DATED: 18 NOVEMBER 2009 ASSET REPACKAGING TRUST FIVE B.V. (incorporated with limited liability in The Netherlands and having its corporate seat in Amsterdam) (the "Issuer") PROSPECTUS Series 202 EUR 2,000,000 Mezzanine Loan Linked Secured Notes due 2017 (the "Notes") DEUTSCHE BANK AG, LONDON BRANCH as Arranger The attention of investors is drawn to the section headed "Investment Considerations and Risk Factors" on page 3 of this Prospectus.
TABLE OF CONTENTS INVESTMENT CONSIDERATIONS AND RISK FACTORS...3 GENERAL...7 TERMS AND CONDITIONS OF THE NOTES...10 FURTHER INFORMATION CONCERNING THE TRUST INSTRUMENT...26 INFORMATION CONCERNING THE CALCULATION AGENT...27 USE OF PROCEEDS...28 TAX CONSIDERATIONS...28 LEGAL OPINIONS...28 AVAILABILITY OF PROSPECTUS AND OTHER DOCUMENTS...28 AGENT AND LISTING AGENT...28 SELLING RESTRICTIONS...29 DUTCH TAXATION...31 ANNEX 1 INFORMATION CONCERNING THE ISSUER...34 ANNEX 2 INFORMATION CONCERNING TREE INVERSIONES INMOBILIARIAS, S.A...35 ANNEX 3 FORM OF FACILITY AGREEMENT...39 2
INVESTMENT CONSIDERATIONS AND RISK FACTORS Purchasers of Notes should conduct such independent investigation and analysis regarding the Issuer, the Facility Agreement (as defined in the section headed "Terms and Conditions of the Notes" and substantially in the form as set out in Annex 3) and the Borrower (as defined in the section headed "Terms and Conditions of the Notes" and as further described in Annex 2), and all other relevant persons and market and economic factors as they deem appropriate, in light of their own financial circumstances and investment objectives, to evaluate the merits and risks of an investment in the Notes. Such risks are to be identified and considered by each prospective purchaser on a case-by-case basis. The Issuer, the Trustee and the Arranger disclaim any responsibility to advise purchasers of Notes of the risks and investment considerations associated with the purchase of the Notes as they may exist at the date hereof or from time to time thereafter. However, as part of such independent investigation and analysis, prospective purchasers of Notes should consider all the information set forth in the Base Prospectus and this Prospectus, including the considerations set forth below. Such considerations do not purport to be an exhaustive list of potential risks in connection with any investment in the Notes. The Issuer accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case) the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. Neither the Base Prospectus nor this Prospectus is intended to provide the basis of any credit or other evaluation or should be considered as a recommendation or an invitation that any recipient of the Base Prospectus or this Prospectus should purchase any of the Notes. None of the Issuer, the Trustee or the Arranger purports to be a source of information and credit analysis with respect to the Notes. (A) All payments to be made by the Issuer in respect of the Notes will be made only from and to the extent of the sums received or recovered from time to time by or on behalf of the Issuer or the Trustee in respect of the Mortgaged Property (as defined in Condition 4.2) in respect of such Notes; (B) To the extent that such sums are less than the amount which the holders of the Notes may have expected to receive if paragraph (A) above did not apply (the difference being referred to herein as a "shortfall"), such shortfall will be borne by such holders in accordance with the Terms and Conditions of the Notes and the order of priorities specified in this Prospectus and the Trust Instrument; and (C) Each holder of the Notes, by subscribing for or purchasing the Notes, will be deemed to accept and acknowledge that it is fully aware that: (i) the holders of the Notes shall look solely to the sums referred to in paragraph (A), as applied in accordance with paragraph (B) above (the "Relevant Sums") for payments to be made by the Issuer in respect of the Notes; (ii) the obligations of the Issuer to make payments in respect of the Notes will be limited to the Relevant Sums and the holders of the Notes shall have no further recourse to the Issuer in respect of the Notes related thereto; (iii) without prejudice to the foregoing, any right of the holders of the Notes to claim payment of any amount exceeding the Relevant Sums shall be automatically extinguished; and (iv) the holders of the Notes shall not be able to petition for the winding up of the Issuer as a consequence of any such shortfall. Investment in the Notes is only suitable for investors who: (1) have the requisite knowledge and experience in financial and business matters, and access to, and knowledge of, appropriate analytical resources, to evaluate the information contained in the Base Prospectus and this Prospectus and the merits and risks of an investment in the Issuer in the context of such investors financial position and circumstances; (2) are capable of bearing the economic risk of an investment in the Issuer for an indefinite period of time; 3
(3) are acquiring the Notes for their own account for investment, not with a view to resale, distribution or other disposition of the Notes (subject to any applicable law requiring that the disposition of the investor s property be within its control); and (4) recognise that it may not be possible to make any transfer of the Notes for a substantial period of time, if at all. Further, each prospective purchaser of Notes must determine, based on its own independent review and such professional advice as it deems appropriate under the circumstances, that its acquisition of the Notes (i) is fully consistent with its (or if it is acquiring the Notes in a fiduciary capacity, the beneficiary s) financial needs, objectives and condition, (ii) complies and is fully consistent with all investment policies, guidelines and restrictions applicable to it (whether acquiring the Notes as principal or in a fiduciary capacity) and (iii) is a fit, proper and suitable investment for it (or if it is acquiring the Notes in a fiduciary capacity, for the beneficiary), notwithstanding the clear and substantial risks inherent in investing in or holding the Notes. None of the Issuer, the Trustee, the Arranger nor any other person has or will make any representation or statement