Document:

Exhibit
10.3

 

	
   

  	
  DATED

  	
  3
  OCTOBER 2007

  	
   

  

 

 

(1) HPFM (BECKET HOUSE) LIMITED
  (as Borrower)

 

- and-

 

(2) THE ROYAL BANK OF SCOTLAND PLC 

(as Lender)

 

 

£12,700,000 SENIOR TERM

LOAN FACILITY

AGREEMENT

 

 

CONTENTS

 

	
  1.

  	
  DEFINITIONS AND
  INTERPRETATION

  	
  1

  
	
   

  	
   

  	
   

  
	
  2.

  	
  THE FACILITY

  	
  7

  
	
   

  	
   

  	
   

  
	
  3.

  	
  PURPOSE

  	
  7

  
	
   

  	
   

  	
   

  
	
  4.

  	
  CONDITIONS OF UTILISATION

  	
  8

  
	
   

  	
   

  	
   

  
	
  5.

  	
  UTILISATION

  	
  8

  
	
   

  	
   

  	
   

  
	
  6.

  	
  REPAYMENT

  	
  9

  
	
   

  	
   

  	
   

  
	
  7.

  	
  PREPAYMENT AND
  CANCELLATION

  	
  9

  
	
   

  	
   

  	
   

  
	
  8.

  	
  INTEREST

  	
  10

  
	
   

  	
   

  	
   

  
	
  9.

  	
  FEES

  	
  10

  
	
   

  	
   

  	
   

  
	
  10.

  	
  TAX GROSS UP AND
  INDEMNITIES

  	
  10

  
	
   

  	
   

  	
   

  
	
  11.

  	
  INCREASED COSTS

  	
  12

  
	
   

  	
   

  	
   

  
	
  12.

  	
  OTHER INDEMNITIES

  	
  13

  
	
   

  	
   

  	
   

  
	
  13.

  	
  MITIGATION

  	
  13

  
	
   

  	
   

  	
   

  
	
  14.

  	
  COSTS AND EXPENSES

  	
  13

  
	
   

  	
   

  	
   

  
	
  15.

  	
  REPRESENTATIONS

  	
  14

  
	
   

  	
   

  	
   

  
	
  16.

  	
  INFORMATION UNDERTAKINGS

  	
  17

  
	
   

  	
   

  	
   

  
	
  17.

  	
  GENERAL UNDERTAKINGS

  	
  18

  
	
   

  	
   

  	
   

  
	
  18.

  	
  PROPERTY COVENANTS

  	
  19

  
	
   

  	
   

  	
   

  
	
  19.

  	
  FINANCIAL COVENANTS

  	
  26

  
	
   

  	
   

  	
   

  
	
  20.

  	
  EVENTS OF DEFAULT

  	
  27

  
	
   

  	
   

  	
   

  
	
  21.

  	
  CHANGES TO THE PARTIES

  	
  29

  
	
   

  	
   

  	
   

  
	
  22.

  	
  PAYMENT MECHANICS

  	
  30

  
	
   

  	
   

  	
   

  
	
  23.

  	
  SET-OFF

  	
  31

  
	
   

  	
   

  	
   

  
	
  24.

  	
  NOTICES

  	
  31

  
	
   

  	
   

  	
   

  
	
  25.

  	
  CALCULATIONS AND
  CERTIFICATES

  	
  32

  
	
   

  	
   

  	
   

  
	
  26.

  	
  PARTIAL INVALIDITY

  	
  32

  
	
   

  	
   

  	
   

  
	
  27.

  	
  REMEDIES AND WAIVERS

  	
  32

  

 

 

	
  28.

  	
  GOVERNING LAW

  	
  33

  
	
   

  	
   

  	
   

  
	
  29.

  	
  ENFORCEMENT

  	
  33

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 1

  	
  34

  
	
   

  	
   

  	
   

  
	
  Conditions precedent

  	
  34

  
	
   

  	
   

  	
   

  
	
  SCHEDULE 2

  	
  37

  
	
   

  	
   

  	
   

  
	
  Form of Utilisation Request

  	
  37

  

 

 

	
  THIS
  SENIOR TERM LOAN FACILITY AGREEMENT is made on

  	
   

  	
  September 2007

  

 

BETWEEN

 

(1)                                 HPFM (BECKET HOUSE) LIMITED registered in Guernsey, company number 47655
and having its registered office at La Tonnelle House, Les Banques, St Sampson,
Guernsey as borrower (“Borrower”); and

 

(2)                                 THE ROYAL BANK OF SCOTLAND
PLC as lender (“Lender”).

 

SECTION 1

 

INTERPRETATION

 

1.                                     DEFINITIONS AND INTERPRETATION

 

1.1                               Definitions

 

In
this Agreement:

 

“Account Charge” means an account charge in respect of the Rent Account and Deposit Account
executed or to be executed by the Borrower on or about the date of this
Agreement in favour of the Lender in form and substance satisfactory to the
Lender;

 

“Assignment of Rental Income” means an assignment of the Net Rental Income
executed or to be executed by the Borrower on or about the date of this
Agreement in favour of the Lender in form and substance satisfactory to the
Lender;

 

“Availability Period” means the period from and including the date
of this Agreement to and including the Final Availability Date;

 

“Base Rate” means the Lender’s base lending rate as determined by the Lender from
time to time;

 

“Business Day” means a day (other than a Saturday or Sunday) on which banks are open
for general business in London;

 

“Dangerous Substance” means any substance the presence of which has
under Environmental Law in the relevant jurisdiction to be notified to a
regulatory authority or which is regulated by a regulatory authority under such
Environmental Law or is categorised or listed under such Environmental Law as
being proscribed, prohibited or restricted or as requiring precautions to be
taken or notifications to be made and (without limitation) any radioactive
emission and any substance of whatever kind and form and in whatever combination
capable of causing harm to any lifeform or the environment;

 

“Debenture” means the debenture granted or to be granted by the Borrower in favour
of the Lender containing fixed and floating charge(s) over the whole of the
assets and undertaking of the Borrower in form and substance satisfactory to
the Lender;

 

“Default” means an Event of Default or any event or circumstance specified in
clause 20 (Events of Default)  which
would (with the expiry of a grace period, the giving of notice, the making of
any determination under the Finance Documents or any combination of any of the foregoing
in each case as specified in clause 20 (Events of Default))  be an Event of Default;

 

1

 

“Deposit Account” has the meaning given to it in clause 18.16 (Deposit Account);

 

“Disposal” means a sale or disposal (including a disposal by way of the grant of a
lease at a premium) of the whole or any part of the Property;

 

“Duty of Care Agreement” means a duty of care agreement entered into
or to be entered into between the Borrower, the Property Manager and the
Lender, in form and substance satisfactory to the Lender;

 

“Environmental Law” means any law or regulation concerning:

 

(a)                                  the protection of health and safety;

 

(b)                                 the environment; or

 

(c)                                  any emission or substance which is capable of
causing harm to any living organism or the environment;

 

“Environmental Licence” means any permission of whatever kind
required by any Environmental Law;

 

“Event of Default” means any event or circumstance specified as such in clause 20 (Events of
Default);

 

“Facility” means the senior term loan facility made available under this Agreement
as described in clause 2 (The Facility);

 

“Facility Limit” means, from time to time, the lowest of:

 

(a)                                  £12,700,000;

 

(b)                                 seventy-seven point five per cent (76%) of
the market value of the Property as determined by the Initial Valuation; and

 

(c)                                  such amount that ensures compliance with the
undertakings set out in clause 19 (Financial Covenants);

 

“Final Availability Date” means 30 September 2007;

 

“Finance Documents” means this Agreement, each Security Document, the Duty of Care Agreement
and any other document designated as such by the Lender and the Borrower;

 

“GAAP” means generally accepted accounting principles in the United Kingdom or
Guernsey;

 

“Headlease” means a lease dated 29 November 1984 made between (I) The Wardens and Commonality
of the Mystery of Mercers of the City of London and (2) General Accident Fire and
Life Assurance Corporation plc;

 

“Initial Valuation” means the Valuation of the Property carried out by the Valuer as a condition
precedent pursuant to clause 4.1 (Conditions precedent)  confirming a market value (assuming
vacant possession) of not less than £14,650,000 and containing satisfactory commentary
on re-letting potential, anticipated rental levels and market comparables;

 

2

 

“Intercreditor Deed” means the intercreditor deed executed or to
be executed by the Borrower, the Mezzanine Lender, the Loan Stock Holder and
the Lender on or around the date of this Agreement in form and substance
satisfactory to the Lender;

 

“Intercreditor Lenders” means the Mezzanine Lender and the Loan Stock
Holder;

 

“Interest Payment Date” means the penultimate Business Day of March,
June, September and December in each calendar year and on final repayment of
the Loan;

 

“Legal Charge” means the first ranking legal charge in respect of the Property
executed or to be executed by the Borrower on or around the date of this
Agreement;

 

“Loan” means the loan made under the Facility or, as the context may require,
the principal amount outstanding thereunder;

 

“Loan Stock Documents” means the Loan Stock Instrument and the Loan
Stock Security Documents;

 

“Loan Stock Holder” is as defined in the Intercreditor Deed;

 

“Loan Stock Instrument” means the loan stock instrument dated on or
around the date of this Agreement constituting £600,000 zero coupon loan stock
2009 of the Borrower;

 

“Loan Stock Security Documents” means the “Security Documents” referred to in
the Loan Stock Instrument and any other document creating security given to the
Loan Stock Holder as security for amounts which may become due under the Loan
Stock Documents;

 

“Margin” means one point two five per cent (1.25%)
per annum;

 

“Material Adverse Effect” means:

 

(a)                                  a material adverse effect on the business,
assets or financial condition of the Borrower;

 

(b)                                 a material adverse effect on the ability of
the Borrower to perform its obligations under any Finance Document; or

 

(c)                                  an event or circumstance which results in any
of the Security Documents not being enforceable substantially in accordance
with its terms against any party to that Security Document;

 

“Mezzanine Facility Agreement” means mezzanine term loan facility agreement
between The Royal Bank of Scotland plc and the Borrower dated on or about the
date of this Agreement;

 

“Mezzanine Finance Documents” means the Mezzanine Facility Agreement and
the Mezzanine Security Documents;

 

“Mezzanine Lender” means The Royal Bank of Scotland plc or its successors and assigns under
the Mezzanine Facility Agreement;

 

3

 

“Mezzanine Security Documents” means the “Security Documents” referred to in
the Mezzanine Facility Agreement and any other document creating security given
to the Mezzanine Lender as security for amounts due or which may become due
under the Mezzanine Finance Documents;

 

“Net Rental Income” means the Rental Income less (1) amounts due to be paid by the Borrower
by way of rent under the Headlease and (2) Service Charges;

 

“Occupational Lease” means any lease, licence, tenancy or other
occupational arrangement granted for occupation of any part of the Property at
any relevant time;

 

“Party” means a party to this Agreement;

 

“Permitted Costs” means the costs applicable to the operation of the Borrower calculated
as follows:

 

(a)                                 in each calendar year following the date of
this Agreement an amount in respect of the Borrower’s management fee which is
equal to the lower of 0.5% of the current Valuation of the Property and
£100,000 (exclusive of VAT); and

 

(b)                                during the period from the date of this Agreement until the Repayment
Date, both dates inclusive, an aggregate amount of up to £100,000 (exclusive of
VAT) in respect of agreed professional fees incurred by the Borrower in
relation to the redevelopment of the Property,

 

in
each case provided that no Event of Default has occurred or would result from
the payment of any Permitted Cost;

 

“Planning Acts” means the Town and Country Planning Act 1990, the Planning (Listed Buildings
and Conservation Areas) Act 1990, the Planning (Hazardous Substances) Act 1990,
the Planning (Consequential Provisions) Act 1990 and the Planning and
Compensation Act 1991 and all other legislation, subordinate legislation and
circulars regulating the use and development of land;

 

“Property” means leasehold known as Ground Floor to Eighth Floor and roof of
Becket House, Cheapside registered at the Land Registry under Title Number
NGL523024 and described in more detail in the Headlease;

 

“Property Management Agreement” means the agreement dated on or around the
date hereof between the Borrower and the Property Manager or such other
agreement as may be entered into between the Borrower and the Property Manager
from time to time (subject to the terms of this Agreement);

 

“Property Manager” means Boon Godbold or such other property manager acceptable to the
Lender (acting reasonably);

 

“Qualifying Lender” means:

 

(a)                                  a lender (other than a lender within
sub-paragraph (b) below) which is a lender which is a bank (as defined for the
purposes of section 349 of the Taxes Act) and which is within the charge to
United Kingdom corporation tax in respect of payments of interest made in
respect of that advance; or

 

(b)                                 a lender which is:

