.I. 

Beaulieu Properties has no employees. 


It is estimated that the capitalisation of Beaulieu Properties on or about the Closing Date will be as 

follows: 



100 ordinary shares of u10 each, 99 of which are fully paid up and are held by Paris Properties and 1 of 

which is fully paid up and is held by SPCR. 

147

Loan Capital: 


u42,533,473 

Save for the foregoing, at the date of this document, Beaulieu Properties has no borrowings or 



contingent liabilities. All loan capital is secured over the assets of Beaulieu Properties. 

Enoville S.a.r.l. 

Introduction 

Enoville S.a.r.l. (‘‘Enoville’’) was incorporated in Paris on 28 January 2000 (registered number 

429 308 323) as a limited liability company under the laws of France. The registered office of Enoville is 

at 36 avenue Hoche, 75008 Paris. The authorised share capital of Enoville is u19,862.22, divided into 3,000 

ordinary shares of u6,620.74 each, 2,999 of which are fully paid up and are held by SARL Paris Properties 

and 1 of which is fully paid up and is held by Ringmerit Limited. 


The principal objects of Enoville are set out in Article 2 of its Articles of Incorporation, which provides 













properties; 















Enoville has not engaged, since its incorporation, in any activities other than those described in its 

corporate purpose and those incidental thereto and registration as a private limited company under the 





sentence, Enoville has not, since its incorporation, engaged in any activities. 

148


The manager of Enoville and its business address and other principal activities are: 




Manager of Enoville SARL 

75008 Paris 

Enoville has no employees. 


It is estimated that the capitalisation of Enoville on or about the Closing Date will be as follows: 



3,000 ordinary shares of u6,62074 each, 2,999 of which are fully paid up and are held by SARL Paris 

Properties and 1 of which is fully paid up and is held by Ringmerit Limited. 

Loan Capital: 

Commercial Mortgage Loan Agreement (to be advanced on or about the Closing Date) u4,963,000 

Save for the foregoing, at the date of this document, Enoville has no borrowings or indebtedness in the 



loan capital is secured over the assets of Enoville. 

IDB Immobilier S.A.S. 

Introduction 

IDB Immobilier S.A.S. (‘‘IDB Immobilier’’) was incorporated in Paris on 30 January 1974 (registered 

number 302 181 870) as a simplified joint stock company under the laws of France. The registered office 

of IDB Immobilier is at 36 avenue Hoche, 75008 Paris. The authorised share capital of IDB Immobilier 

is u780,000, divided into 20,000 ordinary shares of u39 each, all of which are fully paid up and are held 

by Immobiliere Ménelas. 





− the construction, fitting-out, administration, management and renting as well as the execution of any 








properties; 












149

− and generally all transactions (whether financial, commercial, industrial, non-commercial, real estate 



IDB Immobilier has not engaged, since its incorporation, in any activities other than those described in 

its corporate purpose and those incidental thereto and registration as a simplified joint stock company 

under the laws of France, the authorisation of the documents and matters referred to or contemplated in 

this document to which it is or will be a party (including but not limited to the Commercial Mortgage Loan 



sentence, IDB Immobilier has not, since its incorporation, engaged in any activities. 

President 

The President of IDB Immobilier and its business address and other principal activities are: 




President of IDB Immobilier 

75008 Paris 

IDB Immobilier has no employees. 


It is estimated that the capitalisation of IDB Immobilier on or about the Closing Date will be as follows: 



20,000 ordinary shares of u39 each, all of which are fully paid up and are held by Immobiliere Ménelas. 

Loan Capital: 


u18,669,000 

Save for the foregoing, at the date of this document, IDB Immobilier has no borrowings or indebtedness 

in the nature of borrowings (including loan capital issued, or created but unissued), term loans, liabilities 

under acceptances or acceptance credits, mortgages, charges or guarantees or other contingent liabilities. 

All loan capital is secured over the assets of IDB Immobilier. 

Immobiliere Ménelas S.a.r.l. 

Introduction 

Immobiliere Ménelas S.a.r.l. (‘‘Immobiliere Ménelas’’) was incorporated in Paris on 2 January 2001 

(registered number 434 127 197) as a limited liability company under the laws of France. The registered 

office of Immobiliere Ménelas is at 36 avenue Hoche, 75008 Paris. The authorised share capital of 

Immobiliere Ménelas is u1,010,000 divided into 101,000 ordinary shares of u10 each, 100,999 of which are 

fully paid up and are held by SARL Paris Properties and 1 of which is fully paid up and held by SAS 

SPCR. 


The principal objects of Immobiliere Ménelas are set out in Article 2 of its Articles of Incorporation, 

which provides that the objects of the company include, inter alia: 







150






properties; 















Immobiliere Ménelas has not engaged, since its incorporation, in any activities other than those described 

in its corporate purpose and those incidental thereto and registration as a private limited company under 

the laws of France, the authorisation of the documents and matters referred to or contemplated in this 




sentence, Immobiliere Ménelas has not, since its incorporation, engaged in any activities. 


The manager of Immobiliere Ménelas and its business address and other principal activities are: 




Manager of Immobilière 

75008 Paris 

Ménelas SARL 

Immobiliere Ménelas has no employees. 


It is estimated that the capitalisation of Immobiliere Ménelas on or about the Closing Date will be as 

follows: 



101,000 ordinary shares of u10 each, 100,999 of which are fully paid up and are held by SARL Paris 

Properties and 1 of which is fully paid up and is held by SAS SPCR. 

Loan Capital: 


u29,211,000 

Save for the foregoing, at the date of this document, Immobiliere Ménelas has no borrowings or 



contingent liabilities. All loan capital is secured over the assets of Immobiliere Ménelas. 

151

7 rue d’Amiens S.C.I. 

Introduction 

7 rue d’Amiens S.C.I. (‘‘7 rue d’Amiens’’) was incorporated in Paris on 28 September 1990 (registered 

number 379 418 536) as a private company with limited liability under the laws of France. The registered 

office of 7 rue d’Amiens is at 36 avenue Hoche, 75008 Paris. 

The authorised share capital of 7 rue d’Amiens is u2,000, divided into 1,000 ordinary shares of u2 each, 

999 of which are fully paid up and are held by Paris Provinces Properties and 1 of which is fully paid up 

and is held by Paris Properties. 


The principal objects of 7 rue d’Amiens are set out in Article 2 of its Articles of Incorporation, which 





























company. 

7 rue d’Amiens has not engaged, since its incorporation, in any activities other than those described in its 






sentence, 7 rue d’Amiens has not, since its incorporation, engaged in any activities. 

152


The manager of 7 rue d’Amiens and its business address and other principal activities are: 




Manager of 7 rue d’Amiens 

75008 Paris 

7 rue d’Amiens has no employees. 


It is estimated that the capitalisation of 7 rue d’Amiens on or about the Closing Date will be as follows: 



1000 ordinary shares of u2 each of which 999 shares have been issued and fully paid by PPP and 1 has been 

issued and fully paid by Paris Properties. 

Loan Capital: 


u7,448,000 

Save for the foregoing, at the date of this document, 7 rue d’Amiens has no borrowings or indebtedness 



Paris Provinces Properties S.C.I. 

Introduction 

Paris Provinces Properties S.C.I. (‘‘PPP’’) was incorporated in Paris on 30 November 2000 (registered 

number 433 741 188) as a private company with limited liability under the laws of France. The registered 

office of PPP is at 36 avenue Hoche, 75008 Paris. The authorised share capital of PPP is u12,300,000, 

divided into u12,300,000 ordinary shares of u1 each, 12,299,999 of which are fully paid up and are held by 

Paris Properties and 1 of which is fully paid up and is held by SPCR. 


The principal objects of PPP are set out in Article 2 of its Articles of Incorporation, which provides that 

the objects of the company include, inter alia: 



















153










company. 

PPP has not engaged, since its incorporation, in any activities other than those described in its corporate 

purpose and those incidental thereto and registration as a private limited company under the laws of 

France, the authorisation of the documents and matters referred to or contemplated in this document to 

which it is or will be a party (including but not limited to the Commercial Mortgage Loan Agreement and 

the granting of security for repayment of the Commercial Mortgage Loan Agreement) and matters which 

are incidental or ancillary to the foregoing. Other than as described in the foregoing sentence, PPP has 

not, since its incorporation, engaged in any activities. 


The manager of PPP and its business address and other principal activities are: 




Manager of Paris Provinces 

75008 Paris 

S.C.I. 

PPP has no employees. 


It is estimated that the capitalisation of PPP on or about the Closing Date will be as follows: 



u12,300,000 ordinary shares of u1 each, 12,299,999 of which are fully paid up and are held by Paris 

Properties and 1 of which is fully paid up and is held by SPCR. 

Loan Capital: 


u100,411,500 

Save for the foregoing, at the date of this document, PPP has no borrowings or indebtedness in the nature 

of borrowings (including loan capital issued, or created but unissued), term loans, liabilities under 


loan capital is secured over the assets of PPP. 

Management Report – certification of accounts 

The following is the text of a report dated 14 June 2005 received by the president of PPP from Mazars & 

Guerard, the registered auditors to PPP. The financial information contained therein comprises PPP’s 

statutory accounts. Statutory accounts were delivered each year to the companies’ registrar (‘‘greffe du 

tribunal de commerce’’) since incorporation. PPP’s accounting year end is 31 December with the first 

statutory accounts being drawn up to 31 December 2002. 

154

PARIS PROVINCES PROPERTIES 

Financial Statements Year ended 31 December 2004 

Statutory Auditor’s Report 

(Translated from French into English) 

In compliance with the assignment entrusted to us by your shareholders’ annual general meeting, we 

hereby report to you, for the year ended 31 December 2004, on: 

• the audit of the accompanying financial statements of PARIS PROVINCES PROPERTIES drawn up 

in euros, 

• the justification of our assessments, 

• the specific verifications and information required by law. 

These financial statements have been approved by the statutory Manager. Our role is to express an 

opinion on these financial statements based on our audit. 

1 Opinion on the financial statements 

We conducted our audit in accordance with the professional standards applicable in France. Those 

standards require that we plan and perform the audit to obtain reasonable assurance about whether the 

financial statements are free of any material misstatement. An audit includes examining, on test basis, 

evidence supporting the amounts and disclosures in the financial statements. An audit also includes 

assessing the accounting principles used and significant estimates made by the management as well as 

evaluating the overall financial statements presentation. We believe that our audit provides a reasonable 

basis for our opinion. 

In our opinion, the financial statements give a true and fair view of the company’s financial position and 

its assets and liabilities as of 31 December 2004, and of the results of its operations for the year then ended 

in accordance with accounting principles generally accepted in France. 

2 Justification of assessments 

In accordance with the requirements of article L. 225-235 of Commercial Code relating to the justification 

of our assessments, we bring to your attention the following matters: 

The notes to the accounts explain the accounting principles and the methods of valuation concerning fixed 

assets. Relating to our assessment of the accounting principles used, we examined these methods and their 

correct application. 

The assessments on these matters were thus made in the context of the performance of our audit of the 

financial statements, taken as a whole, and therefore contributed to the development of our audit opinion 

expressed in the first part of this report. 

3 Specific verifications and information 

We also performed the specific verifications required by law in accordance with the professional standards 

applied in France. 

We have no comment as to the fair presentation and the conformity with the financial statements of the 

information given in the management report of the statutory Manager, and in the documents addressed 

to the shareholders with respect to the financial position and the financial statements. 

La Défense, June 14 th , 2005 

Statutory Auditor 

MAZARS & GUERARD 

Philippe Bouillet 

155

1 – BALANCE SHEET – ASSETS 

Corporate name: PARIS PROVINCES PROPERTIES 

Address of the company: 36, avenue Hoche 75008 Paris 

SIRET number: 433 741 188 

Uncalled subscribed capital 

31 December 2004 31 December 2003 

Gross amount 

Accumulated depreciation, 

amortisation and provisions Net amount Net Amount 

1 2 3 4 

INTANGIBLE 

Initial investment cost 

Research and development expenses 

Concessions, patents and similar rights 

Goodwill 6,370,691 6,370,691 3,827,569 

Other intangible assets 

Advances and deposits on intangible assets 

Land 27,598,725 27,598,725 25,660,895 

TANGIBLE 

Buildings 94,529,584 13,100,040 81,429,543 84,934,035 

Industrial fixtures, equipment and tooling 

Other tangible assets 

In-progress fixed assets 997,359 997,359 331,164 

Advances and deposits 

Consolidated shares 

FINANCIAL 

Investments 2,374,153 2,374,153 2,374,153 

Receivables related to investments 

Capitalized securities 9,091 

Loans 

Other financial assets 456,426 456,426 493,378 

TOTAL (II) 132,326,938 13,100,040 119,226,898 117,630,285 

Raw materials and supplies 

CURRENT ASSETS 

INVENTORIES 

Products and services undergoing processing 

Services undergoing processing 

Semi-finished and finished goods 

Goods held for resale 

Advances and deposits paid to suppliers 27,343 

RECEIVABLES 

Accounts receivable and related accounts 2,105,192 279,825 1,825,366 2,858,313 

Other receivables 9,669,901 9,669,901 13,078,319 

Unpaid subscribed and called-up capital 

Investment securities 

(among which ......... treasury shares) 294,103 294,103 872,232 

MISCELL. 

Quick assets 1,040,078 1,040,078 535,405 

Prepaid expenses 1,941,113 1,941,113 821,621 

TOTAL (III) 15,050,387 279,825 14,770,561 18,193,233 

REGULARISATION ACCOUNTS 

Expenses amortised over more than one financial 

year (IV) 2,474,610 2,474,610 3,602,052 

Premium on bond redemption (V) 

Translation differential (VI) 

GRAND TOTAL (I TO VI) 149,851,934 13,379,865 136,472,069 139,425,570 

156

2 – BALANCE SHEET – LIABILITIES AND SHAREHOLDER’S EQUITY 



SHAREHOLDER’S EQUITY 

Share capital (incl. paid-up capital: 12 300 000 ) 12,300,000 12,300,000 

Issue premium, merger surplus, share premium 

Reevaluation surplus (consolidation surplus: EK ) 

Legal reserve 

Statutory or contractual reserves 

Regulated reserves (incl. special reserve for provision for price fluctuations) 

Other reserves 

Retained earnings / losses (4,601,017) -2,709,760 

NET INCOME OR LOSS (1,622,671) -1,891,257 

Investment subsidies 

Regulated provisions 412,927 189,512 

TOTAL (I) 6,489,239 7,888,495 

OTHER STOCKHOLDER’S EQUITY 

Yield from issuance of non voting shares 

Conditional advances 

TOTAL (II) 

Reserves for contingency / liability & charges 

Reserves for contingencies 

Provisions for liabilities and charges 266,450 384,000 

TOTAL (III) 266,450 384,000 

LIABILITIES 

Convertible bond loans 

Other bond loans 

Debts / loans granted by credit institutions 118,261,035 119,616,998 

Other financial loans and debts (incl.Loans entitling the bank to an interest in the 

company EI) 3,587,849 4,010,489 

Advances and deposits collected on orders in progress 

Accounts payable and related payables 1,140,953 1,502,089 

Tax payable, payroll and debts to social institutions 833,859 663,763 

Debts on fixed assets and related accounts 1,435,205 1,699,920 

Other liabilities 4,433,149 3,659,815 

Regular account 

Deferred income 15,707 

TOTAL (IV) 129,707,758 131,153,075 

Translation differential (V) 8,622 

GRAND TOTAL (I TO V) 136,472,069 139,425,570 

157

3 – INCOME STATEMENT 


31 December 2004 

France Export Total 


OPERATING INCOME 

Sales of goods 

Sales of production – goods 

– services 21,229,080 21,229,080 18,711,522 

Net turnover 21,229,080 21,229,080 18,711,522 

Stored production 

Capitalised production 

Operating subsidies 

Depreciations and reserve reversals, expense transfer 928,189 1,210,901 

Other operating income 389,986 

Total operating income (I) 22,157,269 20,312,409 

OPERATING EXPENSES 

Purchase of goods (including customs duties) 

Changes in inventory (goods) 

Purchase of raw materials and other supplies (including customs duties) 

Changes in inventory (raw materials and suplies) 

Other purchases and external expenses 7,459,250 6,036,630 

Taxes and related payments 2,645,706 2,857,454 

Wages and salaries 

Social security contributions 

Operating allowances 

fixed assets 

depreciation 5,845,378 5,640,979 

provision 

current assets 

provision 225,892 347,378 

for contingencies provision 266,450 384,000 

Other expenses 641,226 239,833 

Total operating expenses (II) 17,083,902 15,506,274 

1 – OPERATING RESULT (I – II) 5,073,366 4,806,135 

Joint venture 

Attributed income or transferred loss (III) 

Loss assumed or transferred income (IV) 

FINANCIAL INCOME 

Financial income from investments 

Income from other investment securities and from receivables related to fixed assets 

Other interest and related income 15,650 

Reserve reversals, expense transfer 

Profits on exchange rates 1,873 12,250 

Net gains on sales of investment securities 15,443 22,638 

Total financial income (V) 32,966 34,888 

FINANCIAL EXPENSES 

Financial allowances for depreciations and provisions 

Interest and assimilated expenses 6,110,027 6,406,428 

Loss on exchange rates 229 

Net loss on sales of investment securities 

Total financial expenses (VI) 6,110,256 6,406,428 

2 – FINANCIAL RESULT (V – VI) (6,077,290) (6,371,539) 

3 – ORDINARY RESULT BEFORE TAX (I - II + III - IV +V-VI) -1,003,924 -1,565,404 

158

3 – INCOME STATEMENT (CONTINUED) 



EXTRAORDINARY INCOME 

Extraordinary operating gains 14,792 29,045 

Extraordinary capital gains 10 2,141,000 

Depreciations and reserve reversals, expense transfer 

Total extraordinary income (VII) 14,802 2,170,045 

EXTRAORDINARY EXPENSES 

Extraordinary operating expenses 746 273,723 

Extraordinary capital expenses 9,091 2,072,378 

Extraordinary depreciation expense and provisions 623,712 149,797 

Total extraordinary expenses (VIII) 633,549 2,495,898 

4 - EXTRAORDINARY RESULT (VII-VIII) (618,747) (325,853) 

Employee profit sharing (IX) 

Income tax (X) 

TOTAL INCOME (I+III+V+VII) 22,205,036 22,517,342 

TOTAL EXPENSES (II+IV+VI+VIII+IX+X) 23,827,707 24,408,599 

5 – PROFIT OR LOSS (TOTAL INCOME - TOTAL EXPENSES) -1,622,671 -1,891,257 

159

NOTES TO THE ACCOUNTS 

Before repartition of the period ending 31 December 2004, the Balance Sheet (presented in list-form) 

total is u136,472,069, and the total of the Income Statement for the same period is u23,827,707, with total 

losses at u1,622,670.70. 

The period is 12 months long and covers 1 January 2004 to 31 December 2004. 

The notes that follow are part of Annual Financial Statements. 

The accounts were closed on 18 March 2005. 

ACCOUNTING RULES AND METHODS 

The general accounting rules have been applied according to the following underlying assumptions: 

– Continuity of the operation in progress, 

– Use for a succession of financial periods, 

− 

Independence of financial periods 

and conform to the general accounting rules as well as those of the presentation of annual accounts. 

The method used for the evaluation of the elements comprising the accounting records is the method of 

historical costs. 

Intangible Assets 

− 

Purchase of Leasing Contracts In-Progress: 

EVALUATION METHODS 

Intangible Assets represent the difference between the remaining part of the leasing contract and the fair 

value of the contract, before executing the option. The part of the intangible asset related to 

building/construction is amortised (derogatory amortisation) at a rate of 4% or 5%. 

Tangible/Fixed Assets 

Fixed assets are valued at their acquisition price (buying price, accessory costs and cancellation fees 

outside of the cost of acquisition of the fixed asset) or, at their production cost. 

The book value of tangible assets is compared to their approximate market value, an independent and 

updated expert opinion is used as reference for all of the tangible assets, on which grounds no 

depreciation has been brought to our attention. 

With regard to Property, land is valued on the basis of information provided by the company. 

Financial Assets: Investment 

Financial Investments are transcribed in the balance sheet at their acquisition price or at their original 

cost. 

A provision for depreciation is constituted when the utility of the investment, determined in function of 

its profitability, its future prospects or its adjusted book value, is inferior to its original book value. 

Circulating or Current Assets 

The elements listed under circulating assets are receivables noted at their par value minus, when 

necessary, the provision in view of bringing them back to their market value. 

Amortisation 

Fixed assets are subject to a depreciation schedule determined according to the length and probable 

conditions of use of these goods. This schedule is, in general, the straight-line method. The net book worth 

obtained in this manner is considered to be economically sound. 

160

The principal schedules of depreciation used are as follows: 

− Amortisable Lease Renewals 20 years 

− Buildings 20 to 25 years 

− Plant Assets 10 years 

− Fixtures 20 years 

Contingent Liability 

The provision for empty units is currently u266,450. 

Deferred Charges 

The following deferred charges include the acquisition cost of the following assets: 

− 

− 

− 

Property Tax 

Notary fees and compensation 

Tax Publicity Foncière 

The amortisation schedule retained in accounting is 5 years. The allotment is calculated, au prorate 

temporis, from the acquisition date of the corresponding assets. 

161

FIXED ASSETS 


Gross value at 

the beginning of 

Increases 

financial year 

Reevaluation 

Purchases 

1 2 3 

FIXED ASSETS 

INTANGIBLE 

Initial investment cost, research and development 

expenses 

TOTAL (I) 

Other intangible assets TOTAL (II) 3,827,569 2,543,122 

TANGIBLE 

Land 25,660,895 1,937,830 

Buildings 

on land owned by the company 92,305,158 760,854 

on land owned by a third party 

General installations, fixtures and fittings 1,217,883 733,526 

Technical installations, indust. machinery & 

tooling 


General installations, fixtures and fittings 

Transportation equipment 

Office equipment, computers & furniture 

Returnable packaging and miscellaneous 

In-progress tangible assets 331,164 1,334,028 


TOTAL (III) 119,515,100 4,766,238 

FINANCIAL 


Other investments 2,374,153 

Other capitalised securities 9,091 

Loans & other financial assets 493,378 

TOTAL (IV) 2,876,622 

OVERALL TOTAL (I+II+III+IV) 126,219,291 7,309,360 

FIXED ASSETS 

INTANGIBLE 

Initial investment cost, research 

and development expenses 

TOTAL I 

Decreases 

Reeval. 

By transfer from 

account to account 

By disposal to 

third 

parties, putting 

out of order 

Gross value 

of assets 

end of financial 

year 

1 2 3 4 

Other intangible assets TOTAL II 6,370,691 

TANGIBLE 

Land 27,598,725 

Buildings 

on land owned by the company 487,837 92,578,175 


general installations, fixtures 

and fittings 1,951,409 

Technical installations, indust. 

machinery & tooling 


general installations, fixtures 

and fittings 


Office equipment, computers & 

furniture 

Returnable packaging and 

miscellaneous 

In-progress tangible 

assets 667,833 997,359 

Advances 

TOTAL III 667,833 487,837 123,125,668 

FINANCIAL 


Other investments 2,374,153 

Other capitalised securities 9,091 

Loans & other financial 

assets 36,952 456,426 

TOTAL IV 36,952 9,091 2,830,579 

OVERALL TOTAL (I+II+III+IV) 704,786 496,927 132,326,938 

Original value 

of assets 

end of financial year 

162

DEPRECIATION 


SITUATION AND MOVEMENTS OF THE FINANCIAL YEAR 

Decreases: 

Accumulated 

depreciation 

at beginning 

of financial year 

Increases: 

allowance 


allowances for 

elements taken 

out 

& reversals 

Accumulated 

depreciation 

end 


1 2 3 4 

DEPRECIABLE ASSETS 

Initial investment, research & development 

expenses 

TOTAL I 


TOTAL II 

Land 

Buildings 

on land owned by the company 8,496,793 4,903,854 487,837 12,912,810 


general installations, fixtures and fittings 92,214 95,017 187,230 

Technical installations, industrial machinery & 

tooling 






TOTAL III 8,589,006 4,998,871 487,837 13,100,040 

OVERALL TOTAL (I+II+III) 8,589,006 4,998,871 487,837 13,100,040 

Depreciable assets 

Initial investment, research 

& development 

expenses TOTAL I 


TOTAL II 

BREAK-DOWN OF THE FINANCIAL YEAR 

DEPRECIATION ALLOWANCES 

Straight-line 

depreciation 

Accelerated 

depreciation 

MOVEMENTS OF THE 

RESERVE 

FOR DEROGATORY 

DEPRECIATION 

Extraordinary 

depreciation Allowances Reversals 

1 2 3 4 5 

Land 

Buildings 

on land owned by the 

company 4,503,557 400,297 

on land owned by a third 

party 

general installations, 

fixtures and fittings 95,017 

Techncl installations, indust. 

machnry & tooling 


General installations, 

fixtures and fittings 


Office equipment, 

computers & furniture 


miscellaneous 

TOTAL III 4,598,573 400,297 

OVERALL TOTAL 

(I+II+III) 4,598,573 400,297 

MOVEMENTS DURING THE FINANCIAL YEAR AFFECTING 

EXPENSES AMORTIZED OVER SEVERAL FINANCIAL YEARS 

Net amount 

beginning of 


Increases 

Depreciation 

allowances 

Net amount 

end of 


Expenses amortised over several 

years 3,602,052 119,363 1,246,805 2,474,610 

Premium on bond redemption 

163

RESERVES IN THE BALANCE SHEET 


Amount at the 

beginning of the 

tax year 

INCREASES 

Allowances of the 

tax year 

DECREASES 

Recaptures during 

the tax year 

Amount at the end 

of the tax year 

Nature of the reserves 

1 2 3 4 

REGULATED RESERVES 

Reserves for reconstruction of minning & 

petroleum deposits 

Reserves for investment 

Reserves for price increase 

Reserves for price fluctuation 

Derogatory depreciation 189,512 223,415 412,927 

Tax reserves for foreign establishment set 

up before 1.1.1992 

Tax reserves for foreign establishment set 

up after 1.1.1992 

Reserves for loan for establishment (art. 

39 quinquies H of tax code) 

Other regulated reserves 

TOTAL I 189,512 223,415 412,927 

RESERVES FOR CONTINGENCIES 

AND CHARGES 

Reserves for lawsuits 

Reserves for warranty given to clients 

Reserves for losses on forward markets 

Reserves for fines & penalties 

Reserves for loss on exchange rates 

Reserves for pensions (or similar) 

Reserves for taxes 

Reserves for renewal of fixed assets 

Reserves for major repairs 

Reserves for social contribution on 

accrued vacation 

Other reserves for contingencies & 

charges 384,000 266,450 384,000 266,450 

TOTAL II 384,000 266,450 384,000 266,450 

RESERVE FOR DEPRECIATION 

fixed assets 

– intangibles 

– tangibles 

– consolidated shares 

– capitalised securities 

– other financial assets 

On inventories & in-progress work 

On accounts receivable 478,760 225,892 424,826 279,825 

Other reserves for depreciation 

TOTAL III 478,760 225,892 424,826 279,825 

GRAND TOTAL (I+II+III) 1,052,272 715,757 808,826 959,202 

including 

– operating allow. & reversals 492,342 808,826 

– financial 

– exceptional 223,415 

10 

164

TABLE OF RECEIVABLES AND LIABILITIES 

AT THE END OF FINANCIAL YEAR 


STATUS OF RECEIVABLES Gross amount Up to 1 year Over 1 year 

1 2 3 

RELATED TO FIXED ASSETS 

Receivables related to investments 0 

Loans (1) (2) 0 

Other financial assets 456,426 0 456,426 

RELATED TO CURRENT ASSETS 

Bad debts 344,383 344,383 

Other accounts receivable 1,760,809 1,760,809 0 

Receivables representing lent securities 

previous provision for depreciation 0 

Payroll & assimilated 0 

Social security & other social institutions 0 

State & other public institutions 

Income tax 0 

V.A.T. 1,018,771 1,018,771 0 

Other taxes & assimilated payments 0 

Miscellaneous 4,590,906 4,590,906 0 

Group & shareholders (2) 4,060,224 4,060,224 

Miscellaneous receivables (incl. receivables relative to securities 

in pawn) 

Prepaid expenses 1,941,113 1,941,113 0 

TOTALS 14,172,632 13,371,823 800,809 

FOOT NOTES 

(1) Amount of 

– loans allowed during the year 

– redemptions obtained during the year 

(2) Loans granted to individual shareholders 

STATUS OF LIABILITIES Gross amount Up to 1 year 

Over 1 year & 

up to 5 years Over 5 years 

1 2 3 4 

Convertible bond loans (1) 0 

Other bond loans (1) 0 

Loans from Credit institutions (1) 

originally < 1 year 667,026 667,026 0 

originally > 1 year 117,594,009 2,456,544 50,973,533 64,163,932 

Other financial loans (1) (2) 3,492,202 3,492,202 0 

accounts payable and related accounts 1,140,953 1,140,953 

Payroll & assimilated 0 0 

Social security & other social institutions 0 0 


Income tax 0 0 

V.A.T. 807,736 807,736 0 

Special bonds used to pay V.A.T. 0 

Other taxes & assimilated payments 26,123 26,123 0 

Debts on fixed assets & related accounts 1,435,205 1,435,205 0 

Group & shareholders (2) 95,647 95,647 0 

Other debts 4,433,149 4,433,149 0 

Debts representing borrowed securities 0 

Deferred income 15,707 15,707 0 

TOTALS 129,707,758 11,078,090 54,465,735 64,163,932 

FOOT NOTES 

(1) 

Loans subscribed during financial year 

Loans paid back during financial year 1,894,909 

(2) 

Amount of loans and debts contracted with 

individual shareholders 

165

TABLE OF ACCRUED ASSETS AND ACCRUED LIABILITIES 


Accrued assets included in the following positions in the Balance Sheet 31 December 2004 31 December 2003 

Recievables related to investments 

Other capitalised securities 

Loans 

Other financial assets 

Accounts recievable and assimilated accounts 933,581 1,275,993 

Other accounts recievable 3,415 22,942 

Short-term investments 

Quick assets 

Total 936,996 1,298,935 

Accrued liabilities included in the following positions in the Balance Sheet 12/31/2004 12/31/2003 



Debts/loans granted by credit institutions 666,999 128,080 

Other financial loans and debts 

Accounts payables and related payables 849,885 517,443 


Debts on fixed assets and related accounts 882,409 242,890 

Other liabilities 286,347 28,521 

Total 2,711,763 952,789 

166


DEFERRED REVENUES AND PREPAID EXPENSES 

Deferred Revenues 31 December 2004 31 December 2003 

Operating Income 15,707 

Financial Income 

Extraordinary Income 

Total 15,707 

Prepaid Expenses 12/31/2004 12/31/2003 

Operating Expenses 1,811,697 821,621 

Financial Expenses 129,417 

Extraordinary Expenses 

Total 1,941,113 821,621 

EXPENSES AMORTISED OVER SEVERAL YEARS 


Net amount 

Amortisation 

left over 


Fixed assets acquisition costs 2,474,610 1 to 4 years 

Charges for loans issued 

Allocated charges 

Total 2,474,610 

LEGAL CAPITAL 

Number of shares 

Shares in Capital 

Nominal Value 

Beginning of 

the tax year 

Created during 

the tax year 

Reimbursed during 

the tax year 

End of the 

tax year 

Shares 1 12,300,000 12,300,000 

167

LEASING 


Elements from Balance Sheet 

Historical 

cost 

Theoretical provisions 

Total 

For the period accumulated 

Fees 

Theoretical 

net worth Period Accumulated 

Land 3,027,321 3,027,321 

Buildings 22,883,885 1,862,254 4,121,073 18,762,812 2,903,008 4,613,080 



In-progress fixed assets 

Total 25,911,206 1,862,254 4,121,073 21,790,133 2,903,008 4,613,080 

Elements from the Balance Sheet 

Fees to be payed 

Over 1 year 

and up to 

Up to 1 year 5 years Over 5 years Total 

Residual 

Buying Price 

Amount 

concerning 

the period 

Land 

Buildings 2,800,476 9,854,276 10,543,282 23,198,034 2,581,245 2,903,008 




Total 2,800,476 9,854,276 10,543,282 23,198,034 2,581,245 2,903,008 

168

SECURITY INTEREST GUARANTEED DEBTS 


Guaranteed 

Debts 

Security 

interest amount 



Debts/loans granted by credit institutions 117,594,009 117,594,009 


Advances and deposits collected on orders in-progress 

Accounts payable and related payables 

Tax payable, payroll and debts to social institutions 

Debts on fixed assets and related accounts 

Other liabilities 

Total 117,594,009 117,594,009 

Net book valued of 

guaranteed goods 

169

AFFILIATED COMPANIES AND INVESTMENTS IN EUROS 


Amount concerning the companies 

In which the 

company 

Item 

Affiliated Companies has interest 

Advances and deposits collected on fixed assets 

Investments 2,374,153 


Loans 

Advances and deposits paid on orders 

Accounts receivable and related accounts 

Other receivables 4,590,906 




Debts/loans granted by credit institutions 41,249,059 





Other liabilities 95,647 

Income from investments 

Other financial income 

Financial expenses 2,951,559 

PPMPP S.a.r.l. 

