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LMA - key clauses (Event of default (Lender's options: (Waiver (would…
LMA - key clauses
Event of default
Triggered by: Misrep (under representations), Undertakings and other specified events
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Tax gross-up
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Clause 13.2(d)
Borrower only obliged to increase the payment if there is a change in teh law whereby the lender ceases to be a Qualifying Lender
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Borrower has ability to prepay loan or replace a lender in the event it is obliged to gross-up interest (Clause 8.2)
Tax credit (Clause 13.4)
Where there is a gross-up, Lender may be credited. They will then use to off-set tax liability. Borrower will want excess returned to them, however rarely able to under this clause in practice
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Loan transfers
Clause 24.3(c) provides on an assignment, the new lender can only benefit from tax gross-up as the EL could #
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Confidentiality
EL can disclose to a potential NL such confidential information as EL considers appropriate (Clause 36.2(b)i
EL can disclose to sub/risk participants such confidential info as EL considers appropriate, provided NL enters into a confidentiality agreement (Clause 36.2(b)ii
Condition precedents
Clause 4.1
Initial
Agent confirms form is satisfactory and notifies majority lenders #
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Parties
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Arranger
Acts on Majority Lender instructions (Clause 26.2). NB, this affects to whom liability is owed
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