 

4

 

(i)                                     a company resident in the United Kingdom for
United Kingdom tax purposes; or

 

(ii)                                  a company not so resident in the United
Kingdom which carried on a trade in the United kingdom through a permanent
establishment and which brings into account interest payable in computing the
chargeable profits (for the purposes of section 11(2) of the Taxes Act) of that
company; or

 

(c)                                  a building society (as defined for the
purposes of section 477A of the Taxes Act;

 

“Rent Account” has the meaning given to it in clause 18.15 (Rent account);

 

“Rental Income” means the aggregate of all gross rents, licence fees and other monies reserved
by or arising out of any Occupational Lease or any agreement for lease or
otherwise, without limitation, derived by the Borrower from the Property from
time to time;

 

“Repayment Date” means 31 January 2009;

 

“Report on Title” means, in relation to the Property, a report on title from Forsters
LLP, legal advisor to the Borrower, addressed to the Lender in form and
substance satisfactory to the Lender;

 

“Reservations” means:

 

(a)                                  the principle that equitable remedies are
remedies which may be granted or refused at the discretion of the court;

 

(b)                                 the limitation on enforcement by laws
relating to bankruptcy, insolvency, liquidation, re-organisation, court
schemes, moratoria, administration and other laws affecting the rights of
creditors generally;

 

(c)                                  the time barring of claims under the
Limitation Acts;

 

(d)                                 the possibility that an undertaking to assume
liability for or to indemnify against non- payment of UK stamp duty may be
void;

 

(e)                                  defences of set-off or counterclaim; and

 

(f)                                    similar principles, rights and defences under
the laws of any foreign jurisdictions in which relevant obligations may have to
be performed;

 

“Sale and Purchase Agreement” means an agreement dated on or around the date
hereof between the Borrower and the Vendor regarding the sale and purchase of
the Property;

 

“Security” means a mortgage, charge, pledge, lien, standard security, assignation
or other security interest securing any obligation of any person or any other agreement
or arrangement having a similar effect;

 

“Security Assets” means the Property and any other assets of the Borrower charged or otherwise
secured to the Lender under the Security Documents as security for amounts due
or which may become due under the Finance Documents;

 

“Security Documents” means the Account Charge, the Assignment of
Rental Income, the Legal Charge, the Debenture, the Duty of Care Agreement, the
Intercreditor Deed and any other document creating security given to the Lender
as security for amounts due or which may become due under the Finance
Documents;

 

5

 

“Senior Interest” means, in respect of any period, the aggregate of all sums of interest payable
during such period under any Finance Document;

 

“Service Charges” means all and any payments (whether or not reserved as rent) to be made
by the tenants or other occupiers pursuant to the terms of the Occupational
Leases in respect of the Services including for the avoidance of doubt any payments
on account of balancing charges or payments in respect of any reserve sinking
fund or the like including any VAT on the same;

 

“Services” means the services amenities and so far as the Borrower may from time
to time require the items of expenditure to be or which may be provided,
carried out or incurred by the Borrower pursuant to the provisions of the
Occupational Leases and/or the Head Lease, in each case relating to the ongoing
insurance, maintenance, repair, renewal, decoration and cleaning of the
Property;

 

“Shareholders” means HPFM (Guernsey) Limited or such other shareholders from time to time
as there may be with the consent of the Lender;

 

“Sterling” and “£” denote the lawful currency of
the United Kingdom from time to time;

 

“Tax” means
any tax, levy, impost, duty or other charge or withholding of a similar nature (including
any penalty or interest payable in connection with any failure to pay or any
delay in paying any of the same);

 

“Taxes Act” means the Income and Corporation Taxes Act 1988;

 

“Unpaid Sum” means any sum due and payable but unpaid by the Borrower under the Finance
Documents;

 

“Utilisation” means the utilisation of the Facility;

 

“Utilisation Date” means the date of the Utilisation, being the date on which the Loan is
to be advanced;

 

“Utilisation Request” means a notice substantially in the form set
out in schedule 2 (Utilisation Request);

 

“Valuation” means a valuation of the Property (including the Initial Valuation) by
the Valuer on the basis of market value as defined in the practice statements
of the Appraisal and Valuation Manual and Guidance Notes issued by the Royal
Institution of Chartered Surveyors current at the time of such Valuation;

 

“Valuer” means GVA Grimley or such other valuer or surveyor as may be appointed
by the Lender for the purposes of this Agreement;

 

“VAT” means
value added tax as provided for in the Value Added Tax Act 1994 and any other
tax of a similar nature; and

 

“Vendor” means Halladale General Partner 2 Limited.

 

1.2                               Construction

 

(a)                                  Unless a contrary indication appears, any
reference in this Agreement to:

 

(i)                                     the “Borrower”
or any “Party” shall be
construed so as to include its successors in title, permitted assigns and
permitted transferees;

 

6

 

(ii)                                  “assets” includes
present and future properties, revenues and rights of every description;

 

(iii)                               a “Finance Document” or
any other agreement or instrument is a reference to that Finance Document or
other agreement or instrument as amended or supplemented, restated or novated;

 

(iv)                              “indebtedness”
includes any obligation (whether incurred as principal or as surety) for the
payment or repayment of money, whether present or future, actual or contingent;

 

(v)                                 a “person”
includes any person, firm, company, corporation, government, state or agency of
a state or any association, trust or partnership (whether or not having
separate legal personality) or two or more of the foregoing;

 

(vi)                              a “regulation” includes
any regulation, rule, official directive, request or guideline (whether or not
having the force of law) of any governmental, intergovernmental or
supranational body, agency, department or regulatory, self-regulatory or other
authority or organisation;

 

(vii)                           a provision of law is a reference to that provision as amended or
re-enacted; and

 

(viii)                      a time of day is a reference to London time.

 

(b)                               Section, clause and schedule headings are for
ease of reference only.

 

(c)                                 Unless a contrary indication appears, a term
used in any other Finance Document or in any notice given under or in
connection with any Finance Document has the same meaning in that Finance
Document or notice as in this Agreement.

 

(d)                                A Default (other than an Event of Default) is “continuing” if it has not been remedied to
the satisfaction of the Lender or waived in writing by the Lender and an Event
of Default is “continuing” if it
has not been waived in writing by the Lender.

 

2.                                     THE FACILITY

 

Subject
to the terms of this Agreement, the Lender makes available to the Borrower a
Sterling senior term loan facility in an amount equal to the Facility Limit.

 

3.                                     PURPOSE

 

3.1                               Purpose

 

The
Borrower shall apply the Loan towards financing the costs of acquisition of the
Property.

 

3.2                               Monitoring

 

The
Lender is not bound to monitor or verify the application of any amount borrowed
pursuant to this Agreement.

 

7

 

4.                                     CONDITIONS OF UTILISATION

 

4.1                              Conditions precedent

 

The
Lender shall not make available the Loan unless the Lender has received all of
the documents and other evidence listed in schedule 1 (Conditions precedent)  in form and substance satisfactory
to the Lender unless otherwise waived or postponed by the Lender.

 

4.2                              Further conditions precedent

 

The
Lender will only be obliged to advance the Loan if on the date of the
Utilisation Request and on the proposed Utilisation Date:

 

(a)                                no Default is continuing or would result from
the proposed advance; and

 

(b)                                 the repeating representations referred to in
clause 15 (Representations)  are
true in all material respects.

 

5.                                     UTILISATION

 

5.1                               Delivery of the Utilisation
Request

 

The
Borrower may utilise the Facility by giving to the Lender the duly completed
Utilisation Request.

 

5.2                               Time for delivery

 

Unless
the Lender otherwise agrees, the latest time for receipt by the Lender of the
duly completed Utilisation Request is 11.00am on the Business Day preceding the
proposed Utilisation Date.

 

5.3                               Utilisation Request
irrevocable

 

The
Utilisation Request is irrevocable.

 

5.4                               Completion of Utilisation
Request

 

The
Utilisation Request will not be regarded as having been duly completed unless:

 

(a)                                 the proposed Utilisation Date is a Business
Day falling within the Availability Period; and

 

(b)                                the amount of the proposed advance complies with this Agreement and, in
particular, the amount of the proposed advance would not cause the Facility
Limit to be exceeded.

 

5.5                               Number of Utilisations

 

(a)                                 The Borrower may make one Utilisation only.
Immediately following such Utilisation any undrawn balance of the Facility
shall forthwith be cancelled and shall no longer be available for drawing.

 

(b)                                Immediately following the Final Availability Date, any undrawn balance
of the Facility shall forthwith be cancelled and shall no longer be available
for drawing.

 

8

 

6.                                      REPAYMENT

 

6.1                               Repayment Date

 

The
Borrower shall repay the Loan in full on the Repayment Date.

 

6.2                               Disposal proceeds

 

All
proceeds of any Disposal of the Property must be paid to the Lender to be
applied in or towards repayment of the Loan in accordance with clause 7.2 (Voluntary
prepayment of the Loan).

 

7.                                      PREPAYMENT AND CANCELLATION

 

7.1                               Illegality

 

If
it becomes unlawful in any applicable jurisdiction for the Lender to perform
any of its obligations as contemplated by this Agreement or to fund or maintain
its participation in the Loan:

 

(a)                                 the Lender shall promptly notify the Borrower
upon becoming aware of that event;

 

(b)                                 upon the Lender notifying the Borrower, the
Facility will be immediately cancelled; and

 

(c)                                  the Borrower shall repay the Loan on the date
specified by the Lender in the notice delivered to the Borrower (being no later
than the last day of any applicable grace period permitted by law).

 

7.2                               Voluntary prepayment of the
Loan

 

The
Borrower may, if it gives the Lender not less than 5 Business Days’ (or such
shorter period as the Lender may agree) prior notice, prepay the whole or any
part of the Loan (but if in part, being an amount that reduces the amount of
the Loan by a minimum amount, and an integral multiple, of £100,000) or, if
less, the amount outstanding.

 

7.3                               Right of repayment in
certain circumstances

 

(a)                                   If:

 

(i)                                     any sum payable to the Lender by the Borrower
is required to be increased under clause 10.2 (Tax gross-up);  or

 

(ii)                                  the Lender claims indemnification from the
Borrower under clause 10.3 (Tax indemnity)  or clause 11.1 (Increased Costs);

 

the
Borrower may, whilst the circumstance giving rise to the requirement or indemnification
continues, give the Lender notice of its intention to procure the repayment of
the Loan.

 

(b)                                 On the date specified by the Borrower in the
notice referred to in clause 7.3(a), the Borrower shall repay the Loan.

 

9

 

7.4                              Restrictions

 

(a)                                  Any notice of prepayment given by any party
under this clause 7 shall be irrevocable and, unless a contrary indication
appears in this Agreement, shall specify the date or dates upon which the
relevant prepayment is to be made and the amount of that prepayment.

 

(b)                                 Any repayment or prepayment under this
Agreement shall be made together with accrued interest on the amount prepaid
and without premium or penalty.

 

8.                                      INTEREST

 

8.1                               Calculation of interest

 

The
rate of interest on the Loan is the percentage rate per annum which is the aggregate
of:

 

(a)                                the Margin; and

 

(b)                               Base Rate.

 

8.2                               Payment of interest

 

The
Borrower shall pay accrued interest on the Loan on each Interest Payment Date.

 

8.3                               Default interest

 

(a)                                 If the Borrower fails to pay any amount
payable by it under a Finance Document on its due date, interest shall accrue
on the Unpaid Sum from the due date up to the date of actual payment (both
before and after judgment) at a rate which is two per cent higher than the rate
which would otherwise apply in terms of this Agreement.

 

(b)                                Default interest (if unpaid) arising on an Unpaid Sum will be
compounded with the Unpaid Sum on each Interest Payment Date.

 

9.                                      FEES

 

The
Borrower shall pay to the Lender an arrangement fee of £63,500 on the earlier
of (i) the Utilisation Date and (ii) the date falling 45 days after the date of
this Agreement.

 

10.                               TAX GROSS UP AND INDEMNITIES

 

10.1                        Definitions

 

(a)                                  In this Agreement:

 

“Tax Credit” means a credit against, relief or remission for, or repayment of any Tax;

 

“Tax Deduction” means a deduction or withholding for or on account of Tax from a payment
under a Finance Document;

 

“Tax Payment” means either the increase in a payment made by the Borrower to the Lender
under clause 10.2 (Tax gross-up)  or a payment under clause 10.3 (Tax indemnity).

 

10

 

(b)                                  Unless a contrary indication appears, in this
clause 10 a reference to “determines” or
“determined” means a determination
made in the absolute discretion of the person making the determination.

 

10.2                        Tax gross-up

 

(a)                                 The Borrower shall make all payments to be
made by it without any Tax Deduction, unless a Tax Deduction is required by
law.