Introduction 

PPMPP S.a.r.l. (‘‘PPMPP’’) was incorporated in Paris on 8 March 2002 (registered number 441 220 274) 

as a limited liability company under the laws of France. The registered office of PPMPP is at 36 avenue 

Hoche, 75008 Paris. The authorised share capital of PPMPP is u3,007,500, divided into 3,007,500 ordinary 

shares of u1 each, 3,007,499 of which are fully paid up and are held by SARL Paris Properties and 1 of 

which is fully paid up and is held by SAS SPCR. 


The principal objects of PPMPP are set out in Article 2 of its Articles of Incorporation, which provides 













properties; 







170









PPMPP has not engaged, since its incorporation, in any activities other than those described in its 






sentence, PPMPP has not, since its incorporation, engaged in any activities. 


The manager of PPMPP and its business address and other principal activities are: 




Manager of PPMPP 

75008 Paris 

PPMPP has no employees. 


It is estimated that the capitalisation of PPMPP on or about the Closing Date will be as follows: 



3,007,500 ordinary shares of u1 each, 3,007,499 of which are fully paid up and are held by SARL Paris 

Properties and 1 of which is fully paid up and is held by SAS SPCR. 

Loan Capital: 


u75,887,000 

Save for the foregoing, at the date of this document, PPMPP has no borrowings or indebtedness in the 


acceptances or acceptance credits, mortgages, charges or guarantees or other contingent liabilities. 

Auditors’ Report 

The following is the text of a report dated 14 June 2005 received by the manager of PPMPP from Mazars 

& Guerard, the registered auditors to PPMPP. The financial information contained therein comprises 

PPMPP’s statutory accounts. Statutory accounts were delivered each year to the companies’ registrar 

(‘‘greffe du tribunal de commerce’’) since incorporation. PPMPP’s accounting year end is 31 December 

with the first statutory accounts being drawn up to 31 December 2002. 

171

P.P.M.P.P. 




In compliance with the assignment entrusted to us by decision of your shareholders, we hereby report to 

you, for the year ended 31 December 2004, on: 

• the audit of the accompanying financial statements of P.P.M.P.P. drawn up in euros, 



































172


Corporate name: P.P.M.P.P. 





Gross amount 



1 2 3 4 

INTANGIBLE 




Goodwill 



Land 20,401,134 20,401,134 11,807,478 

TANGIBLE 

Buildings 93,688,950 12,152,175 81,536,774 60,819,012 



In-progress fixed assets 24,257 



FINANCIAL (2) 

Investments 


Capitalised securities 

Loans 


TOTAL (II) 114,090,083 12,152,175 101,937,908 72,650,747 



INVENTORIES 





Advances and deposits paid to suppliers 239,200 239,200 669,377 

RECEIVABLES 

Accounts receivable and related accounts 596,964 92,285 504,679 1,677,666 

Other receivables 2,746,579 2,746,579 4,093,244 



(among which ......... treasury shares) 1,743,041 1,743,041 791,168 

MISCELL. 

Quick assets 1,255,255 1,255,255 1,319,221 

Prepaid expenses 216,023 216,023 87,408 

TOTAL (III) 6,797,062 92,285 6,704,777 8,638,084 



year (IV) 2,645,927 2,645,927 1,280,012 




173





Share capital (incl. paid-up capital: 83 007 500) 3,007,500 3,007,500 

Issue premium, merger surplus, share premium 

Reevaluation surplus (consolidation surplus: EK) 

Legal reserve 




Retained earnings / losses 48,666 -1,906,310 

NET INCOME OR LOSS (316,204) 1,954,976 


Regulated provisions 

TOTAL (I) 2,739,962 3,056,166 




TOTAL (II) 


Reserves for contingencies 134,000 


TOTAL (III) 411,840 415,513 

LIABILITIES 




Other financial loans and debts (incl. Loans entitling the bank to an interest in the 

company EI) 10,126,052 11,922,793 

Advances and deposits collected on orders in progress 985,290 751,123 

Accounts payable and related payables 912,017 1,190,662 




Regular account 

Deferred income 1,743 

TOTAL (IV) 108,136,810 79,097,163 

Translation differential 


174



France 


Export Total 31 December 2003 



Sales of production – goods 

– services 13,221,039 13,221,039 6,684,210 

Net turnover 13,221,039 13,221,039 6,684,210 




Depreciations and reserve reversals, expense transfer 2,618,535 681,242 

Other operating income 4,239 






Other purchases and external expenses 3,428,344 1,910,787 





fixed assets 

depreciation 4,727,352 2,106,325 

provision 


provision 46,322 215,513 

for contingencies 

provision 277,840 415,513 

Other expenses 122,807 


1 – OPERATING RESULT (I - II) 3,887,455 1,533,851 

Joint venture 

Attributed income or transferred loss (III) 919,877 

Loss assumed or transferred income (IV) 6,670 


Financial income from investments 586,726 


Other interest and related income 4 


Profits on exchange rates 2,315 






Loss on exchange rates 



2 - FINANCIAL RESULT (V - VI) (4,054,842) (2,186,697) 

3 – ORDINARY RESULT BEFORE TAX (I - II + III - IV +V-VI) -167,387 260,361 

175






Extraordinary capital gains 2,574,277 


Total extraordinary income (VII) 3,236 2,578,751 


Extraordinary operating expenses 18,053 359,344 

Extraordinary capital expenses 524,791 

Extraordinary depreciation expense and provisions 134,000 

Total extraordinary expenses (VIII) 152,053 884,135 

4 - EXTRAORDINARY RESULT (VII-VIII) (148,817) 1,694,615 





5 – PROFIT OR LOSS (TOTAL INCOME – TOTAL EXPENSES) -316,204 1,954,976 

176




losses at u316,203.90. 



The following accounts were closed on 18 March 2005. 



− Continuity of the operation in progress, 

− Use for a succession of financial periods, 

− Independence of financial periods 


The method used for the evaluation of the elements comprising the accounting records is that of historical 

costs. 






updated expert opinion is used as reference for all of the tangible assets. On this basis, a provision for 

depreciation of u134,000 has been constituted for the Trappes building. 





Amortisation 






− Plant Assets 10 years 

− Fixtures 20 years 





− Registration duties 

− Notary fees and compensation 

− Tax Publicity Foncière 

The amortisation schedule retained in accounting is 5 years. The payment is calculated, au prorata 


177


FIXED ASSETS 

Increases 



financial year Reevaluation Purchases 

1 2 3 

FIXED ASSETS 

INTANGIBLE 


expenses TOTAL (I) 

Other intangible assets TOTAL (II) 

TANGIBLE 

Land 11,807,478 8,593,656 

Buildings 

on land owned by the company 68,678,764 24,734,296 


General installations, fixtures and fittings 247,985 27,905 

Technical installations, indust. machinery & tooling 






In-progress tangible assets 24,257 


TOTAL (III) 80,758,483 33,355,857 

FINANCIAL 


Other investments 


Loans & other financial assets 

TOTAL (IV) 

OVERALL TOTAL (I+II+III+IV) 80,758,483 33,355,857 

Decreases 

Reeval. 

By disposal to third 

Original value of 

By transfer from 

account to account 

parties, putting 

out of order 

Gross value of assets 

end of financial year 

assets end of 


1 2 3 4 

FIXED ASSETS 

INTANGIBLE 

Initial investment cost, 

research and development 



TOTAL II 

TANGIBLE 

Land 20,401,134 

Buildings 


company 93,413,060 

on land owned by a third 

party 



Technical installations, 

indust. machinery & 

tooling 




Transportation equipment* 


computers & furniture 


miscellaneous * 


Advances 

TOTAL III 24,257 114,090,083 

FINANCIAL 


Other investments 


Loans & other financial 

assets 

TOTAL IV 

OVERALL TOTAL (I+II+III+IV) 24,257 114,090,083 

178


DEPRECIATION 


Accumulated 

depreciation 

at beginning 


Increases: 

allowance 


Decreases: 


elements taken 

out & reversals 

Accumulated 

depreciation 

end of 


1 2 3 4 

DEPRECIABLE ASSETS 



Other intangible assets TOTAL II 

Land 

Buildings 

on land owned by the company 8,071,633 4,019,983 12,091,616 


general installations, fixtures and fittings 36,103 24,456 60,559 


tooling 






TOTAL III 8,107,736 4,044,439 12,152,175 

OVERALL TOTAL (I+II+III) 8,107,736 4,044,439 12,152,175 

BREAK-DOWN OF THE FINANCIAL YEAR 

DEPRECIATION ALLOWANCES 

Straight-line 

depreciation 

Accelerated 

depreciation 


RESERVE 

FOR DEROGATORY 

DEPRECIATION 

Extraordinary 


1 2 3 4 5 

Depreciable assets 

Initial investment, 

research & 

development 



TOTAL II 

Land 

Buildings 


company 4,019,983 

on land owned by a 

third party 



Techncl installations, 

indust. machinery & 

tooling 


General installations, 


Transportation 

equipment 


computers & 

furniture 

Returnable packaging 

and miscellaneous 

TOTAL III 4,044,439 

OVERALL TOTAL 

(I+II+III) 4,044,439 

MOVEMENTS DURING THE FINANCIAL 

YEAR AFFECTING EXPENSES 

AMORTISED OVER SEVERAL 

FINANCIAL YEARS 

Net amount 

beginning of 


Increases 

Depreciation 

allowances 

Net amount 

end of 


Expenses amortised over several years 1,280,012 2,048,829 682,913 2,645,927 


179





Reserves for reconstruction of 

minning & petroleum deposits 




Derogatory depreciation 

Tax reserves for foreign establishment 

set up before 1.1.1992 

Tax reserves for foreign establishment 

set up after 1.1.1992 

Reserves for loan for establishment 

(art. 39 quinquies H of tax code) 


TOTAL I 

Amount at the 

beginning 


INCREASES 

Allowances of 

the tax year 

DECREASES 

Recaptures 

during the tax year 

Amount at the end 


1 2 3 4 

RESERVES FOR CONTINGENCIES 

AND CHARGES 



Reserves for losses on forward 

markets 







Reserves for social contribution on 

accrued vacation 

Other reserves for contingencies & 

charges 415,513 411,840 415,513 411,840 

TOTAL II 415,513 411,840 415,513 411,840 


fixed assets 

– intangibles 

– tangibles 

– consolidated shares 

– capitalised securities 

– other financial assets 



Other reserves for depreciation 

TOTAL III 200,156 46,322 154,192 92,285 

GRAND TOTAL (I+II+III) 615,669 458,162 569,706 504,125 

including 


– financial 

– exceptional 134,000 

10 

180




Gross amount Up to 1 year Over 1 year 

1 2 3 

STATUS OF RECEIVABLES 



Loans (1) (2) 0 

Other financial assets 0 0 


Bad debts 141,210 48,924 92,285 

Other accounts receivable 455,754 455,754 0 


previous provision for depreciation 0 




Income tax 0 

V.A.T. 586,980 586,980 0 

Other taxes & assimilated payments 0 

Miscellaneous 0 

Group & shareholders (2) 

Miscellaneous receivables (incl. receivables relative to 

securities in pawn) 2,159,599 2,159,599 

Prepaid expenses 216,023 216,023 0 

TOTALS 3,559,566 3,467,281 92,285 

FOOT NOTES 

(1) Amount of 




Gross amount 

Up to 1 year 

Over 1 year & 

up to 5 years Over 5 years 

STATUS OF LIABILITIES 1 2 3 4 



Loans from originally < 1 year 458,259 458,259 0 

Credit institutions (1) originally > 1 

year 92,213,652 2,298,000 66,580,652 23,335,000 


accounts payable and related accounts 912,017 912,017 


Social security & other social 

institutions 0 


Income tax 0 

V.A.T. 748,246 748,246 0 



Debts on fixed assets & related accounts 946,054 946,054 0 

Group & shareholders (2) 7,848,681 7,848,681 0 

Other debts 1,657,236 1,657,236 0 



TOTALS 107,151,521 17,235,868 66,580,652 23,335,000 

FOOT NOTES 

(1) (2) 

Loans subscribed during financial 

year 33,225,673 


Amount of loans and debts 

contracted with individual 

shareholders 

181






Loans 


Accounts recievable and assimilated accounts 362,300 395,674 



Quick assets 

Total 668,213 403,148 

Accrued liabilities included in the following positions in the Balance Sheet 31 December 2004 31 December 2003 




Other financial loans and debts 164,006 372,418 





Total 2,317,912 2,008,069 

182




Operating Income 1,743 

Financial Income 


Total 1,743 


Operating Expenses 216,023 87,408 

Financial Expenses 


Total 216,023 87,408 



Net amount 

Amortisation 

left over 


Fixed assets acquisition costs 2,645,927 2 to 5 years 



Total 2,645,927 

LEGAL CAPITAL 


Shares in Capital 

Nominal Value 

Beginning of 

the tax year 

Created during 

the tax year 


the tax year 

End of the 

tax year 

Shares 1 3,007,500 3,007,500 

183



Guaranteed 

Debts 

Security 











Total 92,213,652 92,213,652 



184




In which 

the company 

Item 

Affiliated companies has interest 


Investments 


Loans 



Other receivables 




Debts/loans granted by credit institutions 

Other financial loans and debts 7,848,681 







Financial expenses 356,804 

185

The Paris Properties Parent Obligors 

Introduction 

Paris Properties, a parent obligor of the Paris Properties Borrowers, was incorporated in Paris on 

29 November 2000 (registered number 433 704 038) as a limited liability company with a sole shareholder 

under the laws of France. The registered office of Paris Properties is at 36, avenue Hoche, 75008 Paris. The 

authorised share capital of Paris Properties is u19,260,000 divided into 19,260,000 shares of u1 each, all of 

which are held by Mr Jean-Pierre Raynal. 


Paris Properties has as its object the following activities: 

– purchase, either for consideration or by means of contribution of all or part of commercial or 











properties; 















French Investment Portfolio Asset Management (hereafter ‘‘FIPAM’’), was incorporated on 27 June 2001 

(registered number B 438 302 044) as a limited company under the laws of France and acts as a property 

manager of the properties owned, inter alia, by the Paris Properties Borrowers. The registered office of 

FIPAM is at 36, avenue Hoche, 75008 Paris. Its authorised share capital is u10,000 divided into 10,000 

shares of u1 each, held as follows: 

– 3,750 shares held by RINGMERIT LIMITED; 

– 3,750 shares held by PROUDREED LIMITED; and 

– 2,500 shares held by Mr Jean-Pierre Raynal. 

186


The manager of Paris Properties and its business address and other principal activities are: 




Manager of Paris Properties 

75008 Paris 

2PI S.C.I. 


Introduction 

2PI S.C.I. (‘‘2PI’’) was incorporated in Paris on 12 November 2003 (registered number 450 750 435) as a 

private company with limited liability under the laws of France. The registered office of 2PI is at 36 avenue 

Hoche, 75008 Paris. The authorised share capital of 2PI is u1,000, divided into 100 ordinary shares of u10 

each, 99 of which are fully paid up and are held by Proudreed France and 1 is fully paid up and is held 

by Proudreed Limited. 


The principal objects of 2PI are set out in Article 2 of its Articles of Incorporation, which provides that 

the objects of the company include, inter alia: 









purchased beforehand, or of any other property the company may own; 



















company. 

2PI has not engaged, since its incorporation, in any activities other than those described in its corporate 

purpose and those incidental thereto and registration as a private limited company under the laws of 

France, the authorisation of the documents and matters referred to or contemplated in this document to 

187

which it is or will be a party (including but not limited to the Commercial Mortgage Loan Agreement and 

the granting of security for repayment of the Commercial Mortgage Loan Agreement) and matters which 

are incidental or ancillary to the foregoing. Other than as described in the foregoing sentence, 2PI has not, 

since its incorporation, engaged in any activities. 


The manager of 2PI and its business address and other principal activities are: 




Manager of 2PI S.C.I. 

75008 Paris 

2PI has no employees. 


It is estimated that the capitalisation of 2PI on or about the Closing Date will be as follows: 



100 ordinary shares of u10 each, 99 of which are fully paid up and are held by Proudreed France and 1 

is fully paid up and is held by Proudreed Limited. 

Loan Capital: 


u27,650,000 

Save for the foregoing, at the date of this document, 2PI has no borrowings or indebtedness in the nature 

of borrowings (including loan capital issued, or created but unissued), term loans, liabilities under 


loan capital is secured over the assets of 2PI. 

Dep Immo Com S.C.I. 

Introduction 

Dep Immo Com S.C.I. (‘‘Dep Immo Com’’) was incorporated in Paris on 23 July 1991 (registered number 

382 583 326) as a private company with limited liability under the laws of France. The registered office of 

Dep Immo Com is at 36 avenue Hoche, 75008 Paris. The authorised share capital of Dep Immo Com is 

u2,000, divided into 1,000 ordinary shares of u2 each, 999 of which are fully paid up and are held by 

Proudreed France and 1 of which is fully paid up and is held by Proudreed Limited. 


The principal objects of Dep Immo Com are set out in Article 2 of its Articles of Incorporation, which 










purchased beforehand, or of any other property the company may own; 

− the purchase or subscription of shares of any company whose main object is to facilitate directly or 



188















Dep Immo Com has not engaged, since its incorporation, in any activities other than those described in 

its corporate purpose and those incidental thereto and registration as a private limited company under the 





sentence, Dep Immo Com has not, since its incorporation, engaged in any activities. 


The manager of Dep Immo Com and its business address and other principal activities are: 




Manager of Dep Immo Com 

75008 Paris 

S.C.I. 

Dep Immo Com has no employees. 


It is estimated that the capitalisation of Dep Immo Com on or about the Closing Date will be as follows: 



1,000 ordinary shares of u2 each, 999 of which are fully paid up and are held by Proudreed France and 

1 of which is fully paid up and is held by Proudreed Limited. 

Loan Capital: 


u4,555,027 

Save for the foregoing, at the date of this document, Dep Immo Com has no borrowings or indebtedness 



All loan capital is secured over the assets of Dep Immo Com. 

Proudreed France SARL 

Introduction 

Proudreed France SARL (‘‘Proudreed France’’), acting as borrower, was incorporated in Paris on 

13 August 1999 (registered number 423 990 266) as a limited liability company under the laws of France. 

The registered office of Proudreed France is at 36 avenue Hoche, 75008 Paris. The authorised share 

capital of Proudreed France is u8,192, divided into 512 ordinary shares of u16 each, 495 of which are fully 

paid up and are held by Proudreed Limited and 17 of which are fully paid up and are held by Mr. 

Jean-Pierre Raynal. 

189


The principal objects of Proudreed France are set out in Article 2 of its Articles of Incorporation, which 













properties; 















Proudreed France has not engaged, since its incorporation, in any activities other than those described in 

its corporate purpose and those incidental thereto and registration as a private limited company under the 





sentence, Proudreed France has not, since its incorporation, engaged in any activities. 


The manager of Proudreed France and its business address and other principal activities are: 




Manager of Proudreed France 

75008 Paris 

SARL 

Proudreed France has no employees. 


It is estimated that the capitalisation of Proudreed France on or about the Closing Date will be as follows: 



512 ordinary shares of u16 each, 495 of which are fully paid up and are held by Proudreed Limited and 

17 of which are fully paid up and are held by Mr. Jean-Pierre Raynal. 

190

Loan Capital: 


u73,324,000 

Save for the foregoing, at the date of this document, Proudreed France has no borrowings or indebtedness 



Auditors’ Report 

The following is the text of a report dated 14 June 2005 received by the manager of Proudreed France 

from Mazars & Guerard, the registered auditors to Proudreed France. The financial information 

contained therein comprises Proudreed France’s statutory accounts. Statutory accounts were delivered 

each year to the companies’ registrar (‘‘greffe du tribunal de commerce’’) since incorporation. Proudreed 

France’s accounting year end is 31 December with the first statutory accounts being drawn up to 

31 December 2000. 

191

PROUDREED FRANCE 




In compliance with the assignment entrusted to us by your shareholders’ annual general meeting, we 

hereby report to you, for the year ended 31 December 2004, on: 

• the audit of the accompanying financial statements of PROUDREED FRANCE drawn up in euros, 



































192


Corporate name: PROUDREED France 





Gross amount 



1 2 3 4 

INTANGIBLE 




Goodwill 1,564,329 1,564,329 



Land 18,689,888 18,689,888 18,506,888 

TANGIBLE 

Buildings 61,485,895 10,728,924 50,756,971 52,208,217 


Other tangible assets 93,404 

In-progress fixed assets 187,914 187,914 



FINANCIAL 

Investments 527,597 527,597 527,597 


Capitalised securities 

Loans 

Other financial assets 114 

TOTAL (II) 82,455,623 10,728,924 71,726,699 71,336,221 



INVENTORIES 





Advances and deposits paid to suppliers 927,306 927,306 1,585,725 

RECEIVABLES 

Accounts receivable and related accounts 1,537,002 690,564 846,438 1,649,536 

Other receivables 11,715,068 74,888 11,640,180 2,750,407 



(among which ......... treasury shares) 1,030,942 

MISCELL. 

Quick assets 222,120 222,120 566,451 

Prepaid expenses 275,262 275,262 167,840 

TOTAL (III) 14,676,759 765,452 13,911,307 7,750,899 



year (IV) 1,134,512 1,134,512 1,861,819 




193





Share capital (incl. paid-up capital: 8,192 ) 8,192 8,192 

Issue premium, merger surplus, share premium 140,832 140,832 

Reevaluation surplus (consolidation surplus: EK ) 

Legal reserve 819 819 




Retained earnings / losses 3,440,446 1,946,700 

NET INCOME OR LOSS 806,407 1,493,746 


Regulated provisions 43,342 

TOTAL (I) 4,440,039 3,590,290 




TOTAL (II) 


Reserves for contingencies 


TOTAL (III) 246,800 77,812 

LIABILITIES 




Other financial loans and debts (incl.Loans entitling the bank to an interest in the 

company EI) 22,976,315 17,156,062 

Advances and deposits collected on orders in progress 

Accounts payable and related payables 718,018 731,158 

Tax payable, payroll and debts to social institutions 955,422 1,208,036 



Regular. account 

Deferred income 59,879 69,155 

TOTAL (IV) 80,778,760 76,085,592 

Translation differential 1,306,919.00 1,195,245 


194




France Export Total 




Sales of production .goods 

.services 14,407,327 14,407,327 13,509,100 

Net turnover 14,407,327 14,407,327 13,509,100 




Depreciations and reserve reversals, expense transfer 451,794 1,100,779 

Other operating income 45,774 182,458 


OPERATING EXPENSES 





Other purchases and external expenses(3)(6 bis) 5,279,402 3,564,542 





fixed assets 

depreciation 3,603,788 3,479,285 

provision 


provision 555,699 395,216 

for contingencies provision 246,800 77,812 

Other expenses 306,811 18,069 


1 – OPERATING RESULT (I – II) 2,834,077 4,715,135 

Joint venture 

Attributed income or transferred loss (III) 

Loss assumed or transferred income (IV) 


Financial income from investments 


Other interest and related income 25,357 13,838 


Profits on exchange rates 1,568 






Loss on exchange rates 166 



2 – FINANCIAL RESULT (V – VI) (2,062,930) (2,011,194) 

3 – ORDINARY RESULT BEFORE TAX (I - II + III - IV +V-VI) 777,147 2,703,940 

195






Extraordinary capital gains C8 1 


Total extraordinary income (VII) 80,728 49,817 


Extraordinary operating expenses 2,126 3,555 

Extraordinary capital expenses 

Extraordinary depreciation expense and provisions 43,342 

Total extraordinary expenses (VIII) 45,468 3,555 

4 - EXTRAORDINARY RESULT (VII-VIII) 35,260) 46,262) 





5 – PROFIT OR LOSS (TOTAL INCOME - TOTAL EXPENSES) 806,407 1,493,746 

196

PROUDREED FRANCE 




gains at u806,407.39. 



The following accounts were closed on 18 March 2005. 



− Continuity of the operation in progress, 

− Use for a succession of financial periods, 

− Independence of financial periods 


The method used for the evaluation of the elements comprising the accounting records is that of historical 

costs. 


Intangible Assets 

− Purchase of Leasing Contracts In-Progress: 

Intangible Assets represent the difference between the remaining part of the leasing contract and the fair 

value of the contract, before executing the option. The part of the intangible asset related to 

building/construction is amortised (derogatory amortisation) at a rate of 4% or 5%. 





updated expert opinion is used as reference for all of the tangible assets, on which grounds no 

depreciation has been brought to our attention. 


Financial Assets: Investment 

Financial Investments are transcribed in the balance sheet at their acquisition price or at their original 

cost. 

A provision for depreciation is constituted when the utility of the investment, determined in function of 

its profitability, its future prospects or its adjusted book value, is inferior to its original book value. 




Amortisation 




197


− Software 1 year 


− Fixtures and Layout 20 years 





− 

− 

− 

− 

− 

Registration duties 

Notary fees and compensation 

Registrar of Mortgages Salary 

Tax Publicity Foncière 

Mortgage Tax 

The amortisation schedule retained in accounting is 5 years. The allotment is calculated, au prorata 


198

FIXED ASSETS 


Increases 



financial year Reevaluation Purchases 

FIXED ASSETS 1 2 3 

INTANGIBLE 


expenses 

TOTAL (I) 

Other intangible assets TOTAL (II) 1,829 1,564,329 

TANGIBLE 

Land 18,506,888 183,000 

Buildings 

on land owned by the company 58,719,381 437,592 


General installations, fixtures and fittings 1,371,870 957,052 



General installations, fixtures and fittings 96,238 






TOTAL (III) 78,694,376 1,577,644 187,914 

FINANCIAL 


Other investments 527,597 


Loans & other financial assets 114 

TOTAL (IV) 527,711 

OVERALL TOTAL (I+II+III+IV) 79,223,917 1,577,644 1,752,243 

Decreases 

Reeval. 

By transfer 

from 

account to 

account 

By disposal to third 

parties, putting out 

of order 

Gross value 

of assets 

end of 


Original value 

of assets 

end of 


FIXED ASSETS 1 2 3 4 

INTANGIBLE 


expenses 

TOTAL I 

Other intangible assets TOTAL II 1,829 1,564,329 

TANGIBLE 

Land 18,689,888 

Buildings 

on land owned by the company 59,156,973 


general installations, fixtures and fittings 2,328,922 



general installations, fixtures and fittings 96,238 





Advances 

TOTAL III 96,238 80,363,697 

FINANCIAL 


Other investments 527,597 


Loans & other financial assets 114 

TOTAL IV 114 527,597 

OVERALL TOTAL (I+II+III+IV) 96,238 1,944 82,455,623 

199

DEPRECIATION 



Accumulated 

depreciation 

at beginning 


Increases: 

allowance 


Decreases: 


elements taken out 

& reversals 

Accumulated 

depreciation 

end 


DEPRECIABLE ASSETS 1 2 3 4 

Initial investment, research & 

development expenses 

TOTAL I 

Other intangible assets TOTAL II 1,829 1,829 

Land 

Buildings 

on land owned by the company 7,678,235 2,666,642 10,344,877 


general installations, fixtures and fittings 204,798 176,415 -2,834 384,047 


tooling 


General installations, fixtures and fittings 2,834 2,834 




TOTAL III 7,885,867 2,843,057 10,728,924 

OVERALL TOTAL (I+II+III) 7,887,696 2,843,057 1,829 10,728,924 

BREAK-DOWN OF THE FINANCIAL 

YEAR DEPRECIATION ALLOWANCES 

Straight-line 

depreciation 

Accelerated 

depreciation 


RESERVE FOR 

DEROGATORY 

DEPRECIATION 

Extraordinary 


Depreciable assets 1 2 3 4 5 


expenses 

TOTAL I 

Other intangible assets TOTAL II 43,342 

Land 

Buildings 

on land owned by the company 2,666,642 


general installations, fixtures and fittings 176,415 

Techncl installations, indust. machnry & 

tooling 






TOTAL III 2,843,057 

OVERALL TOTAL (I+II+III) 2,843,057 43,342 

Net amount 

beginning of 


Increases 

Depreciation 

allowances 

Net amount 

end of 


MOVEMENTS DURING THE FINANCIAL 

YEAR AFFECTING EXPENSES 

AMORTISED OVER SEVERAL 

FINANCIAL YEARS 

Expenses amortised over several years 1,861,819 33,424 760,731 1,134,512 


200



Amount at the 

beginning of 

the tax year 

INCREASES 

Allowances of 

the tax year 

DECREASES 

Recaptures during 

the tax year 

Amount at the 

end of the 

tax year 


1 2 3 4 


Reserves for reconstruction of minning & 

petroleum deposits 




Derogatory depreciation 43,342 43,342 

Tax reserves for foreign establishment set up 

before 1.1.1992 

Tax reserves for foreign establishment set up after 

1.1.1992 

Reserves for loan for establishment (art. 39 

quinquies H of tax code) 


TOTAL I 43,342 43,342 

RESERVES FOR CONTINGENCIES AND 

CHARGES 



Reserves for losses on forward markets 







Reserves for social contribution on accrued 

vacation 

Other reserves for contingencies & charges 77,812 246,800 77,812 246,800 

TOTAL II 77,812 246,800 77,812 246,800 


fixed assets 

- intangibles 

- tangibles 

- consolidated shares 

- capitalised securities 

- other financial assets 



Other reserves for depreciation 74,888 74,888 

TOTAL III 533,327 555,699 323,574 765,452 

GRAND TOTAL (I+II+III) 611,139 845,841 401,386 1,055,594 


including –financial ’’ 

–exceptional ’’ 43,342 

10 

201




Gross amount Up to 1 year Over 1 year 

STATUS OF RECEIVABLES 1 2 3 



Loans (1) (2) 0 

Other financial assets 0 0 


Bad debts 837,221 146,657 690,564 

Other accounts receivable 699,781 699,781 0 


previous provision for depreciation UQ 0 




Income tax 1,256,443 1,256,443 

V.A.T. 493,775 493,775 0 


Miscellaneous 0 

Group & shareholders (2) 8,355,634 8,355,634 

Miscellaneous receivables (incl. receivables 

relative to securities in pawn) 1,604,159 1,529,271 74,888 

Prepaid expenses 275,262 275,262 0 

TOTALS 13,527,333 12,761,881 765,452 

FOOT NOTES 

(1) Amount of 




Gross amount Up to 1 year 

Over 1 year 

&upto 

5 years Over 5 years 

STATUS OF LIABILITIES 1 2 3 4 



Loans from Credit institutions (1) 

originally < 1 year 319,960 319,960 0 

originally > 1 year 53,103,255 53,103,255 0 


accounts payable and related accounts 718,018 718,018 

Payroll & assimilated 0 0 

Social security & other social institutions 0 0 


Income tax 0 0 

V.A.T. 930,853 930,853 0 



Debts on fixed assets & related accounts 557,339 557,339 0 

Group & shareholders (2) 19,982,608 19,982,608 0 

Other debts 2,088,570 2,088,570 0 



TOTALS 80,778,760 24,681,797 56,096,963 0 

FOOT NOTES (1) 

Loans subscribed during financial year (2) Amount of loans and debts contracted 


with individual shareholders 

202






Loans 


Accounts recievable and assimilated accounts 458,802 227,776 



Quick assets 

Total 812,917 260,774 

Accrued liabilities included in the following positions in the Balance Sheet 12/31/2004 12/31/2003 




Other financial loans and debts 5,265 





Total 1,679,253 844,436 

203

Corporate Name: PROUDREED France 



Operating Income 58.857 69,155 

Financial Income 1,022 


Total 59,879 69,155 


Operating Expenses 275,262 167,840 

Financial Expenses 


Total 275,262 167,840 



Net amount 

Amortisation 

left over 

Deferred Charges 1,134,512 1 to 4 years 

Fixed assets acquisition costs 



Total 1,134,512 

LEGAL CAPITAL 


Shares in 

Capital 

Nominal 

Value 

Beginning of 

the tax year 

Created during the 

tax year 


the tax year 

End of the 

tax year 

Sares 16 512 512 

204

LEASING 


Elements from Balance Sheet 

Historical 

cost 

Theoretical provisions 

Total 

For the period accumulated 

Fees 

Theoretical 

net worth Period Accumulated 

Land 2,636,000 2,636,000 

Buildings 28,346,731 1,494,718 4,124,797 24,221,934 2,264,725 




Total 30,982,731 1,494,718 4,124,797 26,857,934 2,264,725 0 

Elements from the Balance Sheet 

Fees to be payed 

Over 1 year 

and up to 

Up to 1 year 5 years Over 5 years Total 

Residual 

Buying Price 

Amount 

concerning 

the period 

Land 182,077 558,819 740,896 1,862,245 32,857 

Buildings 2,663,190 10,710,250 14,186,485 27,559,925 2,305,000 2,231,868 




Total 2,845,267 11,269,069 14,186,485 28,300,821 4,167,245 2,264,725 

205


FINANCIAL GUARANTEES 

GUARANTEES GIVEN 

AMOUNT 

Discounted notes not yet matured 

Securities & guarantees 

Tangible asset leasing agreements (personal property) 

Tangible asset leasing agreements (Real estate) 32,468,066 

Retirement and pension agreements 

Total (1) 32,468,066 

(1) which concerns 

– Managers 

– Subsidiairies 

– Investment 

– Other affiliated corporations 

– Guarantees with real security interest 

GUARANTEES RECEIVED 

Total (2) 

MUTUAL GUARANTEES 

Total 

AMOUNT 

AMOUNT 

206



Guaranteed 

Debts 

Security 











Total 53,103,255 53,103,255 



MOTHER COMPANIES CONSOLIDATING THE COMPANY’S ACCOUNTS: 

PROUDREED LIMITED 

Registered Office: 16 CARLTON CRESCENT SOUTHAMPTON (G.B.) 

