FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

The Liquidity Facility Agreement will be governed by French Law.
9. The Hedging Agreements
On the Closing Date, the Issuer will enter into fixed/floating interest rate swap transactions and interest
rate caps with the Hedging Providers, each under an International Swaps and Derivatives Association Inc.
1992 Master Agreement (Multicurrency-Cross Border Version) in order to address certain risks arising as
a result of the Borrowers paying to the Issuer a fixed rate of interest on the Commercial Mortgage Loans
and the Issuer paying a floating rate of interest under the Notes.
The Hedging Agreements further provide that in the event that a ‘‘Hedging Downgrade Event’’, (as
defined in the Hedging Agreements but equating to the relevant Hedging Provider ceasing to have a short
term debt rating of at least A-1 by S&P and a combined short-term rating of at least F1 and long-term
rating of at least A by Fitch) has occurred, the relevant Hedging Provider will be required within 30 days,
at its own expense, to do one of the following:
(a) to procure another person who satisfies the requisite ratings criteria to become a co-obligor or to
guarantee the obligations of the Hedging Provider;
(b) to transfer its obligations under the Hedging Agreements to a replacement hedging provider who
satisfies the requisite ratings criteria;
(c) to provide collateral to secure its obligations under the relevant Hedging Agreement in an amount
sufficient to satisfy the then-current requirements of the Rating Agencies, such collateral to be
provided in accordance with the relevant Hedging Credit Support Document and to be credited to
the ‘‘swap collateral ledger’’ of the Issuer Transaction Account; or
(d) to take such other action as it may agree with the relevant Rating Agency.
If the relevant Hedging Provider fails to do so, the Issuer will in such circumstances be entitled (but not
obliged) to terminate the relevant Hedging Agreement.
Each Hedging Agreement will be governed by English law.
For a further description of the Hedging Providers, see the section entitled ‘‘The Key Transaction Parties’’
above. For a further description of the Hedging Agreements, see the section entitled ‘‘Resources Available
to the Borrowers and the Issuer’’ below.
10. Transaction Reporting
Pursuant to the Issuer Regulations, the Management Company will agree, (but subject always to any
confidentiality restrictions imposed by applicable law), to organise an annual information meeting for
Noteholders and Unitholders to review the operational and financial performance of the Issuer and each
Borrower during the previous year.
11. Subordination of Intercompany Liabilities
The Obligors of each Borrower Group will enter into a Subordination Agreement with the Lenders and
the Management Company, representing the Issuer, on the Closing Date pursuant to which the Obligors
will agree that all intercompany debt and other liabilities of one Obligor to another in the same Borrower
Group shall be subordinated to the payment in full of all amounts owing under the relevant Commercial
Mortgage Loan Agreement.
Each Subordination Agreement will be governed by French law.
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