as to the suitability of the Notes for investors. None of the Issuer, the Trustee, the Arranger, nor any other person is acting as an investment adviser or discretionary investment manager in relation to or assumes any fiduciary obligation to, or is in an agency relationship with, any purchaser of Notes. Credit and Performance Risks The ability of the Issuer to meet its obligations under the Notes will be dependent on the performance by the Borrower of all its payment and other obligations to the Issuer as a lender under the Facility Agreement. Accordingly, Noteholders are exposed, among other things, to the credit and performance risks of the Borrower. Investors in the Notes shall be deemed to have fully understood the provisions of the Facility Agreement and the Collateral (as defined in the section headed "Terms and Conditions of the Notes") and, in particular, the fact that amounts due in respect of the Notes will be affected by the amounts due and payable to the Issuer under the Facility Agreement in relation to the Collateral. Prepayment Risk Although the Notes amortise in instalments, with the final instalment scheduled to be due on the Maturity Date, the Notes may be redeemed earlier, in full, pursuant to a mandatory redemption event owing to taxation reasons or on an early termination of the Facility Agreement for reasons including a prepayment in whole of the Loan (as defined in the section headed "Terms and Conditions of the Notes"). In addition, the Notes may also be partially redeemed earlier upon one or more partial prepayments under the Facility Agreement. Spanish NRIT Risk for the Issuer and the Noteholders The Issuer will pass through to Noteholders amounts received by the Issuer as a lender under the Facility Agreement. The Issuer s rights as a lender under the Facility Agreement and the Finance Documents (as defined in the Facility Agreement) are charged in favour of the Trustee (and thereby subject to English law security (the "Security")) in order to secure the Issuer s obligations under the Notes. Upon an enforcement of the Security, Spanish tax law will treat the Trustee as the entity entitled to payments in respect of the Facility Agreement and any amounts of interest payable to Noteholders out of the proceeds of enforcement of the Security may be subject to withholding at the general rate of Spanish Non Resident Income Tax ("NRIT") because the Trustee will not quality for an exemption from NRIT. NRIT is currently 18 per cent. Clawback Risk for the Issuer and the Noteholders The Terms and Conditions of the Notes provide that if the Issuer is required to repay any amount paid to it under the Facility Agreement (each such amount a "Clawback Amount"), the amounts payable to Noteholders under the Notes shall be reduced, if necessary to zero (but never to an amount less than zero), or amounts already paid to Noteholders may be reclaimed, until the Issuer has recovered the Clawback Amount in full. A Clawback Amount could arise if a lender for any reason gets paid more than its pro rata entitlement of principal, interest or other amounts under the Facility Agreement. 4
Interest Rate Basis Risk The Notes pass through to Noteholders amounts received by the Issuer as a lender under the Facility Agreement. The Notes do not bear an entitlement to an independent rate of interest. The return on the Notes will depend upon the floating interest rate and spread under the Facility Agreement and the receipt by the Issuer of interest from the Borrower. Noteholders Instructions Regarding the Facility Agreement and Other Finance Documents, and Trustee Directions The Issuer, as a lender under the Facility Agreement, may from time to time be called upon to exercise its right to consent, waive or vote on events that occur under the Facility Agreement. Before exercising its right, the Issuer will need to be instructed by holders of not less than 75 per cent. in principal amount of the Notes as to how to exercise its right. Holders who do not vote or vote against any proposal will be bound by the instructions of holders of the requisite percentage. If the Issuer fails to receive instructions from the requisite percentage as to how to exercise its right, it will not exercise its right, which could adversely affect its position as a result of decisions being made under the Facility Agreement by other lenders that require less than all lenders to agree. The Issuer will not consent to any amendment or waiver described above without the consent of the Trustee. The Trustee will not consent to any such amendment or waiver without having first received written directions signed by or on behalf of, in aggregate, the holders of not less than 75 per cent. in principal amount of the Notes (a "Written Direction"), consenting to such amendment or waiver and directing the Trustee to consent to such amendment or waiver. Any such Written Direction will be binding on all Noteholders and may be relied upon by the Trustee. Under Clause 35 (Amendments and Waivers) of the Facility Agreement, the facility agent thereunder may under certain circumstances amend or waive any provision of any Finance Document with the consent of the Borrower and the Majority Lenders (as defined in the Facility Agreement). Any such amendment or waiver may therefore be effected without the consent of the Issuer if the Issuer does not constitute one of the Majority Lenders who give their consent to such amendment or waiver. The Issuer does not expect its percentage of the loans under the Facility Agreement to be capable of blocking any decision requiring less than all lenders to agree, and it will therefore be bound by what the requisite percentage of lenders agree. Limited Recourse Obligations The Notes represent limited recourse debt obligations of the Issuer. The Notes are payable solely from the realisation of the security created pursuant to the Trust Instrument. None of the Trustee, or any of its Affiliates or any other person or entity will be obliged to make payments in respect of the Notes. Consequently, Noteholders must rely solely on amounts received by the Issuer, in its capacity as a lender under the Facility Agreement, for payment of amounts due to them under the Notes and no other assets will be available for payment of the shortfall and, following