THE MALL FUNDING PLC

Transcription

1 THE MALL FUNDING PLC (incorporated in England and Wales with limited liability under registered number ) 375,000,000 Secured Floating Rate Notes due 2014 (Issue Price: per cent.) Application has been made to the Irish Financial Services Regulatory Authority (the IFSRA), as competent authority under Directive 2003/71/EC (the Prospectus Directive), for this prospectus to be approved. Application has been made to the Irish Stock Exchange for 375,000,000 Secured Floating Rate Notes of the Issuer (the Second Issue Notes) to be admitted to the Official List and trading on its regulated market. Such market is a regulated market for the purposes of Directive 93/22/EEC (the Investment Services Directive). This Offering Circular will, subject to its being approved by the IFSRA in accordance with the requirements of the Prospectus Directive, comprise a Prospectus for the purposes of the Prospectus Directive. The Second Issue Notes will be issued as Further Notes and will have the same terms as, and will be consolidated to form a single series and be fungible with, the 1,060,000,000 Secured Floating Rate Notes of the Issuer issued on 5 May 2005 (the Original Notes and, together with the Second Issue Notes, the Notes ). The Second Issue Notes will be issued on the Second Closing Date. The sole source of funds for the payment of principal and interest on the Notes will remain the right of the Issuer to receive interest payments and principal repayments under the Intercompany Loan (including the Further Loan to be advanced on or about the Second Closing Date) made by the Issuer to the Borrower. The Second Issue Notes will initially be represented by a Temporary Global Note, without coupons or talons, which will be deposited with a Common Depositary for Euroclear and Clearstream, Luxembourg, on or about the Second Closing Date or such later date as may be agreed by the Issuer, the Lead Manager and the Note Trustee. The Temporary Global Note will be exchangeable not earlier than 40 days after the Second Closing Date (and upon certification of non-u.s. beneficial ownership) for interests in a Permanent Global Note, in bearer form, without coupons or talons attached, which will also be deposited with the Common Depositary. Save in certain limited circumstances, Notes in definitive form will not be issued in exchange for the Global Notes. The Second Issue Notes will be issued on 27 September Interest on the Notes is payable by reference to successive Interest Periods. Interest will be payable quarterly in arrear on the Interest Payment Date falling in January, April, July and October (subject to adjustment as specified herein for non-business days) in each year. The first payment of interest to be made on the Second Issue Notes will be payable on the Interest Payment Date falling in October 2006 and will be in respect of the period from (and including) the Second Closing Date to (but excluding) that Interest Payment Date. Each subsequent Interest Period will commence on (and include) an Interest Payment Date and end on (but exclude) the next succeeding Interest Payment Date. Interest on the Second Issue Notes will accrue at an annual rate of LIBOR (as defined in the Conditions) for three-month sterling deposits (or in the case of the first Interest Period, a linear interpolation of LIBOR for two week and one month sterling deposits) plus a margin of 0.18 per cent. per annum. See further Condition 4 (Interest) of the terms and conditions of the Notes reproduced in this document in the section entitled Terms and Conditions of the Notes below. The Notes will mature on the Final Maturity Date unless previously redeemed. There is no scheduled mandatory redemption of the Notes other than a single repayment of principal on the Final Maturity Date. The Notes will be subject to mandatory redemption and/or optional redemption, in whole or in part, before the Final Maturity Date in the limited circumstances, and subject to the conditions, described in the section entitled Terms and Conditions of the Notes below. If any withholding or deduction for or on account of tax is applicable to the Notes, payments of interest on, and principal and premium (if any) of, the Notes will be made subject to any such withholding or deduction, without the Issuer or any other person being obliged to pay any additional or further amounts as a consequence. The Second Issue Notes will be obligations of the Issuer only and will not be guaranteed by, or be the responsibility of, any other person or entity. It should be noted, in particular, that the Second Issue Notes will not be obligations of, and will not be guaranteed by the Borrower, the Nominee HoldCos, the Nominees, any of the other Legal Owners, the General Partner, the Limited Partner, the Note Trustee, the Issuer Security Trustee, the Lead Manager, the other Managers, the Fund Manager (or any other member of the Aviva plc group of companies), the Property Manager (or LD943357/121+

2 any other member of the Capital & Regional plc group of companies), the Cash Manager, the Liquidity Facility Provider, the Swap Providers, the Obligor Security Trustee, the Agent Bank, the Paying Agents or the Account Bank (each as defined under the section entitled Summary Information below), but the proceeds of the issue of the Second Issue Notes will be on-lent to the Borrower and secured over all (with certain exceptions described further herein) of the assets and undertaking of the Borrower, the General Partner, the Nominee HoldCos and the Nominees being, primarily, ownership interests in 23 shopping malls located in the United Kingdom, all as more particularly described below. The Second Issue Notes are expected on issue to be assigned an AAA rating by Fitch, an Aaa rating by Moody s and an AAA rating by S&P. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision, suspension or withdrawal at any time by the assigning rating organisation. A discussion of certain risks and factors, which should be considered in connection with an investment in Second Issue Notes, is set out in the section herein entitled Risk Factors. Sole Arranger and Lead Manager CREDIT SUISSE Co-Manager THE ROYAL BANK OF SCOTLAND plc The date of this document is 22 September 2006.

3 The Issuer accepts responsibility for the information contained in this document. To the best of the knowledge and belief of the Issuer (having 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. The Issuer has the benefit of warranties from each of the Borrower, the General Partner, the Limited Obligors (to a limited extent) and the Nominees for the information contained in this document. No person is or has been authorised in connection with the issue and sale of the Second Issue Notes to give any information or to make any representation not contained in this document and, if given or made, such information or representation must not be relied upon as having been authorised by or on behalf of the Issuer, the Borrower, the General Partner, the Limited Partner, any of the Nominee HoldCos, any of the Nominees, any of the other Legal Owners, the Fund Manager (or any other member of the Aviva plc group of companies), the Property Manager (or any other member of the Capital & Regional plc group of companies), the Note Trustee, the Issuer Security Trustee, the Managers, the Cash Manager, the Liquidity Facility Provider, the Swap Providers, the Obligor Security Trustee, the Agents or the Account Bank. Neither the delivery of this document nor any sale or allotment made in connection with the offering of any of the Second Issue Notes shall under any circumstances constitute a representation or create any implication that there has been no change in the affairs of the Issuer, the Borrower, the General Partner, the Limited Partner, any of the Nominees HoldCos or any of the Nominees or in the information contained herein since the date hereof or that the information contained herein is correct as at any time subsequent to the date hereof. The Second Issue Notes have not been, and will not be, registered under the Securities Act, and include Second Issue Notes in bearer form that are subject to U.S. tax law requirements. The Second Issue Notes may not be offered, sold or delivered, directly or indirectly, in the United States or to any U.S. persons (as defined in the section called Subscription and Sale below) except pursuant to an exemption from, or in a transaction not subject to, the registration requirements of the Securities Act. The Second Issue Notes are being offered for sale outside the United States in accordance with Regulation S under the Securities Act. See further the section entitled Subscription and Sale below. Other than the approval of this document as listing particulars in accordance with the listing rules of the Stock Exchange, no action has been or will be taken to permit a public offering of the Second Issue Notes or the distribution of this document in any jurisdiction where action for that purpose is required. The distribution of this document and the offering of the Second Issue Notes in certain jurisdictions may be restricted by law. Persons into whose possession this document (or any part hereof) comes are required by the Issuer and the Managers to inform themselves about, and to observe, any such restrictions. For a further description of certain restrictions on the offer and sale of Second Issue Notes and the distribution of this document, see further the section entitled Subscription and Sale below. Neither this document nor any part hereof constitutes an offer of, or an invitation by, or on behalf of, the Issuer or the Managers to subscribe for or purchase any of the Second Issue Notes. Neither this document, nor any part hereof, may be used for or in connection with an offer to, or Page 3

4 solicitation by, any person in any jurisdiction or in any circumstances in which such offer or solicitation is not authorised or to any person to whom it is unlawful to make such offer or solicitation. The Second Issue Notes may not be offered or sold to persons in the United Kingdom except to persons whose ordinary activities involve them in acquiring, holding, managing or disposing of investments (as principal or agent) for the purpose of their business or otherwise in circumstances that have not resulted and will not result in an offer to the public in the United Kingdom within the meaning of the Public Offers or Securities Regulations This Offering Circular and any other communication in connection with the offering and issuance of the Second Issue Notes may only be issued or passed on to a person of a kind described in Article 49(2) of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2001 or a person to whom this Offering Circular or any other such communication may otherwise lawfully be issued or passed on (all such persons together being referred to as relevant persons). This communication must not be acted on or relied on by persons who are not relevant persons. Any investment or investment activity to which this communication relates is available only to relevant persons and will be engaged in only with relevant persons. References in this document to, pounds or sterling are to the lawful currency for the time being of the United Kingdom of Great Britain and Northern Ireland. Credit Suisse Securities (Europe) Limited and Credit Suisse International are regulated by the Financial Services Authority. Credit Suisse is regulated by the Swiss Federal Banking Commission (Eidgenössiche Bankenkommission). In the United Kingdom, Credit Suisse is additionally authorised and regulated by the Financial Services Authority. In connection with the distribution of the Second Issue Notes, the Lead Manager may over-allot or effect transactions with a view to supporting the market price of the Second Issue Notes at a level which might be higher than that which might otherwise prevail for a limited period after the issue date. Such stabilising, if commenced, may be discontinued at any time, shall be in accordance with all applicable laws and must be brought to an end after a limited period. Any loss or profit sustained as a consequence of any such over allotment or stabilising shall be for the account of the Lead Manager. Capitalised terms used in this document, unless otherwise indicated, have the meanings set out in this document. A schedule of defined terms used appears at the back of this document. Page 4

5 CONTENTS PAGE SUMMARY INFORMATION...7 DIAGRAMMATIC OVERVIEW OF THE PARTIES AND TRANSACTION AS AT THE SECOND CLOSING DATE...13 TRANSACTION SUMMARY...14 KEY TRANSACTION PARTIES...17 KEY CHARACTERISTICS OF THE PROPERTY PORTFOLIO...24 GEOGRAPHIC DISTRIBUTION OF THE SECURITISED PORTFOLIO...39 PRINCIPAL FEATURES OF THE NOTES...40 RISK FACTORS...44 SUMMARY OF PRINCIPAL DOCUMENTS...86 RESOURCES AVAILABLE TO THE OBLIGORS AND THE ISSUER USE OF PROCEEDS VALUATION REPORT THE MALL FUNDING PLC (THE ISSUER) THE MALL LIMITED PARTNERSHIP (THE BORROWER) THE MALL (GENERAL PARTNER) LIMITED (THE GENERAL PARTNER) THE MALL UNIT TRUST (THE LIMITED PARTNER) MORLEY FUND MANAGEMENT LIMITED (THE FUND MANAGER) CAPITAL & REGIONAL PROPERTY MANAGEMENT LIMITED (THE PROPERTY MANAGER) THE NOMINEE HOLDCOS THE LEGAL OWNERS THE SWAP PROVIDERS AND THE LIQUIDITY FACILITY PROVIDER TERMS AND CONDITIONS OF THE NOTES FORM OF THE SECOND ISSUE NOTES UNITED KINGDOM TAXATION SUBSCRIPTION AND SALE GENERAL INFORMATION SCHEDULE OF DEFINED TERMS APPENDIX 1 FINANCIAL STATEMENTS - THE MALL FUNDING PLC Page 5

6 1.1 DIRECTORS REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM INCORPORATION ON 4 APRIL 2005 TO 31 DECEMBER UNAUDITED DIRECTORS REPORT AND FINANCIAL STATEMENTS FOR THE PERIOD FROM 1 JANUARY 2006 TO 30 JUNE 2006 APPENDIX 2 FINANCIAL STATEMENTS: THE MALL LIMITED PARTNERSHIP 2.1 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER UNAUDITED CONSOLIDATED FINANCIAL STATEMENTS FOR THE SIX MONTHS ENDED 30 JUNE 2006 APPENDIX 3 FINANCIAL STATEMENTS: THE MALL (GENERAL PARTNER) LIMITED 3.1 CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER UNAUDITED FINANCIAL STATEMENTS FOR THE PERIOD 1 JANUARY 2006 TO 30 JUNE 2006 Page 6

7 SUMMARY INFORMATION The following information is a summary of the principal features of the issue of the Second Issue Notes, the making of an Additional Loan under the Intercompany Loan both of which will be issued or made, as the case may be, on the Second Closing Date as well as the Acquisition/CapEx Facility, which was entered into on the First Closing Date. This summary should be read in conjunction with, and is qualified in its entirety by reference to, the detailed information presented elsewhere in this document. THE SECOND ISSUE NOTES Principal Amount: 375,000,000 Issue Price: Interest Rate: Interest Accrual Method: Interest Payment Dates: Interest Period: No Scheduled Amortisation: Prepayment: per cent. LIBOR for three-month sterling deposits plus 0.18 per cent. per annum. Actual/365 (fixed). Interest will be paid quarterly in arrear on the Interest Payment Dates falling on 22 January, on 22 April, on 22 July and on 22 October (or if not a Business Day, the next succeeding Business Day) in each year. There will be a short first Interest Period in respect of the Second Issue Notes, which shall commence on (and include) the Second Closing Date and end on (but exclude) the Interest Payment Date falling in October Each succeeding Interest Period in respect of the Second Issue Notes will match an Interest Period on the Original Notes and will commence on (and include) an Interest Payment Date and end on (but exclude) the next following Interest Payment Date. The final Interest Period for all Notes shall commence on (and include) the Interest Payment Date falling in January 2014 and end on (but exclude) the Final Interest Payment Date. Single repayment on the Final Maturity Dates If the Borrower prepays the Intercompany Loan, the Issuer shall redeem the Notes (including the Second Issue Notes) pro rata in accordance with the amount prepaid or repaid on the relevant Interest Payment Date at their Page 7

8 then Principal Amount Outstanding together with interest and other amounts (including, in certain circumstances as described in Condition 5(b), Loan Early Prepayment Penalties payable on prepayments made on or before the Interest Payment Date falling in April 2007 or October 2008, as the case may be depending on how such prepayment is funded) accrued to that Interest Payment Date. Final Maturity Date: Interest Payment Date falling in April 2014 Application for Listing: ISIN: Application has been made to IFSRA, as the competent authority under the Prospectus Directive, for the Offering Circular to be approved. Application has been made to the Stock Exchange for the Second Issue Notes to be admitted to the Official List and trading on its regulated market. XS Common Code: Expected Ratings: Fitch: AAA Moody s: Aaa S&P: AAA Use of Proceeds: To fund the Additional Loan (being made by way of Further Loan) under the Intercompany Loan described below THE COMMERCIAL MORTGAGE LOAN (THE INTERCOMPANY LOAN ) Parties: The Issuer, the Borrower, the General Partner, the Issuer Security Trustee, the Obligors, the Limited Obligors and the Obligor Security Trustee. Page 8

9 Principal Amount of the Further Loan: Interest Rate on the Further Loan: The gross proceeds of the issue of the Second Issue Notes will be on-lent by the Issuer to the Borrower under the Intercompany Loan Agreement. The Borrower will be obliged to repay the Issuer on the Final Maturity Date in relation to the Intercompany Loan an amount equal to the principal amount of the Second Issue Notes to be redeemed on the Final Maturity Date in relation to the Notes (the Further Loan Repayment Amount). Interest will accrue on the Further Loan Repayment Amount, 200,000,000 of the Further Loan Repayment Amount will be designated as the Fixed Rate Tranche and 175,000,000 will be designated as the Floating Rate Tranche. The Further Loan will be used for the purpose of refinancing existing secured borrowings of the Borrower and for general partnership purposes. (i) Fixed Rate Tranche: 4.81 per cent. per annum. (ii) Floating Rate Tranche: LIBOR for three-month sterling deposits plus a margin of 0.18 per cent. per annum. Interest Periods and Interest Payment Dates in respect of the Further Loan: Interest will be paid quarterly in arrear on the Interest Payment Dates falling in January, April, July and October (or if not a Business Day, the next succeeding Business Day) in each year, but provided that the first Interest Period in respect of the Further Loan shall commence on (and include) the Second Closing Date and end on (but exclude) the Interest Payment Date falling in October 2006 and the final Interest Period in respect of the Further Loan shall commence on (and include) the Interest Payment Date falling in January 2012 and end on (but exclude) the Final Repayment Date. Final Repayment Date: Interest Payment Date falling in April 2012 Security: On the First Closing Date, the Issuer as lender under the Intercompany Loan, pursuant to the Security Trust and Intercreditor Deed, shared in the benefit, inter alia, of the first fixed mortgages (or standard securities) over, and rental income from, the Property Portfolio, Page 9

10 which comprised 22 shopping centres located throughout Great Britain (and the Allders Store, Camberley following its refinancing with proceeds drawn under the Acquisition/CapEx Facility) but, on an enforcement of the Security, it would only have had priority and entitlement in terms of payment to the proceeds of enforcement from the Securitised Portfolio, being 20 of such shopping centres. The Issuer also had the sole benefit of the Obligor/Issuer Floating Charge Agreement. On the Second Closing Date, the Issuer, as lender under the Intercompany Loan will, again pursuant to the Security Trust and Intercreditor Deed, share in the benefit, inter alia, of the first fixed mortgages (or standard securities) over, and rental income from, the Property Portfolio, now comprising 24 shopping centres located throughout Great Britain but, on an enforcement of the Security, will only have priority and entitlement in terms of payment to the proceeds of enforcement from the Securitised Portfolio, being 23 of such shopping centres as at the Second Closing Date (the Allders Store, Camberley remaining in the Acquisition/CapEx Facility Portfolio). The Issuer will also continue to have the sole benefit of the Obligor/Issuer Floating Charge Agreement. THE ACQUISITION/CAPEX FACILITY Borrower: Acquisition/CapEx Facility Provider: The Borrower. The Royal Bank of Scotland plc. Principal Amount: A revolving credit facility of up to 300,000,000 (of which up to 75,000,000 will continue to be available to the Borrower to fund its capital expenditure requirements and any various costs as further detailed Page 10

11 below). Purpose: Facility Interest Rate: Facility Interest Periods and Interest Payment Dates: Final Facility Maturity Date: Security and Subordination For use by the Borrower to acquire further shopping centres or land with a view to enhancing the Property Portfolio, and to fund, if necessary, any maintenance as well as development and ongoing capital expenditure requirements and any costs of the Borrower as further detailed below. LIBOR for three-month sterling deposits plus a margin. Interest will be paid on the last day of each Facility Interest Period. The date falling 364 days after the date of the Acquisition/CapEx Facility Agreement, subject to extension. The current extension is to 3 May The Acquisition/CapEx Facility Provider will share in the benefit, inter alia, of the first fixed mortgages (or standard securities) over, and rental income from, the Property Portfolio. Prior to enforcement of the Security, payment of all amounts of interest and principal on the Acquisition/CapEx Facility will be made after payment in full of all amounts of interest that are due and payable on the Intercompany Loan. On enforcement of the Security, however, payments of interest and principal on the Acquisition/CapEx Facility will have sole entitlement in respect of the proceeds of enforcement from the Allders Store, Camberley and such other Mortgaged Properties as from time to time may be acquired with the proceeds of the Acquisition/CapEx Facility, and in each case to the extent not transferred to the Securitised Portfolio pursuant to the terms of the Common Terms Deed, all of such Mortgaged Properties together being the Acquisition/CapEx Facility Portfolio. Page 11

12 THE PROPERTY PORTFOLIO As at the Second Closing Date, a Property Portfolio of 24 retail shopping centres, each a Mortgaged Property, situated in Great Britain all comprising the Securitised Portfolio and Facility Portfolios, as further described in the section entitled Key Characteristics of the Property Portfolio below. Page 12

13 DIAGRAMMATIC OVERVIEW OF THE PARTIES AND TRANSACTION AS AT THE SECOND CLOSING DATE NORWICH UNION (SHAREHOLDER GP) LIMITED CAPITAL & REGIONAL (MALL GP) LIMITED INVESTORS PROPERTY MANAGER NOTEHOLDERS NOTE TRUSTEE Note Issue Proceeds Principal & Interest on the Notes Liquidity Facility Proceeds LIQUIDITY FACILITY PROVIDER CASH MANAGER ISSUER Principal & Interest on Liquidity Facility ISSUER SECURITY TRUSTEE SWAP PROVIDERS NORWICH UNION (MALL GP) LIMITED Intercompany Loan Proceeds Principal & Interest on Intercompany Loan & Note Expenses THE MALL (GENERAL PARTNER) LIMITED Obligor Security Group BORROWER THE MALL LIMITED PARTNERSHIP NOMINEE HOLDCOS NOMINEES NOMINEES OCCUPATIONAL TENANTS Occupational Leases Properties resting on contract THE MALL UNIT TRUST (LIMITED PARTNER) Rental Income NULAP CAMBERLEY UNIT TRUST Occupational Leases Rental Income Security for Intercompany Loan and the Acquisition/ CapEx Facility granted by the Obligors and the Limited Obligors ACQUISITION/CAPEX FACILITY PROVIDER Rental Income OCCUPATIONAL TENANTS OCCUPATIONAL TENANTS FUND MANAGER CASH MANAGER OBLIGOR SECURITY TRUSTEE * This diagram does not show the C&R Sellers. For a further description of the C&R Sellers, please see the section entitled The Key Characteristics of the Property Portfolio Overview. Page 13DAM

14 TRANSACTION SUMMARY The information in this section does not purport to be complete and is qualified in its entirety by reference to the detailed information appearing elsewhere in this document. Prospective purchasers of the Second Issue Notes are advised to read carefully, and to rely solely on, the detailed information appearing elsewhere in this document in making any decision whether or not to invest in any Second Issue Notes. Capitalised terms used, but not defined, in this section can be found elsewhere in this document, unless otherwise stated. A schedule of defined terms is set out at the end of this document. Previous Note Issuance by the Issuer The Issuer issued 1,060,000,000 Secured Floating Rate Notes due 2014 on the First Closing Date (the Original Notes ). The gross proceeds of the issue of the Original Notes was applied by the Issuer in providing the Initial Loan to the Borrower, acting through the General Partner, on the First Closing Date pursuant to the terms of the Intercompany Loan Agreement. Changes to the Transaction Documents Certain of the Transaction Documents entered into on the First Closing Date (including the Intercompany Loan Agreement, the Common Terms Deed, the Security Trust and Intercreditor Deed and the Issuer Deed of Charge) will be supplemented and/or amended, as the case may be, on or about the Second Closing Date to provide for, inter alia, the issue of the Second Issue Notes. Descriptions of the principal terms of the Transaction Documents (if applicable, as to be supplemented and/or amended on or about the Second Closing Date) are contained in the sections entitled Summary of Principal Documents below. Issue of the Second Issue Notes On the Second Closing Date, the Issuer will issue the Second Issue Notes for an amount equal to per cent. of their issue price. The Second Issue Notes will be issued as Further Notes and will have the same terms as and will be consolidated to form a single series and be fungible with the Original Notes. After the Second Closing Date, the Issuer will use receipts of principal and interest paid to it in respect of the Intercompany Loan (both in respect of the Initial Loan and in respect of the Further Loan to be advanced on the Second Closing Date), together with any swap payments from the Swap Providers and any drawings from the Liquidity Facility, to make payments of principal and interest due in respect of the Notes (including the Second Issue Notes). Expenses relating to the Second Issue Notes will be financed by the Issuer out of payments from the Borrower, on the Second Closing Date, by way of an Additional Fee and, thereafter, any On-going Facility Fee payable pursuant to the Intercompany Loan Agreement. The Intercompany Loan On the Second Closing Date, the gross proceeds of the issue of the Second Issue Notes will be applied by the Issuer in providing an Additional Loan to the Page 14DAM

15 Borrower, acting through the General Partner, by way of a Further Loan under, and pursuant to the terms of, the Intercompany Loan Agreement. The Borrower will be obliged to repay the Issuer on the Final Repayment Date an amount equal to the principal amount of the Second Issue Notes to be redeemed on the Final Maturity Date. Such Further Loan will rank pari passu in point of priority of payment and security with the Initial Loan and will be advanced on the same terms and conditions (save as to effective interest rate) as the Initial Loan. The Borrower will apply the proceeds of the Intercompany Loan, inter alia, to refinance its borrowings by way of Acquisition/CapEx Facility under the Acquisition/CapEx Agreement and will otherwise use the proceeds thereof for general partnership purposes. The Acquisition/CapEx Facility Pursuant to the terms of the Acquisition/CapEx Facility Agreement, the Acquisition/CapEx Facility Provider has agreed to make a revolving credit facility available (subject to satisfaction of certain conditions precedent) to the Borrower. The proceeds of any drawing under the Acquisition/CapEx Facility are to be applied by the Borrower to finance any possible future property acquisitions of the Borrower, to finance the maintenance and development of, and its ongoing capital expenditure requirements in respect of, the Property Portfolio, to finance all costs, fees and expenses (and taxes thereon) and all stamp, documentary, registration or similar taxes incurred by or in connection with the Acquisition/CapEx Facility, the Property Portfolio, any Permitted Acquisition or any of the purposes described above, provided that a maximum aggregate principal amount of up to 75,000,000 of such facility will be available at any time to fund the Borrower s capital expenditure requirements. Interest will be payable under the Acquisition/CapEx Facility at a floating rate, determined on each Determination Date, with reference to LIBOR for sterling deposits for the relevant interest period plus a margin. The Acquisition/CapEx Facility will be subordinated in point of payment of interest and principal to the Intercompany Loan prior to enforcement of the Obligor Security. Upon enforcement of the Obligor Security, the Acquisition/CapEx Facility Provider will have sole entitlement to the proceeds arising from the sale of the Allders Store, Camberley, and any other Mortgaged Properties which may be held within the Acquisition/CapEx Facility Portfolio from time to time. Authorised Credit Facilities The Borrower is entitled at any time to enter into one or more Authorised Credit Facilities with one or more Authorised Credit Facility Providers for the purposes of acquiring further Mortgaged Properties to be comprised within a Facility Portfolio and which will be designated as an Authorised Credit Facility Portfolio. Prior to the enforcement of the Obligor Security, each such Authorised Credit Facility will rank in point of payment of interest and principal pari passu with the Acquisition/CapEx Facility. Upon enforcement of the Obligor Security, the relevant Authorised Credit Facility Provider shall have sole entitlement to the proceeds of enforcement arising from the sale of the Mortgaged Properties within its relevant Authorised Credit Facility Portfolio. Page 15

16 The Liquidity Facility Pursuant to the Liquidity Facility Agreement, the Liquidity Facility Provider has agreed to make a liquidity facility available to the Issuer. If, at any time it is determined that a Liquidity Facility Shortfall has arisen, the Cash Manager shall (on behalf of the Issuer) deliver a drawdown request under the Liquidity Facility Agreement requesting a Liquidity Facility drawing to be made on the then next Interest Payment Date. Any amounts drawn under the Liquidity Facility may only be used to pay senior costs and expenses and interest on the Notes and shall be repaid in accordance with the relevant Issuer Priorities of Payments, together with interest thereon, on the next succeeding Interest Payment Date on which the Issuer has funds available for that purpose. The Swap Agreements The Issuer has (either directly or by way of novation) entered into certain fixed/floating interest rate swap transactions with Credit Suisse International (formerly Credit Suisse First Boston International) in order to address certain risks arising as a result of the Borrower paying to the Issuer a fixed rate of interest on the Initial Loan and the Issuer paying a floating rate of interest in respect of the Original Notes. On or before the Second Closing Date, the Issuer will (either directly or by way of novation) enter into certain additional fixed/floating interest rate swap transactions with the Swap Providers in order to address similar risks as arising in respect of the Further Loan and the Second Issue Notes. Page 16

17 KEY TRANSACTION PARTIES The Issuer The Mall Funding PLC, a public company with limited liability, incorporated in England and Wales with registered number and whose registered office is at c/o Wilmington Trust SP Services (London) Limited, Level 11, Tower 42, International Financial Centre, 25 Old Broad Street, London EC2N 1HQ. The Borrower The Mall Limited Partnership, an English limited partnership, was established under the terms of the Partnership Deed on 14 January The partnership was registered as a limited partnership in England on 14 January 2002 under number LP7977. The founder partners of the Borrower were NULAP and the General Partner. The General Partner has at all times been ultimately beneficially owned by Aviva plc and Capital & Regional plc. C&R MLP became a partner on 25 January 2002 and the Partnership Deed was amended and restated between the General Partner and NULAP and C&R MLP as limited partners. Since that date, NULAP and C&R MLP have exchanged their interests in the Borrower for units in the Limited Partner which, in turn, acting through the trustee of the unit trust, BNP Paribas Jersey Trust Corporate Limited, acceded as a limited partner in the Borrower. The Borrower owns the beneficial interest in each of the Mortgaged Properties with the exception of the Mortgaged Properties situated in (i) Camberley where the Mortgaged Property is held within a unit trust, units in which are owned by the Borrower and by Capital & Regional (Mall Jersey) Limited as further described below, (ii) the major part of the Dolphin Centre and the major part of the Liberty II Centre, Romford; Walthamstow; the major part of Epsom; Wood Green and Barnsley which are held beneficially by the C&R Sellers on a bare trust solely for the Borrower and (iii) Aberdeen and Falkirk which are owned or held by certain Nominees holding as trustees under a bare trust or trusts of which the Borrower is the named beneficiary. The General Partner The Mall (General Partner) Limited, a limited liability company incorporated in England and Wales, was established for the principal purpose of acting as the general partner of the Borrower. It is responsible for the management of the Borrower. It has delegated the operation and management of the Mortgaged Properties (other than the Mortgaged Property situated in Camberley in respect of which the Camberley Trustees have provided for broadly analogous arrangements) to the Fund Manager and the Property Manager. As at the First Closing Date, the General Partner was jointly owned, and will be so owned as of the Second Closing Date, by the GP HoldCos, being Norwich Union (Mall GP) Limited (which is whollyowned, ultimately, by Aviva plc) and Capital & Regional (Mall GP) Limited (which is wholly-owned, ultimately, by Capital & Regional plc). With effect from the First Closing Date, each GP HoldCo has provided a share pledge over the shares it holds in Page 17

18 the General Partner and given a floating charge over its assets, property and undertaking. The General Partner legally and beneficially owns 100 per cent. of the shares in the Nominee HoldCos and per cent. of the units in the Camberley Unit Trust on behalf of the Borrower. The General Partner provided on the First Closing Date, pursuant to the Jersey Security Documents, a security interest in respect of its holding of shares in the Nominee HoldCos and any interest it may have in the units in the Camberley Unit Trust. The Jersey Security Documents are governed by Jersey law. The Limited Partner The Mall Unit Trust is a unit trust formed in Jersey by a trust instrument between BNP Paribas Jersey Trust Corporation Limited and Morley (Jersey Unit Trusts) Management Limited, which is owned by Morley Investment Holdings Limited, the ultimate holding company of which is Aviva plc. It was established for the principal purpose of acting as the limited partner of the Borrower; accordingly it has a limited role in the management of the Borrower. The Nominees and the other Legal Owners Each of the Nominees is a limited liability company incorporated in England and Wales and was established for the principal purpose of holding with another Nominee the bare legal title (or, in respect of the Mortgaged Properties situated in Scotland, the title) to one or more of the Mortgaged Properties on trust (subject as mentioned below) for the Borrower, save in respect of the Mortgaged Properties situated in the major parts of the Dolphin Centre and the Liberty II Centre, Romford, Walthamstow; the major part of the Mortgaged Property situated in Epsom; Wood Green and Barnsley, which are held on trust for the C&R Sellers, who themselves hold the beneficial title on trust for the Borrower. Each of the Nominees is whollyowned by a Nominee HoldCo except for Mall Nominee One Limited and Mall Nominee Two Limited which are wholly owned directly by the General Partner. In relation to the Mortgaged Properties situated in Bexleyheath, Edgware and Ilford, NULAP holds the bare legal title as sole trustee on a bare trust for the Borrower, as sole beneficiary. In relation to the Mortgaged Property situated in Camberley, the Camberley Trustees hold the bare legal title on trust for Capital & Regional (Mall Jersey) Limited and the Borrower as unit holders in the Camberley Unit Trust. The legal title (or, in Scotland, the title) to any Additional Mortgaged Properties acquired by the Borrower after the First Closing Date will be held through either existing Nominees or two additional limited liability English companies established for such purpose see further the section entitled Permitted Restructuring of the Obligor Security Group and the Property Portfolio within the section entitled Summary of the Principal Documents below. Those entities that hold the legal title (or, in Scotland, the title) to the Mortgaged Properties are referred to in this document as the Legal Owners. Page 18

19 The Nominee HoldCos Alhambra Barnsley Limited; Ashley Epsom Limited; Howgate Freehold Limited; Howgate Leasehold Limited; Liberty Romford Limited; Selbourne Walthamstow Limited; Trinity Aberdeen Limited and Wood Green London Limited, being the Nominee HoldCos, are limited liability companies incorporated in Jersey, and were each established for the sole purpose of acting as the holding companies of the Nominees. The Nominee HoldCos are wholly-owned subsidiaries of the General Partner (who holds the legal and beneficial interest in 100 per cent. of the shares in the Nominee HoldCos). The Initial Obligors and the Limited Obligors On the First Closing Date, the Initial Obligors under the Transaction Documents were the Borrower, the General Partner, the Nominee HoldCos and the Nominees. On the Second Closing Date, the Limited Obligors under the Transaction Documents will be the Camberley Trustees, the GP HoldCos and NULAP. The Initial Obligors will comprise the Obligor Security Group on the Second Closing Date and the Limited Obligors will provide only limited covenants and in certain cases, security and/or guarantees, as further described in this document. The Fund Manager Morley Fund Management Limited is a limited liability company incorporated in England and Wales which is authorised and regulated by the UK Financial Services Authority. The ultimate holding company of Morley Fund Management Limited is Aviva plc. The Fund Manager currently provides fund management and administration services in respect of the Borrower and/or the Camberley Trustees and the relevant Legal Owners including, inter alia, making distributions to the General Partner and Limited Partner, reviewing and approving any business plans in relation to the Borrower and arranging valuations of the Mortgaged Properties pursuant to the terms of the Fund Manager s Agreement. For further details as to the Fund Manager and the role it performs, see further the sections entitled The Mall Limited Partnership (the Borrower) and Summary of Principal Documents The Fund Manager s Agreement below. On the First Closing Date, the Fund Manager entered into a duty of care deed with, inter alios, the Obligor Security Trustee, which duty of care deed will continue to apply. The Property Manager Capital & Regional Property Management Limited is a limited liability company incorporated in England and Wales and is a wholly-owned subsidiary of Capital & Regional plc. The Property Manager provides property management services in relation to the Mortgaged Properties on behalf of the Borrower and/or the Camberley Trustees and the relevant Legal Owners including, inter alia, monitoring and inspecting the Mortgaged Properties to ensure that they are kept in good repair and that the terms of the Occupational Leases are otherwise complied with (including the collection of rents on behalf of the relevant Legal Owners from the Occupational Page 19

20 Tenants and the allocation of such amounts to pay expenses relating to the Mortgaged Properties) pursuant to the terms of the Property and Asset Management Agreement. From the First Closing Date, the Property Manager has had responsibility for the initial allocation of the cashflows from the Mortgaged Properties and has had to act in accordance with the terms of the Cash Management Agreement, the Property and Asset Management Agreement and the Property Manager Duty of Care Deed and they will continue to do so. For further details as to the Property Manager and the role it performs, see further the sections entitled The Mall Limited Partnership (The Borrower), Capital & Regional Property Management Limited (The Property Manager) and Summary of Principal Documents The Property and Asset Management Agreement below. On the First Closing Date, the Property Manager entered into a duty of care deed with, inter alios, the Obligor Security Trustee, which duty of care deed will continue to apply. The Acquisition/CapEx Facility Provider The Royal Bank of Scotland plc, acting through its office at 280 Bishopsgate, London EC2M 4RB, was the Acquisition/CapEx Facility Provider as at the First Closing Date and will continue to be so as at the Second Closing Date. The Note Trustee J.P. Morgan Corporate Trustee Services Limited has been appointed as the Note Trustee for the holders of the Original Notes pursuant to a trust deed dated the First Closing Date (the Original Trust Deed ) and will be appointed pursuant to a supplemental trust deed dated the Second Closing Date (the First Supplemental Trust Deed, and together with the Original Trust Deed, the Trust Deed ) as trustee to represent the interests of the holders of the Second Issue Notes. The Note Trustee, in its capacity as trustee under the Trust Deed, will represent the interests of the Noteholders. The Note Trustee or any other trustee appointed under the Trust Deed may retire at any time upon giving not less than 30 days prior written notice to the Issuer without giving any reason and without being responsible for any costs incurred by the Issuer as a result. The Note Trustee and any other trustee appointed under the Trust Deed may also be removed by the Noteholders. The retirement or removal of any trustee will not become effective unless a sole corporation or at least two trustees would remain in office immediately afterwards. If a trustee gives notice of retirement or is removed by the Noteholders, the Issuer will use reasonable endeavours to arrange for a new trustee (being a trust corporation) to be appointed under the Trust Deed as soon as reasonably practicable afterwards. If the Issuer fails to arrange for the appointment of a new trustee by the expiry of the notice of retirement, the Note Trustee will use all reasonable endeavours to appoint a successor trustee. The Issuer Security Trustee J.P. Morgan Corporate Trustee Services Limited has been appointed as the Issuer Security Trustee pursuant to the Issuer Deed of Charge dated the First Closing Date (the Original Issuer Deed of Charge ) and will continue to be so appointed in respect of the First Supplemental Issuer Deed of Charge dated on or about the Second Page 20

21 Closing Date (the First Supplemental Issuer Deed of Charge and together with the Original Issuer Deed of Charge, the Issuer Deed of Charge ). The Issuer Security Trustee holds the security granted by the Issuer under and pursuant to the Original Issuer Deed of Charge and will also hold the security granted under the First Supplemental Issuer Deed of Charge on behalf of itself, the Noteholders and the other Issuer Secured Creditors. The Obligor Security Trustee J.P. Morgan Corporate Trustee Services Limited has been granted the benefit of certain covenants, representations and warranties as well as certain guarantees and indemnities by the Initial Obligors and (but to a lesser extent and not in all respects) by the Limited Obligors pursuant to the Security Trust and Intercreditor Deed. Each of the Initial Obligors have also under the Security Trust and Intercreditor Deed granted certain security interests over their respective assets, property and undertaking as well as security powers of attorney in favour of the Obligor Security Trustee to secure (to the extent possible) such guarantees, indemnities and covenants. Certain of the Limited Obligors have also granted certain fixed security interests over certain of their assets as well as security powers of attorney to the Obligor Security Trustee pursuant to the Security Trust and Intercreditor Deed. The Obligor Security Trustee holds the benefit of the Security Trust and Intercreditor Deed as well as security created thereunder on behalf of itself, the Issuer, the Acquisition/CapEx Facility Provider, any further Authorised Credit Facility Provider and the other Obligor Secured Creditors. The Cash Manager The Mall Cash Manager Limited has been appointed by the Borrower, the General Partner, the Legal Owners, the Acquisition/CapEx Facility Provider, the Issuer and the Obligor Security Trustee, inter alia, to operate and have, or appoint its duly authorised agent to operate and have, sole signing rights to the Cash Management Account, the Disposal Proceeds Account and the Cash Reserve Account on behalf of the Borrower and the Obligor Security Trustee and to maintain such accounts in accordance with the Cash Management Agreement and the other Obligor Transaction Documents. The Cash Manager has also been appointed to operate and have, or appoint its duly authorised agent to operate and have, sole signing rights to the Issuer Transaction Account and the Liquidity Facility Standby Account on behalf of the Issuer and will maintain such accounts and the monies held therein in accordance with the Cash Management Agreement and the Issuer Transaction Documents. The Cash Manager, on the First Closing Date, appointed JPMorgan Chase Bank N.A. to act as its duly authorised agent to carry out its duties under the Cash Management Agreement and to operate the accounts and related payments and JPMorgan Chase Bank N.A. will continue to act as such duly authorised agent. Page 21

22 The Account Bank JPMorgan Chase Bank, N.A. currently maintains and will continue to maintain certain accounts as Account Bank on behalf of the Issuer and the Borrower pursuant to the Cash Management Agreement. The Liquidity Facility Provider Barclays Bank PLC currently provides the Liquidity Facility to the Issuer pursuant to the terms of the Liquidity Facility Agreement dated the First Closing Date (the Liquidity Facility Agreement ). See further the section entitled Summary of Principal Documents The Liquidity Facility for a description of the Liquidity Facility and the section entitled The Swap Providers and the Liquidity Facility Provider for a description of the Liquidity Facility Provider. The Swap Providers Credit Suisse International (formerly Credit Suisse First Boston International) agreed on the First Closing Date to provide certain interest rate swaps to the Issuer relating to the Original Notes pursuant to the terms of a Swap Agreement. As of the Second Closing Date, Credit Suisse International and The Royal Bank of Scotland plc (together, the Swap Providers ) will agree to provide similar interest rate swaps to the Issuer relating to the Second Issue Notes, pursuant to the terms of a separate Swap Agreement. For a description of the Swap Providers see further the section entitled The Swap Providers and the Liquidity Facility Provider and for a description of the terms of the Swap Agreements see further the section entitled Resources Available to the Obligor and the Issuer The Swap Agreements. The Issuer Corporate Services Administrator and the Cash Manager Corporate Services Administrator Wilmington Trust SP Services (London) Limited (formerly SPV Management Limited), a limited liability company incorporated in England and Wales (acting through its office at Level 11, Tower 42, International Financial Centre, 25 Old Broad Street, London EC2N 1HQ), has been appointed, as the Issuer Corporate Services Administrator pursuant to the Issuer Corporate Services Administration Agreement, and the Cash Manager Corporate Services Administrator pursuant to the Cash Manager Corporate Services Administration Agreement and provides and will continue to provide certain secretarial and administration services to the Issuer, subject to and in accordance with the Issuer Corporate Services Administration Agreement and the Cash Manager Corporate Services Administration Agreement. Wilmington Trust s appointment may be terminated by the Issuer or the Cash Manager in the event of a material breach by the Issuer Corporate Services Administrator, or the Cash Manager Corporate Services Administrator as the case may be, or if the Issuer Corporate Services Administrator, or the Cash Manager Corporate Services Administrator, enters into Insolvency Proceedings. Any termination of such appointment shall not take effect until a successor has been appointed in accordance with the Issuer Corporate Services Administration Page 22