207




In which the 

company has 

Item 

Affiliated companies interest 


Investments 527,597 


Loans 



Other receivables 8,355,634 




Debts/loans granted by credit institutions 





Other liabilities 19,982,608 



Financial expenses 5,265 

LIST OF SUBSIDIARIES AND INVESTMENTS 

euros 

Capital 

Shareholders’ 

Equity 

Pourcentage 

of capital 

possessed 

Result of 

most recent 

period 

A. INFORMATION CONCERNING THE 

CONTROLLED COMPANIES AND 

INVESTMENTS 

1. Controlled companies (possession of over 50%) 

SCI DEP IMMO COMM 

36, ave Hoche 75008 

SIRET N° 382 583 326 00055 2,000 1,024,019 99.90 338,737 

SCI 2PI 

36, ave Hoche 75008 

SIRET N° 450 750 435 00023 1,000 -530,470 99.90 -527,565 

2. Investments (between 10 to 50% possession) 

B. INFORMATION CONCERNING THE OTHER CONTROLLED COMPANIES AND INVESTMENTS 

1. Controlled companies not mentioned in A: 

a) French 

b) Foreign 

2. Investments not mentioned in A: 

a) French 

b) Foreign 

208

THE PROPERTY MANAGER 

French Investment Portfolio Asset Management (‘‘FIPAM’’), was incorporated on 27 June 2001 

(registered number B 438 302 044) as a limited company (société à responsibilité limitée) under the laws 

of France. The registered office of FIPAM is at 36, avenue Hoche, 75008 Paris, France. FIPAM will be 

appointed as Property Manager pursuant to the terms of the Property Management Agreements (as to 

which see the section entitled ‘‘Summary of Principal Documents – The Property Management Agreements’’ 

above). 

Principal Activity 

The Property Manager provides property management services in relation to the Secured Properties 

including, inter alia, monitoring and inspecting the Secured Properties to ensure they are in good repair, 

negotiating any rent reviews under any lease, conducting negotiations with Occupational Tenants 

including surrenders of leases, the granting of new leases and renewals of existing leases, collection of 

rental income and other monies due under the Occupational Leases, including, without limitation, any 

taxes, insurance proceeds and service charges. 

Management 

The Manager (gérant) of the Property Manager is Mr. Jean-Pierre Raynal. 

Appointment as Property Manager 

The Property Manager will be appointed by the Borrowers on or around the Closing Date, in each case 

pursuant to a Property Management Agreement between the Property Manager and the relevant 

Borrower, to be the property manager of the relevant Borrower with full power and authority to act as 

property manager for the relevant Borrower and exercise all the powers expressed to be granted to the 

Property Manager pursuant to the relevant Property Management Agreement. 

Share Capital 

As at the date of this Offering Circular the Property Manager has an authorised share capital of u10,000 

divided into 10,000 shares of u1 each, of which 3,750 shares are held by Ringmerit Limited, 3,750 shares 

are held by Proudreed Limited and 2,500 shares are held by Mr Jean-Pierre Raynal. 

209

THE HEDGING PROVIDERS 


HSBC Bank plc and its subsidiaries form a UK-based group providing a comprehensive range of banking 

and related financial services. 

HSBC Bank plc (formerly Midland Bank plc) was formed in England in 1836 and subsequently registered 

as a limited company in 1880. In 1923, the company adopted the name of Midland Bank Limited which 

it held until 1982 when the name was changed to Midland Bank plc. 

During the year ended 31 December 1992, Midland Bank plc became a wholly owned subsidiary 

undertaking of HSBC Holdings plc, whose Group Head Office is at 8 Canada Square, London E14 5HQ, 

United Kingdom. HSBC Bank plc adopted its current name, changing from Midland Bank plc, in the year 

ended 31 December 1999. 

The HSBC Group is one of the largest banking and financial services organisations in the world, with over 

9,800 offices in 77 countries and territories in Europe, the Asia-Pacific region, the Americas, the Middle 

East and Africa. Its total assets at 31 December 2004 were US$1,266 billion. HSBC Bank plc is the HSBC 

Group’s principal operating subsidiary undertaking in Europe. 

The short-term unsecured obligations of HSBC Bank plc are currently rated A-1+, P-1 and F1+ by S&P, 

Moody’s and Fitch, respectively and the long-term obligations of HSBC Bank plc are currently rated Aa2, 

AA– and AA by , Moody’s, S&P and Fitch, respectively. 

The information contained in this Offering Circular with respect to HSBC Bank plc relates to and has 

been obtained from it. The delivery of this Offering Circular shall not create any implication that there 

has been no change in the affairs of HSBC Bank plc since the date of this Offering Circular, or that the 

information contained or referred to in it is correct as of any time subsequent to its date. 


Société Générale is a French limited liability company (Société Anonyme) having the status of a bank and 

is registered in France in the Commercial Register under number 552120222. It has its registered office 

at 29 Boulevard Haussman, 75009 Paris and its head office at Tour S.G., 17 Cours Valmy, 97972 Paris La 

Defense. 

Société Générale was incorporated by deed approved by the decree of 4th May 1864. It was then 

nationalised in 1945, but returned to the private sector in July 1987 as a ‘‘Société Anonyme’’ under the 

laws of the Republic of France. Its existence has been extended to 31 December 2047. 

The purpose of the Société Générale Group (the ‘‘SG Group’’) is to engage in banking, finance, insurance 

brokerage and credit operations in France and outside France with all persons, corporate entities, public 

and local authorities in accordance with the regulations applicable to ‘‘Etablissements de Crédit’’ (Credit 

Institutions). 

At 31 December 2004, the SG Group had total assets of u601.1 billion, total customer loans of u198.9 

billion, and total customer deposits of u174.5 billion. At December 31st, 2004, SG Group shareholders’ 

equity was u18.6 billion. The SG Group employed, at December 31st, 2004, more than 93,000 employees 

and is present in 80 countries in Europe, the Asia-Pacific region, the Americas, the Middle East and 

Africa. 

The short-term unsecured obligations of Société Générale are rated A1+, P-1 and F1+ by S&P, Moody’s 

and Fitch, respectively and the long-term obligations are rated AA–, Aa2 and AA– by S&P, Moody’s and 

Fitch, respectively. 

The information contained in this Offering Circular with respect to Société Générale relates to and has 

been obtained from it. The delivery of this Offering Circular shall not create any implication that there 

has been no change in the affairs of Société Générale since the date of this Offering Circular, or that the 

information contained or referred to in it is correct as of any time subsequent to its date. 

210

THE LIQUIDITY FACILITY PROVIDER 

CCF 

CCF was founded in 1894. By joining the HSBC Group in July 2000, CCF has taken on a new global 

dimension, while pursuing its strategic goal to become a leading French bank in its target customer 

segments. Integration with HSBC Group has substantially strengthened CCF’s international capability. 

Headquartered in London, HSBC is one of the largest banking and financial services organisations in the 

world. HSBC’s international network comprises over 9,800 offices in 77 countries and territories in 

Europe, the Asia-Pacific region, the Americas, the Middle East and Africa. 

The CCF group has a total of 14,000 employees, including 7,200 in the parent company. 

The CCF group has a network of 780 branches throughout France, including 224 operating under the CCF 

brand name and 556 operating under the brand names of the Group’s ten regional banks. 

In November 2005, CCF will adopt the HSBC brand in France as it plans to improve customer service and 

accelerate growth. 

The short-term unsecured obligations of CCF are currently rated A-1+, P-1 and F1+ by S&P, Moody’s and 

Fitch, respectively and the long-term obligations of CCF are currently rated AA−, Aa3 and AA by S&P, 

Moody’s and Fitch, respectively. 

The information contained in this Offering Circular with respect to CCF relates to and has been obtained 

from it. The delivery of this Offering Circular shall not create any implication that there has been no 

change in the affairs of CCF since the date of this Offering Circular, or that the information contained or 

referred to in it is correct as of any time subsequent to its date. 

211

TERMS AND CONDITIONS OF THE NOTES 

The following are the terms and conditions of the Notes in the form (subject to completion and amendment) 

in which they will be set out in the Issuer Regulations. These terms and conditions include summaries of, and 

are subject to, the detailed provisions of, the Issuer Regulations, the Paying Agency Agreement and the other 

Transaction Documents (each as defined below). 

The u255,400,000Class A Floating Rate Notes due 2017 (the ‘‘Class A Notes’’), the u56,800,000 Class B 

Floating Rate Notes due 2017 (the ‘‘Class B Notes’’), the u28,400,000 Class C Floating Rate Notes due 

2017 (the ‘‘Class C Notes’’), the u28,400,000 Class D Floating Rate Notes due 2017 (the ‘‘Class D Notes)’’ 

and the u28,400,000 Class E Floating Rate Notes due 2017 (the ‘‘Class E Notes’’ and, together with the 

Class A Notes, the Class B Notes, the Class C Notes and the Class D Notes, the ‘‘Notes’’)ofFCC 

Proudreed Properties 2005 (the ‘‘Issuer’’) shall be issued pursuant to the regulations to be dated on or 

about 21 October 2005 or such later date as may be agreed between the Management Company and the 

Custodian (the ‘‘Issuer Regulations’’) and are subject to these terms and conditions (the ‘‘Conditions’’). 

Under a paying agency agreement dated 21 October 2005 (the ‘‘Paying Agency Agreement’’) between the 

Management Company (representing the Issuer), the Custodian, HSBC Bank plc as principal paying 

agent (the ‘‘Principal Paying Agent’’), HSBC Institutional Trust Services (Ireland) Limited as Irish paying 

agent (the ‘‘Irish Paying Agent’’ and together with the Principal Paying Agent, the Irish Paying Agent and 

any other paying agents appointed from time to time in respect of the Notes under the Paying Agency 

Agreement, the ‘‘Paying Agents’’) among other things, the Management Company (representing the 

Issuer) will appoint the Paying Agents to make payments of principal, interest and other amounts (if any) 

in respect of the Notes on its behalf, except that no Paying Agent shall be appointed in the United States. 

These Conditions include summaries of, and are subject to, the detailed provisions of, the Issuer 

Regulations, the Paying Agency Agreement and the other Transaction Documents. 

The Noteholders and all persons claiming through them or under the Notes are entitled to the benefit of, 

and are bound by, the Issuer Regulations, copies of which are available for inspection at the specified 

office of the Principal Paying Agent and the Irish Paying Agent. 

1. DEFINITIONS AND PRINCIPLES OF CONSTRUCTION 

Definitions 

(a) In these Conditions: 

‘‘Adjusted Principal Amount Outstanding’’ means, on any date in relation to a Note, the Principal 

Amount Outstanding of that Note after deducting the Principal Losses allocated to that Note in 

accordance with Condition 5(f) on or prior to that date; 

‘‘Borrower’’ means any of the Paris Properties Borrowers and the Proudreed France Borrowers; 

‘‘Borrowers Account Bank’’ means (i) in relation to the Proudreed France Borrowers, CCF and (ii) 

in relation to the Paris Properties Borrowers, Société Générale; 

‘‘Borrower Group’’ means (i) in relation to a Paris Properties Borrower, that Borrower, the other 

Paris Properties Borrowers and their Parent Obligors or (ii) in relation to a Proudreed France 

Borrower, that Borrower, the other Proudreed France Borrowers and their Parent Obligors; 

‘‘Business Day’’ means a day (other than a Saturday or a Sunday) on which commercial banks and 

foreign exchange markets are open for general business in Paris and Dublin and which is a 

TARGET Day; 

‘‘Cash Manager’’ means, as at the Closing Date, CCF acting through its office at 103 avenue des 

Champs Elysées, 75008 Paris, France; 

‘‘Class’’ means the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the 

Class E Notes or any combination of them; 

‘‘Class A Noteholders’’ means the holders of the Class A Notes; 

‘‘Class A Notes’’ means the u255,400,000 Class A Floating Rate Notes due 2017 issued on the 

Closing Date; 

‘‘Class B Noteholders’’ means the holders of the Class B Notes; 

212

‘‘Class B Notes’’ means the u56,800,000 Class B Floating Rate Notes due 2017 issued on the Closing 

Date; 

‘‘Class C Noteholders’’ means the holders of the Class C Notes; 

‘‘Class C Notes’’ means the u28,400,000 Class C Floating Rate Notes due 2017 issued on the Closing 

Date; 

‘‘Class D Noteholders’’ means the holders of the Class D Notes; 

‘‘Class D Notes’’ means the u28,400,000 Class D Floating Rate Notes due 2017 issued on the Closing 

Date; 

‘‘Class E Noteholders’’ means the holders of the Class E Notes; 

‘‘Class E Notes’’ means the u28,400,000 Class E Floating Rate Notes due 2017 issued on the Closing 

Date; 

‘‘Clearstream, Luxembourg’’ means Clearstream Banking, société anonyme; 

‘‘Closing Date’’ means 2 November 2005 or such later date as may be agreed between the 

Management Company on behalf of the Issuer, the Borrowers and the Joint Lead Managers; 

‘‘Commercial Mortgage Loan’’ means each or any of the secured commercial mortgage loans made 

by the Lenders to any of the Borrowers in accordance with a Commercial Mortgage Loan 

Agreement and which are from time to time outstanding; 

‘‘Commercial Mortgage Loan Agreement’’ means (1) the loan agreement dated 21 October 2005 

between, inter alios, the Paris Properties Borrowers and the Lenders and/or (2) the loan agreement 

dated on or about the Closing Date between, inter alios, the Proudreed France Borrowers and the 

Lenders, or both as the context requires; 

‘‘Conditions’’ means the terms and conditions applicable to the Notes as set out in the Issuer 

Regulations and as may be modified in accordance with the Issuer Regulations and any reference 

to a particular numbered Condition shall be construed accordingly and references in the Conditions 

to paragraphs shall be construed as paragraphs of such Conditions; 

‘‘EURIBOR’’ means, for a given Interest Period, the rate for deposits in euros for a period of three 

(3) months which appears on Reuters page 248-249 as of 11:00 a.m. (Brussels time), on the Interest 

Determination Date in respect of that Interest Period (or (a) such other page as may replace 

Reuters page 248-249 on that service for the purpose of displaying such information; or (b) if that 

service ceases to display such information, such page as displays such information on such service 

(or, if more than one, that previously approved in writing by the Management Company) as may 

replace the Reuters service (the ‘‘Screen Rate’’). If, on any Interest Determination Date, the Screen 

Rate is unavailable at such time and on such date, the Management Company will request the 

principal Paris office of each Reference Bank, or any other major bank in Euro-Zone inter-bank 

market (where ‘‘Euro-Zone’’ means the region comprised of member states of the European Union 

which have adopted the euro in accordance with the Treaty) appointed by the Management 

Company in good faith, to provide the Management Company with its offered quotation to leading 

banks in the Euro-zone inter-bank market for deposits in euros for a period equal to the relevant 

Interest Period and in an amount equal to the then aggregate Principal Amount Outstanding of all 

Classes of Notes (or, if such an amount cannot be obtained, in an amount that is representative for 

a single transaction in that market at that time) as at 11:00 a.m. (Brussels time) on the Interest 

Determination Date in question. The Euribor for the relevant Interest Period shall be determined, 

on the basis of the offered quotations of those Reference Banks, as the arithmetic mean (rounded 

upwards to four (4) decimal places) of the rates so quoted. If, on any such Interest Determination 

Date, two (2) or three (3) only of the Euribor Reference Banks provide such offered quotations to 

the Management Company, the Euribor for the relevant Interest Period shall be determined, as 

outlined above, on the basis of the offered quotations of those Reference Banks providing such 

quotations. If, on any such Interest Determination Date, one only or none of the Reference Banks 

provides the Management Company with such an offered quotation, the Management Company 

shall forthwith consult with two (2) banks (or, where one only of the Reference Banks provides such 

a quotation, one additional bank) to provide such a quotation or quotations to the Management 

Company (which bank or banks is or are in the opinion of the Management Company, suitable for 

such purpose) and the Euribor for the Interest Period in question shall be determined, as outlined 

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above, on the basis of the offered quotations of such banks as so agreed (or, as the case may be, the 

offered quotations of such banks as so agreed and the relevant Reference Bank). If no such bank 

or banks is or are so agreed or such bank or banks as so agreed does or do not provide such a 

quotation or quotations, then the Euribor for the relevant Interest Period shall be the Euribor in 

effect for the last preceding Interest Period to which the foregoing provisions of this definition shall 

have applied; 

‘‘Euro’’ or ‘‘w’’ refers to the single currency unit of the member States of the European Union that 

have adopted the single currency in accordance with the Treaty establishing the European 

Community (signed in Rome on 25 March 1957) as amended by the Treaty on European Union 

(signed in Maastricht on 7 February 1992); 

‘‘Euroclear’’ means Euroclear Bank S.A./N.V., as operator of the Euroclear System; 

‘‘Euroclear France’’ means Euroclear France, société anonyme; 

‘‘Fees and Expenses’’ means any fees, costs and expenses, other remuneration and indemnity 

payment which are due and payable; 

‘‘Final Maturity Date’’ means the Interest Payment Date falling in August 2017; 

‘‘Final Offering Circular’’ means the final offering circular relating to the issue of the Notes; 

‘‘Fitch’’ means Fitch Ratings Ltd. or any successor to its rating business; 

‘‘Hedging Agreement’’ means each ISDA Master Agreement, schedule thereto and each 

confirmation, each dated the Closing Date between the Management Company on behalf of the 

Issuer, the Custodian and each Hedging Provider and the transactions effected thereunder, together 

the ‘‘Hedging Agreements’’; 

‘‘Hedging Credit Support Document’’ means, in respect of each Hedging Agreement and Hedging 

Provider, the 1995 ISDA Credit Support Annex (Bilateral Form-Transfer) or such other collateral 

agreement as may be entered into between the Issuer and the relevant Hedging Provider; 

‘‘Hedging Downgrade Event’’ has the meaning given in the Hedging Agreements but, in any event, 

equating to the Hedging Providers ceasing to have a short term debt rating of A-1 by S&P and a 

combined short term rating of at least F1 and long term rating of at least A by Fitch; 

‘‘Hedging Payments’’ means those payments due from the Hedging Providers under the Hedging 

Agreements; 

‘‘Hedging Providers’’ means, as at the Closing Date, HSBC Bank plc and Société Générale, acting 

through their offices at 8 Canada Square, London, E14 5HQ, United Kingdom and 17 Cours Valmy 

92987 Paris La Défense, France respectively (or such other replacement parties as may be appointed 

by the Issuer in accordance with the Transaction Documents); 

‘‘Hedging Subordinated Amounts’’ means any amounts due to the Hedging Providers under the 

Hedging Agreements (other than any amounts attributed to the return of collateral to such Hedging 

Provider) either (a) due to the occurrence of an Event of Default (as defined under the Hedging 

Agreements) where the Hedging Provider is the Defaulting Party (as defined in the Hedging 

Agreements) or a Hedging Downgrade Event under such Hedging Agreement in respect of which 

the Hedging Provider is the defaulting or affected party or (b) in respect of amounts by which any 

payment made to the relevant Hedging Provider under the relevant Hedging Agreement is 

increased as a consequence of an amount for or on account of Tax being required to be withheld or 

deducted from that payment; 

‘‘Hedging Termination Payments’’ means any amounts due to the Hedging Providers under the 

Hedging Agreements (to the extent not funded by payments of interest in respect of the Commercial 

Mortgage Loans) including any amounts due to a Hedging Provider under a Hedging Agreement on 

termination of such Hedging Agreement but excluding any Hedging Subordinated Amounts; 

‘‘Interest Amount’’ has the meaning given to it in Condition 4(d) (Interest – Determination of Rates 

of Interest and Calculation of Interest Amounts); 

‘‘Interest Determination Date’’ means the date falling two (2) Business Days prior to an Interest 

Payment Date; 

‘‘Interest Payment Date’’ means 18 February, 18 May, 18 August and 18 November in each year, 

except if such day is not a Business Day, in which case it shall be the next succeeding Business Day 

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unless such day falls in the next month, in which case it shall be the preceding Business Day, on 

which interest will be paid in respect of the Notes; 

‘‘Interest Period’’ means each period from (and including) an Interest Payment Date and ending on 

(but excluding) the next Interest Payment Date provided that the first Interest Period shall be the 

period from (and including) the Closing Date and ending on (but excluding) the Interest Payment 

Date falling in February 2006 and the last Interest Period shall be the period from (and including) 

the Interest Payment Date falling in May 2017 and ending on (but excluding) the Final Maturity 

Date; 

‘‘Investor Report’’ means the report to be prepared quarterly by the Management Company on 

behalf of the Issuer; 

‘‘Irish Paying Agent’’ means HSBC Institutional Trust Services (Ireland) Limited acting through its 

office at HSBC House, Harcourt Centre, Harcourt Street, Dublin 2, Ireland; 

‘‘Irish Stock Exchange’’ means the Irish Stock Exchange Limited; 

‘‘Issuer’’ means the debt mutual funds (fonds commun de créances) named FCC Proudreed 

Properties 2005, created at the joint initiative of the Management Company and the Custodian, 

acting as founders of the Issuer, and governed by the Issuer Regulations, Articles L.214-43 to 

L.214-49, Article L.231-7 and Articles R.214-92 to R.214-115 of the French Monetary and Financial 

Code and by any law whatsoever applicable to fonds communs de créances; 

‘‘Issuer Account Bank’’ means, as at the Closing Date, CCF; 

‘‘Issuer Account Bank and Cash Management Agreement’’ means the agreement dated 

21 October 2005 between, inter alios, the Management Company (representing the Issuer), the 

Custodian, the Cash Manager and the Issuer Account Bank; 

‘‘Issuer Accounts’’ means the Issuer Transaction Account, the Mortgage Reserve Account and the 

Liquidity Facility Standby Account; 

‘‘Issuer Debt Service Required Amount’’ means, in respect of any Interest Payment Date, the 

amount required to pay the Issuer’s outstanding obligations under items (i) to (viii) of the Issuer 

Pre-Enforcement Priority of Payments on such Interest Payment Date; 

‘‘Issuer Post-Enforcement Priority of Payments’’ means the order of the Issuer’s priority of payment 

post enforcement of the Notes as set out in Condition 3(i) (Status and Priority – Priority of Payments 

Following Enforcement); 

‘‘Issuer Pre-Enforcement Priority of Payments’’ means the order of the Issuer’s priority of payment 

prior to enforcement of the Notes as set out in Condition 3(h) (Status and Priority – Priority of 

Payments Prior to Enforcement); 

‘‘Issuer Priority of Payments’’ means the Issuer Pre-Enforcement Priority of Payments and the 

Issuer Post-Enforcement Priority of Payments; 

‘‘Issuer Transaction Account’’ means the general transaction account held in the name of the Issuer 

with the Issuer Account Bank; 

‘‘Issuer Transaction Documents’’ means: 

(a) the Issuer Regulations; 

(b) the Paying Agency Agreement; 

(c) the Issuer Account Bank and Cash Management Agreement; 

(d) the Units Subscription Agreement; 

(e) the Notes Subscription Agreement; 

(f) the Receivables Transfer and Servicing Agreement; 

(g) each Issuer Transfer Document; 

(h) the Hedging Agreements; 

(i) the Property Manager Duty of Care Agreement; 

(j) the Liquidity Facility Agreement; 

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(k) the Master Definitions and Framework Agreement; and 

(l) the Subordination Agreement, 

and any other document entered into by one or more Transaction Parties which is designated as an 

‘‘Issuer Transaction Document’’ with the consent of the relevant Transaction Parties and the 

Management Company; 

‘‘Joint Lead Managers’’ means HSBC Bank plc and Société Générale as joint lead managers of the 

issuance of the Notes; 

‘‘Liquidity Event’’ means the occurrence of: (i) the Liquidity Facility Provider ceasing to have the 

Liquidity Requisite Ratings and/or (ii) the Liquidity Facility Provider declining to renew the 

commitment period of the Liquidity Facility; 

‘‘Liquidity Facility’’ means a 364 day euro-revolving liquidity facility provided by the Liquidity 

Facility Provider pursuant to the Liquidity Facility Agreement to permit drawings to be made of up 

to the Liquidity Facility Maximum Amount as reduced or cancelled from time to time under the 

Liquidity Facility Agreement; 

‘‘Liquidity Facility Agreement’’ means a facility agreement dated 21 October 2005 between, inter 

alios, the Management Company on behalf of the Issuer, the Custodian and the Liquidity Facility 

Provider in relation to the Liquidity Facility; 

‘‘Liquidity Facility Maximum Amount’’ means u26 million, being the maximum amount available 

for drawdown under the Liquidity Facility, as the same may be reduced from time to time in 

accordance with the Liquidity Facility Agreement; 

‘‘Liquidity Facility Provider’’ means CCF SA under the Liquidity Facility Agreement or such other 

entity or entities appointed as liquidity facility provider from time to time, subject to and in 

accordance with the terms of the Liquidity Facility Agreement; 

‘‘Liquidity Facility Standby Account’’ means the account held in the name of the Issuer for the 

deposit of Liquidity Facility Standby Drawings (if any) with the Liquidity Facility Provider (for so 

long as it satisfies the Rating Criteria) or the Issuer Account Bank or (subject to the written approval 

of the Liquidity Facility Provider, such approval not to be unreasonably delayed or withheld) any 

other bank, the short-term, unsecured, unsubordinated and unguaranteed debt obligations of which 

satisfy the Rating Criteria; 

‘‘Liquidity Facility Standby Drawing’’ means a drawing following a Liquidity Event or the principal 

amount of that drawing outstanding at a particular time, where the context requires; 

‘‘Liquidity Requisite Ratings’’ means the Liquidity Facility Provider’s short term unsecured, 

unsubordinated and unguaranteed debt obligations of at least A-1+ by S&P and F1 by Fitch; 

‘‘Liquidity Shortfall’’ means in relation to an Interest Payment Date a shortfall between (i) all 

amounts which will be received by the Issuer on or by such Interest Payment Date and (ii) the Issuer 

Debt Service Required Amount determined in respect of the related Interest Payment Date; 

‘‘Liquidity Subordinated Amounts’’ means the amount by which any payment made to the Liquidity 

Facility Provider under the Liquidity Facility Agreement is increased as a consequence of an amount 

for or on account of Tax being required to be withheld or deducted from that payment; 

‘‘Masse’’ has the meaning given to it in Condition 11(a) (the Masse); 

‘‘Meeting’’ means a meeting of the Noteholders relating to any Masse; Account’’; 

‘‘Mortgage Reserve Account’’ means each reserve account held with the Issuer Account Bank in the 

name of the Issuer and established for the purpose of maintaining a reserve fund for the payment 

of registration costs in respect of any unregistered Additional Mortgages; 

‘‘Most Senior Class’’ means, at any time: 

(i) the Class A Notes; or 

(ii) if no Class A Notes are then outstanding, the Class B Notes (if at that time any Class B Notes 

are then outstanding); or 

(iii) if no Class A Notes or Class B Notes are then outstanding, the Class C Notes (if at that time 

any Class C Notes are then outstanding); 

216

(iv) if no Class A Notes, Class B Notes or Class C Notes are then outstanding, the Class D Notes 

(if at that time any Class D Notes are then outstanding); 

(v) if no Class A Notes, Class B Notes, Class C Notes or Class D Notes are then outstanding, the 

Class E Notes (if at that time any Class E Notes are then outstanding); 

‘‘No Material Prejudice Test’’ has the meaning given to it in Condition 3(e) (Status and Priority – 

Status and Relationship between the Notes); 

‘‘Note Enforcement Notice’’ means a notice delivered by the relevant Noteholder Representative to 

the Issuer in accordance with Condition 9 (Note Events of Default); 

‘‘Note Event of Default’’ has the meaning given in Condition 9; 