 

(b)                                The Borrower shall promptly upon becoming aware that the Borrower must
make a Tax Deduction (or that there is any change in the rate or the basis of a
Tax Deduction) notify the Lender accordingly.

 

(c)                                 If a Tax Deduction is required by law to be
made by the Borrower the amount of the payment due from the Borrower shall be
increased to an amount which (after making any Tax Deduction) leaves an amount
equal to the payment which would have been due if no Tax Deduction had been
required.

 

(d)                                If the Borrower is required to make a Tax Deduction, the Borrower shall
make that Tax Deduction and any payment required in connection with that Tax
Deduction within the time allowed and in the minimum amount required by law.

 

(e)                                 Within 30 days of making either a Tax
Deduction or any payment required in connection with that Tax Deduction, the
Borrower shall deliver to the Lender evidence reasonably satisfactory to the
Lender that the Tax Deduction has been made or (as applicable) any appropriate
payment paid to the relevant taxing authority.

 

10.3                        Tax indemnity

 

(a)                                  The Borrower shall (within three Business
Days of demand by the Lender) pay to the Lender an amount equal to the loss,
liability or cost which the Lender determines will be or has been (directly or
indirectly) suffered for or on account of Tax by the Lender in respect of a
Finance Document.

 

(b)                                  Clause 10.3(a) shall not apply:

 

(i)                                     with respect to any Tax assessed on the
Lender under the law of the jurisdiction in which the Lender is incorporated
or, if different, the jurisdiction (or jurisdictions) in which the Lender is
treated as resident for tax purposes, if that Tax is imposed on or calculated
by reference to the net income received or receivable (but not any sum deemed
to be received or receivable) by the Lender; or

 

(ii)                                    to the extent a loss, liability or cost:

 

(A)                              is compensated for by an increased payment under clause 10.2 (Tax gross-up);  or

 

(B)                                would have been compensated for by an increased payment under clause
10.2 (Tax
gross-up)  but
was not so compensated solely because one of the exclusions in clause 10.2(d)
applied.

 

11

 

10.4                        Tax Credit

 

If
the Borrower makes a Tax Payment and the Lender determines that:

 

(a)                                  a Tax Credit is attributable either to an
increased payment of which that Tax Payment forms a part, or to that Tax
Payment; and

 

(b)                                the Lender has obtained, utilised and
retained that Tax Credit;

 

the
Lender shall pay an amount to the Borrower which the Lender determines shall
leave it (after that payment) in the same after-Tax position as it would have
been in had the Tax Payment not been required to be made by the Borrower.

 

10.5                        Stamp taxes

 

The
Borrower shall pay and, on first demand, indemnify the Lender against any cost,
loss or liability the Lender incurs in relation to all stamp duty, registration
and other similar Taxes payable in respect of any Finance Document other than
in relation to the transfer of any interest of the Lender pursuant to clause
21.1.

 

11.                               INCREASED COSTS

 

11.1                        Increased Costs

 

(a)                                  Subject to clause 11.2 (Exceptions)  the Borrower shall, within three
Business Days of demand by the Lender, pay for the account of the Lender the
amount of any Increased Costs incurred by the Lender as a result of:

 

(i)                                     the introduction of or any change in (or in
the interpretation, administration, or application of) any law or regulation;
or

 

(ii)                                  compliance with any law or regulation, 

 

in each case applied to (i) and (ii), after the date of this Agreement.

 

(b)                                 In this Agreement “Increased Costs” means:

 

(i)                                     a reduction in the rate of return from the
Facility or on the Lender’s overall capital other than arising as a result of a
change in the taxation of the Lender’s net income;

 

(ii)                                  an additional or increased cost; or

 

(iii)                               a reduction of any amount due and payable
under any Finance Document,

 

which
is incurred or suffered by the Lender to the extent that it is attributable to
the Lender having entered into this Agreement or funding or performing its
obligations under any Finance Document.

 

11.2                        Exceptions

 

(a)                                   Clause 11.1 (Increased Costs)  does not apply to the extent any
Increased Cost is:

 

(i)                                     attributable to a Tax Deduction required by
law to be made by the Borrower;

 

(ii)                                  compensated for by clause 10.3 (Tax
indemnity);  or

 

12

 

(iii)                              attributable to the wilful breach by the
Lender of any law or regulation.

 

(b)                                 In this clause 11.2 a reference to a “Tax Deduction” has the same meaning given
to the term in clause 10.1 (Definitions).

 

12.                               OTHER INDEMNITIES

 

12.1                          The Borrower shall, within three Business Days of demand, indemnify the
Lender against any cost, loss or liability incurred by the Lender as a result
of:

 

(a)                                 the occurrence of any Event of Default;

 

(b)                                its failure to pay any amount due under a
Finance Document on its due date;

 

(c)                                  funding, or making arrangements to fund the
Loan requested by the Borrower in the Utilisation Request but not made by
reason of the operation of any one or more of the provisions of this Agreement
(other than by reason of default or negligence by the Lender alone); or

 

(d)                                 the Loan (or part of the Loan) not being prepaid
in accordance with a notice of prepayment given by the Borrower.

 

12.2                       The Borrower shall promptly indemnify the
Lender against any cost, loss or liability incurred by the Lender (acting
reasonably) as a result of:

 

(a)                                 investigating any event which it reasonably
believes is a Default; or

 

(b)                                 acting or relying on any notice, request or
instruction which it reasonably believes to be genuine, correct and
appropriately authorised.

 

13.                               MITIGATION

 

13.1                        Mitigation

 

The
Lender shall take all reasonable steps to mitigate any circumstances which
arise and which would result in any amount becoming payable under or pursuant
to, or cancelled pursuant to, any of clause 7.1 (Illegality), clause 10 (Tax Gross Up and Indemnities), clause 11.1 (Increased
Costs)  including
(but not limited to) transferring its rights and obligations under the Finance
Documents.

 

13.2                        Limitation of liability

 

(a)                                  The Borrower shall indemnify the Lender for
all costs and expenses reasonably incurred by it as a result of steps taken by
it under clause 13.1 (Mitigation).

 

(b)                                 The Lender is not obliged to take any steps
under clause 13.1 (Mitigation)  if, in its opinion (acting reasonably), to do so
might be prejudicial to it.

 

14.                               COSTS AND EXPENSES

 

14.1                        Transaction expenses

 

The
Borrower shall promptly on demand pay the Lender the amount of all reasonable
costs and expenses (including legal fees and fees of the Valuer reasonably
incurred by the Lender) in connection with the negotiation, preparation,
printing and execution of:

 

13

 

(a)                                  this Agreement and any Finance Documents; and

 

(b)                                 any other Finance Documents executed after
the date of this Agreement.

 

14.2                        Amendment costs 

 

If:

 

(a)                                 the Borrower requests an amendment, waiver or
consent; or

 

(b)                                an amendment is required pursuant to clause
22.5 (Change
of currency),

 

the
Borrower shall, within three Business Days of demand, reimburse the Lender for
the amount of all costs and expenses (including legal fees and fees of the
Valuer) reasonably incurred by the Lender in responding to, evaluating,
negotiating or complying with that request or requirement.

 

14.3                        Enforcement costs

 

The
Borrower shall, within three Business Days of demand, pay to the Lender the
amount of all costs and expenses (including legal fees) incurred by the Lender
in connection with the enforcement of, or the preservation of any rights under,
any Finance Document and any proceedings instituted by or against the Lender as
a consequence of taking or holding any Security in connection with any Finance
Document or enforcing these rights.

 

15.                             REPRESENTATIONS

 

15.1                       Initial representations

 

The
Borrower makes the representations and warranties set out in this clause 15 to
the Lender on the date of this Agreement.

 

15.2                       Status

 

(a)                                  It is a limited company, duly incorporated
and registered under the laws of Guernsey.

 

(b)                                 It has the power to own its assets and carry
on its business as it is being conducted.

 

153                           Binding obligations

 

Subject
to the registration of the Security Documents in the Land Registry and with the
Registrar of Companies (as appropriate) and the Reservations the obligations
expressed to be assumed by it in each Finance Document are legal, valid,
binding and enforceable obligations.

 

15.4                        Non-conflict with other obligations

 

The
entry into and performance by it of, and the transactions contemplated by, the
Finance Documents do not and will not conflict with:

 

(a)                                   any law or regulation applicable to it;

 

(b)                                  its constitutional documents; or

 

(c)                                 any agreement or instrument binding upon it
or any of its assets to the extent that any such conflict would have a Material
Adverse Effect.

 

14

 

15.5                        Power and authority

 

It
has the power to enter into, perform and deliver, and has taken all necessary
action to authorise its entry into, performance and delivery of, the Finance
Documents to which it is a party and the transactions contemplated by those
Finance Documents.

 

15.6                        Validity and admissibility in evidence

 

All
authorisations required or desirable:

 

(a)                                to enable it lawfully to enter into, exercise its rights and comply
with its obligations in the Finance Documents to which it is a party; and

 

(b)                               to make the Finance Documents to which it is a party admissible in
evidence in its jurisdiction of incorporation, 

 

have been obtained or effected and are in full force
and effect.

 

15.7                        Deduction of Tax

 

(a)                                  It is not required to make any deduction for
or on account of Tax from any payment it may make under any Finance Document;
and

 

(b)                                 It has applied for and, following the
processing of such application, will maintain all approvals required from HM
Revenue & Customs in order to allow it to receive all Rental Income without
deduction of Tax under Section 42A (Non Resident Landlord Scheme) of the Taxes
Act.

 

15.8                        No filing or stamp taxes

 

Under
the law of its jurisdiction of incorporation it is not necessary that the
Finance Documents be filed, recorded or enrolled with any court or other
authority in that jurisdiction or that any stamp, registration or similar tax
be paid on or in relation to the Finance Documents or the transactions
contemplated by the Finance Documents.

 

15.9                        No default

 

(a)                                 No Event of Default is continuing or could
reasonably be expected to result from the making of the Loan.

 

(b)                                No other event or circumstance is outstanding which constitutes a
default under any other agreement or instrument which is binding on it to which
its assets are subject which could be reasonably expressed to have a Material
Adverse Effect.

 

15.10                 No misleading information

 

(a)                                 Any written factual information provided by
it for the purposes of the Facility was true and accurate in all material
respects as at the date it was provided or as at the date (if any) at which it
is stated.

 

(b)                                The written financial projections (if any) delivered to the Lender in
connection with the Facility have been prepared on the basis of recent
historical information and on the basis of reasonable assumptions.

 

(c)                                 Nothing has occurred or been omitted from the
information delivered to the Lender in connection with the Facility and no
information has been given or withheld that

 

15

 

results
in the information delivered to the Lender being untrue or misleading in any material
respect.

 

15.11                 No proceedings pending or
threatened

 

No
litigation, arbitration or administrative proceedings of or before any court,
arbitral body or agency which, if adversely determined, could reasonably be
expected to have a Material Adverse Effect have (to the best of its knowledge
and belief, having made proper enquiry) been started or threatened against it.

 

15.12                 Ranking of security

 

Subject
to the registration of the Security Documents in the Land Registry and with the
Registrar of Companies (as appropriate) in England and Guernsey, the Securities
created by the Security Documents constitute in each case a first priority
fixed or floating Security (as stated therein) as described in the relevant
Security Document over the relevant Security Assets.

 

15.13                 No Security

 

No
Security (other than that created by the Security Documents, Loan Stock
Security Documents, the Mezzanine Security Documents or in favour of the Vendor
over the Deposit Account which shall be the subject of a deed of priorities
between the Vendor, the Lender, the Loan Stock Holder and the Mezzanine Lender)
exists and the Borrower shall not, by reason of its execution of the Finance
Documents, become obliged to create in favour of any person other than the
Lender any Security over any of its property, revenues or assets.

 

15.14                 No other business, assets or
liabilities

 

The
Borrower has not traded or carried on any business since incorporation and on
the Utilisation Date the Borrower shall have no assets or liabilities other
than:

 

(a)                                 the Property and all rights and obligations
arising in connection with or in relation thereto including under the Sale and
Purchase Agreement;

 

(b)                                to the Lender, pursuant to the Finance
Documents; and

 

(c)                                 to the Intercreditor Lenders where permitted
pursuant to the Intercreditor Deed.

 

15.15                 Ownership of the Borrower

 

The
whole of the issued share capital of the Borrower is legally and beneficially
owned and controlled by the Shareholders.

 

15.16                 Dangerous Substances

 

Save
as disclosed by the Borrower in writing prior to the date of this Agreement or
in the Initial Valuation so far as the Borrower is aware (having made all
reasonable enquiries), no Dangerous Substance has been used, disposed of, dealt
with or is otherwise present at, in, on, from or under any part of the Property
(whether or not then within the ownership, occupation or control of the
Borrower).

