1. International standards and best practices: benefits and risks The Romanian legal angle Andrei Burz Pinzaru Partner

2. We are supporters of transposing international best practices at local level as a basis for increasing effectiveness in business

3. © 2012 Reff & Asociatii Best practices as the starting point = More time to focus on the stringent commercial aspects Less time spent on technicalities Increased efficiency 3 Benefits of standardization

4. © 2012 Reff & Asociatii  Size and complexity  Turning a “template” into a “bible”  Pragmatic approach and specific tailoring required  Improper dealing by local laws with foreign concepts  The “security agent” concept incompletely covered by law no. 71/2011  Mandatory applicable local law principles  Voting rights to the agent in case of default vs. revocable mandate under Romanian law 4 Risks: downsides of “importing” best practices

5. Properly consider the use of the new LMA recommended form of facility agreement for real estate finance in Romania

6. © 2012 Reff & Asociatii6 Mandatory applicable local law?

7. © 2012 Reff & Asociatii Real estate financing vs. Creditul ipotecar pentru investitii imobiliare Lenders and their counsel to consider:  Applicability of the Romanian mortgage lending law no. 190/1999  Mandatory provisions of the Romanian mortgage lending law  Costs of funding for the borrower  Rules in case of variable interest  Contract termination and procedure – depending on type of default occurred  Enforceability towards insurer 7

8. © 2012 Reff & Asociatii8 Applicable law

9. © 2012 Reff & Asociatii Freedom of choice is the rule When there is a conflict of laws 9 English law vs. Romanian law

10. © 2012 Reff & Asociatii10 Enforceability

11. © 2012 Reff & Asociatii  Recent case law  Alternative solutions 11

12. © 2012 Reff & Asociatii12 Transferability

13. © 2012 Reff & Asociatii  Transferability of the claim  Regulated by the law governing the claim English law or Romanian law specific aspects to consider New instrument for transfer under the New Civil Code: assignment of contract  Impact on the security  If English law governed facility agreement, impact depends on solution chosen for security structure  Romanian law specifics Notarized form mandatory to ensure publicity for transfer of Mortgage receivables Incomplete regulation of the security agent’s mandate 13

14. Bespoke, not ready made: LMA recommended version should be tailored to suit the commercial specifics of each transaction

15. © 2012 Reff & Asociatii LMA response to highly negotiated clauses in commercial real estate finance – not “one size fits all”  Operations of accounts “The Security Agent has sole signing rights in relation to the Rent Account.”  Lease covenants “No Borrower may without the consent of the [Agent/Majority Lenders]: -Enter into any Agreement for Lease -Agree to any amendment, supplement, extension, waiver, surrender or release in respect of any Lease Document -Exercise any right to break, determine or extend any Lease Document”  Negotiable character  Commercial sense and negotiation positions 15 Customizing the standard

16. © 2012 Reff & Asociatii Reff & Associates is the correspondent law firm of Deloitte Romania, integrated with the global Deloitte multi-disciplinary advisory practice. Deloitte refers to one or more of Deloitte Touche Tohmatsu Limited, a UK private company limited by guarantee, and its network of member firms, each of which is a legally separate and independent entity. Please see www.deloitte.com/ro/about for a detailed description of the legal structure of Deloitte Touche Tohmatsu Limited and its member firms.www.deloitte.com/ro/about