Titan Europe 2007-1 (NHP) Limited - Irish Stock Exchange

In addition, the law in England and Wales is unclear as to whether an administrative receiver may be
appointed to a company that is incorporated overseas. As regards security granted by the Issuer incorporated
overseas, while such an appointment ought to be possible, no assurance can be given that the English courts
would uphold the appointment of an administrative receiver thereto if the appointment were challenged.
The Insolvency Act also contains an out-of-court route into administration for a qualifying floating
chargeholder, the directors or the relevant company itself. If the appointment is to be made by a qualifying
floating chargeholder, it must give at least two business days’ written notice of its intention to appoint to any
prior qualifying floating chargeholder, or obtain its written consent. If notice is given, a copy of that notice
must be filed at court. Upon such filing, an interim moratorium on enforcement of the relevant security will
take effect. That moratorium lasts for five business days beginning with the date of filing, or until an
administrator is appointed (whichever is earlier). If the appointment is to be made by the company or its
directors, they must give at least five business days’ written notice of their intention to appoint to any person
who is or may be entitled to appoint an administrative receiver and to any person who is or may be the holder of
any qualifying floating charge entitled to appoint an administrator out-of-court. A copy of that notice must be
filed at court. Upon such filing, an interim moratorium on enforcement of the relevant security will take effect.
That moratorium lasts for ten business days beginning with the date of filing of the notice, or until an
administrator is appointed (whichever is earlier). During the notice period, the holder of a qualifying floating
charge can appoint its own insolvency practitioner, rather than the company’s or directors’ chosen insolvency
practitioner, as administrator. If a person entitled to receive a notice of intention to appoint does not respond to
the notice of intention to appoint, the appointer’s chosen administrator will take office after the notice period has
elapsed and upon a notice of intention to appoint being filed at court. Where the holder of a qualifying floating
charge within the context of a capital market transaction retains the power to appoint an administrative receiver,
such holder may prevent the appointment of an administrator (either by the new out-of-court route or by the
court based procedure) by appointing an administrative receiver prior to the appointment of the administrator
being completed. These provisions of the Insolvency Act give primary emphasis in relation to administration to
the rescue of a company as a going concern and achieving a better result for the creditors as a whole. No
assurance can be given that the primary purpose of the new provisions will not conflict with the interests of
Noteholders were the Issuer ever subject to administration. Administrative receivers often require an indemnity
to meet their costs and expenses as a condition of their appointment. Such an indemnity would rank ahead of
payments on the lending. However, where the lender believes that a chargor is diligently taking all appropriate
steps to make good any breach under a loan or charge instrument, and the security granted in respect of lending
is not prejudiced, or where the lender does not believe it would be in the interests of the Noteholders to do so,
the lender may decline or defer appointment of any receiver.
In cases where a property is lawfully occupied by third parties pursuant to leasehold interests granted by the
related owner of the property, the receiver’s right to possession would be exercised by directing the tenants to
pay rent to the lender.
Receivers may choose to sell the property the subject of the security interest. Alternatively the receiver
may choose to manage and operate the asset itself for a period of time. Receivers may have powers to borrow
funds to operate the property (which are treated as an expense of the receivership and so rank ahead of the
secured debt) or re-let or redevelop the property.
In the event that a receiver were to be appointed in relation to a Borrower and/or its respective assets, there
may be delays in timely receipt of payments by the Issuer, or deductions from amounts due to the Issuer in
respect of indemnities to or borrowings by a receiver, each of which in turn, may have an adverse impact on the
funds available in respect of the Notes.
Enforcement – Scotland: Whereas in England and Wales it is possible to appoint a receiver to enforce a
fixed charge over real property which has been granted by a company (usually under the LPA) who derives
power from both the LPA and the charge instrument, it is not possible to appoint an LPA Receiver in relation to
Properties situated in Scotland (a “Scottish Property”). Instead, the Security Agent as heritable creditor must
enforce in its own name in accordance with the Conveyancing and Feudal Reform (Scotland) Act 1970 as
amended (the “1970 Act”). The 1970 Act dictates the remedies available to the Security Agent on enforcement.
At any time after the Libra Whole Loan or its Related Security have become enforceable, the Security Agent has
three possible routes to initiate enforcement in relation to Scottish Properties:
(a) serving a calling up notice (in the format prescribed by the 1970 Act) requiring payment of the amounts
due; the relevant Obligor has two months to pay the amounts due (although the two month period can
be shortened by agreement);
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