realisation of the Mortgaged Property charged to secure the Notes, none of the Issuer, the Trustee or any of their Affiliates nor any other person shall be obliged to pay any shortfall and all outstanding claims shall be extinguished. Legality of Purchase None of the Issuer, the Arranger, the Calculation Agent or any of their respective affiliates or officers, employees or agents has or assumes responsibility for the lawfulness of the acquisition of the Notes by a prospective purchaser of the Notes (whether acquiring the Notes as principal or in a fiduciary capacity), whether under the laws of the jurisdiction of the relevant prospective purchaser's incorporation or (if different) the jurisdiction in which it operates (and, if it is acquiring the Notes in a fiduciary capacity, also under any laws of any jurisdiction which may be applicable to the beneficiaries), or for compliance by that prospective purchaser with any law, regulation or regulatory policy applicable to it (and, if it is acquiring the Notes in a fiduciary capacity, applicable to the beneficiaries). A prospective investor may not rely on the Issuer, the Arranger, the Calculation Agent, or any of their respective affiliates or officers, employees or agents when making determinations in relation to these matters. 5
No Secondary Market Currently no secondary market exists for the Notes. The Arranger is not under any obligation to make a market in the Notes and it is highly unlikely that any secondary market for the Notes will develop. In the unlikely event that a secondary market in the Notes does develop, there can be no assurance that it will provide the Noteholders with liquidity of investment or that it will continue for the life of the Notes. Accordingly, the purchase of the Notes is suitable only for investors who can bear the risks associated with a lack of liquidity in the Notes and the financial and other risks associated with an investment in the Notes. Investors must be prepared to hold the Notes for an indefinite period of time or until maturity or early redemption of the Notes (as the case may be). In addition, the Notes are subject to significant transfer restrictions as described under "Subscription and Sale and Transfer Restrictions" in the Base Prospectus and as set out in this Prospectus under "Selling Restrictions" which further limit the liquidity of the Notes. Application has been made to list the Notes on the Official List of the Irish Stock Exchange and trading on its regulated market. Taxation Each Noteholder will assume and be solely responsible for any and all taxes of any jurisdiction or governmental or regulatory authority, including, without limitation, any state or local taxes or other like assessment or charges that may be applicable to it, by reason of holding the Notes, or to any payment to it in respect of the Notes. Noteholders should inform themselves as to the tax consequences applicable to them of the acquisition, holding or disposal of the Notes. All payments of principal by the Issuer in respect of the Notes will be made subject to any withholding or deduction for, or on account of, any applicable tax. In the event of the imposition of any such taxes, the Issuer is required to use all reasonable endeavours (subject to the consent of the Trustee) to arrange for the substitution of its obligations by a company incorporated in another jurisdiction or (subject as provided above) to change its residence for taxation purposes or, to the extent permitted by law, change its domicile to another jurisdiction, failing which, or if it is unable to do so in a tax efficient manner, it shall redeem the Notes, subject to certain exceptions. Purchasers of Notes should conduct such independent investigation and analysis regarding the tax treatment of the Notes as they deem appropriate to evaluate the merits and risks of an investment in the Notes. Tax risks include, without limitation, a change in any applicable law, treaty, rule or regulation or the interpretation thereof by any relevant authority which may adversely affect payments or deliveries in respect of the Notes. Subordination of Mezzanine Lenders In addition to having acquired an interest in the Loan (as defined in the section headed "Terms and Conditions of the Notes"), the Issuer has also acquired an interest in a senior loan facility under the terms of the Finance Documents (the "Senior Loan"). The Finance Documents provide that, upon an enforcement of the security conferred by the Finance Documents, lenders in respect of the Senior Loan (the "Senior Lenders") rank in priority to lenders under the Loan (the "Mezzanine Lenders"). Accordingly, in an enforcement of security situation, Mezzanine Lenders are not entitled to receive payment of any amounts owed to them in connection with the Loan until such time as all amounts owed to Senior Lenders in connection with the Senior Loan have been fully and irrevocably paid or discharged. THE CONSIDERATIONS SET OUT ABOVE ARE NOT, AND ARE NOT INTENDED TO BE, A COMPREHENSIVE LIST OF ALL CONSIDERATIONS RELEVANT TO A DECISION TO PURCHASE OR HOLD ANY NOTES. THE ATTENTION OF INVESTORS IS ALSO DRAWN TO THE SECTIONS HEADED "INVESTOR SUITABILITY" AND "INVESTMENT CONSIDERATIONS AND RISK FACTORS" IN THE BASE PROSPECTUS. 6
GENERAL The Prospectus has been approved by the Irish Financial Services Regulatory Authority (the "Financial Regulator"), as competent authority under the Prospectus Directive 2003/71/EC (the "Prospectus Directive"). The Financial Regulator only approves this Prospectus as meeting the requirements imposed under Irish and EU law pursuant to the Prospectus Directive. Application has been made to the Irish Stock Exchange (the "Irish Stock Exchange") for the Notes to be admitted to the Official List and trading on its regulated market. Such approval relates only to the Notes which are to be admitted to trading on the regulated market of the Irish Stock Exchange or other regulated markets for the purposes of Directive 2004/39/EC or which are to be offered to the public in any Member State of the European Economic Area. This Prospectus, under which the Notes are issued, incorporates by reference the base prospectus dated 11 September 2009 (the "Base Prospectus") issued in relation to the Issuer s USD 10,000,000,000 