‘‘Note Principal Payment’’ has the meaning given to it in Condition 5(f) (Redemption, Purchase and 

Cancellation – Note Principal Payments, Principal Amount Outstanding, Adjusted Principal Amount 

Outstanding and Pool Factor); 

‘‘Noteholder’’ means each holder for the time being of any Class A Note, Class B Note, Class C 

Note, Class D Note or Class E Note; 

‘‘Noteholder Representatives’’ means, as at the Closing Date, in respect of each Class of Notes, 

Association de Représentation des Masses de Titulaires de Valeurs Mobilières, of Centre Jacques 

Ferronnière, 32, rue du Champs de Tir, B.P. 81236, 44312 Nantes Cedex 3, France and, at any time 

thereafter, any other Noteholder Representative appointed in respect of any Class of Notes in 

accordance with the Conditions, and ‘‘Noteholder Representative’’ means any of them; 

‘‘Notes’’ means the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class 

E Notes or, where the context requires, any of them; 

‘‘Notes Subscription Agreement’’ means the subscription agreement dated on or about 21 October 

2005 entered into between, inter alios, the Management Company, the Custodian and the Joint Lead 

Managers pursuant to which the Joint Lead Managers have agreed to jointly and severally subscribe 

and pay for the Notes on the Closing Date; 

‘‘Obligor Security Documents’’ means, in relation to a Borrower Group, any document or 

instrument from which security interests granted in favour of the relevant Lender arise, the benefit 

of which will be assigned to the Issuer together with the Receivables on the Closing Date, creating 

or evidencing security for all or any part of the obligations and liabilities of the Obligors or any of 

them under any of the Obligor Transaction Documents relating to that Borrower Group whether by 

way of personal covenant, charge, security interest, mortgage, pledge or otherwise, including as at 

the Closing Date, each Commercial Mortgage Loan Agreement and ‘‘Obligor Security Document’’ 

shall be construed accordingly; 

‘‘Obligor Transaction Documents’’ means the Obligor Security Documents, each Commercial 

Mortgage Loan Agreement, the relevant Property Management Agreement and the relevant 

Subordination Agreement and any other document entered into by one or more Transaction Parties 

which is designated an ‘‘Obligor Transaction Document’’ with the consent of the Management 

Company and the relevant Obligor; 

‘‘Obligors’’ means, in respect of each Borrower Group, the relevant Borrowers and Parent Obligors; 

‘‘Offering Circulars’’ means the Preliminary Offering Circular and the Final Offering Circular; 

‘‘outstanding’’ means, in relation to the Notes, all the Notes other than: 

(i) those which have been redeemed in full in accordance with the Conditions; 

(ii) those in respect of which the date for redemption in accordance with the Conditions has 

occurred and for which the redemption monies (including all interest and other amounts (if 

any) accrued thereon to such date for redemption) have been duly paid to the Principal Paying 

Agent or the relevant Noteholder Representative in accordance with the paying Agency 

Agreement (and, where appropriate, notice to that effect has been given to the Noteholders 

in accordance with Condition 13 (Notices and Information)) and remain available for payment 

in accordance with the Conditions; 

(iii) those which have become void under Condition 7 (Prescription); 

‘‘Parent Obligor’’ means, in respect of the Paris Properties Borrowers, each of SCI Paris Provinces 

Properties, SPCR SAS, SCI Beaulieu Properties, Ringmerit Limited, SARL Immobilière Ménélas 

217

and Paris Properties SARL and, in respect of the Proudreed France Borrowers, each of Proudreed 

Limited, Proudreed France SARL and Mr. Jean-Pierre Raynal, in each case in their capacity as 

holding company of the shares in the relevant Borrower; 

‘‘Paris Properties Borrowers’’ means each of SCI du 7 rue d’Amiens, SCI Beaulieu Properties, SCI 

Annapaul, SARL Enoville, SARL Les Hauteurs du Loing, SARL Immobilière Menelas, SAS IDB 

Immobilier, SARL PPMPP and SCI Paris Provinces Properties; 

‘‘Paying Agency Agreement’’ means a paying agreement dated on or about the Closing Date and 

made between, inter alios, the Management Company, the Custodian and the Paying Agents 

pursuant to which provision is made for, inter alia, the payment of interest and repayment of 

principal in respect of the Notes; 

‘‘Paying Agents’’ means the Principal Paying Agent and the Irish Paying Agent; 

‘‘Pool Factor’’ means the fraction expressed as a decimal to the sixth point of which the numerator 

is the Adjusted Principal Amount Outstanding of a Note of the relevant Class and the denominator 

is u100,000; 

‘‘Potential Note Event of Default’’ means any event which, with the giving of notice or 

determination of materiality or the fulfilment of any applicable conditions or the lapse of time, or 

a combination of the foregoing, would constitute a Note Event of Default; 

‘‘Preliminary Offering Circular’’ means the offering circular dated 29 September 2005, issued by the 

Issuer in connection with the Notes; 

‘‘Principal Amount Outstanding’’ means, on any date in relation to a Note, the principal amount 

outstanding of that Note as at the Closing Date less the aggregate of all Note Principal Payments 

that have been made by the Issuer in respect of that Note on or prior to that date; 

‘‘Principal Loss’’ means, on any Loan Calculation Date, the amount determined by the relevant FCC 

Servicer to be the amount that has not been recovered on the Commercial Mortgage Loans 

following the default by a Borrower and the completion of the enforcement of the security for the 


‘‘Principal Paying Agent’’ means, as at the Closing Date, HSBC Bank plc, acting through its office 

at 8 Canada Square, London E14 5HQ, United Kingdom; 

‘‘Proudreed France Borrowers’’ means each of Proudreed France SARL, SCI Dep-Immo–Comm, 

and SCI 2PI; 

‘‘Rate of Interest’’ has the meaning given to it in Condition 4(c) (Interest – Rate of Interest); 

‘‘Rating Agencies’’ means Fitch and S&P or, where the context requires, either of them. If at any 

time Fitch or S&P is replaced as a Rating Agency, then references to its rating categories shall be 

deemed instead to be references to the equivalent rating categories of the entity which replaces it 

as a Rating Agency; 

‘‘Rating Downgrade Event’’ means written notification from the Rating Agencies to the Management 

Company (copied to the Custodian), confirming that the then current ratings of the Notes will be 

adversely affected by the relevant event or matter; 

‘‘Ratings Test’’ means receipt by the Management Company of a confirmation from each of the 

Rating Agencies (or, if at any time there is only one Rating Agency, that Rating Agency) that, in 

respect of any event or matter in respect of which such confirmation is required or sought, either: 

(a) no Rating Downgrade Event in respect of such Rating Agency has or will occur as a result of 

the relevant event or matter; or 

(b) that Rating Agency will not downgrade any of the Notes as a result of the relevant event or 

matter; 

‘‘Reference Banks’’ means the principal Paris office of four major banks in the Paris inter-bank 

market selected by the Management Company at the relevant time; 

‘‘Relevant Margin’’ has the meaning given to it in Condition 4(c) (Interest – Rate of Interest); 

‘‘Relevant Date’’ means, for the purposes of Condition 7 (Prescription), in respect of any payment 

in relation to the Notes, whichever is the later of: 

218

(a) 

(b) 

the date on which the payment in question first becomes due; and 

if the full amount payable has not been received by the Principal Paying Agent or the relevant 

Noteholder Representative on or prior to that date, the date on which (the full amount having 

been so received) notice to that effect has been given to the Noteholders in accordance with 

Condition 13 (Notices and Information); 

‘‘Reporting Date’’ means, in relation to any Loan Calculation Date, the day falling on the fifth 

Business Day after such Loan Calculation Date; 

‘‘specified office’’ means with respect to the Paying Agents the offices listed at the end of these 

Conditions or such other offices as may from time to time be duly notified pursuant to Condition 13 

(Notices and Information), provided that any specified office shall not be an office within the United 

States or its possessions; 

‘‘S&P’’ means Standard & Poor’s Ratings Services, a division of The McGraw-Hill Companies Inc. 

or any successor to its rating business; 

‘‘Subordination Agreement’’ means, in relation to each Borrower Group, the subordination 

agreement dated 21 October 2005 between, inter alios, the Lenders, the Management Company and 

the Borrowers and Parent Obligors of that Borrower Group; 

‘‘TARGET’’ means means Trans-European Automated Real-time Gross Settlement Express 

Transfer payment system; 

‘‘TARGET Day’’ means any day on which TARGET is open for the settlement of payments in euro; 

‘‘Tax Authority’’ means any government, state, municipality or any local, federal or other fiscal, 

revenue, customs or excise authority, body or official anywhere in the world, including the French 

tax authorities, in each case having power to tax; 

‘‘Tax Event’’ has the meaning given to it in Condition 5(d) (Redemption, Purchase and Cancellation 

– Optional Redemption for Tax Reasons); 

‘‘Transaction Documents’’ means the Issuer Transaction Documents and the Obligor Transaction 

Documents and any other agreement, instrument, deed or other document entered into in respect 

of the issue of the Notes by the Issuer; 

‘‘Transaction Party’’ means the Issuer, each Noteholder Representative, the Principal Paying Agent, 

the Irish Paying Agent, the Cash Manager, the Joint Lead Managers, the Borrowers, the Parent 

Obligors, the Borrowers’ Agent, the Property Manager, the Hedging Providers, the Liquidity 

Facility Provider, the Issuer Account Banks, the Borrowers Account Bank, the Management 

Company, the Custodian, each FCC Servicer and each Seller. 

General Interpretation 

(b) In these Conditions any reference to: 

(i) ‘‘continuing’’, in respect of a Note Event of Default, shall be construed as a reference to a Note 

Event of Default which has not been waived in accordance with the Conditions and the Issuer 

Regulations; 

(ii) ‘‘Euroclear’’, ‘‘Euroclear France’’ and/or ‘‘Clearstream, Luxembourg’’ shall, wherever the 

context so admits, be deemed to include reference to any additional or alternative clearing 

system approved by the Issuer and each Noteholder Representative in relation to the Notes; 

(iii) ‘‘including’’ shall be construed as a reference to ‘‘including without limitation’’, so that any list 

of items or matters appearing after the word ‘‘including’’ shall be deemed not to be an 

exhaustive list, but shall be deemed rather to be a representative list, of those items or matters 

forming a part of the category described prior to the word ‘‘including’’; 

(iv) a ‘‘law’’ shall be construed as any law (including common or customary law), statute, 

constitution, decree, judgment, treaty, regulation, directive, by-law, order or any other 

legislative measure of any government, supranation, local government, statutory or regulatory 

body or court; 

(v) a ‘‘person’’ means, any individual, firm, company, corporation, government, state or agency of 

a state or any association or partnership, limited liability company, (whether or not having 

separate legal personality) of two or more of the foregoing; 

219

(vi) ‘‘repay’’, ‘‘redeem’’ and ‘‘pay’’ shall each include both of the others and ‘‘repayable’’, 

‘‘repayment’’ and ‘‘repaid’’ and ‘‘redeemable’’, ‘‘redemption’’ and ‘‘redeemed’’ and ‘‘payable’’, 

‘‘payment’’ and ‘‘paid’’ shall be construed accordingly; 

(vii) ‘‘tax’’ or ‘‘Tax’’ means any present or future tax, levy, impost, duty, charge, fee, deduction or 

withholding of any nature whatsoever (including any penalty or interest payable in connection 

with any failure to pay or any delay in paying any of the same) imposed or levied at any time 

by any Tax Authority, and ‘‘taxes’’, ‘‘taxation’’, ‘‘taxable’’ and comparable expressions shall be 

construed accordingly; 

(viii) any ‘‘Transaction Party’’ includes its successors, transferees and assignees and, in the case of 

a Noteholder Representative, includes any additional or replacement representative appointed 

under these Conditions; and 

(ix) ‘‘VAT’’ shall be construed as a reference to value added tax or any other tax of a similar fiscal 

nature imposed by the laws of any jurisdiction. 

Headings and Clauses 

(c) The headings in these Conditions shall not affect their interpretation. References to Clauses, 

Schedules, Exhibits, paragraphs and Articles in any Transaction Document shall, unless its 

context otherwise requires, be construed as references to the Clauses of, Schedules to, Exhibits 

to, paragraphs, and Articles of, of such document. 

Singular and Plural 

(d) Unless the context otherwise requires: 

(i) words denoting the singular number only include the plural number also and vice versa; 

(ii) a defined term in the plural which refers to a number of different items or matters may be used 

in the singular or plural to refer to any (or any set) of those items or matters, as the context 

requires; 

(iii) words denoting one gender only include the other genders; and 

(iv) words denoting persons only include firms, corporations and other organised entities, whether 

separate legal entities or otherwise, and vice versa. 

Agreements and Statutes 

(e) Unless the context otherwise requires, any reference in these Conditions to: 

(i) the Issuer Regulations, the Paying Agency Agreement, any other Transaction Document or 

any other agreement, deed or document shall be construed as a reference to the relevant 

agreement, deed or document as the same may have been, or may from time to time be, 

replaced, extended, amended, varied, novated, supplemented or superseded in accordance 

with its terms and includes any agreement, deed or other document expressed to be 

supplemental to it, as from time to time so extended, amended, varied or novated; and 

(ii) any statutory provision or legislative enactment shall be deemed also to refer to any 

re-enactment, modification or replacement thereof and any statutory instrument, order or 

regulation made thereunder or under any such re-enactment. 

Different Capacities 

(f) Where any Transaction Party from time to time acts in more than one capacity hereunder, the 

provisions of these Conditions shall apply to such Transaction Party as though it were a 

separate party in each such capacity except insofar as they may require such party in one 

capacity to give any notice or information to itself in another capacity. 

2. FORM, DENOMINATION AND TITLE 

Denominations 

(a) The Notes will be issued in minimum denominations of u100,000 each. 

220

Form of Notes 

(b) The Notes are: 

(i) financial instruments (instruments financiers) within the meaning of Article L.211-1 of the 

French Monetary and Financial Code; and 

(ii) transferable securities (valeurs mobilières) within the meaning of Article L.211-2 of the French 


(c) In accordance with the provisions of Article L.211-4 of the French Monetary and Financial 

Code the Notes are issued in dematerialised form (book entry form). No physical documents 

of title will be issued in respect of the Notes. 

(d) The Notes are French law obligations as referred to in Article R.214-99 of the French 

Monetary and Financial Code and the Issuer Regulations and any other laws and regulations 

governing fonds communs de créances. 

(e) The Notes are in dematerialised bearer form. 

Title to Notes 

(f) Title to the Notes will be established by book entry for the purposes thereof, in accordance 

with Article L.211-4 of the French Monetary and Financial Code; no physical document of title 

will be issued in respect of the Notes. Interests in Notes will be transferable only in accordance 

with the rules and procedures for the time being of Euroclear, Euroclear France or of 

Clearstream, Luxembourg, as appropriate. Each person who is for the time being shown in the 

records of Euroclear, Euroclear France or of Clearstream, Luxembourg as the holder of a 

particular principal amount of the Notes (each, an ‘‘Accountholder)’’ shall be treated at all 

times by the Issuer, any Noteholder Representative and the Paying Agents as the absolute 

owner of such principal amount of the Notes for the purposes of making payments thereon and 

all other purposes, and none of the Issuer, any Noteholder Representative and the Paying 

Agents shall be liable for so treating such holder. 

Issuer Regulations binding 

(g) By subscribing or purchasing any Note, a Noteholder shall automatically and without any 

formalities (de plein droit et sans qu’il soit besoin d’autre formalité) be bound by the provisions 

of the Issuer Regulations, as they may be amended from time to time. 

3. STATUS AND PRIORITY 

Status and Relationship between the Notes 

(a) The Notes constitute direct, unsecured and, upon issue, unconditional obligations of the Issuer 

subject to the terms of the Issuer Regulations and these Conditions. 

(b) The Notes are obligations solely of the Issuer and are not obligations of, or guaranteed by, any 

of the other parties to the Transaction Documents. 

(c) The Notes of each Class rank pari passu without preference or priority amongst themselves. 

The Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class E 

Notes rank as among themselves in accordance with the Priority of Payments set out in this 

Condition 3 (Status and Priority). Certain other obligations of the Issuer rank in priority to the 

Notes in accordance with the applicable Priority of Payments. 

(d) The Units are in all circumstances subordinated to the Notes of all Classes. No payment of 

interest or principal in respect of the Units will be made until the Notes have been redeemed 

in full. 

(e) The Management Company shall have regard to the interests of the Noteholders as a whole 

in relation to the exercise or performance of each of its powers, authorities, duties, discretions 

and obligations under the Issuer Regulations and the other Transaction Documents. If, in 

relation to the exercise or performance of any of those powers, authorities, duties, discretions 

and obligations, in the Management Company’s opinion there is or may be a conflict: 

(i) between the interests of (A) the Class A Noteholders and (B) the other Noteholders, the 

Management Company shall, to the extent permitted by applicable law, have regard only to the 

interests of the Class A Noteholders; and 

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(ii) if there are no Class A Notes outstanding, between the interests of (A) the Class B 

Noteholders and (B) the other Noteholders, the Management Company shall, to the extent 

permitted by applicable law, have regard only to the interests of the Class B Noteholders, 

(iii) if there are no Class A Notes or Class B Notes outstanding, between the interests of (A) the 

Class C Noteholders and (B) the Class D Noteholders, the Management Company shall, to the 

extent permitted by applicable law, have regard only to the interests of the Class C 

Noteholders, 

(iv) if there are no Class A Notes, Class B Notes or Class C Notes outstanding, between the 

interests of (A) the Class D Noteholders and (B) the Class E Noteholders, the Management 

Company shall, to the extent permitted by applicable law, have regard only to the interests of 

the Class E Noteholders, 

provided that in relation to any amendment or waiver of any provision of the Issuer Regulations 

(including these Conditions) the Management Company shall have regard to the interests of the 

Noteholders as a whole irrespective of any conflict between the interests of the different Classes of 

Noteholders. 

(f) The Management Company or any Noteholder Representative in considering whether any 

event or any action taken or to be taken is materially prejudicial to the interests of any Class 

of Noteholders (the ‘‘No Material Prejudice Test’’) shall be entitled to take into account 

whether or not the Ratings Test has been satisfied; provided that the Management Company 

and each Noteholder Representative shall continue to be responsible for taking into account 

all other matters which would be relevant to the No Material Prejudice Test. 

(g) The Management Company or the relevant Noteholder Representative may, in its absolute 

discretion, at any time and without prejudice to Conditions 3(d) (Status and Priority – Status 

and Relationship between the Notes), or 11 (The Masse and the Noteholder Representative), and 

having regard to the particular circumstances then applicable, convene a Meeting or Meetings 

of the Noteholders or of a specific Class or Classes of Noteholders. 

Priority of Payments Prior to Enforcement 

(h) Prior to the delivery of a Note Enforcement Noticein accordance with Condition 9 (Note 

Events of Default), the Management Company shall on each Interest Payment Date instruct 

the Cash Manager to make payments from amounts standing to the credit of the Issuer 

Transaction Account other than any amounts credited to the ‘‘swap collateral ledger’’ of the 

Issuer Transaction Account following the occurrence of a Hedging Downgrade Event in 

respect of that Hedging Provider (which are to be applied in returning collateral to, or in 

satisfaction of amounts owing by, the relevant Hedging Provider in accordance with the 

relevant Hedging Agreement and the relevant Hedging Credit Support Document), to be 

applied in paying or providing for the payment of the following amounts (in each case, 

together with any interest and any VAT thereon, as provided for in the relevant Transaction 

Documents) in the following order of priority (the ‘‘Issuer Pre-Enforcement Priority of 

Payments’’) (in each case only if and to the extent that payments or provisions of a higher 

order of priority have been made in full), in accordance with and as more fully set out in the 

Issuer Regulations: 

(i) first, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any Fees and Expenses payable to the Management Company, the Custodian, any 

Noteholder Representative and their respective appointees, respectively, and/or in connection 

with any Meetings of the Noteholders, and to the auditors of the Issuer, in each case under the 

provisions of the Issuer Regulations or the other Transaction Documents as applicable; 

(ii) second, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of: 

(A) any amounts payable by the Issuer in respect of the Issuer’s operating expenses incurred 

in the course of the Issuer’s business (other than as provided elsewhere in this priority of 

payments) that have become due and payable, including: 

(1) any amounts payable by the Issuer to third parties in respect of the establishment, 

maintenance and good standing of the Issuer or otherwise payable for the on going 

existence or maintenance of its business and which are not otherwise specified or 

provided for in items (i) to (xvii) (inclusive); 

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(iii) 

(iv) 

(v) 

(B) 

(C) 

(2) any amounts payable by the Issuer in respect of any Fees and Expenses of the 

Paying Agents incurred under the provisions of the Paying Agency Agreement; 

(3) any amounts payable by the Issuer in respect of any Fees and Expenses of the 

Issuer Account Bank and the Cash Manager, respectively, under the Issuer Account 

Bank and Cash Management Agreement; and 

(4) any amounts payable by the Issuer in respect of any Fees and Expenses of the FCC 

Servicers in accordance with the Receivables Transfer and Servicing Agreement; 

any amounts payable by the Issuer to the Rating Agencies in respect of any Fees and 

Expenses and the Irish Stock Exchange in respect of any fees that, in each case, they may 

reasonably incur on an ongoing basis in connection with the rating or listing of the Notes, 

as the case may be; and 

any amounts payable to the Liquidity Facility Provider under the Liquidity Facility 

Agreement (including, for the avoidance of doubt, following any Liquidity Facility 

Standby Drawing) other than the Liquidity Subordinated Amounts; 

third, in or towards satisfaction of any amounts payable to the Hedging Providers under the 

Hedging Agreements including Hedging Termination Payments in respect of the Hedging 

Agreement but excluding any Hedging Subordinated Amounts; 

fourth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any interest payable (including any deferred interest payable, such interest 

having been deferred upon allocation of a Principal Loss) in respect of the Class A Notes; 

fifth, in or towards satisfaction, pro rata and pari passu according to the respective amounts due 

in respect of any interest payable (including any deferred interest payable) in respect of the 

Class B Notes; 

(vi) sixth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any interest payable (including any deferred interest payable) in respect of 

the Class C Notes; 

(vii) seventh, in or towards satisfaction, pro rata and pari passu according to the respective amounts 


the Class D Notes; 

(viii) eighth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 


the Class E Notes; 

(ix) 

(x) 

ninth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class A Notes; 

tenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class B Notes; 

(xi) eleventh, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class C Notes; 

(xii) twelfth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class D Notes; 

(xiii) thirteenth, in or towards satisfaction, pro rata and pari passu according to the respective 

amounts due in respect of any principal payable in respect of the Class E Notes; 

(xiv) fourteenth, in or towards satisfaction of any amounts payable to the Liquidity Facility Provider 

under the Liquidity Facility Agreement in respect of Liquidity Subordinated Amounts; 

(xv) fifteenth, in or towards satisfaction of any amounts payable in respect of amounts due to the 

Hedging Providers under the Hedging Agreements in respect of Hedging Subordinated 

Amounts; 

(xvi) sixteenth, in or towards satisfaction of any amounts due to the Borrowers under the 

Commercial Mortgage Loan Agreements; and 

(xvii)seventeenth, on the Issuer Liquidation Date only, in or towards repayment of the Units, and in 

or towards payment of the liquidation surplus (if any), in each case to the Unitholders. 

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Priority of Payments Following Enforcement 

(i) Following the delivery of a Note Enforcement Notice in accordance with Condition 9 (Note 

Events of Default), all monies received by the Issuer following the delivery of a Note 

Enforcement Notice, other than (i) amounts standing to the credit of the Liquidity Standby 

Facility Account (which are to be paid directly and only to the Liquidity Facility Provider) 

and (ii) any amounts standing to the credit of the ‘‘swap collateral ledger’’ of the Issuer 

Transaction Account representing amounts attributable to assets transferred as collateral by 

a Hedging Provider following the occurrence of a Hedging Downgrade Event in respect of 

that Hedging Provider (which are to be applied only in returning collateral to, or in 

satisfaction of amounts owing by, the relevant Hedging Provider in accordance with the 

relevant Hedging Agreement and the relevant Hedging Credit Support Document) will be 

applied in paying or providing for the payment of the following amounts (in each case, 

together with any interest and any VAT thereon, as provided for in the relevant Transaction 

Documents) in the following order of priority (the ‘‘Issuer Post-Enforcement Priority of 

Payments’’) (and in each case only if and to the extent that payments of a higher order of 

priority have been made in full), in accordance with and as more fully set out in the Issuer 

Regulations: 

(i) first, in or towards satisfaction, pari passu and pro rata according to the respective amounts 

thereof, of any amounts payable by the Issuer in respect of any Fees and Expenses of the FCC 

Servicers in accordance with the Receivables Transfer and Servicing Agreement; 

(ii) second, in or towards satisfaction, pari passu and pro rata according to the respective amounts 

thereof, of the amounts due in respect of any Fees and Expenses payable to the Management 

Company, the Custodian, any Noteholder Representative and their respective appointees (if 

any), and/or in connection with any Meeting of the Noteholders and the auditors of the Issuer 

appointed under the provisions of the Issuer Regulations, and any other amounts payable to 

any of them under any of the other Transaction Documents, together with interest thereon as 

provided for therein; 

(iii) third, in or towards satisfaction, pro rata and pari passu, according to the respective amounts 

due in respect of: 

(A) any amounts payable by the Issuer in respect of any Fees and Expenses of the Paying 

Agents incurred under the provisions of the Paying Agency Agreement; and 

(B) any amounts payable by the Issuer in respect of any Fees and Expenses of the Issuer 

Account Bank and the Cash Manager under the Issuer Account Bank and Cash 

Management Agreement; and 

(C) any amounts payable by the Issuer in respect of any Fees and Expenses of any third 

parties; and 

(D) any amounts payable to the Liquidity Facility Provider under the Liquidity Facility 

Agreement other than the Liquidity Subordinated Amounts; 

(iv) fourth, in or towards satisfaction of any amounts payable to the Hedging Providers under the 

Hedging Agreements including Hedging Termination Payments but excluding any Hedging 

Subordinated Amounts; 

(v) fifth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any interest payable (including any deferred interest payable, such interest 

having been deferred upon allocation of a Principal Loss) in respect of the Class A Notes; 

(vi) sixth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class A Notes; 

(vii) seventh, in or towards satisfaction, pro rata and pari passu according to the respective 

amounts due in respect of any interest payable (including any deferred interest payable) in 

respect of the Class B Notes; 

(viii) eighth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class B Notes; 

(ix) ninth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 


the Class C Notes; 

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(x) 

(xi) 

(xii) 

(xiii) 

(xiv) 

(xv) 

tenth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class C Notes; 

eleventh, in or towards satisfaction, pro rata and pari passu according to the respective 


respect of the Class D Notes; 

twelfth, in or towards satisfaction, pro rata and pari passu according to the respective amounts 

due in respect of any principal payable in respect of the Class D Notes; 

thirteenth, in or towards satisfaction, pro rata and pari passu according to the respective 


respect of the Class E Notes; 

fourteenth, in or towards satisfaction, pro rata and pari passu according to the respective 

amounts due in respect of any principal payable in respect of the Class E Notes; 

fifteenth, in or towards satisfaction of any amounts payable to the Liquidity Facility Provider 

under the Liquidity Facility Agreement in respect of Liquidity Subordinated Amounts; 

(xvi) sixteenth, in or towards satisfaction of any amounts payable in respect of amounts due to the 

Hedging Providers under the Hedging Agreements in respect of Hedging Subordinated 

Amounts; 

(xvii) seventeenth, in or towards satisfaction of any amounts due to the Borrowers under the 

Commercial Mortgage Loan Agreements; and 

(xviii) eighteenth, on the Issuer Liquidation Date only, in or towards repayment of the Units, and in 

or towards payment of the liquidation surplus (if any), in each case to the Unitholders. 

4. INTEREST 

Period of Accrual 

(a) Each Note bears interest on its Principal Amount Outstanding from (and including) the 

Closing Date. Each Note (or in the case of the redemption of part only of a Note, that part only 

of that Note) shall cease to bear interest from and including the date on which it is redeemed 

in full. 

Interest Payment Dates and Interest Periods 

(b) Interest on each Note is, subject to Condition 4(f) (Interest Deferral and Accrual), payable 

quarterly in arrear on each Interest Payment Date in respect of the Interest Period ending on 

(but excluding) that Interest Payment Date. 

Rate of Interest 

(c) (i) The rate of interest payable from time to time in respect of each Class of Notes (the 

‘‘Rate of Interest’’) will be determined by the Management Company in accordance with 

this Condition 4 (Interest). 

(ii) The Rate of Interest in respect of each Class of Notes for each Interest Period shall be the 

aggregate of: 

the Relevant Margin; and 

EURIBOR. 

(iii) For the purposes of these Conditions, the ‘‘Relevant Margin’’ shall be: 

for the Class A Notes, 0.23 per cent. per annum; 

for the Class B Notes, 0.29 per cent. per annum; 

for the Class C Notes, 0.33 per cent. per annum; 

for the Class D Notes, 0.52 per cent. per annum; and 

for the Class E Notes, 0.75 per cent. per annum. 

225

Determination of Rates of Interest and Calculation of Interest Amounts 

(d) The Management Company shall, on each Interest Determination Date, determine and as 

soon as practicable after 11.00 a.m. (Paris time) notify to the Cash Manager, each Noteholder 

Representative, the Principal Paying Agent and the Hedging Providers and the FCC Servicers 

in respect of each Class of Notes: 

(i) the Rate of Interest applicable to the relevant Interest Period; and 

(ii) the aggregate amount of interest due on each Note of each Class for the relevant Interest 

Period which shall be an amount equal to the product of: 

(A) an amount equal to the product of (aa) the Rate of Interest for that Class of Note and 

(bb) the Principal Amount Outstanding of such Note on the first day of the relevant 

Interest Period (after giving effect to any Note Principal Payments made by the Issuer on 

that date); and 

(B) an amount equal to the quotient of (aa) the actual number of days in the relevant Interest 

Period and (bb) 360 days (the ‘‘Interest Amount’’). The resulting figure shall be rounded 

down to the nearest cent. 

Publication of Rate of Interest, Interest Amounts 

(e) As soon as practicable after being informed of the determination pursuant to Condition 4(d) 

(Interest – Determination of Rates of Interest and Calculation of Interest Amounts), the 

Management Company shall cause the Rate of Interest and the Interest Amount applicable to 

each Class of Notes for the relevant Interest Period and the Interest Payment Date on which 

that Interest Period will end to be notified to the Principal Paying Agent and the Irish Stock 

Exchange (for so long as the Notes are listed on the Irish Stock Exchange) and will cause the 

same to be published in accordance with Condition 13 (Notices and Information). The Interest 

Amounts and Interest Payment Date so notified may subsequently be amended (or appropriate 

alternative arrangements made by way of adjustment) without notice if the Interest Period is 

extended or shortened. Interest Deferral and Accrual 

Interest Deferral and Accrual 

(f) Payments of interest on each Class of Notes, other than the Most Senior Class of Notes then 

outstanding, will be subject to deferral to the extent there are insufficient funds standing to the 

credit of the Issuer Transaction Account (after taking into account any amount available for 

drawing under the Liquidity Facility Agreement) on any Interest Payment Date to pay in full 

the amount of interest that would otherwise be payable on that Class of Notes in accordance 

with the Issuer Pre-Enforcement Priority of Payments, provided that this provision shall cease 

to apply upon the Class E Notes becoming the Most Senior Class of Notes outstanding. 