 

15.17                 Property

 

Save
as is disclosed in the Report on Title, the Borrower is the legal and
beneficial owner of the Property and has a good and marketable title to the
Property.

 

16

 

15.18                 Valuations

 

To
the best of the Borrower’s knowledge and belief (having made all reasonable
enquiries), all information provided by the Borrower to the Valuer for the
purposes of the Initial Valuation and any subsequent Valuation was accurate as
of the date to which it was prepared and delivered to the Valuer and no
information has been omitted or withheld which would make that information
misleading or which may be material.

 

15.19                 Centre of Main Interests

 

The
centre of main interests of the Borrower is situated in Guernsey or the United
Kingdom and the Borrower has no establishment outside Guernsey or the United
Kingdom.

 

15.20                 Repetition of
representations

 

Unless
it is expressed to be given at a specific date, each representation is deemed
to be made by the Borrower by reference to the facts and circumstances then
existing on the Utilisation Date and on each Interest Payment Date.

 

16.                             INFORMATION UNDERTAKINGS

 

16.1                        Financial statements

 

The
Borrower shall supply to the Lender as soon as the same become available, but
in any event within 270 days after the end of each of its financial years,
audited financial statements for that financial year.

 

16.2                        Requirements as to financial statements

 

(a)                                  Each set of financial statements delivered by
the Borrower pursuant to clause 16.1 (Financial statements)  shall be certified by a director
of the Borrower as fairly representing its financial condition as at the date
as at which those financial statements were drawn up.

 

(b)                                 The Borrower shall procure that each set of
financial statements delivered pursuant to clause 16.1 (Financial statements)  is prepared using GAAP.

 

16.3                        Information: miscellaneous

 

The
Borrower shall supply to the Lender:

 

(a)                                  all material documents dispatched by the
Borrower to its shareholders (or any class of them) or its creditors generally,
at the same time as they are dispatched;

 

(b)                                 promptly upon becoming aware of them, the
details of any litigation, arbitration or administrative proceedings which are
current, threatened or pending against the Borrower, and which could reasonably
be expected to, if adversely determined, have a Material Adverse Effect;

 

(c)                                  no later than 3 months prior to the Repayment
Date, details of the Borrower’s exit strategy in respect of the Property;

 

(d)                                 promptly, such further information regarding
the financial condition, business and operations of the Borrower as the Lender
may reasonably request.

 

17

 

16.4                        Notification of Default

 

The
Borrower shall notify the Lender of any Default (and the steps, if any, being
taken to remedy it) promptly upon becoming aware of its occurrence.

 

17.                             GENERAL UNDERTAKINGS

 

17.1                        Compliance with laws

 

The
Borrower shall comply in all respects with all laws to which it may be subject,
if failure so to comply would materially impair its ability to perform the
obligations under the Finance Documents.

 

17.2                        Negative pledge

 

The
Borrower shall not create or permit to subsist any Security over any of its
assets other than under the Security Documents, the Loan Stock Security
Documents, the Mezzanine Security Documents or in favour of the Vendor over the
Deposit Account without the prior written consent of the Lender.

 

17.3                        Disposals

 

Other
than pursuant to an Occupational Lease granted in accordance with clause 18.6 (Occupational
Leases),  the
Borrower shall not without the previous written consent of the Lender enter
into a single transaction or a series of transactions (whether related or not)
and whether voluntary or involuntary to sell, lease, transfer or otherwise
dispose of any asset.

 

17.4                        Merger

 

The
Borrower shall not without the previous written consent of the Lender enter
into any amalgamation, demerger, merger or reconstruction.

 

17.5                        Change of business

 

The
Borrower shall procure that without the previous written consent of the Lender
no substantial change is made to the nature of its business from that carried
on at the date of this Agreement, namely its ownership of the Property.

 

17.6                        Lending and borrowing

 

The
Borrower shall not:

 

(a)                                  incur any financial indebtedness other than
under the Finance Documents, the Sale and Purchase Agreement or to the
Intercreditor Lenders in accordance with the terms of the Intercreditor Deed;

 

(b)                                 make any loans or give any other form of
credit; or

 

(c)                                  give any guarantee or indemnity to or for the
benefit of any person in respect of any obligation of any other person.

 

17.7                        Shares and dividends

 

The
Borrower shall not without the previous written consent of the Lender:

 

18

 

(a)                                  declare or pay any dividends or make any
other distribution in respect of any of its shares;

 

(b)                                 issue any further shares or alter any rights
attaching to its issued shares as at the date of this Agreement; or

 

(c)                                 repay or redeem any of its share capital.

 

17.8                        “Know Your Customer” Requirements

 

The
Borrower undertakes at all times to comply with the Lender’s account opening /“know your customer” requirements/procedures
and to promptly, on request, supply to the Lender (or procure the supply to the
Lender of) such documentation/information as is required to enable the Lender
to comply (or continue to comply) with these requirements/procedures.

 

18.                             PROPERTY COVENANTS

 

18.1                        Information about the Property

 

(a)                                  The Borrower shall provide the Lender within
30 days of each quarter end with a quarterly summary of the Occupational
Leases.

 

(b)                                 The Borrower shall, at the Lender’s request
from time to time, deliver to the Lender such information as the Lender shall
reasonably request and which shall include:

 

(i)                                     details of any rent or periodic reviews on
any Occupational Leases, in process or agreed;

 

(ii)                                  a copy of any material report by any property
manager, any insurance broker, surveyor or other professional in relation to
the Property;

 

(iii)                               details of any material dispute in relation
to the Property;

 

(iv)                              details of any rent arrears in respect of the
Property;

 

(v)                                 details of any proposed capital expenditure
in relation to the Property;

 

(vi)                              details of any material remediation or repair
work, repairs required to, or undertaken at the Property; and

 

(vii)                           any other material matter arising in relation
to the Property.

 

18.2                        Valuations

 

In
relation to Valuations, the Borrower shall comply with the following:

 

(a)                                  the Lender may request a Valuation at any
time if an Event of Default is outstanding or the Lender reasonably believes
that a material change in circumstances affecting the value of the Property has
occurred and, if the relevant Valuation discloses a breach of clause 19.1 (Security
cover),  the
Borrower shall immediately upon demand pay the costs of any such Valuation
otherwise the cost of such Valuation shall be for the account of the Lender;

 

(b)                                 The Lender may request a Valuation once in
each calendar year (each a “Valuation Period”),
at the expense of the Borrower;

 

19

 

(c)                                  The Lender may request a Valuation at its own
cost at any time, provided that, if that Valuation discloses the occurrence of
an Event of Default, the costs of such Valuation shall be immediately payable
by the Borrower; and

 

(d)                                 the Borrower shall, subject at all times to
the Occupational Leases, assist in any way it is able (including the provision
of relevant information) in relation to the provision of any Valuation referred
to in this clause 18.2.

 

18.3                        Environmental matters

 

The
Borrower shall:

 

(a)                                  comply in all material respects with all
applicable Environmental Law in relation to the Property (including, without
limitation, its condition) including the obtaining of and compliance with all
requisite Environmental Licences; and

 

(b)                                 promptly upon receipt, notify the Lender of
any communication of whatsoever nature, whether specific or general, served on
it concerning any alleged breach of any Environmental Law relating to the
Property (including, without limitation, its condition) or non-compliance with
any Environmental Licence relating to the Property, which, if substantiated,
could reasonably be expected to have a Material Adverse Effect.

 

18.4                        Access

 

Subject
to the terms of each Occupational Lease, at all reasonable times and upon
reasonable notice being given to the Borrower, the Borrower shall procure the
Lender and its agents are permitted access to the Property for any purpose
relating to the Finance Documents.

 

18.5                        Insurance

 

(a)                                  The Borrower shall effect:

 

(i)                                     insurance on the Property, trade and other
fixtures and fixed plant and machinery on the Property against loss or damage by
fire, storm, tempest, flood, subsidence, earthquake, lightning, explosion,
impact, aircraft and other aerial devices and articles dropped from them, riot,
civil commotion and malicious damage, bursting or overflowing of water tanks,
apparatus or pipes and such other risks as the Lender may require to be insured
on a full reinstatement basis, including, without limitation, site clearance,
professional fees, VAT (together with provision for forward inflation) and loss
of rents for a period of not less than three years (or such other greater
period for which rent may be suspended in the event of damage to or destruction
of the demised premises under any Occupational Lease);

 

(ii)                                   third party liability insurance;

 

(iii)                                insurance against acts of terrorism;

 

(iv)                              such other insurances as a prudent company in the same business as the Borrower
would effect,

 

in
an amount in form, and with an insurance company or underwriters, acceptable to
the Lender.

 

20

 

(b)                                 The Borrower shall procure that the Lender’s
interest is noted on all insurance policies required under this clause 18.5.
Every policy shall contain:

 

(i)                                     a standard mortgagee clause under which the
insurance will not be vitiated or avoided as against the Lender as a result of
any misrepresentation, act or neglect or failure to disclose on the part of any
insured party or any circumstances beyond the control of an insured party; and

 

(ii)                                  terms providing that it shall not, so far as
the Lender are concerned, be invalidated for failure to pay any premium, due
without the insurer first giving to the Lender not less than 14 days written
notice.

 

(c)                                  The Borrower shall use all reasonable
endeavours to procure that the Lender receives any information in connection
with the insurance and copies of the policies as the Lender may reasonably
require and shall notify the Lender of renewals made and variations or
cancellations of policies made or, to the knowledge of the Borrower threatened
or pending.

 

(d)                                The Borrower shall not do or permit anything to be done which may make
void or voidable any insurance policy in connection with the Property.

 

(e)                                  The Borrower shall procure prompt payment of
all premiums and all other things necessary to keep each insurance policy in
force.

 

(f)                                    If the Borrower fails to comply with any of
the provisions of this clause 18.5 the Lender may, at the expense of the
Borrower, effect any insurance and generally do such things as the Lender may
reasonably consider necessary or desirable to prevent or remedy any breach of
this clause 18.5.

 

(g)                                 Subject to clause 18.5(h) and the Headlease,
the Borrower shall apply all monies received or receivable under any insurance
in respect of the Property towards replacing, restoring or reinstating the
Property.

 

(h)                               To the extent that any insurance policy and
the Headlease or any Occupational Lease does not restrict the proceeds of
insurance under that policy being used to prepay the Loan, the proceeds of
insurance shall, at the option of the Lender but only after an Event of Default
has occurred, be used to prepay the Loan.

 

(i)                                     Compliance with the insurance obligations by
the freehold owner of the Property in accordance with the Headlease shall be
deemed compliance with clauses 18.5(a) to (e) above.

 

18.6                        Occupational Leases

 

(a)                                Subject to clauses 18.6(d) and (e) below, the
Borrower shall not without the previous written consent of the Lender:

 

(i)                                     grant or enter into an agreement to grant any
new Occupational Lease or create any overriding interest in respect of the
Property other than as required by statute;

 

(ii)                                waive, release or vary any of the material terms of any Occupational
Lease or accept any surrender of any Occupational Lease or exercise any power
to determine or extend the same;

 

21

 

(iii)                               agree to any rent reviews on any Occupational Lease other than
upward-only rent reviews;

 

(iv)                              give any licence or approval or consent under
any Occupational Lease (unless a relevant Occupational Lease provides that the
Borrower’s licence, approval or consent may not be unreasonably withheld for
the relevant matter in issue and it would be unreasonable to withhold consent);
or

 

(v)                                 forfeit or otherwise take any action to treat
any Occupational Lease as terminated or otherwise bring any Occupational Lease
to an end prior to its stated expiration date.

 

(b)                                 Subject to clause 18.6(d) below, the Borrower
shall promptly inform the Lender of every application for consent to any
assignment, sub-letting or other disposal of or dealing with the whole or any
part of any interest under any Occupational Lease and shall promptly supply the
Lender with full copies of such application and of any references or other
documents provided or obtained in support thereof.

 

(c)                                  The Borrower shall notify the Lender of any
notice of disclaimer of any Occupational Lease within seven days of receipt. It
shall thereafter promptly comply with the Lender’s instructions with regard to
the exercise or enforcement of any entitlement to require any surety under the
relevant Occupational Lease to take up a new Occupational Lease of the affected
premises.

 

(d)                                 This clause 18.6 shall only apply to
Occupational Leases with an annual rental income in excess of £20,000.

 

(e)                                  The Lender shall not unreasonably withhold
its consent to any matter pursuant to this clause 18 and the Lender’s consent
shall be deemed to have been given to any matter should the Lender fail to
respond to the Borrower with its consent or otherwise within 5 Business Days of
any request for consent being made.

