#10309 - Conditions Precedent Ws 6 Prep Task - Finance and Capital Markets

1. List any documents which you would expect Danton Bank plc (“Danton”) to include as conditions precedent in Part I of Schedule 2 of the Facilities Agreement. Also state who is responsible for producing the doc and why the bank wants it.

The List of the document should be as precise in the level of detail required from certain documents and tailored to the specific facts. LOOK at Points to Note

Docs provided by:

• Borrower’s Sol (most, including searches)

• Bank’s Sol (para 4)

• Seller’s Sol (for borrower purchasing buildings)

• Barboroli& Cosmopolitan (para 2(d))

• Premier Construction Limited Docs (para 3(k) & n(ii))

• Accountants (para 5(a))

Task 1

Question 1

• the Borrower will not be able to draw down the money until the Condition Precedent is satisfied. If it is likely that they will not be able to comply with the Condition Precedent it may be necessary to negotiate the Condition Precedent. It is possible that the bank may waive the condition temporarily or permanently. Of course, the bank may just refuse to sign the agreement.At this stage the bank may also have access to contractual remedies. Moreover, the Co. is likely to have been paying the bank fees associated to the facility. Extending completion of the FA will mean that Co. will continue to pay these fees.

Question 2

• Get an undertaking from the Borrower’ssolicitors that once the funds are made available to the borrower from the Facility Agreement they will discharge the mortgage and have the charge removed at completion.

• That the Mortgage will be discharged using form MR04

• Get confirmation from the Bank beneficiary of the security of how much is necessary to discharge the mortgages and that they will be discharged as soon as the money is paid

• Make it a Condition Subsequent

Question 3

• The Borrower’s solicitor will firstwant an irrevocable instruction from our client before giving the undertaking that the Borrower will use the money to purchase the property.

• Get an undertaking from Borrower’s solicitor that the money will be used to purchase the property;

Question 4

• Making a reutilization request. schedule 3 part I, that is the form in which the request needs to be made; and

• Borrower needs to comply with Clause 4.2 of the Facilities Agreement (Repeated Representations and No event of default)

Task 2

Question 1

• Clause 7 of the Legal Opinion. The wording of the opinion is problematic “or in the future”. Reliance on the opinion should be limited to as few parties as possible and not in the future. Any amendment to this would need to be approved by a partner in the firm.

• No, the bank will require a new opinion (even if the opinion is identical to the previous one) in order to update its effect in case there have been changes to the law.

• The syndicate will also want an incoming bank to rely on...