Secured Note Programme (the "Programme"). Deutsche Bank AG, London Branch, of Winchester House, 1 Great Winchester Street, London EC2N 2DB (the "Arranger") is the Arranger for the Notes. Terms defined in the Base Prospectus have the same meaning in this Prospectus. This Prospectus comprises a prospectus for the purposes of the Prospectus Directive. This Prospectus does not constitute, and may not be used for the purposes of, an offer or solicitation by anyone in any jurisdiction in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation, and no action is being taken to permit an offering of the Notes or the distribution of this Prospectus in any jurisdiction where such action is required. The Issuer is a private limited liability company and accordingly its Articles of Association prohibit any invitation to the public to subscribe for any shares or debentures of the Issuer. This Prospectus does not constitute an invitation to the public within the meaning of the Irish Companies Acts 1963 to 2009 to subscribe for the Notes. The Notes will be governed by and construed in accordance with English law. The Issuer accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Issuer (which has taken all reasonable care to ensure that such is the case), the information contained in this document is in accordance with the facts and does not omit anything likely to affect the import of such information. No person has been authorised to give any information or to make representations other than those contained in this Prospectus in connection with the issue or sale of the Notes and, if given or made, such information or representations must not be relied upon as having been authorised by the Issuer, the Arranger or either of them. Neither the delivery of this Prospectus nor any sale made in connection herewith shall, under any circumstances, create any implication that there has been no change in the affairs of the Issuer since the date hereof. The language of the Prospectus is English. Certain legislative references and technical terms have been cited in their original language in order that the correct technical meaning may be ascribed to them under applicable law. Except as specified in this Prospectus, the Issuer does not intend to provide post issuance transaction information regarding the Notes or the Collateral. The net proceeds of realisation of the Mortgaged Property may be less than the sums due to the holders of the Notes (the difference being referred to herein as a "shortfall"). The shortfall will be borne by the holders of the Notes pro rata in accordance with the Terms and Conditions of the Notes and the order of priorities specified in this Prospectus. Each holder of Notes, by subscribing for or purchasing such Notes, will be deemed to accept and acknowledge that it is fully aware that, in the event of a shortfall, (i) the Issuer shall be under no obligation to pay, and the other assets (if any) of the Issuer, including, in particular, assets securing other series of Notes will not be available for payment of such shortfall, (ii) all claims in respect of such shortfall shall be extinguished and (iii) the Trustee, the holders of the Notes and shall have no 7
further claim against the Issuer nor against its officer(s), director(s), agent(s), member(s), employee(s), securityholder(s) or incorporator(s) or their respective successors or assigns in respect of such unpaid amounts and will accordingly not be able to petition for the winding up of the Issuer as a consequence of such shortfall. None of the Trustee, the Issuer or the Arranger has any obligation to any holders of Notes for payment of any such shortfall amount by the Issuer in respect of the Notes. Documents Incorporated By Reference This Prospectus should be read and construed in conjunction with the Base Prospectus which has been previously published and approved by the Financial Regulator. The Base Prospectus shall be deemed to be incorporated in, and form part of, this Prospectus, save that any statement contained in the Base Prospectus which is deemed to be incorporated herein shall be deemed to be modified or superseded for the purpose of this Prospectus to the extent that a statement contained herein modifies or supersedes such earlier statement (whether expressly, by implication or otherwise). Any statement so modified or superseded shall not be deemed, except as so modified or superseded to constitute a part of this Prospectus. Expenses All payment of costs and expenses of the Issuer in connection with the issue of the Notes set out below, will be met by the Arranger. It is anticipated that no surpluses shall be accumulated by the Issuer in respect of the Notes. The expenses related to the admission to trading of the Notes on the Irish Stock Exchange are estimated to be EUR 2,600. Documents Available for Inspection Copies of the following documents will be available for inspection and collection during usual business hours on any weekday (Saturdays, Sundays and public holidays excepted) at the registered office of the Issuer, the specified office of the Principal Paying Agent in London and the specified office of the Paying Agent in Ireland (together with the Principal Paying Agent, the "Paying Agents"), free of charge, for so long as the Notes shall remain outstanding and, for so long as the Notes remain listed on the Irish Stock Exchange, at the office of the Listing Agent specified on the back page of this Prospectus: (i) this Prospectus, the Base Prospectus and any notice of amendment; (ii) the Trust Instrument and any supplemental trust instrument; (iii) each document incorporated by reference into the Trust Instrument (including without limitation the documents setting out the terms of the Agency Agreement and the Purchase Agreement; (iv) annual financial statements of the Issuer; (v) the annual financial statements and the quarterly interim financial statements of Deutsche Bank Aktiengesellschaft; (vi) copies of any offering documents setting forth the terms and conditions of the securities constituting the Collateral; (vii) copies of the annual financial statements and interim financial statements (if any) of the issuer of the securities constituting the Collateral; and (viii) the Issuer s Deed of Incorporation. ERISA Considerations By its purchase and acceptance of a Note, each holder will be deemed to have represented and warranted that either (i) no ERISA Plan (as defined below) assets have been used to purchase such Notes or (ii) one or more prohibited transaction statutory or administrative exemptions applies such that the use of such plan assets to purchase and hold such Notes will not constitute a non-exempt prohibited transaction under the U.S. Employee Retirement Income Security Act of 1974, as amended ("ERISA"), or Section 4975 of the U.S. Internal Revenue Code of 1986, as amended (the "Code"). As used herein "ERISA Plan" means employee benefit plans subject to Title 1 of ERISA or an individual retirement 8
