LCP Proudreed PLC - Irish Stock Exchange

(i) 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 which satisfies
the Rating Criteria);
(ii) to maintain systems sufficient to identify all the cash-flows and collateral applicable to the relevant
Commercial Mortgage Loans;
(iii) to notify the Borrower Security Trustee within 10 Business Days of any uncured payment default
exceeding in the case of any individual lease £50,000 per quarter (in the case of LCP Real Estate)
and £15,000 per quarter (in the case of Proudreed Real Estate), or significant tenant default in any
case when the cumulative uncured payment default of any particular tenant exceeds £100,000 per
quarter (in the case of LCP Real Estate) and £50,000 per quarter (in the case of Proudreed Real
Estate).
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 Deeds will be governed by English Law.
7. 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 sterling liquidity facility (the ‘‘Liquidity Facility’’) to permit
drawings to be made in an aggregate of up to £18,900,000 (the ‘‘Liquidity Facility Maximum Amount’’)
on any Interest Payment Date, in circumstances where there is a shortfall between 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 (d) 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
6(e) (Note Principal Payments, Principal Amount Outstanding, Adjusted Principal Amount Outstanding
and Pool Factor) (a‘‘Liquidity Shortfall’’), to be determined by the Cash Manager 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 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.
The Liquidity Facility Agreement will be governed by English Law.
8. The Hedging Agreements
On or before 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 and, in either case, the then-current rating of the outstanding Notes
is as a result downgraded or placed under review for a possible downgrade) has occurred, the relevant
Hedging Provider will be required within 30 days, at its own expense, to do one of the following:
(i) to procure another person who satisfies the requisite ratings criteria to become a co-obligor or to
guarantee the obligations of the Hedging Provider;
(ii) to transfer its obligations under the Hedging Agreements to a replacement hedging provider who
satisfies the requisite ratings criteria;
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