 

18.7                        Lease and title compliance

 

The
Borrower shall:

 

(a)                                  perform all the terms on its part contained
in each Occupational Lease in all material respects;

 

(b)                                 enforce all obligations owed to it under each
Occupational Lease and other agreement or instrument relating to the Property;
and

 

(c)                                  properly perform and/or comply with (and
indemnify the Lender in respect of any breach of) any conditions, restrictions,
stipulations, burdens and easements of whatsoever nature affecting the Property.

 

18.8                        Notices

 

Within
7 days after the receipt by the Borrower of any notices issued by any public,
local or other authority relating to the Property including (without
limitation), any applications, notices, proposals, orders, requisitions,
compulsory purchase proposals, redevelopment plans and any notices issued
pursuant to the Planning Acts, the Borrower shall:

 

(a)                                  deliver a copy to the Lender; and

 

22

 

(b)                                 inform the Lender of the steps taken or proposed
to be taken by way of compliance.

 

18.9                        Power to remedy

 

In
case of default by the Borrower in performing any material obligation or other
covenant affecting the Property, subject to the terms of any Occupational
Lease, the Borrower shall permit the Lender and/or its Lenders and contractors:

 

(a)                                  to enter on the Property;

 

(b)                                 to comply with or object to any notice served
on the Borrower relating to the Property; and

 

(c)                                  to take any action the Lender may reasonably
consider expedient to prevent or remedy any breach of any such term or to
comply with or object to any such notice.

 

18.10                 Repair

 

The
Borrower shall keep:

 

(a)                                  the Property in good and substantial repair
and condition and decorative order; and

 

(b)                                 all fittings, plant, machinery, implements
and other effects belonging to it in a good state of repair, working order and
condition.

 

18.11                 Alterations

 

(a)                                  The Borrower shall not, at any time, without
the prior written consent of the Lender:

 

(i)                                     affect, carry out or permit any development,
demolition, reconstruction or rebuilding of or any structural alteration to, or
material change in the use of the Property save in case of emergency; or

 

(ii)                                sever, unfix or remove any of the material structural fixtures or
partitions (except for the purpose and in the course of effecting necessary
repairs thereto or of replacing the same with new or improved models or
substitutes) on the Property.

 

(b)                                 The Borrower shall be entitled to carry out
non-structural alterations to the Property where the same would have no adverse
effect on the Rental Income achievable in respect of the Property or on the
value of the Property.

 

18.12                 Pay outgoings

 

The
Borrower shall punctually pay or cause to be paid and shall on demand indemnify
the Lender against all existing and future rents, taxes, duties, fees, renewal
fees, charges, assessments, impositions and outgoings whatsoever whether
imposed by deed or by statute or otherwise and whether in the nature of capital
or revenue and even though of a wholly novel character, which now or at any
time during the continuance of the security constituted by or pursuant to the
Finance Documents are payable in respect of the Property or any part thereof.

 

23

 

18.13                 Planning

 

The
Borrower shall or, as the case may be, will procure that each tenant under an Occupational
Lease shall:

 

(a)                                  comply in all material respects with any
conditions attached to any planning permissions obtained by it and comply with
any agreement or undertaking under the Planning Acts or any other similar Act
or Acts relating to or affecting the Property and not (save for any development
permitted under the Planning Acts) carry out any development (as defined in the
Planning Acts) on or of the Property or make any material change in use of the
Property other than in accordance with any planning permission obtained by it;

 

(b)                                 not make any material application for
planning permission or implement any planning permission obtained or enter or
agree to enter into any agreement or undertaking under the Planning Acts or any
other similar Act or Acts without the prior written consent of the Lender.

 

18.14                 VAT

 

(a)                                 The Borrower shall ensure that it remains
directly liable for VAT and does not become part of any VAT group with any
other person.

 

(b)                                The Borrower shall not alter its status in relation to VAT through any
act or omission in relation to the Property or any interest in the Property.

 

18.15                 Rent account

 

(a)                                  The Borrower must maintain a deposit account
with the Lender designated the “Rent Account” which is account number 11404440,
sort code 83-06-08 (the “Rent Account”).

 

(b)                                 The Borrower may not, without the prior
consent of the Lender, maintain any bank account other than with the Lender.

 

(c)                                  The Lender shall have sole signing rights in
relation to the Rent Account.

 

(d)                                 The Borrower must ensure that all Net Rental
Income and all VAT receipts received by the Borrower are paid into the Rent
Account.

 

(e)                                  If any payment of any amount referred to in
paragraph ((d)) above is paid into an account other than the Rent Account, that
payment must be paid immediately into the Rent Account.

 

(f)                                    On each Interest Payment Date, unless a
Default is continuing the Lender shall and is irrevocably authorised by the
Borrower to, withdraw from, and apply all amounts standing to the credit of the
Rent Account (other than those amounts standing to the credit of the Rent
Account pursuant to Clause 19.1(b) or 19.2(b)(i)), in the following order:

 

(i)                                     firstly, payment of any unpaid fees, costs and
expenses of the Lender due but unpaid under the Finance Documents;

 

(ii)                                  secondly, payment of any amount of interest
due under the Finance Documents in respect of the relevant Interest Payment
Date;

 

24

 

(d)                                 If the Property Manager is in breach of the
Property Management Agreement, then, in so far as the Borrower can, it shall,
if requested by the Lender;

 

(i)                                    terminate the appointment of the Property
Manager; and

 

(ii)                                  select and appoint a replacement Property
Manager of the Property on terms and conditions approved in writing by the
Lender (acting reasonably).

 

(e)                                  The Borrower shall procure that each Property
Manager appointed by it enters into a Duty of Care Agreement.

 

19.                            FINANCIAL COVENANTS

 

19.1                        Security cover

 

(a)                                  The amount of the Loan shall not at any time
exceed seventy-seven point five per cent (76%) of the market value of the
Property (assuming vacant possession) as determined by the most recent
Valuation.

 

(b)                                 If at any time either Party notifies the
other that there is a breach of clause 19. l(a),  the Borrower
may, within 10 Business Days of such notification:

 

(i)                                     place on deposit in the Rent Account an
amount which, if applied in prepaying the Loan, would result in the Borrower
being able to comply with its obligations under clause 19.1(a); or

 

(ii)                                    prepay the Loan in such amount as will ensure
compliance with clause 19.1(a) following such prepayment.

 

(c)                                  If the Borrower makes and maintains a deposit
in accordance with clause 19.1(b) above, it will not be regarded as being in
breach of clause 19.1(a) but without prejudice to any subsequent breach of such
paragraph.

 

(d)                                 If the Borrower makes and maintains a deposit
in accordance with clause 19.1(b) above and the test is subsequently satisfied
without taking into account the monies placed on deposit pursuant to clause
19.1(b), then, provided no Default is continuing and no Default would result
from such release, the Lender shall release the relevant cash to such account
as the Borrower directs together with such interest accrued on the Rent
Account.

 

19.2                        Interest cover

 

(a)                                  The ratio of the Net Rental Income in respect
of any period to the Senior Interest in respect of such period shall not be
less than 1.30:1.

 

(b)                                 If at any time either Party notifies the
other that there is a breach of clause 19.2(a), the Borrower may, within 10
Business Days of such notification:

 

(i)                                     place on deposit in the Rent Account an
amount which, if applied in prepaying the Loan, would result in the Borrower
being able to comply with its obligations under clause 19.2(a); or

 

(ii)                                   prepay the Loan in such amount as will ensure
compliance with clause 19.2(a) following such prepayment.

 

26

 

(c)                                  If the Borrower makes and maintains a deposit
in accordance with clause 19.2(b) above, it will not be regarded as being in
breach of clause 19.2(a) but without prejudice to any subsequent breach of such
paragraph.

 

(d)                                 If the Borrower makes and maintains a deposit
in accordance with clause 19.2(b) above and the test is subsequently satisfied
without taking into account the monies placed on deposit pursuant to clause
19.2(b), then, provided no Default is continuing and no Default would result
from such release, the Lender shall release the relevant cash to such account
as the Borrower directs together with such interest accrued on the Rent
Account.

 

19.3                      Testing Dates

 

The
dates for compliance with the covenant set out in clause 19.2 (Interest
cover)  will be
each date on which a quarterly summary is provided to the Borrower under clause
18.1 (Information about the Property).

 

20.                            EVENTS OF DEFAULT

 

Each
of the events or circumstances set out in clause 20 is an Event of Default.

 

20.1                        Non-payment

 

The
Borrower does not pay on the due date any amount payable pursuant to a Finance Document
at the place at and in the currency in which it is expressed to be payable
other than as a result of the failure of the appropriate payment transmission
system provided that such payment is made to the Lender within 3 Business Days
of the due date.

 

20.2                        Financial covenants

 

Any
requirement of clause 19 (Financial Covenants)  is not satisfied unless so
remedied in accordance with clause 19(b)or 19.2(b).

 

20.3                        Other obligations

 

(a)                                  The Borrower does not comply with any
provision of the Finance Documents (other than those referred to in clauses 19 (Financial
Covenants)  or
20.1 (Non-payment).

 

(b)                                 No Event of Default in relation to this
clause will occur if the failure to comply is capable of remedy and is remedied
within five Business Days of the Lender giving notice to the Borrower or the
Borrower becoming aware of the failure to comply.

 

20.4                        Misrepresentation

 

(a)                                  Any representation or statement made or
deemed to be made by the Borrower in the Finance Documents or any other
document delivered by or on behalf of the Borrower under or in connection with
any Finance Document is or proves to have been incorrect or misleading in any
material respect when made or deemed to be made.

 

(b)                                 No Event of Default in relation to this
clause will occur if the failure to comply is capable of remedy and is remedied
within five Business Days of the Lender giving notice to the Borrower or the
Borrower becoming aware of the failure to comply.

 

27

 

20.5                        Cross default

 

(a)                                  Any financial indebtedness of the Borrower is
not paid when due nor within any originally applicable grace period.

 

(b)                                 Any financial indebtedness of the Borrower is
declared to be or otherwise becomes due and payable prior to its specified
maturity as a result of an event of default (however described).

 

(c)                                  Any commitment for any financial indebtedness
of the Borrower is cancelled or suspended by a creditor of the Borrower as a
result of an event of default (however described).

 

(d)                                 Any creditor of the Borrower becomes entitled
to declare any financial indebtedness of the Borrower due and payable prior to
its specified maturity as a result of an event of default (however described).

 

20.6                        Insolvency

 

(a)                                  The Borrower is unable or admits its
inability to pay its debts as they fall due, suspends making payments on any of
its debts or, by reason of actual or anticipated financial difficulties,
commences negotiations with one or more of its creditors with a view to rescheduling
any of its indebtedness.

 

(b)                                 The value of the assets of the Borrower is
less than its liabilities (taking into account contingent and prospective
liabilities).

 

(c)                                  A moratorium is declared in respect of any
indebtedness of the Borrower.

 

20.7                        Insolvency proceedings

 

(a)                                  Any corporate action, legal proceedings or
other procedure or step is taken in relation to:

 

(i)                                     the suspension of payments, a moratorium of
any indebtedness, winding-up, dissolution, declaration en etat de désastre,
preliminary vesting orders, saisie, administration or reorganisation (by way of
voluntary arrangement, scheme of arrangement or otherwise) of the Borrower;

 

(ii)                                  a composition, compromise, assignment or
arrangement with any creditor of the Borrower;

 

(iii)                               the appointment of a liquidator, receiver,
administrative receiver, administrator, compulsory manager or other similar
officer in respect of the Borrower; or

 

(iv)                              enforcement of any Security over any assets
of the Borrower,

 

or
any analogous procedure or step is taken in any jurisdiction.

 

20.8                        Creditors’ process

 

Any
expropriation, attachment, sequestration, distress or execution affects any
asset or assets of the Borrower.

 

28

 

20.9                      Unlawfulness

 

It
is or becomes unlawful for the Borrower to perform any of its obligations under
the Finance Documents.

 

20.10               Repudiation

 

The
Borrower repudiates a Finance Document or evidences an intention to repudiate a
Finance Document.

 

20.11               Allegation of
ineffectiveness

 

Any
Finance Document is not, or is alleged by the Borrower not to be, binding on or
enforceable against the Borrower.

 

20.12               Material adverse change

 

Any
event or series of events occurs which in the reasonable opinion of the Lender
is likely to have a Material Adverse Effect.

 

20.13               Ownership and control of the
Borrower

 

Without
the previous written consent of the Lender there is any change in the legal
and/or beneficial ownership or control of the Borrower including the transfer
of all or any part of the share capital of the Borrower to any other person.

 

20.14               Compulsory purchase

 

All
or any material part of the Property is compulsorily purchased or the
applicable local authority makes an order for such compulsory purchase and any
compensation monies are not applied in prepayment of the Loan in full
accordance with clause 7.2.