In addition, payments of interest on each Class of Notes to which a Principal Loss has been 

allocated in accordance with Condition 5(f) (Note Principal Payments, Principal Amount 

Outstanding, Adjusted Principal Amount Outstanding and Pool Factor) will, insofar as such 

interest relates to any amount by which the Principal Amount Outstanding of that Class of 

Notes exceeds the Adjusted Principal Amount Outstanding of that Class of Notes, be subject 

to deferral to the extent that there are insufficient amounts standing to the credit of the Issuer 

Transaction Account on any Interest Payment Date to pay in full in accordance with the Issuer 

Pre-Enforcement Priority of Payments the amount of interest which would otherwise be 

payable on that Class of Notes. Amounts may not be drawn under the Liquidity Facility 

Agreement to cover any such shortfall. 

The amount by which the aggregate amount of interest paid on any Class of Notes on any 

Interest Payment Date in accordance with this Condition 4 (Interest) falls short of the 

aggregate amount of interest which otherwise would be payable on the relevant Notes on that 

date, shall be aggregated with the amount of, and treated for the purposes of, this Condition 4 

(Interest) as if it were interest due on each such Class of Notes and, subject as provided in this 

condition, shall be payable on the next succeeding Interest Payment Date. The amount of any 

such shortfall that has remained outstanding for a period of one year shall, without prejudice 

to the provisions of this Condition 4(f), be deemed to form part of the Principal Amount 

Outstanding of the relevant Class of Notes for the purposes of the calculation of interest in 

accordance with Condition 4(d). 

226

If, on the Final Maturity Date (or on any earlier redemption of the relevant Class of Notes in 

full), there remains any such shortfall, the amount of such shortfall will become due and 

payable on the Final Maturity Date (or, in the case of any earlier redemption of the relevant 

Class of Notes in full, on the date of such earlier redemption). 

5. REDEMPTION, PURCHASE AND CANCELLATION 

Final Redemption 

(a) Unless previously redeemed in full and cancelled, the Notes will be redeemed at their Principal 

Amount Outstanding on the Final Maturity Date together with interest and other amounts (if 

any) accrued to the Final Maturity Date. The Class A Notes will be redeemed in full in priority 

to the Class B Notes, the Class B Notes will be redeemed in full in priority to the Class C Notes 

and the Class C Notes will be redeemed in full in priority to the Class D Notes and the Class 

D Notes will be redeemed in full in priority to the Class E Notes. 

Mandatory Redemption following prepayment or repayment of a Commercial Mortgage Loan 

(b) If a Borrower prepays or repays its Commercial Mortgage Loan, for whatever reason, the 

Management Company shall, upon giving not more than 60 days nor less than 30 days’ (in the 

case of a voluntary prepayment) or three Business Days’ (in the case of a mandatory 

prepayment) notice of redemption to the Principal Paying Agent, each Noteholder 

Representative and the Noteholders in accordance with Condition 13 (Notices and Information), 

redeem all Classes of Notes where both Commercial Mortgage Loans have been prepaid or 

repaid in full (or, if only one Commercial Mortgage Loan has been repaid in full or one or 

more Commercial Mortgage Loans have been prepaid or repaid only in part, each Class of 

Note in accordance with the applicable Issuer Priority of Payments to the extent of the amount 

repaid or prepaid on the Interest Payment Date) at the respective Principal Amount 

Outstanding of the relevant classes, together with interest and other amounts accrued to that 

Interest Payment Date. 

Mandatory Redemption on the Issuer Liquidation Date 

(c) If liquidation proceedings in respect of the Issuer are initiated in accordance with the 

provisions of the Issuer Regulations the Management Company shall redeem all Classes of 

Notes at their respective Principal Amounts Outstanding as of the Issuer Liquidation Date, 

together with interest and other amounts accrued to the Issuer Liquidation Date, subject to 

and in accordance with the relevant Issuer Priority of Payments. 

Optional Redemption for Tax Reasons 

(d) If the Issuer at any time satisfies each Noteholder Representative immediately prior to the 

giving of the notice referred to below that a Tax Event has occurred, then the Issuer may 

redeem all, but not some only, of the Notes on the Interest Payment Date specified in the 

notice referred to in sub-paragraph (A) below at their Principal Amount Outstanding together 

with interest and other amounts (if any) accrued to that Interest Payment Date, provided that: 

(A) the Management Company has given not more than 60 nor less than 30 days’ notice of 

redemption to each Noteholder Representative and the Noteholders in accordance with 

Condition 13 (Notices and Information); and 

(B) the Management Company has delivered to each Noteholder Representative prior to the 

giving of the notice referred to in sub-paragraph (A) a certificate to the effect that it will have 

available, not subject to the interest of any other person, the funds required to discharge the 

amount payable to Noteholders on redemption of the Notes together with any amounts 

required under the Issuer Pre-Enforcement Priority of Payments to be paid in priority to, or 

pari passu with, the Notes. 

The occurrence of any of the following events shall be a ‘‘Tax Event’’: 

(i) by reason of a change in the Tax law (or the application or official interpretation thereof), 

which change becomes effective on or after the Closing Date, the Issuer would be 

required to deduct or withhold from any payment of principal or interest on the Notes 

227

(although the Issuer will not have any obligation to pay additional amounts in respect of 

such withholding or deduction) any amount for or on account of any Taxes imposed, 

levied, collected, withheld or assessed by any French Tax Authority (other than by reason 

of the relevant Noteholder having some connection with France in addition to the 

holding of the Notes); 

(ii) by reason of a change in the Tax law (or the application or official interpretation thereof), 

which change becomes effective on or after the Closing Date, the Issuer or any Hedging 

Provider (or any other Hedging Provider with which the Issuer may enter into a Hedging 

Agreement) would be required to deduct or withhold from any payments in respect of a 

Hedging Agreement or such other Hedging Agreement (whether or not the Issuer or the 

relevant Hedging Provider has an obligation to pay additional amounts in respect of such 

withholding or deduction) any amount for or on account of any Taxes imposed, levied, 

collected, withheld or assessed by any Tax Authority; 

(iii) by reason of a change of tax law (or the application or official interpretation thereof), 

which change becomes effective on or after the Closing Date, the amounts payable to the 

Issuer in respect of principal, interest or other sums payable under the Commercial 

Mortgage Loan Agreements cease to be receivable in full on the dates on which they are 

due to be paid unless adequately compensated for by gross-up provisions in such 

Commercial Mortgage Loan Agreement; or 

(iv) the Issuer, by reason of a change in or expiry of Tax law (or in the application or official 

interpretation of any Tax law), would be subject to any Tax. 

Optional Redemption 

(e) (i) on giving not more than 60 nor less than 30 days prior notice to the relevant Noteholder 

Representative and to the relevant Class of Noteholders in accordance with Condition 13 

(Notices and Information) and provided that (A) on the Interest Payment Date on which 

such notice expires, no Note Enforcement Notice has been served and (B) the 

Management Company has, prior to giving such notice, certified to the relevant 

Noteholder Representative and provided evidence acceptable to the relevant Noteholder 

Representative to the effect that it will have the necessary funds to discharge any 

amounts required under the Issuer Regulations to be paid on such Interest Payment 

Date, the Issuer may redeem all of the Most Senior Class of Notes (and all of the Notes 

of any other Class which would otherwise be the Most Senior Class of Notes) on any 

Interest Payment Date. The aggregate payment to be made in respect of the Notes to be 

redeemed is hereafter referred to as the ‘‘Redemption Amount’’. 

(ii) the Issuer shall, on exercise of its option to redeem pursuant to Condition 5(e)(i), redeem 

the Notes of that Class pro rata. 

(iii) the Redemption Amount in respect of any Notes redeemed pursuant to Condition 5(e)(i) 

will be an amount equal to the Principal Amount Outstanding of the relevant Notes 

together with accrued but unpaid interest on the Principal Amount Outstanding of the 

relevant Notes up to and including the date of redemption. 

Note Principal Payments, Principal Amount Outstanding, Adjusted Principal Amount Outstanding and 

Pool Factor 

(f) If as a result of the application of the proceeds of any repayment or prepayment of a 

Commercial Mortgage Loan pursuant to Condition 5(b) (Redemption, Purchase and 

Cancellation – Mandatory Redemption) in accordance with the Issuer Pre-Enforcement 

Priority of Payments any amount is to be applied to redeem the Notes, each Note of each Class 

will be redeemed in an amount (the ‘‘Note Principal Payment’’) equal to the lesser of (i) the 

funds remaining credited to the Issuer Transaction Account and available for payment of 

principal in respect of that Class and (ii) the aggregate Principal Amount Outstanding in 

respect of that Class, divided by the number of Notes of that Class and rounded down to the 

nearest euro. 

If any Principal Loss occurs, on the next Reporting Date such Principal Loss will be allocated to a 

particular Class of Notes (and pro rata to the Notes within that Class), in each case rounded down 

to the nearest euro, as follows: 

228

(i) first, to the Class E Notes, until the Adjusted Principal Amount Outstanding of such Notes is 

zero; 

(ii) second, to the Class D Notes, until the Adjusted Principal Amount Outstanding of such Notes 

is zero; 

(iii) third, to the Class C Notes, until the Adjusted Principal Amount Outstanding of such Notes 

is zero; 

(iv) fourth, to the Class B Notes, until the Adjusted Principal Amount Outstanding of such Notes 

is zero; 

(v) fifth, to the Class A Notes, until the Adjusted Principal Amount Outstanding of such Notes is 

zero. 

With respect to each Class of Notes on (or as soon as practicable after) each Reporting Date 

immediately preceding an Interest Payment Date on which such a redemption will take place or such 

a Principal Loss will be allocated, the Management Company shall: 

(i) determine the amount of the Note Principal Payment (if any) due on the Interest Payment 

Date next following such Reporting Date in respect of each Note of that Class; 

(ii) determine the Principal Amount Outstanding of each Note of that Class after deducting the 

amount redeemable; 

(iii) determine the Adjusted Principal Amount Outstanding of each Note of the relevant Class to 

which a Principal Loss has been allocated; and 

(iv) determine the fraction expressed as a decimal to the sixth point (the ‘‘Pool Factor’’), of which 

the numerator is the Adjusted Principal Amount Outstanding of a Note of that Class referred 

to in sub-paragraph (iii) and the denominator is u100,000. 

The Management Company will cause each determination of a Note Principal Payment, Principal 

Amount Outstanding, Adjusted Principal Amount Outstanding and Pool Factor to be notified not 

less than three Business Days prior to the relevant Interest Payment Date to the Issuer, each 

Noteholder Representative, the Paying Agents and (for so long as the Notes are listed on the Irish 

Stock Exchange) the Irish Stock Exchange, and will cause notice of each such determination to be 

given in accordance with Condition 13 (Notices and Information) not less than three Business Days 

prior to the relevant Interest Payment Date. 

Notice of Redemption Irrevocable 

(g) A notice of redemption under Condition 5(d) (Redemption, Purchase and Cancellation – 

Optional Redemption for Tax Reasons), or Condition 5(f) (Redemption, Purchase and 

Cancellation – Note Principal Payments, Principal Amount Outstanding and Pool Factor) shall 

be irrevocable and the Issuer shall be bound to redeem the relevant Notes in accordance with 

these Conditions on the Interest Payment Date specified in the notice. 

Cancellation 

(h) All Notes redeemed in full under this Condition will be cancelled upon redemption and may 

not be resold or re-issued. 

No Purchase by Issuer 

(i) The Issuer will not be permitted to purchase any of the Notes. 

6. PAYMENTS 

Payments of Principal in respect of the Notes 

(a) Any payment of interest or principal in respect of a Note shall be paid outside the United 

States and its possessions in euro on the corresponding Interest Payment Date to the person 

in whose name such Note is registered in the registers of Euroclear France, Clearstream, 

Luxembourg, or Euroclear (together with Clearstream, Luxembourg and Euroclear France 

the ‘‘Relevant Clearing Systems’’). Any payment of principal and/or interest shall be made in 

accordance with the rules of the Relevant Clearing Systems. 

229

Currency of Payment 

(b) Payments in respect of the Notes will be made in euro by cheque drawn on a bank in France 

or, at the option of the Noteholder, by transfer to a euro account maintained by the payee. 

Payments subject to the Issuer Regulations and all Fiscal Laws 

(c) Payments of principal, interest and other amounts (if any) in respect of the Notes are subject 

in all cases to the Issuer Priority of Payments and the Issuer Regulations and to any fiscal or 

other laws and regulations applicable thereto. 

Paying Agents 

(d) The initial Principal Paying Agent and the Irish Paying Agent and their respective initial 

specified offices are listed at the end of these Conditions. The Management Company reserves 

the right, at any time to vary or terminate the appointment of any Paying Agent and to appoint 

additional or other paying agents, provided that the additional or other paying agents shall not 

specify an office within the United States or its possessions. For so long as the Notes are listed 

on the Irish Stock Exchange the Issuer will at all times maintain a paying agent with a specified 

office in Ireland. The relevant Paying Agent shall at its own expense on behalf of the Issuer 

not less than 14 days prior to the date on which any change in its specified office or any change 

in or addition to the Paying Agents is to take effect give notice of such change to the 

Noteholders in accordance with Condition 13 (Notices and Information). For so long as any 

Note is outstanding, the Issuer agrees that there will at all times be a Paying Agent in a 

member state of the European Union that will not be obliged to withhold or deduct tax 

pursuant to European Council Directive 2003/48/EC or any law implementing or complying 

with, or introduced in order to conform to such Directive. 

7. PRESCRIPTION 

General 

(a) 

Principal 

(b) 

Interest 

(c) 

After the date on which a Note becomes void in its entirety, no claim may be made in respect 

of it. 

Claims for payment of principal in respect of Notes shall become void unless the relevant claim 

is made within ten years of the appropriate Relevant Date. 

Claims for interest in respect of Notes shall become void unless the relevant claim is made 

within five years of the appropriate Relevant Date. 

8. TAXATION 

All payments in respect of the Notes will be made without withholding or deduction for or on 

account of any present or future taxes, duties or charges of whatsoever nature unless the Issuer or 

the relevant Paying Agent (as applicable) is required by the law of the jurisdiction of the tax 

residency of the Issuer to make any payment in respect of the Notes subject to any withholding or 

deduction for or on account of any such taxes, duties or charges. In that event, the Issuer or the 

relevant Paying Agent (as the case may be) shall make such payment after such withholding or 

deduction has been made and shall account to the relevant authorities for the amount so withheld 

or deducted. Neither the Issuer nor the Paying Agents will be obliged to make any additional 

payments to the Noteholders in respect of such withholding or deduction. 

9. NOTE EVENTS OF DEFAULT 

Determination of a Note Event of Default 

(a) The relevant Noteholder Representative shall, if it has been directed to do so by a resolution 

230

of a Meeting of the holders of the Most Senior Class of Notes then outstanding give a notice 

(a ‘‘Note Enforcement Notice’’) to the Management Company declaring the Notes to be due 

and repayable at any time after the occurrence of any of the events specified in Condition 9(b) 

(Note Events of Default – Events). 

Events 

(b) 

(i) 

(ii) 

The occurrence of any of the following events shall be a ‘‘Note Event of Default’’: 

non-payment of any amount on any Class of Notes when due, subject to Condition 4(f) 

(Interest Deferral and Accrual), unless such default is caused by an administrative or technical 

error and payment is made within three Business Days of its due date or (in the case of 

payments of interest, cost and expenses only) payment is made within five Business Days of its 

due date; or 

the Issuer failing duly to perform or observe any other obligation binding upon it under the 

Notes, the Issuer Regulations or any of the other Transaction Documents and such failure 

(A) being incapable of remedy (as determined by the a Meeting of the Most Senior Class of 

Notes) or (B) being a failure which is capable of remedy (as determined by a Meeting of the 

Most Senior Class of Notes), but which remains unremedied for a period of 21 days following 

the giving by the relevant Noteholder Representative to the Management Company 

(representing the Issuer) of notice requiring the same to be remedied. 

Acceleration 

(c) Upon delivery of a Note Enforcement Notice, the Notes shall immediately become due and 

repayable at their Principal Amount Outstanding together with accrued interest up to (but 

excluding) the earlier of (i) the date on which all principal, interest and other amounts (if any) 

are paid in full and (ii) the seventh day after notice has been given to the Noteholders in 

accordance with Condition 13 (Notices and Information) that the full amount has been 

received by the Principal Paying Agent or the Noteholder Representatives. 

10. NOTEHOLDER ACTION 

General Prohibition 

(a) Subject to Condition 10(b) (Noteholder Action – Exceptions), no Noteholder shall be entitled 

to take any proceedings or other action directly against the Issuer. 

Exceptions 

(b) If the relevant Noteholder Representative having become bound to give a Note Enforcement 

Notice to the Management Company fails to do so within a reasonable time and that failure 

is continuing, a Meeting of the holders of the Most Senior Class of Notes then outstanding may 

decide to sign and give a Note Enforcement Notice to the Management Company (representing 

the Issuer) in accordance with Condition 9 (Note Events of Default). 

Limit on Noteholder Action 

(c) Pursuant to Article L.214-48-I of the French Monetary and Financial Code, only the 

Management Company may enforce the rights of the Issuer against third parties, including the 

Borrowers. Accordingly, the Noteholders shall have no recourse whatsoever against the 

Borrowers. 

(d) Except as expressly permitted to do in this Condition 10 (Noteholder Action) or otherwise 

under the Issuer Regulations, the Noteholders shall not be entitled to take any steps: 

(i) to initiate or join any person in initiating any liquidation proceedings in relation to the Issuer; 

or 

(ii) to take any steps or proceedings that would result in the Issuer Priority of Payments in the 

Issuer Regulations not being observed. 

Limited Recourse 

(e) Without limitation to the generality of the foregoing, the Noteholders shall be deemed to have 

231

(f) 

(i) 

(ii) 

agreed that until all sums required by the terms of the relevant Issuer Priority of Payments to 

be paid in priority thereto have been paid or discharged in full and then if and only to the 

extent that the Issuer shall have funds available to pay such amounts and shall be permitted 

to pay such amounts in accordance with the terms of the relevant Issuer Priority of Payments 

together with all other amounts payable pari passu therewith, no amount expressed to be 

payable by the Issuer to the Noteholders in respect of the Notes in accordance with the terms 

and conditions of the Notes or under any other Issuer Transaction Document shall be capable 

of becoming due and payable. 

Each of the Noteholders shall be deemed to have agreed and acknowledged that 

notwithstanding any other provision of the Issuer Regulations and any other Issuer Transaction 

Document: 

it will only have recourse in respect of any amount, claim or obligation due or owing to it by 

the Issuer under the Issuer Regulations, the Notes and the other Issuer Transaction 

Documents (the ‘‘Claims’’) to the extent of available funds in accordance with the Issuer 

Priority of Payments applicable to that Class which shall be applied by the Management 

Company subject to and in accordance with the terms of that Issuer Priority of Payments and 

after all prior ranking claims in respect of those funds have been paid or discharged in full in 

accordance with that Issuer Priority of Payments; 

if, after application of available funds in accordance with the relevant Priority of Payments, any 

Claim remains outstanding, that Claim shall be extinguished. 

11. THE MASSE AND THE NOTEHOLDER REPRESENTATIVE 

The Masse 

(a) The Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the Class D 

Noteholders and the Class E Noteholders respectively, will be automatically grouped for the 

defence of their respective common interests in a masse (or a body) for the Noteholders of 

each Class (each, a ‘‘Masse’’). 

(b) If, and to the extent that, all Notes of a given Class are held by a single Noteholder, the rights, 

powers and authority of the relevant Masse will be vested in such Noteholder. 

(c) In accordance with the provisions of Article L.228-90 of the French Commercial Code, each 

Masse shall be governed by Articles L.228-46 et seq. of the French Commercial Code and by 

the French decree n°67-236 of 23 March 1967, as amended, but only to the extent such 

provisions are not limited in their application to bodies corporate and do not conflict with the 

provisions of the Issuer Regulations, Articles L.214-43 et seq. of the French Monetary and 

Financial Code and the other specific laws and regulations governing fonds communs de 

créances. Any notice of a Meeting, resolutions passed at any Meeting and any other decision 

that is required to be published pursuant to Articles L.228-46 et seq. of the French Commercial 

Code and by the French decree n°67-236 of 23 March 1967, as amended, shall be published in 

the manner provided under Condition 13 (Notice and Information). 

Status of each Masse 

(d) In accordance with the provisions of Article L.228-46 of the French Commercial Code, each 

Masse will be a separate legal entity (personnalité civile) and will be represented by one 

representative (a ‘‘Noteholder Representative’’). Each Masse, represented by the relevant 

Noteholder Representative, will be empowered to exercise all rights, take all actions and claim 

all benefits, which in each case are common to the holders of the Notes of the relevant Masse, 

to the exclusion of each Noteholder of that Class. 

Noteholder Representative 

(e) Any person or association may be appointed as a Noteholder Representative, other than: 

(i) the Management Company or the Custodian; 

(ii) any person holding 10 per cent. or more of the share capital of the Management Company 

and/or Custodian or in respect of which the Management Company and/or Custodian holds 

10 per cent. or more of the share capital; 

232

(iii) any person guaranteeing all or part of the obligations of the Issuer; 

(iv) the respective managers (gérants), general managers (directeurs généraux), members of the 

board of directors (conseil d’administration) or executive board (directoire) or supervisory 

board (conseil de surveillance), statutory auditors (commissaires aux comptes) or employees of 

any of the persons described in sub-paragraphs (i), (ii) or (ii) above, or any of their ascendants, 

descendants or spouses; 

(v) the Borrowers; or 

(vi) any person who is prohibited from engaging in the profession of banking or who is not entitled 

to act as a director, administrator or manager of a business. 

(f) The initial Noteholder Representative will be Association de Représentation des Masses de 

Titulaires de Valeurs Mobilières, of Centre Jacques Ferronnière, 32, rue du Champs de Tir, B.P. 

81236, 44312 Nantes Cedex 3, France, for all Classes of Notes. 

Appointment of each Noteholder Representative 

(g) In the event of the death, resignation, retirement or revocation of the appointment of any 

Noteholder Representative, a substitute Noteholder Representative will be appointed by a 

Meeting of the Noteholders of the relevant Class. 

(h) A Noteholder Representative shall be appointed in respect of each Masse by a Meeting of the 

relevant Noteholders. If, and to the extent that, all of the Notes of a given Class are held by 

a single Noteholder, the rights, powers and authority of the relevant Noteholder Representative 

will be vested in such Noteholder; in such case, following any transfer of any Note, to the 

extent that there is more than one Noteholder for any Class of Notes, the Management 

Company shall forthwith convene a Meeting of the Noteholders of the relevant Class for the 

purposes of appointing a Noteholder Representative in respect of such Class of Notes. 

(i) An annual fee shall be payable to any Noteholder Representative in an amount to be agreed 

upon the appointment of the relevant Noteholder Representative. 

(j) Each Noteholder Representative shall be appointed in accordance with Article L. 228-48 of 

the French Commercial Code. 

(k) Any interested party shall have the right to obtain, at the office of the Management Company, 

the name and address of any Noteholder Representative appointed by a Meeting of the 

Noteholders. 

Powers of each Noteholder Representative 

(l) Pursuant to the provisions of Article L.228-53 of the French Commercial Code, each 

Noteholder Representative shall, in the absence of any decision to the contrary of a Meeting 

of the relevant Noteholders, have the power to take any acts of management (actes de gestion) 

to protect the common interests of the relevant Noteholders. Pursuant to the provisions of 

Article L.228-54 of the French Commercial Code, legal proceedings initiated by or against the 

Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the Class D 

Noteholders or the Class E Noteholders may only be brought be brought by or against the 

relevant Noteholder Representative; any such legal proceedings that are not brought by or 

against the relevant Noteholder Representative in accordance with this Condition 11(l) shall 

not be legally valid. The Noteholders shall not be entitled to interfere in the management of 

the affairs of the Issuer. 

Meetings of Noteholders 

(m) Meetings of the Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the 

Class D Noteholders or the Class E Noteholders may be convened either by the Management 

Company or by the relevant Noteholder Representative, and may be held at any such place 

and time as may be specified in the notice of Meeting. In addition, pursuant to the provisions 

of Article L.228-58 of the French Commercial Code, one or more Class A Noteholders, 

Class B Noteholders, Class C Noteholders or Class D Noteholders holding at least onethirtieth 

of the outstanding Notes of the relevant Class may require, by written demand, the 

233

Management Company and the relevant Noteholder Representative to convene a Meeting of 

the relevant Masse. If no Meeting has been convened within two (2) months from delivery of 

such demand, the relevant Noteholders may designate one of their number to petition a court 

to appoint an agent to convene the Meeting. 

(n) 

(o) 

(p) 

Notice of the date, hour, place, agenda and quorum requirements of any Meeting will be 

notified in the manner provided in Condition 13 (Notices and Information) not less than fifteen 

(15) days prior to the date of the Meeting. 

Each Noteholder shall have the right to participate in any Meeting of the relevant Masse in 

person or by proxy; each Note carries the right to one vote. 

Any Meeting not convened in accordance with the foregoing provisions shall nonetheless be 

validly convened if all the Noteholders of the relevant Class are present or represented at the 

Meeting. 

Powers of Meetings 

(q) 

(i) 

(ii) 

(iii) 

Meetings of the Class A Noteholders, the Class B Noteholders, the Class C Noteholders, the 

Class D Noteholders or the Class E Noteholders may be convened to consider any matter 

affecting their interests, including the dismissal and replacement of the relevant Noteholder 

Representative, any proposal in relation to legal action involving the Issuer and any proposal 

aimed at amending the Conditions, including without limitation any modification which would 

have the effect, in respect of any Class of Notes, of (A) postponing or altering any day for the 

payment of interest, (B) reducing, cancelling or rescheduling the amount of principal or the 

amount or rate of interest payable or any fees, (C) altering the priority of payment of interest 

or principal or other amounts payable on the Notes under these Conditions, (D) altering the 

currency of payment or (E) altering the Final Maturity Date, 

provided that Meetings may not increase the obligations of the relevant Noteholders, nor 

establish unequal treatment between Noteholders of the same Class. 

Notwithstanding any matter approved at any Meeting, the Noteholders shall not have the 

power to require the Issuer, the Management Company, the Custodian or any other person to 

take any action or to make any amendments to the Conditions or the Transaction Documents. 

The Management Company alone shall have the power to act on behalf of the Issuer (together 

with the Custodian) and to consent to amendments to the Conditions, the Issuer Regulations 

and the other Transaction Documents, in each case in the best interest of the Noteholders and 

the Unitholders. The Management Company shall be entitled (but shall in no circumstances be 

bound), to consider any decision of the Noteholders at a Meeting as being in the best interest 

of the Noteholders and to act in accordance with their interests as expressed by them at the 

Meeting. 

No modification or waiver of any provision of the Issuer Regulations, of which these 

Conditions form a part and to which they are subject, shall become effective unless executed 

in writing and signed by the Management Company and the Custodian, and provided that: 

any such amendments or waiver shall not reduce the level of security enjoyed by the 

Noteholders and Unitholders, and in particular that prior confirmation has been received from 

the Rating Agencies that such modification or waiver will not result in the downgrading of the 

then current rating of the Notes; 

any such amendment or waiver shall not modify the financial characteristics of any Class of 

Notes unless the prior approval of the holders of the relevant Notes has been obtained 

pursuant to the applicable majority rules set out in Condition 11(r) below; and 

any amendments or waivers shall be notified to the Noteholders of all outstanding Notes. 

Noteholders shall be bound by all amendments effected in accordance with the foregoing provisions 

as of the third (3 rd ) Business Day after the date of notification referred to in sub-paragraph (iii). 

Quorum and majority rules 

(r) 

The quorum at any Meeting originally convened of the Class A Noteholders, the Class B 

234

(s) 

Noteholders, the Class C Noteholders, the Class D Noteholders or the Class E Noteholders 

shall be at least two Noteholders of the relevant Class present or represented holding at least 

one quarter of the Principal Amount Outstanding of the relevant Notes. There shall be no 

quorum requirement in respect of any Meeting reconvened after being adjourned for want of 

a quorum. 

Decisions at Meetings of the Class A Noteholders, the Class B Noteholders, the Class C 

Noteholders, the Class D Noteholders or the Class E Noteholders Meeting shall be taken at 

a two-third majority of votes cast by the Noteholders of the relevant Class present or 

represented. 

Notice of decisions, Information to Noteholders 

(t) Decisions of any Meeting of the Class A Noteholders, the Class B Noteholders, the Class C 

Noteholders, the Class D Noteholders or the Class E Noteholders must be published in 

accordance with the provisions of Condition 13 (Notices and Information) not more than 

90 days after the date of such Meeting. 

(u) Each Noteholder or Noteholder Representative shall have the right, during the 15 day period 

preceding any Meeting, to consult or make a copy of the text of the resolutions which will be 

proposed and of the reports which will be presented at the Meeting, which will be available for 

inspection at the head office of the Management Company and at the specified office of the 

Paying Agents and at any other place as specified in the notice for Meeting. 

Expenses 

(v) 

The Issuer will pay reasonable expenses incurred by any Masse, including reasonable expenses 

relating to the convening and holding of Meetings, and all reasonable administrative expenses 

agreed upon by a Meeting of Noteholders. No such expense may be charged against interest 

payable on the Notes. 

12. AGENTS 

Paying Agents Solely Agents of Issuer 

(a) In acting under the Paying Agency Agreement and in connection with the Notes, the Paying 

Agents act solely as agents of the Issuer and (to the extent provided in the Paying Agency 

Agreement) shall not be under any fiduciary duty (or its equivalent under the laws of any other 

jurisdiction) or other obligation towards, or have any relationship of agency for or with, any 

of the Noteholders. 

Determinations Binding 

(b) Any determination or calculation made by the Management Company in respect of amounts 

payable on the Notes shall be binding on the Noteholders absent manifest error, breach of 

contract or negligence. 

13. NOTICES AND INFORMATION 

Valid Notices 

(a) Any notice to Noteholders shall be validly given if it is published in a leading English language 

daily newspaper having general circulation in London and Paris (which is expected to be the 

Financial Times) or, if this is not practicable, in another leading English language newspaper 

as each Noteholder Representative shall approve having general circulation in London and 

Paris. Any such notice shall be deemed to have been given to Noteholders on the date of such 

publication or, if published more than once or on different dates, on the first date on which 

publication is made in the manner required in the newspaper referred to above. 

235

Notices by Delivery to Euroclear, Euroclear France and/or Clearstream, Luxembourg 

(b) For so long as any Notes are held through Euroclear, Euroclear France and/or Clearstream, 

Luxembourg, notices to Noteholders may be given by delivery of the relevant notice to 

Euroclear, Euroclear France and/or Clearstream, Luxembourg (as the case may be) for 

communication to the relevant accountholders rather than by publication as required by 

Condition 13(a) (Notices and Information – Valid Notices). Any notice delivered to Euroclear, 

Euroclear France and/or Clearstream, Luxembourg shall be deemed to have been given to 

Noteholders on the date on which such notice is delivered to Euroclear, Euroclear France 

and/or Clearstream, Luxembourg (as the case may be). So long as the Notes are listed on the 

Irish Stock Exchange and the rules of that exchange so require, notices will also be published 

in a leading English language daily newspaper having general circulation in Ireland (which is 

expected to be the Irish Times). 

Notices on Screen Page 

(c) Any notice specifying an Interest Payment Date, a Rate of Interest, an Interest Amount, a 

Note Principal Payment, a Principal Amount Outstanding or a Pool Factor or specifying that 

a Note Enforcement Notice has been given shall also appear on such page of the Reuters 

service or the Bloomberg serviceor such other medium for the electronic display of data 

approved by each Noteholder Representative and notified to the Noteholders in accordance 

with Condition 13(a) (Notices and Information – Valid Notices) or Condition 13(b) (Notices 

and Information – Notices by Delivery to Euroclear and/or Clearstream). 

