LCP Proudreed PLC - Irish Stock Exchange

emoval, rebuilding, reinstating and replacing the Secured Property together with architects’, surveyors’
and other professional fees in accordance with the terms of the Headleases and the Occupational Leases,
(b) to maintain appropriate and adequate insurance having regard to the terms of the Occupational
Leases in respect of each Secured Property covering not less than 3 years’ loss of rent, (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 upon the occurrence of a Loan Event of
Default, such other risks as the Borrower Security Trustee acting reasonably may from time to time
specify 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, the relevant Headleases and the
relevant Occupational Leases. Any insurance policy entered into by the Borrowers as described above
must be subject to renewal and for a term of no more than one year.
On the Closing Date, all of the Secured Properties (other than four of the Occupational Leases sampled
that are insured by the Occupational Tenants) will be insured under a policy with Assicurazioni Generali
S.p.A., (‘‘Generali’’) expiring on 31st March 2006, that insures London and Cambridge Properties Limited
and any declared associated and subsidiary companies (including the Borrowers) with a total sum insured
of £1,505,932,959. If Generali (or any other insurer) 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 Borrower Security Trustee
(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 are 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
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 four Secured Properties where the Occupational Tenants are responsible for insuring
such properties, the Borrowers must use all reasonable endeavours to procure that the relevant
Occupational Tenants effect insurance comparable to that required to be effected by the Borrowers on
the terms prescribed by the relevant Occupational Lease and to keep and maintain such insurances in the
joint names of the relevant Obligors, the Issuer and the Borrower Security Trustee or otherwise with the
Issuer and the Borrower Security Trustee as co-insured and named as first loss payee or with the interest
of the Borrower Security Trustee in respect of the relevant Secured Property endorsed on the relevant
insurance policy.
Generally, the Occupational Leases sampled 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 Borrowers
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 sampled) 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 is currently three years. In a small
number of Occupational Leases sampled, the tenant has a right to terminate if damage or destruction is
caused by an uninsured risk. In respect of a small number of the Secured Properties from the sample of
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