FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

A breach of a Financial Covenant may be remedied by the deposit of an amount into the Borrower
Transaction Account which is sufficient to generate an amount of income which, if such income had been
available on the first day of the Historical Calculation Period, or Forward-Looking Calculation Period, by
reference to which either the Historical ICR or Projected ICR in respect of the relevant Borrower Group,
respectively, was calculated, in each case as would have ensured that such breach would not have occurred
had the Financial Covenants been calculated as if such remedy had been implemented on the first day of
the relevant Historical Calculation Period or Forward-Looking Calculation Period, as the case may be. If
not so remedied, a breach of a Financial Covenant will be capable of constituting a Loan Event of Default
in respect of the relevant Commercial Mortgage Loan.
In addition, any breach of a Financial Covenant may be remedied through any remedial action which the
Rating Agencies confirm to the Management Company and the relevant FCC Servicer would not lead to
a downgrade of the then-current rating applicable to the Notes.
LTV Ratio
Pursuant to the terms of each Commercial Mortgage Loan Agreement, each Borrower will covenant and
undertake to ensure that, during the Second Reference Period, the LTV Ratio in respect of the relevant
Borrower Group is not greater than 70 per cent.
The LTV Ratio will be tested by or on behalf of each Borrower Group on each Loan Calculation Date
during the Second Reference Period commencing on the Loan Calculation Date falling in August 2012
on the basis of the market value of the relevant Secured Property as determined in the most recent
Valuation Reports.
If, on a Loan Calculation Date during the Second Reference Period, the LTV Ratio is greater than 70%,
each of the Borrowers in that Borrower Group will be required in accordance with (j) of the Obligor
Pre-Enforcement Priority of Payments to deposit all sums then standing to the credit of the Borrower
Transaction Account of each such Borrower (after deducting amounts necessary to pay items (a) to (i) of
the Obligor Pre-Enforcement Priority of Payments) into the Cash Trap Account of each such Borrower
on the immediately following Loan Interest Payment Date, provided that if, in respect of a Loan
Calculation Date during the Second Reference Period, the LTV Ratio is greater than 70% but both the
Historical ICR and the Projected ICR are greater than 2.0:1, the amount required to be deposited into the
Cash Trap Account shall be limited to the amount required to bring the LTV Ratio, once the deposit has
been made, to a level less than 70%.
Failure by a Borrower Group to maintain its LTV Ratio at or below 70 per cent. during the Second
Reference Period does not constitute a Loan Event of Default.
General Covenants
Pursuant to the terms of each Commercial Mortgage Loan Agreement, the Borrowers will give certain
covenants (which may be limited in certain circumstances by certain materiality qualifications) including,
without limitation:
• to procure that an Occupational Tenant keeps and maintains, in good and substantial repair and
condition, the Secured Properties and, upon the failure by a tenant to do so and to the extent that
it is legally possible for the Borrower to do so, to keep and maintain, in good and substantial repair
and condition, the Secured Properties;
• to take such steps as are appropriate and permitted by law to ensure that the relevant Occupational
Tenant complies, or if the Occupational Tenant does not or is unable to comply, to itself comply,
with material aspects of laws and regulations relating to or affecting the Secured Properties
(including in relation to planning laws and regulations) and to take (and to procure to the extent
legally possible, that the relevant tenants take) all necessary steps to remove any Dangerous
Substances from the Secured Property, other than Dangerous Substances stored or used by
Occupational Tenants in compliance with Environmental Laws;
• to ensure that all new Occupational Leases are entered into on terms which in all circumstances a
reasonably prudent owner of commercial property of the type owned by the relevant Borrower
(having regard to, inter alia, the Secured Property, the market conditions at the time and the
interests of good estate management) would accept and to maintain the value of the Secured
Properties (in particular, resulting from rent payable under the new Occupational Lease, the
committed term of the new Occupational Lease, the quality of the new Occupational Tenants and
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