USERS GUIDE THE GERMAN LAW VERSION FORM OF FACILITY AGREEMENT FOR REAL ESTATE FINANCE MULTIPROPERTY INVESTMENT TRANSACTIONS OCTOBER 2016

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1 For the avoidance of doubt, this Users Guide and the REF Document are in a non-binding, recommended form. Their intention is to be used as a starting point for negotiation only. Individual parties are free to depart from their terms and should always satisfy themselves of the regulatory implications of their use. USERS GUIDE TO THE GERMAN LAW VERSION OF FORM OF FACILITY AGREEMENT FOR REAL ESTATE FINANCE MULTIPROPERTY INVESTMENT TRANSACTIONS OCTOBER 2016 The Loan Market Association ("LMA") consents to the use, reproduction and transmission of this document by members of the Loan Market Association for the preparation and documentation of agreements relating to transactions or potential transactions in the loan markets. This document may be reproduced and transmitted to non-members of the Loan Market Association in hard copy only. The LMA does not consent to the use, reproduction or transmission of this document for any other purpose, in any other manner or by any other person and expressly reserves all other rights. Loan Market Association. All rights reserved FR:

2 STATEMENT The German law version of the form of facility agreement for real estate finance multiproperty investment transactions was developed by a working party consisting of representatives of major German and international banks and a number of Germany based law firms. The objective was to adapt the English law Single Currency Term Facility Agreement for Real Estate Finance Multiproperty Investment Transactions specifically to the requirements of German law and German real estate finance market practice (including the German Pfandbrief market) whilst otherwise retaining the form and substance of the LMA English law document. It is believed that this exercise will broaden the potential use of LMA Primary Documents in the German market by making available a German law compliant version for those parties wishing to be governed by German rather than English law. When considering use of the German law version of the form of facility agreement for real estate finance multiproperty investment transactions it is recommended that borrowers and lenders should: consider the option of continuing to use existing documentation carefully consider changes to the German law version of the form of facility agreement for real estate finance multiproperty investment transactions that may be required note that, whilst the LMA German law document contains references to provisions relevant for the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister), these are not intended to be a comprehensive set of references to all provisions that may be relevant for the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister) note that changes to the LMA German law document (whether in the form of deletions, additions or any other amendment) may affect the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister) carefully consider any requirements as to the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister) and the impact of any changes to the LMA German law document on such suitability always have the benefit of independent legal advice The LMA Board believes the German law version of the form of facility agreement for real estate finance multiproperty investment transactions will provide a valuable aid to the further development of the syndicated loan market in Germany FR:

3 CONTENTS 1. Important Notice Introduction The Transaction Anatomy Of The Ref Document Section By Section Guide To The Ref Document FR:

4 1. IMPORTANT NOTICE This Users Guide has been prepared for the Loan Market Association ("LMA") in connection with the German law version of the form of facility agreement for real estate finance multiproperty investment transactions (the "REF Document") published by the LMA. Whilst every care has been taken in the preparation of this Users Guide and the REF Document, no representation or warranty is given by the LMA or Allen & Overy LLP: as to the suitability of the REF Document for any particular transaction, in particular as to the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister) that the REF Document will cover any particular eventuality as to the accuracy or completeness of the contents of this Users Guide. This Users Guide provides limited guidance only on the terms of the REF Document. It is not intended to be a comprehensive analysis of the REF Document nor to explain exactly how each provision operates. In particular, users of the REF Document should satisfy themselves as to the taxation, regulatory and accounting implications of its use and that the REF Document is appropriate to the terms of the commercial transaction. The REF Document contains references to provisions relevant for the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister). The references are not intended to be a comprehensive set of references to all provisions that may be relevant for the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister); changes to the REF Document (whether in the form of deletions, additions or any other amendment) may affect such suitability. Users of the REF Document should satisfy themselves as to the requirements for the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister) and that the REF Document reflects such requirements. Neither the LMA nor Allen & Overy LLP are liable for any losses suffered by any person as a result of any contract made on the terms of the REF Document or which may arise from the presence of any errors or omissions in this Users Guide or the REF Document and no proceedings shall be taken by any person in relation to such losses. For the avoidance of doubt, this Users Guide and the REF Document are in a non-binding, recommended form. Their intention is to be used as a starting point for negotiation only. Individual parties are free to depart from their terms and should always satisfy themselves of the regulatory implications of their use.

