Document:

Exhibit 10.1

 

EXECUTION VERSION

 

 

 

SHIRE PLC

 

as the Company

 

 

CITIGROUP GLOBAL MARKETS LIMITED

 

as mandated lead arranger and bookrunner

 

with

 

CITIBANK INTERNATIONAL LIMITED

 

as Agent

 

 

 

	
 

US$ 850,000,000

 

TERM FACILITY AGREEMENT

 

DATED 11 JANUARY 2015

 

 

 

 

Slaughter and May

One Bunhill Row

London EC1Y 8YY

(MJD)

 

  

  

  

CONTENTS

 

	
Clause

	
Page

	 	 	 
	
1.

	
Definitions and interpretation

	
1

	
2.

	
The Facility

	
22

	
3.

	
Purpose

	
24

	
4.

	
Conditions of Utilisation

	
24

	
5.

	
Utilisation

	
26

	
6.

	
Repayment

	
28

	
7.

	
Illegality, voluntary prepayment and cancellation

	
28

	
8.

	
Mandatory prepayment

	
30

	
9.

	
Restrictions

	
32

	
10.

	
Extension of Facility

	
33

	
11.

	
Interest

	
35

	
12.

	
Interest Periods

	
36

	
13.

	
Changes to the calculation of interest

	
37

	
14.

	
Fees

	
38

	
15.

	
Tax gross-up and indemnities

	
41

	
16.

	
Increased Costs

	
55

	
17.

	
Other indemnities

	
57

	
18.

	
Mitigation by the Lenders

	
59

	
19.

	
Costs and expenses

	
60

	
20.

	
Guarantee and indemnity

	
62

	
21.

	
Representations

	
67

	
22.

	
Information undertakings

	
70

	
23.

	
Financial covenants

	
74

	
24.

	
General undertakings

	
81

	
25.

	
Sanctions

	
88

	
26.

	
Events of Default

	
88

 

 

 

 

 

 

 

	
27.

	
Changes to the Lenders

	
93

	
28.

	
Changes to the Obligors

	
99

	
29.

	
Role of the Agent, the Arrangers and the Reference Banks

	
102

	
30.

	
Conduct of Business by the Finance Parties

	
112

	
31.

	
Sharing among the Finance Parties

	
112

	
32.

	
Payment mechanics

	
115

	
33.

	
Set-off

	
118

	
34.

	
Notices

	
118

	
35.

	
Calculations and certificates

	
121

	
36.

	
Partial invalidity

	
121

	
37.

	
Remedies and waivers

	
121

	
38.

	
Amendments and waivers

	
122

	
39.

	
Confidential Information

	
127

	
40.

	
Confidentiality of Funding Rates and Reference Bank Quotations

	
131

	
41.

	
Counterparts

	
133

	
42.

	
Governing law

	
134

	
43.

	
Enforcement

	
134

  

  

  

THIS AGREEMENT is dated 11 January 2015 and made between:

 

	
(1)

	
SHIRE PLC, a registered public company incorporated in Jersey under the Companies (Jersey) Law 1991 with registered number 99854 (the "Company", the “Original Borrower” and the "Original Guarantor");

 

	
(2)

	
CITIGROUP GLOBAL MARKETS LIMITED as mandated lead arranger and bookrunner (the mandated lead arranger and bookrunner, the “Original Arranger”);

 

	
(3)

	
THE FINANCIAL INSTITUTION listed in Schedule 1 (The Original Lender) as lender (the "Original Lender"); and

 

	
(4)

	
CITIBANK INTERNATIONAL LIMITED as facility agent of the other Finance Parties (in this capacity, the "Agent").

 

IT IS AGREED as follows:

 

SECTION 1

INTERPRETATION

 

	
1.

	
DEFINITIONS AND INTERPRETATION

 

	
1.1

	
Definitions

 

In this Agreement:

 

"Acceptable Bank" means a bank or financial institution which has a rating for its long term unsecured and non-credit enhanced debt obligations of A or higher by Standard & Poor's Corporation or Fitch Ratings Ltd or A2 or higher by Moody's Investor Services Inc. or a comparable rating from an internationally recognised credit rating agency.

 

"Accession Letter" means a document substantially in the form set out in Schedule 6 (Form of Accession Letter).

 

"Acquisition" means a two-step transaction pursuant to which a member of the Group will commence the Tender Offer, followed as promptly as practicable after the consummation of the Tender Offer (including any extension of the offer period) by a Merger, with all of the issued and outstanding Target Shares not validly tendered in the Tender Offer cancelled in the Merger, in each case, on the terms and subject to the conditions set forth in the Acquisition Agreement and the Tender Offer Materials.

 

"Acquisition Agreement" means the agreement and plan of merger, dated on or around the date of this Agreement, among the Company, the Merger Subsidiary and the Target, together with such amendments, waivers or supplements made from time to time in accordance with the terms of this Agreement.

 

 

 

1

 

 

	
  

	
"Acquisition Costs" means:

 

	
  

	
(a)

	
any refinancing, repayment, conversion or redemption of any indebtedness of the Target or its Subsidiaries or any amount required to finance the Target and its Subsidiaries;

 

	
  

	
(b)

	
all fees, claims (including settlements thereof), costs, expenses or stamp, registration, transfer or other Taxes incurred by (or required to be paid by) any member of the Group in connection with the Acquisition or the Facility or any refinancing, repayment, redemption or financing referred to in paragraph (a); and

 

	
  

	
(c)

	
any integration or reorganisation costs resulting from the Acquisition or any amounts payable to third parties in connection with, or as a result of, the Acquisition.

 

"Acquisition CP Satisfaction" means all conditions to the Tender Offer under the Acquisition Agreement have been satisfied (or waived in accordance with Clause ‎24.10 (Conduct of the Acquisition)).

 

"Acquisition Documents" means:

 

(a)        the Acquisition Agreement; and

 

(b)        the Certificate of Merger,

 

in each case together with such amendments, waivers or supplements made from time to time in accordance with the terms of this Agreement.

 

"Additional Borrower" means each company which becomes an Additional Borrower in accordance with Clause ‎28 (Changes to the Obligors).

 

"Additional Guarantor" means each company which becomes an Additional Guarantor in accordance with Clause ‎28 (Changes to the Obligors).

 

"Additional Obligor" means an Additional Borrower or an Additional Guarantor.

 

"Affiliate" means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company, provided that, in relation to The Royal Bank of Scotland plc (to the extent that it is or becomes a Finance Party), the term "Affiliate" shall include The Royal Bank of Scotland N.V. and each of its Affiliates, but shall not include (i) the UK government or any member or instrumentality thereof, including Her Majesty's Treasury and UK Financial Investments Limited (or any directors, officers, employees or entities thereof) or (ii) any persons or entities controlled by or under common control with the UK government or any member or instrumentality thereof (including HM Treasury and UK Financial Investments Limited) and which are not part of The Royal Bank of Scotland Group plc and its subsidiaries or subsidiary undertakings.

 

 

 

2

 

 

 

“Arranger" means the Original Arranger and any bank or financial institution that accedes to this Agreement as a mandated lead arranger or lead arranger pursuant to Syndication.

 

“Assignment Agreement” means an agreement substantially in the form set out in Part 1 of Schedule 4 (Form of Assignment Agreement).

 

"Authorisation" means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration.

 

"Availability Period" means the period from and including the date of this Agreement to and including the date falling 11 Months after the date of this Agreement.

 

"Available Commitment" means a Lender's Commitment minus:

 

	
  

	
(a)

	
the amount of its participation in any outstanding Loans; and

 

	
  

	
(b)

	
in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date.

 

"Available Facility" means the aggregate for the time being of each Lender's Available Commitment.

 

"Borrower" means the Original Borrower or an Additional Borrower, unless it has ceased to be a Borrower in accordance with Clause ‎28 (Changes to the Obligors).

 

"Break Costs" means the amount (if any) by which:

 

	
  

	
(a)

	
the interest excluding the Margin which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;

 

exceeds:

 

	
  

	
(b)

	
the amount which that Lender would be able to obtain by placing an amount equal to the total sum received by it on deposit with a leading bank in the Relevant Interbank Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period.

 

"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York City.

 

"Capital Markets Proceeds" means the cash proceeds received by any member of the Group from any public or private issue, sale or offering of any debt securities (including, without limitation, any bond or note issuance or private placement or instruments that are convertible into equity or any hybrid instrument but excluding any debt securities that are mandatorily convertible into equity) in the national or international debt capital markets by 

 

 

 

3

 

 

any member of the Group but excluding any commercial paper issued by any member of the Group but, in each case, after deducting any reasonable fees, costs, expenses and Taxes which are incurred by members of the Group with respect to that issue, sale or offering to persons who are not members of the Group.

 

"Certificate of Merger" means the certificate of merger specifying the effective time of the Merger filed with the Secretary of State of the State of Delaware in such form as required by, and executed in accordance with, the relevant provisions of Section 251 of the General Corporation Law of the State of Delaware.

 

"Code" means, at any date, the US Internal Revenue Code of 1986 and the regulations promulgated thereunder as in effect at such date.

 

	
  

	
"Commitment" means:

 

	
  

	
(a)

	
in relation to the Original Lender, the amount set opposite its name under the heading “Commitment” in Schedule 1 (The Original Lender) and the amount of any other Commitment transferred to it under this Agreement; and

 

	
  

	
(b)

	
in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement,

 

to the extent not cancelled, reduced or transferred by it under this Agreement.

 

"Compliance Certificate" means a certificate substantially in the form set out in Schedule 7 (Form of Compliance Certificate).

 

"Confidential Information" means all information relating to the Parent Company, any member of the Group, the Group, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:

 

(a)        any member of the Group or any of its advisers; or

 

	
  

	
(b)

	
another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,

 

in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes

 

(i)         information that:

 

	
  

	
(A)

	
is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause ‎39 (Confidential Information); or

 

	
  

	
(B)

	
is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or

 

 

 

4

 

 

 

	
  

	
(C)

	
is known by that Finance Party before the date the information is disclosed to it in accordance with paragraph (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and

 

	
  

	
(ii)

	
any Funding Rate or Reference Bank Quotation.

 

"Confidentiality Undertaking" means a confidentiality undertaking substantially in the form as set out in Schedule 11 (Form of Confidentiality Undertaking) or in any other form agreed between the Parent Company and the Agent.

 

"Controlled Group” means any trade or business, whether or not incorporated, which is under common control with an Obligor within the meaning of Section 4001 of ERISA or is part of a group that includes an Obligor and that is treated as a single employer under Section 414 of the Code.  When any provision of this Agreement relates to a past event, the term “member of the Controlled Group” includes any person that was a member of the Controlled Group at the time of that past event.

 

"CTA" means the Corporation Tax Act 2009.

 

"Default" means an Event of Default or any event or circumstance specified in Clause ‎26 (Events of Default) which would (with the expiry of a grace period, the giving of notice, the making of any determination under the Finance Documents or any combination of any of the foregoing with an event or circumstance specified in Clause ‎26 (Events of Default)) be an Event of Default.

 

"Defaulting Lender" means any Lender:

 

	
  

	
(a)

	
which has failed to make its participation in a Loan available or has notified the Agent or any Obligor or has indicated publicly that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause ‎5.4 (Lenders' participation);

 

(b)        which has otherwise rescinded or repudiated a Finance Document; or

 

(c)        with respect to which an Insolvency Event has occurred and is continuing,

 

unless, in the case of paragraph (a) above:

 

(i)         its failure to pay is caused by:

 

(A)       administrative or technical error; or

 

(B)       a Disruption Event; and

 

payment is made within three Business Days of its due date;

 

 

 

5

 

 

	
  

	
(ii)

	
the Lender is disputing in good faith whether it is contractually obliged to make the payment in question; or

 

	
  

	
(iii)

	
the circumstances contemplated by Clause ‎7.1 (Illegality) apply in respect of that Lender and the Lender has given notice thereof to the Agent in accordance with such Clause.

 

"Disposal" means a sale, transfer or other disposal by a member of the Group of any shares, undertaking or business to a person that is not a member of the Group (whether by a voluntary or involuntary single transaction or series of transactions) but excluding any sale, transfer or other disposal of shares in a member of the Group which (following such sale, transfer or other disposal) remains a member of the Group.

 

"Disposal Proceeds" means the cash consideration received by any member of the Group (including any amount receivable in repayment of intercompany debt and, when received, any deferred consideration whether by way of adjustment to the purchase price or otherwise) for any Disposal after deducting:

 

	
  

	
(a)

	
any reasonable expenses incurred, and provisions for liability made, by any member of the Group with respect to that Disposal to persons who are not members of the Group; and

 

	
  

	
(b)

	
any Tax incurred and required to be paid by any member of the Group in connection with that Disposal (including, for the avoidance of doubt, in connection with the receipt of any deferred consideration) (as reasonably determined by that member of the Group, on the basis of known rates and taking account of any available credit, deduction or allowance).

 

"Disruption Event" means either or both of:

 

	
  

	
(a)

	
a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or

 

	
  

	
(b)

	
the occurrence of any other event which results in a disruption (including without limitation, disruption of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:

 

	
  

	
(i)

	
from performing its payment obligations under the Finance Documents; or

 

	
  

	
(ii)

	
from communicating with other Parties in accordance with the terms of the Finance Documents,

 

and which (in either such case) is not caused by, and is beyond the control of, the Party whose operations are disrupted.

 

 

 

6

 

 

"Employee Plan" means, at any time, an “employee pension benefit plan” as defined in Section 3(2) of ERISA subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA (other than a Multiemployer Plan), maintained or contributed to (or to which there is or was an obligation to contribute) by any Obligor or ERISA Affiliate.

 

"ERISA" means, at any date, the United States Employee Retirement Income Security Act of 1974 (or any successor legislation thereto) and the regulations promulgated and rulings issued thereunder.

 

"ERISA Affiliate" means each person (as defined in Section 3(9) of ERISA) that is a member of a Controlled Group of any Obligor.

 

"Event of Default" means any event or circumstance specified as such in Clause ‎26 (Events of Default).

 

"Exchange Act" means the Securities Exchange Act of 1934 of the United States, as amended from time to time, and any successor statute.

 

"Excluded Disposal Proceeds" means:

 

	
  

	
(a)

	
subject to paragraph ‎(C) of Clause ‎8.2 (Mandatory prepayment and cancellation out of certain proceeds) any Disposal Proceeds which the Parent Company has notified in writing to the Agent (on or before the date on which such Disposal Proceeds would (but for such notification) be required to be applied pursuant to Clause ‎8.2 (Mandatory prepayment and cancellation out of certain proceeds)) could (in the Parent Company’s reasonable opinion) reasonably be expected to be applied within 365 days of the date of receipt of the relevant Disposal Proceeds by the applicable member of the Group in or towards the purchase of assets used in the business of the Group (including, without limitation, all milestone payments and similar payments under any new or existing agreement relating to the in-licensing co-development or other acquisition of intellectual property or other assets or products);

 

	
  

	
(b)

	
any Disposal Proceeds which do not exceed US$ 10,000,000 (or its equivalent in any other currency or currencies) for any Disposal (whether by a single transaction or series of related transactions); and

 

	
  

	
(c)

	
any other Disposal Proceeds greater than US$ 10,000,000 (or its equivalent in any other currency or currencies) for any Disposal (whether by a single transaction or series of related transactions) to the extent that, when aggregated with all such other Disposal Proceeds receivable by the Group in the same financial year, such Disposal Proceeds do not exceed US$ 200,000,000 (or its equivalent in any other currency or currencies).

 

 

 

7

 

 

“Existing Facilities Agreements” means

 

	
  

	
(a)

	
the US$ 2,100,000,000 facilities agreement dated 12 December 2014 made between, among others, the Company and Barclays Bank PLC as facility agent; and

 

	
  

	
(b)

	
the US$ 2,600,000,000 term facilities agreement dated 11 November 2013 made between, among others, the Company and Morgan Stanley Bank International Limited as agent.

 

"Existing Financial Indebtedness" means the existing Financial Indebtedness listed in Schedule 10 (Existing Financial Indebtedness).

 

"Existing Loans" means the existing loans listed in Schedule 9 (Existing Loans).

 

"Existing Security" means the existing Security listed in Schedule 8 (Existing Security).

 

"Extended Loans" has the meaning set out in Clause ‎10.1 (Extension).

 

"Extension Notice" has the meaning set out in Clause ‎10.2 (Extension Notice).

 

"Facility" means the term loan facility made available under this Agreement as described in Clause ‎2.1 (Grant of Facility).

 

"Facility Office" means:

 

	
  

	
(a)

	
in relation to a Lender, the office identified as such opposite such Lender's name in Schedule 1 (The Original Lender) or such other office as it may from time to time select; and

 

	
  

	
 (b)

	
in relation to a New Lender, the office notified by that New Lender to the Agent in writing on or before the date it becomes a Lender as the office through which it will perform its obligations under this Agreement (including as may be notified at the end of the Transfer Certificate to which it is party as a transferee), or such other office as it may from time to time select.

 

"FATCA" means:

 

	
  

	
(a)

	
Sections 1471 to 1474 of the Code or any associated regulations or other official guidance;

 

	
  

	
(b)

	
any treaty, law, regulation or other official guidance enacted in any jurisdiction other than the US, or relating to an intergovernmental agreement between the US and any jurisdiction other than the US, which (in either case) facilitates the implementation of paragraph (a) above; or

 

	
  

	
(c)

	
any agreement pursuant to the implementation of paragraphs (a) or (b) above with the IRS, the US government or any governmental or taxation authority in any jurisdiction other than the US.

 

 

 

8

 

 

	
  

	
"FATCA Application Date" means:

 

	
  

	
(a)

	
in relation to a "withholdable payment" described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014;

 

	
  

	
(b)

	
in relation to a "withholdable payment" described in section 1473(1)(A)(ii) of the Code (which relates to "gross proceeds" from the disposition of property of a type that can produce interest from sources within the US), 1 January 2017; or

 

	
  

	
(c)

	
in relation to a "passthru payment" described in section 1471(d)(7) of the Code not falling within paragraphs (a) or (b) above, 1 January 2017,

 

or, in each case, such other date from which such payment may become subject to a deduction or withholding required by FATCA as a result of any change in FATCA after the date of this Agreement.

 

"FATCA Deduction" means a deduction or withholding from a payment under a Finance Document required by FATCA.

 

"FATCA Exempt Party" means a Party that is entitled to receive payments free from any FATCA Deduction.

 

"Federal Reserve Board" means the Board of Governors of the Federal Reserve System of the United States (or any successor thereto).

 

"Fee Letter" means any letter or letters dated on or about the date of this Agreement between the Original Arranger or any of its Affiliates and the Parent Company (or the Agent and the Parent Company) setting out any of the fees payable in connection with the Facility.

 

"Finance Document" means this Agreement, any Fee Letter, any Accession Letter, any Resignation Letter, the Syndication Letter, any Utilisation Request and any other document designated as such by the Agent and the Parent Company but excluding any hedging arrangements.

 

"Finance Party" means the Agent, any Arranger or any Lender.

 

"Financial Indebtedness" means any indebtedness for or in respect of:

 

	 	
(a)

	
moneys borrowed;

 

	
  

	
(b)

	
any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;

 

	
  

	
(c)

	
any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;

 

	
  

	
(d)

	
the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with US GAAP, be treated as a finance or capital

 

  

9

  

	
  

	
lease (but excluding the amount of any liability in respect of any lease or hire purchase contract which would not, in accordance with US GAAP as at the date of this Agreement, be treated as a finance or capital lease);

 

	
  

	
(e)

	
receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis);

 

	
  

	
(f)

	
any amount raised under any other transaction (including any forward sale or purchase agreement) having the commercial effect of a borrowing;

 

	
  

	
(g)

	
any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);

 

	
  

	
(h)

	
any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;

 

	
  

	
(i)

	
any amount raised by the issue of redeemable shares which are redeemable prior to the seventh anniversary of the date of this Agreement other than redeemable shares issued by a Subsidiary of the Parent Company where such redeemable shares are acquired by another member of the Group as consideration for, or in connection with, an issue by a member of the Group of equity securities or, to the extent not so acquired, are redeemed within 30 days after the date of their issue;

 

	
  

	
(j)

	
any amount of any liability under an advance or deferred purchase agreement if one of the primary reasons behind the entry into such agreement is to raise finance (excluding, for the avoidance of doubt, milestone and deferred consideration payments in respect of acquisitions of shares or other assets which are the subject of any acquisition); and

 

	
  

	
(k)

	
(without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (j) above.

 

"Fraudulent Transfer Law" means any applicable US Bankruptcy Law or any applicable US state law, in each case concerning fraudulent transfer or conveyance.

 

"Funding Rate" means any individual rate notified by a Lender to the Agent pursuant to paragraph (A)(ii) of Clause ‎13.4 (Cost of funds).

 

"Group" means the Parent Company and its Subsidiaries for the time being.

 

"Guarantor" means the Original Guarantor and any Additional Guarantor, unless it has ceased to be a Guarantor in accordance with Clause ‎28 (Changes to the Obligors).

 

"Holding Company" means, in relation to a company or corporation, any other company or corporation in respect of which it is a Subsidiary.

 

 

 

10

 

 

"Impaired Agent" means the Agent at any time when:

 

	
  

	
(a)

	
it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;

 

(b)        the Agent otherwise rescinds or repudiates a Finance Document;

 

	
  

	
(c)

	
(if the Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of "Defaulting Lender"; or

 

(d)        an Insolvency Event has occurred and is continuing with respect to the Agent;

 

unless, in the case of paragraph (a) above:

 

(i)         its failure to pay is caused by:

 

(A)       administrative or technical error; or

 

(B)       a Disruption Event; and

 

payment is made within five Business Days of its due date; or

 

	
  

	
(ii)

	
the Agent is disputing in good faith whether it is contractually obliged to make the payment in question.

 

"Increase Confirmation" means a confirmation substantially in the form set out in Schedule 13 (Form of Increase Confirmation).

 

"Increase Lender" has the meaning given to that term in Clause ‎2.2 (Increase).

 

"Information Memorandum" means the document (if any) prepared in relation to the Group and the Acquisition, approved by the Company and distributed by the Original Arranger in connection with the Syndication.

 

"Insolvency Event" means, in relation to a Finance Party:

 

	
  

	
(a)

	
the appointment of a liquidator, receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of that Finance Party or all or substantially all of that Finance Party's assets;

 

	
  

	
(b)

	
that Finance Party suspends making payments on all or substantially all of its debts or publicly announces an intention to do so; or

 

	
  

	
(c)

	
any analogous procedure or step is taken in any jurisdiction with respect to that Finance Party.

 

"Interest Period" means, in relation to a Loan, each period determined in accordance with Clause ‎12 (Interest Periods) and in relation to an Unpaid Sum, each period determined in accordance with Clause ‎11.3 (Default interest).

 

 

 

11

 

 

"Interpolated Screen Rate" means, in relation to any Loan, the rate rounded to the same number of decimal places as the two relevant Screen Rates which results from interpolating on a linear basis between:

 

	
  

	
(a)

	
the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and

 

	
  

	
(b)

	
the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,

 

	
  

	
each as of the Specified Time on the Quotation Day for dollars.

 

"Ireland" means the Republic of Ireland.

 

"IRS" means the United States Internal Revenue Service or any successor.

 

"Lender" means:

 

(a)        the Original Lender; and

 

	
  

	
(b)

	
any bank or financial institution which has become a Party to this Agreement in accordance with Clause ‎2.2 (Increase) or Clause ‎27 (Changes to the Lenders),

 

which, in each case, has not ceased to be a Party as a Lender in accordance with the terms of this Agreement.

 

"LIBOR" means, in relation to any Loan:

 

	
  

	
(a)

	
the applicable Screen Rate as of the Specified Time for the currency of that Loan and for a period equal in length to the Interest Period of that Loan; or;

 

	
  

	
(b)

	
as otherwise determined pursuant to Clause ‎13.1 (Unavailability of Screen Rate),

 

and, if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero.

 

"Loan" means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan.

 

"Loan Proceeds" means any Financial Indebtedness raised in the international or domestic market by way of a syndicated or bilateral bank or other loan financing after the date of this Agreement, in each case, of any member of the Group, but excluding:

 

	
  

	
(a)

	
any Financial Indebtedness arising out of a utilisation of the Facility;

 

	
  

	
(b)

	
any Financial Indebtedness arising out of a utilisation under an Existing Facilities Agreement or any replacement or refinancing thereof (to the extent that, in each case, the aggregate amount of such Financial Indebtedness does not exceed the amount of Financial Indebtedness that could be incurred under an Existing Facilities Agreement on the date of this Agreement (assuming no

 

  

12

  

	
  

	
increase in the “Total Commitments” as defined in the applicable Existing Facilities Agreement));

 

	
  

	
(c)

	
any money market lines and overdraft facilities with a maturity of six Months or less;

 

	
  

	
(d)

	
any Financial Indebtedness to the extent raised by way of a syndicated or bilateral bank or other loan financing for the purpose of funding the acquisition by any member of the Group of any company, shares, undertaking or business (and related costs, liabilities and expenses), other than any acquisition of the Target;

 

	
  

	
(e)

	
any Financial Indebtedness to the extent owed by one member of the Group to another member of the Group;

 

	
  

	
(f)

	
any Financial Indebtedness falling within paragraphs (b), (d), (e), (g), (h), (i) or (k) of the definition of Financial Indebtedness; and

 

	
  

	
(g)

	
any other Financial Indebtedness referred to above (and not falling within any of paragraphs (a) to (e) above), the principal amount of which in full under the terms of the instrument (when aggregated with the principal amount of all other such Financial Indebtedness referred to above (and not falling within any of paragraphs (a) to (e) above)) does not exceed US$ 100,000,000 (or the equivalent in other currencies),

 

but, in each case, after deducting any reasonable fees, costs, expenses and Taxes which are incurred by members of the Group with respect to the raising of that Financial Indebtedness to persons who are not members of the Group.

 

"Majority Lenders" means, subject to Clause ‎38.4 (Disenfranchisement of Defaulting Lenders):

 

	
  

	
(a)

	
if there are no Loans then outstanding, a Lender or Lenders whose Commitments aggregate not less than  662/3 per cent. of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated not less than 662/3 per cent. of the Total Commitments immediately prior to the reduction); or

 

	
  

	
(b)

	
at any other time, a Lender or Lenders whose participations in the Loans then outstanding aggregate not less than 662/3 per cent. of all the Loans then outstanding.

 

"Margin" means in relation to any Loan, 0.50 per cent. per annum, provided that such Margin will increase by 0.25 per cent. per annum on the earlier of:

 

	
  

	
 (a)

	
the date falling nine Months after the date of this Agreement; and

 

	
  

	
 (b)

	
the date which is the later of:

 

	
  

	
(i)

	
the date on which Acquisition CP Satisfaction occurs; and

 

 

 

13

 

 

 

	
  

	
(ii)

	
the date falling six Months after the date of this Agreement,

 

and on each subsequent date falling at three Month intervals thereafter.

 

"Margin Stock" means “margin stock” as defined in Regulation U.

 

"Material Adverse Effect" means a:

 

	
  

	
(a)

	
material adverse change in the business, operations, assets or financial condition of the Group taken as a whole which is likely to have a material adverse effect on the ability of the Obligors taken as a whole or the Parent Company to perform their respective payment obligations under the Finance Documents; or

 

	
  

	
(b)

	
material adverse effect on the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under the Finance Documents.

 

"Material Company" means, at any time:

 

	
(a) 

	
an Obligor; or

 

	
  

	
(b)

	
a Subsidiary of the Parent Company which has EBITDA (as defined in Clause ‎23.1 (Financial definitions) but calculated as though it applied to it) representing 10 per cent. or more of the EBITDA of the Group.

 

Compliance with such conditions shall be determined by reference to the most recent Compliance Certificate supplied by the Parent Company and/or the latest audited financial statements of that Subsidiary (consolidated in the case of a Subsidiary which itself has Subsidiaries) and the latest audited consolidated financial statements of the Group.

 

A report by the auditors of the Parent Company that a Subsidiary is or is not a Material Company (determined in accordance with the preceding paragraph) shall, in the absence of manifest error, be conclusive and binding on all Parties.

 

"Maturity Date" means the Original Maturity Date, subject to extension pursuant to Clause ‎10 (Extension of Facility).

 

"Merger" means a merger pursuant to which the Merger Subsidiary will be merged with and into the Target whereby the Target is the surviving corporation pursuant to Section 251 of the General Corporation Law of the State of Delaware, and pursuant to which all outstanding Target Shares (other than those owned by the Target, any validly tendered and not validly withdrawn pursuant to the Tender Offer, or in respect of which appraisal rights are validly exercised and perfected under the General Corporation Law of the State of Delaware) will be converted into the right to receive cash.

 

"Merger Subsidiary" means Knight Newco 2, Inc., a corporation incorporated under the laws of the State of Delaware and a member of the Group.

 

 

 

14

 

 

 

"Month" means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that:

 

	
  

	
(a)

	
(subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one or, if there is not, on the immediately preceding Business Day;

 

	
  

	
(b)

	
if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and

 

	
  

	
(c)

	
if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.

 

The above rules will apply only to the last Month of any period.

 

"Multiemployer Plan" means, at any time, a multiemployer plan (as defined in Section 4001(a)(3) of ERISA), subject to the provisions of Title IV of ERISA,  then or at any time during the previous five years maintained for, or contributed to (or to which there is or was an obligation to contribute) by any Obligor or ERISA Affiliate.

 

"Newco Scheme" means a scheme of arrangement or analogous proceeding (each, a "Scheme", and including any modification, addition or condition thereto approved by the relevant court) which effects, in accordance with Clause ‎24.9 (Top Newco), the interposition of one or more limited liability companies (each, a "Newco") between:

 

	
  

	
(a)

	
in relation to the first Scheme following the date of this Agreement, the shareholders immediately prior to that Scheme of the Company and the Company; or

 

	
  

	
(b)

	
in relation to any subsequent Scheme, the Newco interposed by the previous Scheme and its shareholders (provided that, where more than one Newco was interposed as part of the previous Scheme, only the top such Newco shall constitute Newco for these purposes).

 

"Newco Scheme Date" means the date of completion of any Newco Scheme.

 

"Obligor" means a Borrower or a Guarantor.

 

"Original Financial Statements" means, in relation to the Parent Company, the audited consolidated financial statements of the Group for the financial year ended 31 December 2013.

 

"Original Maturity Date" means the date which is 364 days after the date of this Agreement.

 

“Parent Company” means the Company or, after completion of any Newco Scheme in accordance with the terms of this Agreement, the most recently interposed Top Newco.

 

 

 

15

 

 

 

"Participating Member State" means any member state of the European Union that has the euro as its lawful currency in accordance with legislation of the European Union relating to Economic and Monetary Union.

 

"Party" means a party to this Agreement.

 

"Permitted Securitisation" means any arrangements forming part of a transaction involving the securitisation or other financing of assets or cash flows (or both) relating to royalty income up to an aggregate funding amount equivalent for all such arrangements of US$ 350,000,000 over the life of the Facility.

 

"Qualifying Lender" has the meaning given to it in Clause ‎15 (Tax gross-up and indemnities).

 

"Quotation Day" means, in relation to any period for which an interest rate is to be determined, two Business Days before the first day of that period, unless market practice differs in the Relevant Interbank Market in which case the Quotation Day will be determined by the Agent in accordance with market practice in the Relevant Interbank Market (and if quotations would normally be given by leading banks in the Relevant Interbank Market on more than one day, the Quotation Day will be the last of those days).

 

"Reference Bank Quotation" means any quotation supplied to the Agent by a Reference Bank.

 

"Reference Bank Rate" means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Agent at its request by the Reference Banks:

 

	
  

	
(i)

	
(other than where paragraph (ii) below applies) as the rate at which the relevant Reference Bank could borrow funds in the London interbank market in US dollars and for the relevant period were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or

 

	
  

	
(ii)

	
if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator.

 

	
  

	
"Reference Banks" means the principal London offices of any banks as may be appointed by the Agent in consultation with the Parent Company.

 

"Register" has the meaning given to that term in Clause ‎29.21 (The Register).

 

"Regulation U" or "Regulation X" means, respectively, Regulation U or X of the Federal Reserve Board as now and from time to time in effect from the date of this Agreement and all official rulings and interpretations thereof and thereunder.

 

"Relevant Interbank Market" means the London interbank market.

 

 

 

16

 

 

 

"Repeating Representations" means each of the representations set out in Clauses ‎21.2 (Status) to ‎21.7 (Governing law and enforcement), Clause ‎21.10 (No default),  Clause ‎21.13 (Pari passu ranking), Clause ‎21.14 (Anti-corruption law), Clause ‎21.15 (Sanctions) and Clause ‎21.17 (Federal Reserve regulations).

 

"Representative" means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian.

 

"Resignation Letter" means a letter substantially in the form set out in Schedule 6 (Form of Resignation Letter).

 

"Screen Rate" means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over administration of that rate) for the relevant currency and period displayed on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters.  If such page or service ceases to be available, the Agent may specify another page or service displaying the relevant rate after consultation with the Parent Company.

 

"SEC" means the United States Securities and Exchange Commission or any successor thereto.

 

"Security" means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect.

 

“Selection Notice” means a notice substantially in the form set out in Part II of Schedule 3 (Selection Notice).

 

"SGF" means Shire Global Finance, a private unlimited company incorporated in England with registered number 05418960.

 

"Specified Time" means a time determined in accordance with Schedule 12 (Timetables).

 

"Subsidiary" means a subsidiary within the meaning of section 1159 of the Companies Act 2006.

 

"Syndication" means the primary syndication of the Facility.

 

"Syndication Letter" means the letter dated on or around the date of this Agreement between the Original Arranger, the Agent and the Company.

 

"Target" means NPS Pharmaceuticals, Inc., a corporation incorporated under the laws of the State of Delaware.

 

"Target Shares" means the shares of common stock, par value $0.001 per share, of the Target.

 

 

 

17

 

 

 

"Tax" means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same).

 

“TCA” means the Taxes Consolidation Act 1997 of Ireland (as amended).

 

“Tender Offer” means a cash tender offer to acquire any and all of the outstanding Target Shares on the terms and subject to the conditions set forth in the Acquisition Agreement and the Tender Offer Materials.

 

“Tender Offer Materials” means the Tender Offer Statement on Schedule TO with respect to the Tender Offer by a member of the Group, filed with the SEC pursuant to the Exchange Act in the manner set forth in the Acquisition Agreement, which will contain as exhibits, among other things, an offer to purchase and forms of the related letter of transmittal, summary advertisement, and form of notice of guaranteed delivery together with all exhibits, supplements and amendments thereto.

 

"Top Newco" means the top Newco most recently interposed by any Newco Scheme from time to time.

 

"Total Commitments" means the aggregate of the Commitments, being US$ 850,000,000 as at the date of this Agreement.

 

"Transfer Certificate" means a certificate substantially in the form set out in Part 2 of Schedule 4 (Form of Transfer Certificate) or any other form agreed between the Agent and the Parent Company.

 

"Transfer Date" means, in relation to an assignment or a transfer, the later of:

 

	
  

	
(a)

	
the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and

 

	
  

	
(b)

	
the date on which the Agent executes the relevant Assignment Agreement or Transfer Certificate.

 

"UK Borrower" means a Borrower which is incorporated in the United Kingdom or operating in the United Kingdom through a permanent establishment with which any payment under this Agreement is connected.

 

"Unpaid Sum" means any sum due and payable but unpaid by an Obligor under the Finance Documents.

 

"US" and "United States" means the United States of America, its territories, possessions and other areas subject to the jurisdiction of the United States of America.

 

"USA Patriot Act" means the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and Obstruct Terrorism Act of 2001, Public Law 107-56 of the United States, as amended.

 

 

 

18

 

 

 

"US Bankruptcy Law" means the United States Bankruptcy Code of 1978 (Title 11 of the United States Code) or any other United States federal or state bankruptcy, insolvency or similar law.

 

"US GAAP" means generally accepted accounting principles in the United States of America.

 

"Utilisation" means a utilisation of the Facility.

 

"Utilisation Date" means the date of a Utilisation, being the date on which the relevant Loan is to be made.

 

"Utilisation Request" means a notice substantially in the form set out in Part I of Schedule 3 (Utilisation Request).

 

"VAT" means, in respect of the United Kingdom, value added tax as provided for in the Value Added Tax Act 1994 and any regulations promulgated thereunder; in respect of Ireland, value added tax as provided for in the Value-Added Tax Consolidation Act 2010 and any regulations promulgated thereunder; and any other Tax of a similar nature whether imposed in the United Kingdom or Ireland in substitution for, or levied in addition to, such Taxes, or imposed elsewhere.

 

	
1.2

	
Construction

 

	
  

	
(A)

	
Unless a contrary indication appears any reference in this Agreement to:

 

	
  

	
(i)

	
the "Agent", an "Arranger", any "Finance Party", any "Lender", any "Obligor" or any "Party" shall be construed so as to include its successors in title, permitted assigns and permitted transferees;

 

	
  

	
(ii)

	
"assets" includes present and future properties, revenues and rights of every description;

 

	
  

	
(iii)

	
a "company" shall be construed so as to include any corporation or other body corporate, wherever and however incorporated or established;

 

	
  

	
(iv)

	
a "Finance Document" or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended or novated;

 

	
  

	
(v)

	
"indebtedness" includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;

 

	
  

	
(vi)

	
a "person" includes any person, firm, company, corporation, government, state or agency of a state or any association, trust or partnership (whether or not having separate legal personality) of two or more of the foregoing;

 

 

 

19

 

 

 

	
  

	
(vii)

	
a "regulation" includes any regulation, rule, official directive or guideline (whether or not having the force of law but if not having the force of law being of a type which any person to which it applies is accustomed to comply) of any governmental, intergovernmental or supranational body, agency, department or regulatory, self-regulatory or other similar authority or organisation;

 

	
  

	
(viii)

	
a provision of law or regulation (including an accounting standard) is a reference to that provision as amended or re-enacted;

 

	
  

	
(ix)

	
a time of day is a reference to London time; and

 

	
  

	
(B)

	
The determination of the extent to which a rate is "for a period equal in length" to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.

 

	
  

	
(C)

	
Section, Clause and Schedule headings are for ease of reference only.

 

	
  

	
(D)

	
Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.

 

	
  

	
(E)

	
A Default or an Event of Default is "continuing" if it has not been remedied or waived.

 

	
1.3

	
Currency symbols and definitions

 

"$", "dollars", "US Dollars" and "US$" denote the lawful currency for the time being of the United States of America.

 

"EUR" and "euro" means the single currency unit of the Participating Member States.

 

"£" and "sterling" denote the lawful currency for the time being of the United Kingdom.

 

	
1.4

	
Third party rights

 

	
  

	
(A)

	
Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the "Third Parties Act") to enforce or to enjoy the benefit of any term of this Agreement.

 

	
  

	
(B)

	
Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary this Agreement at any time.

 

 

 

20

 

 

 

	
1.5

	
Irish terms

 

	
  

	
(A)

	
an “administration” includes an examinership within the meaning of the Companies (Amendment) Act 1990 of Ireland (as amended); and

 

	
  

	
(B)

	
an “administrator” includes an examiner within the meaning of the Companies (Amendment) Act 1990 of Ireland (as amended).

 

  

21

  

SECTION 2

FACILITY

 

	
2.

	
THE FACILITY

 

	
2.1

	
Grant of Facility

 

Subject to the terms of this Agreement, the Lenders make available to the Borrower a term loan facility in US Dollars in an aggregate amount equal to the Total Commitments.

 

	
2.2

	
Increase

 

	
  

	
(A)

	
The Parent Company may, by giving prior notice to the Agent by no later than 30 days after the effective date of a cancellation of:

 

	
  

	
(i)

	
the Available Commitments of a Defaulting Lender in accordance with Clause ‎7.4 (Right of repayment and cancellation in relation to a single Lender or Defaulting Lender); or

 

	
  

	
(ii)

	
the Commitments of a Lender in accordance with Clause ‎7.1 (Illegality) or paragraph (A) of Clause ‎7.4 (Right of repayment and cancellation in relation to a single Lender or Defaulting Lender),

 

request that the Total Commitments be increased (and the Total Commitments shall be so increased) in an aggregate amount in dollars of up to the amount of the Available Commitments or Commitments so cancelled, as follows:

 

	
  

	
(a)

	
the increased Commitments will be assumed by one or more Lenders or other banks, financial institutions, trusts, funds or other entities which (in each case) shall not be a member of the Group (each an "Increase Lender") selected by the Parent Company and each of which confirms in writing its willingness to assume (whether in the Increase Confirmation or otherwise) and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been the Original Lender;

 

	
  

	
(b)

	
each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the rights and obligations owed by each Obligor and the Lender whose Commitment has been cancelled (the "Cancelled Lender") to each other only insofar as that Obligor and the Increase Lender have assumed and/or acquired the same in place of that Obligor and the Cancelled Lender;

 

	
  

	
(c)

	
each Increase Lender shall become a Party as a "Lender" and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another which differ from the rights and

 

  

22

  

obligations owed by the Cancelled Lender and each of the other Finance Parties to each other only insofar as the Increase Lender and those Finance Parties have assumed and/or acquired the same in place of the Cancelled Lender and those Finance Parties;

 

	
  

	
(d)

	
the Commitments of the other Lenders shall continue in full force and effect; and

 

	
  

	
(e)

	
any increase in the Total Commitments shall take effect on the date specified by the Parent Company in the notice referred to above or any later date on which the conditions set out in paragraph ‎(B) below are satisfied.

 

	
  

	
(B)

	
An increase in the Total Commitments will be effective only on:

 

	
  

	
(i)

	
the execution by the Agent of an Increase Confirmation from the relevant Increase Lender;

 

	
  

	
(ii)

	
in relation to an Increase Lender which is not a Lender immediately prior to the relevant increase, the performance by the Agent of all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender, the completion of which the Agent shall promptly notify to the Parent Company and the Increase Lender.

 

	
  

	
(C)

	
Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the 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 in accordance with this Agreement on or prior to the date on which the increase becomes effective.

 

	
  

	
(D)

	
The Parent Company shall, on the date upon which the increase takes effect, pay to the Agent (for its own account) a fee of US$ 3,000 and the Parent Company shall promptly on demand pay the Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause ‎2.2 (Increase).

 

	
  

	
(E)

	
Clause ‎27.4 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause ‎2.2 (Increase) in relation to an Increase Lender as if references in that Clause to:

 

	
  

	
(i)

	
an "Existing Lender" were references to all the Lenders immediately prior to the relevant increase;

 

	
  

	
(ii)

	
the "New Lender" were references to that "Increase Lender"; and

 

	
  

	
(iii)

	
a "re-transfer" and "re-assignment" were references to, respectively, a "transfer" and "assignment".

 

 

 

23

 

 

 

	
2.3

	
Finance Parties' rights and obligations

 

	
  

	
(A)

	
The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.

 

	
  

	
(B)

	
The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor shall be a separate and independent debt.

 

	
  

	
(C)

	
A Finance Party may, except as otherwise stated in the Finance Documents, separately enforce its rights under the Finance Documents.

 

	
3.

	
PURPOSE

 

	
3.1

	
Purpose

 

Each Borrower shall apply all amounts borrowed by it under the Facility towards financing the purchase price payable (including any amounts that are payable in respect of employee equity or equity-based awards of the Target in connection with the Acquisition or that are payable or reasonably expected to be payable in respect of Target Shares as to which a Target stockholder has properly exercised a demand for appraisal pursuant to the General Corporation Law of the State of Delaware) in respect of the Acquisition including related Acquisition Costs and transaction costs (including related integration and reorganisation costs).

 

	
3.2

	
Monitoring

 

No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.

 

	
4.

	
CONDITIONS OF UTILISATION

 

	
4.1

	
Initial conditions precedent

 

	
  

	
(A)

	
No Borrower (nor the Parent Company) may deliver a Utilisation Request unless the Agent has received all of the documents and other evidence listed in Part I(A) of Schedule 2 (Conditions precedent to initial Utilisation) in form and substance satisfactory to the Agent (acting reasonably). The Agent shall notify the Parent Company and the Lenders promptly upon being so satisfied.

 

	
  

	
(B)

	
The Lenders will be obliged to comply with Clause ‎5.4 (Lenders' participation) in relation to any Utilisation only if on or before the Utilisation Date for that Utilisation the Agent has received all of the documents and other evidence listed in Part I(B) of Schedule 2 (Further condition precedent to initial Utilisation) in form and substance satisfactory to the Agent (acting reasonably).  The Agent

 

 

  

24

  

shall notify the Parent Company and the Lenders promptly upon being satisfied it has received such documents and other evidence.

 

	
  

	
(C)

	
Other than to the extent that the Majority Lenders notify the Agent in writing to the contrary before the Agent gives the notification described in paragraph (A) or paragraph (B) above, the Lenders authorise (but do not require) the Agent to give that notification.  The Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.

 

	
4.2

	
Further conditions precedent

 

The Lenders will be obliged to comply with Clause ‎5.4 (Lenders' participation) in relation to a Loan only if on the date of the Utilisation Request and on the proposed Utilisation Date:

 

	
  

	
(A)

	
no Default is continuing or will result from the proposed Loan; and

 

	
  

	
(B)

	
the Repeating Representations to be made by each Obligor are true in all material respects.

 

	
4.3

	
Maximum number of Utilisation Requests

 

A Borrower may not deliver a Utilisation Request if, as a result of the proposed Utilisation, six or more Loans would be outstanding, unless otherwise agreed by the Parent Company and the Agent.

 

  

25

  

SECTION 3

UTILISATION

 

	
5.

	
UTILISATION

 

	
5.1

	
Delivery of a Utilisation Request

 

A Borrower may utilise the Facility by delivery by it (or the Parent Company on behalf of the Borrower) to the Agent of a duly completed Utilisation Request not later than the Specified Time.

 

	
5.2

	
Completion of a Utilisation Request

 

	
  

	
(A)

	
Each Utilisation Request delivered to the Agent pursuant to Clause ‎5.1 (Delivery of a Utilisation Request) is irrevocable and will not be regarded as having been duly completed unless:

 

	
  

	
(i)

	
the proposed Utilisation Date is a Business Day within the Availability Period;

 

	
  

	
(ii)

	
the currency and amount of the Utilisation comply with Clause ‎5.3 (Currency and amount); and

 

	
  

	
(iii)

	
the proposed Interest Period complies with Clause ‎12 (Interest Periods).

 

	
  

	
(B)

	
Only one Loan may be requested in each Utilisation Request delivered to the Agent pursuant to Clause ‎5.1 (Delivery of a Utilisation Request).

 

	
5.3

	
Currency and amount

 

	
  

	
(A)

	
The currency specified in a Utilisation Request delivered to the Agent pursuant to Clause ‎5.1 (Delivery of a Utilisation Request) for the purpose of drawing a Loan must be dollars.

 

	
  

	
(B)

	
The amount of the proposed Loan shall be an amount which is not more than the Available Facility and must be a minimum of US$ 10,000,000 or, if less, the Available Facility.

 

	
5.4

	
Lenders' participation

 

	
  

	
(A)

	
If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the Utilisation Date through its Facility Office.

 

	
  

	
(B)

	
The amount of each Lender's participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.

 

 

 

26

 

 

 

	
  

	
(C)

	
The Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan promptly following receipt of the relevant Utilisation Request.

 

	
  

	
(D)

	
The applicable Commitments which, at that time, are unutilised shall be immediately and automatically cancelled at the end of the Availability Period.

 

 

  

27

  

SECTION 4

REPAYMENT, PREPAYMENT AND CANCELLATION

 

	
6.

	
REPAYMENT

 

	
  

	
(A)

	
Each Borrower that has drawn a Loan shall repay that Loan in full on the Maturity Date.

 

	
  

	
(B)

	
No Borrower may reborrow any part of the Facility which is repaid (other than as contemplated in Clause ‎2.2 (Increase)).

 

	
7.

	
ILLEGALITY, VOLUNTARY PREPAYMENT AND CANCELLATION

 

	
7.1

	
Illegality

 

If it becomes unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan, that Lender shall promptly notify the Agent upon becoming aware of that event and shall also notify the Agent that it requires either or both of the following:

 

	
  

	
(A)

	
upon the Agent notifying the Parent Company, each Commitment of that Lender will be immediately cancelled; and/or

 

	
  

	
(B)

	
each Borrower shall repay that Lender's participation in the Loans made to that Borrower on the last day of the Interest Period for each Loan occurring after the Agent has notified the Parent Company or, if earlier, the date specified by the Lender in the notice delivered to the Agent (being no earlier than the last day of any applicable grace period permitted by law).

 

	
7.2

	
Voluntary cancellation

 

The Parent Company may, if it gives the Agent not less than three Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of US$ 10,000,000) of an Available Facility.  Any cancellation under this Clause ‎7.2 (Voluntary cancellation) shall reduce the Commitments of the Lenders rateably under the Facility.

 

	
7.3

	
Voluntary prepayment of Loans

 

The Borrower to which a Loan has been made may, if it gives the Agent not less than three Business Days' (or such shorter period as the Majority Lenders may agree) prior notice, prepay the whole or any part of a Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of US$ 10,000,000).

 

 

 

28

 

 

	
7.4

	
Right of repayment and cancellation in relation to a single Lender or Defaulting Lender

 

	
  

	
(A)

	
If:

 

	
  

	
(i)

	
any sum payable to any Lender by an Obligor is required to be increased under paragraph (D) of Clause ‎15.2 (Tax gross-up);

 

	
  

	
(ii)

	
the Parent Company receives a demand from the Agent under Clause ‎15.3 (Tax indemnity) or Clause ‎16.1 (Increased Costs); or

 

	
  

	
(iii)

	
a Lender becomes a Defaulting Lender,

 

the Parent Company may, while the circumstance under paragraphs ‎(i) or ‎(iii) above or the circumstance giving rise to the demand or notice under paragraph ‎(ii) above continues, give the Agent notice of cancellation of the Commitment of that Lender and its intention to procure the repayment of that Lender's participation  in the Loans.

 

	
  

	
(B)

	
On receipt of a notice from the Parent Company referred to in paragraph ‎(A) above, the Commitment of that Lender shall immediately be reduced to zero.

 

	
  

	
(C)

	
On the last day of each Interest Period which ends after the Parent Company has given notice under paragraph ‎(A) above (or, if earlier, the date specified by the Parent Company in that notice), the Borrower to which a Loan is outstanding shall repay that Lender's participation in that Loan.

 

	
7.5

	
Mandatory Cancellation

 

	
  

	
(A)

	
Subject to paragraph (B) below, if the Parent Company determines (acting reasonably) that it is certain that the Acquisition will not complete during the Availability Period, it will promptly notify the Agent.  On receipt by the Agent of such notice, the Commitments of each Lender shall immediately be cancelled in full.

 

	
  

	
(B)

	
If the Parent Company determines (acting reasonably) that the Acquisition would complete during the Availability Period if such Availability Period were extended, it may promptly notify the Agent and request the consent of the Lenders to such extension in accordance with Clause ‎38 (Amendments and waivers).  For the avoidance of doubt, no such extension shall be made unless it is consented to by each Lender and no Lender is obliged to give such consent (and the decision whether to do so shall be in each Lender’s sole discretion).

 

 

 

29

 

 

 

	
8.

	
MANDATORY PREPAYMENT

 

	
8.1

	
Mandatory Prepayment on Change of control

 

	
  

	
(A)

	
If any person or group of persons acting in concert gains control of the Parent Company (other than pursuant to a Newco Scheme):

 

	
  

	
(i)

	
the Parent Company shall promptly notify the Agent upon becoming aware of that event;

 

	
  

	
(ii)

	
a Lender shall not be obliged to fund a Utilisation; and

 

	
  

	
(iii)

	
if a Lender so requires, the Agent shall, by not less than 30 days' notice to the Parent Company, cancel that Lender's Commitments and, subject to paragraph ‎(D) below, declare all outstanding Loans due to such Lender, together with accrued interest, and all other amounts accrued under the Finance Documents immediately due and payable, whereupon that Lender's Commitment will be cancelled and all such outstanding amounts will become immediately due and payable.

 

	
  

	
(B)

	
For the purpose of paragraph ‎(A) above "control" means:

 

	
  

	
(i)

	
the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to cast, or control the casting of, more than one-half of the maximum number of votes that may be cast at a general meeting of the Parent Company; or

 

	
  

	
(ii)

	
the holding of more than one-half of the issued share capital of the Parent Company (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).

 

	
  

	
(C)

	
For the purpose of paragraph ‎(A) above "acting in concert" means a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them, either directly or indirectly, of shares in the Parent Company, to obtain or consolidate control of the Parent Company.

 

	
  

	
(D)

	
If a date for prepayment of a Loan pursuant to Clause ‎8.1(A)(iii) falls otherwise than on the last day of an Interest Period, such prepayment may be made on the last day of that Loan’s then current Interest Period (unless the relevant Lender instead requires prepayment upon expiry of the notice to the Parent Company pursuant to Clause ‎8.1(A)(iii) (or such longer period as that Lender and the Parent Company may agree), provided that in such case no Break Costs shall be payable in relation thereto).

 

 

 

30

 

 

 

	
8.2

	
Mandatory prepayment and cancellation out of certain proceeds

 

	
  

	
(A)

	
The Parent Company shall ensure that all:

 

	
  

	
(i)

	
Capital Markets Proceeds;

 

	
  

	
(ii)

	
Loan Proceeds; and

 

	
  

	
(iii)

	
Disposal Proceeds, other than any Excluded Disposal Proceeds,

 

are applied in cancellation of the Available Commitments and (if applicable) prepayment of the Loans at the times and in the order of application contemplated by paragraphs (B), (D) and (E) below.

 

	
  

	
(B)

	
Any amount to be applied in cancellation and (if applicable) prepayment pursuant to paragraph ‎(A) above shall be applied in the following order:

 

	
  

	
(i)

	
first, towards the cancellation of the Available Commitments until such Available Commitments have been reduced to zero (and, for the avoidance of doubt, the Available Commitments of the Lenders will be cancelled rateably); and

 

	
  

	
(ii)

	
secondly, in prepayment of the Loans until all the Loans have been prepaid in full.

 

The Parent Company shall be entitled to select which Loans shall be prepaid in accordance with paragraph (ii) above.

 

	
  

	
(C)

	
If the Parent Company has delivered a notice to the Agent in accordance with paragraph (a) of the definition of “Excluded Disposal Proceeds” in Clause 1.1 (Definitions) and any such Disposal Proceeds are not applied in or towards the purchase of assets used in the business of the Group within the applicable 365 day period set out in that paragraph, the Parent Company shall ensure that all such remaining Disposal Proceeds are applied in cancellation of the Available Commitments and (if applicable) prepayment of the Loans in the order of application contemplated by paragraph (B) above and at the times contemplated by paragraphs (D) and (E) below.

 

	
  

	
(D)

	
Any prepayment of a Loan pursuant to paragraph (B) or (C) above shall be made no later than the date which is the earlier of:

 

	
  

	
(i)

	
one Month after the Trigger Date; and

 

	
  

	
(ii)

	
the last day of the first Interest Period relating to the Loan being prepaid to end at least three Business Days after the Trigger Date,

 

provided that if, before that date, the Agent exercises any of its rights under paragraph (A) or (B) of Clause ‎26.14 (Acceleration), or the Commitments of a Lender are cancelled under Clause 8.1 (Mandatory Prepayment on Change of

 

  

31

  

control) above, that amount shall be applied on the date of acceleration or, as the case may be, cancellation.

 

	
  

	
(E)

	
The Parent Company shall, within three Business Days of the Trigger Date, notify the Agent of a cancellation of Available Commitments or a requirement to prepay Loans pursuant to paragraphs (B) or (C) above.

 

	
  

	
(F)

	
For the purposes of this Clause ‎8.2 (Mandatory prepayment and cancellation out of certain proceeds), the “Trigger Date” means:

 

	
  

	
(i)

	
in the case of Capital Markets Proceeds and Loan Proceeds, the date of receipt of the relevant Capital Markets Proceeds or Loan Proceeds by the applicable member of the Group;

 

	
  

	
(ii)

	
in the case of Disposal Proceeds other than Excluded Disposal Proceeds, the date of receipt of the relevant Disposal Proceeds by the applicable member of the Group; and

 

	
  

	
(iii)

	
in the case of Disposal Proceeds to which paragraph (C) above applies, the first anniversary of the date of receipt of the relevant Disposal Proceeds by the applicable member of the Group.

 

	
8.3

	
Mandatory Prepayment – Acquisition CP Satisfaction

 

If Acquisition CP Satisfaction has not occurred by 5.00pm on the last day of the Availability Period:

 

	
  

	
(a)

	
all outstanding Loans, together with accrued interest and all other amounts accrued under the Finance Documents, shall be repaid within three Business Days after the last day of the Availability Period; and

 

	
  

	
(b)

	
the Commitments of each Lender shall be cancelled in full.

 

	
9.

	
RESTRICTIONS

 

	
9.1

	
Notices of cancellation and prepayment

 

Any notice of cancellation or prepayment given by any Party under Clause ‎7 (Illegality, voluntary prepayment and cancellation) or Clause ‎8 (Mandatory prepayment) shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.

 

	
9.2

	
Interest and other amounts

 

Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.

 

 

 

32

 

 

	
9.3

	
No reborrowing of Loan

 

No Borrower may reborrow any part of a Loan which is prepaid.

 

	
9.4

	
Prepayment in accordance with Agreement

 

The Borrowers shall not repay or prepay all or any part of the Loan or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.

 

	
9.5

	
No reinstatement of Commitments

 

For the avoidance of doubt, subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.

 

	
9.6

	
Agent's receipt of notices

 

If the Agent receives a notice under Clause ‎7 (Illegality, voluntary prepayment and cancellation) or Clause ‎8 (Mandatory prepayment) it shall promptly forward a copy of that notice to either the Parent Company or the affected Lender, as appropriate.

 

	
9.7

	
Effect of repayment or prepayment on Commitments

 

If all or part of any Lender’s participation in a Loan under the Facility is repaid or prepaid and is not available for redrawing (other than by operation of Clause 2.2 (Increase)), an amount of that Lender’s Commitment (equal to the amount of the participation which is repaid or prepaid) in respect of the Facility will be deemed to be cancelled on the date of repayment or prepayment.

 

	
10.

	
EXTENSION OF FACILITY

 

	
10.1

	
Extension

 

	
  

	
(A)

	
Subject to Clause ‎10.2 (Extension Notice), the Parent Company shall be entitled to extend the Maturity Date of all or any part of the Loans outstanding on the date of an Extension Notice for an additional period of:

 

	
  

	
(i)

	
six Months from the Original Maturity Date in the case of the first extension under this Clause ‎10 (Extension of Facility) (such extended Maturity Date being the “First Extended Maturity Date”); and

 

	
  

	
(ii)

	
six Months from the First Extended Maturity Date in the case of the second extension under this Clause ‎10 (Extension of Facility),

 

	
  

	
the Loans so extended being the "Extended Loans".

 

	
  

	
(B)

	
Any part of any Loan outstanding on the Original Maturity Date which the Parent Company has not requested be extended pursuant to paragraph ‎(A)(i) above shall be repayable on the Original Maturity Date in accordance with Clause ‎6 (Repayment).

 

 

 

33

 

 

	
  

	
(C)

	
Any part of any Loan outstanding on the First Extended Maturity Date which the Parent Company has not requested be extended pursuant to paragraph (A)(ii) above shall be repayable on the First Extended Maturity Date in accordance with Clause ‎6 (Repayment).

 

	
10.2

	
Extension Notice

 

The right of the Parent Company to extend the Maturity Date pursuant to Clause ‎10.1 (Extension) may be exercised no more than twice, in each case, by it giving notice to the Agent (the "Extension Notice") not more than 60 or less than 30 days before (A) the Original Maturity Date in the case of the first extension or (B) the First Extended Maturity Date in relation to the second extension.  Such notice shall be given in writing, shall be unconditional and binding on the Parent Company and shall specify the aggregate amount of the Loans which the Parent Company wishes to extend.

 

	
10.3

	
Notification of Extension Notice

 

The Agent shall forward a copy of each Extension Notice to the relevant Lenders as soon as practicable after receipt of it provided that failure of the Agent to do so shall not affect the Parent Company's right to effect any extension in accordance with this Clause ‎10 (Extension of Facility).

 

	
10.4

	
Maturity Date of Extended Loans

 

Following delivery of an Extension Notice pursuant to Clause ‎10.2 (Extension Notice) above, the Maturity Date of any Extended Loans shall be the date falling six months after (A) the Original Maturity Date or (B) the First Extended Maturity Date, as the case may be, and references to "Maturity Date" shall be construed accordingly, subject to:

 

	
  

	
(A)

	
no Event of Default having occurred or continuing on (A) the Original Maturity Date or (B) the First Extended Maturity Date, as the case may be; and

 

	
  

	
(B)

	
the Repeating Representations to be made by each Obligor being true in all material respects on (A) the Original Maturity Date or (B) the First Extended Maturity Date, as the case may be.

 

  

34

  

SECTION 5

COSTS OF UTILISATION

 

	
11.

	
INTEREST

 

	
11.1

	
Calculation of interest

 

The rate of interest on each Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:

 

	
  

	
(A)

	
Margin; and

 

	
  

	
(B)

	
LIBOR.

 

	
11.2

	
Payment of interest

 

The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six Monthly intervals after the first day of the Interest Period).

 

	
11.3

	
Default interest

 

	
  

	
(A)

	
If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph ‎(B) below, is one per cent. higher than the rate which would have been payable if the overdue amount had, during the period of non-payment, constituted a Loan in the currency of the overdue amount for successive Interest Periods, each of a duration selected by the Agent (acting reasonably).  Any interest accruing under this Clause ‎11.3 (Default interest) shall be immediately payable by the Obligor on demand by the Agent.

 

	
  

	
(B)

	
If any overdue amount consists of all or part of a Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:

 

	
  

	
(i)

	
the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and

 

	
  

	
(ii)

	
the rate of interest applying to the overdue amount during that first Interest Period shall be one per cent. higher than the rate which would have applied if the overdue amount had not become due.

 

	
  

	
(C)

	
Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.

 

 

 

35

 

 

 

	
11.4

	
Notification of rates of interest

 

	
  

	
(A)

	
The Agent shall promptly notify the Lenders and the Parent Company of the determination of a rate of interest under this Agreement.

 

	
  

	
(B)

	
The Agent shall promptly notify the Borrower of each Funding Rate relating to a Loan.

 

	
12.

	
INTEREST PERIODS

 

	
12.1

	
Selection of Interest Periods

 

	
  

	
(A)

	
A Borrower (or the Parent Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if that Loan has already been borrowed) in a Selection Notice.

 

	
  

	
(B)

	
Each Selection Notice for a Loan is irrevocable and must be delivered to the Agent by the Borrower (or the Parent Company on behalf of that Borrower) not later than the Specified Time.

 

	
  

	
(C)

	
If the Borrower (or the Parent Company on behalf of the Borrower) fails to deliver a Selection Notice to the Agent in accordance with paragraph (B) above, the relevant Interest Period will be one Month.

 

	
  

	
(D)

	
Subject to this Clause ‎12 (Interest Periods), a Borrower (or the Parent Company) may select an Interest Period of one week, one, two, three or six Months or any other period agreed between the Parent Company and the Agent (acting on the instructions of all the Lenders).

 

	
  

	
(E)

	
Prior to the close of Syndication, Interest Periods shall be one Month or one week or such shorter period as agreed between the Parent Company and the Agent (acting on the instructions of all the Lenders).

 

	
  

	
(F)

	
An Interest Period for a Loan shall not extend beyond its Maturity Date.

 

	
  

	
(G)

	
With effect from the close of Syndication, no more than five Interest Periods of one week may be selected during the 12 Month period commencing on the close of Syndication and thereafter no Interest Periods of one week may be selected, in each case unless otherwise agreed by the Agent (acting on the instructions of all the Lenders).

 

	
12.2

	
Overrunning of the Maturity Date

 

If an Interest Period in respect of a Loan borrowed would otherwise overrun its Maturity Date, it shall be shortened so that it ends on its Maturity Date.

 

	
12.3

	
Other adjustments

 

	
  

	
(A)

	
If an Interest Period is not a period of a number of Months and it would otherwise end on a day which is not a Business Day, that Interest Period will

 

  

36

  

instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).

 

	
  

	
(B)

	
The Agent (after prior consultation with the Lenders) and the Parent Company may enter into such other arrangements as they may agree for the adjustment of Interest Periods.

 

	
12.4

	
Notification

 

The Agent shall notify the relevant Borrower and the Lenders of the duration of each Interest Period promptly after ascertaining its duration.

 

	
13.

	
CHANGES TO THE CALCULATION OF INTEREST

 

	
13.1

	
Unavailability of Screen Rate

 

	
  

	
(A)

	
Interpolated Screen Rate: If no Screen Rate is available for LIBOR for the Interest Period of a Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan.

 

	
  

	
(B)

	
Reference Bank Rate:  If no Screen Rate is available for LIBOR for:

 

	
  

	
(i)

	
the currency of a Loan; or

 

	
  

	
(ii)

	
the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate,

 

the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time for the currency of that Loan and for a period equal in length to the Interest Period of that Loan.

 

	
  

	
(C)

	
Cost of funds:  If paragraph (B) above applies but no Reference Bank Rate is available for the relevant currency or Interest Period, there shall be no LIBOR for that Loan and Clause ‎13.4 (Cost of funds) shall apply to that Loan for that Interest Period.

 

	
13.2

	
Calculation of Reference Bank Rate

 

	
  

	
(A)

	
Subject to paragraph (B) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.

 

	
  

	
(B)

	
If, at or about noon on the Quotation Day, none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank Rate for the relevant Interest Period.

 

 

 

37

 

 

	
13.3

	
Market disruption

 

If, before close of business in London on the Quotation Day for the relevant Interest Period, the Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 50 per cent. of that Loan) that the cost to it of funding its participation in that Loan from the wholesale market for the relevant currency would be in excess of LIBOR then Clause ‎13.4 (Cost of funds) shall apply to that Loan for the relevant Interest Period.

 

	
13.4

	
Cost of funds

 

	
  

	
(A)

	
If this Clause ‎13.4 (Cost of funds) applies, the rate of interest on each Lender's share of the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:

 

	
  

	
(i)

	
the Margin; and

 

	
  

	
(ii)

	
the rate notified to the Agent by that Lender as soon as practicable and, in any event, before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to the relevant Lender of funding its participation in that Loan from whatever source it may reasonably select.

 

	
  

	
(B)

	
If this Clause ‎13.4 (Cost of funds) applies and the Agent or the Parent Company so requires, the Agent and the Parent Company shall enter into negotiations (for a period of not more than thirty days) with a view to agreeing a substitute basis for determining the rate of interest.

 

	
  

	
(C)

	
Any alternative basis agreed pursuant to paragraph (B) above shall, with the prior consent of all the Lenders and the Parent Company, be binding on all Parties.

 

	
13.5

	
Break Costs

 

	
  

	
(A)

	
Each Borrower shall, within five Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.

 

	
  

	
(B)

	
Each Lender shall, as soon as reasonably practicable after a demand by the Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.

 

	
14.

	
FEES

 

	
14.1

	
Commitment fee

 

	
  

	
(A)

	
The Parent Company shall pay to the Agent (for the account of each Lender) a fee in US dollars computed at the rate of the applicable Commitment Fee Rate

 

  

38

  

 multiplied by the applicable Margin on that Lender's Available Commitment for the Availability Period.

 

	
  

	
(B)

	
The “Commitment Fee Rate” means:

 

	
  

	
(i)

	
with effect from the first Utilisation Date, 35 per cent.;

 

	
  

	
(ii)

	
prior to the first Utilisation Date:

 

	
  

	
(a)

	
during the first Month of the Availability Period (or any part thereof), 0 per cent.;

 

	
  

	
(b)

	
during the second Month of the Availability Period (or any part thereof), 112/3 per cent.;

 

	
  

	
(c)

	
during the third Month of the Availability Period (or any part thereof), 231/3 per cent.; and

 

	
  

	
(d)

	
during the fourth or any subsequent Month of the Availability Period (or any part thereof), 35 per cent.

 

	
  

	
(C)

	
The accrued commitment fee is payable quarterly in arrear on the last day of each successive period of three Months which ends during the Availability Period, on the last day of the Availability Period and, if cancelled in full, on the cancelled amount of the relevant Lender's Commitment at the time the cancellation is effective.  The accrued commitment fee shall be paid within three Business Days after its due date.

 

	
  

	
(D)

	
No commitment fee is payable to the Agent (for the account of a Lender) on any Available Commitment of that Lender for any day on which that Lender is a Defaulting Lender.

 

	
14.2

	
Extension fee

 

	
  

	
(A)

	
Following the delivery of an Extension Notice, the Parent Company shall pay to the Agent (for the account of each Lender of an Extended Loan) an extension fee computed at the applicable Extension Fee Rate multiplied by the aggregate amount of the Extended Loans on the date of the relevant Extension Notice. Such fee shall be paid on the Original Maturity Date in relation to the first extension and the First Extended Maturity Date in relation to the second extension.

 

	
  

	
(B)

	
The “Extension Fee Rate” means with respect to Extended Loans:

 

	
  

	
(i)

	
if the aggregate amount of such Extended Loans on the date of the relevant Extension Notice is more than 50% of the aggregate amount on the date of this Agreement of the Total Commitments, 0.20 per cent.; and

 

 

 

39

 

 

 

	
  

	
(ii)

	
if the aggregate amount of such Extended Loans on the date of the relevant Extension Notice is 50% or less of the aggregate amount on the date of this Agreement of the Total Commitments, 0.10 per cent.

 

	
14.3

	
Participation fee

 

The Parent Company shall pay to the Agent (for the account of the Lenders) a participation fee in the amount and at the times agreed in a Fee Letter.

 

	
14.4

	
Agency fee

 

The Parent Company shall pay to the Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.

 

  

40

  

SECTION 6

ADDITIONAL PAYMENT OBLIGATIONS

 

	
15.

	
TAX GROSS-UP AND INDEMNITIES

 

	
15.1

	
Definitions

 

	
  

	
(A)

	
In this Agreement:

 

"HMRC DT Treaty Passport Scheme" means the HM Revenue & Customs Double Taxation Treaty Passport Scheme for overseas corporate lenders.

 

"Protected Party" means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document.

 

"Qualifying Lender" means:

 

	
  

	
(a)

	
with respect to an amount due from an Obligor incorporated in the United Kingdom or operating in the United Kingdom through a permanent establishment with which the relevant amount is connected:

 

	
  

	
(i)

	
a Lender which is beneficially entitled to the interest payable to that Lender in respect of an advance under a Finance Document and is a Lender:

 

	
  

	
(1)

	
which is a bank (as defined for the purpose of Section 879 of the Income Tax Act 2007) making an advance under a Finance Document and which is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from Section 18A of the CTA; or

 

	
  

	
(2)

	
in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of Section 879 of the Income Tax Act 2007) at the time that that advance was made, and which either is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance or would be within such charge as respects such payments apart from Section 18A of the CTA;

 

	
(ii) 

	
a Treaty Lender with respect to the United Kingdom; or

 

	
(iii) 

	
a Lender which is:

 

 

 

41

 

 

 

	
  

	
(1)

	
a company resident in the United Kingdom for United Kingdom Tax purposes;

 

	
  

	
(2)

	
a partnership each member of which is:

 

	
  

	
(A)

	
a company so resident in the United Kingdom; or

 

	
  

	
(B)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

 

	
  

	
(3)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of Section 19 of the CTA) of that company;

 

(such Qualifying Lender within this Clause ‎15.1(A)(a) being a “UK Qualifying Lender”); and

 

	
  

	
(b)

	
with respect to a payment made by an Obligor resident for Tax purposes in Ireland or operating in Ireland through a branch or agency with which the relevant amount is connected:

 

	
  

	
(i)

	
a Lender which is beneficially entitled to the interest payable to that Lender in respect of an advance under a Finance Document and is:

 

	
  

	
(1)

	
an entity which is, pursuant to Section 9 of the Irish Central Bank Act 1971, licensed to carry on banking business in Ireland and whose Facility Office is located in Ireland and which is carrying on a bona fide banking business in Ireland for the purposes of Section 246(3)(a) of the TCA;

 

	
  

	
(2)

	
an authorised credit institution under the terms of Directive 2013/36/EC of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms that has duly established a branch in Ireland and has made all necessary notifications to its home state competent

 

  

42

  

authorities required thereunder in relation to its intention to carry on banking business in Ireland and carries on a bona fide banking business in Ireland for the purposes of Section 246(3)(a) of the TCA and has its Facility Office located in Ireland;

 

	
  

	
(3)

	
a company (within the meaning of Section 4 of the TCA):

 

	
  

	
(A)

	
which, by virtue of the law of a Relevant Territory is resident in the Relevant Territory as defined in Section 246(1) of the TCA and that jurisdiction imposes a Tax that generally applies to interest receivable in that jurisdiction by companies from sources outside that jurisdiction; or

 

	
  

	
(B)

	
in receipt of interest which:

 

	
  

	
(i)

	
is exempted from the charge to Irish income tax pursuant to the terms of a double taxation treaty entered into between Ireland and another jurisdiction that is in force on the date the relevant interest is paid; or

 

	
  

	
(ii)

	
would be exempted from the charge to Irish income tax pursuant to the terms of a double taxation treaty entered into between Ireland and another jurisdiction signed on or before the date on which the relevant interest is paid but not in force on that date, assuming that treaty had the force of law on that date by virtue of Section 826(1) of the TCA;

 

provided that, in the case of both (A) and (B) above, such company does not provide its commitment through or in connection with a trade or business which is carried out in Ireland by it through a branch or agency;

 

	
  

	
(4)

	
a US corporation that is incorporated in the US and is subject to US federal income tax on its worldwide income provided that such US corporation does not provide its commitment in connection with a trade or business which is carried on in Ireland through a branch or agency in Ireland;

 

 

 

43

 

 

 

	
  

	
(5)

	
a US LLC, where the ultimate recipients of the interest payable to that LLC satisfy the requirements set out in paragraph (3) or (4) above and the business conducted through the LLC is so structured for market reasons and not for Tax avoidance purposes, provided that such LLC and the ultimate recipients of the relevant interest do not provide their commitment in connection with a trade or business which is carried on in Ireland through a branch or agency in Ireland;

 

	
  

	
(6)

	
a company (within the meaning of Section 4 of the TCA):

 

	
  

	
(A)

	
which advances money in the ordinary course of a trade which includes the lending of money;

 

	
  

	
(B)

	
in whose hands any interest payable in respect of money so advanced is taken into account in computing the trading income of that company;

 

	
  

	
(C)

	
which has complied with the notification requirements set out in Section 246(5)(a) of the TCA; and

 

	
  

	
(D)

	
whose Facility Office is located in Ireland;

  

	
  

	
(7)

	
a qualifying company (within the meaning of Section 110 of the TCA) and whose Facility Office is located in Ireland; or

 

	
  

	
(8)

	
an investment undertaking (within the meaning of Section 739B of the TCA) and whose Facility Office is located in Ireland; or

 

(ii)        a Treaty Lender with respect to Ireland

 

(such Qualifying Lender within this Clause ‎15.1(A)(b) being an “Irish Qualifying Lender”).

 

“Relevant Territory” means:

 

(a)        a member state of the European Communities (other than Ireland); or

 

	
  

	
(b)

	
to the extent it is not a member state of the European Communities, a jurisdiction with which Ireland has entered into a double taxation treaty that either has the force of law by virtue of Section 826(1) of the TCA or which will have the force of law on completion of the procedures set out in Section 826(1) of the TCA.

 

 

 

44

 

 

 

"Tax Credit" means a credit against, relief or remission from, or repayment of, any Tax.

 

"Tax Deduction" means a deduction or withholding for or on account of Tax from a payment under a Finance Document, other than a FATCA Deduction.

 

"Tax Payment" means either the increase in a payment made by an Obligor to a Finance Party under Clause ‎15.2 (Tax gross-up) or a payment under Clause ‎15.3 (Tax indemnity).

 

"Treaty Lender", with respect to a jurisdiction, means a Lender which is, on the date any relevant payment falls due, entitled under the provisions of a double taxation treaty (a "Treaty") in force on that date to receive payments of interest from a person resident for the purposes of the relevant Treaty in such jurisdiction (or operating in such jurisdiction (other than Ireland) through a permanent establishment, branch or agency with which the relevant payments of interest are connected) without a Tax Deduction (subject to the completion of any necessary procedural formalities, such as an application by a Lender to HM Revenue & Customs or the Irish Revenue Commissioners, as appropriate, that payments may be made to that Lender without a Tax Deduction).

 

"UK Non-Bank Lender" means:

 

	
  

	
(i)

	
where a Lender becomes a Party on the day on which this Agreement is entered into, a Lender identified in Schedule 1 (The Original Lender) as a UK Non-Bank Lender; and

 

	
  

	
(ii)

	
where a Lender becomes a Party after the day on which this Agreement is entered into, a Lender which gives a UK Tax Confirmation in the Assignment Agreement, Transfer Certificate or Increase Confirmation which it executes on becoming a Party.

 

"UK Tax Confirmation" means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:

 

	
  

	
(i)

	
a company resident in the United Kingdom for United Kingdom Tax purposes;

 

	 	
(ii)

	
a partnership each member of which is:

 

	
  

	
(a)

	
a company so resident in the United Kingdom; or

 

	 	
(b)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

 

 

 

45

 

 

 

	
  

	
(iii)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of Section 19 of the CTA) of that company.

 

	
  

	
(B)

	
Unless a contrary indication appears, in this Clause ‎15 (Tax gross-up and indemnities) a reference to "determines" or "determined" means a determination made in the absolute discretion of the person making the determination.

 

	
15.2

	
Tax gross-up

 

	
  

	
(A)

	
Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.

 

	
  

	
(B)

	
The Parent Company shall promptly upon becoming aware that an Obligor is required by law to make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Agent accordingly.

 

	
  

	
(C)

	
Each Lender as at the date of this Agreement confirms that it is a UK Qualifying Lender and an Irish Qualifying Lender.  This confirmation is given as at the date of this Agreement.  A Lender which becomes party to this Agreement by means of a Transfer Certificate or Increase Confirmation or which becomes a New Lender by virtue of execution of an Assignment Agreement shall confirm therein (i) that it is a UK Qualifying Lender and an Irish Qualifying Lender and (ii) for the benefit of the Agent and without liability to any Obligor, whether it is a Treaty Lender with respect to the UK and Ireland (and, in respect of Ireland, whether it is a Treaty Lender which is not otherwise an Irish Qualifying Lender), and shall indicate, by giving or not giving a UK Tax Confirmation, whether it is a UK Non-Bank Lender.  If a New Lender fails to indicate its status in accordance with this Clause 15.2‎(C), then such New Lender shall be treated for the purposes of this Agreement (individually by each Obligor) as if it is not a UK Qualifying Lender or an Irish Qualifying Lender, in each case until such time as it notifies the Agent of its status.  Each Lender which confirmed that it was a UK Qualifying Lender and/or an Irish Qualifying Lender undertakes to notify the Agent and the Parent Company promptly upon becoming aware of it ceasing to be a UK Qualifying Lender or an Irish Qualifying Lender (as applicable) (other than as a result of any change after it became a Lender under this Agreement in (or in the interpretation, administration or application of) any law or Treaty, or any published practice or concession of any relevant Tax authority).  If the Agent receives such notification from a Lender it shall notify the Parent Company and the relevant Obligor.  For the avoidance of doubt, a Transfer Certificate, Increase Confirmation or Assignment Agreement shall not be invalidated by any failure of a Lender to comply with this Clause ‎15.2(C).

 

	
  

	
(D)

	
If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.

 

 

 

46

 

 

 

	
  

	
(E)

	
An Obligor is not required to make an increased payment to a Lender under paragraph ‎(D) above for a Tax Deduction in respect of Tax imposed:

 

	
  

	
(i)

	
by the United Kingdom from a payment of interest on a Loan if, on the date on which the payment falls due:

 

	
  

	
(a)

	
the payment could have been made to the relevant Lender without a Tax Deduction if it was a UK Qualifying Lender (other than a Lender that is a UK Qualifying Lender by virtue only of being a Treaty Lender with respect to the United Kingdom), but on that date that Lender is not or has ceased to be a UK Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or concession of any relevant Tax authority; or

 

	
  

	
(b)

	
the relevant Lender is a UK Qualifying Lender solely by virtue of paragraph (a)(iii) of the definition of Qualifying Lender in Clause 15.1(A) and:

 

	
  

	
(1)

	
an officer of H.M. Revenue & Customs has given (and not revoked) a direction (a "Direction") under Section 931 of the Income Tax Act 2007 which relates to the payment and that Lender has received from the Obligor making the payment or from the Parent Company a certified copy of that Direction; and

 

	
  

	
(2)

	
the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or

 

	
  

	
(c)

	
the relevant Lender is a UK Qualifying Lender solely by virtue of paragraph (a)(iii) of the definition of Qualifying Lender in Clause 15.1(A) and:

 

	
  

	
(1)

	
the relevant Lender has not given a UK Tax Confirmation to the Obligor making the payment; and

 

	
  

	
(2)

	
the payment could have been made to the Lender without any Tax Deduction if the Lender had given a UK Tax Confirmation to the Obligor making the payment, on the basis that the UK Tax Confirmation would have enabled that Obligor to have formed a reasonable belief that the payment was an "excepted payment" for the purpose of Section 930 of the Income Tax Act 2007; or

 

	
  

	
(d)

	
the relevant Lender is a UK Qualifying Lender by virtue only of being a Treaty Lender with respect to the United Kingdom and the Obligor making the payment is able to demonstrate that the

 

  

47

  

payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations, if any, under any of paragraphs ‎(H) to (J) below; or

 

	
  

	
(ii)

	
by Ireland from a payment of interest on a Loan if, on the date on which the payment falls due:

 

	
  

	
(a)

	
the payment could have been made to the relevant Lender without a Tax Deduction if it was an Irish Qualifying Lender (other than a Lender that is an Irish Qualifying Lender by virtue only of being a Treaty Lender with respect to Ireland) but on that date that Lender is not or has ceased to be an Irish Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty, or any published practice or concession of any relevant Tax authority; or

 

	
  

	
(b)

	
the relevant Lender is a Treaty Lender with respect to Ireland (and not otherwise an Irish Qualifying Lender) and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations, if any, under paragraph ‎(H) below.

 

	
  

	
(F)

	
If an Obligor is required by law to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.

 

	
  

	
(G)

	
Within thirty days of making either a Tax Deduction or any payment to the relevant Tax authority required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Agent for the Finance Party entitled to the payment evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant authority.

 

	
  

	
(H)

	
(i)

	
Subject to sub-paragraph ‎(H)(ii) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing as soon as reasonably practicable any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.

 

	
  

	
(ii)

	
Nothing in this paragraph ‎(H) shall require a Treaty Lender with respect to the UK (a “UK Treaty Lender”) to:

 

	
  

	
(a)

	
register under the HMRC DT Treaty Passport Scheme;

 

	
  

	
(b)

	
apply the HMRC DT Treaty Passport Scheme to any Loan if it has so registered; or

 

 

 

48

 

 

 

	
  

	
(c)

	
file Treaty forms if it has made, or is deemed to have made, a notification in accordance with paragraphs ‎(I) or ‎(J) below and either: (1) the UK Borrower making that payment has not complied with its obligations under paragraph ‎(N) below; or (2) the application made by the UK Borrower using form DTTP2 has been unsuccessful, unless in the case of (2) only, the UK Borrower notifies the UK Treaty Lender in writing to that effect, in which case the UK Treaty Lender shall co-operate in completing as soon as reasonably practicable from the date of such written notification any procedural formalities necessary to comply with its obligation under this paragraph ‎(H).

 

	
  

	
(I)

	
Each Original Lender which is a UK Treaty Lender and which wishes the HMRC DT Treaty Passport Scheme to apply to each Loan made by it to a UK Borrower pursuant to this Agreement shall notify the Agent and the Parent Company, within ten days of the date of this Agreement, that it holds a passport under the HMRC DT Treaty Passport Scheme and that it wishes the HMRC DT Treaty Passport Scheme to apply to each such Loan (and such notification shall include the scheme reference number of that passport and the jurisdiction of Tax residence of the Lender), provided that such Lender can satisfy such notification requirements by including its scheme reference number and jurisdiction of Tax residence opposite its name in Schedule 1 (The Original Lender).

 

	
  

	
(J)

	
Each New Lender (as defined in Clause ‎27.1 (Assignments and transfers by the Lenders)) which becomes a Party in accordance with Clause ‎27 (Changes to the Lenders) and each Increase Lender which becomes a Party in accordance with Clause ‎2.2 (Increase) that, in each case, is a UK Treaty Lender and which wishes the HMRC DT Treaty Passport Scheme to apply to each Loan made by it to a UK Borrower pursuant to this Agreement or made by another person to a UK Borrower under this Agreement and assigned or otherwise transferred to it shall notify the Agent and the Parent Company within ten days of the date it becomes a Party that it holds a passport under the HMRC DT Treaty Passport Scheme and that it wishes the HMRC DT Treaty Passport to apply to each such Loan (and such notification shall include the scheme reference number of that passport and the jurisdiction of Tax residence of the Lender) provided that such Lender can satisfy such notification requirements by including its scheme reference number and jurisdiction of Tax residence opposite its name in the Transfer Certificate, Assignment Agreement or Increase Confirmation (as applicable) that it executes on becoming a Party as long as the Parent Company receives that Transfer Certificate, Assignment Agreement or Increase Confirmation within ten days of execution.

 

	
  

	
(K)

	
A Treaty Lender with respect to Ireland shall, promptly after it becomes a Lender:

 

	
  

	
(i)

	
deliver such forms as may be required by the relevant Tax authorities; and

 

 

 

49

 

 

 

	
  

	
(ii)

	
use all reasonable endeavours to ensure that all procedural formalities are completed, so that the Borrower obtains authorisation to make that payment without a Tax Deduction including, but not limited to, making and filing an appropriate application for relief under the relevant double taxation treaty.

 

	
  

	
(L)

	
Any Irish Qualifying Lender to which interest may be paid free of withholding tax due to such Lender falling within Section 246(3)(h) of the TCA shall, following a request from the Borrower, confirm its name, address and country of Tax residence to the Borrower to enable it to comply with its reporting obligations under Section 891A of the TCA.

 

	
  

	
(M)

	
Any Irish Qualifying Lender shall provide to the Borrower and update (or cause to be provided and updated) any correct, complete and accurate information reasonably requested and necessary (in the sole determination of the Borrower) for the Borrower in order to permit the Borrower to comply with its obligation under Section 891E of the TCA and all regulations made pursuant to that section.

 

	
  

	
(N)

	
Where a UK Treaty Lender makes, or is deemed to make, a notification pursuant to either of paragraph ‎(I) or paragraph ‎(J) above:

 

	
  

	
(i)

	
each UK Borrower which is a Party as a Borrower as at the date of this Agreement (in the case of a notification pursuant to paragraph (I) above) or as at the relevant Transfer Date or the date on which the increase in the relevant Commitment described in the relevant Increase Confirmation takes effect (in the case of a notification pursuant to paragraph (J) above) shall file a duly completed form DTTP2 in respect of such UK Treaty Lender with HM Revenue & Customs within 20 days of the Parent Company receiving (or being deemed to receive) the relevant notification and shall promptly provide that UK Treaty Lender with a copy of that filing; and

 

	
  

	
(ii)

	
each Additional Borrower which is a UK Borrower (and, in the case of a notification pursuant to paragraph (J) above, which becomes an Additional Borrower after the relevant Transfer Date or the date on which the increase in the relevant Commitment described in the relevant Increase Confirmation takes effect) shall file a duly completed form DTTP2 in respect of such UK Treaty Lender with HM Revenue & Customs within 30 days of its becoming a Party and shall promptly provide that UK Treaty Lender with a copy of that filing,

 

and, for the purposes of this paragraph ‎(N), a form DTTP2 which contains erroneous information shall not be regarded as not being “duly completed” to the extent that erroneous information has been provided to the UK Borrower in question by the relevant UK Treaty Lender.

 

	
  

	
(O)

	
Where a UK Treaty Lender does not make, and is not deemed to have made, any notification pursuant to either of paragraph ‎(I) or ‎(J) above, no UK Borrower

 

  

50

  

or Additional Borrower which is a UK Borrower shall file any forms relating to the HMRC DT Treaty Passport Scheme in respect of that UK Treaty Lender.

 

	
  

	
(P)

	
A UK Non-Bank Lender shall promptly notify the Parent Company and the Agent if there is any change in the position from that set out in the UK Tax Confirmation.

 

	
15.3

	
Tax indemnity

 

	
  

	
(A)

	
The Parent Company shall (within three Business Days of demand by the Agent) pay to a Protected Party an amount equal to any loss, liability or cost which that Protected Party determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document or the transactions occurring under such Finance Document.

 

	
  

	
(B)

	
Paragraph ‎(A) above shall not apply:

 

	
  

	
(i)

	
with respect to any Tax assessed on a Finance Party:

 

	
  

	
(a)

	
under the law of the jurisdiction in which that Finance Party is incorporated or, if different, the jurisdiction (or jurisdictions) in which that Finance Party is treated as resident for Tax purposes or as having a permanent establishment for Tax purposes through which it has negotiated or manages or administers its participation in the Facility; or

 

	
  

	
(b)

	
under the law of the jurisdiction in which that Finance Party's Facility Office is located in respect of amounts received or receivable in that jurisdiction,

 

if in either such case that Tax is imposed on or calculated by reference to the net income, profit or gains received or receivable (but not any sum deemed to be received or receivable) by that Finance Party, permanent establishment or Facility Office; or

 

	
  

	
(ii)

	
to the extent a loss, liability or cost:

 

	
  

	
(a)

	
is compensated for by an increased payment under Clause ‎15.2 (Tax gross-up) or a payment under Clause ‎15.5 (Stamp Taxes) or Clause ‎15.6 (VAT);

 

	
  

	
(b)

	
would have been compensated for by an increased payment under Clause ‎15.2 (Tax gross-up) but was not so compensated for solely because any or all of the exclusions in paragraph (E) of Clause ‎15.2 (Tax gross-up) applied;

 

	
  

	
(c)

	
would have been compensated for by a payment under Clause ‎15.5 (Stamp Taxes) or Clause ‎15.6 (VAT) but was not so compensated for solely because one of the exclusions in those clauses applied;

 

 

 

51

 

 

 

	
  

	
(d)

	
relates to any Tax assessed prior to the date which is 365 days prior to the date on which the Protected Party requests such payment from the Parent Company, unless a determination of the amount claimed could be made only on or after the earlier of those dates; or

 

	
  

	
(e)

	
relates to a FATCA Deduction required to be made by any person.

 

	
  

	
(C)

	
A Protected Party making, or intending to make, a claim under paragraph ‎(A) above shall promptly notify the Agent of the loss, liability or cost which will give, or has given, rise to the claim, following which the Agent shall reasonably promptly notify the Parent Company.

 

	
  

	
(D)

	
A Protected Party shall, on receiving a payment from an Obligor under this Clause ‎15.3 (Tax indemnity), notify the Agent.

 

	
15.4

	
Tax Credit

 

If an Obligor makes a Tax Payment and the relevant Finance Party determines that:

 

	
  

	
(i)

	
a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to the circumstances giving rise to that Tax Payment; and

 

	
  

	
(ii)

	
that Finance Party has obtained, utilised and retained the benefit of that Tax Credit in whole or in part,

 

the Finance Party shall pay an amount to the Obligor which that Finance Party determines (acting reasonably) will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.

 

	
15.5

	
Stamp Taxes

 

The Parent Company shall pay and, within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability that that Finance Party incurs in relation to all stamp duty, registration, excise and other similar Taxes payable in respect of any Finance Document or the transaction occurring under any of them other than in respect of an assignment or transfer by a Lender.

 

	
15.6

	
VAT

 

	
  

	
(A)

	
All consideration expressed to be payable under a Finance Document by any Party to a Finance Party shall be deemed to be exclusive of any amounts in respect of VAT. If VAT is chargeable on any supply made by any Finance Party to any Party in connection with a Finance Document and such Finance Party is required to account to the relevant Tax authority for VAT, that Party shall pay to the Finance Party (in addition to and at the same time as paying the

 

  

52

  

consideration) an amount equal to the amount of the VAT against delivery of an appropriate VAT invoice.

 

	
  

	
(B)

	
If VAT is chargeable on any supply made by any Finance Party (the "Supplier") to any other Finance Party (the "Recipient") under a Finance Document, and any other Party (the "Relevant Party") is required by the terms of any Finance Document to pay an amount equal to the consideration for such supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):

 

	
  

	
(i)

	
(where the Supplier is the person required to account to the relevant Tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment that the Recipient receives from the relevant Tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and

 

	
  

	
(ii)

	
(where the Recipient is the person required to account to the relevant Tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that the Recipient is not entitled to credit or repayment from the relevant Tax authority in respect of that VAT.

 

	
  

	
(C)

	
Where a Finance Document requires any Party to reimburse a Finance Party for any costs or expenses, that obligation shall be deemed to extend to all amounts in respect of VAT incurred by the Finance Party in respect of the costs or expenses to the extent that the Finance Party reasonably determines that the Finance Party is not entitled to credit or repayment of the amount in respect of the VAT from the relevant Tax authority.

 

	
  

	
(D)

	
Any reference in this Clause 15.6 (VAT) to any Party shall, at any time when such Party is treated as a member of a group or unity (or fiscal unity) for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated at that time as making the supply, or (as appropriate) receiving the supply, under the grouping rules (provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by the relevant member state of the European Union) or any other similar provision in any jurisdiction which is not a member state of the European Union) so that a reference to a Party shall be construed as a reference to that Party or the relevant group or unity (or fiscal unity) of which that Party is a member for VAT purposes at the relevant time or the relevant representative member (or head) of that group or unity (or fiscal unity) at the relevant time (as the case may be).

 

	
  

	
(E)

	
In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration

 

  

53

  

and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.

 

	
15.7

	
FATCA Information

 

	
  

	
(A)

	
Subject to paragraph (C) below, each Party shall, within ten Business Days of a reasonable request by another Party:

 

	
  

	
(i)

	
confirm to that other Party whether it is:

 

	
  

	
(a)

	
a FATCA Exempt Party; or

 

	
  

	
(b)

	
not a FATCA Exempt Party;

 

	
  

	
(ii)

	
supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party's compliance with FATCA; and

 

	
  

	
(iii)

	
supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party's compliance with any other law, regulation, or exchange of information regime.

 

	
  

	
(B)

	
If a Party confirms to another Party pursuant to paragraph (A)(i) above that it is a FATCA Exempt Party and it subsequently becomes aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.

 

	
  

	
(C)

	
Paragraph (A) above shall not oblige any Finance Party to do anything, and paragraph (A)(iii) above shall not oblige any other Party to do anything, which would or might in its reasonable opinion constitute a breach of:

 

	
  

	
(i)

	
any law or regulation;

 

	
  

	
(ii)

	
any fiduciary duty; or

 

	
  

	
(iii)

	
any duty of confidentiality.

 

	
  

	
(D)

	
If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (A)(i) or (A)(ii) above (including, for the avoidance of doubt, where paragraph (C) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information.

 

 

 

54

 

 

 

	
15.8

	
FATCA Deduction

 

	
  

	
(A)

	
Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.

 

	
  

	
(B)

	
Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction), notify the Party to whom it is making the payment and, in addition, notify the Parent Company, the Agent and the other Finance Parties.

 

	
15.9

	
Survival of obligations

 

Without prejudice to the survival of any other section of this Agreement, the agreements and obligations of each Obligor and each Finance Party contained in this Clause ‎15 (Tax gross-up and indemnities) shall survive the payment in full by the Obligors of all obligations under this Agreement and the termination of this Agreement.

 

	
16.

	
INCREASED COSTS

 

	
16.1

	
Increased Costs

 

	
  

	
(A)

	
Subject to Clause ‎16.3 (Exceptions) the Parent Company shall, within five Business Days of a demand by the Agent, pay for the account of a Finance Party an amount equal to the Increased Costs incurred by that Finance Party or any of its Affiliates as a result of (i) the introduction of or any change in (or in the judicial or generally accepted interpretation or the administration or application of) any law or regulation; (ii) compliance with any law or regulation made after the date of this Agreement or (iii) the application of or compliance with Basel III or CRD IV (each as defined in Clause ‎16.3 (Exceptions) below), provided that the relevant Finance Party confirms to the Agent and the Parent Company that it is seeking to recover Basel III or CRD IV costs to a similar extent from its borrowers generally where the facilities extended to such borrowers include a right for the Finance Party to recover such costs.

 

	
  

	
(B)

	
In this Agreement "Increased Costs" means:

 

	
  

	
(i)

	
a reduction in the rate of return from the Facility or on a Finance Party's (or its Affiliate's) overall capital;

 

	
  

	
(ii)

	
an additional or increased cost; or

 

	
  

	
(iii)

	
a reduction of any amount due and payable under any Finance Document,

 

which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its

 

  

55

  

Commitment or funding or performing its obligations under any Finance Document.

 

	
16.2

	
Increased Costs claims

 

	
  

	
(A)

	
A Finance Party intending to make a claim pursuant to Clause ‎16.1 (Increased Costs) shall notify the Agent of the event giving rise to the claim, following which the Agent shall promptly notify the Parent Company.

 

	
  

	
(B)

	
Each Finance Party shall, as soon as practicable after a demand by the Agent, provide a certificate confirming the amount of its Increased Costs.

 

	
16.3

	
Exceptions

 

	
  

	
(A)

	
Clause ‎16.1 (Increased Costs) does not apply to the extent any Increased Cost is:

 

	
  

	
(i)

	
attributable to a Tax Deduction required by law to be made by an Obligor or to a FATCA Deduction required to be made by any person;

 

	
  

	
(ii)

	
compensated for by Clause ‎15.3 (Tax indemnity), Clause ‎15.5 (Stamp Taxes) or Clause ‎15.6 (VAT) (or would have been compensated for under those clauses but was not so compensated for because any of the exclusions, exceptions or carve-outs to such clauses applied);

 

	
  

	
(iii)

	
attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation;

 

	
  

	
(iv)

	
incurred more than 180 days before the date on which the Finance Party makes a claim in accordance with Clause ‎16.2 (Increased Cost claims) or gives notice to the Parent Company (through the Agent) of its intention to do so (and provided that if any such notice is given, the applicable claim must then be made no later than 365 days after the date of such notice), unless a determination of the amount incurred could be made only on or after the latest date described above; or

 

	
  

	
(v)

	
attributable to the implementation or application of or compliance with the "International Convergence of Capital Measurement and Capital Standards, a Revised Framework" published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) ("Basel II") or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates).

 

	
  

	
(B)

	
In this Clause ‎16.3 (Exceptions):

 

	
  

	
(i)

	
a reference to a "Tax Deduction" has the same meaning given to the term in Clause ‎15.1 (Definitions);

 

 

 

56

 

 

 

	
  

	
(ii)

	
"Basel III" means:

 

	
  

	
(a)

	
the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented and restated;

 

	
  

	
(b)

	
the rules for global systemically important banks contained in "Global systemically important banks: assessment methodology and the additional loss absorbency requirement – Rules text" published by the Basel Committee on Banking Supervision in November 2011, as amended, supplemented or restated; and

 

	
  

	
(c)

	
any further guidance or standards published by the Basel Committee on Banking Supervision relating to “Basel III”; and

 

	
  

	
(iii)

	
"CRD IV" means:

 

	
  

	
(a)

	
Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and

 

	
  

	
(b)

	
Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms.

 

	
17.

	
OTHER INDEMNITIES

 

	
17.1

	
Currency indemnity

 

	
  

	
(A)

	
If any sum due from an Obligor under the Finance Documents (a "Sum"), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the "First Currency") in which that Sum is payable into another currency (the "Second Currency") for the purpose of:

 

	
  

	
(i)

	
making or filing a claim or proof against that Obligor; or

 

	
  

	
(ii)

	
obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,

 

that Obligor shall as an independent obligation, within five Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising out of or as a result of the conversion including any discrepancy between (i) the rate of exchange used to convert that Sum from the

 

  

57

  

First Currency into the Second Currency and (ii) the rate or rates of exchange available to that person at the time of its receipt of that Sum.

 

	
  

	
(B)

	
Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.

 

	
17.2

	
Other indemnities

 

The Parent Company shall (or shall procure that an Obligor will), within five Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party as a result of:

 

	
  

	
(A)

	
the occurrence of any Event of Default;

 

	
  

	
(B)

	
a failure by an Obligor to pay any amount due under a Finance Document on its due date, including, without limitation, any cost, loss or liability arising as a result of Clause ‎31 (Sharing among the Finance Parties);

 

	
  

	
(C)

	
funding, or making arrangements to fund, its participation in a Loan requested by a Borrower (or the Parent Company on behalf of a Borrower) in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or

 

	
  

	
(D)

	
a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Parent Company.

 

	
17.3

	
Acquisition Indemnity

 

	
  

	
(A)

	
The Parent Company shall (or shall procure that an Obligor will) within five Business Days of demand indemnify each Indemnified Person against any liability, loss, cost or expense (including reasonable legal fees) incurred by or awarded against that Indemnified Person arising out of, in connection with or based on:

 

	
  

	
(i)

	
the Acquisition (whether or not completed); or

 

	
  

	
(ii)

	
the use of proceeds of any Loan,

 

except to the extent such liability, loss, cost or expense (including reasonable legal fees) incurred or awarded against an Indemnified Person results from any breach by that Indemnified Person of a Finance Document or results directly from the fraud, gross negligence or wilful misconduct of that Indemnified Person.

 

	
  

	
(B)

	
The Parent Company shall (or shall procure that an Obligor will) within five Business Days of demand indemnify each Indemnified Person against any third party cost or expense (including reasonable legal fees) incurred by any Indemnified Person in connection with investigating, preparing, pursuing or

 

  

58

  

defending any action, claim, suit, investigation or proceeding arising out of or in connection with, or based on the matters referred to in paragraph (A)(i) or (ii) above, except to the extent such cost or expense (including legal fees) results directly from the fraud, gross negligence or wilful misconduct of that Indemnified Person.

 

	
  

	
(C)

	
For the purposes of this Clause ‎17.3 (Acquisition Indemnity), "Indemnified Person" means each Finance Party in its capacity as such, any of its Affiliates and each of its (or its Affiliates') respective directors, officers, employees and agents.

 

	
  

	
(D)

	
No Finance Party shall have any duty or obligation, whether as fiduciary for any Indemnified Person or otherwise, to recover any payment made or required to be made under paragraph (A) or (B) above.

 

	
  

	
(E)

	
The Parent Company agrees that no Indemnified Person shall have any liability to the Company or any of its Affiliates for or in connection with anything referred to in paragraph (A) or (B) above except for any such liability, damages, loss, cost or expense incurred by the Company or any of its Affiliates that results directly from any breach by that Indemnified Person of any Finance Document or from the fraud, gross negligence or wilful misconduct of that Indemnified Person.

 

	
17.4

	
Indemnity to the Agent

 

The Parent Company shall, within five Business Days of demand, indemnify the Agent against any cost, loss or liability incurred by the Agent (acting reasonably) as a result of:

 

	
  

	
(A)

	
investigating any event which it reasonably believes is a Default;

 

	
  

	
(B)

	
acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or

 

	
  

	
(C)

	
instructing lawyers, accountants, Tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement.

 

	
18.

	
MITIGATION BY THE LENDERS

 

	
18.1

	
Mitigation

 

	
  

	
(A)

	
Each Finance Party shall, in consultation with the Parent Company, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause ‎7.1 (Illegality), Clause ‎15 (Tax gross-up and indemnities) or Clause ‎16 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.

 

	
  

	
(B)

	
Paragraph ‎(A) above does not in any way limit the obligations of any Obligor under the Finance Documents.

 

 

 

59

 

 

 

	
  

	
(C)

	
Each Finance Party shall notify the Agent as soon as reasonably practicable after it becomes aware that any circumstances of the kind described in paragraph ‎(A) above have arisen or may arise. The Agent shall notify the Parent Company promptly of any such notification from a Finance Party.

 

	
18.2

	
Limitation of liability

 

	
  

	
(A)

	
The Parent Company shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause ‎18.1 (Mitigation).

 

	
  

	
(B)

	
A Finance Party is not obliged to take any steps under Clause ‎18.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might be prejudicial to it.

 

	
19.

	
COSTS AND EXPENSES

 

	
19.1

	
Transaction expenses

 

The Parent Company shall promptly on demand pay the Agent and the Arrangers reasonable professional fees and all out of pocket expenses (including legal fees subject to any cap referred to in a Fee Letter) properly incurred by any of them in connection with the negotiation, preparation, printing and execution of:

 

	
  

	
(A)

	
this Agreement and any other documents referred to in this Agreement; and

 

	
  

	
(B)

	
any other Finance Documents executed after the date of this Agreement.

 

	
19.2

	
Amendment costs

 

If:

 

	
  

	
(A)

	
an Obligor requests an amendment, waiver or consent; or

 

	
  

	
(B)

	
an amendment is required pursuant to Clause ‎32.10 (Change of currency),

 

the Parent Company shall, within five Business Days of demand, reimburse the Agent for the amount of all costs and expenses (including legal fees) reasonably incurred by the Agent in responding to, evaluating, negotiating or complying with that request or requirement.

 

	
19.3

	
Enforcement costs

 

The Parent Company shall, within five Business Days of demand, pay to each Finance Party the amount of all:

 

	
  

	
(A)

	
reasonable costs and expenses (including legal fees) incurred by that Finance Party in connection with the preservation; and

 

 

 

 

60

 

 

	
  

	
(B)

	
costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement,

 

of any rights under any Finance Document.

 

  

61

  

SECTION 7

GUARANTEE

 

	
20.

	
GUARANTEE AND INDEMNITY

 

	
20.1

	
Guarantee and indemnity

 

Each Guarantor irrevocably and unconditionally jointly and severally:

 

	
  

	
(A)

	
guarantees to each Finance Party punctual performance by each Borrower of all that Borrower's obligations under the Finance Documents;

 

	
  

	
(B)

	
undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, that Guarantor shall immediately on demand pay that amount as if it were the principal obligor; and

 

	
  

	
(C)

	
indemnifies each Finance Party immediately on demand against any cost, loss or liability suffered by that Finance Party if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal. The amount of the cost, loss or liability shall be equal to the amount which that Finance Party would otherwise have been entitled to recover.

 

	
20.2

	
Continuing guarantee

 

This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.

 

	
20.3

	
Reinstatement

 

If any payment by an Obligor or any discharge given by a Finance Party (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is avoided or reduced as a result of insolvency or any similar event:

 

	
  

	
(A)

	
the liability of each Obligor shall continue as if the payment, discharge, avoidance or reduction had not occurred; and

 

	
  

	
(B)

	
each Finance Party shall be entitled to recover the value or amount of that security or payment from each Obligor, as if the payment, discharge, avoidance or reduction had not occurred.

 

	
20.4

	
Waiver of defences

 

The obligations of each Guarantor under this Clause ‎20 (Guarantee and indemnity) will not be affected by an act, omission, matter or thing which, but for this Clause ‎20.4 (Waiver of defences), would reduce, release or prejudice any of its obligations under this Clause ‎20 (Guarantee and indemnity) (without limitation and whether or not known to it or any Finance Party) including:

 

 

 

62

 

 

 

	
  

	
(A)

	
any time, waiver or consent granted to, or composition with, any Obligor or other person;

 

	
  

	
(B)

	
the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;

 

	
  

	
(C)

	
the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;

 

	
  

	
(D)

	
any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;

 

	
  

	
(E)

	
any amendment (however fundamental) or replacement of a Finance Document or any other document or security;

 

	
  

	
(F)

	
any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or

 

	
  

	
(G)

	
any insolvency or similar proceedings.

 

	
20.5

	
Immediate recourse

 

Each Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from that Guarantor under this Clause ‎20 (Guarantee and indemnity). This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.

 

	
20.6

	
Appropriations

 

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:

 

	
  

	
(A)

	
refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and no Guarantor shall be entitled to the benefit of the same; and

 

	
  

	
(B)

	
hold in an interest-bearing suspense account any moneys received from any Guarantor or on account of any Guarantor's liability under this Clause ‎20 (Guarantee and indemnity).

 

 

 

63

 

 

 

	
20.7

	
Deferral of Guarantors' rights

 

Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Agent otherwise directs, no Guarantor will exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents (including under Clause ‎20.11 (Limitations on guarantee under US law)):

 

	
  

	
(A)

	
to be indemnified by an Obligor;

 

	
  

	
(B)

	
to claim any contribution from any other guarantor of any Obligor's obligations under the Finance Documents; and/or

 

	
  

	
(C)

	
to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party.

 

	
20.8

	
Release of Guarantor's right of contribution

 

If any Guarantor (a "Retiring Guarantor") ceases to be a Guarantor in accordance with the terms of the Finance Documents for the purpose of any sale or other disposal of that Retiring Guarantor then on the date such Retiring Guarantor ceases to be a Guarantor:

 

	
  

	
(A)

	
that Retiring Guarantor is released by each other Guarantor from any liability (whether past, present or future and whether actual or contingent) to make a contribution to any other Guarantor arising by reason of the performance by any other Guarantor of its obligations under the Finance Documents; and

 

	
  

	
(B)

	
each other Guarantor waives any rights it may have by reason of the performance of its obligations under the Finance Documents to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under any Finance Document or of any other security taken pursuant to, or in connection with, any Finance Document where such rights or security are granted by or in relation to the assets of the Retiring Guarantor.

 

	
20.9

	
Additional security

 

This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.

 

	
20.10

	
Waiver of defences under Jersey law

 

Each Obligor irrevocably and unconditionally waives such right as it may have or claim under Jersey law:

 

	
  

	
(A)

	
whether by virtue of the droit de discussion or otherwise to require that recourse be had by any Finance Party to the assets of any other Obligor or any other

 

 

  

64

  

person before any claim is enforced against that Obligor in respect of the obligations assumed by it under any of the Finance Documents;

 

	
  

	
(B)

	
whether by virtue of the droit de division or otherwise to require that any liability under any of the Finance Documents be divided or apportioned with any other Obligor or any other person or reduced in any manner whatsoever; and

 

	
  

	
(C)

	
to require that any other Obligor and/or any other person be joined in, or otherwise made a party to, any proceedings brought against it in respect of its obligations under any Finance Document,

 

and each Obligor irrevocably agrees to be bound by its obligations under the Finance Documents irrespective of whether or not the formalities required by Jersey law relating to the rights or obligations of sureties have been complied with or observed.

 

	
20.11

	
Limitations on guarantee under US law

 

	
  

	
(A)

	
Notwithstanding anything to the contrary contained herein or in any other Finance Document:

 

	
  

	
(i)

	
each Finance Party agrees that the maximum liability of each Guarantor under this Clause 20 (Guarantee and indemnity) shall in no event exceed an amount equal to the greatest amount that would not render such Guarantor’s obligations hereunder and under the other Finance Documents subject to avoidance under US Bankruptcy Law or to being set aside, avoided or annulled under any Fraudulent Transfer Law, in each case after giving effect to:

 

	
  

	
(a)

	
all other liabilities of such Guarantor, contingent or otherwise, that are relevant under such Fraudulent Transfer Law (specifically excluding, however, any liabilities of such Guarantor in respect of intercompany indebtedness to any Borrower to the extent that such Financial Indebtedness would be discharged in an amount equal to the amount paid by such Guarantor hereunder); and

 

	
  

	
(b)

	
the value as assets of such Guarantor (as determined under the applicable provisions of such Fraudulent Transfer Law) of any rights to subrogation, contribution, reimbursement, indemnity or similar rights held by such Guarantor pursuant to:

 

	
  

	
(1)

	
applicable law; or

 

	
  

	
(2)

	
any other agreement providing for an equitable allocation among such Guarantor and the borrowers and other Guarantors of obligations arising under this Agreement or other guarantees of such obligations by such parties; and

 

 

 

65

 

 

 

	
  

	
(ii)

	
each Party agrees that, in the event any payment or distribution is made on any date by a Guarantor under this Clause 20 (Guarantee and indemnity), each such Guarantor shall (subject to Clause ‎20.7 (Deferral of Guarantors’ rights) above) be entitled to be indemnified from each other Guarantor in an amount equal to such payment, in each case multiplied by a fraction of which the numerator shall be the net worth of the contributing Guarantor and the denominator shall be the aggregate net worth of all the Guarantors.

 

  

66

  

SECTION 8

REPRESENTATIONS, UNDERTAKINGS AND EVENTS OF DEFAULT

 

	
21.

	
REPRESENTATIONS

 

	
21.1

	
Time of Representations

 

	
  

	
(A)

	
Subject to paragraph (B) below, each Obligor makes the representations and warranties set out in this Clause ‎21 (Representations) to each Finance Party on the date of this Agreement.

 

	
  

	
(B)

	
The representations given at paragraphs (B) and (C) of Clause ‎21.11 (No misleading information) below are made on the close of Syndication only.

 

	
21.2

	
Status

 

	
  

	
(A)

	
It is a corporation or a company, as applicable, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

 

	
  

	
(B)

	
It and each of its Subsidiaries has the power to own its assets and carry on its business as it is being conducted.

 

	
21.3

	
Binding obligations

 

The obligations expressed to be assumed by it in each Finance Document are, subject to laws or legal procedures affecting the enforceability of creditors' rights generally and any other reservations set out in the legal opinions listed in Part I(A) of Schedule 2 (Conditions precedent to initial Utilisation) or delivered in connection with an Obligor's accession to this Agreement, legal, valid, binding and enforceable obligations.

 

	
21.4

	
Non-conflict with other obligations

 

The entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with:

 

	
  

	
(A)

	
any law or regulation applicable to it;

 

	
  

	
(B)

	
its or any of its Subsidiaries' constitutional documents; or

 

	
  

	
(C)

	
any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets which conflict would reasonably be likely to have a Material Adverse Effect.

 

	
21.5

	
Power and authority

 

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the transactions contemplated for it by those Finance Documents.

 

 

 

67

 

 

 

	
21.6

	
Validity and admissibility in evidence

 

All Authorisations required:

 

	
  

	
(A)

	
to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents to which it is a party; and

 

	
  

	
(B)

	
to make the Finance Documents to which it is a party admissible in evidence in its jurisdiction of incorporation,

 

(other than as disclosed in a legal opinion delivered to the Agent pursuant to Part I(A) of Schedule 2 (Conditions precedent to initial Utilisation) or in connection with an Obligor's accession to this Agreement) have been obtained or effected and are in full force and effect.

 

	
21.7

	
Governing law and enforcement

 

	
  

	
(A)

	
The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation.

 

	
  

	
(B)

	
Any judgment obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.

 

	
21.8

	
Deduction of Tax

 

It is not required to make any deduction for or on account of:

 

	
  

	
(A)

	
United Kingdom Tax from any payment it may make under any Finance Document to a Lender so long as the Lender is a UK Qualifying Lender falling within Clause 15.1(A)(a)(i);

 

	
  

	
(B)

	
Irish Tax from any payment it may make under any Finance Document to a Lender so long as the Lender is an Irish Qualifying Lender falling within Clause 15.1(A); or

 

	
  

	
(C)

	
Jersey Tax from any payment it may make under any Finance Document to a Lender.

 

	
21.9

	
No filing or stamp Taxes

 

Under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar Tax be paid in such jurisdiction on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents other than in respect of an assignment or transfer by a Lender.

 

	
21.10

	
No default

 

No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation.

 

 

 

68

 

 

 

	
21.11

	
No misleading information

 

Save as disclosed in writing to the Agent and the Arrangers prior to the date of this Agreement or in the case of paragraphs (B) and (C) below, prior to the close of Syndication:

 

	
  

	
(A)

	
any factual information, including any information which discloses evidence of material litigation which is pending or threatened, provided by or on behalf of any member of the Group to any of the Finance Parties prior to the date of this Agreement in connection with its entry into this Agreement was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated;

 

	
  

	
(B)

	
no information has been given or withheld that results in the information referred to in paragraph ‎(A) above being untrue or misleading in any material respect;

 

	
  

	
(C)

	
any factual information contained in the Information Memorandum provided by or on behalf of any member of the Group was (to the best of the Company's knowledge and belief, having made reasonable enquiries, in the case of factual information relating to the Target), true and accurate and complete in all material respects as at the date of the Information Memorandum or (as the case may be) as at the date the information is expressed to be given and nothing has occurred or been omitted which would result in the information being inaccurate or misleading in any material respect; and

 

	
  

	
(D)

	
as of the date of this Agreement, there has been no change in the business or the consolidated financial condition of the Group since the date of its last audited financial statements that would have a Material Adverse Effect.

 

	
21.12

	
Financial statements

 

In the case of the Parent Company only:

 

	
  

	
(A)

	
Its Original Financial Statements were prepared in accordance with US GAAP consistently applied.

 

	
  

	
(B)

	
Its Original Financial Statements fairly represent its financial condition and operations (consolidated) during the relevant financial year.

 

	
21.13

	
Pari passu ranking

 

Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.

 

	
21.14

	
Anti-corruption law

 

Its policy is to conduct its businesses in compliance with applicable anti-corruption laws and it has instituted and maintained, and will continue to maintain, policies and procedures reasonably designed to promote compliance with such laws.

 

 

 

69

 

 

 

	
21.15

	
Sanctions

 

Its policy is and will continue to be to conduct its businesses in compliance with applicable sanctions enforced by the U.S. Department of Treasury’s Office of Foreign Assets Control, the United Nations Security Council and the European Union or Her Majesty’s Treasury (collectively, “Sanctions”).

 

	
21.16

	
ERISA Matters

 

No Obligor or ERISA Affiliate has during the past five years maintained, contributed to or had an obligation to contribute to any Employee Plan or Multiemployer Plan.

 

	
21.17

	
Federal Reserve regulations

 

No part of the proceeds of any Utilisation will be used, whether directly or indirectly, and whether immediately, incidentially or ultimately, for any purpose which violates the provisions of the regulations of the Federal Reserve Board.

 

	
21.18

	
The Parent Company

 

As a matter of Irish law, the Parent Company is resident for Tax purposes in Ireland on the basis that its place of central management and control is in Ireland.

 

	
21.19

	
Repetition

 

	
  

	
(A)

	
The Repeating Representations are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on:

 

	
  

	
(i)

	
the date of each Utilisation Request and the first day of each Interest Period;

 

	
  

	
(ii)

	
in the case of an Additional Obligor, the day on which such company becomes (or it is proposed that such company becomes) an Additional Obligor; and

 

	
  

	
(iii)

	
each Newco Scheme Date.

 

	
  

	
(B)

	
The representation in Clause ‎21.14 (Anti-corruption law) is deemed to be made by each Additional Obligor (by reference to the facts and circumstances then existing) on the day on which such company becomes (or it is proposed that such company becomes) an Additional Obligor.

 

	
22.

	
INFORMATION UNDERTAKINGS

 

The undertakings in this Clause ‎22 (Information undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

 

 

70

 

 

 

	
22.1

	
Financial statements

 

The Parent Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

 

	
  

	
(A)

	
by the end of the following Business Day after the same becomes publicly available, but in any event within 120 days after the end of each of its financial years, its audited consolidated financial statements for that financial year; and

 

	
  

	
(B)

	
by the end of the following Business Day after the same becomes publicly available, but in any event within 90 days after the end of the first half of each of its financial years, its unaudited consolidated financial statements for that financial half year.

 

	
22.2

	
Compliance Certificate

 

	
  

	
(A)

	
The Parent Company shall supply to the Agent, with each set of financial statements delivered pursuant to paragraphs (A) and (B) of Clause ‎22.1 (Financial statements), a Compliance Certificate setting out (in reasonable detail) computations as to compliance with Clause ‎23 (Financial covenants) as at the date as at which those financial statements were drawn up.

 

	
  

	
(B)

	
Each Compliance Certificate shall be signed by two signatories of the Parent Company authorised pursuant to the resolutions and by reference to specified signatures, in each case as referred to in Schedule 2 (Conditions precedent) and as may be updated from time to time in a manner satisfactory to the Agent (acting reasonably).

 

	
22.3

	
Requirements as to financial statements

 

	
  

	
(A)

	
The Parent Company shall procure that each set of financial statements delivered pursuant to Clause ‎22.1 (Financial statements) is prepared using US GAAP.

 

	
  

	
(B)

	
Following the completion of any Newco Scheme, Top Newco shall supply to the Agent, together with its audited consolidated financial statements for the financial year in which the relevant Newco Scheme has completed and required to be delivered pursuant to paragraph (A) of Clause ‎22.1 (Financial statements), a reconciliation between those consolidated financial statements and the consolidated financial statements of the Company or, as applicable, the previously interposed Top Newco relevant to the financial year in which the Newco Scheme has completed.

 

	
  

	
(C)

	
The Parent Company shall procure that each set of financial statements delivered pursuant to Clause ‎22.1 (Financial statements) is prepared using US GAAP and accounting practices and financial reference periods consistent with those applied in the preparation of the Original Financial Statements unless, in relation to any set of financial statements:

 

 

 

71

 

 

 

	
  

	
(i)

	
there has been a change in US GAAP or accounting practices which is relevant to the preparation of that set of financial statements but which does not have any impact upon calculations for the purposes of establishing compliance with Clause ‎23.2 (Financial condition), and such change has been disclosed in a Form 10K or 10Q statement filed by (or on behalf of) the Parent Company with the SEC; or

 

	
  

	
(ii)

	
there has been a change in:

 

	
  

	
(a)

	
US GAAP or accounting practices which has an impact upon calculations for the purposes of establishing compliance with Clause ‎23.2 (Financial condition); or

 

	
  

	
(b)

	
financial reference periods; and

 

the Parent Company notifies the Agent that there has been such change and delivers to the Agent, if and to the extent reasonably necessary for the purposes of establishing compliance with Clause ‎23.2 (Financial condition) taking into account any disclosure which has been made in any relevant Form 10K or 10Q filed by (or on behalf of) the Parent with the SEC:

 

	
  

	
(1)

	
a description of any change necessary for those financial statements to reflect the US GAAP, accounting practices and reference periods upon which those Original Financial Statements were prepared; and

 

	
  

	
(2)

	
sufficient information, in form and substance as may reasonably be required by the Agent, to enable the Lenders to determine whether Clause ‎23 (Financial covenants) has been complied with and make an accurate comparison between the financial position indicated in those financial statements and those Original Financial Statements.

 

Any reference in this Agreement to those financial statements shall be construed as a reference to those financial statements as adjusted to reflect the basis upon which the Original Financial Statements were prepared.

 

	
  

	
(D)

	
If the Parent Company notifies the Agent of a change in accordance with paragraph ‎(C)(ii)(a) above, the Parent Company and Agent shall enter into negotiations in good faith with a view to agreeing:

 

	
  

	
(i)

	
whether or not the change might result in any material alteration in the commercial effect of any of the terms of this Agreement; and

 

	
  

	
(ii)

	
if so, any amendments to this Agreement which may be necessary to ensure that the change does not result in any material alteration in the commercial effect of those terms,

 

and if any amendments are agreed they shall take effect and be binding on each of the Parties in accordance with their terms.

 

 

 

72

 

 

 

	
22.4

	
Information: miscellaneous

 

The Parent Company shall supply to the Agent (in sufficient copies for all the Lenders, if the Agent so requests):

 

	
  

	
(A)

	
all documents dispatched by the Parent Company to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched;

 

	
  

	
(B)

	
copies of any public announcement made by the Parent Company which discloses the details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group; and

 

	
  

	
(C)

	
promptly, such further information as any Finance Party (through the Agent) may reasonably request at reasonable times and at reasonable intervals.

 

	
22.5

	
Notification of default

 

Each Obligor shall notify the Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification regarding such Default has already been provided by another Obligor).

 

	
22.6

	
"Know your customer" checks

 

	
  

	
(A)

	
If:

 

	
  

	
(i)

	
the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;

 

	
  

	
(ii)

	
any change in the status of an Obligor or the composition of the shareholders of an Obligor after the date of this Agreement; or

 

	
  

	
(iii)

	
a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender (which would be permitted under Clause ‎27 (Changes to the Lenders)) prior to such assignment or transfer,

 

obliges the Agent or any Lender (or, in the case of paragraph ‎(iii) above, any prospective new Lender) to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is within that Obligor's possession or control reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in paragraph ‎(iii) above, on behalf of any prospective new Lender) in order for the Agent, such Lender or, in the case of the event described in paragraph ‎(iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary "know your

 

  

73

  

customer" or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

	
  

	
(B)

	
Each Lender shall promptly upon the request of the Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself) in order for the Agent to carry out and be satisfied it has complied with all necessary "know your customer" or other similar checks required under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.

 

	
  

	
(C)

	
The Parent Company shall, by not less than ten Business Days' prior written notice to the Agent, notify the Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Obligor pursuant to Clause ‎28 (Changes to the Obligors).

 

	
  

	
(D)

	
Following the giving of any notice pursuant to paragraph ‎(C) above, if the accession of such Additional Obligor obliges the Agent or any Lender to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Parent Company shall promptly upon the request of the Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with the results of all necessary "know your customer" or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Obligor.

 

	
22.7

	
"Know your customer" confirmation

 

Each Lender confirms as at the date of this Agreement that, under "know your customer" requirements in existence as at the date of this Agreement, it does not require financial statements for Obligors other than the Company.

 

	
23.

	
FINANCIAL COVENANTS

 

	
23.1

	
Financial definitions

 

	
  

	
(A)

	
For the purpose of this Clause ‎23 (Financial covenants), amounts computed for the Group shall represent those assets, liabilities, income and expenses contained in the accounting records of the Parent Company and its Subsidiaries.  For the avoidance of doubt, such amounts and the financial covenants shall not include any assets, liabilities, income and expenses recorded in any variable interest entity which the Group consolidates under US GAAP pursuant to Accounting Standards Codification 810, Consolidation (formerly FIN 46(R)), Consolidation of Variable Interest Entities - An Interpretation of ARB No. 51, as amended by FSA 167, Amendments to FASB Interpretation No. 46(R)).

 

 

 

74

 

 

 

	
  

	
(B)

	
In this Clause ‎23 (Financial covenants):

 

“Acquisition Costs” means all fees, costs and expenses, stamp, registration and other Taxes incurred by the Parent Company or any other member of the Group in connection with any acquisition following the date of this Agreement.

 

"Borrowings" means, at any time, any indebtedness in respect of:

 

	
  

	
(a)

	
the principal amount of moneys borrowed and any net debit balances at banks after application of applicable account pooling arrangements;

 

	
  

	
(b)

	
the principal amount raised under acceptance credit facilities other than acceptances relating to the purchase or sale of goods in the ordinary course of trading;

 

	
  

	
(c)

	
the principal amount of any debenture, bond, note, loan stock, commercial paper or other securities;

 

	
  

	
(d)

	
the capitalised element of indebtedness under finance leases or capital leases entered into primarily as a method of raising finance or financing the acquisition of the asset leased;

 

	
  

	
(e)

	
receivables sold or discounted other than receivables sold or discounted in the ordinary course of trading or on non-recourse terms;

 

	
  

	
(f)

	
indebtedness arising from deferred payment agreements except in the ordinary course of trading (and excluding, for the avoidance of doubt, milestone and deferred consideration payments in respect of acquisitions of shares or other assets which are the subject of any acquisition);

 

	
  

	
(g)

	
any fixed or minimum premium payable on repayment of any debt instrument;

 

	
  

	
(h)

	
principal amounts raised under any other transaction having the commercial effect of a borrowing; or

 

	
  

	
(i)

	
(without double counting) any guarantee, indemnity or similar assurance for any of the items referred to in paragraphs (a) to (h) above.

 

"Cash" means, at any time:

 

	
  

	
(a)

	
cash at bank denominated in sterling, dollars, euro or other currency freely convertible into dollars and freely transferable and credited to an account in the name of a member of the Group with a reputable financial institution and to which a member of the Group is alone beneficially entitled and for so long as that cash is repayable on demand, provided that:

 

 

 

75

 

 

 

	
  

	
(i)

	
repayment of that cash is not contingent on the prior discharge of any other indebtedness of any Group member or of any other person whatsoever or on the satisfaction of any other condition;

 

	
  

	
(ii)

	
there is no Security over that cash except Security created or constituted pursuant to a Finance Document or Security securing obligations of a member of the Group granted in favour of another member of the Group; and

 

	
  

	
(iii)

	
such cash is freely and immediately available and convertible into dollars to be applied in repayment or prepayment of the Borrowings; and

 

	
  

	
(b)

	
to the extent the relevant indebtedness is included in Borrowings, cash collateral provided for such indebtedness up to a maximum amount equal to the principal amount of such indebtedness.

 

"Cash Equivalent Investments" means:

 

	
  

	
(a)

	
debt securities denominated in sterling, dollars, euro or other currency freely convertible into dollars issued by, or unconditionally guaranteed by, the United Kingdom or the United States of America which are not convertible into any other form of security and having not more than three months to final maturity;

 

	
  

	
(b)

	
debt securities denominated in sterling, dollars or euro or other currency freely convertible into dollars which are not convertible into any other form of security, and having not more than three months to final maturity, at all times rated P-1 (Moody's Investor Services Inc.) or A-1 (Standard & Poor's Corporation) and which are not issued or guaranteed by any member of the Group;

 

	
  

	
(c)

	
certificates of deposit denominated in sterling, dollars or euro or other currency freely convertible into dollars issued by, and acceptances by, banking institutions authorised under applicable legislation of the United Kingdom rated P-1 (Moody's Investor Services Inc.) or A-1 (Standard & Poor's Corporation); and

 

	 	
(d) 

	
other securities (if any) approved in writing by the Agent,

 

provided that:

 

	
  

	
(i)

	
there is no Security over the investments referred to in paragraphs (a) to (d) above except Security created or constituted pursuant to a Finance Document or Security securing obligations of a member of the Group granted in favour of another member of the Group; and

 

	
  

	
(ii)

	
cash proceeds of the investments referred to in paragraphs (a) to (d) above are freely and immediately available and convertible into dollars to be applied in repayment or prepayment of the Borrowings.

 

  

76

  

 

"EBITDA" means, in respect of any Relevant Period, consolidated operating income for such period (after giving effect to the following adjustments, if applicable):

 

	
  

	
(a)

	
before deducting any corporation tax or other Taxes on income, profits or gains;

 

	
  

	
(b)

	
before deducting interest payable and before adding interest receivable;

 

	
  

	
(c)

	
before deducting unusual or non-recurring losses or charges, provided that any accruals or reserves in the ordinary course of business shall be excluded (and, for the avoidance of doubt, up-front milestone and licensing payments which have been charged to the income statement on initial recognition under US GAAP shall constitute unusual or non-recurring losses or charges and accordingly shall not be deducted from EBITDA);

 

	
  

	
(d)

	
before adding extraordinary gains and non-cash gains;

 

	
  

	
(e)

	
after deducting the amount of net profit (or adding back the amount of net loss) of any Group company (other than the Parent Company) which is attributable to any third party (other than another Group company) which is a shareholder in that Group company;

 

	
  

	
(f)

	
after adding back the amount of any loss and after deducting the amount of any gain against book value arising on a disposal of any asset (other than stock disposed of in the ordinary course of trading);

 

	
  

	
(g)

	
after deducting any income (to the extent not received in cash) and adding back any loss from any associate or joint venture or any other companies in which a Group company has a minority interest;

 

	
  

	
(h)

	
before deducting any depreciation or amortisation;

 

	
  

	
(i)

	
before deducting any distributions;

 

	
  

	
(j)

	
before deducting any non-cash write-offs of in-process research and development, goodwill, non-cash stock compensation charges, non-cash stock revaluation charges arising on an acquisition and non-cash write-offs of any investments, intellectual property or fixed assets;

 

	
  

	
(k)

	
before adding or deducting any changes in the fair value of contingent consideration; and

 

	
  

	
(l)

	
before deducting any Acquisition Costs.

 

For the purposes of paragraph (A) of Clause ‎23.2 (Financial condition) only, EBITDA shall be adjusted, at any time, on a pro-forma basis to include businesses or assets acquired in the period and exclude businesses or assets disposed of in the period.

 

  

77

  

 

"Liquid Investments" means at any time:

 

	
  

	
(a)

	
any investment in marketable debt obligations for which a recognised trading market exists and which are not convertible or exchangeable to any other security provided that:

 

	
  

	
(i)

	
each obligation has a credit rating of either A or A-1 or higher by Standard & Poor's Corporation (or in each case the equivalent rating including the equivalent money market fund rating by Standard & Poor's Corporation) or A2 or P-1 or higher by Moody's Investor Services Inc. (or in each case the equivalent rating including the equivalent money market fund rating by Moody's Investor Services Inc.) and further provided that no more than 25 per cent. of all such investments shall be rated A and A-1 by Standard & Poor's Corporation (and in each case the equivalent rating including the equivalent money market fund rating by Standard & Poor's Corporation) and A2 and P-1 by Moody's Investor Services Inc. (and in each case the equivalent rating including the equivalent money market fund rating by Moody's Investor Services Inc.);

 

	
  

	
(ii)

	
each obligation is beneficially owned by a member of the Group;

 

	
  

	
(iii)

	
no obligation is issued by or guaranteed by a member of the Group; and

 

	
  

	
(iv)

	
there is no Security over such obligation save pursuant to the Finance Documents or Security securing obligations of a member of the Group granted in favour of another member of the Group; and

 

	
  

	
(b)

	
any investment accessible within 30 days in money market funds which have a credit rating of either A-1 or higher by Standard & Poor's Corporation (or in each case the equivalent rating including the equivalent money market fund rating by Standard & Poor's Corporation) or P-1 or higher by Moody's Investor Services Inc. (or in each case the equivalent rating including the equivalent money market fund rating by Moody's Investor Services Inc.) or Rule 2a7 Money Market Funds as defined in the US Investment Company Act 1940 provided that:

 

	
  

	
(i)

	
such investment is beneficially owned by a member of the Group; and

 

	
  

	
(ii)

	
there is no Security over such investment save pursuant to the Finance Documents or Security securing obligations of a member of the Group granted in favour of another member of the Group,

 

  

78

  

 

provided that the cash proceeds of the investments referred to in paragraphs (a) and (b) above, either through sale or redemption, are freely and immediately available and convertible into dollars to be applied in repayment or prepayment of the Borrowings.

 

"Net Debt" means, at any time, the aggregate consolidated Borrowings of the Group from sources external to the Group, less all Cash and Cash Equivalent Investments of the Group and the then mark to market value of Liquid Investments.

 

"Net Interest" means, in respect of any Relevant Period, the sum of (i) the amount of interest and similar charges payable in respect of Borrowings by the Group during such period less (ii) the amount of interest received or receivable and any similar income of the Group during such period excluding any payment or amortisation of front end or one off specific upfront arrangement fees payable under or in connection with this Agreement or any Fee Letter or under any other agreement or fee letter relating to any other Borrowings incurred for the purposes of an acquisition.  For the purposes of this definition:

 

	
  

	
(a)

	
prior to the delivery of a valuation judgment by the relevant court in connection with any "appraisal" or similar proceedings brought by former common stockholders or shareholders of any company acquired by any member of the Group after the date of this Agreement, the amount of interest and similar charges payable by the Group in respect of any potential award in such proceedings shall be deemed to be as recorded in the Group's financial statements for the Relevant Period; and

 

	
  

	
(b)

	
following the delivery of a valuation judgment by the relevant court in connection with the proceedings described in paragraph (a) above, and following any revised valuation judgment on appeal from such proceedings, the amount of interest and similar charges payable by the Group in respect of the court's valuation shall be as determined by the court, but allocated on a pro rata basis from (and including) the calendar month in which the relevant acquisition is consummated to (but excluding) the calendar month in which such interest or similar charges are actually paid.

 

"Relevant Period" means each period of twelve months ending on the last day of the Parent Company's financial year and each period of twelve months ending on the last day of the first half of the Parent Company's financial year with the first such period ending on 30 June 2015.

 

	
23.2

	
Financial condition

 

The Parent Company shall ensure that:

 

	
  

	
(A)

	
the ratio of Net Debt to EBITDA of the Group in respect of the most recently ended Relevant Period (the "Leverage Ratio") shall not at any time exceed 3.5:1, except that, following the Acquisition or any other acquisition by the

 

  

79

  

Group for a consideration which includes a cash element of at least US$ 250,000,000, the Parent Company may elect to increase the Leverage Ratio to 4.0:1 for the Relevant Period in which the acquisition was completed and the immediately following Relevant Period (except in the case of an In-licensing Acquisition (as defined below)). The election must be made by no later than the date on which the Compliance Certificate for the first Relevant Period to which that election relates is delivered pursuant to Clause ‎22.2 (Compliance Certificate) (or the date on which such Compliance Certificate was due to have been delivered if earlier). For the avoidance of doubt, an acquisition includes an in-licensing agreement under which the Group acquires certain rights to products and projects (an "In-licensing Acquisition") which would require the Group to pay licence fees, milestone payments or other similar fees or payments ("In-licensing Fees and Payments").  Notwithstanding the above, where the acquisition is an In-licensing Acquisition the Parent Company may elect to increase the Leverage Ratio to 4.0:1 where the aggregate In-licensing Fees and Payments in respect of that In-licensing Acquisition totals at least US$ 250,000,000 in any one Relevant Period. The increase in the Leverage Ratio shall apply to the Relevant Period in which such In-licensing Fees and Payments were paid and the immediately following Relevant Period and the election must be made by no later than the date on which the Compliance Certificate for the first Relevant Period to which that election relates is delivered pursuant to Clause ‎22.2 (Compliance Certificate) (or the date on which such Compliance Certificate was due to have been delivered if earlier). Only one election under this paragraph ‎(A) may be made; and

 

	
  

	
(B)

	
the ratio of EBITDA of the Group to Net Interest in respect of the most recently ended Relevant Period shall not be less than 4.0:1.

 

	
23.3

	
Financial testing

 

	
  

	
(A)

	
The financial covenants set out in Clause ‎23.2 (Financial condition) shall be tested by reference to each of the financial statements and/or each Compliance Certificate delivered pursuant to Clause ‎22.2 (Compliance Certificate).

 

	
  

	
(B)

	
If paragraph (D) of Clause ‎22.3 (Requirements as to financial statements) applies (and for so long as no amendments to the contrary have been agreed pursuant to paragraph (D) of Clause ‎22.3 (Requirements as to financial statements)), then the financial covenants set out in Clause ‎23.2 (Financial condition) shall be tested by reference to the relevant financial statements as adjusted pursuant to paragraph (C) of Clause ‎22.3 (Requirements as to financial statements) (and/or relevant Compliance Certificate delivered in accordance with Clause ‎22.2  (Compliance Certificate)) to reflect the basis upon which the Original Financial Statements were prepared and, to the extent relevant, any other information delivered to the Agent in accordance with paragraph (C) of Clause ‎22.3 (Requirements as to financial statements).

 

 

 

80

 

 

 

	
24.

	
GENERAL UNDERTAKINGS

 

The undertakings in this Clause ‎24 (General undertakings) remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.

 

	
24.1

	
Authorisations

 

Each Obligor shall promptly obtain, comply with and do all that is necessary to maintain in full force and effect any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability and admissibility in evidence in its jurisdiction of incorporation of any Finance Document subject to any applicable bankruptcy, insolvency, reorganisation, moratorium and other similar laws or legal procedures affecting the enforceability of creditors' rights generally and any other reservations set out in any of the legal opinions listed in Part I(A) of Schedule 2 (Conditions precedent to initial Utilisation) or delivered in connection with an Obligor's accession to this Agreement.

 

	
24.2

	
Compliance with laws

 

Each Obligor shall comply in all respects with all laws to which it may be subject, if failure so to comply would have a Material Adverse Effect.

 

	
24.3

	
Negative pledge

 

	
  

	
(A)

	
No Obligor shall (and the Parent Company shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.

 

	
  

	
(B)

	
No Obligor shall (and the Parent Company shall ensure that no other member of the Group will):

 

	
  

	
(i)

	
sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;

 

	
  

	
(ii)

	
sell, transfer or otherwise dispose of any of its receivables on recourse terms;

 

	
  

	
(iii)

	
enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or

 

	
  

	
(iv)

	
enter into any other preferential arrangement having a similar effect,

 

in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.

 

 

 

81

 

 

 

	
  

	
(C)

	
Paragraphs ‎(A) and ‎(B) above do not apply to:

 

	
  

	
(i)

	
any Security (or transaction ("Quasi-Security") described in paragraph ‎(B) above) created with the prior written consent of the Majority Lenders;

 

	
  

	
(ii)

	
any Security or Quasi-Security listed in Schedule 8 (Existing Security) except to the extent the principal amount secured by that Security exceeds the amount stated in that Schedule;

 

	
  

	
(iii)

	
any netting or set-off arrangement entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting or setting-off debit and credit balances;

 

	
  

	
(iv)

	
any lien arising by operation of law and in the ordinary course of trading and not as a result of any default or omission by any member of the Group;

 

	
  

	
(v)

	
any future title retention provisions to which a member of the Group is subject entered into in the ordinary course of trading;

 

	
  

	
(vi)

	
any netting or set-off arrangement entered into by any member of the Group under any treasury transaction entered into in the ordinary course of business;

 

	
  

	
(vii)

	
any Security or Quasi-Security over or affecting any asset acquired by a member of the Group after the date of this Agreement if:

 

	
  

	
(a)

	
the Security or Quasi-Security was not created in contemplation of the acquisition of that asset by a member of the Group;

 

	
  

	
(b)

	
the principal amount secured has not been increased in contemplation of or since the acquisition of that asset by a member of the Group; and

 

 

 

82

 

 

 

	
  

	
(c)

	
the Security or Quasi-Security is removed or discharged within six months of the date of acquisition of such asset;

 

	
  

	
(viii)

	
any Security or Quasi-Security over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security or Quasi-Security is created prior to the date on which that company becomes a member of the Group, if:

 

	
  

	
(a)

	
the Security or Quasi-Security was not created in contemplation of the acquisition of that company;

 

	
  

	
(b)

	
the principal amount secured has not increased in contemplation of or since the acquisition of that company; and

 

	
  

	
(c)

	
the Security or Quasi-Security is removed or discharged within six months of that company becoming a member of the Group;

 

	
  

	
(ix)

	
any Security entered into pursuant to any Finance Document;

 

	
  

	
(x)

	
any Security or Quasi-Security created in connection with a Permitted Securitisation;

 

	
  

	
(xi)

	
any Security or Quasi-Security created or subsisting over cash or Cash Equivalent Investments (determined as if proviso (i) of the definition of “Cash Equivalent Investments” did not apply) deposited in an escrow account or subject to escrow or similar agreements or arrangements in connection with any acquisition of an undertaking or company by a member of the Group after the date of this Agreement provided that such requirements for escrow arrangements are entered into (a) on an arm’s length basis and (b) such that the Security or Quasi-Security is removed or discharged within one month following the discharge in full of the liabilities supported by such accounts, agreements or arrangements;

 

	
  

	
(xii)

	
any Security or Quasi-Security arising as a consequence of any credit support or collateral provision arrangement (including without limitation initial margining) on arm’s length terms in relation to any derivative transaction which falls within paragraph (B)(vii) of Clause ‎24.8 (Financial Indebtedness);

 

	
  

	
(xiii)

	
any Security or Quasi-Security constituted by any lease or hire purchase contract which falls within the exclusion to paragraph (d) of the definition of Financial Indebtedness;

 

	
  

	
(xiv)

	
any Security on Target Shares constituting Margin Stock, if and to the extent that the value of all Margin Stock of the Parent Company and the other members of the Group exceed 25 per cent. of the value of the total assets of the Group subject to Clause ‎24.3(A) or (B); or

 

	
  

	
(xv)

	
any Security or Quasi-Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security or Quasi-Security given by any member of the Group other than any permitted under paragraphs ‎(i) to ‎(xiv) above) does not exceed at any time US$ 350,000,000 (or its equivalent in another currency or currencies).

 

	
  

	
(D)

	
Paragraph ‎(B) above does not apply to any Quasi-Security granted by a member of the Group or to any Security granted by a member of the Group in favour of another wholly owned member of the Group but only in respect of liabilities owing to the Group.

 

 

 

83

 

 

 

	
24.4

	
Disposals

 

	
  

	
(A)

	
No Obligor shall (and the Parent Company shall ensure that no other member of the Group will) enter into a single transaction or a series of transactions (whether related or not and whether voluntary or involuntary) to sell, lease, transfer, dispose by way of de-merger or otherwise dispose of any asset.

 

	
  

	
(B)

	
Paragraph ‎(A) above does not apply to any sale, lease, transfer or other disposal:

 

	
  

	
(i)

	
made in the ordinary course of business of the disposing entity;

 

	
  

	
(ii)

	
of assets in exchange for other assets which are comparable or superior as to value;

 

	
  

	
(iii)

	
in the form of out-licensing arrangements entered into by a member of the Group in the ordinary course of trading;

 

	
  

	
(iv)

	
of obsolete assets on normal commercial terms;

 

	
  

	
(v)

	
of assets by one member of the Group to another member of the Group;

 

	
  

	
(vi)

	
of cash for any purpose permitted under the Finance Documents;

 

	
  

	
(vii)

	
of assets held by any member of the Group if such member of the Group has already contracted to dispose of such assets at the time such member of the Group is acquired;

 

	
  

	
(viii)

	
made with the prior written consent of the Majority Lenders;

 

	
  

	
(ix)

	
of cash by the payment of dividends and other distributions in respect of share capital which are not contrary to law;

 

	
  

	
(x)

	
made in connection with a Permitted Securitisation; or

 

	
  

	
(xi)

	
at market value and on arm's length terms,

 

provided that no sale, lease, transfer or other disposal which would otherwise be permitted pursuant to the terms of any of paragraphs ‎(i) to ‎(v) and ‎(vii) to ‎(xi) (inclusive) above which would be deemed to be a class 1 transaction under the Listing Rules of the Financial Conduct Authority (other than any sale of Margin Stock for fair value as determined by the board of directors of the Parent Company in good faith) shall be permitted without the consent of the Majority Lenders.

 

For the purpose of this Clause ‎24.4 (Disposals), "ordinary course of business" means the ordinary course of trading of the relevant entity or made as part of the day to day operation of the relevant entity as carried on at the date hereof or as part of any activities ancillary to the ordinary course of trading.

 

 

 

84

 

 

 

	
24.5

	
Change of business

 

The Parent Company shall procure that no substantial change is made to the general nature of the business of the Group from that carried on at the date of this Agreement.

 

	
24.6

	
Insurance

 

Each Obligor shall (and the Parent Company shall ensure that each member of the Group will) maintain material insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business (and each member of the Group may maintain insurances with a captive insurer for this purpose).

 

	
24.7

	
Loans

 

	
  

	
(A)

	
No Obligor shall (and the Parent Company shall ensure that no member of the Group will) make any loans or grant any credit.

 

	
  

	
(B)

	
Paragraph ‎(A) above does not apply to:

 

	
  

	
(i)

	
loans existing at the date of this Agreement and listed in Schedule 9 (Existing Loans) except to the extent the principal amount of the loans exceeds the amount stated in that Schedule;

 

	
  

	
(ii)

	
trade credit in the ordinary course of trading;

 

	
  

	
(iii)

	
loans to directors or employees in the ordinary course of business not exceeding US$ 10,000,000 in aggregate;

 

	
  

	
(iv)

	
loans or credit made by one member of the Group to another member of the Group;

 

	
  

	
(v)

	
loans entered into pursuant to any Finance Documents;

 

	
  

	
(vi)

	
loans or credit made with the consent of the Majority Lenders; or

 

	
  

	
(vii)

	
loans or credit the principal amount of which (when aggregated with the principal amount of any other loans given by any member of the Group other than any permitted under paragraphs ‎(i) to ‎(vi) above) does not exceed US$ 350,000,000 (or its equivalent in another currency or currencies).

 

	
24.8

	
Financial Indebtedness

 

	
  

	
(A)

	
No Obligor shall (and the Parent Company shall ensure that no member of the Group will) incur or allow to remain outstanding any Financial Indebtedness.

 

	
  

	
(B)

	
Paragraph (A) above does not apply to:

 

	
  

	
(i)

	
any Financial Indebtedness incurred under the Finance Documents;

 

 

 

85

 

 

 

	
  

	
(ii)

	
any Financial Indebtedness incurred under an Existing Facilities Agreement or any replacement or refinancing thereof (but, in each case, only to the extent that the amount of such Financial Indebtedness does not in aggregate exceed the amount of Financial Indebtedness that could be incurred under an Existing Facilities Agreement on the date of this Agreement);

 

	
  

	
(iii)

	
any Existing Financial Indebtedness and any refinancing thereof (to the extent the aggregate amount outstanding is not increased as a result of or pursuant to the refinancing);

 

	
  

	
(iv)

	
any trade credit in the ordinary course of trading;

 

	
  

	
(v)

	
any Financial Indebtedness to the extent owed by one member of the Group to another member of the Group;

 

	
  

	
(vi)

	
any Financial Indebtedness incurred by a Guarantor;

 

	
  

	
(vii)

	
any Financial Indebtedness not otherwise described in this paragraph ‎(B) to the extent it is applied in voluntary prepayment and cancellation of the Facility pursuant to Clause ‎7 (Illegality, voluntary prepayment and cancellation);

 

	
  

	
(viii)

	
any derivative transaction entered into in the ordinary course of treasury operations and not for speculative purposes, and any liability of any member of the Group in relation to any collateral, margin or other form of credit support posted or otherwise provided to or for the benefit of any member of the Group under or in relation to any such derivative transaction;

 

	
  

	
(ix)

	
any Financial Indebtedness incurred with the consent of the Majority Lenders;

 

	
  

	
(x)

	
any Permitted Securitisation; and

 

	
  

	
(xi)

	
any other Financial Indebtedness, the principal amount of which (when aggregated with the principal amount of any other Financial Indebtedness incurred by any member of the Group other than any permitted under paragraphs ‎(i) to ‎(x) above) does not, at any time, exceed US$ 350,000,000 (or its equivalent in another currency or currencies).

 

	
24.9

	
Top Newco

 

The Finance Parties hereby consent to the Parent Company entering into any Newco Scheme, provided that each Top Newco interposed by such Newco Scheme accedes as a Guarantor to this Agreement in accordance with Clause ‎28.4 (Additional Guarantors) by no later than the Newco Scheme Date.

 

 

 

86

 

 

 

	
24.10

	
Conduct of the Acquisition

 

	
  

	
(A)

	
The Company shall ensure that neither the Tender Offer nor the Acquisition Agreement is amended, waived or otherwise modified to increase the price per Target Share payable in the Merger or Tender Offer or otherwise to increase the consideration payable to the holders of the Target Shares in connection with the transactions contemplated by the Acquisition Agreement, in each case, in excess of the amount agreed with the Original Arranger on or before the date of this Agreement, without the consent of the Agent (acting on the instructions of the Majority Lenders).

 

	
  

	
(B)

	
Other than as provided by paragraph (A) above, the Company shall ensure that no other amendments, modifications or waivers (including, without limitation, any amendments to, or waivers of, any of the conditions to the consummation of the Merger or the Tender Offer) are made to the Acquisition Agreement or the Tender Offer which could reasonably be expected to have a material adverse effect on the Lenders (in their capacity as such) without the prior consent of the Majority Lenders, unless such changes are required by applicable law or regulations.

 

	
  

	
(C)

	
The Company shall, and shall ensure that each member of the Group will, comply with all laws and regulations applicable in the context of the Merger including, without limitation, the Exchange Act, the Hart-Scott-Rodino Antitrust Improvements Act of 1976, as amended, and all applicable provisions of the General Corporation Law of the State of Delaware, as replaced or substituted by any other applicable laws or regulations.

 

	
  

	
(D)

	
The Company shall comply with all obligations under the terms of the Acquisition Agreement save where failure to do so could not reasonably be expected to have a material adverse effect on the Lenders (in their capacity as such).

 

	
  

	
(E)

	
The Company shall keep the Agent reasonably informed as to the status and progress of material developments in relation to the Acquisition.

 

	
  

	
(F)

	
The Company shall notify the Agent promptly when Acquisition CP Satisfaction occurs.

 

	
  

	
(G)

	
As soon as reasonably practicable following the first Utilisation Date, the Company shall provide (or cause to be provided) to the Agent evidence that all filings have been made with each applicable governmental authority that are necessary to voluntarily deregister and de-list the Target from the NASDAQ.

 

	
24.11

	
Anti-corruption law

 

No Obligor shall (and the Parent Company shall ensure that no member of the Group will) directly or indirectly use the monies advanced under the Facility or lend, contribute or otherwise make available such monies to any Subsidiary, joint venture partner or other person or entity where the purpose of such monies being made available is to

 

  

87

  

fund any activity that would at the time of such funding, to the knowledge of any Obligor, be in breach of applicable anti-corruption laws and regulations.

 

	
24.12

	
Sanctions

 

No Obligor shall (and the Parent Company shall ensure that no member of the Group will) directly or indirectly use the monies advanced under the Facility or lend, contribute or otherwise make available such monies to any Subsidiary, joint venture partner or other person or entity where the purpose of such monies being made available is to fund any activity that would at the time of such funding, to the knowledge of any Obligor after reasonable inquiry, be in breach of applicable Sanctions.

 

	
25.

	
SANCTIONS

 

	
25.1

	
Any Lender may notify the Agent in writing that it is a restricted lender (a “Restricted Lender”), and shall therefore be deemed to be a Restricted Lender for the purposes of this Agreement unless and until it notifies the Agent in writing to the contrary.

 

	
25.2

	
The representations and undertakings in Clauses ‎21.15 (Sanctions) and ‎24.12 (Sanctions) (the “Sanctions Provisions”) shall only apply for the benefit of a Restricted Lender to the extent that the making of or compliance with such provisions does not result in a violation of or conflict with the Council Regulation (EC) No 2271/96 of 22 November 1996 protecting against the effects of the extra-territorial application of legislation adopted by a third country, and actions based thereon or resulting therefrom, Section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung - AWV) in connection with the German Foreign Trade Law (Außenwirtschaftsgesetz - AWG)  and/or any other applicable anti-boycott or similar laws or regulations.

 

	
25.3

	
In connection with any amendment, waiver, determination or direction relating to any part of a Sanctions Provision, to the extent that a Restricted Lender so notifies the Agent prior to that amendment, waiver, determination or direction being made or effected, the Commitments of that Restricted Lender will be excluded for the purpose of determining whether the consent of the Majority Lenders has been obtained or whether the determination or direction by the Majority Lenders has been made.

 

	
25.4

	
For the avoidance of doubt, this Clause ‎25 (Sanctions) shall not affect the obligations of the Obligors to, or the rights of, any Lender which is not a Restricted Lender with respect to a Sanctions Provision.

 

	
26.

	
EVENTS OF DEFAULT

 

Each of the events or circumstances set out in this Clause ‎26 (Events of Default) is an Event of Default (save for Clause ‎26.13 (Clean-up Period) and Clause ‎26.14 (Acceleration)).

 

	
26.1

	
Non-payment

 

An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place at and in the currency in which it is expressed to be payable unless:

 

 

 

88

 

 

 

	
  

	
(A)

	
its failure to pay is caused by administrative or technical error; and

 

	
  

	
(B)

	
payment is made within five Business Days of its due date.

 

	
26.2

	
Financial covenants

 

Any requirement of Clause ‎23 (Financial covenants) is not satisfied.

 

	
26.3

	
Other obligations

 

	
  

	
(A)

	
An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause ‎26.1 (Non-payment) and Clause ‎26.2 (Financial covenants)).

 

	
  

	
(B)

	
No Event of Default under paragraph ‎(A) above will occur if the failure to comply is capable of remedy and is remedied within 20 Business Days of the Agent giving notice to the Parent Company or the Parent Company becoming aware of the failure to comply.

 

	
26.4

	
Misrepresentation

 

Any representation or statement made or deemed to be made by an Obligor in the Finance Documents is or proves to have been incorrect or misleading in any material respect when made or deemed to be made and which, if the circumstances giving rise to the misrepresentation or the misrepresentation are capable of remedy, are not remedied within 20 Business Days of the Agent giving notice to the Parent Company or the Parent Company becoming aware of the misrepresentation.

 

	
26.5

	
Cross default

 

	
  

	
(A)

	
Any Financial Indebtedness of any member of the Group is not paid when due nor within any originally applicable grace period.

 

	
  

	
(B)

	
Any Financial Indebtedness of any member of the Group is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).

 

	
  

	
(C)

	
Any commitment for any Financial Indebtedness of any member of the Group is cancelled or suspended by a creditor of any member of the Group as a result of an event of default (however described).

 

	
  

	
(D)

	
Any creditor of any member of the Group becomes entitled to declare any Financial Indebtedness of any member of the Group due and payable prior to its specified maturity as a result of an event of default (however described).

 

	
  

	
(E)

	
No Event of Default will occur under this Clause ‎26.5 (Cross default) if:

 

	
  

	
(i)

	
the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs ‎(A) to ‎(D) above is less than US$ 50,000,000 (or its equivalent in any other currency or currencies); or

 

 

 

 

89

 

 

	
  

	
(ii)

	
the Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (A) to (D) above is due or payable to another member of the Group.

 

	
26.6

	
Insolvency

 

	
  

	
(A)

	
A Material Company is unable or admits inability to pay its debts as they fall due or, in the case that a Material Company is a company incorporated in Ireland, is unable or admits inability to pay its debts within the meaning of Section 214 of the Companies Act, 1963 of Ireland (as amended by Section 123 of the Companies Act, 1990) and/or Section 2 of the Companies (Amendment) Act, 1990), suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors with a view to rescheduling any of its indebtedness.

 

	
  

	
(B)

	
The value of the assets of any Material Company is less than its liabilities (taking into account contingent and prospective liabilities).

 

	
  

	
(C)

	
A moratorium is declared in respect of any indebtedness of any Material Company.

 

	
26.7

	
Insolvency proceedings

 

	
  

	
(A)

	
Any corporate action, legal proceedings or other procedure or step is taken in relation to:

 

	
  

	
(i)

	
the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration, examinership or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of any Material Company other than a solvent liquidation or reorganisation of any Material Company which is not an Obligor;

 

	
  

	
(ii)

	
a composition, compromise, assignment or arrangement with any creditor of any Material Company;

 

	
  

	
(iii)

	
the appointment of a liquidator (other than in respect of a solvent liquidation of a Material Company which is not an Obligor), receiver, administrative receiver, administrator, examiner, compulsory manager, viscount or other similar officer in respect of any Material Company or any of its assets;

 

	
  

	
(iv)

	
enforcement of any Security over any assets of any Material Company;

 

	
  

	
(v)

	
declaration of "en désastre" being made in respect of any assets of any Material Company; or

 

 

 

90

 

 

 

	
  

	
(vi)

	
the "bankruptcy" of a Material Company within the meaning of the Interpretation (Jersey) Law 1954,

 

or any analogous procedure or step is taken in any jurisdiction.

 

	
  

	
(B)

	
Notwithstanding paragraphs ‎(A)(i) to ‎(A)(vi) above, an Event of Default will occur under this Clause ‎26.7 (Insolvency proceedings) only if, in the case of a petition being presented or an application made for the appointment of a liquidator or administrator or other similar officer, it is not discharged within 21 days.

 

	
26.8

	
Creditors' process

 

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of a Material Company which has an aggregate value of not less than US$ 10,000,000.

 

	
26.9

	
Ownership of the Obligors

 

An Obligor (other than the Parent Company) is not or ceases to be a Subsidiary of the Parent Company.

 

	
26.10

	
Unlawfulness

 

It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents.

 

	
26.11

	
Repudiation

 

An Obligor repudiates a Finance Document or evidences an intention to repudiate a Finance Document.

 

	
26.12

	
Material adverse change

 

	
  

	
(A)

	
A material adverse change occurs in the business, operations, assets or financial condition of the Group, considered as a whole, which is likely to have a material adverse effect on the ability of the Obligors, taken as a whole, or the Parent Company to meet their respective payment obligations under this Agreement.

 

	
  

	
(B)

	
For the purpose of a determination in respect of paragraph ‎(A) above, any litigation, arbitration, administrative or regulatory proceedings disclosed in the 10-Q and 10-K statements of the Parent Company most recently filed with the SEC prior to the date of this Agreement will be considered not to have a material adverse effect described under paragraph ‎(A) above, and, for the avoidance of doubt, a product coming off patent or orphan designation in the normal course of its life cycle (including the financial effects thereof) shall not constitute a material adverse change under this Clause ‎26.12 (Material adverse change).

 

 

 

91

 

 

 

	
26.13

	
Clean-up Period

 

Notwithstanding any other provision of this Agreement, if, during any period (each, a "Clean-up Period") of three months from (and including) the date on which a member of the Group becomes the owner of record of the shares or other assets which are the subject of the Acquisition or any other acquisition after the date of this Agreement, any event or circumstance arises or becomes apparent which would otherwise constitute a Default or an Event of Default (other than under Clause ‎26.1 (Non-payment)) (a "Clean-up Default"), that Clean-up Default will not, during the relevant Clean-up Period:

 

	
  

	
(A)

	
constitute a Default or an Event of Default (or any other actual or potential breach of any term of this Agreement);

 

	
  

	
(B)

	
operate to prevent any Utilisation or the making of any Loan; or

 

	
  

	
(C)

	
allow any Finance Party to accelerate or take any other action contemplated by Clause ‎26.14 (Acceleration) or to take any enforcement action,

 

provided that the Clean-up Default:

 

	
  

	
(i)

	
is capable of remedy within the Clean-up Period and reasonable steps are taken to remedy it;

 

	
  

	
(ii)

	
relates to the target company or target undertaking of that acquisition or the Subsidiaries of such target company or target undertaking; and

 

	
  

	
(iii)

	
is not reasonably likely to have a Material Adverse Effect.

 

	
26.14

	
Acceleration

 

On and at any time after the occurrence of an Event of Default which is continuing, the Agent may, and shall if so directed by the Majority Lenders, by notice to the Parent Company:

 

	
  

	
(A)

	
cancel the Total Commitments whereupon they shall immediately be cancelled;

 

	
  

	
(B)

	
declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, whereupon they shall become immediately due and payable; and/or

 

	
  

	
(C)

	
declare that all or part of the Loans be payable on demand, whereupon they shall immediately become payable on demand by the Agent on the instructions of the Majority Lenders.

 

  

92

  

SECTION 9

CHANGES TO PARTIES

 

	
27.

	
CHANGES TO THE LENDERS

 

	
27.1

	
Assignments and transfers by the Lenders

 

Subject to this Clause ‎27 (Changes to the Lenders), a Lender (the "Existing Lender") may:

 

	
  

	
(A)

	
assign any of its rights; or

 

	
  

	
(B)

	
transfer by novation any of its rights and obligations (provided any such transfer is pro rata to such Existing Lender's participations in outstanding Loans and Commitments),

 

only to another bank or financial institution (the "New Lender).

 

	
27.2

	
Conditions of assignment or transfer

 

	
  

	
(A)

	
A transfer of part of a Commitment or the rights and obligations under this Agreement by an Existing Lender must be in a minimum amount of US$ 10,000,000.

 

	
  

	
(B)

	
The consent of the Parent Company is required for an assignment or transfer by an Existing Lender, unless:

 

	
  

	
(i)

	
the assignment or transfer is to another Lender or an Affiliate of a Lender, provided that, in the case of the assignment or transfer of any Available Commitment, such Lender or such Affiliate of a Lender is an Acceptable Bank; or

 

	
  

	
(ii)

	
at the time of the assignment or transfer, an Event of Default has occurred and is continuing.

 

	
  

	
(C)

	
(i)

	
Subject to paragraph (B) above, the consent of the Parent Company to an assignment or transfer must not be unreasonably withheld or delayed.  For the avoidance of doubt, it shall not be unreasonable for the Parent Company to withhold its consent in the event the proposed New Lender is not an Acceptable Bank.

 

	
  

	
(ii)

	
Subject to paragraph (B) above, the Parent Company will be deemed to have given its consent ten Business Days after the Existing Lender has requested it unless consent is expressly refused by the Parent Company within that time.

 

	
  

	
(D)

	
In the event an Existing Lender enters into an assignment or transfer without the consent of the Parent Company (if required pursuant to paragraph ‎(B) above), such assignment or transfer shall be void and not be valid and effective towards the other Finance Parties and the Obligors.

 

 

 

93

 

 

 

	
  

	
(E)

	
An assignment will be effective only on:

 

	
  

	
(i)

	
receipt by the Agent of written confirmation from the New Lender (in form and substance satisfactory to the Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it was the Original Lender;

 

	
  

	
(ii)

	
performance by the Agent of all "know your customer" or other checks relating to any person that it is required to carry out in relation to such assignment to a New Lender, the completion of which the Agent shall promptly notify to the Existing Lender and the New Lender; and

 

	
  

	
(iii)

	
entry by the New Lender into a Confidentiality Undertaking with the Parent Company.

 

	
  

	
(F)

	
A transfer will be effective only if the procedure set out in Clause ‎27.5 (Procedure for transfer) is complied with and if the New Lender has, prior to the Transfer Date, entered into a Confidentiality Undertaking with the Parent Company.

 

	
  

	
(G)

	
If:

 

	
  

	
(i)

	
a Lender assigns or transfers any of its rights or obligations under the Finance Documents or changes its Facility Office; and

 

	
  

	
(ii)

	
as a result of circumstances existing at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment (or increased payment) to the New Lender or Lender acting through its new Facility Office under Clause ‎15 (Tax gross-up and indemnities) or Clause ‎16 (Increased Costs),

 

then the New Lender or Lender acting through its new Facility Office is entitled to receive payment (or increased payment) under those Clauses only to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer or change had not occurred, provided that this paragraph ‎(G) shall not apply:

 

	
  

	
(y)

	
in respect of an assignment or transfer made in the ordinary course of Syndication; or

 

	
  

	
(z)

	
in relation to a payment which is required under Clause ‎15.2 (Tax gross-up), to a UK Treaty Lender that has included a confirmation of its scheme reference number and its jurisdiction of Tax residence in accordance with paragraph ‎15.2(J) of Clause ‎15.2 (Tax gross-up) if the Obligor making the payment has not submitted a form DTTP2 to HM Revenue & Customs in respect of that UK Treaty Lender, unless the relevant payment falls due before (or less than 10 Business Days after) the Company receives a copy of the Transfer Certificate or Assignment Agreement entered into or Increase Confirmation

 

 

  

94

  

given by that UK Treaty Lender pursuant to Clause ‎27.7 (Copy of Assignment Agreement, Transfer Certificate or Increase Confirmation to Parent Company).

 

	
27.3

	
Assignment or transfer fee

 

Other than on Syndication, a New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Agent (for its own account) a fee of US$ 3,000.

 

	
27.4

	
Limitation of responsibility of Existing Lenders

 

	
  

	
(A)

	
Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:

 

	
  

	
(i)

	
the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;

 

	
  

	
(ii)

	
the financial condition of any Obligor;

 

	
  

	
(iii)

	
the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or

 

	
  

	
(iv)

	
the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other document,

 

and any representations or warranties implied by law are excluded.

 

	
  

	
(B)

	
Each New Lender confirms to the Existing Lender and the other Finance Parties that it:

 

	
  

	
(i)

	
has made (and shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and

 

	
  

	
(ii)

	
will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.

 

	
  

	
(C)

	
Nothing in any Finance Document obliges an Existing Lender to:

 

	
  

	
(i)

	
accept a re-transfer from a New Lender of any of the rights and obligations assigned or transferred under this Clause ‎27 (Changes to the Lenders); or

 

 

 

95

 

 

 

	
  

	
(ii)

	
support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.

 

	
27.5

	
Procedure for transfer

 

	
  

	
(A)

	
Subject to the conditions set out in Clause ‎27.2 (Conditions of assignment or transfer) a transfer is effected in accordance with paragraph ‎(C) below when the Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph ‎(B) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.

 

	
  

	
(B)

	
The Agent shall be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender only once it is reasonably satisfied it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.

 

	
  

	
(C)

	
Subject to Clause ‎27.9 (Pro rata interest settlement), on the Transfer Date:

 

	
  

	
(i)

	
to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the "Discharged Rights and Obligations");

 

	
  

	
(ii)

	
each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;

 

	
  

	
(iii)

	
the Agent, the Arrangers, the New Lender and other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been the Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Agent, the Arrangers and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and

 

	
  

	
(iv)

	
the New Lender shall become a Party as a "Lender".

 

 

 

96

 

 

 

	
27.6

	
Procedure for assignment

 

	
  

	
(A)

	
Subject to the conditions set out in Clause ‎27.2 (Conditions of assignment or transfer) an assignment may be effected in accordance with paragraph ‎(C) below when the Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Agent shall, subject to paragraph ‎(B) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement

 

	
  

	
(B)

	
The Agent shall be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender only once it has complied with all necessary "know your customer" or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender

 

	
  

	
(C)

	
Subject to Clause ‎27.9 (Pro rata interest settlement), on the Transfer Date:

 

	
  

	
(i)

	
the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement

 

	
  

	
(ii)

	
the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the "Relevant Obligations") and expressed to be the subject of the release in the Assignment Agreement; and

 

	
  

	
(iii)

	
the New Lender shall become a Party as a "Lender" and will be bound by obligations equivalent to the Relevant Obligations.

 

	
  

	
(D)

	
Lenders may utilise procedures other than those set out in this Clause ‎27.6 (Procedure for assignment) to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with Clause ‎27.5 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause ‎27.2 (Conditions of assignment or transfer).

 

	
27.7

	
Copy of Assignment Agreement, Transfer Certificate, Increase Confirmation to Parent Company

 

The Agent shall, as soon as reasonably practicable after it has executed an Assignment Agreement, Transfer Certificate or Increase Confirmation, send to the Parent Company (for itself and on behalf of each Obligor) a copy thereof.

 

	
27.8

	
Security over Lenders' rights

 

In addition to the other rights provided to Lenders under this Clause ‎27 (Changes to the Lenders), each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by

 

  

97

  

 way of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:

 

	
  

	
(A)

	
any charge, assignment or other Security to secure obligations to a federal reserve or central bank or any government authority, department or agency, including HM Treasury; and

 

	
  

	
(B)

	
in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,

 

except that no such charge, assignment or Security shall:

 

	
  

	
(i)

	
release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or other Security for the Lender as a party to any of the Finance Documents; or

 

	
  

	
(ii)

	
require any payments to be made by an Obligor other than or in excess of or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.

 

	
27.9

	
Pro rata interest settlement

 

If the Agent has notified the Lenders and the Parent Company that it is able to distribute interest payments on a pro rata basis to Existing Lenders and New Lenders then in respect of any transfer pursuant to Clause ‎27.5 (Procedure for transfer) or any assignment pursuant to Clause ‎27.6 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):

 

	
  

	
(A)

	
any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date ("Accrued Amounts") and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six Monthly intervals after the first day of that Interest Period); and

 

	
  

	
(B)

	
the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:

 

	
  

	
(i)

	
when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and

 

	
  

	
(ii)

	
the amount payable to the New Lender on that date will be the amount which would, but for the application of this Clause ‎27.9 (Pro rata interest settlement), have been payable to it on that date, but after deduction of the Accrued Amounts.

 

 

 

98

 

 

 

	
28.

	
CHANGES TO THE OBLIGORS

 

	
28.1

	
Assignment and transfers by Obligors

 

No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.

 

	
28.2

	
Additional Borrowers

 

	
  

	
(A)

	
Subject to compliance with the provisions of paragraphs (C) and (D) of Clause ‎22.6 ("Know your customer" checks), the Parent Company may request that any of its Subsidiaries becomes an Additional Borrower. That Subsidiary shall become an Additional Borrower if:

 

	
  

	
(i)

	
all the Lenders approve the addition of that Subsidiary (which approval is not to be unreasonably withheld);

 

	
  

	
(ii)

	
the Parent Company delivers to the Agent a duly completed and executed Accession Letter;

 

	
  

	
(iii)

	
the Parent Company confirms that no Default is continuing or will occur as a result of that Subsidiary becoming an Additional Borrower; and

 

	
  

	
(iv)

	
the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent required to be delivered by an Additional Obligor) in relation to that Additional Borrower, each in form and substance satisfactory to the Agent, acting reasonably.

 

	
  

	
(B)

	
The Agent shall notify the Parent Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent required to be delivered by an Additional Obligor).

 

	
28.3

	
Resignation of a Borrower

 

	
  

	
(A)

	
The Parent Company may request that a Borrower (other than the Parent Company) ceases to be a Borrower by delivering to the Agent a Resignation Letter.

 

	
  

	
(B)

	
The Agent shall accept a Resignation Letter and notify the Parent Company and the Lenders of its acceptance if:

 

	
  

	
(i)

	
no Default is continuing or will result from the acceptance of the Resignation Letter (and the Parent Company has confirmed this is the case); and

 

	
  

	
(ii)

	
the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents,

 

  

99

  

 

whereupon that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents.

 

	
  

	
(C)

	
Upon becoming an Additional Borrower, that Subsidiary shall make any filings (and provide copies of such filings) as required by, and in accordance with, Clause ‎15.2 (Tax gross up).

 

	
28.4

	
Additional Guarantors

 

	
  

	
(A)

	
Subject to compliance with the provisions of paragraphs (C) and (D) of Clause ‎22.6 ("Know your customer" checks), the Parent Company may request that any of its Subsidiaries or, in the case of any Newco Scheme, the proposed Top Newco, become an Additional Guarantor. That Subsidiary or, as the case may be, Top Newco, shall become an Additional Guarantor if:

 

	
  

	
(i)

	
the Parent Company delivers to the Agent a duly completed and executed Accession Letter; and

 

	
  

	
(ii)

	
the Agent has received all of the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent required to be delivered by an Additional Obligor) in relation to that Additional Guarantor, each in form and substance reasonably satisfactory to the Agent.

 

	
  

	
(B)

	
The Agent shall notify the Parent Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it, acting reasonably) all the documents and other evidence listed in Part II of Schedule 2 (Conditions precedent required to be delivered by an Additional Obligor).

 

	
28.5

	
Repetition of representations

 

Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary or, as the case may be, Top Newco, that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.

 

	
28.6

	
Resignation of a Guarantor

 

	
  

	
(A)

	
The Parent Company may request that a Guarantor (other than the Parent Company) ceases to be a Guarantor by delivering to the Agent a Resignation Letter.

 

	
  

	
(B)

	
The Agent shall accept a Resignation Letter (whereupon that company shall cease to be a Guarantor and shall have no further rights or obligations as a Guarantor under the Finance Documents) and notify the Parent Company and the Lenders of its acceptance if:

 

	
  

	
(i)

	
no Default is continuing or will result from the acceptance of the Resignation Letter (and the Parent Company has confirmed this is the case); and

 

 

 

100

 

 

 

 

	
  

	
(ii)

	
all the Lenders have consented to the Parent Company's request.

 

 

 

 

  

101

  

SECTION 10

THE FINANCE PARTIES

 

	
29.

	
ROLE OF THE AGENT, THE ARRANGERS AND THE REFERENCE BANKS

 

	
29.1

	
Appointment of the Agent

 

	
  

	
(A)

	
Each of the Arrangers and the Lenders appoints the Agent to act as its agent under and in connection with the Finance Documents.

 

	
  

	
(B)

	
Each of the Arrangers and the Lenders authorises the Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.

 

	
29.2

	
Instructions

 

	
  

	
(A)

	
The Agent shall:

 

	
  

	
(i)

	
unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Agent in accordance with any instructions given to it by:

 

	
  

	
(a)

	
all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and

 

	
  

	
(b)

	
in all other cases, the Majority Lenders; and

 

	
  

	
(ii)

	
not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above.

 

	
  

	
(B)

	
The Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion. The Agent may refrain from acting unless and until it receives any such instructions or clarification that it has requested.

 

	
  

	
(C)

	
Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Agent by the Majority Lenders shall override any conflicting instructions given by any other Finance Parties and will be binding on all Finance Parties.

 

	
  

	
(D)

	
The Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance Documents and which may include payment in

 

  

102

  

advance) for any cost, loss or liability which it may incur in complying with those instructions.

 

	
  

	
(F)

	
In the absence of instructions, the Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.

 

	
  

	
(G)

	
The Agent is not authorised to act on behalf of a Lender (without first obtaining that Lender's consent) in any legal or arbitration proceedings relating to any Finance Document.

 

	
29.3

	
Duties of the Agent

 

	
  

	
(A)

	
The Agent's duties under the Finance Documents are solely mechanical and administrative in nature.

 

	
  

	
(B)

	
Subject to paragraph (C) below, the Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Agent for that Party by any other Party.

 

	
  

	
(C)

	
Without prejudice to Clause ‎27.7 (Copy of Assignment Agreement, Transfer Certificate, Increase Confirmation to Parent Company), paragraph (B) above shall not apply to any Assignment Agreement, Transfer Certificate or Increase Confirmation.

 

	
  

	
(D)

	
Except where a Finance Document specifically provides otherwise, the Agent is not obliged to review or check the adequacy, accuracy or completeness of any document it forwards to another Party.

 

	
  

	
(E)

	
If the Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.

 

	
  

	
(F)

	
If the Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Agent or the Arrangers) under this Agreement it shall promptly notify the other Finance Parties.

 

	
  

	
(G)

	
The Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others are implied).

 

	
29.4

	
Role of the Arrangers

 

Except as specifically provided in the Finance Documents, the Arrangers have no obligations of any kind to any other Party under or in connection with any Finance Document.

 

 

 

103

 

 

 

	
29.5

	
No fiduciary duties

 

	
  

	
(A)

	
Nothing in any Finance Document constitutes the Agent or any Arranger as a trustee or fiduciary of any other person.

 

	
  

	
(B)

	
Neither the Agent nor any Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.

 

	
29.6

	
Business with the Group

 

The Agent or any Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.

 

	
29.7

	
Rights and discretions

 

	
  

	
(A)

	
The Agent may:

 

	
  

	
(i)

	
rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised; and

 

	
  

	
(ii)

	
assume that:

 

	
  

	
(a)

	
any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and

 

	
  

	
(b)

	
unless it has received notice of revocation, that those instructions have not been revoked; and

 

	
  

	
(iii)

	
rely on a certificate from any person:

 

	
  

	
(a)

	
as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or

 

	
  

	
(b)

	
to the effect that such person approves of any particular dealing, transaction, step, action or thing,

 

as sufficient evidence that that is the case and, in the case of paragraph (a) above, may assume the truth and accuracy of that certificate.

 

	
  

	
(B)

	
The Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:

 

	
  

	
(i)

	
no Default has occurred (unless it has actual knowledge of a Default arising under Clause ‎26.1 (Non-payment));

 

	
  

	
(ii)

	
any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and

 

 

 

104

 

 

 

	
  

	
(iii)

	
any notice or request made by the Parent Company (other than a Utilisation Request) is made on behalf of and with the consent and knowledge of all the Obligors.

 

	
  

	
(C)

	
The Agent may engage and pay for the advice or services of any lawyers, accountants, Tax advisers, surveyors or other professional advisers or experts.

 

	
  

	
(D)

	
Without prejudice to the generality of paragraph (C) above or paragraph (E) below, the Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Agent (and so separate from any lawyers instructed by the Lenders) if the Agent in its reasonable opinion deems this to be necessary.

 

	
  

	
(E)

	
The Agent may rely on the advice or services of any lawyers, accountants, Tax advisers, surveyors or other professional advisers or experts (whether obtained by the Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.

 

	
  

	
(F)

	
The Agent may act in relation to the Finance Documents through its officers, employees and agents.

 

	
  

	
(G)

	
Unless a Finance Document expressly provides otherwise, the Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.

 

	
  

	
(H)

	
Without prejudice to the generality of paragraph (G) above, the Agent may disclose the identity of a Defaulting Lender to the other Finance Parties and the Parent Company and shall disclose the same upon the written request of the Parent Company or the Majority Lenders.

 

	
  

	
(I)

	
Notwithstanding any other provision of any Finance Document to the contrary, neither the Agent nor an Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.

 

	
  

	
(J)

	
Notwithstanding any provision of any Finance Document to the contrary, the Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.

 

	
29.8

	
Responsibility for documentation

 

Neither the Agent nor an Arranger is responsible or liable for:

 

	
  

	
(A)

	
the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Agent, an Arranger, an Obligor or any other person in or in connection with any Finance Document or the transactions contemplated in

 

  

105

  

the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

	
  

	
(B)

	
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or

 

	
  

	
(C)

	
any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.

 

	
29.9

	
No duty to monitor

 

The Agent shall not be bound to enquire:

 

	
  

	
(A)

	
whether or not any Default has occurred;

 

	
  

	
(B)

	
as to the performance, default or any breach by any Party of its obligations under any Finance Document; or

 

	
  

	
(C)

	
whether any other event specified in any Finance Document has occurred.

 

	
29.10

	
Exclusion of liability

 

	
  

	
(A)

	
Without limiting paragraph (B) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Agent), the Agent will not be liable for:

 

	
  

	
(i)

	
any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct;

 

	
  

	
(ii)

	
exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or

 

	
  

	
(iii)

	
without prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever (including, without limitation, for negligence or any other category of liability whatsoever  but not including any claim based on the fraud of the Agent) arising as a result of:

 

	
  

	
(a)

	
any act, event or circumstance not reasonably within its control; or

 

 

 

106

 

 

 

	
  

	
(b)

	
the general risks of investment in, or the holding of assets in, any jurisdiction,

 

including (in each case and without limitation) such damages, costs,  losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.

 

	
  

	
(B)

	
No Party (other than the Agent) may take any proceedings against any officer, employee or agent of the Agent in respect of any claim it might have against the Agent or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document and any officer, employee or agent of the Agent may rely on this paragraph (B) subject to Clause ‎1.4 (Third party rights) and the provisions of the Third Parties Act.

 

	
  

	
(C)

	
The Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Agent if the Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Agent for that purpose.

 

	
  

	
(D)

	
Nothing in this Agreement shall oblige the Agent or Arranger to carry out:

 

	
  

	
(i)

	
any "know your customer" or other checks in relation to any person; or

 

	
  

	
(ii)

	
any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,

 

on behalf of any Lender and each Lender confirms to the Agent and the Arrangers that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Agent or the Arrangers.

 

	
  

	
(E)

	
Without prejudice to any provision of any Finance Document excluding or limiting the Agent's liability, any liability of the Agent arising under or in connection with any Finance Document shall be limited to the amount of actual loss which has been suffered (as determined by reference to the date of default of the Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Agent at any time which increase the amount of that loss. In no event shall the Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Agent has been advised of the possibility of such loss or damages.

 

 

 

107

 

 

 

	
29.11

	
Lenders' indemnity to the Agents

 

Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Agent, within three Business Days of demand, against any cost, loss or liability incurred by the Agent (otherwise than by reason of the Agent's gross negligence or wilful misconduct) in acting as Agent under the Finance Documents (unless the Agent has been reimbursed by an Obligor pursuant to a Finance Document).

 

	
29.12

	
Resignation of the Agent

 

	
  

	
(A)

	
The Agent may resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and the Parent Company.

 

	
  

	
(B)

	
Alternatively the Agent may resign by giving notice to the Lenders and the Parent Company, in which case the Majority Lenders (after consultation with the Parent Company) may appoint a successor Agent.

 

	
  

	
(C)

	
If the Majority Lenders have not appointed a successor Agent in accordance with paragraph (B) above within 30 days after notice of resignation was given, the retiring Agent (after consultation with the Parent Company) may appoint a successor Agent.

 

	
  

	
(D)

	
The retiring Agent shall, at its own cost, make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as Agent under the Finance Documents.

 

	
  

	
(E)

	
The Agent's resignation notice shall only take effect upon the appointment of a successor.

 

	
  

	
(F)

	
Upon the appointment of a successor, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of Clause ‎17.4 (Indemnity to the Agent) and this Clause ‎29 (Role of the Agent, the Arrangers and the Reference Banks). Its successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

	
  

	
(G)

	
The Agent shall resign in accordance with paragraph (B) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Agent pursuant to paragraph (C) above) if on or after the date which is three months before the earliest FATCA Application Date relating to any payment to the relevant Agent under the Finance Documents, either:

 

	
  

	
(i)

	
the Agent fails to respond to a request under Clause ‎15.7 (FATCA Information) and the Parent Company or a Lender reasonably believes

 

  

108

  

 that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

 

	
  

	
(ii)

	
the information supplied by the Agent pursuant to Clause ‎15.7 (FATCA Information) indicates that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or

 

	
  

	
(iii)

	
the Agent notifies the Parent Company and the Lenders that the Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;

 

and (in each case) the Parent Company or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Agent were a FATCA Exempt Party, and the Parent Company or that Lender, by notice to the Agent, requires it to resign.

 

	
29.13

	
Replacement of the Agent

 

	
  

	
(A)

	
After consultation with the Parent Company, the Majority Lenders may, by giving 30 days' notice to the Agent (or, at any time such Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Agent by appointing a successor Agent (acting through an office in the United Kingdom).

 

	
  

	
(B)

	
The retiring Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) make available to the successor Agent such documents and records and provide such assistance as the successor Agent may reasonably request for the purposes of performing its functions as an Agent under the Finance Documents.

 

	
  

	
(C)

	
The appointment of the successor Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Agent. As from this date, the retiring Agent shall be discharged from any further obligation in respect of the Finance Documents but shall remain entitled to the benefit of this Clause ‎29 (Role of the Agent, the Arrangers and the Reference Banks) (and any agency fees for the account of the retiring Agent shall cease to accrue from (and shall be payable on) that date).

 

	
  

	
(D)

	
Any successor Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.

 

	
29.14

	
Confidentiality

 

	
  

	
(A)

	
In acting as agent for the Finance Parties, the Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.

 

 

 

109

 

 

 

	
  

	
(B)

	
If information is received by another division or department of the Agent, it may be treated as confidential to that division or department and the relevant Agent shall not be deemed to have notice of it.

 

	
29.15

	
Relationship with the Lenders

 

	
  

	
(A)

	
Subject to Clause ‎27.9 (Pro rata interest settlement), and without prejudice to Clause ‎29.21 (The Register), the Agent may treat the person shown in the Agent's record (including, for the avoidance of doubt, the Register) as Lender at the opening of business (in the place of the Agent's principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:

 

	
  

	
(i)

	
entitled to or liable for any payment due under any Finance Document on that day; and

 

	
  

	
(ii)

	
entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day.

 

	
  

	
(B)

	
Without prejudice to Clause ‎29.21 (The Register), any Lender may by notice to the Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, fax number and (where communication by electronic mail or other electronic means is permitted under Clause ‎34.6 (Electronic communication)) electronic mail address and/or any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, fax number, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause ‎34.2 (Addresses) and/or Clause ‎34.6(A) (Electronic communication) and the Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.

 

	
29.16

	
Credit appraisal by the Lenders

 

Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Agent and Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:

 

	
  

	
(A)

	
the financial condition, status and nature of each member of the Group;

 

	
  

	
(B)

	
the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;

 

 

 

110

 

 

 

	
  

	
(C)

	
whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document, the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and

 

	
  

	
(D)

	
the adequacy, accuracy or completeness of any information provided by the Agent, any other Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.

 

	
29.17

	
Agents' management time

 

Any amount payable to the Agent under Clause ‎17.4 (Indemnity to the Agent), Clause ‎19 (Costs and expenses) and Clause ‎29.11 (Lenders' indemnity to the Agents) shall include the cost of utilising the Agent's extraordinary management time or other extraordinary resources not contemplated at the date of this Agreement (in connection with any Default, any request for or granting of a waiver or consent, or amendment to a Finance Document or the preservation or enforcement of any right arising under the Finance Documents) and will be calculated on the basis of such reasonable daily or hourly rates as the Agent may notify to the Parent Company and the Lenders, and is in addition to any fee paid or payable to the Agent under Clause ‎14 (Fees).

 

	
29.18

	
Deduction from amounts payable by the Agent

 

If any Party owes an amount to the Agent under the Finance Documents the Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.

 

	
29.19

	
Role of Reference Banks

 

	
  

	
(A)

	
No Reference Bank is under any obligation to provide a quotation or any other information to the Agent.

 

	
  

	
(B)

	
No Reference Bank will be liable for any action taken by it under or in connection with any Finance Document, or for any Reference Bank Quotation, unless directly caused by its gross negligence or wilful misconduct.

 

	
  

	
(C)

	
No Party (other than the relevant Reference Bank) may take any proceedings against any officer, employee or agent of any Reference Bank in respect of any claim it might have against that Reference Bank or in respect of any act or omission of any kind by that officer, employee or agent in relation to any Finance Document, or to any Reference Bank Quotation, and any officer, employee or agent of each Reference Bank may rely on this Clause ‎29.19 (Role

  

111

  

of Reference Banks) subject to Clause ‎1.4 (Third party rights) and the provisions of the Third Parties Act.

 

	
29.20

	
Third party Reference Banks

 

A Reference Bank which is not a Party may rely on Clause ‎29.19 (Role of Reference Banks), paragraph (B) of Clause ‎38.2 (Exceptions) and Clause ‎40 (Confidentiality of Funding Rates and Reference Bank Quotations) subject to Clause ‎1.4 (Third party rights) and the provisions of the Third Parties Act.

 

	
29.21

	
The Register

 

The Agent, acting for these purposes solely as an agent of the Borrowers, will maintain (and make available for inspection by the Obligors and the Lenders upon reasonable prior notice at reasonable times) a register for the recordation of, and will record, the names and addresses of the Lenders and the respective amounts of the Commitments and Loans of each Lender from time to time (the “Register”).  The entries in the Register shall be conclusive and binding, absent manifest error, for all purposes and the Obligors, the Agent, the Lenders and each other Finance Party shall treat each person whose name is recorded in the Register as a Lender hereunder for all purposes of this Agreement.

 

	
29.22

	
USA Patriot Act

 

Each Lender that is subject to the requirements of the USA Patriot Act hereby notifies each Obligor that pursuant to the requirements of the USA Patriot Act, such Lender is required to obtain, verify and record information that identifies such Obligor, which information includes the name and address of such Obligor and other information that will allow such Lender to identify such Obligor in accordance with the USA Patriot Act.

 

	
30.

	
CONDUCT OF BUSINESS BY THE FINANCE PARTIES

 

No provision of this Agreement will:

 

	
  

	
(A)

	
interfere with the right of any Finance Party to arrange its affairs (Tax or otherwise) in whatever manner it thinks fit;

 

	
  

	
(B)

	
oblige any Finance Party to investigate or claim any credit, relief, remission or repayment available to it or the extent, order and manner of any claim; or

 

	
  

	
(C)

	
oblige any Finance Party to disclose any information relating to its affairs (Tax or otherwise) or any computations in respect of Tax.

 

	
31.

	
SHARING AMONG THE FINANCE PARTIES

 

	
31.1

	
Payments to Finance Parties

 

If a Finance Party (a "Recovering Finance Party") receives or recovers any amount from an Obligor other than in accordance with Clause ‎32 (Payment mechanics) and applies that amount to a payment due under the Finance Documents then:

 

 

 

112

 

 

	
  

	
(A)

	
the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery to the Agent;

 

	
  

	
(B)

	
the Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Agent and distributed in accordance with Clause ‎32 (Payment mechanics), without taking account of any Tax which would be imposed on the Agent in relation to the receipt, recovery or distribution; and

 

	
  

	
(C)

	
the Recovering Finance Party shall, within three Business Days of demand by the Agent, pay to the Agent an amount (the "Sharing Payment") equal to such receipt or recovery less any amount which the Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause ‎32.6 (Partial payments).

 

	
31.2

	
Redistribution of payments

 

The Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) in accordance with Clause ‎32.6 (Partial payments).

 

	
31.3

	
Recovering Finance Party's rights

 

	
  

	
(A)

	
On a distribution by the Agent under Clause ‎31.2 (Redistribution of payments), the Recovering Finance Party will be subrogated to the rights of the Finance Parties which have shared in the redistribution.

 

	
  

	
(B)

	
If and to the extent that the Recovering Finance Party is not able to rely on its rights under paragraph ‎(A) above, the relevant Obligor shall be liable to the Recovering Finance Party for a debt equal to the Sharing Payment which is immediately due and payable.

 

	
31.4

	
Reversal of redistribution

 

If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:

 

	
  

	
(A)

	
each Finance Party which has received a share of the relevant Sharing Payment pursuant to Clause ‎31.2 (Redistribution of payments) shall, upon request of the Agent, pay to the Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay); and

 

	
  

	
(B)

	
that Recovering Finance Party's rights of subrogation in respect of any reimbursement shall be cancelled and the relevant Obligor will be liable to the reimbursing Finance Party for the amount so reimbursed.

 

 

 

113

 

 

 

	
31.5

	
Exceptions

 

	
  

	
(A)

	
This Clause ‎31 (Sharing among the Finance Parties) shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause, have a valid and enforceable claim against the relevant Obligor.

 

	
  

	
(B)

	
A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings if:

 

	
  

	
(i)

	
it notified that other Finance Party of the legal or arbitration proceedings; and

 

	
  

	
(ii)

	
that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.

 

  

114

  

SECTION 11

ADMINISTRATION

 

	
32.

	
PAYMENT MECHANICS

 

	
32.1

	
Payments to the Agent

 

	
  

	
(A)

	
On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.

 

	
  

	
(B)

	
Payment shall be made to such account in the principal financial centre of the country of that currency (or, in relation to euro, in a principal financial centre in a Participating Member State or London) and with such bank as the Agent specifies.

 

	
32.2

	
Distributions by the Agent

 

Each payment received by the Agent under the Finance Documents for another Party shall, subject to Clause ‎32.3 (Distributions to an Obligor), Clause ‎32.4 (Clawback) and Clause ‎29.18 (Deduction from amounts payable by the Agent) be made available by the Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Agent by not less than five Business Days' notice with a bank in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London).

 

	
32.3

	
Distributions to an Obligor

 

The Agent may (with the consent of the Obligor or in accordance with Clause ‎33 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.

 

	
32.4

	
Clawback

 

	
  

	
(A)

	
Where a sum is to be paid to the Agent under the Finance Documents for another Party, the Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.

 

	
  

	
(B)

	
If the Agent pays an amount to another Party and it proves to be the case that the Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Agent shall on demand refund the same to the Agent together with interest on

 

  

115

  

that amount from the date of payment to the date of receipt by the Agent, calculated by the Agent to reflect its cost of funds.

 

	
32.5

	
Impaired Agent

 

	
  

	
(A)

	
If, at any time, the Agent becomes an Impaired Agent, an Obligor or a Lender which is required to make a payment under the Finance Documents (the "Paying Party") to the Agent in accordance with Clause ‎32.1 (Payments to the Agent) may instead either pay that amount direct to the required recipient or pay that amount to an interest-bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Obligor or the Lender making the payment and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the "Recipient Party" or "Recipient Parties"). In each case such payments must be made on the due date for payment under the Finance Documents.

 

	
  

	
(B)

	
All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Parties pro rata to their respective entitlements.

 

	
  

	
(C)

	
A Party which has made a payment in accordance with this Clause ‎32.5 (Impaired Agent) shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.

 

	
  

	
(D)

	
If a Lender makes a payment into a trust account pursuant to paragraph ‎(A) above to which an Obligor is beneficially entitled, the Lender shall promptly notify the Parent Company.  Promptly upon request by the relevant Obligor, and to the extent that it has been provided with the necessary information by that Obligor, the Lender shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the relevant Obligor.

 

	
  

	
(E)

	
Promptly upon the appointment of a successor Agent in accordance with Clause ‎29.13 (Replacement of the Agent), and without prejudice to paragraph ‎(D)  above, each Paying Party shall give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Agent for distribution to the Recipient Parties in accordance with Clause ‎32.2 (Distributions by the Agent).

 

 

 

116

 

 

 

	
32.6

	
Partial payments

 

	
  

	
(A)

	
If the Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:

 

	
  

	
(i)

	
first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Agent and each Arranger under the Finance Documents;

 

	
  

	
(ii)

	
secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;

 

	
  

	
(iii)

	
thirdly, in or towards payment pro rata of any principal due but unpaid under this Agreement; and

 

	
  

	
(iv)

	
fourthly, in or towards payment pro rata of any other sum due but unpaid under the Finance Documents.

 

	
  

	
(B)

	
The Agent shall, if so directed by the Majority Lenders, vary the order set out in paragraphs (A)(i) to (A)(iv) above.

 

	
  

	
(C)

	
Paragraphs (A) and (B) above will override any appropriation made by an Obligor.

 

	
32.7

	
No set-off by Obligors

 

All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.

 

	
32.8

	
Business Days

 

	
  

	
(A)

	
Any payment which is due to be made on a day that is not a Business Day shall be made on the next Business Day in the same calendar month (if there is one) or the preceding Business Day (if there is not).

 

	
  

	
(B)

	
During any extension of the due date for payment of any principal or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.

 

	
32.9

	
Currency of account

 

	
  

	
(A)

	
Subject to paragraphs ‎(B) to (E) below, US Dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.

 

	
  

	
(B)

	
A repayment of a Loan or Unpaid Sum or a part of a Loan or Unpaid Sum shall be made in the currency in which that Loan or Unpaid Sum is denominated on its due date.

 

 

 

117

 

 

 

	
  

	
(C)

	
Each payment of interest shall be made in the currency in which the sum in respect of which the interest is payable was denominated when that interest accrued.

 

	
  

	
(D)

	
Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.

 

	
  

	
(E)

	
Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.

 

	
32.10

	
Change of currency

 

	
  

	
(A)

	
Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:

 

	
  

	
(i)

	
any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Agent (after consultation with the Parent Company); and

 

	
  

	
(ii)

	
any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Agent (acting reasonably).

 

	
  

	
(B)

	
If a change in any currency of a country occurs, this Agreement will, to the extent the Agent (acting reasonably and after consultation with the Parent Company) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Interbank Market and otherwise to reflect the change in currency.

 

	
33.

	
SET-OFF

 

A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, regardless of the place of payment, booking branch or currency of either obligation. If the obligations are in different currencies, the Finance Party may convert either obligation at a market rate of exchange in its usual course of business for the purpose of the set-off.

 

	
34.

	
NOTICES

 

	
34.1

	
Communications in writing

 

Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by fax or letter.

 

 

 

118

 

 

 

	
34.2

	
Addresses

 

The address and fax number (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:

 

	
  

	
(A)

	
in the case of the Parent Company, that identified with its name below;

 

	
  

	
(B)

	
in the case of each Original Lender, that identified with its name below;

 

	
  

	
(C)

	
in the case of each other Lender and any other Obligor, that notified in writing to the Agent on or prior to the date on which it becomes a Party; and

 

	
  

	
(D)

	
in the case of the Agent, that identified with its name below,

 

or any substitute address or fax number or department or officer as the Party may notify to the Agent (or the Agent may notify to the other Parties, if a change is made by the Agent) by not less than five Business Days' notice.

 

	
34.3

	
Delivery

 

	
  

	
(A)

	
Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will be effective only:

 

	
  

	
(i)

	
if by way of fax, when received in legible form; or

 

	
  

	
(ii)

	
if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,

 

and, if a particular department or officer is specified as part of its address details provided under Clause ‎34.2 (Addresses), if addressed to that department or officer.

 

	
  

	
(B)

	
Any communication or document to be made or delivered to the Agent will be effective only when actually received by the Agent and then only if it is expressly marked for the attention of the department or officer identified with the Agent's signature below (or any substitute department or officer as the Agent shall specify for this purpose).

 

	
  

	
(C)

	
All notices from or to an Obligor shall be sent through the Agent.

 

	
  

	
(D)

	
Any communication or document made or delivered to the Parent Company in accordance with this Clause ‎34 (Notices) will be deemed to have been made or delivered to each of the Obligors.

 

	
34.4

	
Notification of address and fax number

 

Promptly upon receipt of notification of an address and fax number  of any Party (other than a Finance Party) or change of address or fax number of any Party (other than a

 

  

119

  

Finance Party) in each case pursuant to Clause ‎34.2 (Addresses) or changing its own address or fax number, the Agent shall notify the other Parties.

 

	
34.5

	
Communication when the Agent is an Impaired Agent

 

If the Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Agent (if and to the extent that the same is required pursuant to the terms of this Agreement), communicate with each other directly and (while the Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Agent has been appointed unless such replacement Agent becomes an Impaired Agent.

 

	
34.6

	
Electronic communication

 

	
  

	
(A)

	
Any communication to be made between any two Parties under or in connection with the Finance Documents may be made by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:

 

	
  

	
(i)

	
notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and

 

	
  

	
(ii)

	
notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.

 

	
  

	
(B)

	
Any such electronic communication as specified in paragraph (A) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication.

 

	
  

	
(C)

	
Any such electronic communication as specified in paragraph (A) above made between any two Parties will be effective only when actually received (or made available) in readable form and in the case of any electronic communication made by a Party to the Agent only if it is addressed in such a manner as the Agent shall specify for this purpose.

 

	
  

	
(D)

	
Any electronic communication which becomes effective, in accordance with paragraph (C) above, after 5:00 p.m. in the place in which the Party to whom the relevant communication is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.

 

	
  

	
(E)

	
Any reference in a Finance Document to a communication being sent or received shall be construed to include that communication being made available in accordance with this Clause ‎34.6 (Electronic communication).

 

 

 

120

 

 

 

	
34.7

	
English language

 

	
  

	
(A)

	
Any notice given under or in connection with any Finance Document must be in English.

 

	
  

	
(B)

	
All other documents provided under or in connection with any Finance Document must be:

 

	
  

	
(i)

	
in English; or

 

	
  

	
(ii)

	
if not in English, and if so required by the Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.

 

	
35.

	
CALCULATIONS AND CERTIFICATES

 

	
35.1

	
Accounts

 

In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.

 

	
35.2

	
Certificates and determinations

 

Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest or proven error, prima facie evidence of the matters to which it relates.

 

	
35.3

	
Day count convention

 

Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Interbank Market differs, in accordance with that market practice.

 

	
36.

	
PARTIAL INVALIDITY

 

If, at any time, any provision of the Finance Documents is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.

 

	
37.

	
REMEDIES AND WAIVERS

 

No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under the Finance Documents shall operate as a waiver, nor shall any single or partial exercise of any right or remedy prevent any further or other exercise or

 

  

121

  

the exercise of any other right or remedy. The rights and remedies provided in this Agreement are cumulative and not exclusive of any rights or remedies provided by law.

 

	
38.

	
AMENDMENTS AND WAIVERS

 

	
38.1

	
Required consents

 

	
  

	
(A)

	
Subject to Clause ‎38.2 (Exceptions) and Clause ‎38.5 (Exclusion of Commitments of Defaulting Lender) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.

 

	
  

	
(B)

	
The Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause ‎38 (Amendments and waivers).

 

	
38.2

	
Exceptions

 

	
  

	
(A)

	
An amendment or waiver that has the effect of changing or which relates to:

 

	
  

	
(i)

	
the definition of "Majority Lenders" in Clause ‎1.1 (Definitions);

 

	
  

	
(ii)

	
an extension to the date of payment of any amount under the Finance Documents;

 

	
  

	
(iii)

	
a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;

 

	
  

	
(iv)

	
an increase in or an extension of any Commitment;

 

	
  

	
(v)

	
a change to the Borrowers or Guarantors other than in accordance with Clause ‎28 (Changes to the Obligors);

 

	
  

	
(vi)

	
any provision which expressly requires the consent of all the Lenders;

 

	
  

	
(vii)

	
Clause ‎2.3 (Finance Parties' rights and obligations), Clause ‎8 (Mandatory prepayment), Clause ‎27 (Changes to the Lenders), Clause ‎31 (Sharing among Finance Parties), this Clause ‎38 (Amendments and waivers), Clause ‎42 (Governing law) or Clause ‎43.1 (Jurisdiction); or

 

	
  

	
(viii)

	
the nature or scope of the guarantee and indemnity granted by the Parent Company (and any Newco, if applicable) under Clause ‎20 (Guarantee and indemnity).

 

shall not be made without the prior consent of all the Lenders. This provision is subject to Clause ‎38.4 (Disenfranchisement of Defaulting Lenders) and Clause ‎38.5 (Exclusion of Commitments of Defaulting Lender).

 

	
  

	
(B)

	
An amendment or waiver which relates to the rights or obligations of the Agent or an Arranger or a Reference Bank (each in their capacity as such) may not be

 

  

122

  

effected without the consent of the Agent, that Arranger or that Reference Bank as the case may be.

 

	
38.3

	
Replacement of Screen Rate

 

	
  

	
(A)

	
Subject to paragraph (B) of Clause ‎38.2 (Exceptions), if any Screen Rate is not available for a currency which can be selected for a Loan, any amendment or waiver which relates to providing for another benchmark rate to apply in relation to that currency in place of that Screen Rate (or which relates to aligning any provision of a Finance Document to the use of that other benchmark rate) may be made with the consent of the Majority Lenders and the Obligors.

 

	
  

	
(B)

	
If any Lender fails to respond to a request for an amendment or waiver described in paragraph (A) above within 5 Business Days (unless the Parent Company and the Agent agree to a longer time period in relation to any request) of that request being made:

 

	
  

	
(i)

	
its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of Total Commitments has been obtained to approve that request; and

 

	
  

	
(ii)

	
its status as a Lender shall be disregarded for the purpose of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve that request.

 

	
38.4

	
Disenfranchisement of Defaulting Lenders

 

	
  

	
(A)

	
Subject to paragraph ‎(C) below, for so long as a Defaulting Lender has any Available Commitment, in ascertaining the Majority Lenders or whether any given percentage (including, without limitation, unanimity) of the Total Commitments or whether the approval of all Lenders has been obtained in relation to any request for a consent, waiver, amendment or other vote under the Finance Documents:

 

	
  

	
(i)

	
that Defaulting Lender's Commitments will be reduced by the amount of its Available Commitments; and

 

	
  

	
(ii)

	
that Defaulting Lender will not be treated as a Lender for the purposes of paragraph ‎(A) of Clause ‎38.2 (Exceptions) if it has no participation in an outstanding Loan.

 

	
  

	
(B)

	
Subject to paragraph ‎(C) below, for the purposes of this Clause ‎38.4 (Disenfranchisement of Defaulting Lenders), the Agent may assume that the following Lenders are Defaulting Lenders:

 

	
  

	
(i)

	
any Lender which has notified the Agent that it has become a Defaulting Lender;

 

 

 

123

 

 

 

	
  

	
(ii)

	
any Lender in relation to which it is aware that any of the events or circumstances referred to in paragraphs (a), (b) or (c) of the definition of "Defaulting Lender" has occurred,

 

unless it has received notice to the contrary from the Lender concerned (together with any supporting evidence reasonably requested by the Agent) or the Agent is otherwise aware that the Lender has ceased to be a Defaulting Lender.

 

	
  

	
(C)

	
For the avoidance of doubt nothing in this Clause ‎38.4 (Disenfranchisement of Defaulting Lenders) or otherwise shall relieve, reduce or affect any obligation of a Defaulting Lender under Clause ‎7.4 (Right of repayment and cancellation in relation to a single Lender or Defaulting Lender) or Clause ‎31 (Sharing among the Finance Parties) or any other obligation owed by such Defaulting Lender to a Finance Party and the Commitments, and participations in any Loan, of a Defaulting Lender shall not be reduced or excluded for the purposes of any calculation to that extent.

	 

 

	
38.5

	
Exclusion of Commitments of Defaulting Lender

 

Subject to paragraph (C) of Clause ‎38.4 (Disenfranchisement of Defaulting Lenders), if any Defaulting Lender fails to respond to a request for a consent, waiver, amendment of or in relation to any of the terms of any Finance Document or other vote of Lenders under this Agreement within five Business Days (or any longer period for response expressly stipulated by the Parent Company in or in relation to the relevant consent, waiver or amendment request ) of that request being made:

 

	
  

	
(A)

	
its Commitment shall not be included for the purpose of calculating the Total Commitments when ascertaining whether any relevant percentage of the Total Commitments has been obtained to approve that request; and

 

	
  

	
(B)

	
it will not count as a Lender for the purposes of Clause ‎38.2 (Exceptions).

 

	
38.6

	
Replacement of Defaulting Lender

 

	
  

	
(A)

	
The Parent Company may, at any time a Lender has become and continues to be a Defaulting Lender, by giving not less than five Business Days' prior written notice to the Agent and such Lender:

 

	
  

	
(i)

	
replace such Lender by requiring such Lender to (and to the extent permitted by law such Lender shall) transfer (and, as applicable, procure the transfer of) pursuant to and in accordance with Clause ‎27 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement;

 

	
  

	
(ii)

	
require such Lender to (and to the extent permitted by law such Lender shall) transfer (and, as applicable, procure the transfer of) pursuant to Clause ‎27 (Changes to the Lenders) all (and not part only) of the undrawn Commitment of the Lender; or

 

 

 

124

 

 

 

	
  

	
(iii)

	
require such Lender to (and to the extent permitted by law such Lender shall) transfer (and, as applicable, procure the transfer of) pursuant to Clause ‎27 (Changes to the Lenders) all (and not part only) of its rights and obligations in respect of the Facility,

 

to a Lender or other bank, financial institution, trust, fund or other entity (a "Replacement Lender") selected by the Parent Company, and which confirms its willingness to assume and does assume all the obligations or all the relevant obligations of the transferring Lender in accordance with Clause ‎27 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer equal to the outstanding principal amount of such Lender's participation in the outstanding Utilisations and all accrued interest (to the extent that the Agent has not given a notification under Clause ‎27.9 (Pro-rata interest settlement) Break Costs and other amounts payable thereto under the Finance Documents, or such other purchase price as may be agreed by the Defaulting Lender with the Replacement Lender and the Parent Company.

 

	
  

	
(B)

	
Each Lender hereby instructs the Agent to execute on its behalf any Transfer Certificate which is required to give effect to the terms of this Clause if that Lender is a Defaulting Lender due to the occurrence of an Insolvency Event.

 

	
  

	
(C)

	
Any transfer of rights and obligations of a Defaulting Lender pursuant to this Clause shall be subject to the following conditions:

 

	
  

	
(i)

	
the Parent Company shall have no right to replace the Agent;

 

	
  

	
(ii)

	
neither the Agent nor the Defaulting Lender shall have any obligation to the Parent Company to find a Replacement Lender; and

 

	
  

	
(iii)

	
in no event shall the Defaulting Lender be required to pay or surrender to such Replacement Lender any of the fees received by the Defaulting Lender pursuant to the Finance Documents.

 

	
38.7

	
Replacement of Non-Consenting Lender

 

	
  

	
(A)

	
If at any time any Lender becomes a Non-Consenting Lender (as defined in paragraph ‎(C) below), then the Parent Company may, on five Business Days prior written notice to the Agent and such Lender:

 

	
  

	
(i)

	
cancel the Commitment of the Non-Consenting Lender at the next interest payment date; or

 

	
  

	
(ii)

	
require such Lender to (and such Lender shall) transfer pursuant to Clause ‎27 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to another Lender (a "Replacement Lender") which confirms its willingness to assume and does assume all the obligations of the transferring Lender (including the assumption of the transferring Lender's participations on the same basis as the transferring Lender) in accordance with Clause ‎27 (Changes to the Lenders) for a purchase price in cash payable at the time of transfer

 

  

125

  

equal to the outstanding principal amount of such Lender's participation in the outstanding Utilisations and all accrued interest, Break Costs and other amounts payable in relation thereto under the Finance Documents.

 

	
  

	
(B)

	
The replacement of a Lender pursuant to this Clause ‎38.7 (Replacement of Non-Consenting Lender) shall be subject to the following conditions:

 

	
  

	
(i)

	
the Parent Company shall have no right to replace the Agent;

 

	
  

	
(ii)

	
neither the Agent nor the Lender shall have any obligation to the Parent Company to find a Replacement Lender;

 

	
  

	
(iii)

	
in the event of a replacement of a Non-Consenting Lender such replacement must take place no later than ten Business Days after the date the Non-Consenting Lender notifies the Parent Company and the Agent of its failure or refusal to agree to any consent, waiver or amendment to the Finance Documents requested by the Parent Company; and

 

	
  

	
(iv)

	
in no event shall the Lender replaced under this Clause ‎38.7 (Replacement of Non-Consenting Lender) be required to pay or surrender to such Replacement Lender any of the fees received by such Lender pursuant to the Finance Documents.

 

	
  

	
(C)

	
In the event that:

 

	
  

	
(i)

	
the Parent Company or the Agent (at the request of the Parent Company) has requested the Lenders to consent to a waiver or amendment of any provisions of the Finance Documents;

 

	
  

	
(ii)

	
the waiver or amendment in question requires the consent of all the Lenders; and

 

	
  

	
(iii)

	
Lenders whose Commitments aggregate 85 per cent. or more of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated 85 per cent. or more of the Total Commitments prior to that reduction) have consented to such waiver or amendment,

 

then any Lender who has declined or failed to consent or provide approval by the later of (a) the date nominated by the Agent in the request to the Lenders as a deadline for response, and (b) three Business Days after such 85 per cent. Lender approval or consent has been received, shall be deemed a "Non-Consenting Lender".

 

	
38.8

	
No split voting

 

In relation to any consent or exercise of discretion in connection with any waiver, amendment or otherwise by any Lender under or in connection with a Finance Document, such Lender shall only be entitled to a single vote representing, as the case

 

  

126

  

may be, its Commitment and/or participations in the Loans and shall not be entitled to split such vote.

 

	
39.

	
CONFIDENTIAL INFORMATION

 

	
39.1

	
Confidentiality

 

Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause ‎39.2 (Disclosure of Confidential Information) and Clause ‎39.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.

 

	
39.2

	
Disclosure of Confidential Information

 

Any Finance Party may disclose:

 

	
  

	
(A)

	
to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall reasonably consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph ‎(A) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;

 

	
  

	
(B)

	
to any person:

 

	
  

	
(i)

	
to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents and to any of that person's Affiliates, Representatives and professional advisers;

 

	
  

	
(ii)

	
with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person's Affiliates, Representatives and professional advisers;

 

	
  

	
(iii)

	
appointed by any Finance Party or by a person to whom paragraph (i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (B) of Clause ‎29.15 (Relationship with the Lenders));

 

 

 

127

 

 

 

	
  

	
(iv)

	
who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in paragraph (i) or (ii) above;

 

	
  

	
(v)

	
to whom and to the extent that information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, Tax or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;

 

	
  

	
(vi)

	
to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause ‎27.8 (Security over Lenders' rights);

 

	
  

	
(vii)

	
to whom and to the extent that information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes concerning the Finance Documents;

 

	
  

	
(viii)

	
who is a Party; or

 

	
  

	
(ix)

	
with the prior written consent of the Parent Company;

 

in each case, such Confidential Information as that Finance Party shall reasonably consider appropriate if:

 

	
  

	
(a)

	
in relation to paragraphs (i), (ii) and (iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;

 

	
  

	
(b)

	
in relation to paragraph (iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;

 

	
  

	
(c)

	
in relation to paragraphs (v), (vi) and (vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that in the case of paragraph (v) only there shall be no requirement to so inform if, in the reasonable opinion of that Finance Party, it is not practicable so to do in the circumstances; and

 

	
  

	
(C)

	
to any person appointed by that Finance Party or by a person to whom paragraph ‎(B)(i) or paragraph ‎(B)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents

 

  

128

  

including, without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph ‎(C) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Parent Company and the relevant Finance Party; and

 

	
  

	
(D)

	
to any rating agency (including its professional advisers), such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents.

 

	
39.3

	
Disclosure to numbering service providers

 

	
  

	
(A)

	
Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:

 

	
  

	
(i)

	
names of Obligors;

 

	
  

	
(ii)

	
country of domicile of Obligors;

 

	
  

	
(iii)

	
place of incorporation of Obligors;

 

	
  

	
(iv)

	
date of this Agreement;

 

	
  

	
(v)

	
the names of the Agent and the Arrangers;

 

	
  

	
(vi)

	
date of each amendment and restatement of this Agreement;

 

	
  

	
(vii)

	
amount of Total Commitments;

 

	
  

	
(viii)

	
currency of the Facility;

 

	
  

	
(ix)

	
type of Facility;

 

	
  

	
(x)

	
ranking of Facility;

 

	
  

	
(xi)

	
Maturity Date;

 

	
  

	
(xii)

	
changes to any of the information previously supplied pursuant to paragraphs (i) to (xi) above; and

 

	
  

	
(xiii)

	
such other information agreed between such Finance Party and the Parent Company to be disclosable expressly for the purposes of this Clause ‎39.3 (Disclosure to numbering service providers),

  

129

  

 

to enable such numbering service provider to provide its usual syndicated loan numbering identification services.

 

	
  

	
(B)

	
The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of the numbering service provider.

 

	
  

	
(C)

	
The Agent shall notify the Parent Company and the other Finance Parties of:

 

	
  

	
(i)

	
the name of any numbering service provider appointed by the Agent in respect of this Agreement, the Facility and/or one or more Obligors; and

 

	
  

	
(ii)

	
the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.

 

	
  

	
(D)

	
Each Obligor represents that none of the information set out in paragraphs (A)(i) to (A)(xiii) above is, nor will at any time be, unpublished price sensitive information.

 

	
39.4

	
Entire agreement

 

This Clause ‎39 (Confidential Information) constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.

 

	
39.5

	
Inside information

 

Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.

 

	
39.6

	
Notification of disclosure

 

Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Parent Company:

 

	
  

	
(A)

	
in advance of the circumstances of any disclosure of Confidential Information made pursuant to paragraph (B)(v) (except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function) and paragraph (B)(vii), in each case of Clause ‎39.2 (Disclosure of Confidential Information); and

 

	
  

	
(B)

	
promptly upon becoming aware that Confidential Information has been disclosed in breach of this Clause ‎39 (Confidential Information).

 

 

 

130

 

 

 

	
39.7

	
Continuing obligations

 

The obligations in this Clause ‎39 (Confidential Information) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 24 months from the earlier of:

 

	
  

	
(A)

	
the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and

 

	
  

	
(B)

	
the date on which such Finance Party otherwise ceases to be a Finance Party.

 

	
40.

	
CONFIDENTIALITY OF FUNDING RATES AND REFERENCE BANK QUOTATIONS

 

	
40.1

	
Confidentiality and disclosure

 

	
  

	
(A)

	
The Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (B), (C) and (D) below.

 

	
  

	
(B)

	
The Agent may disclose:

 

	
  

	
(i)

	
any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the relevant Borrower pursuant to Clause ‎11.4 (Notification of rates of interest); and

 

	
  

	
(ii)

	
any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/Settlement Service Providers or such other form of confidentiality undertaking agreed between the Agent and the relevant Lender or Reference Bank, as the case may be.

 

	
  

	
(C)

	
The Agent may disclose any Funding Rate or any Reference Bank Quotation, and each Obligor may disclose any Funding Rate, to:

 

	
  

	
(i)

	
any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this paragraph (i) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;

 

 

 

131

 

 

 

	
  

	
(ii)

	
any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;

 

	
  

	
(iii)

	
any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and

 

	
  

	
(iv)

	
any person with the consent of the relevant Lender or Reference Bank, as the case may be.

 

	
  

	
(D)

	
The Agent's obligations in this Clause ‎40 (Confidentiality of Funding Rates and Reference Bank Quotations) relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause ‎11.4 (Notification of rates of interest) provided that (other than pursuant to paragraph (B)(i) above) the Agent shall not include the details of any individual Reference Bank Quotation as part of any such notification.

 

	
40.2

	
Related obligations

 

	
  

	
(A)

	
The Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Agent, any Reference Bank Quotation for any unlawful purpose.

 

	
  

	
(B)

	
The applicable Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:

 

	
  

	
(i)

	
of the circumstances of any disclosure made pursuant to paragraph (C)(ii) of Clause ‎40.1 (Confidentiality and disclosure) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and

 

 

 

132

 

 

 

	
  

	
(ii)

	
upon becoming aware that any information has been disclosed in breach of this Clause ‎40 (Confidentiality of Funding Rates and Reference Bank Quotations).

 

	
40.3

	
No Event of Default

 

No Event of Default will occur under Clause ‎26.3 (Other obligations) by reason only of an Obligor’s failure to comply with this Clause ‎40 (Confidentiality of Funding Rates and Reference Bank Quotations).

 

	
41.

	
COUNTERPARTS

 

Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.

 

  

133

  

SECTION 12

GOVERNING LAW AND ENFORCEMENT

 

	
42.

	
GOVERNING LAW

 

This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

	
43.

	
ENFORCEMENT

 

	
43.1

	
Jurisdiction

 

	
  

	
(A)

	
The courts of England have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute regarding the existence, validity or termination of or any non-contractual obligation arising out of or in connection with this Agreement) (a "Dispute").

 

	
  

	
(B)

	
The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.

 

	
43.2

	
Service of process

 

Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):

 

	
  

	
(A)

	
irrevocably appoints SGF as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and

 

	
  

	
(B)

	
agrees that failure by an agent for service of process to notify the relevant Obligor of the process will not invalidate the proceedings concerned,

 

and, by signing this agreement, SGF hereby accepts such appointment on the terms of this Clause ‎43.2 (Service of process).

 

	
43.3

	
Waiver of jury trial

 

EACH OF THE PARTIES TO THIS AGREEMENT IRREVOCABLY WAIVES TRIAL BY JURY IN ANY ACTION OR PROCEEDING WITH RESPECT TO THIS AGREEMENT OR ANY OF THE FINANCE DOCUMENTS.

 

This Agreement has been entered into on the date stated at the beginning of this Agreement.

 

 

  

134

  

SCHEDULE 1

THE ORIGINAL LENDER

 

	
Name of

Original Lender

	
Commitment

(US$)

	
Facility Office

	
Treaty Passport scheme reference number and jurisdiction of Tax residence (if applicable)

	
UK Non-Bank Lender?

	
Citibank, N.A. London Branch

	
850,000,000

	
London

	
Not applicable

	
No

	
Total Commitments

	
850,000,000

	  	  	  

 

 

  

  

  

SCHEDULE 2

CONDITIONS PRECEDENT

 

PART I(A)

CONDITIONS PRECEDENT TO INITIAL UTILISATION

 

	
1. 

	
The Parent Company

 

	
(a)

	
A copy of the constitutional documents of the Parent Company.

 

	
(b)

	
A copy of a resolution of the board of directors (or a duly appointed committee of the board of directors) of the Parent Company, resolving in writing to delegate all powers, authorities and discretions of the Parent Company in relation to the negotiation and entry into this Agreement and all documents and matters related, ancillary or incidental thereto, to a named delegate, with full powers of sub-delegation, and confirming that signature of any document by such delegate constitutes conclusive evidence of its approval by him.

 

	
(c)

	
An extract from a resolution of the board of directors of the Parent Company evidencing due appointment of the committee of the board of directors referred to in paragraph (b) above, if applicable.

 

	
(d)

	
A specimen of the signature of each person authorised by the resolutions referred to in paragraph (b) above.

 

	
(e)

	
A certificate of the Parent Company (signed by a director or other authorised signatory) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.

 

	
(f)

	
A certificate of an authorised signatory of the Parent Company certifying that each copy document relating to it specified in this Part I(A) of Schedule 2 (Conditions precedent to initial Utilisation) is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

 

	
2. 

	
Legal opinions

 

	
(a)

	
A legal opinion of Linklaters LLP, legal advisers to the Arrangers and the Agent in England.

 

	
(b)

	
A legal opinion of Ogier, legal advisers to the Arrangers and the Agent in Jersey.

 

	
3. 

	
Other documents and evidence

 

	
(a)

	
Duly executed Fee Letters, Syndication Letter and this Agreement.

 

	
(b)

	
Evidence that any agent for service of process referred to in Clause ‎43.2 (Service of process) has accepted its appointment.

 

 

 

  

 

 

 

	
(c)

	
The Original Financial Statements and interim financial statements of the Parent Company.

 

	
(d)

	
Evidence that the fees, costs and expenses then due from the Parent Company pursuant to Clause ‎14 (Fees) and Clause ‎19 (Costs and expenses) have been paid or will be paid by the first Utilisation Date.

 

	
(e)

	
Any information that is requested by a Finance Party (acting reasonably) to ensure compliance with applicable "know your customer" requirements.

 

	
(f)

	
A copy of any other Authorisation or other document, opinion or assurance which the Agent reasonably considers to be necessary or desirable (if it has notified the Parent Company accordingly) in connection with the entry into and performance of the transactions contemplated by any Finance Document or for the validity and enforceability of any Finance Document.

 

	
4.

	
Acquisition information

 

A certified copy of the duly executed Acquisition Documents (except the Certificate of Merger), including an abridged post-Acquisition group structure chart showing the Company, each Obligor and each holding company of an Obligor and a sources and uses statement in a form and substance satisfactory to the Arrangers, acting reasonably.

 

  

  

  

PART I(B)

FURTHER CONDITION PRECEDENT TO INITIAL UTILISATION

 

	
1.

	
A certificate of an authorised signatory of the Parent Company certifying that:

 

	
  

	
(a)

	
neither the Tender Offer nor the Acquisition Agreement has been amended, waived or otherwise modified to increase the price per Target Share payable in the Merger or Tender Offer or otherwise to increase the consideration payable to the holders of the Target Shares in connection with the transactions contemplated by the Acquisition Agreement, in each case, other than in accordance with Clause ‎24.10 (Conduct of the Acquisition);

 

	
  

	
(b)

	
no other amendments, modifications or waivers (including, without limitation, any amendments to, or waivers of, any of the conditions to the consummation of the Merger or the Tender Offer) have been made to the Acquisition Agreement or the Tender Offer, other than in accordance with Clause ‎24.10 (Conduct of the Acquisition); and

 

	
  

	
(c)

	
Acquisition CP Satisfaction has occurred.

 

  

  

  

PART II

CONDITIONS PRECEDENT REQUIRED TO BE DELIVERED BY AN ADDITIONAL OBLIGOR

 

	
1. 

	
An Accession Letter, duly executed by the Additional Obligor and the Parent Company.

 

	
2. 

	
A copy of the constitutional documents of the Additional Obligor.

 

	
3.

	
If the Additional Obligor is a US Obligor, (i) a copy of a good standing certificate (including verification of tax status) with respect to the Additional Obligor, issued as of a recent date by the secretary of state or other appropriate official of the Additional Obligor's jurisdiction of incorporation or organisation and (ii) a solvency certificate signed by an officer of such Additional Obligor in form and substance satisfactory to the Agent and its counsel, acting reasonably.

 

	
4.

	
A copy of a resolution of the board of directors (or a duly appointed committee of the board of directors) of the Additional Obligor:

 

	
  

	
(a)

	
approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;

 

	
  

	
(b)

	
authorising a specified person or persons to execute the Accession Letter on its behalf; and

 

	
  

	
(c)

	
authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including, in relation to an Additional Borrower, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents.

 

	
5.

	
A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.

 

	
6.

	
A certificate of the Additional Obligor (signed by a director or other authorised signatory) confirming that borrowing or guaranteeing, as appropriate, the total commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.

 

	
7.

	
A certificate of an authorised signatory of the Additional Obligor certifying that each copy document listed in this Part II of Schedule 2 (Conditions precedent required to be delivered by an Additional Obligor) is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.

 

	
8.

	
A copy of any other authorisation or other document, opinion or assurance which the Agent reasonably considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.

 

	
9.

	
If available, the latest audited financial statements of the Additional Obligor.

 

	
10.

	
A legal opinion of Linklaters LLP, legal advisers to the Arrangers and the Agent in England.

 

 

 

  

 

 

 

	
11.

	
If the Additional Obligor is incorporated in a jurisdiction other than England and Wales, a legal opinion of the legal advisers to the Arrangers and the Agent or the Parent Company, as the case may be, in the jurisdiction in which the Additional Obligor is incorporated.

 

	
12.

	
If the proposed Additional Obligor is incorporated in a jurisdiction other than England and Wales, evidence that the agent for service of process specified in Clause ‎43.2 (Service of process), if not an Obligor, has accepted its appointment in relation to the proposed Additional Obligor.

 

	
13.

	
Any information that is requested by a Finance Party (acting reasonably) to ensure compliance with applicable “know your customer” requirements.

 

  

  

  

SCHEDULE 3

REQUESTS

 

PART I

UTILISATION REQUEST

 

	
From:

	
[Borrower]

 

	
To: 

	
[l] as Agent

 

Dated:

 

Dear Sirs

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.

 

	
2. 

	
We wish to borrow a Loan on the following terms:

 

	
Proposed Utilisation Date:

	
[           ] (or, if that is not a Business Day, the next Business Day)

	 	 
	
Currency of Loan:

	
US Dollars

	 	 
	
Amount:

	
[      ] or, if less, the Available Facility

	 	 
	
Interest Period

	
[           ]

 

	
3.

	
We confirm that each condition specified in Clause ‎4.2 (Further conditions precedent) of the Agreement is satisfied on the date of this Utilisation Request.

 

	
4.

	
The proceeds of this Loan should be credited to [account].

 

	
5.

	
This Utilisation Request is irrevocable.

 

	
6.

	
We confirm that the Loan to which this Utilisation Request relates is to be utilised for the purpose set out in Clause ‎3.1 (Purpose) of the Agreement.

 

Yours faithfully

 

 

.......................................

Authorised signatory for

[Name of relevant Borrower]

 

  

  

  

PART II

SELECTION NOTICE

 

	
From: 

	
[Borrower]

 

	
To: 

	
[l] as Agent

 

Dated:

 

Dear Sirs

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement.  This is a Selection Notice.  Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.

 

	
2. 

	
We refer to the following Loan[s] with an Interest Period ending on [               ].

 

	
3. 

	
We request that the next Interest Period for the above Loan[s] is [      ].

 

	
4. 

	
This Selection Notice is irrevocable.

 

Yours faithfully

 

 

.....................................

Authorised signatory for

[Name of relevant Borrower]

 

 

  

  

  

SCHEDULE 4

 

PART I

FORM OF ASSIGNMENT AGREEMENT

 

	
To: 

	
[l] as Agent

 

[       ] as the Parent Company, for and on behalf of each Obligor

 

	
From: 

	
[the Existing Lender] (the “Existing Lender”) and [the New Lender] (the “New Lender”)

 

Dated:

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement.  This is an Assignment Agreement.  Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.

 

	
2. 

	
We refer to Clause‎27.6 (Procedure for assignment).

 

	
  

	
(a)

	
The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender's Commitments and participations in Loans under the Agreement as specified in the Schedule.

 

	
  

	
(b)

	
The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender's Commitments and participations in Loans under the Agreement specified in the Schedule.

 

	
  

	
(c)

	
The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.

 

	
3. 

	
The proposed Transfer Date is [ ].

 

	
4.

	
On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.

 

	
5.

	
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause ‎34.2 (Addresses) are set out in the Schedule.

 

 

 

  

 

 

 

	
6.

	
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph ‎(C) of Clause ‎27.4 (Limitation of responsibility of Existing Lenders).

 

	
7.

	
The New Lender confirms:

 

	
  

	
(a)

	
that it is a UK Qualifying Lender and an Irish Qualifying Lender1; [and]

 

	 	
(b)

	
[for the benefit of the Agent and without liability to any Obligor, that it is a Treaty Lender with respect to [the UK] [and] [Ireland [and, with respect to Ireland, that it is a Treaty Lender which is not otherwise an Irish Qualifying Lender]]].2

 

	
8.

	
The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:

 

	
  

	
(a)

	
a company resident in the United Kingdom for United Kingdom Tax purposes;

 

	
  

	
(b)

	
a partnership each member of which is:

 

	
  

	
(i)

	
a company so resident in the United Kingdom; or

 

	
  

	
(ii)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

 

	
  

	
(c)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of Section 19 of the CTA) of that company.3

 

	
9. 

	
The New Lender confirms that it is not a Defaulting Lender.

 

	
10.

	
The New Lender confirms that it is [not]4 an Acceptable Bank.

 

  

	
1

	
Note that, pursuant to paragraph (C) of Clause ‎15.2 (Tax gross-up), the New Lender must confirm that it is a UK Qualifying Lender and an Irish Qualifying Lender.

 

  

	
2

	
Delete/amend as applicable. Note that, pursuant to paragraph (C) of Clause ‎15.2 (Tax gross-up), the New Lender must confirm whether or not it is a Treaty Lender with respect to the UK and Ireland (and, in respect of Ireland, whether it is a Treaty Lender which is not otherwise an Irish Qualifying Lender).

 

  

	
3

	
Delete/amend as applicable if the New Lender comes within paragraph (a)(iii) of the definition of Qualifying Lender in Clause 15.1(A).

 

  

	
4

	
Include/delete as applicable.

  

 

 

  

 

 

 

	
11.

	
[The New Lender confirms that it is a UK Treaty Lender that holds a passport under the HMRC DT Treaty Passport Scheme (reference number [         ]), so that interest payable to it by a UK Borrower is generally subject to full exemption from UK withholding tax and its jurisdiction of Tax residence is [          ] and notifies the Parent Company that:

 

	
  

	
(a)

	
each UK Borrower which is a Party as a UK Borrower as at the Transfer Date must, to the extent that the New Lender becomes a Lender under the Facility which is made available to that Borrower pursuant to Clause 2 (The Facility) of the Agreement, make an application to HM Revenue & Customs under form DTTP2 within 20 days of the Parent Company receiving or being deemed to receive this notification; and

 

	
  

	
(b)

	
each Additional Borrower which is a UK Borrower and which becomes an Additional Borrower after the Transfer Date must make an application to HM Revenue & Customs under form DTTP2 within 30 days of becoming an Additional Borrower.5

 

	
12.

	
This Assignment Agreement acts as notice to the Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause ‎27.7 (Copy of Assignment Agreement, Transfer Certificate, Increase Confirmation to Parent Company), to the Parent Company (on behalf of each Obligor) of the assignment referred to in this Assignment Agreement.

 

	
13.

	
The Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.

 

	
14.

	
This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

	
15.

	
This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.

 

 

 

	
5

	
This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport Scheme and wishes that scheme to apply to this Agreement.  A copy of the Assignment Agreement must be sent to the Parent Company at the same time as the Agent.

 

  

  

  

THE SCHEDULE

 

Rights to be assigned and obligations to be released and undertaken

 

[insert relevant details]

 

[Facility office address, email address, fax number and attention details for notices and account details for payments]

 

	
[Existing Lender] 

	
[New Lender]

	 	 
	
Branch: [ ] 

	
Branch MEI: [ ]

	 	 
	
By: 

	
By:

 

This Assignment Agreement is accepted by the Agent and the Transfer Date is confirmed as [   ].

 

Signature of this Assignment Agreement by the Agent constitutes confirmation by the Agent of receipt of notice of the assignment referred to herein, which notice the Agent receives on behalf of each Finance Party.

 

[Agent]

 

Agent MEI: [  ]

 

By:

 

  

  

  

SCHEDULE 4

 

PART II

FORM OF TRANSFER CERTIFICATE

 

	
To: 

	
[l] as Agent

 

[            ] as the Parent Company, for and on behalf of each Obligor

 

	
From:

	
[The Existing Lender] (the "Existing Lender") and [The New Lender] (the "New Lender")

 

Dated:

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.

 

	
2. 

	
We refer to Clause‎27.5 (Procedure for transfer) of the Agreement:

 

	
  

	
(a)

	
The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation all or part of the Existing Lender's Commitment, rights and obligations referred to in the Schedule in accordance with Clause ‎27.5 (Procedure for transfer) of the Agreement.

 

	
  

	
(b)

	
The proposed Transfer Date is [            ].

 

	
  

	
(c)

	
The Facility Office and address, fax number and attention details for notices of the New Lender for the purposes of Clause ‎34.2 (Addresses) of the Agreement are set out in the Schedule.

 

	
3.

	
The New Lender expressly acknowledges the limitations on the Existing Lender's obligations set out in paragraph ‎(C) of Clause ‎27.4 (Limitation of responsibility of Existing Lenders) of the Agreement.

 

	
4.

	
The New Lender confirms:

 

	
  

	
(a)

	
that it is a UK Qualifying Lender and an Irish Qualifying Lender6; [and]

 

  

  

	
6

	
Note that, pursuant to paragraph (C) of Clause ‎15.2 (Tax gross-up), the New Lender must confirm that it is a UK Qualifying Lender and an Irish Qualifying Lender.

  

 

 

  

 

 

	
(b)

	
[for the benefit of the Agent and without liability to any Obligor, that it is a Treaty Lender with respect to [the UK] [and] [Ireland [and, with respect to Ireland, that it is a Treaty Lender which is not otherwise an Irish Qualifying Lender]]].7

 

	
5.

	
The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:

 

	
  

	
(a)

	
a company resident in the United Kingdom for United Kingdom Tax purposes;

 

	
  

	
(b)

	
a partnership each member of which is:

 

	
  

	
(i)

	
a company so resident in the United Kingdom; or

 

	
  

	
(ii)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

 

	
  

	
(c)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of Section 19 of the CTA) of that company.8

 

	
6. 

	
The New Lender confirms that it is not a Defaulting Lender.

 

	
7. 

	
The New Lender confirms that it is [not]9 an Acceptable Bank.

 

	
8.

	
[The New Lender confirms that it is a UK Treaty Lender that holds a passport under the HMRC DT Treaty Passport Scheme (reference number [         ]), so that interest payable to it by a UK Borrower is generally subject to full exemption from UK withholding tax and its jurisdiction of Tax residence is [          ] and notifies the Parent Company that:

 

	
  

	
(a)

	
each UK Borrower which is a Party as a UK Borrower as at the Transfer Date must, to the extent that the New Lender becomes a Lender under the Facility which is made available to that Borrower pursuant to Clause 2 (The Facility) of the Agreement, make an application to HM Revenue & Customs under form

 

 

	
7

	
Delete/amend as applicable.  Note that, pursuant to paragraph (C) of Clause ‎15.2 (Tax gross-up), the New Lender must confirm whether or not it is a Treaty Lender with respect to the UK and Ireland (and, in respect of Ireland, whether it is a Treaty Lender which is not otherwise an Irish Qualifying Lender).

 

	
8

	
Delete/amend as applicable if the New Lender comes within paragraph (a)(iii) of the definition of Qualifying Lender in Clause 15.1(A).

 

	
9

	
Include/delete as applicable.

 

  

  

  

	
  

	
 DTTP2 within 20 days of the Parent Company receiving or being deemed to receive this notification; and

 

	
  

	
(b)

	
each Additional Borrower which is a UK Borrower and which becomes an Additional Borrower after the Transfer Date must make an application to HM Revenue & Customs under form DTTP2 within 30 days of becoming an Additional Borrower.10

 

	
9.

	
This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.

 

	
10.

	
This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

 

 

 

	
10

	
This confirmation must be included if the New Lender holds a passport under the HMRC DT Treaty Passport Scheme and wishes that scheme to apply to this Agreement.  A copy of the Transfer Certificate must be sent to the Parent Company at the same time as the Agent.

 

  

  

  

THE SCHEDULE

 

Commitment/rights and obligations to be transferred

 

[insert relevant details]

 

[Facility Office address, email address, fax number and attention details for notices and account details for payments]

  

 

	
[Existing Lender] 

	
[New Lender]

	 	 
	
Branch: [ ] 

	
Branch: [ ]

	 	 
	
Branch MEI: [ ] 

	
Branch MEI: [ ]

	 	 
	
By: 

	
By:

  

This Transfer Certificate is accepted by the Agent and the Transfer Date is confirmed as [           ].

 

[Agent]

 

Agent MEI: [  ]

 

By:

 

  

  

  

SCHEDULE 5

FORM OF ACCESSION LETTER

 

	
To: 

	
[l] as Agent

 

	
From:

	
[Subsidiary] [Top Newco] and [Parent Company] on behalf of [Subsidiary] [Top Newco] and [Parent Company]]

 

Dated:

 

Dear Sirs

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.

 

	
2.

	
[Subsidiary] [Top Newco] agrees to become an Additional [Borrower]/[Guarantor] and to be bound by the Terms of the Agreement as an Additional [Borrower]/[Guarantor] pursuant to Clause [‎28.2 (Additional Borrowers)]/[Clause ‎28.4 (Additional Guarantors)] of the Agreement. [Subsidiary] [Top Newco] is a company duly incorporated under the laws of [name of relevant jurisdiction].

 

	
3. 

	
[Subsidiary's] [Top Newco’s] administrative details are as follows:

 

Address:

 

Fax No:

 

Attention:

 

	
4.

	
This Accession Letter and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

	
[5. 

	
This [Guarantor] Accession Letter is entered into by a deed.]

 

  

  

 

	

[[Parent Company] 

	

[[Subsidiary] [Top Newco]

	 	 
	
By: ]

	
By:]

  

 

  

  

  

SCHEDULE 6

FORM OF RESIGNATION LETTER

 

	
To: 

	
[l] as Agent

 

	
From:

	
[resigning Obligor] and [Parent Company] on behalf of [resigning Obligor] and [Parent Company]]

 

Dated:

 

Dear Sirs

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.

 

	
2.

	
Pursuant to [Clause ‎28.3 (Resignation of a Borrower)]/[Clause ‎28.6 (Resignation of a Guarantor)], we request that [resigning Obligor] be released from its obligations as a [Borrower]/[Guarantor] under the Agreement.

 

3.           We confirm that:

 

	
  

	
(a)

	
no Default is continuing or will result from the acceptance of this Resignation Letter; and

 

(b)           [                     ].

 

	
4.

	
This Resignation Letter and any non-contractual obligations arising out of or in connection with it are governed by English law.

 

 

  

  

  

  

	

[[Parent Company] 

	

[[resigning Obligor]

	 	 
	
By: ]

	
By:]

  

 

 

 

 

  

  

  

SCHEDULE 7

FORM OF COMPLIANCE CERTIFICATE

 

	
To: 

	
[l] as Agent

 

	
From: 

	
[Parent Company]

 

Dated:

 

Dear Sirs

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is a Compliance Certificate. Terms defined in the Agreement have the same meaning when used in this Compliance Certificate unless given a different meaning in this Compliance Certificate.

 

	
2. 

	
We confirm that:

 

[Insert details of financial covenants and whether the Parent Company is in compliance with those covenants]

 

	
3. 

	
[We confirm that no Default is continuing.]

 

	
4.

	
We confirm that the ratio of Net Debt to EBITDA is [    ]:1.

 

 

	
Signed:........................... 

	
Signed:...........................

	
Authorised signatory 

	
Authorised signatory

	
of 

	
of 

	 	 
	
[Parent Company] 

	
[Parent Company]

 

 

 

 

  

  

  

SCHEDULE 8

EXISTING SECURITY

 

 

	
Name of

member of the Group

	
Security

	
Total Principal Amount of Indebtedness Secured

	
Pharma International Insurance Limited

	
Collateral against letters of credit

	
US$ 5,000,000

  

  

  

SCHEDULE 9

EXISTING LOANS

 

 

	
Name of

member of the Group

	
Loan

	
Total Principal Amount

of Existing Loans

	
None

	  	  

 

  

  

  

SCHEDULE 10

EXISTING FINANCIAL INDEBTEDNESS

 

 

	
Name of

member of the Group

	
Financial Indebtedness

	
Total Principal Amount

of Existing Financial Indebtedness

	
Pharma International Insurance Limited

	
Counter indemnity obligations related to bank issued letters of credit

	
US$ 5,000,000

	
Shire Italy S.p.A.

	
Counter indemnity obligations related to bank issued guarantees

	
EUR 27,132,000

	
Shire HGT Inc.

	
US property capital lease

	
US$ 7,737,000

 

  

  

  

SCHEDULE 11

FORM OF CONFIDENTIALITY UNDERTAKING

 

CONFIDENTIALITY AGREEMENT

 

DATED:

 

PARTIES:

 

	
(1) 

	
[  ] ("Discloser"); and

 

	
(2) 

	
[  ] ("Recipient").

 

RECITALS:

 

The Discloser is willing to disclose to the Recipient and the Recipient wishes to receive certain Confidential Information (as defined below) for the Purpose (as defined below) on the terms and conditions set out in this Agreement.

 

OPERATIVE PROVISIONS:

 

	
1. 

	
DEFINITIONS

 

	
1.2 

	
In this Agreement:

 

	
“Affiliates”

	
means any company or other entity which directly or indirectly controls, is controlled by or is under common control with a Party, where 'control' means the ownership of more than 50 per cent. of the issued share capital or other equity interest or the legal power to direct or cause the direction of the general management and policies of such Party, company or other entity;

	
“Confidential Information”

	
means all information, data and any other material relating to Shire's and its Affiliates' business, projects or products, being information:

	 	(i)	
(disclosed by the Discloser or its Representatives to the Recipient or its Representatives or acquired directly or indirectly from the Discloser or its Representatives by the Recipient or its Representatives in each case for the purposes of or in connection with the Purpose and whether in written, electronic, oral, visual or other form;

	 	(ii)	
generated by way of any analysis, compilations, data studies or other documents prepared by the Recipient or its Representatives containing, reflecting or based in whole or in part on 

 

 

 

 

  

 

 

 

	 	 	
 information referred to in (i) above; and

	 	(iii)	
regarding the existence, nature or status of any discussions between the Parties or their Representatives with respect to the Purpose, including the existence and terms of this Agreement;

	 	
Confidential Information shall not include information, data and any other material that:

	 	(a)	
is public knowledge at the time of disclosure under this Agreement or which subsequently becomes public knowledge (other than as a result of a breach of this Agreement or other fault on the part of the Recipient or its Representatives); or

	 	(b)	
was lawfully in the possession of the Recipient or its Representatives prior to its disclosure under this Agreement or which subsequently comes into its or their possession from a third party (to the best of its or their knowledge having made due enquiry, otherwise than in breach of any obligation of confidentiality owed to the Discloser or its Representatives, either directly or indirectly);

	
“Party” and “Parties”

	
means respectively the Discloser or the Recipient or, as the case may be, both such parties;

	
“Purpose”

	
means the use of the Confidential Information to allow [the Parties to discuss the possibility of the Recipient acquiring] / [the Recipient to acquire]  an interest in a financial facility to Shire;

	
“Representatives”

	
means the Affiliates of each Party and the directors, officers, employees, agents, representatives, attorneys and advisors of each Party and each Party's Affiliates; and

	
“Shire”

	
means Shire PLC, a company incorporated in Jersey under the Companies (Jersey) Law 1991 with registered number 99854.

 

	
1.2 

	
In this Agreement, unless the context otherwise requires:

 

	
  

	
(A)

	
references to "persons" includes individuals, bodies corporate (wherever incorporated), unincorporated associations and partnerships;

 

 

 

  

 

 

 

	
  

	
(B)

	
the headings are inserted for convenience only and do not affect the construction of the Agreement;

 

	 	
(C) 

	
references to one gender includes both genders; and

 

	
(D) 

	
a "Party" includes references to that party's successors and permitted assigns.

 

	
2. 

	
USE AND NON-DISCLOSURE

 

	
2.1

	
Subject to the terms of this Agreement, in consideration of the disclosure of the Confidential Information by or on behalf of the Discloser to the Recipient or its Representatives, the Recipient undertakes:

 

	
  

	
(A)

	
not to use the Confidential Information nor allow it to be used by its Representatives for any purpose other than the Purpose and to cease to use it upon request by the Discloser;

 

	
  

	
(B)

	
to treat and maintain the Confidential Information in strict confidence and not to directly or indirectly communicate or disclose it in any way to any other person without the Discloser's express prior written consent, except to such of the Recipient's Representatives who reasonably require access to the Confidential Information for the Purpose and who are notified of the terms of this Agreement and who owe a duty of confidence to the Recipient in respect the Confidential Information;

 

	
  

	
(C)

	
to assume responsibility and liability for any breach of the terms of this Agreement by any of the Recipient's Representatives (or actions which would amount to such a breach if the same were party to this Agreement) who have access to the Confidential Information; and

 

	
  

	
(D)

	
to take all reasonable measures and appropriate safeguards commensurate with those which the Recipient employs for the protection of its confidential information (and to procure that all such steps are taken by its Representatives) to maintain the confidentiality of the Confidential Information, to copy the Confidential Information only to the extent reasonably necessary to achieve the Purpose and not to permit unsupervised copying of the Confidential Information.

 

	
2.2

	
No disclosure or announcement to any third party of the Confidential Information may be made by the Recipient or on its behalf except where:

 

	
  

	
(A)

	
such disclosure is compelled by a court of law, statute, regulation or securities exchange;

 

	
  

	
(B)

	
the Discloser has, where practicable, been given sufficient written notice in advance to enable it to seek protection or confidential treatment of such Confidential Information; and

 

	
(C) 

	
such disclosure is limited to the extent actually so required.

 

 

 

  

 

 

 

	
3. 

	
RIGHTS TO CONFIDENTIAL INFORMATION

 

	
3.1

	
The Recipient acknowledges that nothing in this Agreement is intended to amount to or implies any transfer, licence or other grant of rights in relation to the Confidential Information or any other patents, design rights, trade marks, copyrights or other intellectual property rights owned or used by the Discloser.

 

	
3.2

	
The Discloser and its Representatives give no warranty as to the completeness, sufficiency or accuracy of the Confidential Information and accept no liability howsoever arising from the Recipient's or its Representatives' use of the Confidential Information. Accordingly, neither the Discloser nor its Representatives shall be liable for any direct, indirect or consequential loss or damage suffered by any person howsoever arising, whether in contract or tort, as a result of relying on any statement contained in or omitted from the Confidential Information. For the avoidance of doubt this clause is without prejudice to the express terms of any agreement entered into by the Discloser and/or its Representatives in connection with the Purpose.

 

	
3.3

	
Nothing in this Agreement shall be or be construed as being an agreement between the Parties or any of their respective Affiliates to enter into any arrangement or further agreement relating to the subject matter of this Agreement, any such arrangement or agreement being the subject of separate negotiations.

 

	
3.4

	
The Recipient acknowledges and agrees that all Confidential Information and all copies thereof shall be and remain the exclusive property of the Discloser. The Recipient shall or shall procure, on the Discloser's request and at the Discloser's option, either the destruction or return of the Confidential Information, without retaining any copies, extracts or other reproductions in whole or in part thereof other than to the extent required to be retained for legal or regulatory purposes (in respect of which the Recipient shall remain under an ongoing duty of confidence). On the Discloser's request, all Confidential Information comprising analyses, compilations, data studies or other documents prepared by the Recipient or its Representatives containing or based in whole or in part on the Confidential Information received from the Discloser or reflecting the Recipient's view of such Confidential Information shall be destroyed by the Recipient save to the extent required to be retained for legal or regulatory purposes (in respect of which the Recipient shall remain under an ongoing duty of confidence). Upon request, such return and/or destruction shall be certified in writing to the Discloser by an authorised officer of the Recipient supervising such destruction or return.

 

	
4. 

	
REMEDIES

 

Due to the proprietary nature of the Confidential Information, the Parties understand and agree that the Discloser or its Affiliates may suffer irreparable harm in the event that the Recipient fails to comply with any of the obligations contained herein and that monetary damages alone may not be an adequate remedy to compensate the Discloser or its Affiliates for such breach. Accordingly, the Parties agree that the Discloser or any of its Affiliates, as appropriate, shall be entitled to seek the remedies of injunction, specific performance and other equitable relief for any threatened or actual breach of the obligations contained in this Agreement.

 

 

 

  

 

 

 

	
5. 

	
DURATION

 

The term of this Agreement shall be for a period of three years from the date of disclosure under this Agreement.

 

	
6. 

	
OTHER PROVISIONS

 

	
6.1

	
Any variation to this Agreement is only valid if it is in writing and signed by or on behalf of each Party.

 

	
6.2

	
This Agreement may not be assigned by a Party without the prior written consent of the other Party.

 

	
6.3

	
Any delay or failure by the Discloser in exercising any right, power or privilege under this Agreement shall not constitute a waiver of such right, power or privilege nor shall any single or partial exercise preclude any future exercise.

 

	
6.4

	
The rights and remedies of each of the Parties under or pursuant to this Agreement are cumulative, may be exercised as often as such Party considers appropriate and are in addition to its rights and remedies under general law.

 

	
6.5

	
The provisions of this Agreement shall be severable in the event that any of the provisions hereof are held by a court of competent jurisdiction to be invalid, void or otherwise unenforceable, and the remaining provisions shall remain enforceable to the fullest extent permitted by law.

 

	
6.6

	
A person who is not a party to this Agreement other than the Discloser's Affiliate shall have no right under the Contracts (Rights of Third Parties) Act 1999 to enforce any of its terms. Notwithstanding the foregoing, this Agreement may be varied or terminated by agreement in writing between the Parties or this Agreement may be rescinded (in each case) without the consent of any such Affiliates.

 

	
6.7

	
This Agreement may be executed in one or more counterparts, each of which will be deemed to be an original copy of the Agreement, and all of which, when taken together, shall be deemed to constitute one and the same agreement. Signatures to this Agreement transmitted by facsimile transmission, by electronic mail in "portable document format" (".pdf") form, or by any other electronic means intended to preserve the original graphic and pictorial appearance of a document, will have the same effect as physical delivery of the paper document bearing the original signature.

 

	
6.8

	
This Agreement and any non-contractual obligations arising out of or in connection with it shall be governed by and construed in accordance with English law and subject to the exclusive jurisdiction of the English courts.

 

 

 

  

 

 

 

	
Signed for and on behalf of

[                 ]

 

	
)

)

)

	
 

....................................

Signature

 

 

	  	  	
....................................

Print Name

 

 

	  	  	
....................................

Print Title

 

 

 

 

	
Signed for and on behalf of

[                 ]

 

	
)

)

)

	
 

....................................

Signature

 

 

	  	  	
....................................

Print Name

 

 

	  	  	
....................................

Print Title

 

  

  

  

SCHEDULE 12

TIMETABLES

 

 

	
Delivery of a duly completed Selection Notice (Clause ‎12.1 (Selection of Interest Periods))

	  	
U-2

 

10.00am

 

 

	
Delivery of a duly completed Utilisation Request (Clause ‎5.1 (Delivery of a Utilisation Request))

	  	
U-2

 

10.00am

 

 

	
LIBOR is fixed

	  	
Quotation Day

 

as of 11.00am

 

	  	  	  
	  	  	  
	
“U” = date of Utilisation

 

“U – X” = X Business Days prior to the date of Utilisation

	  	  

 

  

  

  

SCHEDULE 13

FORM OF INCREASE CONFIRMATION

 

	
To:

	
[l] as Agent

 

	
  

	
[Parent Company], for and on behalf of each Obligor

 

	
From: 

	
[Increase Lender] (the "Increase Lender")

 

Dated:

 

 

Dear Sirs,

 

Shire PLC – US$ 850,000,000 Term Facility Agreement

dated 11 January 2015 (the "Agreement")

 

	
1.

	
We refer to the Agreement. This is an Increase Confirmation. Terms defined in the Agreement have the same meaning in this Increase Confirmation unless given a different meaning in this Increase Confirmation.

 

	
2. 

	
We refer to Clause‎2.2 (Increase).

 

	
3.

	
The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment specified in the Schedule (the "Relevant Commitment") as if it was the Original Lender under the Agreement.

 

	
4.

	
The proposed date on which the increase in relation to the Increase Lender and the relevant Commitment is to take effect (the "Increase Date") is [insert date].

 

	
5.

	
On the Increase Date, the Increase Lender becomes party to the Finance Documents as a Lender.

 

	
6.

	
The Facility Office and address, fax number and attention details for notices to the Increase Lender for the purposes of Clause ‎34.2 (Addresses) are set out in the Schedule.

 

	
7.

	
The Increase Lender expressly acknowledges the limitations on the Lenders' obligations referred to in Clause ‎2.2 (Increase).

 

	
8.

	
The Increase Lender confirms:

 

  

  

  

 

	
  

	
(a)

	
that it is a UK Qualifying Lender and an Irish Qualifying Lender11; [and]

 

	
  

	
(b)

	
[for the benefit of the Agent and without liability to any Obligor, that it is a Treaty Lender with respect to [the UK] [and] [Ireland [and, with respect to Ireland, that it is a Treaty Lender which is not otherwise an Irish Qualifying Lender]]].12

 

	
9.

	
The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:

 

	
  

	
(a)

	
a company resident in the United Kingdom for United Kingdom Tax purposes;

 

	
  

	
(b)

	
a partnership each member of which is:

 

	
  

	
(i)

	
a company so resident in the United Kingdom; or

 

	
  

	
(ii)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of Section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or

 

	
  

	
(c)

	
a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of Section 19 of the CTA) of that company.13

 

	
10. 

	
The Increase Lender confirms that it is not a Defaulting Lender.

 

	
11. 

	
The Increase Lender confirms that it is [not]14 an Acceptable Bank.

 

	
12.

	
[The Increase Lender confirms that it is a UK Treaty Lender that holds a passport under the HMRC DT Treaty Passport Scheme (reference number [           ]), so that interest payable to it by a UK Borrower is generally subject to full exemption from UK

 

 

	
11

	
Note that, pursuant to paragraph (C) of Clause ‎15.2 (Tax gross-up), the New Lender must confirm that it is a UK Qualifying Lender and an Irish Qualifying Lender.

 

	
12

	
Delete/amend as applicable. Note that, pursuant to paragraph (C) of Clause ‎15.2 (Tax gross-up), the Increase Lender must confirm whether or not it is a Treaty Lender with respect to the UK and Ireland (and, with respect to Ireland, whether it is a Treaty Lender which is not otherwise an Irish Qualifying Lender).

 

	
13

	
Delete/amend as applicable fi the Increase Lender comes within paragraph (a)(iii) of the definition of Qualifying Lender in Clause 15.1(A).

 

	
14

	
Include/delete as applicable.

 

  

  

  

 

 

	
  

	
withholding tax and its jurisdiction of Tax residence is [  ] and notifies the Parent Company that:

 

	
  

	
(a)

	
each UK Borrower which is a Party as a UK Borrower as at the Increase Date must, to the extent that the Increase Lender becomes a Lender under the Facility which is made available to that Borrower pursuant to Clause 2 (The Facility) of the Agreement, make an application to HM Revenue & Customs under form DTTP2 within 20 days of the Parent Company receiving or being deemed to receive this notification; and

 

	
  

	
(b)

	
each Additional Borrower which is a UK Borrower and which becomes an Additional Borrower after the Increase Date must make an application to HM Revenue & Customs under form DTTP2 within 30 days of becoming an Additional Borrower.15

 

	
13.

	
This Increase Confirmation may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Confirmation.

 

	
14.

	
This Increase Confirmation and any non contractual obligations arising out of or in connection with it are governed by English law.

 

	
15.

	
This Increase Confirmation has been entered into on the date stated at the beginning of this Increase Confirmation.

 

 

 

 

 

	
15

	
This confirmation must be included if the Increase Lender holds a passport under the HMRC DT Treaty Passport Scheme and wishes that scheme to apply to this Agreement.  A copy of the Increase Confirmation must be sent to the Parent Company at the same time as the Agent.

 

  

  

  

THE SCHEDULE

 

Relevant Commitment/rights and obligations to be assumed by the Increase Lender

 

[Insert relevant details]

 

[Facility Office address, email address, fax number and attention details for notices and account details for payments]

 

[Increase Lender]

 

 

	
Branch: 

	
[       ]

	 	 
	
Branch MEI:

	
[       ]

	 	 
	
By:

	 

 

 

This Increase Confirmation is accepted as an Increase Confirmation for the purposes of the Agreement by the Agent and the Increase Date is confirmed as [                   ].

 

[Agent]

 

 

Agent MEI:                         [         ]

 

 

By:

 

 

 

 

  

  

  

SIGNATURES

 

The Parent Company

 

SHIRE PLC

 

	
By:

	
/s/ Jeffrey Poulton

 

	
Address:

	
5 Riverwalk 

Citywest Business Campus 

Dublin 24 

Ireland

 

	
Contact: 

	
Company Secretary

 

	
Facsimile: 

	
+44 (0)1256 894 712

 

 

Agent for service of process

 

SHIRE GLOBAL FINANCE

 

	
By:

	
/s/ Thomas Greene

 

	
Address:

	
Hampshire International Business Park 

Chineham 

Basingstoke 

Hampshire 

RG24 8EP

 

	
Contact: 

	
Company Secretary

 

	
Facsimile: 

	
+44 (0)1256 894 712

 

 

  

  

  

The Original Guarantor

 

SHIRE PLC

 

	
By:

	
/s/ Jeffrey Poulton

 

	
Address:

	
5 Riverwalk

	
  

	
Citywest Business Campus

	
  

	
Dublin 24

	
  

	
Ireland

 

	
Contact: 

	
Company Secretary

 

	
Facsimile: 

	
+44 (0)1256 894 712

 

 

The Original Borrower

 

SHIRE PLC

 

	
By:

	
/s/ Jeffrey Poulton

 

	
Address:

	
5 Riverwalk

	
  

	
Citywest Business Campus

	
  

	
Dublin 24

	
  

	
Ireland

 

	
Contact: 

	
Company Secretary

 

	
Facsimile: 

	
+44 (0)1256 894 712

 

 

  

  

  

The Original Arranger

 

CITIGROUP GLOBAL MARKETS LIMITED

 

	
By:

	
/s/ Richard Davies

 

	
Address:

	
Citigroup Centre

London E14 5LB

 

	
Primary Contact:

	Richard Davies

 

	
Telephone:

	+44 20 7986 8488

 

	
Fax Number:

	+44 20 7986 8295

 

	
Email Address:

	richard.llewellyn.davies@citi.com

  

 

  

  

  

The Original Lender

 

CITIBANK, N.A. LONDON BRANCH

 

	
By:

	
/s/ Richard Davies

 

	
Address:

	
Citigroup Centre

London E14 5LB

 

	
Primary Contact:

	Richard Davies

 

	
Telephone:

	+44 20 7986 8488

 

	
Fax Number:

	+44 20 7986 8295

 

	
Email Address:

	richard.llewellyn.davies@citi.com

  

 

  

  

  

The Agent

 

CITIBANK INTERNATIONAL LIMITED

 

	
By:

	
/s/ Steven Wright

  

	
Address:

	
5th Floor, Citigroup Centre

25 Canada Square

Cahary Wharf

London E14 5LB

 

	
Primary Contact:

	EMEA Loans Agency

 

	
Fax Number:

	+44 (0)20 7492 3960Purchase_and_Sale_Contract_Northpointe_and_Cypress

PURCHASE AND SALE CONTRACT
for
NORTHPOINTE INVESTORS, LLC,
a Georgia limited liability company,
THE SOLE OWNER OF
The Avenues at Northpointe
11740 Northpointe Boulevard
Tomball, Texas 77377

AND

VILLAS FAIRFIELD PARTNERS, LLC,

a Georgia limited liability company,

THE SOLE OWNER OF

Avenues at Cypress
21500 Cypresswood Drive
Cypress, Texas 77433

TABLE OF CONTENTS

Page
		
	ARTICLE 1
	DEFINED TERMS    2

		
	ARTICLE 2
	PURCHASE AND SALE OF ENTITY    6

		
	ARTICLE 3
	PURCHASE PRICE, DEPOSIT AND ESCROW PROVISIONS    7

		
	ARTICLE 4
	FINANCING    7

		
	ARTICLE 5
	FEASIBILITY PERIOD    7

		
	ARTICLE 6
	TITLE AND SURVEY    10

		
	ARTICLE 7
	CLOSING    12

		
	ARTICLE 8
	REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER AND PURCHASER    16

		
	ARTICLE 9
	CONDITIONS PRECEDENT TO CLOSING    25

		
	ARTICLE 10
	BROKERAGE    26

		
	ARTICLE 11
	POSSESSION    27

		
	ARTICLE 12
	DEFAULTS AND REMEDIES    27

		
	ARTICLE 13
	RISK OF LOSS OR CASUALTY    27

		
	ARTICLE 14
	EMINENT DOMAIN    28

		
	ARTICLE 15
	MISCELLANEOUS    28

		
	ARTICLE 16
	OPERATION OF THE PROPERTY    36

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EXHIBITS
		
	A
	ENTITY CHART

		
	1.1.10
	LEGAL DESCRIPTION OF THE FAIRFIELD LAND

		
	1.1.25
	LEGAL DESCRIPTION OF THE NORTHPOINTE LAND

		
	3.1.2
	FORM OF ESCROW AGREEMENT

		
	5.5
	LIST OF MATERIALS

		
	6.2
	TITLE MATTERS

		
	7.2.1.1
	AGREEMENT OF ASSIGNMENT AND ASSUMPTION

		
	8.1.1.9
	PROPERTY CONTRACTS

		
	15.23
	AUDIT REPRESENTATION LETTER

		
	16.1
	RENT SCHEDULE

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PURCHASE AND SALE CONTRACT
THIS PURCHASE AND SALE CONTRACT (this “Purchase Contract”) is entered into as of December 2, 2014, between and among the parties listed on Exhibit A attached hereto and made a part hereof, all having a principal address at c/o Davis Development, Inc., 403 Corporate Center Drive, Suite 201, Stockbridge, Georgia 30281 (collectively and individually, “Seller”), NORTHPOINTE INVESTORS, LLC, a Georgia limited liability company (“Northpointe”), VILLAS FAIRFIELD PARTNERS, LLC, a Georgia limited liability company (“Fairfield”) (Northpointe and Fairfield are collectively referred to as “Property Owner”), MORROW INVESTORS, INC., a Georgia corporation (“Morrow”), MIGUEAL B. DAVIS (“Davis”) and PREFERRED APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership, having a principal office at 3284 Northside Parkway, Suite 150, Atlanta, Georgia 30327 (“Purchaser”).
NOW, THEREFORE WITNESSETH:  That for and in consideration of mutual covenants and agreements herein after set forth, Seller, Property Owner, Morrow, and Purchaser hereby agree as follows:
RECITALS
R-1Seller is the owner of 100% of the membership interests of Property Owner, including, without limitation, all of Seller’s right, title and interest in and to the capital, profits and losses of Property Owner and its assets, property, rights, and privileges, both real, personal and mixed, tangible and intangible, of every kind and character whatsoever, including, without limitation, all monies and distributions of property now due or to become due (herein referred to collectively as the “Interests”).
 