account or employee benefit plan subject to Section 4975 of the Code or entities which may be deemed to hold the assets of any such plans. 9
TERMS AND CONDITIONS OF THE NOTES Terms of Series 202 EUR 2,000,000 Mezzanine Loan Linked Secured Notes due 2017 The Notes designated as above (the "Notes") shall have the following "Terms" which shall complete, modify and amend the Conditions set out in the Trust Instrument dated the Issue Date constituting the Notes (as amended and/or restated from time to time the "Trust Instrument") which shall apply to the Notes as so completed, modified and amended. References in the Terms to "paragraphs" and "sub-paragraphs" are to the paragraphs and sub-paragraphs of the Terms, unless the context requires otherwise. 1 Issuer: Asset Repackaging Trust Five B.V. See Annex 1 - "Information Concerning the Issuer". 2 Arranger: Deutsche Bank AG, London Branch acting through its office at Winchester House, 1 Great Winchester Street, London EC2N 2DB. 3 Series No: 202 4 Relevant Currency: Euro ("EUR"). 5 Principal Amount: EUR 2,000,000 The "Initial Principal Amount" of the Notes is EUR 2,000,000 and the "Outstanding Principal Amount" of the Notes means as at any date, the Initial Principal Amount less the aggregate of all Nominal Amount Reductions effective on or before such date, subject to a minimum of zero. "Nominal Amount Reduction" means an amount equal to each amount received by the Issuer in respect of the Collateral (as defined below) by way of (a) an Instalment Amount (defined below) and prepayment amounts pursuant to Clause 7 (Prepayment and Cancellation) of the Facility Agreement (defined below), (each such amount a "Collateral Prepayment"). No amount received by the Issuer in respect of the Collateral representing a Prepayment Fee (as defined in the Facility Agreement) shall be taken into account for purposes of any Nominal Amount Reduction but, for the avoidance of doubt, such amount shall be paid to Noteholders as an Additional Amount (defined below) in accordance paragraph 12. The Calculation Agent is Deutsche Bank AG, London Branch. All communications to and by Deutsche Bank AG, London Branch in its capacity as Calculation Agent should be made to and will be made by Deutsche Bank AG, London Branch, - Trust & 10
6 Form of the Notes: Bearer. Securities Services. The Calculation Agent shall cause the Interest Rate for each Interest Period determined by it, together with the relevant Interest Payment Date, to be notified to the Issuer, each of the Paying Agents and the Irish Stock Exchange as soon as possible after their determination but in no event later than the commencement of the relevant Interest Period. 7 Status: Secured and limited recourse obligations of the Issuer, secured as provided below. 8 Denomination: EUR 200,000. 9 Issue Price: 100 per cent. 10 Issue Date: 22 October 2009 11 Maturity Date: 3 Business Days after 29 May 2017. 12 Interest Rate Basis: Each Note shall bear interest which shall be payable on each Interest Payment Date. Interest shall cease to accrue on each Note on the final scheduled Interest Payment Date. In respect of an Interest Payment Date, the "Interest Amount" payable per Note shall be an amount in the Relevant Currency, less such Note s pro rata share of any Clawback Amount (as defined below) determined by the Calculation Agent in its sole discretion, equal to such Note s pro rata share of the interest amount received by the Issuer pursuant to Clause 8.2 (Payment of interest) of the Facility Agreement in respect of the Collateral Interest Payment Date to which the Interest Payment Date relates. The Calculation Agent shall as soon as is practicable after it becoming aware of the amount of any Interest Amount that will be payable in respect of the Notes, give notice to the Issuer, the Trustee, the Agent and the Noteholders of such Interest Amount. Condition 7.7 shall not apply in respect of the Notes. Interest Rate: Not Applicable. Interest under the Facility Agreement (defined below) is calculated on the basis of 3 month EURIBOR plus a margin of 7.75 per cent. Interest Commencement Date: Interest Accrual Dates: Not Applicable. Not Applicable. 11
Interest Periods: Not Applicable. Interest Payment Dates: Interest in respect of the Notes shall be payable 3 Business Days following each Collateral Interest Receipt Date. An Interest Payment Date relates to the Collateral Interest Payment Date and the Collateral Interest Receipt Date falling immediately prior to that Interest Payment Date. "Collateral Interest Payment Date" means an "Interest Payment Date" as such term is defined in the Facility Agreement. The Collateral Interest Payment Dates are expected to be on or about 29 November, 29 February, 29 May and 29 August, in each year (from and including 29 November 2009 to and including 29 May 2017), as adjusted in accordance with the Modified Following Business Day Convention, for which purpose "Business Days" shall be London, Madrid and Luxembourg. "Collateral Interest Receipt Date" means each date upon which a scheduled payment of interest by the Borrower (as defined below) under the Facility Agreement is received by the Issuer. Day Count Fraction: Not Applicable. Facility Agreement: "Facility Agreement" means the EUR 91,500,000 mezzanine facility agreement, dated 23 September 2009, entered into by, inter alios, Tree Iversiones Inmobiliarias S.A. as borrower (the "Borrower"), Deutsche Bank Luxembourg S.A. as facility agent (the "Facility Agent") and the Mandated Lead Arrangers referred to therein, the form of which is set out in Schedule 2. See Annex 3 to this Prospectus Form of Facility Agreement. Additional Amounts: With effect from the Issue Date, on each date falling 3 Business Days after a Facility Agreement Additional Payment Receipt Date (each, subject to adjustment in accordance with the Following Business Day Convention, an "Additional Amount Payment Date"), the Issuer shall pay the Additional Amount pro rata to each Noteholder less each Note s pro rata share of any Clawback Amount (as defined below) determined by the Calculation Agent in its sole discretion. "Additional Amount" means any Facility Agreement Additional Payment received by the Issuer on the immediately preceding Facility Agreement Additional Payment Receipt Date. "Facility Agreement Additional Payment" means 12