Other Methods for Notice 

(c) Each Noteholder Representative may approve any other method of giving notice to 

Noteholders which is, in its opinion, reasonable having regard to market practice then 

prevailing and to the requirements of the stock exchange on which the Notes are then listed. 

Copy of Notices 

(d) A copy of each notice given in accordance with this Condition 13 (Notices and Information) 

shall be provided to the Rating Agencies and, for so long as the Notes are listed on the Irish 

Stock Exchange and its rules so require, the Irish Stock Exchange. 

Other Noteholder Information 

(e) The Management Company shall provide each Noteholder Representative, the Liquidity 

Facility Provider, the Hedging Provider, the FCC Servicers and each of the Paying Agents with 

copies of: 

(i) the audited annual financial statements of the Issuer as soon as they become publicly 

available (together with the related auditors’ report) and in any case within 120 Business 

Days of year end or such other period as required by law; and 

(ii) on or before the Business Day following each Interest Payment Date, the Investor 

Report. 

The audited annual financial statements of the Issuer (together with the related auditors’ report) and 

the Investor Report shall be available for inspection by the Noteholders on any business day at the 

specified office for the time being of each of the Paying Agents and, in the case of the Investor 

Report, on www.eurotitrisation.fr or such other website as may be notified in accordance with this 

Condition. 

Annual Information Meeting 

(f) The Management Company shall, at the request of any Noteholder Representative or if 

requested in writing by Noteholders holding not less than 10 per cent. in aggregate of the 

Principal Amount Outstanding of the outstanding Notes, on twenty-one (21) days notice to the 

Noteholders, given in accordance with Condition 13, convene an information meeting for the 

benefit of all Noteholders, although the Management Company shall not be obliged to 

convene more than one such meeting in any calendar year (each, an ‘‘Information Meeting’’). 

236

Persons entitled to attend and speak at an Information Meeting will include: 

(i) the Management Company; 

(ii) the Custodian; 

(iii) the Noteholder Representative; 

(iv) any holder of one or more Notes of any Class; 

(v) such other person (including the Borrowers, as applicable) as the relevant Noteholder 

Representative shall deem fit to attend and, if applicable, speak at such an Information 

Meeting; and 

(vi) any duly authorised nominee of any of the above. 

Although a Meeting of Noteholders convened in accordance with Condition 11(m) (The Masse and 

the Noteholder Representative – Meetings of Noteholders) may be held on the same date as any 

Information Meeting, such Information Meeting shall for all purposes be a separate meeting and the 

provisions of Condition 11 (The Masse and the Noteholder Representative) shall apply in full force 

to the relevant Meeting of Noteholders, with the Meeting of Noteholders taking place following the 

conclusion of the relevant Information Meeting. 

14. GOVERNING LAW 

The Issuer Regulations, the Notes and the relationship between (a) the parties to those documents, 

(b) the Noteholders and each relevant Noteholder Representative shall be governed by, and 

interpreted in accordance with, French law. 

PRINCIPAL PAYING AGENT 




United Kingdom 

IRISH PAYING AGENT 

HSBC Institutional Trust Services (Ireland) Limited 

HSBC House 

Harcourt Street 

Dublin 2 

Ireland 

237

TAXATION 

French Taxation 

Pursuant to Article 125 A-III of the French Tax Code, a 16% withholding tax is levied on interest 

payments made by a French debtor to a non French tax resident. However, Article 125 A-III paragraph 

2 of the French Tax Code provides for a withholding tax exemption with respect to interest 

payments deriving from notes (obligations) issued on or after 1 October 1984. In order to benefit from the 

exemption, the beneficiary of the interest must establish (i) that it is not a resident of France for tax 

purposes and (ii) that it is the beneficial owner (bénéficiaire effectif) of the interest payments. 

All payments in respect of the Notes will be made without withholding or deduction for or account of 

French tax provided that the aforementioned conditions are satisfied. 

A Noteholder will not be subject to French income taxes (other than withholding taxes) in respect of any 

payments under the Notes, provided that such holder is neither domiciled in the Republic of France nor 

deemed to be resident, established or carrying on an activity in the Republic of France for French tax 

purposes. 

European Union Directive on the Taxation of Savings Income 

On 3 June 2003, the Council of the European Union adopted a new directive regarding the taxation of 

savings income (2003/48/EC) (the ‘‘Directive’’). The Directive is applicable to interest payments made as 

from 1 July 2005. 

Under the Directive, each Member State will be required to provide to the tax authorities of another 

Member State, inter alia, details of payments of interest within the meaning of the Directive (interest, 

products, premiums or other debt income) made by a paying agent established in the first Member State 

to or for the benefit of an individual (or certain residual entities) resident in that other Member State (the 

‘‘Disclosure of Information Method’’). In this way, the term ‘‘paying agent’’ is defined widely and includes 

in particular any economic operator who is responsible for making interest payments, within the meaning 

of the Directive, for the benefit of individuals (or certain residual entities). 

However, throughout a transitional period (the ‘‘Transitional Period’’), Austria, Belgium and Luxembourg, 

instead of using the Disclosure Information Method used by other Member States, would withhold an 

amount on interest payments. The rate of such withholding tax will equal 15% during the first three years, 

20% during the subsequent three years and 35% until the end of the Transitional Period. The Transitional 

Period has commenced on 1 July 2005 and is to terminate if and when the European Union enters into 

agreements on exchange of information upon request, with several jurisdictions (including the United 

States, Switzerland, Liechtenstein, San Marino, Monaco and Andorra). 

The Directive was implemented into French law by the Amended Finance Law for 2003 dated 30/12/2003, 

by the administrative guidelines (Instruction 5 I-03-05 published 08/12/2005), by the Decree # 2005-330 

dated 6 April 2005 (section 242 ter of the Code Général des Impôts (CGI), and by the Decree # 2005-132 

dated 15 February 2005 (sections 49 I ter, 49 I quater, 49 I quinquies, 49 I sexies of annex III to the CGI). 

These provisions impose on paying agents based in France an obligation to report to the French tax 

authorities, certain information with respect to interest payments made to beneficial owners domiciled in 

another Member State (or certain territories), including, among other things, the identity and address of 

the beneficial owner and a detailed list of the different categories of interests (within the meaning of the 

Directive) paid to that beneficial owner. These reporting obligations have entered into force with respect 

to interest payments made on or after 1 July 2005. The paying agents have nevertheless been required to 

identify the beneficial owners of such payments as from 1 January 2004. 

The attention of Noteholders is drawn to Condition 8 (Taxation). 

238

SUBSCRIPTION AND SALE 

HSBC Bank plc whose principal offices are located at 8 Canada Square, London E14 5HQ, United 

Kingdom and Société Générale whose principal offices are located at Tour SG, 17 cours Valmy, 92987 

Paris La Défense, France (the ‘‘Joint Lead Managers’’) have, pursuant to a subscription agreement dated 

21 October 2005 between, among others, the Joint Lead Managers, the Management Company and the 

Custodian (the ‘‘Subscription Agreement’’), agreed (subject to certain conditions) with the Management 

Company on behalf of the Issuer to subscribe and pay for the Notes at the issue price of 100 per cent of 

their initial principal amount. The issue of the Notes will not proceed unless all of the Notes have been 

placed. 

The Issuer has agreed to reimburse each of the Joint Lead Managers for certain of its costs and expenses 

in connection with the issue of the Notes. Each Joint Lead Manager is entitled to be released and 

discharged from its obligations under the Subscription Agreement in certain circumstances prior to 

payment for the Notes to the Issuer. The Issuer has agreed to indemnify the Joint Lead Managers against 

certain liabilities in connection with the issue of the Notes. 

EEA Standard Selling Restriction 

In relation to each Member State of the European Economic Area which has implemented the Prospectus 

Directive (each, a ‘‘Relevant Member State’’), each Joint Lead Manager has represented and agreed that 

with effect from and including the date on which the Prospectus Directive is implemented in that Relevant 

Member State (the ‘‘Relevant Implementation Date’’) it has not made and will not make an offer of Notes 

to the public in that Relevant Member State prior to the publication of a prospectus in relation to the 

Notes which has been approved by the competent authority in that Relevant Member State or, where 

appropriate, approved in another Relevant Member State and notified to the competent authority in that 

Relevant Member State, all in accordance with the Prospectus Directive, except that it may, with effect 

from and including the Relevant Implementation Date, make an offer of Notes to the public in that 

Relevant Member State at any time: 

(i) to legal entities which are authorised or regulated to operate in the financial markets or, if not so 

authorised or regulated, whose corporate purpose is solely to invest in securities; 

(ii) to any legal entity which has two or more of (1) an average of at least 250 employees during the last 

financial year; (2) a total balance sheet of more than u43,000,000 and (3) an annual net turnover of 

more than u50,000,000, as shown in its last annual or consolidated accounts; or 

(iii) in any other circumstances which do not require the publication by the Issuer of a prospectus 

pursuant to Article 3 of the Prospectus Directive. 

For the purposes of this provision, the expression an ‘‘offer of Notes to the public’’ in relation to any Notes 

in any Relevant Member State means the communication in any form and by any means of sufficient 

information on the terms of the offer and the Notes to be offered so as to enable an investor to decide 

to purchase or subscribe the Notes, as the same may be varied in that Member State by any measure 

implementing the Prospectus Directive in that Member State and the expression ‘‘Prospectus Directive’’ 

means Directive 2003/71/EC and includes any relevant implementing measure in each Relevant Member 

State. 

United States of America 

The Notes have not been and will not be registered under the Securities Act and may not be offered or 

sold within the United States or to, or for the account or benefit of, US persons except in certain 

transactions exempt from the registration requirements of the Securities Act. Terms used in this 

paragraph have the meanings given to them by Regulation S. 

The Notes are in dematerialised bearer form and are subject to U.S. tax law requirements and may not 

be offered, sold or delivered within the United States or its possessions or to a United States person, 

except in certain transactions permitted by US tax regulations. Terms used in this paragraph have the 

meanings given to them by the U.S. Internal Revenue Code of 1986 and regulations thereunder. 

Each Joint Lead Manager has agreed that it will not offer or sell the Notes, (i) as part of its distribution 

at any time and (ii) otherwise until 40 days after the later of the commencement of the offering or the 

Closing Date, within the United States or to, or for the account or benefit of, U.S. persons, and it will have 

sent to each distributor, dealer or person receiving a selling concession, fee or other remuneration to 

239

which it sells Notes during the distribution compliance period (as defined in Regulation S) a confirmation 

or other notice setting forth the restrictions on offers and sales of the Notes within the United States or 

to, or for the account or benefit of, U.S. persons. 

In addition, until 40 days after the commencement of the offering, an offer or sale of Notes within the 

United States by a dealer (whether or not participating in the offering) may violate the registration 

requirements of the Securities Act if such offer or sale is made otherwise than in accordance with an 

available exemption from registration under the Securities Act. 


Each of the Joint Lead Managers has further represented and agreed that: 

(a) it has only communicated or caused to be communicated and will only communicate or cause to be 

communicated an invitation or inducement to engage in investment activity (within the meaning of 

Section 21 of the FSMA) received by it in connection with the issue or sale of the Notes in 

circumstances in which Section 21(1) of the FSMA does not apply to the Issuer; and 

(b) it has complied and will comply with all applicable provisions of the FSMA with respect to anything 

done by it in relation to the Notes in, from or otherwise involving the United Kingdom. 

Republic of France 

Each Joint Lead Manager has represented and agreed that it has not offered, sold or otherwise transferred 

and will not offer, sell or otherwise transfer, directly, or indirectly, the Notes to the public in the Republic 

of France and that offers, sales and transfers of the Notes in the Republic of France will be made only to 

qualified investors (investisseurs qualifiés) and/or (in the case of the Class A Notes only) to a restricted 

circle of investors (cercle restreint d’investisseurs), provided that such investors are acting for their own 

account and/or to persons providing portfolio management financial services (personnes fournissant le 

service d’investissement de gestion de portefeuille pour compte de tiers), all as defined and in accordance 

with Article L. 411-2 of the French Monetary and Financial Code and Decree no. 98-880 dated 1 st October 

1998. The Notes have not been and will not be subject to any approval by or registration (visa) with the 

French Autorité des Marchés Financiers. In accordance with the provisions of Article L.214-44 of the 

French Monetary and Financial Code, the Units and the Notes issued by the Issuer may not be sold by 

way of solicitation (démarchage) in France. 

In addition, each Joint Lead Manager has represented and agreed that it has not distributed or caused to 

be distributed and will not distribute or cause to be distributed in the Republic of France this Offering 

Circular or any other offering material relating to the Notes other than to investors to whom offers, sales 

or other transfers of the Notes in the Republic of France may be made as described above. 

General 

Each Joint Lead Manager acknowledges that, save for having obtained the approval of the Offering 

Circular by the Irish Stock Exchange no action has been or will be taken in any jurisdiction by any Joint 

Lead Manager that would permit an offer of the Notes to the public, or possession or distribution of the 

Offering Circular or any other offering material, in any country or jurisdiction where action for that 

purpose is required. 

Each of the Joint Lead Managers undertakes that it will not, directly or indirectly, offer or sell any Notes, 

or distribute the Offering Circular or any other material relating to the Notes in or from any country or 

jurisdiction except in circumstances that will result in compliance with applicable laws, orders, rules and 

regulations. 

240

GENERAL INFORMATION 

1. The Issuer will issue the Notes pursuant to the Issuer Regulations. The issue of the Notes will be 

authorised by the Management Company on behalf of the Issuer pursuant to the Issuer Regulations 

on the Closing Date. It is expected that the admission of the Notes to listing on the Irish Stock 

Exchange’s market for listed securities will be granted on or about the Closing Date, subject only to 

issue of the Notes. The listing of the Notes will be cancelled if the Notes are not issued. Transactions 

will normally be effected for settlement in euro and for delivery on the third working day after the 

day of the transaction. Prior to official listing and admission to trading, however, dealings in the 

Notes will be permitted by the Irish Stock Exchange in accordance with its rules. 

2. The Notes have been accepted for clearance through Euroclear, Euroclear France and Clearstream, 

Luxembourg. 

Notes Common Code ISIN 

Class A 023298732 FR0010247577 

Class B 023298279 FR0010247585 

Class C 023298406 FR0010247593 

Class D 023298520 FR0010247601 

Class E 023298066 FR0010247619 

3. So long as the Notes are admitted to listing on the Irish Stock Exchange’s market for listed securities, 

the most recently published audited annual accounts of the Issuer (in French, with a translation in 

English) will be available for a period of at least 14 days from the Closing Date and each date of 

publication at the specified offices of the Management Company, the Irish Paying Agent and the 

Principal Paying Agent. The Issuer does not publish interim accounts. 

4. Neither of the Issuer nor any Borrower is, nor has been, involved in any governmental legal or 

arbitration proceedings which may have, or have had, since the date of its creation, in the case of the 

Issuer, or, in the twelve months preceding the date of this Offering Circular, in the case of the 

Borrowers, a significant effect on its financial position, nor is the Management Company or any 

Borrower aware that any such proceedings are pending or threatened. 

5. The Issuer has not commenced operations and no statutory or non statutory accounts in respect of 

the Issuer have been prepared. 

6. Atis Real, Arcadis, Mazars & Guerard, the Notary, Orrick, Herrington & Sutcliffe and Savills have 

given and not withdrawn their written consent to, as the case may be, the inclusion in this Offering 

Circular of their reports or to, reference to their reports in this Offering Circular and references to 

their respective names in the form and context in which they are included and have authorised the 

contents of those parts of the prospectus. 

7. The Issuer will be established on the Closing Date, but has not been established as of the date of this 

Offering Circular. There has been no material adverse change in the financial position or prospects 

of the Issuer. 

8. French law in relation to fonds communs de créances combined with the terms of the Issuer 

Regulations and the role of the Management Company, the Custodian and each Noteholder 

Representative are together intended to prevent any abuse of control of the Issuer. French company 

law combined with the holding structure of each Borrower, covenants made by each Borrower in the 

Transaction Documents and the role of the Management Company are together intended to prevent 

any abuse of control of the Borrowers. 

9. Save as disclosed in this Offering Circular, the Issuer has no outstanding loan capital, borrowings, 

indebtedness or contingent liabilities, nor has the Issuer created any mortgages, charges or given any 

guarantees. 

10. Copies of the following documents may be inspected in physical form during usual business hours 

on any week day (excluding Saturdays and public holidays) at the registered offices of the Irish 

Paying Agent (for so long as any of the Notes are listed on the Irish Stock Exchange) and the 

Management Company for so long as any Notes remain outstanding from the date of this Offering 

Circular: 

(a) the Issuer Regulations and the constitutive documents (statuts) of each Borrower; 

(b) the Valuation Reports; 

241

(c) the excerpts of the financial reports of Mazars & Guerard; 

(d) the Paying Agency Agreement; 

(e) the Environmental Reports; and 

(f) the Orrick Report. 

11. There are no restrictions on the Joint Lead Managers, inter alios, acquiring Notes and/or providing 

investment advice and/or financing to or for third parties. Consequently conflicts of interest may 

exist or may arise as a result of the Joint Lead Managers having different roles in this transaction 

and/or carrying out transactions for third parties. 

12. The total expenses relating to the admission of trading of the Notes are estimated at u1,794,000. 

13. The websites referred to in this Offering Circular do not form part of this Offering Circular. 

242

SCHEDULE OF DEFINED TERMS 

The following terms apply throughout this document unless the content otherwise requires. 

Accountholder means each Borrower and the Issuer; 

Accounting Principles means, in relation to any entity, the accounting principles, standards, conventions 

and practices, from time to time and at any time generally accepted in the jurisdiction in which that entity 

has its head office or is otherwise established, or compliance with which is generally adopted and practised 

by qualified accountants in such jurisdiction; 

Accounts means the Borrower Accounts or the Issuer Accounts or both, as the context requires; 

Additional Mortgage means, in relation to a Borrower Group, the additional contractual mortgages to be 

granted by the Borrowers over the relevant Secured Properties in favour of the Lenders in addition to the 

Mortgages that will be transferred to the Lenders by way of subrogation in connection with the relevant 

Commercial Mortgage Loans and the benefit of which will be transferred to the Issuer on the Closing 

Date; 

Adjusted Principal Amount Outstanding means, on any date in relation to a Note, the Principal Amount 

Outstanding of that Note after deducting the Principal Losses allocated to that Note in accordance with 

Condition 5(f) on or prior to that date; 

Administrative Approvals means any permit, approval, consent, licence or other authorisation the 

Borrowers are required to have in order to permit the acquisition, holding, rental, operation or disposal 

of the Secured Properties in compliance with Environmental Laws or other applicable laws, or which the 

relevant Occupational Tenant is required to have in order to operate or use the relevant Secured Property 

or part thereof in compliance with Environmental Laws or other applicable laws; 

Advance means the aggregate principal amount of all Liquidity Drawings and any Liquidity Facility 

Standby Drawings for the time being outstanding; 

Allocated Loan Amount means, in relation to each Secured Property, the Initial Valuation of the relevant 

Secured Property multiplied by 70 per cent., as the same may be reduced from time to time in accordance 

with the relevant Commercial Mortgage Loan Agreement; 

Ancillary Income means, inter alia, any sums paid or payable in respect of cash takings from car parks 

situated at the Secured Properties, insurance rebates receivable in respect of the Secured Properties, any 

other monies paid or payable in respect of occupation and/or usage of any part of that Secured Property 

and any fixture or fitting on that Secured Property including any fixture or fitting on that Secured Property 

for display or advertisement, on licence or otherwise and any administration facilities provided at the 

Secured Properties; 

Approved Firm means in relation to a required legal opinion, a firm of lawyers from the panel of lawyers 

chosen by the relevant Borrower, as shall be satisfactory to the FCC Servicer from time to time, the firm 

proposed by the Obligors in respect of that legal opinion to be specifically approved for that purpose by 

the FCC Servicer in advance; for these purposes the initial agreed panel is Freshfields Bruckhaus 

Deringer, Linklaters and the Notary, in each case including successors to these firms or any firm arising 

as a result of a merger entered into by one or more of these firms; 

Approved Valuer means each of Savills and Atis Real including any successor to such firm or any firm 

arising as a result of a merger entered into by such firm or such other internationally recognised valuer 

doing business in France as may have been appointed by the Borrowers’ Agent (acting in the name and 

on behalf of the Borrowers) and as approved by the FCC Servicer from time to time; 

Auditor’s Reports means the reports from Mazars & Guerard in relation to the financial statements of 

certain of the Borrowers; 

Basel II means the new capital adequacy framework, published by the Basel Committee on Banking 

Supervision, on the Bank for International Settlements’ web-site entitled: the International Convergence 

of Capital Measurement and Capital Standards: a Revised Framework; 

Borrower means any of the Paris Properties Borrowers and the Proudreed France Borrowers; 

Borrower Accounts means, in respect of any Borrower, the Borrower Transaction Account, the Borrower 

Junior Expenses Account, the Cash Trap Account and the Finance Lease Reserve Account maintained 

in the name of that Borrower with the Borrowers Account Bank; 

243

Borrowers Account Bank means (i) in relation to the Proudreed France Borrowers, CCF and (ii) in 

relation to the Paris Properties Borrowers, Société Générale; 

Borrower Accounts Pledges means the pledges granted by each Borrower over its Borrower Accounts in 

favour of the relevant Lender as security for its obligations under the relevant Commercial Mortgage 

Loan; 

Borrower Dividend Account means, in relation to SARL Immobilière Ménélas, the account held with the 

Borrower Account Bank in the name of that Borrower and established for the purpose of depositing 

amounts to be used for the payment of dividends in SAS IDB Immobilier pursuant to the provisions of 

Article L.431-4 of the French Monetary and Financial Code; 

Borrower Group means (i) in relation to a Paris Properties Borrower, that Borrower, the other Paris 

Properties Borrowers and their Parent Obligors or (ii) in relation to a Proudreed France Borrower, that 

Borrower, the other Proudreed France Borrowers and their Parent Obligors; 

Borrower Junior Expenses Account means, in relation to each Borrower, the deposit account held with the 

Borrowers Account Bank in the name of that Borrower and established for the purpose of depositing 

amounts to be used for the payment of Junior Expenses; 

Borrower Transaction Account means, in relation to each Borrower, the general transaction account held 

with the borrowers Account Bank in the name of that Borrower and established for the purpose of 

receiving and making payments in connection with the Secured Properties of that Borrower and the 

relevant Commercial Mortgage Loan Agreement; 

Borrowers’ Agent means, in respect of any Commercial Mortgage Loan, FIPAM, in its capacity as agent 

(mandataire) of the Borrowers; 

Business Day means a day (other than a Saturday or a Sunday) on which commercial banks and foreign 

exchange markets are open for general business in Paris and Dublin and which is a TARGET Day; 

Calculation Period means either the Forward-Looking Calculation Period or the Historical Calculation 

Period; 

Calendar Quarter Dates means 31 March, 30 June, 30 September and 31 December; 

Cash Manager means, as at the Closing Date, CCF acting through its office at 103 avenue des Champs 

Elysées, 75008 Paris, France; 

Cash Trap Account means, in relation to each Borrower, the reserve account held with the Borrowers 

Account Bank in the name of that Borrower and established for the purpose of creating a cash reserve 

in the event that any of the Historical ICR, the Projected ICR or the LTV Ratio reach levels that require 

cash to be credited to and/or held in that account in accordance with the terms of the relevant Commercial 

Mortgage Loan Agreement; 

Certificate of Title means a certificate of title in relation to a Secured Property given on the Closing Date 

by the Notary; 

Class means the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes and the Class 

E Notes or any combination of them; 

Class A Notes means the u255,400,000 Class A Floating Rate Notes due 2017 issued on the Closing Date; 

Class A Noteholders means the holders of the Class A Notes; 

Class B Notes means the u56,800,000 Class B Floating Rate Notes due 2017 issued on the Closing Date; 

Class B Noteholders means the holders of the Class B Notes; 

Class C Notes means the u28,400,000 Class C Floating Rate Notes due 2017 issued on the Closing Date; 

Class C Noteholders means the holders of the Class C Notes; 

Class D Notes means the u28,400,000 Class D Floating Rate Notes due 2017 issued on the Closing Date; 

Class D Noteholders means the holders of the Class D Notes; 

Class E Notes means the u28,400,000 Class E Floating Rate Notes due 2017 issued on the Closing Date; 

Class E Noteholders means the holders of the Class E Notes; 

Clearstream, Luxembourg means Clearstream Banking, société anonyme; 

244

Closing Date means 2 November 2005 or such later date as may be agreed between the Management 

Company, on behalf of the Issuer the Borrowers and the Joint Lead Managers; 

Commercial Mortgage Loan means each or any of the secured commercial mortgage loans made by the 

Lenders to any of the Borrowers in accordance with a Commercial Mortgage Loan Agreement and which 

are from time to time outstanding; 

Commercial Mortgage Loan Agreement means (1) the loan agreement dated 21 October 2005 between, 

inter alios, the Paris Properties Borrowers and the Lenders and/or (2) the loan agreement dated 

21 October 2005 between, inter alios, the Proudreed France Borrowers and the Lenders, or both as the 

context requires; 

Committee means the Basel Committee on Banking Supervision; 

Conditions means the terms and conditions applicable to the Notes as set out in the Issuer Regulations 

and as may be modified in accordance with the Issuer Regulations and any reference to a particular 

numbered Condition shall be construed accordingly and references in the Conditions to paragraphs shall 

be construed as paragraphs of such Conditions; 

CPO Disposal means a disposal of the whole or part of a Disposal Property in connection with a 

compulsory purchase order; 

Custodian means the credit institution acting as custodian of the assets of the Issuer pursuant to the 

French Monetary and Financial Code, being initially CCF; 

Dailly Assignments means the assignment of receivables granted by each Borrower in favour of the 

relevant Lender as security for its obligations under the relevant Commercial Mortgage Loan; 

Dangerous Substance means any product, substance or material regulated by Environmental Law due to 

of its nature, concentration or quantity (including, oil, oil products, chemical products, asbestos, lead and 

dumping in soils, waterways, water tables or atmosphere); 

Defaulting Party has the meaning given to it in the 2000 ISDA Definitions; 

Determination Date means the date that is three Business Days prior to any Interest Payment Date; 

Development means any development, extension, refurbishment and/or alteration to a Secured Property; 

Disposal Expenses means (a) any VAT, stamp duty or stamp duty land tax for which any Borrower is or 

becomes liable as a result of the Permitted Disposal or in respect of which any Borrower has a contingent 

liability under arrangements made in relation thereto, and (b) any corporation tax, including corporation 

tax on chargeable gains or any other tax present or future for which any Borrower is liable as a result of 

the Permitted Disposal, and (c) all reasonable third party costs, fees and expenses incurred in connection 

with a Permitted Disposal; 

Disposal Property means a Secured Property which a Borrower may be entitled to dispose of subject to 

compliance with the conditions set out in the relevant Commercial Mortgage Loan Agreement; 

Drawing means a Liquidity Drawing or a Liquidity Facility Standby Drawing; 

Due Diligence Criteria means the criteria for the due diligence which must be carried out as part of 

acquiring an Incoming Property as set out in the section entitled ‘‘Summary of Principal Documents – The 

Commercial Mortgage Loan Agreements – Same Day Substitution of the Secured Properties’’; 

Due Diligence Reports means the Auditors Reports, Orrick Report, Certificates of Title, Environmental 

Reports, and Valuation Reports; 

Elected Disposal means a voluntary disposal by any Borrower of a Disposal Property for any reason, but 

excluding any Same-Day Substitution Disposal; 

Eligible Investments means 

(a) in relation to investments made or on behalf of the Issuer: 

(i) French Treasury Bonds (bons du Trésor) denominated in Euros; 

(ii) any debt instrument (titre de créances) as referred to in paragraph 2° of Article R.214-94 of the 

French Monetary and Financial Code and denominated in Euros, provided that such debt 

instrument shall: 

(A) be traded on a regulated market (marché réglementé) located in a member State of the 

European Economic Area (Espace Economique Européen); and 

245

(b) 

(B) not confer a direct or indirect right to acquire a share in the capital of a company; and 

(C) be rated at least AAA (in the case of an investment having a maturity of more than 365 

days) or F-1+ (in the case of an investment having a maturity of 365 days or less, and of 

more than 30 days) or F-1 (in the case of an investment having a maturity of less than 30 

days) by Fitch, and A-1+ by S&P; 

(iii) any negotiable debt (titre de créances négociable) in the meaning ascribed by Articles L.213–1 

et seq. of the French Monetary and Financial Code, denominated in Euros provided that: (i) 

its short term credit rating shall be at least A-1+ by S&P and at least AAA (in the case of an 

investment having a maturity of more than 365 days) or F-1+ (in the case of an investment 

having a maturity of 365 days or less, and of more than 30 days) or F-1 (in the case of an 

investment having a maturity of less than 30 days) by Fitch or higher (or such other credit 

rating as may be approved by the Rating Agencies from time to time) or (ii) its long term credit 

rating shall be at least AAA by Fitch and AA- by S&P; and/or 

(iv) mutual fund shares (actions de société d’investissement à capital variable) or mutual fund units 

(parts de fonds communs de placement) which are principally invested in the securities referred 

to in paragraphs 2°, 3° and 4 of Article R.214-95 of the French Monetary and Financial Code, 

denominated in Euros and provided that the short term unsecured, unguaranteed and 

unsubordinated debt obligations of the issuing or guaranteeing entity are rated no lower than 

A-1+ by S&P and/or at least AAA (in the case of an investment having a maturity of more 

than 365 days) or F-1+ (in the case of an investment having a maturity of 365 days or less, and 

of more than 30 days) or F-1 (in the case of an investment having a maturity of less than 30 

days) by Fitch or higher (or such other credit rating as may be approved by the Rating 

Agencies from time to time), with the exception of those referred to in Articles L.214–36 to 

L.214–42 of the French Monetary and Financial Code; 

(v) mutual debt fund units (parts de fonds communs de créances) (other than the Units) 



A-1+ by S&P and at least AAA (in the case of an investment having a maturity of more than 

365 days) or F-1+ (in the case of an investment having a maturity of 365 days or less, and of 

more than 30 days) or F-1 (in the case of an investment having a maturity of less than 30 days) 

by Fitch or higher (or such other credit rating as may be approved by the Rating Agencies from 

time to time); and 

(v) mutual debt fund units (parts de fonds communs de créances) (other than the Units) 



A-1+ by S&P and F-1 (in the case of an investment having a maturity of no more than 30 days) 

or AAA (in all other cases) by Fitch or higher (or such other credit rating as may be approved 

by the Rating Agencies from time to time); and 

(vi) deposits with a credit institution as referred to in paragraph 1° of Article R.214-97 of the 

French Monetary and Financial Code, the short term unsecured and unsubordinated debt 

obligations of which are rated at least F1 by Fitch and A-1+ by Standard’ Poor’s, provided that 

such deposits are capable of being withdrawn or repaid within twenty-four (24) hours of 

demand, 

in each case as further described in the Issuer Regulations, and provided further that in each case, 

no such investments have a maturity falling one Business Day prior to the relevant Interest Payment 

Date, nor may they be disposed of prior to their respective maturities except in exceptional 

circumstances and for the sole purposes of protecting the interests of the Noteholders and 

Unitholders; and 

in relation to any Borrower, any investment in a SICAV money market fund or other capitalprotected 

liquid investment as further described in the relevant Commercial Mortgage Loan 

Agreement, provided that in all cases (i) such investments have a maturity date falling no later than 

the Business Day preceding the next following Loan Interest Payment Date, and (ii) the short term 

unsecured, unguaranteed and unsubordinated debt obligations of the issuing or guaranteeing entity 

are rated no lower than A-1+ by S&P and F-1 (in the case of an investment having a maturity of no 

more than 30 days) or F-1+ (in all other cases) by Fitch or higher (or in each case such other credit 

rating as may be approved by the Rating Agencies from time to time); 

246

Encumbrance includes any mortgage, charge, attachment, right of set-off, assignation in security, pledge, 

lien, hypothecation, right of retention or other right or arrangement giving rise to a priority of payment 

in connection with any indebtedness, any other real or personal security, lien or guarantee of any kind, or 

other encumbrance securing any obligation of any person or any other agreement or arrangement having 

the effect of providing security; 

Environmental Law means the rules of French law (including any provision of international or European 

law applicable in France and any regulation, ordinance, decree, directive, by-law, protocol, authorisation 

(including any administrative authorisation), decision, guideline (in particular any guideline of the 

Ministry of the Environment in relation to restoration of polluted soils) or judgment of any competent 

authority), in force and applicable at any time to a Secured Property and relating to (a) the activities 

carried out and equipment used on the Secured Property, (b) the protection of the environment, including 

emissions, waste or disposal of substances which are polluting, contaminants or dangerous for the 

environment, (c) human health and safety relating to exposure to Dangerous Substances, (d) the use, 

handling, manufacture, production, treatment, distribution, storage, transport and elimination of Dangerous 

Substances and (e) sites which have been listed for environmental protection; 

Environmental Reports means the environmental risk assessment reports prepared by Arcadis in respect 

of a sample of the Secured Properties, such reports being dated as of June 2005, and any reports prepared 

in respect of Incoming Properties; 

Estimated Rental Value means market rent within the meaning of the RICS Appraisal and Valuation 

Standards current at the time of the valuation (or, failing that, the nearest equivalent document defining 

general accepted valuation terms, requirements and practices) assuming: 

(a) a lease on the terms of the relevant Occupational Leases is in force (other than the amount of rent 

but including the provisions as to rent escalation); 

(b) that no premium passed and that any rent free period is in respect of the time which would have 

been needed by the incoming Occupational Tenant to make the property fit for occupation (the 

benefit of which the incoming Occupational Tenant has received); 

(c) that the obligations on the part of the Occupational Tenants in the Occupational Leases have been 

observed and performed; 

(d) that any building on the relevant Secured Property has been constructed to a shell finish, but 

includes any completed alterations funded by the Borrower; and 

(e) if the property has been destroyed or damaged, that the property has been fully reinstated as at the 

valuation date; 

EURIBOR has the meaning given in Condition 1; 

Euro or x refers to the single currency unit of the member States of the European Union that have 

adopted the single currency in accordance with the Treaty establishing the European Community (signed 

in Rome on 25 March 1957) as amended by the Treaty on European Union (signed in Maastricht on 7 

February 1992); 

Euroclear means Euroclear Bank S.A./N.V., as operator of the Euroclear system; 

Euroclear France means Euroclear France, société anonyme; 

Exceptional Operating Costs means, in relation to a Borrower and a Reference Period, the exceptional 

Operating Costs of that Borrower incurred over the course of that Reference Period that were not 

accounted for in the cash flow statement for that Borrower for that Reference Period; 

Existing Lenders means the Borrowers’ existing bank lenders whose loans are to be refinanced by the 


Existing Loans means the Borrowers’ loans existing prior to the Closing Date, which are to be refinanced 

by the Commercial Mortgage Loans; 

Expected Junior Expenses means, in relation to a given Reference Period and to any Borrower, the Junior 

Expenses of such Borrower as set out in the cashflow statement delivered by that Borrower to the relevant 

FCC Servicer pursuant to the provisions of the relevant Commercial Mortgage Loan Agreement and 

relating to that Reference Period; 

Expected Operating Costs means, in relation to a given Reference Period and to any Borrower, the 

Operating Costs of that Borrower as set out in the cashflow statement delivered by that Borrower to the 

relevant FCC Servicer pursuant to the provisions of the relevant Commercial Mortgage Loan Agreement; 

247

FCC Servicer means each entity appointed as servicer of Receivables acquired by the Issuer, being initially 

CCF SA and Société Générale; 

Fees and Expenses means any fees, costs and expenses, other remuneration and indemnity payment which 

are due and payable; 

Final Maturity Date means the Interest Payment Date falling in August 2017; 

Final Offering Circular means the final offering circular relating to the issue of the Notes; 

Final Repayment Date means the Loan Interest Payment Date falling in August 2014; 

Finance Lease means any finance lease (credit-bail) entered into by a Borrower as lessee (crédit-preneur) 

and which has been identified as such in the relevant Commercial Mortgage Loan Agreements; 

Finance Lease Reserve means the reserve fund in relation to payments falling due under Finance Leases 

as set out in the section entitled ‘‘Resources Available to the Borrowers and the Issuer – Borrower Accounts 

– Finance Lease Reserve Account’’; 

Finance Lease Reserve Account means, in relation to each Borrower that is a finance lessee under a 

Finance Lease, the reserve account held with the Borrowers Account Bank in the name of that Borrower 

and established for the purpose of maintaining the Finance Lease Reserve; 

Financial Covenants means the financial covenants of the Borrower in respect of the Historical ICR and 

the Projected ICR; 

Financial Indebtedness means any indebtedness for or in respect of: 

(a) monies borrowed or raised and includes capitalised interest; 

(b) any amount raised by acceptance under any acceptance credit facility or by documentary credits or 

discounted instruments; 

(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, 

loan stock or any similar debt instrument; 

(d) the amount of any liability in respect of any lease (including, for the avoidance of doubt, any crédit 

bail) 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 or purchase agreement) 

having the commercial effect of a borrowing; 

(g) any derivative transaction entered into in connection with protection against or benefit from 

fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only 

the marked to market value shall be taken into account); 

(h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary 

letter of credit or any other instrument issued by a bank or financial institution; and 

(i) any guarantee or indemnity of any kind, and any off-balance sheet commitment, other than a 

suretyship comitment to tax or customs authorities; 

Financial Information means the audited, pro forma, financial statements of the relevant Borrower for the 

financial years ending in 2003 and 2004; 

Financial Regulator means the Irish Financial Services Regulatory Authority; 

Financing Documents means the Commercial Mortgage Loan Agreements, the global cost letters and the 

drawing notices delivered in connection therewith, the Subordination Agreements, the Obligor Security 

Documents, the Issuer Transaction Documents and all other contracts and documents entered into in 

connection therewith or designated as such by the parties to the Commercial Mortgage Loan Agreements; 

FIPAM means French Investment Portfolio Asset Management, incorporated on 27 June 2001 (registered 

under number B 438 302 044) as a limited company (société à responsibilité limitée) under the laws of 

France; 

First Reference Period means the period beginning on the Closing Date and ending on (but excluding) the 

last Loan Calculation Date prior to the seventh anniversary of the Closing Date; 

248

Fitch means Fitch Ratings Ltd., or any successor to its rating business; 

Forward-Looking Calculation Period means, in respect of any Loan Calculation Date, the period of three 

months which begins on (and excludes) the Calendar Quarter Date immediately preceding such Loan 

Calculation Date (or, in respect of the first Forward-Looking Calculation Period, the later of such 

Calendar Quarter Date and the Closing Date) and ends on (and includes) the next following Calendar 

Quarter Date; 

French Commercial Code means the French Code de commerce; 

French Monetary and Financial Code means the French Code monétaire et financier; 

Gross Cash Proceeds means in the case of any Permitted Disposal, the total consideration received by the 

relevant Borrower in connection with such disposal (net of any amounts that notaries are legally entitled 

to retain and in respect of which they are liable in the normal course of their business, including any costs 

relating to releases of an Obligor Security); 

Gross Rental Income means, for any period, the aggregate of all amounts received or, as applicable, 

invoiced by or for the account of the Borrowers in connection with the letting or other use of the Secured 

Properties (together with any amounts attributable to VAT), as reported in the relevant Quarterly 

Operating Reports including each of the following items (without double counting): 

(a) rent and other usage fees invoiced during that period, adjusted to reflect the variation in delinquent 

payments during that period; 

(b) a sum invoiced or received in respect of any apportionment of rent allowed in favour of the 

Borrower in respect of that period; 

(c) any Ancillary Income invoiced during that period, adjusted to reflect the variation in delinquent 

payments during that period; 

(d) any sum received during that period under any policy of insurance in respect of loss of rent, 

including for the payment of default interest; 

(e) any sum received (or the value of any consideration given) during that period for the surrender or 

variation of any Occupational Lease; 

(f) any sum received during that period from any guarantor of any Occupational Tenant under any 

Occupational Lease; 

(g) any interest on, and any damages, compensation or settlement, received during that period in 

respect of, any sum referred to above less any related fees and expenses incurred for the recovery 

thereof (which have not been reimbursed by another person) by the Borrower; 

(h) any sum invoiced or received by way of reimbursement of or provision for service charges and rental 

taxes; 

(i) any contribution to a sinking fund by an Occupational Tenant; 

provided that, when used in connection with a Forward-Looking Calculation Period, amounts referred to 

above, as having been invoiced or received (as set out in the relevant Quarterly Operating Reports or as 

adjusted to reflect the variation in delinquent payments during that period, as the case may be) shall be 

interpreted as meaning amounts to be invoiced or received; 

Hedging Agreement means each ISDA Master Agreement (1992 Multi-currency Cross-border Version), 

the schedule thereto and each confirmation, each dated the Closing Date between the Management 

Company on behalf of the Issuer, the Custodian and each Hedging Provider and the transactions effected 

thereunder, together the Hedging Agreements; 

Hedging Credit Support Document means, in respect of each Hedging Agreement and Hedging Provider, 

the 1995 ISDA Credit Support Annex (Bilateral Form-Transfer) or such other collateral agreement as 

may be entered into between the Issuer and the relevant Hedging Provider; 

Hedging Downgrade Event has the meaning given in the Hedging Agreements but, in any event, equating 

to the Hedging Providers ceasing to have a short term debt rating of A-1 by S&P and a combined short 

term rating of at least F1 and long term rating of at least A by Fitch; 

Hedging Payments means those payments due from the Hedging Providers under the Hedging Agreements; 

Hedging Providers means, as at the Closing Date, HSBC Bank plc and Société Générale, acting through 

their offices at 8 Canada Square, London, E14 5HQ, United Kingdom and 17 Cours Valmy 92987 Paris 

249

La Défense, France respectively (or such other replacement parties as may be appointed by the Issuer in 

accordance with the Transaction Documents); 

Hedging Subordinated Amounts means any amounts due to the Hedging Providers under the Hedging 

Agreements (other than any amounts attributed to the return of collateral to such Hedging Provider) 

either (a) due to the occurrence of an Event of Default (as defined under the Hedging Agreements) where 

the Hedging Provider is the Defaulting Party (as defined in the Hedging Agreements) or a Hedging 

Downgrade Event under such Hedging Agreement in respect of which the Hedging Provider is the 

defaulting or affected party or (b) in respect of amounts by which any payment made to the relevant 

Hedging Provider under the relevant Hedging Agreement is increased as a consequence of an amount for 

or on account of Tax being required to be withheld or deducted from that payment; 

Hedging Termination Payments means any amounts due to the Hedging Providers under the Hedging 

Agreements (to the extent not funded by payments of interest in respect of the Commercial Mortgage 

Loans) including any amounts due to a Hedging Provider under a Hedging Agreement on termination of 

such Hedging Agreement but excluding any Hedging Subordinated Amounts; 

Historical Calculation Period means, in respect of a Loan Calculation Date, the period of twelve months 

(or less in respect of the first twelve months after the Closing Date), which begins on (and excludes) a 

Calendar Quarter Date falling on or after the Closing Date and ends on (and includes) the Calendar 

Quarter Date preceding such Loan Calculation Date. Any such calculations required for an Historical 

Calculation Period that contains fewer than four complete financial quarters will be done in each case only 

on the basis of taking the actual figures for any complete quarters contained in such Historical Calculation 

Period; 

Historical ICR means, as of any Loan Calculation Date, the ratio of the Historical Net Rental Income to 

the Historical Interest Charges in respect of the Historical Calculation Period in respect of such Loan 

Calculation Date; 

Historical Interest Charges means, in relation to an Historical Calculation Period, the accrued cost of 

interest for the relevant Borrower Group under the relevant Commercial Mortgage Loan Agreement 

during such Historical Calculation Period; 

Historical Net Rental Income means, in respect of any Historical Calculation Period, the sum of: 

(a) the aggregate amount of Gross Rental Income (excluding any amounts attributable to VAT), as 

reported in the relevant Quarterly Operating Reports and adjusted for the purposes of the 

treatment, in accordance with accrual basis accounting principles, of any non-cash entries relating to 

rent free periods or tenants’ incentives and any premium or other consideration paid to a Borrower 

in connection with the surrender of an Occupational Lease; 

(b) all other interest income for the relevant Historical Calculation Period; 

(c) minus any amounts under items (h) and (i) of the definition of Gross Rental Income in respect of 

the relevant Historical Calculation Period; 

(d) minus any amounts of Gross Rental Income (excluding for these purposes any items already 

excluded by (c) above) payable in respect of the Secured Properties since the Closing Date and 

recognised as being bad or doubtful during the relevant Historical Calculation Period; 

less the sum of the following items, in each case in respect of the relevant Historical Calculation Period: 

(e) all amounts payable to the Property Manager (or its agents), to the extent not recoverable from 

Occupational Tenants; 

(f) any fees and expenses payable by the Borrowers pursuant to sub-paragraph (b)(iv) of the definition 

of On-going Facility Fee; 

(g) any other amounts payable by the Borrower to the Issuer by way of On-going Facility Fee under the 

Commercial Mortgage Loan Agreement in respect of amounts described in sub-paragraphs (a) to 

(e) and sub-paragraphs (h) and (i) of the definition of On-going Facility Fee; 

(h) any corporation or equivalent tax payable by the Borrower in respect of the Gross Rental Income; 

(i) any other amounts payable by the Borrowers to the French tax authorities (other than VAT); 

(j) any amounts payable to a Valuer in respect of any Valuation Report issued in accordance with the 

terms of a Commercial Mortgage Loan Agreement; 

250

(k) 

(l) 

(m) 

(n) 

any breakage costs payable by the Borrowers to the Lenders pursuant to the Financing Documents; 

any amount payable by or on behalf of the Borrowers to the Borrowers Account Banks; 

(without double counting in respect of items already included in (e) to (l) above) the aggregate 

amount as reported in the relevant Quarterly Operating Reports of all irrecoverable costs, expenses, 

charges and rental taxes in respect of the Occupational Tenants incurred by the relevant Borrowers; 

any amounts of irrecoverable VAT on amounts paid or payable under paragraphs (e) to (m) above; 

Incoming Property means a property which is available to be substituted for the relevant Secured Property 

within the Property Portfolio and which has been selected by the Borrower; 

Information means, together, the Investor Presentation Materials, the Tenancy Schedules, the Due 

Diligence Reports, the Model Information, the Investor Reports, the Financial Information and the 

Offering Circulars and such other information as may be or have been provided to the Rating Agencies 

from time to time; 

Information Date means, in respect of each calendar quarter, the day falling the fifteen (15 th ) Business 

Day15 Business Days following the relevant Calendar Quarter Date last day of such quarter, upon which 

the Borrowers’ Agent shall send the Quarterly Operating Report to the relevant FCC Servicer; 

Information Meeting has the meaning given to it in Condition 13(f) (Information Meeting); 

Initial Facility Fee means an amount equal to all the fees, costs and expenses properly and reasonably 

incurred by the Issuer on or before the Closing Date in connection with the issue of the Notes, the making 

of the Commercial Mortgage Loans and the negotiation, preparation and execution of each Issuer 

Transaction Document (to the exclusion of any fees, taxes and duties payable to the Notary and the costs 

and publicity expenses relating to the setting up of the Obligor Security). In relation to a particular 

Borrower, Initial Facility Fee means that Borrower’s proportionate share (divided as between the 

Borrowers by reference to the principal amounts advanced under their respective Commercial Mortgage 

Loans) of all amounts making up such fee; 

Initial Valuation means the value of the Secured Property as at the Closing Date or, in respect of an 

Incoming Property, the date it was acquired; 

Insolvency Proceedings means the winding-up, dissolution, or administration of a company or corporation 

and 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 of 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; 

Insurance Assignment means the Dailly law assignment by way of security (cession de créances 

professionnelles à titre de garantie) of all proceeds receivable by the Borrowers under the Insurance 

Policies together with the transfer by way of delegation under Article L.121-13 of the French Insurance 

Code of those insurance proceeds that are not subject to the Dailly law assignment by way of security, the 

benefit of which shall be transferred to the Issuer on the Closing Date: 

Insurance Policy means, in respect of any Borrower, each of the policies of insurance relating to the 

relevant Commercial Mortgage Loan Agreement and any policies of insurance (other than the policies of 

life assurance or third party liability) taken out by or on behalf of any Borrower (including any insurances 

taken out by the Borrowers or Occupational Tenants) and any replacement policies thereof, in which any 

Borrower may now or hereafter have an interest; 

Insurer Rating Criteria means a rating of ‘‘A’’ (or better) for long term debt obligations from Fitch and 

S&P; 

Interest Amount has the meaning given to it in Condition 4(d) (Interest – Determination of Rates of Interest 

and Calculation of Interest Amounts); 

Interest Determination Date means the date falling two (2) Business Days prior to an Interest Payment 

Date; 

Intellectual Property means all rights to patents, trademarks, business names, know-how and other 

intellectual property rights whether arising through ownership, licence or use and whether registered, 

subject to registration or otherwise; 

Interest Payment Date means 18 February, 18 May, 18 August and 18 November in each year, except if 

such day is not a Business Day, in which case it shall be the next succeeding Business Day unless such day 

falls in the next month, in which case it shall be the preceding Business Day, on which interest will be paid 

in respect of the Notes; 

251

Interest Period means each period from (and including) an Interest Payment Date and ending on (but 

excluding) the next Interest Payment Date provided that the first Interest Period shall be the period from 

(and including) the Closing Date and ending on (but excluding) the Interest Payment Date falling in 

February 2006 and the last Interest Period shall be the period from (and including) the Interest Payment 

Date falling in May 2017 and ending on (but excluding) the Final Maturity Date; 

Investment Value means the Market Value of the applicable property subject to the terms of the relevant 

Occupational Lease (assumed to exist when valuing an Incoming Property); 

Investor Presentation Materials means all materials, including slides, prepared by the Joint Lead Managers 

in connection with the marketing of the Notes and the credit rating thereof; 

Investor Report means the report substantially in the form and content scheduled to be prepared quarterly 

by the Management Company on behalf of the Issuer; 

Irish Paying Agent means HSBC Institutional Trust Services (Ireland) Limited acting through its office at 

HSBC House, Harcourt Centre, Harcourt Street, Dublin 2, Ireland; 

Irish Stock Exchange means the Irish Stock Exchange Limited; 

Issuer means the debt mutual funds (fonds commun de créances) named FCC Proudreed Properties 2005, 

created at the joint initiative of the Management Company and the Custodian, acting as founders of the 

Issuer, and governed by the Issuer Regulations, Articles L.214-43 to L.214-49, and Article L.231-7 and 

Articles R.214-92 to R.214-115 of the French Monetary and Financial Code and by any law whatsoever 

applicable to fonds communs de créances; 

Issuer Account Bank means, as at the Closing Date, CCF; 

Issuer Account Bank and Cash Management Agreement means the agreement dated 21 October 2005 

between, inter alios, the Management Company (representing the Issuer), the Custodian, the Cash 

Manager and the Issuer Account Bank; 

Issuer Accounts means the Issuer Transaction Account, the Mortgage Reserve Account and the Liquidity 

Facility Standby Account; 

Issuer Cost of Funds means, in relation to a Commercial Mortgage Loan, the rate determined by the 

Management Company as being equal to the sum of the relevant Base Rate and the Relevant Margin, 

where the Base Rate is equal to the weighted average of (i) a fixed rate applied to that proportion of the 

principal amount outstanding of the Commercial Mortgage Loans corresponding to the notional amount 

of the fixed/floating interest rate swap transactions entered into by the Issuer under the Hedging 

Agreements and (ii) the lesser of EURIBOR and a fixed cap applied to that proportion of the principal 

amount outstanding of the Commercial Mortgage Loans corresponding to the notional amount of an 

interest rate cap transaction entered into by the Issuer under the Hedging Agreements, and the Margin 

is an adjustable fixed rate reflecting the weighted average of the Relevant Margins on the Principal 

Amount Outstanding of the Notes; 

Issuer Creditors means the Noteholders, each Noteholder Representative, the Issuer Account Bank and 

Cash Manager, the Paying Agents, the Management Company, the Custodian, the Hedging Provider(s), 

the Liquidity Facility Provider, the statutory auditor of the Issuer, the Rating Agencies and the FCC 

Servicers; 

Issuer Debt Service Required Amount means, in respect of any Interest Payment Date, the amount 

required to pay the Issuer’s outstanding obligations under items (a) to (h) of the Issuer Pre-Enforcement 

Priority of Payments on such Interest Payment Date; 

Issuer Facility Fees means the Initial Facility Fee together with the On-going Facility Fee; 

Issuer Liquidation Date means the date upon which the liquidation procedure of the assets of the Issuer 

is completed in accordance with the Issuer Regulation; 

Issuer Post-Enforcement Priority of Payments means the order of the Issuer’s priority of payment post 

enforcement of the Notes as set out in Condition 3(i) (Status and Priority – Priority of Payments Following 

Enforcement); 

Issuer Pre-Enforcement Priority of Payments means the order of the Issuer’s priority of payment prior to 

enforcement of the Notes as set out in Condition 3(h) (Status and Priority – Priority of Payments Prior 

to Enforcement); 

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Issuer Priority of Payments means the Issuer Pre-Enforcement Priority of Payments and the Issuer 

Post-Enforcement Priority of Payments; 

Issuer Regulations means the regulations (règlement général) dated 21 October 2005 between the 

Management Company and the Custodian, pursuant to which the Management Company and the 

Custodian will create the Issuer and which relates to the creation and operation of the Issuer, and in 

particular to: 

(a) the assets transferred to the Issuer; and 

(b) the Notes issued in respect of the Issuer’s assets; 

Issuer Transaction Account means the general transaction account held in the name of the Issuer with the 

Issuer Account Bank: 

Issuer Transaction Documents means: 

(a) the Issuer Regulations; 

(b) the Paying Agency Agreement; 

(c) the Issuer Account Bank and Cash Management Agreement; 

(d) the Units Subscription Agreement; 

(e) the Notes Subscription Agreement; 

(f) the Receivables Transfer and Servicing Agreement; 

(g) each Issuer Transfer Document; 

(h) the Hedging Agreements; 

(i) the Property Manager Duty of Care Agreement; 

(j) the Liquidity Facility Agreement; 

(k) the Master Definitions and Framework Agreement; and 

(l) the Subordination Agreement, 

and any other document entered into by one or more Transaction Parties which is designated as an ‘‘Issuer 

Transaction Document’’ with the consent of the relevant Transaction Parties and the Management 

Company; 

Joint Lead Managers means HSBC Bank plc and Société Générale as joint lead managers of the issuance 

of the Notes; 

Junior Expenses means, in relation to a Borrower: 

(a) any voluntary prepayment of a Commercial Mortgage Loan by that Borrower; 

(b) any payment by that Borrower of principal, interest, default interest or other amounts payable under 

a Subordinated Loan; 

(c) any expenses incurred by that Borrower in connection with works relating to the compliance with 

applicable standards (mise aux normes), expansion or development of the Secured Properties, or 

with works relating to ensuring compliance with applicable standards (mise aux normes) or to repair 

and maintenance of properties subject to a Finance Lease and which are required to be carried out 

by that Borrower or any other operating costs in relation to properties subject to Finance Leases; 

(d) any payment by that Borrower to an Occupational Tenant relating to an obligation of restitution 

resulting from the termination of an Occupational Lease; 

(e) any Exceptional Operating Costs; 

(f) any fees and expenses payable by that Borrower to the Property Manager in excess of 3.5% of the 

aggregate of the Gross Rental Income of the relevant Secured Properties and of the gross rental 

income from the properties subject to the Finance Leases; 

(g) any expenses incurred by that Borrower in connection with the creation of any security to enable a 

Same-Day Substitution Disposal; 

(h) any Subordinated Loan or other loan to a Parent Obligor granted by that Borrower; 

253

(i) 

(j) 

any dividend payment by that Borrower to its shareholder; 

the payment of the purchase price in connection with the exercise of a purchase option relating to 

a property subject to a Finance Lease; 

Legal Opinions means the legal opinions delivered, or to be delivered, in accordance with the Commercial 

Mortgage Loan Agreements; 

Lenders means CCF and Société Générale; 

Liquidity Drawing means a loan made or to be made under the Liquidity Facility; 

Liquidity Event means the occurrence of: (i) the Liquidity Facility Provider ceasing to have the Liquidity 

Requisite Ratings and/or (ii) the Liquidity Facility Provider declining to renew the commitment period 

of the Liquidity Facility; 

Liquidity Facility means a 364 day euro-revolving liquidity facility provided by the Liquidity Facility 

Provider pursuant to the Liquidity Facility Agreement to permit drawings to be made of up to the 

Liquidity Facility Maximum Amount as reduced or cancelled from time to time under the Liquidity 

Facility Agreement; 

Liquidity Facility Agreement means a facility agreement dated 21 October 2005 between, inter alios, the 

Management Company on behalf of the Issuer, the Custodian and the Liquidity Facility Provider in 

relation to the Liquidity Facility; 

Liquidity Facility Maximum Amount means u26 million being the maximum amount available for 

drawdown under the Liquidity Facility, as the same may be reduced from time to time in accordance with 

the Liquidity Facility Agreement; 

Liquidity Facility Provider means CCF under the Liquidity Facility Agreement or such other entity or 

entities appointed as liquidity facility provider from time to time, subject to and in accordance with the 

terms of the Liquidity Facility Agreement; 

Liquidity Facility Standby Account means the account held in the name of the Issuer for the deposit of 

Liquidity Facility Standby Drawings (if any) with the Liquidity Facility Provider (for so long as it satisfies 

the Rating Criteria) or the Issuer Account Bank or (subject to the written approval of the Liquidity 

Facility Provider, such approval not to be unreasonably delayed or withheld) any other bank, the 

short-term, unsecured, unsubordinated and unguaranteed debt obligations of which satisfy the Rating 

Criteria; 

Liquidity Facility Standby Drawing means a drawing following a Liquidity Event or the principal amount 

of that drawing outstanding at a particular time, where the context requires; 

Liquidity Requisite Ratings means the Liquidity Facility Provider’s short term unsecured, unsubordinated 

and unguaranteed debt obligations of at least A-1+ by S&P and F1 by Fitch; 

Liquidity Shortfall means in relation to an Interest Payment Date a shortfall between (i) all amounts 

which will be received by the Issuer on or by such Interest Payment Date in respect of the related Interest 

Period and (ii) the Issuer Debt Service Required Amount determined in respect of the related Interest 

Payment Date; 

Liquidity Subordinated Amounts means the amount by which any payment made to the Liquidity Facility 

Provider under the Liquidity Facility Agreement is increased as a consequence of an amount for or on 

account of Tax being required to be withheld or deducted from that payment; 

Loan Calculation Date means, in respect of any Information Date, the day falling five Business Days 

following such Information Date; 

Loan Enforcement Notice means a notice delivered by the FCC Servicer to the Borrowers’ Agent, on 

behalf of the relevant Borrowers, in accordance with the terms of a Commercial Mortgage Loan 

Agreement; 

Loan Event of Default means each of the events described in the section entitled ‘‘Summary of Principal 

Documents – The Commercial Mortgage Loan Agreements – Loan Events of Default’’, as more specifically 

set out in the Commercial Mortgage Loan Agreements; 

Loan Interest Payment Date means, in respect of any Interest Payment Date, the day falling three Business 

Days prior to such Interest Payment Date; 

254

Loan Interest Period means each period commencing on (and including) an Interest Payment Date on the 

Notes and ending on (but excluding) the following Interest Payment Date except that the first Loan 

Interest Period shall commence on (and include) the Closing Date and end on (but exclude) the Interest 

Payment Date falling in February 2006 and the final Loan Interest Period shall commence on (and 

include) the Interest Payment Date falling in May 2014 and end on (but exclude) the Final Repayment 

Date; 

LTV Ratio means as of any Loan Calculation Date during the Second Reference Period, the ratio 

(expressed as a percentage) resulting from the division of (a) the total amount outstanding in respect of 

a Commercial Mortgage Loan (taking into account any repayments made on such date), less the credit 

balance, as the case may be, of the Cash Trap Accounts of the Borrowers of the same Borrower Group, 

by (b) the Market Value of all relevant Secured Properties on such date; 

Major Development means any Development, the estimated cost (excluding VAT) of which (as reasonably 

estimated and documented by the Borrower) is in excess of the greater of (A) u250,000 and (B) 10 per 

cent. of the Estimated Rental Value for the relevant Secured Property; 

Management Company means Eurotitrisation; 

Market Value means, in respect of a Secured Property, the market value of such Secured Property as set 

out in the most recent Valuation Report, provided that such market value shall be determined in 

accordance with the RICS Appraisal and Valuation Standards together with any guidance notes issued 

from time to time at the time of the valuation (or, failing that, any comparable replacement standard as 

approved by the Management Company defining generally accepted valuation terms, requirements and 

practices); 

Masse has the meaning given to it in Condition 11(a) (The Masse); 

Material Adverse Effect means 

(a) a material and adverse effect on the ability of the relevant Borrower to perform its payment 

obligations under the Transaction Documents by reference to the relevant Borrower Group; or 

(b) a material and adverse effect on the legality, binding nature, validity or enforceability of the relevant 

security by reference to the relevant Borrower Group; or 

(c) a material and adverse effect on the legality, binding nature, validity or enforceability of the relevant 

security Borrowers’ entitlement to rental income by reference to the relevant Borrower Group, 

provided that, in determining whether or not a material adverse effect has occurred, there shall be 

disregarded in respect of sub-paragraphs (b) and (c) above, the consequences of any matters of law (but 

not matters of fact) to the extent qualifications have been made as to such matters of law in legal opinions 

delivered under the relevant Commercial Mortgage Loan Agreement at or before the Closing Date; 

Mazars & Guerard means the firm of accountants of the same name having its office at Le Vinci 4 allée 

de l’Arche 92075 La Défense, France; 

Meeting means a meeting of the Noteholders relating to any Masse; 

Minor Development means any Development, the estimated cost (excluding VAT) of which (as reasonably 

estimated and documented by the Borrower) is less than or equal to the greater of (A) u250,000 and (B) 

10 per cent. of the Estimated Rental Value for the relevant Secured Property; 

Minor Disposal means a disposal of: 

(a) any asset, where the book value of such asset prior to disposal was less than or equal to u200,000; 

(b) any asset, including any Eligible Investment, not being a Secured Property in accordance with the 

Transaction Documents; and 

(c) a Disposal Property which does not adversely affect the Market Value of the remaining Secured 

Property(ies) after such disposal, as certified by the Property Manager to the relevant FCC Servicer; 

and is effected by the grant of an easement, licence or wayleave necessary to a third party to enable 

the laying in, under or over such Secured Property(ies) of conduits for gas, electricity, 

telecommunications, water, drainage and the like; 