 

20.15               Destruction of the Property

 

The
Property is wholly or substantially destroyed.

 

20.16               Acceleration

 

On
and at any time after the occurrence of an Event of Default the Lender may by
notice to the Borrower:

 

(a)                                  cancel the Facility whereupon it shall
immediately be cancelled;

 

(b)                                 declare that all or part of the Loan,
together with accrued interest, and all other amounts accrued or outstanding
under the Finance Documents be immediately due and payable, whereupon they
shall become immediately due and payable; and/or

 

(c)                                  declare that all or part of the Loan be
payable on demand, whereupon it shall immediately become payable on demand by
the Lender.

 

21.                             CHANGES TO THE PARTIES

 

21.1                         The Lender may without the consent of the Borrower assign all or any
part of its rights or benefits under this Agreement and the Finance Documents
to a Qualifying Lender only. In all other circumstances, the Borrower shall not
unreasonably withhold or delay its consent to such an assignment. The Lender
may disclose to a prospective assignee or to any other

 

29

 

person
who may propose entering into contractual relations with the Lender, or to any investor
or potential investor in a securitisation (or similar transaction of broadly
equivalent economic effect), in relation to this Agreement and the Finance
Documents such information about the Borrower or the Lender’s rights or
obligations under this Agreement and the Finance Documents, and any associated
documentation (including any security), as the Lender shall consider
appropriate provided the Lender procures that third party keeps such information
confidential.

 

21.2                         The Lender may change its lending office to any other of the Lender’s
offices in the United Kingdom.

 

21.3                         The Borrower may not assign any of its rights or transfer any of its
rights or obligations under the Finance Documents.

 

22.                               PAYMENT MECHANICS

 

22.1                        Payments to the Lender

 

(a)                                  On each date on which the Borrower is
required to make a payment under a Finance Document, the Borrower shall make
the same available to the Lender (unless a contrary indication appears in a
Finance Document) for value on the due date in Sterling.

 

(b)                                 Payment shall be made to such account with
such bank as the Lender specifies.

 

22.2                        Partial payments

 

(a)                                  If the Lender receives a payment that is
insufficient to discharge all the amounts then due and payable by the Borrower
under the Finance Documents, the Lender shall apply that payment towards the
obligations of the Borrower under the Finance Documents in the following order:

 

(i)                                     first, in or towards payment pro rata of any
unpaid fees, costs and expenses of the Lender under the Finance Documents;

 

(ii)                                  secondly, in or towards payment pro rata of
any accrued interest, fee or commission due but unpaid under this Agreement;

 

(iii)                               thirdly, in or towards payment pro rata of any principal due but unpaid
under this Agreement; and

 

(iv)                              fourthly, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.

 

22.3                        No set-off by the Borrower

 

All
payments to be made by the Borrower under the Finance Documents shall be
calculated and be made without (and free and clear of any deduction for)
set-off or counterclaim.

 

22.4                        Business Days

 

(a)                                Any payment which is due to be made on a day that is not a Business Day
shall be made on the next Business Day in the same calendar month (if there is
one) or the preceding Business Day (if there is not).

 

30

 

(b)                               During any extension of the due date for
payment of any principal under this Agreement interest is payable on the
principal at the rate payable on the original due date.

 

22.5                       Change of currency

 

(a)                                  Unless otherwise prohibited by law, if more
than one currency or currency unit are at the same time recognised by the
central bank of any country as the lawful currency of that country, then:

 

(i)                                     any reference in the Finance Documents to,
and any obligations arising under the Finance Documents in, the currency of
that country shall be translated into, or paid in, the currency or currency
unit of that country designated by the Lender (after consultation with the
Borrower); and

 

(ii)                                any translation from one currency or currency
unit to another shall be at the official rate of exchange recognised by the
central bank for the conversion of that currency or currency unit into the
other, rounded up or down by the Lender (acting reasonably).

 

(b)                                 If a change in any currency of a country
occurs, this Agreement will, to the extent the Lender (acting reasonably and
after consultation with the Borrower) specifies to be necessary, be amended to
comply with any generally accepted conventions and market practice in the
London interbank market and otherwise to reflect the change in currency.

 

23.                               SET-OFF

 

The
Lender may set off any matured obligation due from the Borrower under the
Finance Documents (to the extent beneficially owned by the Lender) against any
matured obligation owed by the Lender to the Borrower, regardless of the place
of payment, booking branch or currency of either obligation. If the obligations
are in different currencies, the Lender may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of the
set-off.

 

24.                               NOTICES

 

24.1                        Communications in writing

 

Any
communication to be made under or in connection with the Finance Documents
shall be made in writing and, unless otherwise stated, may be made by fax or
letter.

 

24.2                        Addresses

 

The
address and fax number (and the department or officer, if any, for whose
attention the communication is to be made) of each Party for any communication
or document to be made or delivered under or in connection with the Finance
Documents is that identified with its name below or any substitute address, fax
number or department or officer as a Party may notify to the other Party by not
less than five Business Days’ notice.

 

31

 

24.3                      Delivery

 

(a)                                  Any communication or document made or
delivered by one person to another under or in connection with the Finance
Documents will only be effective:

 

(i)                                   if by way of fax, when received in legible
form; or

 

(ii)                                if by way of letter, when it has been left at the relevant address or
five Business Days after being deposited in the post postage prepaid in an envelope
addressed to it at that address,

 

and,
if a particular department or officer is specified as part of its address
details provided under clause 24.2 (Addresses),  if addressed to that department or officer.

 

(b)                                 Any communication or document to be made or
delivered to the Lender will be effective only when actually received by the
Lender and then only if it is expressly marked for the attention of the department
or officer identified with the Lender’s signature below (or any substitute
department or officer as the Lender shall specify for this purpose).

 

25.                               CALCULATIONS AND
CERTIFICATES

 

25.1                       Accounts

 

In
any litigation or arbitration proceedings arising out of or in connection with
a Finance Document, the entries made in the accounts maintained by the Lender
are prima facie evidence of the
matters to which they relate.

 

25.2                       Certificates and determinations

 

Any
certification or determination by the Lender of a rate or amount under any
Finance Document is, in the absence of manifest error, conclusive evidence of
the matters to which it relates.

 

25.3                       Day count convention

 

Any
interest, commission or fee accruing under a Finance Document will accrue from
day to day and is calculated on the basis of the actual number of days elapsed
and a year of 365 days or, in any case where the practice in the London
interbank market differs, in accordance with that market practice.

 

26.                               PARTIAL INVALIDITY

 

If,
at any time, any provision of the Finance Documents is or becomes illegal,
invalid or unenforceable in any respect under any law of any jurisdiction,
neither the legality, validity or enforceability of the remaining provisions
nor the legality, validity or enforceability of such provision under the law of
any other jurisdiction will in any way be affected or impaired.

 

27.                               REMEDIES AND WAIVERS

 

No
failure to exercise, nor any delay in exercising, on the part of the Lender,
any right or remedy under the Finance Documents shall operate as a waiver, nor
shall any single or partial exercise of any right or remedy prevent any further
or other exercise or the exercise of any other right or remedy. The rights and
remedies provided in this Agreement are cumulative and not exclusive of any
rights or remedies provided by law.

 

32

 

28.                              GOVERNING LAW

 

This
Agreement is governed by the law of England and Wales.

 

29.                              ENFORCEMENT

 

29.1                        Jurisdiction of English courts

 

(a)                                 The courts of England and Wales have
exclusive jurisdiction to settle any dispute arising out of or in connection
with this Agreement (including a dispute regarding the existence, validity or
termination of this Agreement) (a “Dispute”).

 

(b)                                The Parties agree that the courts of England and Wales are the most
appropriate and convenient courts to settle Disputes and accordingly no Party
will argue to the contrary.

 

(c)                                 This clause 29 is for the benefit of the
Lender only. As a result, the Lender shall not be prevented from taking
proceedings relating to a Dispute in any other courts with jurisdiction. To the
extent allowed by law, the Lender may take concurrent proceedings in any number
of jurisdictions.

 

29.2                        Service of process

 

Without
prejudice to any other mode of service allowed under any relevant law, the Borrower:

 

(a)                                  irrevocably appoints Forsters LLP of 31 Hill
Street, London W1J 5LS (with copies to Hunter Property Fund Management Limited,
17 Rutland Street, Edinburgh EH1 2AE) as its agent for service of process in relation
to any proceedings before the English courts in connection with any Finance
Document; and

 

(b)                                 agrees that failure by a process agent to
notify the relevant Borrower(s) of the process will not invalidate the
proceedings concerned.

 

This Agreement has been
entered into on the date stated at the beginning of this Agreement.

 

33

 

SCHEDULE 1 

 

Conditions precedent

 

1.                                      AGREEMENTS

 

1.1                               This Agreement duly executed by the Parties.

 

1.2                               Each Security Document duly executed by the
relevant parties.

 

1.3                               The Duty of Care Agreement duly executed by the Borrower and the
Property Manager.

 

1.4                               A certified copy of the Property Management
Agreement.

 

1.5                               Certified copies of the Mezzanine Finance Documents and evidence that
the same have been, or will be contemporaneously with Utilisation of the loan,
drawn down in full.

 

1.6                               Certified copies of the Loan Stock Documents and evidence that the same
have been, or will be contemporaneously with Utilisation of the loan, drawn
down in full.

 

1.7                               A certified copy of the Sale and Purchase Agreement duly executed by
the parties thereto.

 

2.                                      AUTHORISATIONS

 

2.1                                  A copy of the constitutional documents of the
Borrower and the Shareholders.

 

2.2                                  A copy of a resolution of the board of directors
of the Borrower:

 

(a)                                 approving the terms of, and the transactions
contemplated by, the Finance Documents to which it is a party and resolving
that it execute the Finance Documents to which it is a party;

 

(b)                                authorising a specified person or persons to execute the Finance
Documents to which it is a party on its behalf; and

 

(c)                                 authorising a specified person or persons, on
its behalf, to sign and/or despatch all documents and notices (including, if
relevant, the Utilisation Request) to be signed and/or despatched by it under
or in connection with the Finance Documents to which it is a party.

 

2.3                                 A specimen of the signature of each person
authorised by the resolution referred to in paragraph 2(b)(ii) above.

 

2.4                                 A certificate of the Borrower (signed by a
director) confirming that borrowing the Facility would not cause any borrowing
or similar limit binding on the Borrower to be exceeded.

 

2.5                                 A certificate of an authorised signatory of
the Borrower certifying that each copy document relating to it specified in
this schedule 1 is correct, complete and in full force and effect as at a date
no earlier than the date of this Agreement.

 

34

 

3.                                      OTHER DOCUMENTS AND EVIDENCE

 

3.1                                A copy of any other authorisation or other document, opinion or
assurance which the Lender considers to be necessary or desirable in connection
with the entry into and performance of the transactions contemplated by any
Finance Document or for the validity and enforceability of any Finance
Document.

 

3.2                                Evidence that the fees, costs and expenses then due from the Borrower
pursuant to clause 9 (Fees)  and
clause 13 (Costs and Expenses)  have
been paid or will be paid by the Utilisation Date to the extent so due and
payable.

 

3.3                                Such documentation and other evidence as is requested by the Lender in
order for the Lender to carry out and be satisfied it has complied with all
necessary “know your customer” or
similar checks under all applicable laws and regulations pursuant to the transactions
contemplated in the Finance Documents.

 

3.4                                The account mandates in relation to the loan account, the Rent Account
and the Deposit Account and such other forms as the Lender shall require in
relation to the opening of any bank account.

 

3.5                                Evidence that all consents to the Borrower’s acquisition of the
Property and to the Legal Charge required pursuant to the Headlease have been
obtained.

 

3.6                                A legal opinion by Carey Olsen LLP in respect of the Borrower’s
execution of the Finance Documents.

 

4.                                      REPORT ON TITLE AND
VALUATION

 

4.1                                 The Report on Title (including in relation to
all planning permissions in place in respect of the Property).

 

4.2                                 The Initial Valuation.

 

4.3                                 A structural survey and a mechanical and
electrical services report.

 

5.                                      INSURANCE

 

Evidence
of the extent and level of the insurance cover in force in respect of the
Property and that the policies comply with the requirements of the Finance
Documents.

 

6.                                      TITLE DOCUMENTS, ETC

 

6.1                                 All title documents for the Property
including all documents necessary for the application to the Land Register for
registration of the Borrower’s interest in the Property or an undertaking to
provide the same.

 

6.2                                 A copy of the executed Occupational Leases
existing in relation to the Property or an undertaking to provide the same.

 

6.3                                 An effective discharge of all Security (if
any) affecting the Security Assets including completed forms and fees for all
resultant registration formalities or an undertaking to provide the same.