the amount received by the Issuer under the Facility Agreement representing the Issuer s share of any fee, amount or other payment received other than amounts received by the Issuer pursuant to Clause 8.2 (Payment of interest) and Clause 6.1(a) (Repayment of Loan) in each case, of the Facility Agreement (and other amounts or payments described elsewhere in these Terms) including, but not limited to, the additional amounts payable pursuant to Clause 8.3 (Default Interest) and Clause 11.4 (Prepayment Fee) of the Facility Agreement (but excluding any indemnity payments or payments relating to any costs, liabilities or expenses incurred by the Issuer, as determined by the Calculation Agent in its sole discretion). "Facility Agreement Additional Payment Receipt Date" means each date upon which the Issuer receives a Facility Agreement Additional Payment. Clawback: In the event that the Issuer is required to repay any amount paid to it under the Facility Agreement (each such amount a "Clawback Amount"), the Interest Amount payable on each successive Interest Payment Date, the Additional Amount payable on the, or on each successive, Additional Amount Payment Date and/or the Mandatory Redemption Entitlement payable on the, or on each successive, Mandatory Redemption Settlement Date and/or each Note s pro rata share of the final Instalment Amount payable on the Maturity Date shall be reduced, if necessary to zero (but never to an amount less than zero), until the Issuer has recovered the Clawback Amount in full. 13 Redemption: (A) The Notes are Instalment Notes. Unless otherwise redeemed, purchased or cancelled in full prior to the Maturity Date as specified herein or in accordance with the Conditions, each Note will be partially redeemed on each Instalment Date by an amount in EUR (each an "Instalment Amount") equal to its pro rata share (rounded down to the nearest euro cent) of the amount received by the Issuer in respect of the "Repayment Instalment" specified in Clause 6.1(a) (Repayment of Loan) of the Facility Agreement relating to the relevant Instalment Date. "Instalment Date" means each date which is 3 Business Days following the date on which the Issuer receives an Instalment Amount in respect of the relevant 13
"Repayment Date" specified in Clause 6.1(a) (Repayment of Loan) of the Facility Agreement. The Repayment Dates under the Facility Agreement are expected to be on or about 29 November 2010, 28 February 2011, 31 May 2011, 30 August 2011, 29 November 2011, 29 February 2012, 29 May 2012, 29 August 2012, 29 November 2012, 28 February 2013, 29 May 2013, 29 August 2013, 29 November 2013, 28 February 2014, 30 May 2014, 29 August 2014, 28 November 2014, 27 February 2015, 29 May 2015, 28 August 2015, 30 November 2015, 29 February 2016, 31 May 2016, 30 August 2016, 29 November 2016, 28 February 2017 and 29 May 2017. In accordance with paragraph 5 above, the Outstanding Principal Amount of the Notes will be reduced by an amount in EUR equal to the aggregate of the relevant Instalment Amount on the relevant Instalment Date. The final Instalment Amount for each Note is each Note s pro rata share of the Outstanding Principal Amount (subject to reduction in accordance with the provisions of paragraph 12 in relation to the Clawback Amount), subject to redemption pursuant to Conditions 8.2 and 8.3 (in each case, as amended by paragraph 23). Unless previously redeemed in accordance with the Conditions, each Note will be redeemed at its final Instalment Amount 3 Business Days after the Maturity Date. Purchases: (B) Condition 8.5 (Purchases) will not apply to the Notes. Optional Redemption: (C) Conditions 8.4, 8.6, 8.7, 8.8 and 8.11 shall not apply to the Notes. 14 Unmatured Coupons to become void upon early redemption: 15 Talons to be attached to Notes and, if applicable, the number of Interest Payment Dates between the maturity for each Talon (Bearer Notes): 16 Business Day Jurisdictions for Condition 9.8 (jurisdictions required to be open for payment): Not Applicable. Not Applicable. London and Madrid. In these Terms and for the purpose of the Conditions, references to "Business Day" shall, except where specified otherwise, be construed as references to days which are Business Days in London and Madrid and "Relevant 14
Business Days" shall, except where specified otherwise, be construed as references to days which are Business Days in London and Madrid. 17 (a) Notes to be represented on issue by: Temporary Global Note held by the Common Depositary for Euroclear Bank S.A./N.V. ("Euroclear") and Clearstream Banking, société anonyme ("Clearstream, Luxembourg"). Applicable TEFRA exemption: TEFRA D. (c) (d) Temporary Global Note exchangeable for Permanent Global/Definitive Bearer/Registered Notes: Permanent Global Note exchangeable for Definitive Bearer/Registered Notes at the request of the holder: Yes - Temporary Global Note exchangeable for interests in Permanent Global Note held by the Common Depositary for Euroclear and Clearstream, Luxembourg on or after 40 days from Issue Date (or such later date as may be determined to be the Exchange Date in accordance with the terms of the relevant Temporary Global Note) upon certification as to non U.S. beneficial ownership. Yes Definitive Notes will only be issued in exchange for the Permanent Global Note in the limited circumstances set out in the Permanent Global Note. 18 Security: Collateral charged to Trustee, save that the provisions of Condition 4.2(A)(1) shall be amended (as further described in paragraph 30(A) below) so as to provide for a charge in favour of the Trustee over all the Issuer s rights, title and interest under the Facility Agreement and under the Finance Documents (as defined in the Facility Agreement). 