5 2. INTRODUCTION The purpose of this Users Guide is to assist users of the REF Document. The REF Document is a Senior Euro Term Facility Agreement intended for use in German real state finance multiproperty investment transactions which are to be governed by German law. 2.1 Evolution and Scope of the REF Document The REF Document project was begun in response to demand from participants in the German real estate finance market for a German law governed form of real estate investment facility agreement for the German real estate finance market (including the German Pfandbrief market) in much the same way as the LMA provided the English law Single Currency Term Facility Agreement for Real Estate Finance Multiproperty Investment Transactions (the "English REF Document") for the real estate finance markets in England and Wales and Scotland. A Working Party consisting of representatives from major German and international banks (including Pfandbrief banks) and a number of Germany based law firms was established to consider the drafting of the REF Document. It was recognised that, although many German real estate investment transactions have elements in common, the nature of these transactions is such that it would be difficult to produce a document which was "standard" for real estate finance investment transactions. In particular, it was accepted that any document produced would need to be tailored to the particular transaction structure and commercial requirements of the parties involved. However, it was still felt that it would be a step forward in promoting the efficiency of the market if a document was produced which was a good starting point for the draftsman; which provided a common framework and language for those involved in these transactions; and which used the same basic structure and "boilerplate" as the LMA Recommended Forms of Primary Documents, in particular the English REF Document. 1 Further, it was seen as important that the REF Document would in principle comply with the requirements of the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister); relevant drafting options as well as references have been implemented in the REF Document, where and to the extent appropriate. It was accepted that the REF Document would not constitute a comprehensive analysis or guide to all requirements of the suitability of the Facility for registration in a Pfandbrief bank s cover register (Deckungsregister), but that users should satisfy themselves as to such requirements and that the REF Document accurately reflects such requirements. It is important, therefore, to recognise that the REF Document is not a standard form to be followed slavishly for each deal but a document which will be used as a starting point by law firms drafting facility agreements for real estate finance investment transactions. 1 Various clauses of the REF Document contain extensive exclusions of liability in favour of the Agent and/or the Security Agent which correspond to identical clauses in the English REF Document. Among these are paragraph (b) of Clause 4.1 (Initial conditions precedent), paragraph (h) of Clause 8.3 (Hedging), paragraph (h) of Clause 12.8 (FATCA Information), paragraph (a) of Clause 28.3 (Instructions), paragraph (e) of Clause 28.3 (Rights and discretions), Clause (Exclusion of liability), Clause (No responsibility to perfect Transaction Security), Clause (Insurance by Security Agent), Clause (Acceptance of title) and paragraph (e) of Clause (Disruption to Payment Systems etc.)). It should be noted that pursuant to section 276 paragraph 3 of the German Civil Code (Bürgerliches Gesetzbuch) the liability of a contractual party for its own wilful misconduct (Vorsatz) cannot be excluded in advance. In addition, pursuant to section 309 no. 7 of the German Civil Code (Bürgerliches Gesetzbuch) general business terms (Allgemeine Geschäftsbedingungen) may generally not exclude or limit the liability for damages arising from wilful misconduct (Vorsatz), gross negligence (grobe Fahrlässigkeit) or (in the case of injuries to life, body or health only) negligence (Fahrlässigkeit) of (i) the person providing such terms (Verwender) or (ii) its statutory representatives (gesetzlicher Verteter) or vicarious agents (Erfüllungsgehilfen) FR:

6 In order to be helpful, various provisions which may or may not be included in any particular transaction have been included in square brackets in order that a menu of clauses is available to the draftsman should those clauses be required. The non-inclusion of such square-bracketed provisions should not be considered as a departure from the LMA form. A large number of provisions will need to be tailored to a transaction on a case by case basis. In those cases, the REF Document provides a sensible starting point only and does not attempt to deal with the complexities of each transaction. In particular, the provisions setting out the representations, undertakings and events of default are not intended to be exhaustive or absolute. It is expected that further representations, undertakings or events of default may need to be added and that the Clauses that are included may need to be amended. 2.2 Format and use of the REF Document (a) Assumptions The agreement has been produced on the basis of various assumptions set out below; these assumptions have been made in order to (i) avoid overcomplicating the document and (ii) ensure the validity of the REF Document (adapted from the English REF Document) under German law (but excluding sections 305 to 310 of the German Civil Code (Bürgerliches Gesetzbuch) relating to general business conditions). However, if any assumption is not correct in the context of a particular transaction, the REF Document may still represent a useful starting point. The assumptions are explained in more detail in the section-by-section guide in Section 5 of this Users Guide, but in summary the REF Document assumes: the REF Document is to be governed by German law and the transaction is as described in Section of this Users Guide; the Agent is based in London or in Frankfurt and syndication takes place primarily in the London and/or Frankfurt market and the Euromarkets; the Obligors are German limited liability companies (Gesellschaften mit beschränkter Haftung). The REF Document would need to be adapted for any other type of entity, partnership, association or individual; the Obligors are incorporated in Germany. While some provisions applicable to foreign companies are included, it is not possible to contemplate all amendments required for every jurisdiction and so some further changes may need to be made if the Obligors are not incorporated in Germany; the Properties which are the subject of the security are located in Germany; and the terms of the REF Document and the transaction are negotiated (aushandeln) between the parties. (b) Format All the standard sections of a syndicated real estate finance investment facility agreement are included. Where provisions are likely to be deal specific so that no common starting point can easily be identified, spaces have been left or options provided FR:

7 (c) Style As far as possible, the REF Document adopts a "plain English" approach, with clauses broken down into shorter sub-paragraphs and exceptions listed in sub-paragraphs rather than as provisos. The REF Document is divided into Sections and Clauses. Each Clause is divided into sub-clauses, and sub-clauses may be further divided into separate paragraphs. The sequence of numbering is as follows: SECTION 1 HEADING Clause 1 HEADING Clause 1.1 Heading paragraphs (a), (b), (c) paragraphs (i), (ii), (iii) paragraphs (A), (B), (C) paragraphs (1), (2), (3) Headings are given to each Section and Clause only. Cross references should refer to the Clause number and the heading of the Clause. Where additional information is required a gap [ ] is left. Where optional language or more than one option have been included they are identified as [option] or [option 1]/[option 2]. (d) How to use the REF Document It is impossible to use the REF Document without amendment or additions (because of the inclusion of different options and the provisions that have been left blank). It will therefore be necessary to show clearly what amendments have been made, both during the course of negotiation and at the end of the transaction. The following approach is recommended: when distributing the first draft to the syndicate of banks and to the borrowers, the drafting law firm should provide copies of the draft marked to show changes from the REF Document including the deletion of the LMA logo and the copyright notice. Further comparisons should be provided as required by the Parties; and at the end of the transaction, the law firm responsible for the draft should provide the Parties with a conformed copy of the final document marked to show changes from the REF Document. This will help with administration of the facility and any secondary trading that may take place. There is no recommendation for how this comparison will be produced or how additions or deletions should be indicated. 2.3 Relationship with LMA Recommended Forms of Primary Documents To the greatest extent possible the REF Document has been based upon the English REF Document, adapted in accordance with the German law version of the LMA Multicurrency Term and Revolving Facilities Agreement (the "German Law Investment Grade Document"). The English REF Document has been based upon the Recommended Forms of Primary Documents (in particular FR:

8 LMA.MT.06, the Multicurrency Term Facility Agreement). For that reason, where the Users Guide to the Recommended Forms, in particular the Supplemental Users Guide to the German law version of the LMA recommended form of Primary Documents, already covers a particular provision which is replicated in the REF Document, this Users Guide does not repeat what is said in the Recommended Forms Users Guide. Where applicable, for example in relation to the Security Agent, provisions in the REF Document have been based on the LMA senior facilities agreement for leveraged finance transactions (LMA. LeveragedFinanceFacilityAgmt.08) or the LMA intercreditor agreement for leveraged finance transactions (LMA.ICA.03). There are footnotes within the REF Document which may offer additional guidance or explanation for particular Clauses FR:

9 3. THE TRANSACTION Set out below is a brief description of the transaction documented by the REF Document. To the extent that the structure of the transaction in question is different from that described in sections 3.1 to 3.3 below, it is important to note that changes will be required to the REF Document to take account of that structure's particular characteristics and complexities. 3.1 Structure Below is a diagram of the assumed structure. The assumption is that the Company establishes the Borrowers to which finance is provided for the acquisition of the Properties. The assumption is also made that equity investment is made by way of (a) ordinary shares and (b) Subordinated Debt into the Company. Security is held and/or administered by a security trustee for the lenders. It is further assumed that no other forms of finance (such as mezzanine finance) are involved in the transaction but that, where the finance is provided on a floating rate basis, interest rate hedging is provided. The REF Document assumes that the transaction is for investment purposes only and not for the development of a Property. Transaction Structure Chart Shareholder Equity Subordinated Debt Guarantee of Senior Loans Company Subordinated Debt Subordinated Creditor Downstreaming of equity and Subordinated Debt to Borrowers Senior Lenders Senior Loan to each Borrower Borrower 1 Borrower 2 Borrower 3 Acquisition Acquisition Acquisition Property 1 Property 2 Property Facility The REF Document provides for a Euro term loan facility only. The Facility could be provided on either a fixed or floating rate basis. 3.3 Security Structure The security is held and/or administered by a security trustee (defined as the "Security Agent") on behalf of the lenders and the hedge counterparties and is documented in the form of security over property, accounts, rental income, insurances and all other assets of each Obligor, security over the shares in the Company and each Obligor and, often, security over any Subordinated Debt provided to the Company and downstreamed to each Obligor FR:

10 4. ANATOMY OF THE REF DOCUMENT The provisions of the REF Document may be broken down into the following broad categories: 4.1 Section 1 Definitions and interpretation of terms used in the REF Document. 4.2 Section 2 to Section 6 The clauses in these Sections set out the operational mechanics of the agreement and include: the conditions on which the Facility is made available (including the drawdown mechanism and conditions to utilisation) the Finance Parties' rights and obligations in relation to the Facility the terms on which the Facility is to be repaid, prepaid (including relating to mandatory prepayment) and/or cancelled the determination of interest and interest periods requirements relating to hedging provisions relating to fees, costs and expenses and indemnities taxes and increased costs provisions. 4.3 Section 7 This Section sets out how bank accounts are to be operated. These clauses will need to be adapted for the terms of the transaction. 4.4 Section 8 This Section sets out the guarantee and indemnity. 4.5 Section 9 This Section sets out the most commonly negotiated terms: the representations the information undertakings the financial covenants the general undertakings the property undertakings the events of default FR:

11 It is these clauses that particularly need to be tailored to the terms of the transaction and parties involved. 4.6 Section 10 This section deals with: assignments and transfers by the Lenders accession of Hedge Counterparties restrictions on debt purchase transactions, if any resignation of Borrowers accession of additional Subordinated Creditors. 4.7 Section 11 to Section 13 These provisions are what are commonly referred to as the "boilerplate". They are relatively standard clauses setting out: the relationship between the Security Agent, the Agent, the Arranger and the Lenders the roles, powers and rights and responsibilities of the Agent and the Security Agent sharing among the Lenders administrative provisions relating to payments and notices the mechanics for amendments and waivers confidentiality requirements the provisions relating to the governing law and enforcement of the agreement and conclusion of the agreement. 4.8 The Schedules The Schedules contain: transaction specific information (such as details of Lenders and their Commitments, the Hedge Counterparties and the properties) forms of ancillary documentation which may be required throughout the life of the transaction (such as the Utilisation Request, Transfer Certificate and Compliance Certificate) the list of conditions precedent documents LMA confidentiality undertaking timetables for utilising the facility and for rate fixing FR:

12 5. SECTION BY SECTION GUIDE TO THE REF DOCUMENT Please note that this Users Guide does not comment on all definitions and Clauses within the REF Document and (as indicated above) does not repeat guidance already included within the Users Guide to the Recommended Forms of Primary Documents. THE PARTIES The REF Document provides for multiple Borrowers, each of which borrows to acquire a Property. The Company owns 100 per cent. of the share capital in each Borrower. The Company and each Borrower provides a guarantee. The REF Document assumes that the Security Agent will be appointed to hold and/or administer the Security on behalf of the Finance Parties and contains provisions relating to the appointment of the Security Agent. 2 The REF Document provides for one or more Hedge Counterparties to be an original party in that capacity or to accede to the REF Document after signing. Hedge Counterparties are to be included only when the Facility is provided on a floating rate basis. SECTION 1 INTERPRETATION Clause 1.1: Definitions "1992 ISDA Master Agreement", "2002 ISDA Master Agreement" and "German Master Agreement": hedging of the Facility is required to be carried out under an ISDA Master Agreement or a German Master Agreement. "Account": this refers to the various bank accounts the Obligors are to, or may, maintain and which are to be administered in accordance with the REF Document. "Allocated Loan Amount": this is relevant for disposals of Properties but may not be relevant for all transactions. "Asset Manager": this is the agent appointed to manage the portfolio comprising the Properties as a whole. "Break Costs": alternative options are provided depending on whether the Facility is provided on a floating rate or fixed rate basis. "Cancellation Costs": alternative options are provided depending on whether the Facility is provided on a floating rate or fixed rate basis. "Compensation Prepayment Proceeds": these are, subject to certain exceptions, required to be used in mandatory prepayment. 2 For a Facility suitable for registration in a Pfandbrief bank s cover register (Deckungsregister), the structure of the security agency must comply with section 1 para 1 no. 1 or para 2 sentence 1 of the German Pfandbrief Act (Pfandbriefgesetz); for the purposes of the REF Document, it has been assumed that the Security Agent maintains a refinancing register (Refinanzierungsregister) in accordance with the German Banking Act (Kreditwesengesetz) (please see Clause ([Refinancing register[, cover register] and right to request assignment of Land Charge)). If the Security Agent does not maintain a refinancing register, users should carefully check the structure of the security agency on a case-by-case basis for compliance with the German Pfandbrief Act FR:

13 "Debt Service Account": this is one of the Accounts the Obligors may be required to maintain. If relevant, it is principally used for holding amounts to be applied in debt service on the next interest payment date. "Deposit Account": this is one of the Accounts the Obligors may be required to maintain. If relevant, it is principally used for holding amounts to be applied in prepayment. "Disposal Proceeds": the net proceeds of any disposal of a Property or shares in a Borrower. These would usually be applied in mandatory prepayment. "Disposals Account": if relevant for a transaction, the Disposals Account is used to hold the proceeds of disposal of a Property pending prepayment of Loans. "Duty of Care Agreement": this is entered into with a Managing Agent or an Asset Manager and under it the Managing Agent or the Asset Manager (as applicable) acknowledges the security over the relevant Properties and the duties of the Managing Agent or the Asset Manager (as applicable) to the Finance Parties are set out. "Environment" to "Environmental Permits": these definitions are relevant for the environmental matters undertaking in Clause "Excluded Compensation Prepayment Proceeds": these are amounts recovered from a compulsory purchase or similar which do not have to be used in prepayment provided they are used for a particular purpose within a certain time. "Excluded Recovery Proceeds": these are amounts recovered from a Property Vendor or a report provider which do not have to be used in prepayment provided they are used for a particular purpose within a certain time. "Existing Land Charge": this is existing security over Property which is assumed to be discharged upon utilisation of the Facility and to be deleted in the course of the completion of the financed acquisition. "Fixed Rate": this is relevant if the Facility is provided at a fixed rate of interest. "General Account": this is one of the Accounts the Obligors may be required to maintain. If relevant, it is principally used for the day to day requirements of the Obligors. "HBR" or "Heritable Building Right": this is a specific right of title to a Property (comparable to an English leasehold) and may not be relevant for every transaction. "Hedge Counterparty" to "Hedging Prepayment Proceeds": these definitions will be relevant for a floating rate facility with hedging. "Historical [Interest/Debt Service] Cover": this is relevant if an interest or debt service cover covenant is included as a financial covenant and that covenant is to be tested on a historical basis. The definition sets out how Historical Interest Cover or Historical Debt Service Cover is calculated and certain adjustments that are commonly made in calculating both finance costs and passing rental received by the Obligors. If the Company fails to calculate this, the Agent may do so. "Initial Valuation": this is usually provided as a condition precedent. "Insurance Prepayment Proceeds": these are amounts received under insurance policies which are to be used in mandatory prepayment. "Insurances": this is relevant for the Insurances undertaking in Clause FR:

14 "Interest Payment Date": Interest Payment Dates are usually set at the outset and usually correlate closely to rent payment days. "Irrecoverable Service Charge Expenses": these are the costs and expenses for the running of a Property that are not recoverable from a tenant. "Land Charge": this is a form of security over a Property located in Germany. "Lease Document": these are the Agreements for Lease and Occupational Leases under which tenants occupy the Properties and pay rent to the Obligors. "Lease Prepayment Proceeds": these are amounts received under Lease Documents which are to be used in mandatory prepayment. "Loan to Value": this is relevant if a Loan to Value covenant is included as a financial covenant. The definition sets out how the Loan to Value percentage is calculated. "Managing Agent": this is the agent appointed to manage the Properties on a day to day basis (e.g. to collect rent from the tenants). "Material Adverse Effect": this is an important term in the REF Document and is used as a qualifier to certain representations and undertakings as well as triggering the material adverse change Event of Default. This definition should be considered on a case by case basis and is frequently the subject of negotiation. "Permitted Payment": these are amounts which an Obligor is permitted to pay to its Shareholder or to a Subordinated Creditor and are exceptions to the general prohibition on these payments in Clause (Shares, dividends and share redemption) and/or in a Subordination Agreement. These payments should be considered on a transaction by transaction basis. "Projected [Interest/Debt Service] Cover": this is relevant if an interest or debt service cover covenant is included as a financial covenant and that covenant is to be tested on a forward looking basis. The definition sets out how Projected Interest Cover or Projected Debt Service Cover is calculated and certain adjustments that are commonly made in calculating both finance costs and passing rental received by the Obligors. If the Company fails to calculate this, the Agent may do so. "Property": the properties (including HBRs) owned by the Borrowers. Details should be listed in Part IV of Schedule 1. "Property Report": this would usually be a legal due diligence report for each Property and provided as a condition precedent. "Recovery Payment Proceeds": these are amounts recovered from any claim an Obligor may have against a Vendor or a report provider and are, subject to certain exceptions, to be used in mandatory prepayment. "Rent Account": this is one of the Accounts the Obligors may be required to maintain. If relevant, it is principally used for the receipt of amounts paid to Obligors by tenants of the Properties. "Rental Income": this is the amount received by Obligors in connection with the Properties. It includes a number of payments and types of income in addition to periodic payments of rent. "Security Document": this should list each document under which security is granted to the Security Agent by the Obligors. The list will vary from transaction to transaction. "Service Charge Expenses": these are the costs and expenses for the running of a Property FR:

15 "Shareholder's Security Agreement": any shareholder which is not itself an Obligor would provide security over shares owned by it in Obligors under a Shareholder's Security Agreement. This document could also grant security over any Subordinated Debt provided by that Shareholder if appropriate for the relevant transaction. "Subordinated Creditor": the provider of any Subordinated Debt to an Obligor. "Subordinated Creditor's Security Agreement": if security over any Subordinated Debt is required to facilitate a sale of an Obligor on enforcement, any Subordinated Creditor not party to any other Security Document would provide that security under a Subordinated Creditor's Security Agreement. "Subordination Agreement": the document under which any debt provided to an Obligor by a Shareholder or other entity is expressly subordinated to the Facility. "Tenant Contributions": these are payments other than periodic rent, which a tenant might pay or reimburse to an Obligor as contribution to Service Charge Expenses under a Lease Document, usually in connection with services provided, or payments made, by an Obligor in relation to a Property, such as a service charge or for insurance. "Tenant Deposit Account": if relevant for a transaction, the Tenant Deposit Account is used to hold any tenant security deposit. "Transaction Document": this is wider than the definition of Finance Document and is relevant for certain representations, undertakings and Events of Default. "Transaction Obligor": this includes entities in addition to the Obligors which are required to comply with, or whose actions are intended to be controlled by, the REF Document e.g. a Shareholder or a Subordinated Creditor. "Valuation": Valuations are required for (i) calculation of the Loan to Value financial covenant if such a covenant is included and (ii), in case of a Facility to be suitable for registration in a Pfandbrief bank s cover register (Deckungsregister), the determination of the mortgage lending value (Beleihungswert). Valuations are usually provided as a condition precedent and then periodically during the life of a Facility FR:

16 SECTION 2 THE FACILITY Clause 3.1: Purpose This should be amended as appropriate for the particular transaction. Clause 4.1: Initial conditions precedent Under the REF Document, a Borrower can submit a Utilisation Request to the Agent before the conditions precedent are satisfied, but the Lenders are not obliged to participate in a Loan until the conditions precedent have been received. The Agent may decline a Utilisation Request if it does not believe that the conditions precedent will be satisfied by the relevant Utilisation Date. The ability to decline a Request reflects the fact that the Obligors may, prior to a Utilisation, have no assets and therefore no ability to meet an indemnity claim if the Lenders funded a Loan but did not advance it because the conditions precedent were not satisfied. The Clause also provides that a Loan may be made if the conditions precedent have not been satisfied but that the funds would be kept back from the relevant Borrower pending satisfaction. This would usually only be relevant where completion of a transaction was imminent and at a time when Lenders are likely to have funded themselves already. Clause 4.2: Further conditions precedent Compliance with any Interest/Debt Service Cover and/or Loan to Value covenant immediately following the making of a Loan is often required as an additional condition precedent to each drawing. Depending on the transaction, these covenants may be set at a different level to the equivalent default covenants FR:

17 SECTION 4 REPAYMENT, PREPAYMENT AND CANCELLATION Clause 7.3: Mandatory prepayment The Borrowers are obliged to apply various amounts received by them in mandatory prepayment of the Loans including net (after costs, tax and so on) proceeds from disposals, amounts received from closing out or terminating a Hedging Agreement, amounts received in relation to surrenders of or changes to leases, insurance proceeds, proceeds received from compulsory purchase or similar in relation to a Property, amounts received as a result of claims made against a vendor or report provider and certain amounts paid into the Deposit Account. The relevance of each of these should be considered for each transaction. Clause 7.4: Application of mandatory prepayments This Clause sets out how each type of mandatory prepayment is to be applied. The REF Document contemplates that an amount of any disposal proceeds in excess of an agreed percentage of the Allocated Loan Amount plus related interest, Break Costs, prepayment fees and hedging payments for the Property or Borrower disposed of could be returned to the Obligors. Other amounts may be required to be applied in mandatory prepayment in their entirety but these provisions are often negotiated. Some of the amounts required to be used in mandatory prepayment may have been held in the Deposit Account pending the end of an Interest Period. Clause 7.7: Right of repayment and cancellation in relation to a single lender The REF Document does not include the right to replace a Lender as this is not considered market practice in the syndicated real estate finance market. Clause 7.8: Partial prepayment of loans This Clause deals with the effect of partial prepayments on Repayment Instalments for an amortising facility. A number of options are available and the treatment may differ depending on whether the prepayment is mandatory or voluntary FR:

18 SECTION 5 COSTS OF UTILISATION Clause 8.3: Hedging This Clause would be included for a floating rate loan with interest rate hedging (by way of an interest rate swap or an interest rate cap). It contemplates that all interest rate hedging provided by way of an interest rate swap should be provided by an entity that is an original party to, or has acceded to, the REF Document. The Clause sets out various requirements for the Hedging Agreements including settlement dates, restrictions on amendments, termination, closing out and payment suspension. If partial prepayment of a Loan is made and the hedging has been provided by way of an interest rate swap, it is suggested that the nominal amount of the hedging should be reduced to reflect this. The Obligors' rights in relation to their Hedging Agreements are to be assigned or pledged by way of security to the Security Agent and each Hedge Counterparty which is party to the REF Document consents to this in Clause 8.3. This Clause may, if the hedging is provided by way of an interest rate swap (and the Hedge Counterparties are therefore parties to the REF Document), be the subject of negotiation by the Hedge Counterparties. There is an ongoing debate in the market as regards termination and other rights for Hedge Counterparties. The REF Document does not reflect that debate as there is still a lack of a consensus within the market on the issues. Clause 8.4: Default interest and lump sum damages Unpaid default interest is not compounded and default interest does not accrue on overdue interest. However, finance parties are compensated for any damage resulting from a delayed payment of interest. 3 Clause 9.1: Length of Interest Periods Interest Periods are fixed, with the first running from the Utilisation Date until the first Interest Payment Date and subsequent Interest Periods running from one Interest Payment Date to the next. Clause 9.3: Consolidation of Loans Unlike in the investment grade market, there is no option to divide Loans. Clause 10.6: Cancellation Costs The Borrowers are obliged to pay Cancellation Costs, subject to certain exceptions, on the amount of cancelled Commitments if they cancel Commitments or have not utilised the Facility in full by the end of the availability period. Clause 11.4: Security Agent fee Sometimes this fee will be encompassed within the agency fee. Clause 11.5: Prepayment fee It is not unusual in the German real estate finance market for a prepayment fee to be charged, subject to certain exceptions, if all or part of a Loan is prepaid within a certain time. The validity and calculation of 3 Clause 8.4 of the REF Document corresponds broadly to clause 9.3 (Default interest and lump sum damages) in the German Law Investment Grade Document. Please see the Supplemental Users Guide to the German law version of the LMA recommended form of Primary Documents for more information FR:

19 such prepayment fee should be checked on a transaction by transaction basis. The circumstances in which the fee is paid may be negotiated. This should be considered for each particular transaction FR:

20 SECTION 6 ADDITIONAL PAYMENT OBLIGATIONS Clause 12: Tax gross up and indemnities The tax clause takes into account the non-resident tax liability (beschränkte Steuerpflicht) of non-german tax resident lenders that (directly or indirectly) benefit from security over real estate located in Germany (inländischem Grundbesitz) or German rights subject to the civil code provisions relating to real estate (inländische Rechte, die den Vorschriften des bürgerlichen Rechts über Grundstücke unterliegen). Such non-resident tax liability also applies to lenders lending to a borrower that is not tax resident in Germany. The REF Document provides (in line with market practice) for additional carve-outs in the tax gross-up and tax indemnity provisions. Further, the definition of Treaty Lender should be considered on a transaction-by-transaction basis. Clause 13.1: Increased costs As a consequence of this provision, the facilities may possibly be considered to bear a variable interest. As a result, a Borrower may argue that it is entitled (pursuant to section 489 para 2 of the German Civil Code (Bürgerliches Gesetzbuch)) to cancel the total commitments and prepay the Loans at any time at three (3) months' prior notice, without Break Costs and/or prepayment fees. The Lenders may wish to preserve the claim for Break Costs and/or prepayment fees and thus opt for (i) (in the case of a floating rate loan), not being able to require the payment of Increased Costs for the current or any past interest period, or (ii) (in the case of a fixed rate loan), no Increased Costs being payable at all. 4 Clause 14.4: Indemnity to the Security Agent The Security Agent will require an indemnity from the Obligors in relation to its role under the Finance Documents. This indemnity is secured by the Transaction Security. Clause 16.3: Valuations This sets out when, and at which party's expense, updated Valuations must be provided during the life of the Facility. This is likely to be the subject of negotiation. 4 Clause 13.1 of the REF Document corresponds to identical clause 14.1 (Increased costs) in the German Law Investment Grade Document. Please see the Supplemental Users Guide to the German law version of the LMA recommended form of Primary Documents for more information and a drafting option FR:

21 SECTION 7 BANK ACCOUNTS The bank account regime set out in the REF Document will need to be considered on a transaction by transaction basis but it is representative of the type of account arrangement used in many syndicated real estate finance transactions. This Section sets out: what accounts the Obligors are required to have where accounts must be held what must be paid into each account what can be withdrawn from each account, when and by whom the order in which payments are made to various parties on an Interest Payment Date which party controls each account. In deviation to the common practice in the English market, it is common in the German market that the Borrowers operate the accounts, subject to contractual restrictions and/or consent rights by the Agent/Security Agent. Upon a default, the Security Agent may take control of, and operate, the accounts. Structure FR:

22 FR:

23 SECTION 8 GUARANTEE Clause 18.1: Guarantee (Garantie) and indemnity (Ausfallhaftung) The guarantee granted by the Guarantors under Clause 18.1 is a guarantee (Garantie) with a formalised payment demand and has not been drafted to constitute a guarantee upon first demand (Garantie auf erstes Anfordern). Any objections of the guarantor can, unless they are obvious or can be demonstrated by readily available evidence (liquide beweisbar), only be brought in separate court proceedings after the payment under the guarantee has been made. 5 5 Clause 18.1 of the REF Document corresponds to identical clause 18.1 (Guarantee (Garantie) and indemnity (Ausfallhaftung)) in the German Law Investment Grade Document. Please see the Supplemental Users Guide to the German law version of the LMA recommended form of Primary Documents for more information FR:

24 SECTION 9 REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT These provisions are designed to be a starting point for negotiation and should not be considered as necessarily the only representations, undertakings and Events of Default that are to be included in any particular Facility. Each transaction will have its own requirements. If Obligors incorporated outside Germany are party, or if Properties are located in a jurisdiction other than Germany, it will be necessary to take advice in the relevant jurisdictions to determine what specific provisions should be included in respect of the relevant Obligors and/or Properties, and how security can be taken and perfected. Clause 19.16: Title to Property It is assumed that, from the first utilisation date, the Borrowers own the Properties or at least have an expectancy right to them. It is further assumed that, from the first utilisation date, the title to the Properties is, subject to certain exceptions, free of third party security, encumbrances and certain other restrictions that are typically the subject of the legal due diligence in relation to the Properties. Clause 19.18: No other business It is assumed that the Obligors are all special purpose companies set up for the transaction which do not have assets, liabilities or operations other than in relation to the Properties. Clause 19.22: Repetition 6 It will be necessary to consider carefully when the various representations are repeated. Practice in the real estate finance market is for more representations to be repeated than would be normal in the investment grade market. Clause 20.3: Requirements as to financial statements The financial covenants in a real estate finance transaction are generally not driven off financial statements. Clause 20.4: Monitoring of Property This is representative of the level and frequency of Property information provided in many syndicated real estate finance transactions. Note that the use of websites as a means of providing information is not usually relevant in the context of a real estate finance transaction due to the nature of the Obligors and the size of syndicates. Clause 21: Financial covenants Interest Cover or Debt Service Cover and Loan to Value are the standard financial covenants for this type of transaction. Interest Cover and Debt Service Cover may be calculated on either a forward looking or historical basis. On some transactions other financial covenants may be included. Clause 22.3: Negative pledge to Clause 22.14: Ownership These clauses reflect the usual position that the Obligors are special purpose vehicles set up for the transaction which are not intended to have assets, liabilities (financial or otherwise) or operations other than in relation to the acquisition and ownership of the Properties, and which should not, so far as possible, be at risk of claims from third parties other than the Finance Parties. Similarly, as the acquisition of the Properties 6 Clause of the REF Document corresponds to identical clause (Repetition) in the German Law Investment Grade Document. Please see the Supplemental Users Guide to the German law version of the LMA recommended form of Primary Documents for more information FR:

25 has been financed by the Lenders, the general principle is that proceeds from the sale of a Property or the shares in a Borrower should first go to repaying the relevant Loan. Each of these should, however be considered on a transaction by transaction basis. The negative pledge provision in Clause 22.3 also extends to encumbrances. Both the negative pledge provision in Clause 22.3 as well as the no disposal restriction in Clause 22.4 contain exceptions for measures which cannot be prohibited under section 1136 of the German Civil Code in order to avoid these clause being rendered void by the courts. However, Clause (Disposal or encumbrance of a Property) establishes an Event of Default in the event of a disposal or encumbrances on the basis of these exceptions only. Clause 23: Property undertakings These are representative of the property-related undertakings provided in many syndicated real estate finance transactions and are intended to ensure that the Obligors maintain their title to the Properties, collect rent and other amounts due to them, maintain, insure and arrange for appropriate management of the Properties and mitigate the risk of environmental damage or claims. The Security Agent may be authorised to take action to deal with these matters if necessary. Careful consideration should be given to the parties' requirements in relation to insurance. Some of the property undertakings may be contained in the Security Documents relating to the Properties. Clause 24.12: Compulsory purchase to Clause 24.15: Heritable Building Rights These relate to events which threaten the Obligors' title to the Properties and/or the Finance Parties' Security, or which result in serious detriment to the condition of a Property. Clause 24.20: German Civil Code rights In addition to the specified Events of Defaults in Clause 24.1 (Non-payment) to Clause (Disposal or encumbrance of a Property), a Finance Party may also accelerate pursuant to the statutory termination rights of section 490 para 1 of the German Civil Code FR:

26 SECTION 10 CHANGES TO PARTIES Clause 25: Changes to the Lenders and Hedge Counterparties 7 This provides for free transferability by Lenders to any person other than an individual. For a Facility suitable for registration in a Pfandbrief bank s cover register (Deckungsregister), users may not agree on any restrictions on assignments and transfers applying when an Event of Default is continuing. Clause 25.7: Additional Hedge Counterparties This sets out how Hedge Counterparties accede to the REF Document. Clause 26: Restrictions on Debt Purchase Transactions The Clause sets out to which extent transfers to members of the Group are permitted or restricted. For a Facility suitable for registration in a Pfandbrief bank s cover register (Deckungsregister), the inclusion of a prohibition/restriction on debt purchase transactions should be considered on a transaction-by-transaction basis. Clause 27: Changes to the Transaction Obligors Additional Obligors are not provided for as there is no right to acquire additional properties in the REF Document. Clause 27.2: Resignation of a Borrower and Clause 27.3 Release of Security A Borrower may resign in certain circumstances, in which case the security provided by that Borrower will be released. Security Assets may be released from their security in certain circumstances. Clause 27.4: Additional Subordinated Creditors Debt provided to an Obligor by an entity that has not become a Subordinated Creditor will not qualify as Subordinated Debt under the REF Document. 7 Clauses 25.1 to 25.6 and Clause 25.8 of the REF Document corresponds to identical provisions in clauses 24 (Changes to the Lenders) in the German Law Investment Grade Document. Please see the Supplemental Users Guide to the German law version of the LMA recommended form of Primary Documents for more information FR: