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11DeanC.PappasisapartnerintheLosAngelesoceofGoodwinProcterandcanbereachedat213426-2525ordpappasgoodwinprocter.com.AlisonJ.WaisisanassociateintheLosAngelesoceofGoodwinProcterandcanbereachedat213426-2517orawaisgoodwinprocter.com.guarantorsuponadefaultundertheloancausedbyaguarantor.Approvalofcertainmatterslimitedtothatofjusttheadministrativeagentorinlimitedcasesamajorityoflenders.Ifconsentofallofthelendersasupermajorityorevenamajorityoflendersisrequiredtheborrowersabilitytooperateconstructdevelopandmanagethepropertycanbesignicantlyimpacted.Howevercomprisingthesyndicatewithlendersholdingamajorityorsupermajoritywithwhomtheborrowerhasagoodworkingrelationshipandregularlydoesbusinesswithcouldmitigatetheimpactsubstantiallyandallowtheborrowermaximumexibilitytooperateitsproperty.FutureAdvancesAnytimeaborrowerobtainsaloanthatrequiresfutureadvancessuchasaconstructionloantheborrowertakesariskthatthelendersmaynotbeabletofundtheadvance.Aborrowercanminimizethisriskbycontrollingthelenderswhomayparticipateintheloanbuttheborrowerdoesnotalwayshavetheleveragetonegotiatesuchcontrols.Insomecasestheadministrativeagentmaymakeadvancestotheborroweronbehalfofthelendersinrelianceontheotherlendersagreementtopaytheadministrativeagent.Ifthelendersfailtomakepaymentstotheadministra-tiveagentitmayhaveanunfetteredrighttorecallthefundsadvancedfromtheborrowertogetherwithanyapplicableinterestthereon.Therecalloftheadvancesisproblematicfortheborrowerwhohasalreadycommittedorusedthesefundstopaycontractorsvendorssuppliersorotherthirdparties.Toaddressthisproblemaborrowershouldconsiderirequiringalllenderstofundanydisbursementupfronttherebyeliminatingtheriskthatanyfundswouldberecalledbytheadministrativeagentiiprovidingthattheadminis-trativeagentcannotrecallfundsafteranoutsidedatee.g.30daysandiiirequiringimmediatenoticefromtheadministrativeagentifanylenderfailstofunditsproratashareofanyportionoftheloan.Theborrowershouldalsofocusonprovisionsintheloandocumentssettingforththeconsequencestoadefaultinglenderforafailuretofund.Forexampletheotherlendersshouldbegiventheoptiontofundadefaultinglendersamount.Asanotherexampletheconsequencestothedefaultinglendershouldbesevereincludingprovisionsrequiringadefaultinglendertoassignitsinterestintheloantoanexistinglenderorsubordinatingthedefaultinglendersportionoftheloantotheotherportionsoftheloanandpossiblyprovidingthatthedefaultinglendersloanceasestoaccrueinterest.ForeignLendersBorrowersshouldbecognizantofloanassignmentstoforeignlenders.Newlawsbeingphasedinoverthenextfewyearsrequiresignicantwithholdingtaxesimposedonforeignlendersthatdonotmeetcertainrequirements.Iftheborrowerisrequiredunderthetermsoftheloandocumentstogross-upforwithholdingtaxesthentheassignmenttoaforeignlenderthatissubjecttosuchwithholdingtaxwouldbeverycostly.Theloandocumentsshouldprovideforeitherconsenttoassignmentsoverforeignlendersorshouldexcludesuchwithholdingtaxesfromthegross-uppaymentsowedbytheborrower.ConclusionWhileborrowersmaybeabletoobtainlargerloansonmoredesirabletermsfromasyndicateoflendersthatspreadtheexposureamongthegroupborrowersshouldcarefullyconsiderthemyriadissuesthatarisewhendealingwithaconsortiumoflenders.Withknowledgeofthepitfallsborrowersshouldbeabletonegotiateprovi-sionstominimizeoreveneliminatetherisksinvolvedinsyndicatedloans.nREsourceSummer2013