19 Collateral: (A) In these Terms and for the purposes of the Conditions "Collateral" means the Issuer s rights, title and interest in respect of the loan (the "Loan") in the initial principal amount of EUR 2,000,000 under the Facility Agreement. See Annex 3 "Form of Facility Agreement". (B) The Trustee shall apply all moneys received by it under the Trust Instrument in connection with the realisation or enforcement of the security constituted by or pursuant to the Trust Instrument on the basis of Noteholder Priority. (C) Condition 4.5 (Replacement and/or Substitution of Collateral) shall not apply to the Notes. (D) Subject always to the Collateral Terms (as defined in paragraph 23 below) and applicable law, in the event that the Issuer receives written notice (which shall not include receipt by any agent of the 15
Issuer) of a request, demand or action requiring it to vote in its capacity as a lender of record in respect of the Loan the Issuer agrees that, save for any request, act, demand or vote to be made in respect of a matter relating to the Loan which the Trustee, in its absolute discretion, considers to be relating to a minor or technical matter or is made to correct a manifest error (in which case the Issuer may act upon the Trustee s directions), the Issuer shall use reasonable efforts to seek instructions from the Noteholders, pursuant to the procedures outlined below, on how to act in connection with such request, demand, vote or action in respect of the Loan, and then the Issuer shall use reasonable efforts to act in accordance with the written directions (if given in accordance with the terms of this provision and pursuant to the procedures outlined below and provided that the Issuer shall not be liable for any action taken or omitted to be taken in connection with such written directions (except for its own gross negligence or wilful misconduct as determined by the final judgment of a court of competent jurisdiction)) received from Noteholders who comprise, in terms of the aggregate principal amount of Notes held by them, a majority of the Noteholders who have provided Forms of Instruction (as defined below) duly completed, executed and delivered in accordance with the terms of this provision, provided that if at such time the Issuer has any rights pursuant to the Facility Agreement (in connection with the Collateral or otherwise) which are required to be exercised collectively (howsoever described), the Issuer shall exercise such rights in accordance with the instructions received from the Majority Participants (as defined below) (as determined by the Calculation Agent in its sole and absolute discretion and notwithstanding that this may not be in the best interests of the Noteholders) provided that notwithstanding any other term of this provision: (i) the Issuer shall not be obliged to inform Noteholders of any request, act, decision or vote to be made by the Issuer pursuant to the Collateral Terms, or act or refrain from acting in respect of any request, act, decision or vote in accordance with the directions of the Noteholders if informing Noteholders of such request, act, decision or vote would involve the Issuer passing on to the Noteholders, or any other person, information which would constitute "inside information" within the meaning of Section 56 of the Criminal Justice Act 1993 (or any similar provision in any applicable jurisdiction); 16
(ii) (iii) the Issuer shall not be obliged to inform any Noteholder of any request, act, decision or vote to be made by the Issuer pursuant to the Collateral Terms if such Noteholder has, at the time such request, act, decision or vote is to be made, not entered into a confidentiality undertaking on terms and in a form reasonably satisfactory to the Borrower; and the Issuer shall have an overriding right to take or refrain from taking any action in relation to the Loan if the Issuer is required to act (or refrain from acting) in such manner by virtue of any present or future request, requirement, voluntary code or direction (whether or not having the force of law) emanating from or endorsed by any central bank or other regulatory authority to which the Issuer may be subject (a "Regulatory Request"). Any Noteholder wishing to direct the Issuer in respect of any request, act, decision or vote to be made by the Issuer as the lender of record in respect of the Loan may submit to the Issuer, the Agent and the Trustee, a form of voting instruction in form and substance satisfactory to the Agent (the "Form of Instruction"), duly completed and executed. In each Form of Instruction, the Noteholder will warrant and represent as to the extent of its holding and that the Issuer may act or refrain from acting in respect of any request, act, decision or vote to be made by the Issuer as the lender of record in respect of the Loan in accordance with the instructions set out in the Form of Instruction provided no breach of applicable laws or regulations in any jurisdiction by the Issuer, the Agent or any other person would occur as a result thereof and, in each Form of Instruction, each Noteholder will undertake to indemnify each such person against any cost, claim, loss, expense or other loss whatsoever which any such person may incur or sustain as a result of any such breach. The Issuer shall not be obliged to act in accordance with any Form of Instruction received by or on behalf of the Issuer after the Business Day falling 2 Business Days prior to the date upon which the Issuer is required to act or refrain from acting in respect of any request, act, decision or vote or which, in the opinion of the Calculation Agent, does not contain sufficient detail or clarity. 17