Model Information means the information provided by any of the Obligors to the Joint Lead Managers 

and/or the Rating Agencies for the purposes of preparing financial models to be used in the context of the 

Note issuance; 

255

Mortgage means (i) the mortgages (hypothèques conventionnelles) and lender’s liens (privilèges du prêteur 

de deniers) that will be transferred to the Lenders by way of subrogation in connection with the granting 

of the relevant Commercial Mortgage Loans, and the benefit of which will be transferred to the Issuer on 

the Closing Date and (ii) the Additional Mortgages; 

Mortgage Reserve Account means each reserve account held with the Issuer Account Bank in the name of 

the Issuer and established for the purpose of maintaining a reserve fund for the payment of registration 

costs in respect of any unregistered Additional Mortgages; 

Most Senior Class means, at any time: 

(a) the Class A Notes; or 

(b) if no Class A Notes are then outstanding, the Class B Notes (if at that time any Class B Notes are 

then outstanding); 

(c) if no Class A Notes or Class B Notes are then outstanding, the Class C Notes (if at that time any 

Class C Notes are then outstanding); or 

(d) if no Class A Notes, Class B Notes or Class C Notes are then outstanding, the Class D Notes (if at 

that time any Class D Notes are then outstanding); 

(e) if no Class A Notes, Class B Notes, Class C Notes or Class D Notes are then outstanding, the Class 

E Notes (if at that time any Class E Notes are then outstanding); 

Net Cash Proceeds means in the case of a Permitted Disposal, the Gross Cash Proceeds less Disposal 

Expenses; 

Notarised Deed has the meaning given in the section entitled ‘‘Summary of Principal Documents – The 

Related Rights – The Notarised Deeds’’; 

Notary means the Etude Notariale S. Durand des Aulnois, C. Pisani, A. Thabeault and E. Dubost 

Notaires Associés; 

Note Enforcement Notice means a notice delivered by the relevant Noteholder Representative to the 

Issuer in accordance with Condition 9 (Note Events of Default); 

Note Event of Default has the meaning given in Condition 9; 

Note Principal Payment has the meaning given to it in Condition 5(f) (Redemption, Purchase and 

Cancellation – Note Principal Payments, Principal Amount Outstanding, Adjusted Principal Amount 

Outstanding and Pool Factor); 

Noteholder means each holder for the time being of any Class A Note, Class B Note, Class C Note, Class 

D Note or Class E Note; 

Noteholder Representatives means, as at the Closing Date, in respect of each Class of Notes, Association 

de Représentation des Masses de Titulaires de Valeurs Mobilières, of Centre Jacques Ferronnière, 32, rue 

du Champs de Tir, B.P. 81236, 44312 Nantes Cedex 3, France and, at any time thereafter, any other 

Noteholder Representative appointed in respect of any Class of Notes in accordance with the Conditions, 

and Noteholder Representative means any of them; 

Notes means the Class A Notes, the Class B Notes, the Class C Notes, the Class D Notes, the Class E 

Notes or, where the context requires, any of them; 

Notes Subscription Agreement means the subscription agreement dated on or about 21 October 2005 

entered into between, inter alios, the Management Company, the Custodian and the Joint Lead Managers 

pursuant to which the Joint Lead Managers have agreed to jointly and severally subscribe and pay for the 

Notes on the Closing Date; 

Obligor Post-Enforcement Priority of Payments means the order of the relevant Borrower’s priority of 

payments post enforcement of the relevant Commercial Mortgage Loan as set out in the section entitled 

‘‘Resources available to the Borrowers and the Issuer – Available Funds and their Priority of Application’’ 

and in the relevant Commercial Mortgage Loan Agreement; 

Obligor Pre-Enforcement Priority of Payments means the order of the relevant Borrower’s priority of 

payments prior to enforcement of the relevant Commercial Mortgage Loan as set out in the section 

entitled ‘‘Resources available to the Borrowers and the Issuer – Available Funds and their Priority of 

Application’’ and in the relevant Commercial Mortgage Loan Agreement; 

256

Obligor Priority of Payments means, in respect of any Borrower, the applicable Obligor Pre-Enforcement 

Priority of Payments and the applicable Obligor Post-Enforcement Priority of Payments; 

Obligor Secured Obligation means, in respect of each Borrower Group, all monies, liabilities and 

obligations whatsoever, present and future and whether actual or contingent, which from time to time 

become due, owing or payable by the relevant Obligors to the relevant Lender or the Issuer under or 

relating to the Obligor Transaction Documents; 

Obligor Security means, in respect of each Borrower Group, the security created by or pursuant to the 

Obligor Security Documents relating to that Borrower Group over the Obligor Security Assets; 

Obligor Security Assets means the property, rights and assets of the Obligors which are the subject of 

security interests created by the Borrower and the other Obligors in favour of the relevant Lender, the 

benefit of which will be assigned to the Issuer together with the Receivables on the Closing Date, under 

or pursuant to the Obligor Security Documents; 

Obligor Security Documents means, in relation to a Borrower Group, any document or instrument from 

which security interests granted in favour of the relevant Lender arise, the benefit of which will be 

assigned to the Issuer together with the Receivables on the Closing Date, creating or evidencing security 

for all or any part of the obligations and liabilities of the Obligors or any of them under any of the Obligor 

Transaction Documents relating to that Borrower Group whether by way of personal covenant, charge, 

security interest, mortgage, pledge or otherwise, including as at the Closing Date, each Commercial 

Mortgage Loan Agreement and Obligor Security Document shall be construed accordingly; 

Obligor Transaction Documents means the Obligor Security Documents, each Commercial Mortgage 

Loan Agreement, the relevant Property Management Agreement, the relevant Subordination Agreement 

and any other document entered into by one or more Transaction Parties which is designated an ‘‘Obligor 

Transaction Document’’ with the consent of the Management Company and the relevant Obligor; 

Obligors means, in respect of each Borrower Group, the relevant Borrowers and Parent Obligors; 

Occupational Lease means any present or future lease, underlease, sublease, licence, tenancy or right to 

possession, occupation or use and any agreement for any of them relating to any whole or part of a 

Secured Property to which a Borrower’s interest in a Secured Property may be subject from to time; 

Occupational Tenants means the primary tenants under the Occupational Leases; 

Offering Circulars means the Preliminary Offering Circular and the Final Offering Circular; 

On-going Facility Fee means, in respect of the Issuer, a fee to enable the Issuer to pay or provide for all 

amounts (other than any payments of interest on, and repayments of principal in respect of, the Notes that 

are due to be paid on the immediately following Interest Payment Date) required, in accordance with the 

terms of the Issuer Transaction Documents, to be paid or provided for by the Issuer on or shortly after 

the immediately following Interest Payment Date (together in each case with any VAT). As between the 

Borrowers and the Issuer, On-going Facility Fee means the aggregate of (i) that Borrower’s proportionate 

share (divided as between the Borrowers by reference to the principal amounts then outstanding under 

their respective Commercial Mortgage Loans) of all amounts making up such fee excluding amounts 

arising in respect of items (h) and (i) below, and (ii) any amounts arising in respect of that Borrower in 

respect of items (h) and/or (i) below, together in each case with any VAT. The On-going Facility Fee will 

include: 

(a) any amounts payable in respect of Fees and Expenses payable to any Noteholder Representative 

and/or in connection with meetings of the Noteholders under the provisions of the Issuer 


(b) any amounts payable in respect of the Issuer’s operating expenses incurred in the course of the 

Issuer’s business (other than as provided elsewhere in this priority of payments) that have become 

due and payable, including: 

(i) any amounts payable by the Issuer to the Management Company and the Custodian and its 

statutory auditors in respect of any Fees and Expenses pursuant to the Issuer Regulations; 

(ii) any amounts payable by the Issuer to third parties in respect of the establishment, maintenance 

and good standing of the Issuer or otherwise payable for the ongoing existence or maintenance 

of its business; 

(iii) any amounts payable by the Issuer in respect of any Fees and Expenses of the Paying Agents 

incurred under the provisions of the Paying Agency Agreement; 

257

(iv) any amounts payable by the Issuer in respect of Fees and Expenses of the FCC Servicers under 

the provisions of the Receivables Transfer and Servicing Agreement; and 

(v) any amounts payable by the Issuer in respect of any Fees and Expenses of the Issuer Account 

Bank and the Cash Manager under the Issuer Account Bank and Cash Management 

Agreement; 

(c) any amounts payable by the Issuer to the Rating Agencies in respect of any Fees and Expenses and 

to the Irish Stock Exchange in respect of any fees that, in each case, they may reasonably incur on 

an ongoing basis in connection with the rating or listing of the Notes, as the case may be; 

(d) any amounts payable to the Liquidity Facility Provider under the Liquidity Facility Agreement 

other than amounts falling within (h) below and the Liquidity Subordinated Amounts; 

(e) any amounts payable to the Hedging Providers under the Hedging Agreements excluding Hedging 

Termination Payments in respect of the Hedging Agreements falling within (i) below, any Hedging 

Subordinated Amounts; 

(f) any amounts payable in respect of Liquidity Subordinated Amounts due to the Liquidity Facility 

Provider under the Liquidity Facility Agreement; 

(g) any amounts payable in respect of Hedging Subordinated Amounts due to the Hedging Providers 

under the Hedging Agreements; 

(h) any amounts of interest and principal payable to the Liquidity Facility Provider under the Liquidity 

Facility Agreement by reason of the Issuer drawing advances under the Liquidity Facility 

Agreement to meet a Liquidity Shortfall arising due to a Borrower not making payment in full of 

all amounts owed under its Commercial Mortgage Loan on the due date for such payments; and 

(i) any amounts payable to the Hedging Providers by way of Hedging Termination Payments in respect 

of the Hedging Agreements arising as a result of the Issuer adjusting its hedging activities to reflect 

a prepayment by a Borrower under its Commercial Mortgage Loan 

provided that the aggregate amounts payable by the Borrowers in respect of the On-going Facility Fee on 

any Loan Interest Payment Date shall be reduced by the amount of interest credited to the Issuer 

Transaction Account and the Mortgage Reserve Account as of the relevant Loan Interest Payment Date, 

such reduction to be allocated between the Borrowers on a pro rata basis. 

Operating Costs means all costs (whether foreseen or unforeseen) reasonably incurred and related 

exclusively to the regular and day-to-day operation of the Secured Properties (excluding disposals) 

including, as the case may be, insurance premiums, fees and expenses of the Property Manager (up to a 

maximum amount of 3.5% of the aggregate of the Gross Rental Income of the relevant of the Secured 

Properties and of the gross rental income from the properties subject to the Finance Leases), auditors’ 

fees and expenses, the Valuer’s fees and expenses, fees and expenses of legal and tax advisers, general fees 

and expenses of an administrative nature, taxes and charges of any kind whatsoever, maintenance, repairs 

and operating costs of the Secured Properties (but exclusive of any investment expenses), in each case to 

the extent such costs are borne by the Borrowers without the possibility of recourse to the Operational 

Tenants; 

Orrick Report means the report prepared by Orrick, Herrington & Sutcliffe in relation to a sample of 

Occupational Leases; 

Outgoing Property means a Secured Property to be substituted by an Incoming Property; 

Overamortisation Percentage means 10%; 

Parent Obligor means, in respect of the Paris Properties Borrowers, each of SCI Paris Provinces 

Properties, SPCR SAS, SCI Beaulieu Properties, Ringmerit Limited, SARL Immobilière Ménélas and 

Paris Properties SARL, and, in respect of the Proudreed France Borrowers, each of Proudreed Limited, 

Proudreed France SARL and Mr. Jean-Pierre Raynal, in each case in their capacity as holding company 

of the shares in the relevant Borrower; 

Paris Properties Borrowers means each of SCI du 7 rue d’Amiens, SCI Beaulieu Properties, SCI 

Annapaul, SARL Enoville, SARL Les Hauteurs du Loing, SARL Immobilière Menelas, SAS IDB 

Immobilier, SARL PPMPP and SCI Paris Provinces Properties; 

Paying Agency Agreement means a paying agreement dated 21 October 2005 and made between, inter 

alios, the Management Company, the Custodian and the Paying Agents pursuant to which provision is 

made for, inter alia, the payment of interest and repayment of principal in respect of the Notes; 

258

Paying Agents means the Principal Paying Agent and the Irish Paying Agent; 

Permitted Development means any Development that satisfies each of the following criteria: 

(a) the relevant Borrower has confirmed in writing that the undertaking or completion of the relevant 

works should not result in a reduction in the Market Value of the relevant Secured Property; and 

(b) the relevant Borrower has deposited in its Borrower Junior Expenses Account an amount equal to 

at least 110 per cent. of the estimated cost of the relevant works; 

Permitted Disposals means a CPO Disposal, a Minor Disposal, a Same-Day Substitution Disposal and an 

Elected Disposal; 

Permitted Encumbrances means: 

(a) rights of set off existing in the ordinary course of business between any Obligor and the 

Occupational Tenants or existing suppliers; 

(b) an Encumbrance arising under the Obligor Security Documents; 

(c) an Encumbrance securing the obligations of a Borrower under a Finance Lease and which the 

relevant FCC Servicer has confirmed in writing may be maintained; and 

(d) any other Encumbrance created with the prior written consent of the FCC Servicer; 

Permitted Occupational Lease means an Occupational Lease which: 

(a) is a lease with a term of less than 12 years; 

(b) is granted in the ordinary course of the relevant Borrower’s business; 

(c) is not a finance lease and is not entered into in order to raise capital; and 

(d) is on arm’s length terms; 

Pledged Shares means the Shares of each Borrower that are pledged pursuant to the Shares Pledges; 

Pool Factor means the fraction expressed as a decimal to the sixth point of which the numerator is the 

Adjusted Principal Amount Outstanding of a Note of the relevant Class and the denominator is u100,000; 

Potential Loan Event of Default means any event which, with the giving of notice or determination of 

materiality or the fulfilment of any applicable conditions or the lapse of time, or a combination of the 

foregoing, would constitute a Loan Event of Default; 

Potential Note Event of Default means any event which, with the giving of notice or determination of 

materiality or the fulfilment of any applicable conditions or the lapse of time, or a combination of the 

foregoing, would constitute a Note Event of Default; 

Preliminary Offering Circular means the offering circular dated 29 September 2005, issued by the Issuer 

in connection with the Notes; 

Prepayment Amount has the meaning set out in the section entitled ‘‘Summary of Principal Documents – 

the Commercial Mortgage Loan Agreements’’; 

Principal Amount Outstanding means, on any date in relation to a Note, the principal amount outstanding 

of that Note as at the Closing Date less the aggregate of all Note Principal Payments that have been made 

by the Issuer in respect of that Note on or prior to that date; 

Principal Loss means on any Loan Calculation Date, the amount determined by the relevant FCC 

Servicer to be the amount that has not been recovered on the Commercial Mortgage Loans following the 

default by a Borrower and the completion of the enforcement of the security for the relevant Commercial 

Mortgage Loans; 

Principal Paying Agent means, on the Closing Date, HSBC Bank plc acting through its office at 8 Canada 

Square, London E14 5HQ, United Kingdom; 

Projected ICR means, in respect of any Forward-Looking Calculation Period, the ratio of the Projected 

Net Rental Income to the Projected Interest Charges each in respect of such Forward-Looking 

Calculation Period; 

Projected Interest Charges means, in relation to a Forward-Looking Calculation Period the projected cost 

of interest incurred or to be incurred by the relevant Borrowers under the relevant Commercial Mortgage 

259

Loan Agreement during such Forward-Looking Calculation Period calculated on an accruals basis and 

using the rate applicable to the relevant Commercial Mortgage Loan on the last Calendar Quarter Date 

preceding the relevant Loan Calculation Date; 

Projected Net Rental Income means, in respect of any Forward-Looking Calculation Period: 

(a) the aggregate amount of Gross Rental Income (excluding any amounts attributable to VAT) to be 

invoiced or received in respect of the relevant Forward-Looking Calculation Period, adjusted in 

accordance with the then-applicable Accounting Principles (including in relation to the treatment of 

any premium or other consideration paid to a Borrower in connection with the surrender of an 

Occupational Lease and any amount payable under any policy of insurance in respect of loss of rent, 

including for the payment of default interest); 

(b) minus any amounts under items (h) and (i) of the definition of Gross Rental Income in respect of 

the relevant Forward-Looking Calculation Period; 

(c) minus the aggregate amount of all other Gross Rental Income from the Secured Properties (other 

than those referred to in paragraph (b) above) and relating to (i) any Occupational Lease which will 

either terminate (or which may be terminated by the relevant Occupational Tenant) during the 

relevant Forward-Looking Calculation Period, in respect of that part of the relevant Forward- 

Looking Calculation Period after which the relevant Occupational Lease will or may so be 

terminated (provided that, in respect of any Occupational Lease that is to be terminated, notice of 

termination or non-renewal has already been served by the relevant Borrower or Occupational 

Tenant, as the case may be, and that, in the case of an Occupational Lease that may be terminated 

at the option of the Occupational Tenant, that the relevant notice of termination or non-renewal can 

take effect during the relevant Forward-Looking Calculation Period), (ii) any Occupational Lease 

in respect of which the relevant Occupational Tenant is subject to any insolvency proceedings; 

(iii) any Occupational Lease in respect of which the relevant Occupational Tenant is more than 

three months in arrears on its payment obligations under any Occupational Lease at the start of such 

period; 

less the sum of the following items, in each case in respect of the relevant Forward-Looking Calculation 

Period, as reasonably determined by the relevant Borrowers’ Agent: 

(d) the aggregate amount of all non-recoverable property costs and expenses charges and taxes in 

respect of Occupational Tenants paid, or which should reasonably be paid, by the Property Manager 

(or its agents); 

(e) any fees and expenses paid or to be paid by the Borrowers pursuant to sub-paragraph (b)(iv) of the 

definition of On-going Facility Fee; 

(f) any other amounts paid or to be paid by the Borrower to the Issuer by way of On-going Facility Fee 

under the Commercial Mortgage Loan Agreement in respect of amounts described in subparagraphs 

(a) to (e) and sub-paragraphs (h) and (i) of the definition of On-going Facility Fee; 

(g) any corporation or equivalent tax paid or to be paid by the Borrower in respect of the Gross Rental 

Income; 

(h) any other amounts paid or to be paid by the Borrowers to the French tax authorities (other than 

VAT); 

(i) any amounts paid or to be paid to a Valuer in respect of any Valuation Report issued in accordance 

with the terms of a Commercial Mortgage Loan Agreement; 

(j) any breakage costs paid or to be paid by the Borrowers to the Lenders pursuant to the Financing 

Documents; 

(k) any amount paid or to be paid by or on behalf of the Borrowers in respect of the fees and charges 

of the Borrowers Account Banks; 

(l) (without double counting in respect of items already included in (d) to (k) above) the aggregate 

amount of all irrecoverable costs, expenses, charges and rental taxes in respect of the Occupational 

Tenants incurred or which should reasonably be incurred by the relevant Borrowers; 

(m) any amounts of irrecoverable VAT on amounts paid or to be paid under paragraphs (d) to (l) above; 

Property Management Agreement means each property management agreement (mandat de gestion), 

entered into between the Property Manager and each Borrower under which the Property Manager 

260

undertakes to act as property manager for the purposes of, inter alia, managing, promoting and 

administering the relevant Property; 

Property Manager means (a) at the date of the Commercial Mortage Loan Agreement, FIPAM in its 

capacity as property manager under the relevant Property Management Agreement, and (b) or such other 

replacement as may be appointed by the Borrowers in accordance with the Commercial Mortage Loan 

Agreement; 

Property Manager Duty of Care Agreements means the duty of care agreement entered into by the 

Property Manager, the Management Company, the Paris Properties Borrowers and the Proudreed France 

Borrowers, and dated 21 October 2005; 

Property Portfolio means with respect to a Borrower Group, the portfolio of Secured Properties belonging 

to the relevant Borrowers from time to time, and Property Portfolios shall mean the aggregate of both 

such portfolios from time to time; 

Proudreed France Borrowers means each of Proudreed France SARL, SCI Dep-Immo–Comm, and SCI 

2PI; 

Quarterly Operating Report means, in respect of each Commercial Mortgage Loan Agreement, the 

consolidated report to be delivered by the Borrower’s Agent on behalf of the relevant Borrowers to each 

FCC Servicer on each Information Date; 

Rate of Interest has the meaning given to it in Condition 4(c) (Interest−Rate of Interest); 

Rating Agencies means Fitch and S&P or, where the context requires, either of them. If at any time Fitch 

or S&P is replaced as a Rating Agency, then references to its rating categories shall be deemed instead 

to be references to the equivalent rating categories of the entity which replaces it as a Rating Agency; 

Rating Criteria means, in respect of a bank, a rating of at least A-1+ by S&P and F1 by Fitch, in each case 

in respect of its short-term debt obligations; 

Rating Downgrade Event means written notification from the Rating Agencies to the Management 

Company (copied to the Custodian), confirming that the then current ratings of the Notes will be 

adversely affected by the relevant event or matter; 

Ratings Test means receipt by the Management Company of a confirmation from each of the Rating 

Agencies (or, if at any time there is only one Rating Agency, that Rating Agency) that, in respect of any 

event or matter in respect of which such confirmation is required or sought, either: 

(a) no Rating Downgrade Event in respect of such Rating Agency has or will occur as a result of the 

relevant event or matter; or 

(b) that Rating Agency will not downgrade any of the Notes as a result of the relevant event or matter; 

Receivables has the meaning provided in the section entitled ‘‘Transaction Overview – Issuer of the Notes 

and advance of the Commercial Mortgage Loan’’; 

Receivables Transfer and Servicing Agreement means the transfer and servicing agreement to be dated on 

or about the Closing Date, entered into by, inter alios, the Management Company, the Custodian, each 

Seller, each FCC Servicer and the Obligors, the Property Manager and the Borrowers’ Agent, pursuant 

to which each Seller will agree to transfer the Receivables (including the attached Related Rights) to the 

Issuer and each FCC Servicer will agree to service the Receivables for the account of the Issuer; 

Reference Amount means, in respect of any Reference Year, an amount equal to the Historical Net Rental 

Income for the preceding Reference Year, provided that (a) in respect of the first Reference Year, the 

Reference Amount will be equal to (i) u14,000,000 in respect of the Proudreed France Borrowers and (ii) 

u42,000,000 in respect of the Paris Properties Borrowers, and (b) in respect of the final Reference Year, 

the Reference Amount will be equal to the Historical Net Rental Income for the preceding Reference 

Year divided by 365 and multiplied by the number of days in the final Reference Year; 

Reference Banks means the principal Paris office of four major banks in the Paris inter-bank market 

selected by the Management Company at the relevant time; 

Reference Period means, as the context requires, each period running from one Loan Interest Payment 

Date to the following Loan Interest Payment Date, or the period running from the Closing Date to the 

first Loan Interest Payment Date; 

Reference Year means each calendar year, with the exception of the first Reference Year, which shall begin 

on the Closing Date and end on 31 December 2006; 

261

Regulation S means Regulation S under the Securities Act; 

Related Rights means any guarantee or security granted by an Obligor to any Lender the benefit of which 

will be assigned to the Issuer together with the Receivables on the Closing Date by way of a Transfer 

Document, in order to guarantee the payment of any amount owed by it, and/or the fulfilment of the 

obligations of, such Obligor in connection with the Receivables, including: 

(a) any Obligor Security; and 

(b) any guarantee or document executed and delivered after the date of the Commercial Mortgage 

Loan Agreement by means of which any Obligor grants any mortgage, pledge, lien, hypothecation, 

right of set-off, assignment by way of security, reservation of title, or any other security interest or 

guarantee whatsoever to the relevant Lender; 

Relevant Margin has the meaning given to it in Condition 4(c) (Interest – Rate of Interest); 

Reporting Date means, in relation to any Loan Calculation Date, the day falling on the fifth Business Day 

after such Loan Calculation Date; 

RICS means the Royal Institution of Chartered Surveyors; 

RICS Appraisal and Valuation Standards means the mandatory rules, best practice guidance and related 

commentary for members of RICS who undertake property valuations; 

S&P means Standard & Poor’s Ratings Services, a division of the McGraw Hill Companies, Inc. or any 

successor to its rating business; 

Same-Day Substitution Disposal means a disposal of a relevant Disposal Property as substituted on the 

same day by another Secured Property in accordance with the Commercial Mortgage Loan Agreements; 

Second Reference Period means the period beginning on (and including) the last Loan Calculation Date 

prior to the seventh anniversary of the Closing Date and ending on the Final Repayment Date; 

Secured Properties means, with respect to each Borrower, the properties listed in the table set out in the 

relevant Commercial Mortgage Loan Agreement and any Incoming Properties substituted therefor (and 

shall include all estate rights and interests in such properties and all buildings, structures and fixtures on 

such properties) ; 

Securities Act means the United States Securities Act of 1933, as amended; 

Sellers means each of CCF and Société Générale in its capacity as a seller of Receivables pursuant to the 

Receivables Transfer and Servicing Agreement; 

Servicing Report means the report to be provided by each FCC Servicer on each Loan Calculation Date 

to the Management Company substantially in the form set out in (and containing the information referred 

to in) Schedule 4 of the Receivables Transfer and Servicing Agreement; 

Shares Pledge means each pledge granted by each Parent Obligor over its shares in the relevant Borrowers 

(and, in respect of SAS IDB, over the financial instruments account comprising the shares in SAS IDB 

and the Borrower Dividend Account) in favour of the relevant Lender as security for its obligations under 

the relevant Commercial Mortgage Loan Agreement; 

Specified office means with respect to the Paying Agents the offices listed at the end of the Conditions or 

such other offices as may from time to time be duly notified pursuant to Condition 13 (Notices and 

Information) provided that any specified office shall not be an office within the United States or its 

possessions; 

Stabilising Manager means each of Société Générale acting through its office at 17 Cours Valmy 92987 La 

Défense, Paris, France and HSBC Bank plc acting through their office at 8 Canada Square, London E14 

5HQ, United Kingdom; 

Standby Deposit means the amount standing to the credit of the Liquidity Facility Standby Account from 

time to time together with interest on such deposit; 

Subordination Agreement means, in relation to each Borrower Group, the subordination agreement dated 

21 October 2005 between, inter alios, the Lenders, the Management Company and the Borrowers and 

Parent Obligors of that Borrower Group; 

Subordinated Loan means any loan made to a Borrower by any member of that Borrower’s Borrower 

Group who has agreed to subordinate its rights in respect of that loan pursuant to the relevant 

Subordination Agreement to be entered into on or about the Closing Date; 

262

Substitution Criteria means the criteria set out in the section entitled ‘‘Summary of Principal Documents 

– Commercial Mortgage Loans – Same-Day Substitution of the Secured Properties’’ by which an 

Incoming Property may substitute an Outgoing Property, as the same may be more expressly set out in 

the Commercial Mortgage Loan Agreements; 

TARGET means Trans-European Automated Real-time Gross Settlement Express Transfer payment 

system; 

TARGET Day means any day on which TARGET is open for the settlement of payments in euro; 

Tax means any tax, levy, impost, duty, charge, fee, deduction or withholding of any nature whatsoever 

(including any penalty or interest payable in connection with any failure to pay or any delay in paying any 

of the same) imposed or levied at any time by any Tax Authority, and tax, taxes, taxation, taxable and 

comparable expressions shall be construed accordingly; 

Tax Authority means any government, state, municipality or any local, federal or other fiscal, revenue, 

customs or excise authority, body or official anywhere in the world, including the French tax authorities, 

in each case having power to tax; 

Tax Event has the meaning given to it in Condition 5(d) (Redemption, Purchase and Cancellation – 

Optional Redemption for Tax Reasons); 

Tenancy Schedules means the tenancy schedules provided to the Lenders; 

Transaction Documents: means the Issuer Transaction Documents and the Obligor Transaction Documents 

and any other agreement, instrument, deed or other document entered into in respect of the issue of the 

Notes by the Issuer; 

Transaction Party means the Issuer, each Noteholder Representative, the Principal Paying Agent, the 

Irish Paying Agent, the Cash Manager, the Joint Lead Managers, the Borrowers, the Parent Obligors, the 

Borrowers’ Agent, the Property Manager, the Hedging Providers, the Liquidity Facility Provider, the 

Issuer Account Bank, the Borrowers Account Banks, the Management Company, the Custodian, each 

FCC Servicer and each Seller; 

Transfer Document means each acte de cession de créances executed in accordance with the provisions of 

Articles L.214-43 et seq. and Articles R.214-92 to R.214-115 of the French Monetary and Financial Code 

pursuant to which the relevant Lender transfers automatically (de plein droit) to the Issuer the relevant 

Receivables and attached Related Rights pursuant to the provisions of the Receivables Transfer and 

Servicing Agreement; 

Unitholder means a registered holder of one or more Units; 

Units means the two u150 units (parts) issued by the Issuer on the Closing Date; 

Units Subscription Agreement means the subscription agreement entered into on or about the Closing 

Date between the Management Company, representing the Issuer, and the subscribers, in relation to the 

initial subscription of the Units; 

Valuation Report means each valuation report prepared by the initial Approved Valuers and such other 

valuation report by Approved Valuers as prepared from time to time in relation to Secured Properties; 

Valuers means such of the Approved Valuers as may be appointed by the Property Manager or, as the case 

may be, the relevant FCC Servicer for the purpose of preparing the relevant Valuation Report; and 

VAT or Value Added Tax means value added tax imposed in France as referred to in the French tax code 

and legislation (whether delegated or otherwise) supplemental thereto or in any primary or subordinate 

legislation promulgated by the European Union or any official body or agency thereof, and any similar 

turnover tax replacing or introduced in addition to any of the same. 

263





JOINT LEAD MANAGERS 


17 cours Valmy 


France 

ISSUER 

French fonds commun de créances (debt mutual fund) 

FCC Proudreed Properties 2005 

represented by Eurotitrisation as Management Company 


75009 Paris 

France 

Telephone Number: +33(0)1 40 14 31 48 

MANAGEMENT COMPANY 



75009 Paris 

France 

Telephone Number: +33(0)1 40 14 31 48 

SELLER 

CCF 

103 avenue des Champs Elysées 

75008 Paris 

France 

FCC SERVICER 

CCF 


75008 Paris 

France 

LEGAL ADVISERS 

To the Borrowers as to French law, except in respect to 

tax matters 

Linklaters 

25 rue de Marignan 

75008 Paris 

France 

CUSTODIAN 

CCF 


75008 Paris 

France 

SELLER 




France 

FCC SERVICER 




France 

To the Joint Lead Managers, as to French law 

Freshfields Bruckhaus Deringer 

2-4 rue Paul Cézanne 

75008 Paris 

France 

To the Account Banks, Cash Managers, Custodian, FCC Servicers, 

Hedging Providers, Liquidity Facility Provider and Principal Paying Agent 

IRISH PAYING AGENT 

HSBC Institutional Trust Services (Ireland) 

Limited 

HSBC House 

Harcourt Centre 

Harcourt Street 

Dublin 2 

Ireland 

AUDITORS 

Mazars & Guerard 

Le Vinci 4 allée de l’Arche 

92075 La Défense 

France 

Lovells 

6 avenue Kléber 

75116 Paris 

France 

PRINCIPAL PAYING AGENT 





LISTING AGENT 

Goodbody Stockbrokers 

Ballsbridge Park 

Dublin 4 

Ireland 

VALUERS 

Savills 

55, boulevard 

Haussmann 

75008 Paris 

France 

Atis Real 

5 avenue Kléber 

75116 Paris 

France

Capital Printing Systems (UK) Limited 30393

FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

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