 

35

 

7.                                      TAX

 

7.1                                A certified copy of the confirmation from HM Revenue & Customs that
the Borrower is validly registered for VAT purposes with HM Revenue &
Customs.

 

7.2                                A copy of the election made by the Borrower to HM Revenue & Customs
for waiver of exemption in respect of the Property under schedule 10 of the
Value Added Tax Act 1994.

 

7.3                                In relation to stamp duty land tax (“SDLT”),
an undertaking from Forsters LLP to submit the SDLT Return together with such
payment due within 10 days of completion.

 

8.                                      EQUITY

 

Evidence
that the Shareholders have subscribed for £600,000 of equity in the Borrower
and that that equity has been, or will be contemporaneously with the
Utilisation, applied towards the acquisition of the Property.

 

9.                                      FINANCIAL ITEMS

 

9.1                                Opening balance sheet, profit and loss account and cash flow forecast
each in respect of the Borrower.

 

9.2                                 Business plan of the Borrower, including
proposed asset management strategy.

 

9.3                                 The completion statement in respect of the
acquisition of the Property.

 

36

 

SCHEDULE 2 

 

Form of Utilisation Request

 

	
  From:

  	
  HPFM (Becket House) Limited

  
	
   

  	
   

  
	
  To:

  	
  The Royal Bank of Scotland plc

  
	
   

  	
   

  
	
  Dated:

  	
                        2007

  

 

Dear
Sirs

 

HPFM (Becket House) Limited - £12,700,000 Term Loan Facility
Agreement dated [     ] 2007 (“Facility Agreement”)

 

1.                                       We refer to the Facility Agreement. This is a
Utilisation Request. Terms defined in the Facility Agreement have the same
meaning in this Utilisation Request unless given a different meaning in this
Utilisation Request.

 

2.                                      We wish to borrow the Loan on the following
terms:

 

	
   

  	
  Proposed Utilisation Date:

  	
  [             ]
  (or, if that is not a Business Day, the next Business Day)

  
	
   

  	
   

  	
   

  
	
   

  	
  Amount:

  	
   

  

 

3.                                       We confirm that each condition specified in
clause 4.2 (Further conditions precedent)  of the Facility Agreement is satisfied on the date
of this Utilisation Request.

 

4.                                      The proceeds of the Loan should be credited
to [account].

 

5.                                      This Utilisation Request is irrevocable. 

 

Yours
faithfully

 

 

By:

 

	
   

  	
   

  
	
  authorised signatory for

  
	
  HPFM (Becket House)
  Limited

  

 

37

 

	
  THE
  BORROWER

  
	
   

  
	
  HPFM
  (BECKET HOUSE) LIMITED

  
	
   

  
	
  By:

  	
  For Seffery Ltd.

  	
  For Champress Ltd.

  
	
   

  	
  /s/ William Ferry

  	
   

  	
  /s/ Nicholas J. Baptiste

  
	
   

  	
   

  
	
  Address:

  	
  As corporate directors of HPFM (Becket House) Ltd.

  
	
   

  	
   

  
	
  Attention:

  	
   

  
	
   

  	
   

  
	
  Fax:

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
   

  
	
  THE
  LENDER

  
	
   

  
	
  THE ROYAL
  BANK OF SCOTLAND PLC

  
	
   

  
	
   

  
	
  By:

  	
  /s/ Alan Macdonald

  	
   

  
	
   

  	
   

  
	
  Address:

  	
  East of Scotland Corporate
  Banking Office, 1st Floor, 24-25 St Andrew Square, Edinburgh EH2 1AF

  
	
   

  	
   

  
	
  Attention:

  	
  Eddie Thorn

  
	
   

  	
   

  
	
  Fax:

  	
  0131 523 5153Exhibit 4.01

 

	
  CUSIP NO. 52517P6K2

  	
   

  
	
  ISIN NO. US52517P6K25

  	
   

  
	
   

  	
   

  
	
  REGISTERED

  	
  PRINCIPAL AMOUNT: $2,415,000

  
	
  No. R-1

  	
   

  

 

LEHMAN BROTHERS HOLDINGS INC.

 

MEDIUM-TERM NOTE, SERIES I

 

THREE-YEAR NOTES LINKED TO THE DOW JONES-AIG
COMMODITY INDEX EXCESS RETURN
 DUE NOVEMBER 29, 2010

 

THIS NOTE IS A GLOBAL SECURITY WITHIN THE MEANING OF
THE INDENTURE HEREINAFTER REFERRED TO AND IS REGISTERED IN THE NAME OF THE
DEPOSITORY OR A NOMINEE OF THE DEPOSITORY. 
UNLESS THIS CERTIFICATE IS PRESENTED BY AN AUTHORIZED REPRESENTATIVE OF
THE DEPOSITORY TRUST COMPANY (55 WATER STREET, NEW YORK, NEW YORK) TO THE
COMPANY (AS DEFINED BELOW) OR ITS AGENT FOR REGISTRATION OF TRANSFER, EXCHANGE
OR PAYMENT AND ANY CERTIFICATE ISSUED IS REGISTERED IN THE NAME OF CEDE &
CO. OR SUCH OTHER NAME AS REQUESTED BY AN AUTHORIZED REPRESENTATIVE OF THE
DEPOSITORY TRUST COMPANY AND ANY PAYMENT IS MADE TO CEDE & CO., ANY
TRANSFER, PLEDGE OR OTHER USE HEREOF FOR VALUE OR OTHERWISE BY OR TO ANY PERSON
IS WRONGFUL SINCE THE REGISTERED OWNER HEREOF, CEDE & CO., HAS AN INTEREST
HEREIN.

 

UNLESS AND UNTIL IT IS EXCHANGED IN WHOLE OR IN PART
FOR NOTES IN CERTIFICATED FORM (A “CERTIFICATED NOTE”), THIS GLOBAL SECURITY
MAY NOT BE TRANSFERRED EXCEPT AS A WHOLE BY THE DEPOSITORY TO A NOMINEE OF THE
DEPOSITORY OR BY A NOMINEE OF THE DEPOSITORY TO THE DEPOSITORY OR ANOTHER
NOMINEE OF THE DEPOSITORY OR BY THE DEPOSITORY OR ANY SUCH NOMINEE TO A
SUCCESSOR DEPOSITORY OR A NOMINEE OF SUCH SUCCESSOR DEPOSITORY.

 

 

LEHMAN BROTHERS HOLDINGS INC., a corporation duly
organized and existing under the laws of the State of Delaware (herein called
the “Company,” which term includes any successor corporation under the
Indenture referred to on the reverse hereof), for value received, hereby
promises to pay to CEDE & Co., or registered assigns, on the Maturity Date,
an amount equal to the
Redemption Amount at Maturity.

 

The “Maturity Date” is
November 29, 2010, or if such day is not a Business Day, on the next following
Business Day; provided that, if as a result of
a Market Disruption Event the Valuation Date for one or more Index Contracts is
postponed so that it falls less than three Business Days prior to the scheduled
Maturity Date, the Maturity Date will be the third Business Day following the
latest occurring postponed Valuation Date.

 

The
“Valuation Date” is November 19, 2010, or if such day is not an Index Business
Day, the immediately preceding Index Business Day; provided that if a Market
Disruption Event is in effect for one or more Index Contracts on the scheduled
Valuation Date, the Valuation Date may be postponed as described below.

 

The “Redemption Amount at Maturity” for each $10,000
note will be a single U.S. dollar payment on the Maturity Date equal to $10,000
multiplied by the Adjusted Performance.

 

The “Adjusted Performance” is:

 

(A) the sum of 100% plus the product of the Participation Rate times
the difference of the Index Return minus 1, if the Final Index Value is greater
than the Initial Index Value;

 

(B) 100%, if the Final Index Value is less than or equal to the Initial
Index Value but greater than or equal to the Buffer Level; or

 

(C) the sum of 20% plus the Index Return, if the Final Index Value is
less than the Buffer Level.

 

The “Initial Index Value” is 182.345, which is equal to the closing
level of the Index on the Trade Date, as determined and published by the Index
Sponsors, rounded to three decimal places.

 

The “Index Return” is a quotient, the numerator of which is the Final
Index Value and the denominator of which is the Initial Index Value.

 

The “Trade Date” is the November 20, 2007.

 

The “Issue Date” is the November 28, 2007.

 

The “Final Index Value” will be the closing value of the Index on the
Valuation Date, as determined and published by the Index Sponsors (subject to
the occurrence of a Market Disruption Event or an Index Unavailability Event),
rounded to three decimal places.

 

The “Participation Rate” is 145.0%.

 

2

 

The
“Buffer Level” is 145.876, which is equal to the product of the Initial Index
Value times 80%.

 

An “Index Business Day” is a day, as determined in good faith by the
Calculation Agent, on which trading is generally conducted on the Relevant
Exchange for each Index Contract then comprising the Index or any Successor
Index.

 

A “Business Day”, notwithstanding any
provision in the Indenture, is any day that is not is not a Saturday or Sunday
and that is not a day on which banking institutions in New York City generally
are authorized or obligated by law or executive order to be closed.

 

The “Index” is the Dow Jones-AIG Commodity IndexSM Excess
Return published and calculated by the Index Sponsors, subject to adjustment as
described below.

 

The “Index Sponsors” are Dow Jones & Company Inc., AIG
International, Inc. and AIG Financial Products Corp.

 

The “Index Contracts” means the commodities contracts underlying the
Index or any Successor Index.

 

The “Relevant Exchange” means any organized exchange or market of
trading for any futures contract (or any combination thereof) included in the
Index or any Successor Index.

 

If a Market Disruption Event relating to one or more
Index Contracts is in effect on the scheduled Valuation Date, the Calculation
Agent will calculate the Final Index Value in good faith in accordance with the
formula for and method of calculating the Index last in effect prior to
commencement of the Market Disruption Event, using:

 

•                            for each Index Contract
that did not suffer a Market Disruption Event on the scheduled Valuation Date,
the settlement price on the applicable Relevant Exchange of such Index Contract
on the scheduled Valuation Date, and

 

•                            for each Index Contract
that did suffer a Market Disruption Event on the scheduled Valuation Date, the
settlement price of such Index Contract on the applicable Relevant Exchange on
the immediately succeeding trading day on which no Market Disruption Event
occurs or is continuing with respect to such Index Contract;

 

provided however that if a Market
Disruption Event has occurred or is continuing with respect to such Index
Contract on each of the eight scheduled trading days following the scheduled
Valuation Date, then (a) the eighth scheduled trading day shall be deemed the
Valuation Date for such Index Contract and (b) the Calculation Agent will
determine the price for such Index Contract on such eighth scheduled trading
day in its sole and absolute discretion taking into account the latest
available quotation for the price for such Index Contract and any other
information that in good faith it deems relevant.

 

A “Market Disruption Event” means any of the
following events as determined in good faith by the Calculation Agent:

 

3

 

(A)     the termination
or suspension of, or material limitation or disruption in the trading on a
Relevant Exchange of any Index Contract;

 

(B)      the settlement
price on a Relevant Exchange of any Index Contract has increased or decreased
by an amount equal to the maximum permitted price change from the previous day’s
settlement price; or

 

(C)      the settlement price of any Index Contract is not published
by the Relevant Exchange.

 

Notwithstanding the foregoing,
the following events will not constitute Market Disruption Events:

 

(1)       a limitation on the hours in a trading day and/or number of
days of trading, if it results from an announced change in the regular business
hours of the Relevant Exchange; or

 

(2)       a decision to permanently discontinue trading in the Index
Contract or options or futures contracts relating to the Index or the Index
Contract.

 

If an Index Unavailability Event is in effect on the
scheduled Valuation Date (and no Market Disruption Event is then in effect),
the Calculation Agent will determine the Final Index Value on the Valuation
Date in good faith in accordance with the formula for and method of calculating
the Index last in effect prior to commencement of the Index Unavailability
Event using the closing price on the Relevant Exchanges of each Index Contract.

 

An “Index Unavailability Event” means that the Index
is not calculated by the Index Sponsors or any Successor Index is not
calculated and published by the sponsors thereof.

 

If the Index Sponsors discontinue publication
of the Index and the Index Sponsors or another entity publishes a successor or
substitute index that the Calculation Agent determines, in its sole discretion,
to be comparable to the discontinued Index (such index, a “Successor Index”),
then the Final Index Value will be determined by reference to the level of such
Successor Index at the close of trading on the Relevant Exchange or market of
the Successor Index last to close on the Valuation Date; provided, however,
that the Calculation Agent, in its sole discretion, may make such adjustments
as it deems necessary to the level of the Successor Index so that the level of
the Successor Index reflects the same level as that of the Index before it was
discontinued.  Upon any selection by the
Calculation Agent of a Successor Index, the Calculation Agent will cause
written notice thereof to be promptly furnished to the trustee, to the Company
and to the Holders of the notes.

