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3.9 FREQUENCY OF DRAWDOWN AND PROCEDURES

The first loan drawdown[1] is generally conditional upon the provision of all guarantees in the forms and according to the priority ranking specified in the agreement and upon completion of legal, tax, and technical due diligences confirming all assumptions made at the time the loan was granted.

Following receipt by the bank, any requests for drawdown are irrevocable and are subject to a range of conditions. In particular, they must specify the drawdown date, which must under all circumstances be later than the date on which the drawdown is requested, and for example must coincide with the date of conclusion of acquisition of the property in relation to which the borrower has requested drawdown.

The request must also specify the amount requested for drawdown in relation to the respective financing line.

3.10 EVENTS OF DEFAULT

The financing agreement contains all provisions that trigger the default of the financing, with the consequence that the lender is entitled to ask for the total repayment of the capital. Some examples of event of default clauses follow.

Each of the events set out in this Clause is an event of default.

• Non-payment

• A Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:

• its failure to pay is caused by administrative or technical error or a disruption event; and

• payment is made within three business days of its due date.

Breach of obligation

• A Borrower does not comply with any term of:

Clause..;

• a Borrower does not comply with any term of the Finance Documents unless the non-compliance:

• is capable of remedy; and

• is remedied within ten days of the earlier of the bank giving notice and the Borrower becoming aware of the non-compliance.

Misrepresentation

• A representation made or repeated by the Borrower in any Finance Document or in any document delivered by or on behalf of a Borrower under any Finance Document is incorrect in any material respect when made or deemed to be repeated, unless the circumstances giving rise to the misrepresentation:

• are capable of remedy; and

• are remedied within ten days earlier of the Bank giving notice and the Borrower as appropriate, becoming aware of the misrepresentation.

• Cross default

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

• 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.

• Any commitment for any financial indebtedness of the Borrower is cancelled or suspended by a creditor of that Borrower as a result of an event of default.

• Insolvency

• The Borrower is, or is deemed for the purposes of any law to be, unable to pay its debts as they fall due or insolvent or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or announces an intention to do so or, by reason of financial difficulties, commences negotiations with its creditors generally with a view to rescheduling any of its indebtedness.

• A moratorium is declared in respect of any indebtedness of the Borrower.

• Insolvency proceedings

• Except as provided below, any of the following occurs in respect of the Borrower:

• any step is taken with a view to a moratorium or a composition, assignment or similar arrangement with any of its creditors;

• a meeting of its shareholders, directors or other officers is convened for the purpose of considering any resolution for, to petition for or to file documents with a court, its winding-up, administration or dissolution or any such resolution is passed;

• any person presents a petition, or hies documents with a court, for its winding- up, administration or dissolution;

• an order for its winding-up, administration or dissolution is made;

• any liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer is appointed in respect of it or any of its assets;

• its shareholders, directors or other officers request the appointment of, or give notice of their intention to appoint, a liquidator, trustee in bankruptcy, judicial custodian, compulsory manager, receiver, administrative receiver, administrator or similar officer; or

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

• Creditors' process

• Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of the Borrower having an aggregate value in excess of Euro ... and is not discharged within ... days.

• Unlawfulness and repudiation (Finance Documents)

• It is or becomes unlawful for the Borrower to perform any of its obligations under the finance documents.

• Any Finance Document is not effective in accordance with its terms or is alleged by the Borrower to be ineffective in accordance with its terms for any reason.

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

• Cessation of business

• The Borrower ceases or threatens to cease to carry on business other than as a result of a disposal permitted by the Finance Documents.

• Compulsory purchase

• Any part of a property is compulsorily purchased or the applicable local authority makes an order for the compulsory purchase of all or any part of a property; and

• In the opinion of the lender (acting reasonably), taking into account the amount and timing of any compensation payable, the compulsory purchase has or will have a material adverse effect.

• Major damage

• Any part of a property is destroyed or damaged; and

• In the opinion of the lender (acting reasonably), taking into account the amount and timing of receipt of the proceeds of insurance effected in accordance with the terms of this agreement, the destruction or damage has or will have a material adverse effect.

• Material adverse change

• An event or series of events occur which, in the opinion of the lender (acting reasonably) has, or is reasonably likely to have, a material adverse effect.

• Acceleration

• On and at any time after the occurrence of an event of default which is outstanding the bank may, and shall if so directed by the lender by notice to the Borrower:

• cancel the total commitments whereupon they shall immediately be cancelled;

• declare that ah 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

• declare that ah or part of the loan be payable on demand, whereupon they shall immediately become payable on demand by the bank on the instructions of the majority lenders.

  • [1] Also called disbursement.
 
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