In the event that the Issuer receives a Form of Instruction after the day falling 2 Business Days prior to the date upon which the Issuer is required to act or refrain from acting in respect of any request, act, decision or vote, the Issuer shall use reasonable efforts to take into account such Form of Instruction in exercising its voting rights in respect of the Loan (subject always to the provisions of this paragraph 19(D)) but shall not incur any liability should it fail to do so. For these purposes, "Majority Participants" means the persons (including without limitation, the Noteholders) who have a right to deliver, and who have so delivered, duly executed voting instructions to the Issuer with respect to any request, demand or action requiring the Issuer to vote in respect of its interests in the Loan and who comprise a majority (in terms of the aggregate principal amount of securities (including Notes) held by such persons) of the persons who have the right to deliver, and who have so delivered, voting instructions to the Issuer. (E) In the event that the Noteholders direct the Issuer to exercise any rights in its capacity as holder of the Collateral by way of one or more resolutions in writing signed by or on behalf of, in aggregate, the holders of not less than 75 per cent. in principal amount of the Notes then (i) the Trustee and the Issuer shall be entitled to rely on (and shall incur no liability for acting upon) such written resolution(s) if they are accompanied by evidence of the requisite Noteholders holding of the Notes in the form of one or more print-outs generated by accessing the EUCLID system, with such evidence to be dated as of the date of such written resolution(s) and (ii) such written resolution(s) shall, when accompanied by such evidence, be binding on the holders of 100 per cent. in principal amount of the Notes. (F) The Selling Agent is Deutsche Bank AG, London Branch. Assignment of Loan: The Issuer has acquired its interest in the Loan pursuant to an assignment (the "Assignment") under the provisions of an assignment agreement dated 22 October 2009 and expressed to be governed by Spanish law, entered into by the Issuer, Deutsche Bank AG, London Branch (in its capacity as an existing lender under the Facility Agreement, the "Existing Lender") and the Facility Agent (the "Assignment Agreement"). The Trustee has not been provided with a legal 18
opinion as to the effectiveness under Spanish law of the Assignment. However, the Assignment Agreement is in substantially the form of the assignment agreement set out in Schedule 5 to the Facility Agreement. By its execution of the Assignment Agreement, the Issuer has confirmed that, in connection with its interest in the Loan, the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite lender or lenders under, and in accordance with, the Facility Agreement, on or prior to the effective date of the Assignment Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a lender under the Facility Agreement. Under Clause 36 (Amendments and Waivers) of the Facility Agreement, the Facility Agent may under certain circumstances amend or waive any provision of any Finance Document with the consent of the Borrower and the Majority Lenders (as defined in the Facility Agreement). Any such amendment or waiver may therefore be effected without the consent of the Issuer if the Issuer does not constitute one of the Majority Lenders who give their consent to such amendment or waiver. The Issuer will not consent to any amendment or waiver described above without the consent of the Trustee. The Trustee will not consent to any such amendment or waiver without having first received written directions signed by or on behalf of, in aggregate, the holders of not less than 75 per cent. in principal amount of the Notes (a "Written Direction"), consenting to such amendment or waiver and directing the Trustee to consent to such amendment or waiver. Any such Written Direction will be binding on all Noteholders and may be relied upon by the Trustee. The Issuer has also acquired an interest in a senior loan facility under the terms of the Finance Documents (the "Senior Loan"). The Finance Documents provide that, upon an enforcement of the security conferred by the Finance Documents, lenders in respect of the Senior Loan (the "Senior Lenders") rank in priority to lenders under the Loan (the "Mezzanine Lenders"). Accordingly, in an enforcement of security situation, Mezzanine Lenders are not entitled to receive payment of any amounts owed to them in connection with the Loan until such time as all amounts owed to Senior Lenders in connection with the Senior Loan have been fully and irrevocably paid or discharged. 19
20 Swap Agreement: Not Applicable. 21 Repurchase Agreement: Not Applicable. 22 Credit Support Document: Not Applicable. 23 Mandatory Redemption: The Notes are subject to mandatory redemption under Conditions 8.2 and 8.3 (each as amended by this paragraph 23). If the Notes become so subject to mandatory redemption, the following provisions will apply: (A) Condition 8.2 shall apply to the Notes, amended to read as follows: "Mandatory Redemption Following the occurrence of one or more Mandatory Redemption Events (as defined in the Terms) other than a Note Tax Event (as defined in Condition 8.3), each Note will be redeemed in whole by payment of its Mandatory Redemption Entitlement on the Mandatory Redemption Settlement Date (each as defined in the Terms). In the event of the Notes becoming due for redemption and the security constituted by or created pursuant to the Trust Instrument becoming enforceable, the Trustee may take such action as is provided in Condition 4.7 (A) and shall do so if so requested or directed in accordance with the provisions of such Condition (subject in each case to its being indemnified in accordance with such Condition and provided always that the Trustee shall not be required to do anything which is contrary to any applicable law)." Condition 8.3 shall apply to the Notes, amended to read as follows: "Redemption for taxation and other reasons If the Issuer, on the occasion of the next payment due in respect of the Notes, would be required by law to withhold or account for tax or would suffer tax in respect of its income so that it would be unable to make payment of the full amount due (a "Note Tax Event"), then the Issuer shall so inform the Trustee, and shall use all reasonable endeavours to arrange (subject to and in accordance with Condition 13.4) the substitution of a company incorporated in another jurisdiction as the principal obligor or to change its residence for taxation purposes or, to the extent permitted by law, change its domicile to another jurisdiction 20