FCC Proudreed Properties 2005 HSBC SG CORPORATE ...
FCC Proudreed Properties 2005 HSBC SG CORPORATE ...
FCC Proudreed Properties 2005 HSBC SG CORPORATE ...
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after among other things, payments of fees, remuneration and expenses of the Management Company and<br />
the Custodian and their appointees, respectively (if any) and the auditors of the Issuer; the fees and<br />
expenses of the Paying Agents, the Issuer Account Bank and the Cash Manager; amounts due to the<br />
Liquidity Facility Provider (other than the Liquidity Subordinated Amounts) and the Hedging Providers<br />
under the Hedging Agreements (other than the Hedging Subordinated Amounts) and the fees and<br />
expenses of the <strong>FCC</strong> Servicers.<br />
The Management Company is required always to act in the best interest of the Unitholders and the<br />
Noteholders, although the Issuer Regulations provide that in the event of a conflict between decisions<br />
made by (i) the Noteholders and the Unitholders, or (ii) between Noteholders of different classes, the<br />
Management Company shall apply the decisions made by the Noteholders in the case referred to in (i)<br />
above, or the Noteholders ranking in priority in the case referred to in (ii) above, unless any such decision<br />
would result in a modification of the financial characteristics of the other Units or Notes. In such a case,<br />
unless the relevant holders of Units or Notes agree to modify their rights in accordance with the<br />
provisions of the Issuer Regulations, the Management Company shall not be obliged to carry out such a<br />
decision.<br />
Monitoring of compliance with representations, warranties and covenants and the occurrence of a Loan<br />
Event of Default or Potential Loan Event of Default<br />
The Issuer is a fonds commun de créances, a form of special purpose vehicle, and therefore will not, nor<br />
does it possess the resources actively to, monitor whether a Loan Event of Default or a Potential Loan<br />
Event of Default has occurred, including, for this purpose, the continued accuracy of the respective<br />
representations and warranties made by the Borrowers and compliance by the Borrowers with their<br />
respective covenants and undertakings.<br />
The <strong>FCC</strong> Servicers will have no obligation under the Issuer Transaction Documents to monitor whether<br />
a Loan Event of Default or a Potential Loan Event of Default has occurred but will (unless expressly<br />
informed to the contrary by the relevant Borrower) rely on certificates delivered under the applicable<br />
Commercial Mortgage Loan Agreement to determine whether a Loan Event of Default or a Potential<br />
Loan Event of Default has occurred. For further details concerning Loan Events of Default or Potential<br />
Loan Events of Default, see further the section entitled ‘‘Summary of Principal Documents – The<br />
Commercial Mortgage Loan Agreements’’ below.<br />
Each Commercial Mortgage Loan Agreement with a Borrower will require the relevant Borrower (or the<br />
Borrower’s Agent) to inform the relevant <strong>FCC</strong> Servicer and the Management Company of the occurrence<br />
of any Loan Event of Default and Potential Loan Event of Default promptly upon becoming aware of the<br />
same. In addition, each Borrower is required to confirm in each compliance certificate delivered<br />
thereunder (each of which will be delivered to, among other recipients, the Management Company)<br />
whether or not any Loan Event of Default or Potential Loan Event of Default has occurred (and, if one<br />
has, what action is being or proposed to be taken to remedy it).<br />
The occurrence of a Loan Event of Default will entitle the relevant <strong>FCC</strong> Servicer to pursue any of the<br />
courses of action available to it in respect of the affected Borrower and its Property Portfolio, as set out<br />
under the sections entitled ‘‘Summary of Principal Documents – The Commercial Mortgage Loan<br />
Agreements’’ and ‘‘Summary of Principal Documents – The Commercial Mortgage Loan Agreements’’<br />
below.<br />
Direct exercise of rights<br />
The Management Company has the exclusive right to exercise the Issuer’s rights under or in connection<br />
with the Transaction Documents, including, without limitation, in relation to the Commercial Mortgage<br />
Loans. The Noteholders will not have the right to give directions to the Management Company in relation<br />
to the exercise of its rights or to exercise any such rights directly. See further the section entitled<br />
‘‘Directions/Instructions of Noteholders’’.<br />
Early liquidation of the Issuer<br />
The Issuer Regulations set out a number of circumstances in which the Management Company would be<br />
entitled or obliged to liquidate the Issuer. These circumstances may occur prior to the Final Maturity<br />
Date, in which case the Notes may be prepaid in accordance with the mandatory redemption provisions<br />
of Condition 5(c). It is possible that the funds available to the Issuer following its early liquidation may<br />
be insufficient to redeem the Notes in full after payment of amounts ranking in priority in the applicable<br />
Issuer Priority of Payments.<br />
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