 

If the Index Sponsors discontinue publication
of the Index prior to, and such discontinuation is continuing on, the Valuation
Date, and the Calculation Agent determines, in its sole discretion, that no
Successor Index is available at such time, then the Calculation Agent will
determine the Final Index Value on the Valuation Date.  The Final Index Value will be computed by the
Calculation Agent in accordance with the formula for and method of calculating
the Index last in effect prior to such discontinuation, using the settlement
prices on the Relevant Exchanges (or, if trading in an Index Contract has been
materially suspended or materially limited, its good

 

4

 

faith estimate of the settlement price that would have prevailed but
for such suspension or limitation) at the close of trading on the Valuation
Date.

 

If at any time the method of calculating the
Index or a Successor Index, or the level thereof, is, in the good faith judgment
of the Calculation Agent, changed or modified in a material respect, the
Calculation Agent may (but is not obligated to) make such adjustments to the
Index or Successor Index or their respective methods of calculation as, in the
good faith judgment of the Calculation Agent, may be necessary in order to
arrive at a level of a commodity index comparable to the Index or such
Successor Index, as the case may be, as if such changes or modifications had
not been made, and the Calculation Agent will calculate the Final Index Value
with reference to the Index or such Successor Index as adjusted.  Accordingly, if the method of calculating the
Index or a Successor Index is modified or rebased so that the level of the Index
or Successor Index is a fraction or multiple of what it would have been if it
had not been modified or rebased, then the Calculation Agent will adjust the
level of the Index or Successor Index in order to arrive at a level of the
Index or Successor Index as if it has not been modified or rebased.

 

The “Calculation Agent” means Lehman Brothers
Commodity Services Inc., the determinations and calculations of which will be
binding in absence of manifest error.

 

Except as provided below, any Redemption Amount at
Maturity may, at the option of the Company, be made by check mailed to the
person entitled thereto at such person’s address as it appears on the registry
books of the Company.

 

Payment of any Redemption Amount at Maturity will be
made in immediately available funds in accordance with the normal procedures of
the Trustee (or any duly appointed Paying Agent).

 

The Company will pay any administrative costs
imposed by banks in making payments in immediately available funds, but any
tax, assessment or governmental charge imposed upon payments hereunder,
including, without limitation, any withholding tax, will be borne by the Holder
hereof.

 

References
herein to “U.S. dollars” or “U.S.$” or “$” or “USD” are to the coin or currency
of the United States as at the time of payment is legal tender for the payment
of public and private debts.

 

REFERENCE
IS HEREBY MADE TO THE FURTHER PROVISIONS OF THIS NOTE SET FORTH ON THE REVERSE
HEREOF.  SUCH FURTHER PROVISIONS SHALL
FOR ALL PURPOSES HAVE THE SAME EFFECT AS IF SET FORTH AT THIS PLACE.

 

This
Note shall not be valid or become obligatory for any purpose until the
certificate of authentication hereon shall have been signed by the Trustee
under the Indenture.

 

5

 

IN
WITNESS WHEREOF, Lehman Brothers Holdings Inc. has caused this instrument to be
signed by its Chairman of the Board, its President, its Vice Chairman, its
Chief Financial Officer, one of its Vice Presidents or its Treasurer, by manual
or facsimile signature under its corporate seal, attested by its Secretary or
one of its Assistant Secretaries by manual or facsimile signature.

 

	
  Dated: November 28, 2007

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
  [SEAL]

  	
  LEHMAN BROTHERS
  HOLDINGS INC.

  
	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  
	
   

  	
  By:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Andrew M.W.
  Yeung

  
	
   

  	
   

  	
  Title:

  	
  Vice President

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
   

  	
   

  	
   

  
	
   

  	
  Attest:

  	
   

  	
   

  
	
   

  	
   

  	
  Name:

  	
  Cindy Buckholz

  
	
   

  	
   

  	
  Title:

  	
  Assistant
  Secretary

  
					

 

 

TRUSTEE’S CERTIFICATE OF AUTHENTICATION

 

This is one of the
Securities of the series designated herein referred to in the within-mentioned
Indenture.

 

	
  CITIBANK, N.A.

  	
   

  
	
    as Trustee

  	
   

  
	
   

  	
   

  
	
   

  	
   

  
	
  By:

  	
   

  	
   

  	
   

  
	
   

  	
  Authorized Officer

  	
   

  	
   

  

 

6

 

[REVERSE OF NOTE]

 

LEHMAN BROTHERS HOLDINGS INC.

MEDIUM-TERM NOTES, SERIES I

THREE-YEAR NOTES LINKED TO THE DOW JONES-AIG
COMMODITY INDEX EXCESS RETURN  
 DUE NOVEMBER 29, 2010

 

Section
1. 
General.  This Note is one
of a duly authorized series of Notes of the Company designated as the
Medium-Term Notes, Series I, Three-Year
Notes Linked to the Dow Jones-AIG Commodity Index Excess Return (herein
called the “Notes”).  The Notes are one of an indefinite number
of series of debt securities of the Company (collectively, the “Securities”)
issued or issuable under and pursuant to an indenture dated as of September 1,
1987, as amended and supplemented (the “Indenture”), duly executed and
delivered by the Company and Citibank, N.A., as Trustee (herein called the “Trustee”),
to which Indenture and all indentures supplemental thereto reference is hereby
made for a description of the rights, limitations of rights, obligations,
duties and immunities thereunder of the Trustee, the Company and the holders of
the Securities.  The separate series of
Securities may be issued in various aggregate principal amounts, may mature at
different times, may bear interest (if any) at different rates, may be subject
to different redemption provisions or repurchase rights (if any), may be
subject to different sinking, purchase or analogous funds (if any), may be
subject to different covenants and Events of Default and may otherwise vary as
in the Indenture provided.

 

Section
2.  Principal Amount for Indenture
Purposes.  For the purpose of
determining whether Holders of the requisite amount of Notes of this series
outstanding under the Indenture have made a demand, given a notice or waiver or
taken any other action, the principal amount of this Note will be deemed to be
the principal amount of this Note then outstanding.

 

Section
3.  Modification and Waivers.  The Indenture contains provisions permitting
the Company and the Trustee, with the consent of the Holders of not less than
66-2/3% in aggregate principal amount of each series of the Securities at the
time Outstanding to be affected, evidenced as in the Indenture provided, to
execute supplemental indentures adding any provisions to or changing in any
manner or eliminating any of the provisions of the Indenture or of any
supplemental indenture or modifying in any manner the rights of the holders of
the Securities of all such series; provided, however, that no such supplemental
indenture shall, among other things, (i) change the fixed maturity of any
Security, or reduce the Redemption Amount at Maturity or the principal amount
thereof, or reduce the rate or extend the time of payment of interest thereon
or reduce any premium or other amount payable on redemption, or make the
Redemption Amount at Maturity or the principal amount thereof, premium or other
amount payable, if any, or interest thereon payable in any coin or currency
other than that herein above provided, without the consent of the Holder of
each Security so affected, or (ii) change the place of payment on any Security,
or impair the right to institute suit for payment on any Security, or reduce
the aforesaid percentage of Securities, the holders of which are required to
consent to any such supplemental indenture, without the consent of the holders
of each Security so affected.  It is also
provided in the Indenture that, prior to any declaration accelerating the
maturity of any series of Securities, the holders of a majority in aggregate
principal amount of

 

 

the Securities of such
series Outstanding may on behalf of the holders of all the Securities of such
series waive any past default or Event of Default under the Indenture with
respect to such series and its consequences, except a default in the payment of
interest, if any, on the Redemption Amount or the principal amount, or premium,
if any, on any of the Securities of such series, or in the payment of any
sinking fund installment or analogous obligation with respect to Securities of
such series.  Any such consent or waiver
by the Holder of this Note shall be conclusive and binding upon such Holder and
upon all future holders and owners of this Note and any Notes of this series
which may be issued in exchange or substitution herefor, irrespective of
whether or not any notation thereof is made upon this Note or such other Notes
of this series.

 

Section
4.  Obligations Unconditional.  No reference herein to the Indenture and no
provisions of this Note or of the Indenture shall alter or impair the
obligation of the Company, which is absolute and unconditional, to pay any
Redemption Amount on this Note at the place, at the respective times, at the
rate, and in the coin or currency herein prescribed.

 

Section
5.  Defeasance.  The Indenture contains provisions for the
discharge of the Indenture and defeasance at any time of the indebtedness on
this Note upon compliance by the Company with certain conditions set forth
therein, which provisions apply to this Note.

 

Section
6.  Authorized Form and Denominations.  The Notes of this series are issuable in
registered form, without coupons.  Each
Note will be issued initially as either a Global Security or a Certificated
Note, at the option of the Company, in denominations of $10,000 or whole
multiples of $1,000, either at the office or agency to be designated and
maintained by the Company for such purpose in the Borough of Manhattan, New
York City, pursuant to the provisions of the Indenture or at any of such other
offices or agencies as may be designated and maintained by the Company for such
purpose pursuant to the provisions of the Indenture, and in the manner and
subject to the limitations provided in the Indenture, but without the payment
of any service charge, except for any tax or other governmental charges imposed
in connection therewith.  Notes of this
series are exchangeable for a like aggregate principal amount of Notes of this
series of a different authorized denomination, except that Global Securities
will not be exchangeable for Certificated Notes of this series.

 

Section
7.  Registration of Transfer.  As provided in the Indenture and subject to
certain limitations as therein set forth, the transfer of this Note is
registrable in the Security Register, upon surrender of this Note for
registration of transfer, at the Corporate Trust Office or agency in a Place of
Payment for this Note, duly endorsed by, or accompanied by a written instrument
of transfer in form satisfactory to the Company and the Security Registrar
requiring such written instrument of transfer duly executed by, the Holder
hereof or his attorney duly authorized in writing, and thereupon one or more
new Notes of this series, of authorized denominations and for the same
aggregate principal amount, will be issued to the designated transferee or
transferees.

 

If at
any time the Depository notifies the Company that it is unwilling or unable to
continue as Depository or if at any time the Depository shall no longer be
eligible under the Indenture, the Company shall appoint a successor Depository.  If a successor Depository for the Notes of
this series is not appointed by the Company within 90 days after the Company
receives such notice or becomes aware of such ineligibility, the Company will
issue, and the Trustee will authenticate and deliver, Notes of this series in
definitive form in an aggregate principal amount equal to the principal amount
of this Note.

 

 

No
service charge shall be made for any such registration of transfer or exchange,
but the Company may require payment of a sum sufficient to cover any tax or
other governmental charge that may be imposed in connection therewith.

 

Prior to due presentment
of this Note for registration of transfer, the Company, the Trustee and any
agent of the Company or the Trustee may treat the person in whose name this
Note is registered as the owner hereof for all purposes, and neither the
Company nor the Trustee nor any agent of the Company or of the Trustee shall be
affected by any notice to the contrary.

 

Section 8.  Events of Default.  If an Event of Default with respect to Notes
of this series shall occur and be continuing, the amount that may be declared
due and payable upon any acceleration of the notes will be determined by the
Calculation Agent for the period from and including the Issue Date to but
excluding the date of early repayment and will equal, for each note, the
Redemption Amount, calculated as the date of early repayment were the Maturity
Date. If a bankruptcy proceeding is commenced in respect of the Company, the
claim of the beneficial owner of a note for the period from and including the
Issue Date to but excluding the date of early repayment will be capped at the
Redemption Amount, calculated as though the date of the commencement of the
proceeding were the Maturity Date.

 

Section 9.  No Recourse Against Certain Persons.  No recourse for the payment of the Redemption
Amount or for any claim based hereon or otherwise in respect hereof, and no
recourse under or upon any obligation, covenant or agreement of the Company in
the Indenture or any Indenture supplemental thereto or in any Note, or because
of the creation of any indebtedness represented thereby, shall be had against
any incorporator, stockholder, officer or director, as such, past, present or
future, of the Company or of any successor corporation, either directly or
through the Company or any successor corporation, whether by virtue of any
constitution, statute or rule of law or by the enforcement of any assessment or
penalty or otherwise, all such liability being, by the acceptance hereof and as
part of the consideration for the issue hereof, expressly waived and released.

 

Section
10. 
Defined Terms.  All terms
used but not defined in this Note are used herein as defined in the Indenture.

 

Section
11.  GOVERNING LAW.  THIS NOTE SHALL BE GOVERNED BY AND CONSTRUED
IN ACCORDANCE WITH THE LAWS OF THE STATE OF NEW YORK.

Source: [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}, [{"source": "alea-institute/alea-institute/kl3m-data-edgar-agreements/train-00133-of-00352.parquet"}]]