FCC Proudreed Properties 2005 HSBC SG CORPORATE ...

On delivery of a Note Enforcement Notice, all indebtedness outstanding to the Liquidity Facility Provider
under the Liquidity Facility Agreement (other than the Liquidity Subordinated Amounts) will rank in
priority to repayments of principal and payments of interest under the Notes and amounts then standing
to the credit of the Liquidity Facility Standby Account, which represent the Liquidity Facility Standby
Drawing will not be available to the Issuer (but will instead be repaid to the Liquidity Facility Provider).
While the foregoing is a description of the Liquidity Facility Agreement entered into on the Closing Date,
it is possible that in the future it will only be possible to renew or replace it on terms which differ from
those described above.
5. The Hedging Agreements
For a further description of the Hedging Providers, see the section entitled ‘‘The Hedging Providers’’
below.
The Hedging Agreements may be terminated in whole or in part in certain limited circumstances, some
of which are more particularly described below. Any such termination may oblige the Issuer or the
Hedging Providers to make a termination payment. Any payment due to the Hedging Provider(s) from
a replacement Hedging Provider or following termination of the Hedging Agreement will be paid to the
Hedging Provider(s) and will not be made available to the Issuer Creditors.
If any Commercial Mortgage Loan and the corresponding Notes, are prepaid in part or in full other than
in accordance with their stated maturity, a corresponding proportion of the notional amount of the
swap(s) and or cap(s) made pursuant to the Hedging Agreements will terminate or the notional amount
of the swap(s) and/or cap(s) will be reduced in such other way as to reflect a corresponding reduction in
such notional amount, in each case as more specifically set out in the Hedging Agreements.
If the Issuer does not satisfy its payment obligations under a Hedging Agreement, this will constitute a
default by the Issuer thereunder and will entitle the relevant Hedging Provider to terminate the relevant
Hedging Agreement.
Upon the service of a Note Enforcement Notice, the Hedging Providers will have the right to terminate
the Hedging Agreements.
The Issuer’s obligations to the Hedging Providers under the Hedging Agreements (other than in respect
of the Hedging Subordinated Amounts) will rank ahead of the Notes.
The Management Company and the Custodian have undertaken not to make any modification to the
Issuer Priority of Payments which may adversely affect the ranking of any amounts payable to the
Hedging Providers under the Hedging Agreements (including any Fees and Expenses due to the Hedging
Providers), without the prior consent of the Hedging Providers. Failure to comply with this obligation will
constitute an Event of Default under each Hedging Agreement.
All payments to be made by either party under the Hedging Agreement are to be made without
withholding or deduction for or on account of any Tax unless such withholding or deduction is required
by applicable law (as modified by the practice of any relevant Tax Authority). Each of the Issuer and the
Hedging Providers will represent, on entering into the Hedging Agreements, that it is not obliged to make
any such deduction or withholding under current taxation law and practice. If, as a result of a change in
law (or the application or official interpretation thereof), one party is required to make such a withholding
or deduction from any payment to be made to the other party under a Hedging Agreement, the party
making that payment will not be obliged to pay additional amounts to the other party in respect of the
amounts so required to be withheld or deducted. If such additional amounts are payable by the Issuer they
will form part of the Hedging Subordinated Amounts, payments of the On-going Facility Fee in respect
of which will rank junior to payments under the Commercial Mortgage Loans in the Obligor Priority of
Payments. The party making an increased payment will have the right to terminate the relevant Hedging
Agreement (subject, in the case of the Hedging Providers only, to the Hedging Provider’s obligation to use
reasonable efforts (provided that such efforts shall not cause significant economic hardship to the relevant
Hedging Provider) to transfer its rights and obligations under the relevant Hedging Agreement to another
of its offices or affiliates or a suitably rated third party such that payments made by or to that office or
affiliate or third party under the relevant Hedging Agreement can be made without any withholding or
deduction for or on account of Tax).
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