R-2Northpointe holds legal title to the Northpointe Land described in Section 1.1.24 and the Northpointe Property described in Section 1.1.25 hereof.

R-3Fairfield holds legal title to the Fairfield Land described in Section 1.1.9 hereof and the Fairfield Property described in Section 1.1.10 hereof.

R-4Purchaser desires to purchase and Seller has agreed to sell the Interests and all of the benefits accruing to the owner thereof, including, but not limited to, Seller’s interest, through the Property Owner, in the Property (as defined in Section 1.1.29 hereof) on the terms and conditions set forth in this Purchase Contract (which terms and conditions shall control in the event of any conflict with these Recitals). 

R-5Purchaser has agreed to pay the Purchase Price for the Interests to Seller and Seller has agreed to sell the Interests to Purchaser on the terms and conditions set forth in this Purchase Contract.

R-6Purchaser intends to make investigations regarding the Interests and Property and Purchaser’s intended use of the Property, as Purchaser deems necessary and desirable.

ARTICLE 1

   DEFINED TERMS    
1.1    Unless otherwise defined herein, terms with initial capital letters in this Purchase Contract shall have the meanings set forth in this ARTICLE 1 below.

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1.1.1    “Business Day” means any day other than a Saturday or Sunday or Federal holiday or legal holiday in the State in which the Land is located.
1.1.2    “Closing” means the consummation of the purchase and sale and related transactions contemplated by this Purchase Contract in accordance with the terms and conditions of this Purchase Contract.
1.1.3    “Closing Date” means the earlier of (a) thirty (30) days after satisfaction of the Occupancy Condition or (b) February 13, 2015.
1.1.4    “Consultants” shall have the meaning ascribed in Section 5.1 hereof.
1.1.5    “Davis” means Migueal B. Davis, the sole shareholder of Morrow.
1.1.6    “Delinquent Rent” shall have the meaning ascribed in Section 7.1.4 hereof.
1.1.7    “Deposit” means collectively the Initial Deposit and the Second Deposit.
1.1.8     “Effective Date” means the date on which Seller and Purchaser last execute this Purchase Contract as indicated by the dates appearing after Seller’s and Purchaser’s signatures. The Effective Date shall be the date     inserted in the preamble of this Purchase Contract.
1.1.9 “Fairfield Improvements” means all buildings, structures, parking areas, sidewalks, landscaping and improvements located on the Fairfield Land, including, without limitation, the 240-unit apartment community known as Avenues at Cypress.
1.1.10     “Fairfield Land” means all those certain tracts or parcels of land     described on Exhibit 1.1.10 attached hereto.
1.1.11 “Fairfield Property” means the Fairfield Land and Fairfield Improvements and all rights of Fairfield relating to the Fairfield Land and the Fairfield Improvements, including without limitation, any rights, title and interest of Fairfield, if any, in and to (i) any strips and gores adjacent to the Fairfield Land and any land lying in the bed of any street, road, or avenue opened or proposed, in front of or adjoining the Fairfield Land, to the centerline thereof; (ii) any unpaid award for any taking by condemnation or any damage to the Fairfield Property by reason of a change of grade of any street or highway; (iii) all of the easements, rights, privileges, and appurtenances belonging or in any way appertaining to the Fairfield Land and Fairfield Improvements, together with all Fixtures and Tangible Personal Property, all Property Contracts and Leases, Permits and the Miscellaneous Property Assets owned by Fairfield which are located on the Fairfield Property and used in its operation; and (iv) any mineral rights (including, but not limited to rights for oil, gas or other hydrocarbons), rights to revenue or royalties in connection with such     minerals, oil or gas and the extraction thereof.
1.1.12    “Feasibility Period” means the period beginning on the Effective Date and ending at 5:00 p.m. prevailing Atlanta, Georgia time on January 9, 2015.   
1.1.13 “Financial Statements” shall have the meaning ascribed in Section 8.1.1.6 hereof.

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1.1.14 “Fixtures and Tangible Personal Property” means all fixtures, furniture,     furnishings, fittings, equipment, machinery, apparatus, signage, appliances     and other articles of tangible personal property now located on the Land or in the Improvements as of the Effective Date (or hereafter acquired by Property Owner prior to the Closing Date) and used or usable in connection with any present or future occupation or operation of all or any part of the Property.  The term “Fixtures and Tangible Personal Property” does not include (i) equipment leased by Property Owner and the interest of Property Owner in any equipment provided to the Property for use, but not owned or leased by Property Owner, (ii) property owned or leased by any Tenant and guest, employee or other person furnishing goods or services to the Property, or (iii) any software owned by or licensed to Property Owner with respect to the Property or Property Owner.  
1.1.15 “Improvements” means the Fairfield Improvements and the Northpointe Improvements.
1.1.16 “Initial Deposit” means the amount of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00).
1.1.17 “Land” means collectively the Northpointe Land and the Fairfield Land. 
1.1.18     “Lease(s)” means all rights and interests of Property Owner in and to all written leases, subleases and other occupancy agreements, whether or not of record, which provide for the use or occupancy of space or facilities on or relating to the Property and which are in force as of the Effective Date for the Property or thereafter as permitted and in accordance with ARTICLE 16 hereof. 
1.1.19 “Management Contract” means that certain Management Agreement between Property Owner and Manager pertaining to the Land and Improvements.
1.1.20     “Manager” means TX-Davis Development, Inc., a Georgia corporation.
1.1.21     “Materials” shall have the meaning ascribed in Section 5.5 hereof.
1.1.22 “Miscellaneous Property Assets” means all contract rights, leases, concessions, warranties, licenses, plans and specifications, drawings, franchises, logos, tradenames trademarks, servicemarks, website domains, telephone numbers and advertising materials and other items of intangible personal property relating to the ownership or operation of the Property and owned by Property Owner (including, without limitation, the names “Avenues at Cypress” and “The Avenues at Northpointe”), excluding, however, (i) receivables, (ii) Property Contracts, (iii) the general contractor contract (iv) Leases, (v)  Fixtures and Tangible Personal Property, (vi) cash or other funds, whether in petty cash or house “banks,” or on deposit in bank accounts or in transit for deposit, (vii) refunds, rebates or other claims, or any interest thereon, for periods or events occurring prior to the Closing Date, (viii) utility and similar deposits, (ix) insurance or other prepaid items, (x) any capital replacement, repair or other reserves held by Property Owner, or any other party on behalf of or for the benefit of Property Owner, with respect to the Property, (xi) Property Owner’s proprietary books and records, (xii) reimbursements from municipal utility districts relating to construction of district facilities, and (xiii) the Management Contract, except to the extent that Property Owner receives a credit on the 

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closing statement for any such item in which event such item shall be transferred to Purchaser if transferable.
1.1.23 “Morrow” means Morrow Investors, Inc., a Georgia corporation and the sole manager of Property Owner. 
1.1.24 “Northpointe Improvements” means all buildings, structures, parking areas, sidewalks, landscaping and improvements located on the Northpointe Land, including, without limitation, the 280-unit apartment community known as the Avenues of Northpointe.
1.1.25 “Northpointe Land” means all those certain tracts or parcels of land described in Exhibit 1.1.25 attached hereto.
1.1.26 “Northpointe Property” means the Northpointe Land and Northpointe Improvements and all rights of Northpointe relating to the Northpointe Land and the Northpointe Improvements, including without limitation, any rights, title and interest of Northpointe, if any, in and to (i) any strips and gores adjacent to the Northpointe Land and any land lying in the bed of any street, road, or avenue opened or proposed, in front of or adjoining the Northpointe Land, to the centerline thereof; (ii) any unpaid award for any taking by condemnation or any damage to the Northpointe Property by reason of a change of grade of any street or highway; (iii) all of the easements, rights, privileges, and appurtenances belonging or in any way appertaining to the Northpointe Land and Northpointe Improvements, together with all Fixtures and Tangible Personal Property, all Property Contracts and Leases, Permits and the Miscellaneous Property Assets owned by Northpointe which are located on the Northpointe Property and used in its operation; and (iv) any mineral rights (including, but not limited to rights for oil, gas or other hydrocarbons), rights to revenue or royalties in connection with such minerals, oil or gas and the extraction thereof.
1.1.27     “Occupancy Condition” means leases have been executed by Property Owner and Tenants for at least eighty-five percent (85%) of the Units as permitted and in accordance with ARTICLE 16 hereof and as shown on a certified rent roll delivered by Seller to Purchaser.
1.1.28 “Permits” means all licenses and permits granted by governmental authorities having jurisdiction over the Property owned by Property Owner and required in order to own and operate the Property.
1.1.29     “Permitted Exceptions” means those exceptions or conditions permitted to encumber or affect the title to the Property in accordance with the provisions of Section 6.2 hereof.
1.1.30     “Property” means collectively the Northpointe Property and the Fairfield Property.
1.1.31     “Property Contracts” means all purchase orders, maintenance, service, or utility contracts and similar contracts, excluding Leases, which relate to the ownership, maintenance, construction or repair and/or operation of the Property and shall also mean any third party maintenance, service, marketing or other contract relating to the Property 

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which Property Owner is obligated to cause Property Owner’s transferee or assign to assume or execute upon Purchaser's purchase of the Property. 
1.1.32     “Proration Period” shall have the meaning ascribed thereto in Section 7.1.3 hereof.  
1.1.33     “Purchase Contract” means this Purchase and Sale Contract between and among Seller, Morrow and Purchaser.
1.1.34     “Purchase Price” shall have the meaning ascribed thereto in Section 3.1 hereof.
1.1.35     “Rents” shall have the meaning ascribed thereto in Section 7.1.2 hereof.
1.1.36     “Rejected Contracts” shall have the meaning ascribed in Section 5.6 hereof.
1.1.37     “Second Deposit” means the amount of ONE MILLION AND NO/100 DOLLARS ($1,000,000.00). 
1.1.38     “Survey” shall have the meaning ascribed thereto in Section 6.4 hereof.
1.1.39 “Surviving Obligations” shall mean Purchaser’s obligations under Sections 5.3, 5.5, 7.1.2, 7.1.3, 7.1.4, 7.1.5, 10.1 and 15.13 hereof, the obligations of Seller and Morrow under Sections 7.1.2, 7.1.3, 7.1.4, 7.1.5, ARTICLE 8, Sections 10.1 and ARTICLE 15 hereof, and the obligation of Davis under Section 15.21 hereof, which obligations shall survive Closing or termination of the Purchase Contract as provided herein.
1.1.40     “Taxes” shall have the meaning ascribed in Section 8.2.1.4 hereof.
1.1.41     “Tenant” means any person or entity entitled to occupy any portion of the Property under a Lease.
1.1.42     “Tenant Deposits” means all security deposits, pet deposits, cleaning deposits and or other deposits and prepaid rents made or to be made pursuant to the Leases.
1.1.43     “Title Commitment” shall have the meaning ascribed thereto in Section 6.1 hereof.
1.1.44     “Title Insurer” means Chicago Title Insurance Company.
1.1.45     “Units” means the 520 units that are part of the Improvements.
1.1.46     “Utility District Dedication” means the dedication of the storm water detention pond and related storm water, domestic water and sanitary sewer facilities serving the Northpointe Property.  
ARTICLE 2
PURCHASE AND SALE OF ENTITY
2.1    Seller agrees to sell and convey the Interests, including, without limitation, Seller’s interest, through the Property Owner, in the Property, and Purchaser agrees to purchase the Interests, 

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including, without limitation, Seller’s interest, through the Property Owner, in the Property, from Seller, in accordance with the terms and conditions set forth in this Purchase Contract. 
ARTICLE 3
PURCHASE PRICE, DEPOSIT AND ESCROW PROVISIONS
3.1    The total purchase price (“Purchase Price”) for the Interests shall be SEVENTY-SIX MILLION TWO HUNDRED TWENTY-FIVE THOUSAND AND NO/100 DOLLARS ($76,225,000.00), which shall be paid by Purchaser, as follows: 
3.1.1    On or before two (2) Business Days after the Effective Date, Purchaser shall deliver to the Title Insurer, as escrow agent, the Initial Deposit in cash, by wire transfer or certified check. On or before two (2) Business Days after the expiration of the Feasibility Period, Purchaser shall deliver to the Title Insurer, as escrow agent, the Second Deposit in cash, by wire transfer or certified check.  In the event Purchaser fails to deliver the Initial Deposit or Second Deposit to Title Insurer in accordance with this Section 3.1.1 hereof, Seller shall have the right to terminate the Purchase Contract upon written notice to Purchaser.    
3.1.2    The Title Insurer shall hold the Deposit pursuant to the form of Escrow Agreement attached hereto as Exhibit 3.1.2 hereof and make delivery of the Deposit to the party entitled thereto under the terms thereof.  The Title Insurer shall invest the Deposit in an interest‐bearing bank account or money market fund or such investment as Seller and Purchaser shall jointly agree, in writing, with such agreement being provided to Title Insurer in writing. 
3.1.3    If the sale of the Interest is closed by the date fixed therefor, monies held as the Deposit shall be applied to the Purchase Price on the Closing Date and the balance of the Purchase Price, subject to prorations, adjustments and credits provided for in this Purchase Contract, shall be paid at Closing to Seller in immediately available United States funds.
ARTICLE 4
FINANCING
4.1    Purchaser assumes full responsibility to obtain the funds required for settlement, and Purchaser’s acquisition of such funds shall not be a contingency to the Closing.
4.2    All costs and expenses incurred in connection with any financing of the acquisition of the Interests by Purchaser pursuant to this Purchase Contract shall be solely the responsibility of Purchaser.
ARTICLE 5 
FEASIBILITY PERIOD
5.1    Subject to the terms of Section 5.3 below, until Closing or termination of this Purchase Contract, Purchaser, and its agents, contractors, engineers, surveyors, and employees (“Consultants”) shall have the right from time to time to enter onto the Property to do the following:

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5.1.1    To conduct and make any and all customary studies, tests, examinations and inspections, or investigations of or concerning the Property (including without limitation, engineering and feasibility studies, environmental site assessments, evaluation of drainage and flood plain, soil tests for bearing capacity and percolation and surveys, including topographical surveys).
5.1.2    To confirm any and all matters which Purchaser may reasonably desire to confirm with respect to the Property and the Interests.
5.1.3    To ascertain and confirm the suitability of the Property for Purchaser’s intended use of the Property.
5.1.4    To review all Materials (other than Seller’s proprietary information).

5.2    Should the results of any of the matters referred to in Section 5.1 above appear unsatisfactory to Purchaser for any reason in its sole discretion, then Purchaser shall have the right to terminate this Purchase Contract by giving written Notice to that effect to Seller and the Title Insurer on or before 5:00 p.m. prevailing Atlanta, Georgia local time on the date of the expiration of the Feasibility Period.  If Purchaser exercises such right to terminate, (a) this Purchase Contract shall terminate and be of no further force and effect, except for the Surviving Obligations, and (b) Purchaser shall promptly return to Seller or destroy any reports, tests, analyses, studies, or surveys prepared in connection with the Property, and (c) the Initial Deposit will be returned to Purchaser.  If Purchaser fails to provide Seller with written Notice of cancellation on or before the expiration of the Feasibility Period in strict accordance with the Notice provisions of this Purchase Contract, Purchaser shall deliver the Second Deposit to Title Insurer and the Deposit will become non-refundable and, except as otherwise expressly contemplated hereby, this Purchase Contract shall remain in full force and effect, and Purchaser’s obligation to purchase the Property shall be non-contingent and unconditional except only for satisfaction of the conditions expressly stated in this ARTICLE 5 and in ARTICLES 9, 13 and 14 hereof.

5.3    Purchaser shall indemnify and hold Seller and Property Owner harmless for any actions taken by Purchaser and its Consultants on the Property.  Purchaser shall indemnify, defend (with attorneys selected by Purchaser and reasonably approved by Seller) and hold Seller and Property Owner harmless from any and all claims, damages, costs and liability which may arise due to such entries, surveys, tests, investigations and the like.  Seller and Property Owner shall have the right, without limitation, to disapprove any and all entries, surveys, tests, investigations and the like that, in Seller’s reasonable judgment, could result in any injury to the Property or breach of any agreement, or expose Seller to any liability, costs, liens or violations of applicable law, or otherwise adversely affect the Property or Seller’s interest therein.  Purchaser shall exercise commercially reasonable efforts to minimize disruption to the Tenants in connection with Purchaser’s or its Consultants’ activities pursuant to this Section.  No consent by the Seller to any such activity shall be deemed to constitute a waiver by Seller or assumption of liability or risk by Seller.  Purchaser hereby agrees to restore the Property to as near as is reasonably possible to the condition that existed immediately prior to Purchaser’s exercise of its rights pursuant to this ARTICLE 5 at Purchaser’s sole cost and expense.  Notwithstanding anything herein to the contrary, Purchaser shall have no liability to Seller under this Section 5.3 for pre-existing conditions upon the Property or the negligence or willful misconduct of Seller or Property Owner. Purchaser shall cause its Consultants entering the Property to maintain commercial general liability insurance with broad form contractual and personal injury liability endorsements with respect to Consultants’ activities on the Property pursuant to this ARTICLE 5, in amounts and with such insurance carriers as shall be reasonably approved by Seller and naming Property Owner as additional insureds, with endorsements acceptable 

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to Property Owner, including a waiver of defenses of the insurer based on the actions or inaction of Consultants (which insurance must be reasonably approved by Property Owner). The provisions of this Section 5.3 shall survive the Closing or termination of this Purchase Contract.

5.4    Purchaser shall not permit any mechanic’s or materialman’s liens or any other liens to attach to the Property by reason of the performance of any work or the purchase of any materials by Purchaser or any other party in connection with any studies or tests conducted by or for Purchaser.  Purchaser shall give email or telephone notice to Property Owner a reasonable time prior to entry onto the Property, shall deliver proof of insurance coverage required above to Property Owner and shall permit Property Owner to have a representative present during all investigations and inspections conducted on the Property.  Purchaser shall take all reasonable actions and implement all protections necessary to ensure that all actions taken in connection with the investigations and inspections of the Property, and all equipment, materials and substances generated, used or brought onto the Property pose no material threat to the safety of persons or the environment and cause no damage to the Property (all such damage to be promptly repaired) or other property of Property Owner or other persons.  All non-public information made available by Property Owner to Purchaser in accordance with this Purchase Contract or obtained by Purchaser in the course of its investigations shall be treated as confidential information by Purchaser, and, prior to the purchase of the Property by Purchaser, Purchaser shall use its best efforts to prevent its Consultants, agents and employees from divulging such information to any unrelated third parties except as reasonably necessary to third parties engaged by Purchaser for the limited purpose of analyzing and investigating such information for the purpose of evaluating or consummating the transaction contemplated by this Purchase Contract, including Purchaser’s attorneys and representatives, prospective lenders and engineers.
5.5    Seller and Property Owner shall make available for inspection at the Property (or deliver to Purchaser, as reasonably determined by Purchaser and Seller) within two (2) Business Day from the Effective Date the materials and information listed on Exhibit 5.5 attached hereto and made a part hereof (the “Materials”), to the extent in Property Owner’s or Seller’s possession or control.  Additionally, Seller agrees to (i) upon email request from Purchaser, provide to Purchaser during the term of this Purchase Contract operating reports of the Property (such requests may include, but are not limited to, a current rent roll, leasing activity summary report and projected occupancy report) and copies of all Leases executed in the prior seven days, (ii) make available for weekly status calls the property managers for the Property and Lee Little, Regional Manager, and (iii) notify Purchaser prior to the expiration of the Feasibility Period of any property level staff Seller intends to retain after Closing. In no event shall Seller be required to disclose to Purchaser information regarding the partners of Seller, distributions to partners or other partnership information not relating to the condition or operation of the Property or appraisals or other valuation information).  If the sale of the Property is not closed by the date fixed therefor or if the Purchase Contract is terminated for any reason, Purchaser shall, within five (5) calendar days, destroy or return all such Materials to Seller. The provisions of this Section 5.5 shall survive the Closing or termination of this Purchase Contract. 
ARTICLE 6
TITLE AND SURVEY
6.1     Seller shall promptly secure a commitment for title insurance for the Property in an amount equal to the Purchase Price (“Title Commitment”) issued by the Title Insurer for an owner’s title insurance policy on the most recent standard American Land Title Association Policy form or Texas equivalent, together with legible copies of all instruments identified as exceptions therein and shall cause copies thereof to be delivered to Purchaser on or before one (1) Business Day after the Effective Date.  

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6.2    Purchaser shall have the right to examine title to the Property and shall notify Seller in writing on or before 5:00 p.m. prevailing Atlanta, Georgia local time on the date of the expiration of the Feasibility Period of any objections that Purchaser may have.  In addition, if, other than documents relating to the Utility District Dedication, any other title exception, defect, encroachment, land use violation or other matter not appearing in the Title Commitment or Survey as of the effective date of Purchaser’s first title examination, shall be discovered prior to Closing, Purchaser shall have the right to notify Seller in writing of any objections that Purchaser may have to such additional matters.  If Purchaser shall give Seller notice of objection to any title exceptions or defects not caused by any act or omission of Purchaser occurring subsequent to the Effective Date, Seller shall have five (5) Business Days after the effective date of such objections (the “Seller Election Deadline”) to elect and agree in writing to satisfy or cure some, all or none of Purchaser’s title and survey objections prior to Closing (the “Seller Title Response”).  Seller’s failure on or before the Seller Election Deadline to notify Purchaser of which objections it elects to cure shall be deemed to be an election by Seller to cure none of Purchaser’s objections, subject to Seller’s mandatory obligation to cure the Mandatory Removal Liens (as hereinafter defined). If Seller elects to cure less than all of the title and survey objections (subject to Seller’s mandatory obligation to cure the Mandatory Removal Liens), it shall so notify Purchaser on or before the Seller Election Deadline, and Purchaser shall have five (5) Business Days after the earlier of (i) receipt of the Seller Title Response, or (ii) the Seller Election Deadline to elect either (A) to terminate this Purchase Contract, whereupon all rights and obligations hereunder shall immediately terminate (other than the Surviving Obligations), or (B) to close the purchase and sale contemplated hereby in which case all of Purchaser’s uncured title and survey objections and, subject to Purchaser’s right to object to matters not appearing in the Title Commitment or Survey as of the effective date of Purchaser’s first title examination, any other title matters, shall be added to and be made a part of the Permitted Exceptions (as hereinafter defined). The immediately preceding sentence shall not relieve Seller of its obligation to cure the Mandatory Removal Liens.  If Purchaser does not so respond within five (5) Business Days after the earlier of (i) receipt of the Seller Title Response, or (ii) the Seller Election Deadline, then Purchaser shall be deemed to have elected to terminate this Purchase Contract, and all rights and obligations hereunder shall immediately terminate (other than the Surviving Obligations). If any objections shall not be satisfied or cured by Seller by the Closing Date if Seller has agreed in writing to satisfy or cure such objection prior to Closing, then, at the option of Purchaser, Purchaser shall have the right (a) to terminate this Purchase Contract, or (b) to close the purchase regardless of such title objections without any adjustment in the Purchase Price. Purchaser shall have the right at any time to waive any objections that it may have made.  If Purchaser does not terminate this Agreement pursuant to this Section 6.2, then, in such event, Purchaser shall be deemed conclusively to have waived any objections not cured or satisfied by Seller, and Purchaser shall be obligated to purchase the Property, regardless of said objections.  Purchaser agrees that the following items shall be deemed “Permitted Exceptions”:
6.2.1    Such matters disclosed on Exhibit 6.2 attached hereto and made a part hereof.
6.2.2    Such exceptions and matters objected to by Purchaser as provided in Section 6.2 above which Seller does not agree, in writing, to satisfy or cure;
6.2.3    Such exceptions and matters in the Title Commitment not objected to by Purchaser as provided in Section 6.2 above;
6.2.4    All Leases, provided any such new Leases or renewals of existing Leases were disclosed to Purchaser prior to the end of the Feasibility Period as permitted by and in accordance with ARTICLE 16 hereof;

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6.2.5    Real estate and property taxes for the calendar year in which Closing occurs to the extent not due and payable.
6.3     Notwithstanding anything herein to the contrary, Seller shall be obligated to remove from record (by bonding or otherwise) any of the following affecting the Property as of the Closing Date:  (w) other than the Utility District Dedication, any easements or rights of way with respect to the Property granted by Seller after the date hereof and any agreements affecting title to the Property entered into by Seller after the date hereof, in either case, without Purchaser’s prior written approval, which approval shall not be unreasonably withheld or delayed; (x) liquidated final non-appealable liens or judgments affecting the Property; (y) any mortgage or other security interest entered into by Seller; or (z) any mechanic’s or materialman’s lien and any judgment docketed against the Property, in any case resulting from the non-payment by Seller of any sums alleged to be due and owing by Seller to a contractor or materialman (collectively, the “Mandatory Removal Liens”).  The existence of the Mandatory Removal Liens shall not be objections to title, provided that properly executed instruments in recordable form necessary to satisfy and remove the same of record are delivered to the Purchaser at Closing or, in the alternative, with respect to any mortgage, deed to secure debt or deed of trust liens, that payoff letters from the holder of the mortgage, deed to secure debt or deed of trust liens shall have been delivered to and accepted by the Title Insurer (sufficient to remove the same from the policy issued at Closing), together in either case, with recording and/or filing fees.  To the extent the Utility District Dedication is not completed prior to Closing, Purchaser agrees to execute at Closing a post-closing agreement whereby Northpointe or its successor and assigns agrees to sign documentation to effectuate the Utility District Dedication.  
6.4     Seller shall deliver to Purchaser as part of the Materials on or prior to the Effective Date an ALTA/ACSM as-built survey of the Property (the “Survey”).  Purchaser shall be responsible for any additional Survey costs due to requests of Purchaser or Purchaser’s lender other than correction of defects or errors.  Purchaser, at Purchaser’s sole cost and expense, may cause to be prepared an environmental report for the Property (“Environmental Report”).  
6.4.1    Should the Survey or any update of the Survey obtained by Purchaser disclose conditions that give rise to a title defect or exception (other than a Permitted Exception) or reveal any adverse encroachment, land use violation or other matter adverse to the use and operation of the Property, then Purchaser shall have the right to object thereto in accordance with the procedures set forth in ARTICLE 6 above including the right to terminate this Purchase Contract (and the return of the Deposit within two (2) days thereafter) if Seller elects not to cure such objection which right to terminate shall not be limited by the expiration of the Feasibility Period.
6.5    Purchaser shall notify Seller on or before the last day of the Feasibility Period of any Property Contract which Purchaser does not desire to assume (“Rejected Contracts”).  Promptly after it is determined that (a) Purchaser has no title objections, or (b) Purchaser has elected to proceed to Closing, Seller shall give notice of cancellation to each service provider under the Rejected Contracts. To the extent that as of Closing any of the Rejected Contracts have not yet terminated (due to less advance notice of cancellation than required thereunder) Purchaser shall assume the obligations of such Rejected Contract after Closing until the cancellation becomes effective.
ARTICLE 7
CLOSING
7.1    Dates, Places of Closing, Prorations, Delinquent Rent and Closing Costs.

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7.1.1    The Closing shall occur no later than 5:00 p.m. prevailing Atlanta local time, on the Closing Date or such earlier date mutually agreed to by Seller and Purchaser. The Closing shall occur through an escrow with the Title Insurer, whereby the Seller, Purchaser and their attorneys need not be physically present at the Closing and may deliver documents by overnight air courier or other means.
7.1.2    While the transaction(s) contemplated by this Purchase Contract is (directly) a transfer of the Interest to Purchaser, and only indirectly a transfer of the Property to Purchaser, the parties agree to prorate the revenue and expenses of the ordinary operation of the Property as if the Seller was selling the Property as a straight asset sale of the Property to the Purchaser.  Thus, all normal and customarily proratable income and expense items of an asset sale of a improved real property, including, without limitation, Rents (as defined below), operating expenses, real and personal property taxes, any contracts and other operating expenses and fees of the Property, whether recurring or paid in a single installment, shall be prorated as of the Closing Date, Seller being charged or credited, as appropriate, for all of same attributable to the period through and including the Closing Date (and credited for any amounts paid by Seller attributable to the period after the Closing Date) and Purchaser being responsible for, and credited or charged, as the case may be, for all of same attributable to the period after the Closing Date.  Purchaser shall be given a credit against the Purchase Price for Tenant Deposits not applied prior to the Closing Date in accordance with the terms of the Leases. Purchaser shall assume at Closing the obligation to pay any payments due parties under the Property Contracts assumed by Purchaser, provided all of the foregoing have been prorated.  Any real estate ad valorem or similar taxes for the Property, or any installment of assessments payable in installments which installment is payable in the calendar year of Closing, shall be prorated to the date of Closing, based upon actual days involved.  Seller shall be responsible for all real estate, occupancy and personal property taxes and assessments for all years prior to Closing.  All real estate taxes imposed because of a change of use of the Property prior to Closing shall be the responsibility and obligation of Seller. The proration of real property taxes or installments of assessments shall be based upon the assessed valuation and tax rate figures for the year in which the Closing occurs to the extent the same are available; provided, that in the event that actual figures (whether for the assessed value of the Property or for the tax rate) for the year of Closing are not available at the Closing Date, the proration shall be made using a reasonable estimate of the real estate taxes of the Property for the year of Closing, which for the purposes of this Section 7.1.2 shall be $939,515 for the Northpointe Property and $824,112 for the Fairfield Property. The proration shall be adjusted as provided in Section 7.1.3 hereof.  Any special assessment liens encumbering the Property as of the Closing Date which arise from completed improvements located on the Property as of the Closing Date shall be assumed and paid by Seller. Purchaser shall assume and pay all other special assessment liens encumbering the Property.  For purposes of this Section 7.1.2 and Sections 7.1.3 and 7.1.4 hereof the terms “Rent” and “Rents” shall include, without limitation, base rents, and month-to-month fees.  The provisions of this Section 7.1.2 shall survive Closing and shall expire at the end of the Proration Period (as defined below). 
7.1.3    If any of the items subject to proration hereunder cannot be prorated at the Closing because the information necessary to compute such proration is unavailable, or if any errors or omissions in computing prorations at the Closing are discovered subsequent to the Closing, then such item shall be reapportioned and such errors and omissions corrected as soon as practicable after the Closing Date and the proper party reimbursed, which obligation shall survive the Closing for a period (the “Proration Period”) from the Closing Date until six (6) months after the Closing Date for all items except for real estate ad valorem or similar taxes for the Property, which obligation regarding such item shall survive the Closing for a period from the Closing Date until twelve (12) months after the Closing Date.  Neither party hereto shall have the right to require a recomputation of a Closing proration or a correction of an error or omission in a Closing proration unless within the Proration Period one of the parties hereto (i) 

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has obtained the previously unavailable information or has discovered the error or omission, and (ii) has given Notice thereof to the other party together with a copy of its good faith recomputation of the proration and copies of all substantiating information used in such recomputation.  Any utility or other deposits or infrastructure reimbursements or payments relating to the construction of the Property and paid by Seller or Property Owner prior to Closing but reimbursed, returned or paid to Seller or Property Owner after Closing, shall belong to Seller and Purchaser agrees to cooperate with Seller with respect to any such funds.
7.1.4    Since prorations are being made as if the Property was being sold to Purchaser as an asset sale of the Property, if on the Closing Date any Tenant is in arrears in any Rent payment under any Tenant lease (the “Delinquent Rent”), any Delinquent Rent received by Purchaser and Property Owner from such Tenant after the Closing shall be applied to amounts due and payable by such Tenant during the following periods in the following order of priority: (i) first, to the period of time after the Closing Date, (ii) second, to the month in which the Closing occurs, and (iii) third, to the period of time before the Closing Date.  If Delinquent Rent or any portion thereof received by Purchaser after the Closing is due and payable to the Seller by reason of this allocation, the appropriate sum shall be promptly paid to the Seller.  Any monies received by Seller after Closing shall be forwarded to Purchaser for disbursement in accordance with the order of payment provided herein above.  After the Closing, Seller shall continue to have the right, but not the obligation, in its own name, to demand payment of and to collect Delinquent Rent owed to Seller by any Tenant, which right shall include, without limitation, the right to continue or commence legal actions or proceedings against any Tenant (provided, that Seller shall not commence any legal actions or proceedings against any Tenant, which continues as a Tenant at the Property after Closing without the prior consent of Purchaser, which will not be unreasonably withheld or delayed and in any event shall not include an action to evict such tenant), and the delivery of the Assignment as described in Section 7.2.1.1 hereof shall not constitute a waiver by Seller of such right.  Purchaser agrees to reasonably cooperate with Seller at no cost or liability to Purchaser in connection with all efforts by Seller to collect such Delinquent Rent; provided, however, that Purchaser’s obligation to reasonably cooperate with Seller pursuant to this sentence shall not obligate Purchaser to terminate any Lease with an existing Tenant or evict any existing Tenant from the Property.  The provisions of this Section 7.1.4 hereof shall survive Closing and shall expire at the end of the Proration Period.
7.1.5    Seller shall pay the cost of all transfer, sales, use and excise taxes with respect to the Closing, if applicable. Seller shall pay the basic title insurance premium and the cost of the non-imputation endorsement and one-half (1/2) of the Escrow Fees of Title Insurer.  Purchaser shall pay all other of Title Insurer’s fees and charges and, except as provided in the following sentence, all recording costs.  All costs and fees other than those allocated in this Purchase Contract shall be paid by Purchaser and/or Seller in accordance with the custom of the city and state in which the Land is located.  Purchaser and Seller shall each pay their own attorney’s fees associated with the Closing.  The provisions of this Section 7.1.5 shall survive Closing and shall expire at the end of the Proration Period.
7.2    Items To Be Delivered Prior To Or At Closing.  
7.2.1    Seller.  At Closing, Seller (and, as appropriate, Morrow) shall deliver to Purchaser, each of the following items, fully executed, as applicable:
7.2.1.1        An Agreement of Assignment and Assumption (the "Assignment") in the form set forth on Exhibit 7.2.1.1 attached hereto and incorporated herein with respect to the Interests.  The acceptance of the Assignment at Closing shall be deemed to be full performance of, and discharge of, every agreement and obligation on Seller’s part to be performed under 

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this Purchase Contract, except for the Surviving Obligations. 
7.2.1.2        The certificate of formation and operating agreement of Property Owner certified as being true, complete and correct in all respects.  
7.2.1.3        Proof that Property Owner, Morrow and, if applicable, Seller, are duly and validly organized and presently existing in good standing under the laws of its respective formation, together with the applicable authority documents authorizing the sale of the Interests to Purchaser and the execution, delivery and performance by Seller, Property Owner  and Morrow of this Purchase Contract, its respective obligations hereunder, and each document to be executed and delivered by Seller in connection with this Purchase Contract and designating one or more officers to execute documents in Seller's name in connection herewith, certified as correct and complete by Seller, together with an incumbency certificate for each person executing documents on behalf of Seller.
7.2.1.4        All certificates and assignments evidencing the Interests, if any.    
7.2.1.5        A closing statement executed by Seller.
7.2.1.6        An affidavit as to debts and liens to enable Title Insurer to delete the standard exceptions to the title insurance policy the (“Title Policy”) to be issued pursuant to the Title Commitments (other than matters constituting any Permitted Exceptions) and the promulgated Texas form of non-imputation endorsement.
7.2.1.7        A certification of Seller’s non-foreign status pursuant to Section 1445 of the Internal Revenue Code of 1986, as amended.
7.2.1.8        Except for the items expressly listed herein to be delivered at Closing, delivery of any other required items shall be deemed made by Seller to Purchaser, if Seller leaves such documents at the Property in their customary place of storage or in the custody of Purchaser’s representatives.
7.2.1.9        To the extent in Seller’s possession or control, original copies of the Leases and Property Contracts, lease files, keys to the property, Property Owner’s books and records (other than proprietary information) regarding the Property.
7.2.1.10    Evidence of notice of termination of the Rejected Contracts as required in Section 6.5 hereof.
7.2.1.11    Proof that the Management Contract has been terminated and is of no further force or effect.
7.2.1.12    An updated, certified rent roll dated no earlier than three (3) business days prior to the Closing Date.
7.2.1.13    A duly executed and acknowledged certificate executed by Property Owner and Morrow indicating that all of Property Owner’s and Morrow’s representations and warranties made in Section 8.1 herein are true and correct as of the Closing Date as if then made.
7.2.1.14    A duly executed and acknowledged certificate executed by Seller and Morrow indicating that all of Seller’s and Morrow’s representations and warranties made in Section 8.2 herein are true and correct as of the Closing Date as if then made.

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7.2.1.15    A duly executed and acknowledged certificate executed by Davis and Morrow indicating that Davis’ and Morrow’s representation and warranty regarding the liquid net worth of Morrow made in Section 15.21 herein is true and correct as of the Closing Date as if then made.
7.2.1.16    A Non-Imputation Affidavit and Indemnity in form and substance acceptable to Title Insurer and sufficient to induce Title Insurer to issue a non-imputation endorsement to the Title     Policy.
7.2.1.17    Such other documents as are reasonably necessary to consummate the transactions herein contemplated in accordance with the terms of this Purchase Contract, including, without limitation, documents requested by Title Insurer.
7.2.2    Purchaser.  At Closing, Purchaser shall deliver to the Title Insurer (for disbursement to Seller upon the Closing) the following items with respect to the Property being conveyed at such Closing:
7.2.2.1        The balance of the Purchase Price as required by ARTICLE 3 hereof plus or minus the adjustments or prorations required by this Purchase Contract.  If at Closing there are any liens or encumbrances on the Property that Seller is obligated or elects to pay and discharge, Seller may use any portion of the Purchase Price for the Interests to satisfy the same, provided that Seller shall have delivered to Title Insurer, on such Closing instruments in recordable form sufficient to satisfy such liens and encumbrances of record (or, as to any mortgages, deeds to secure debt or deeds of trust, appropriate payoff letters, acceptable to the Title Insurer), together with the cost of recording or filing such instruments.  The existence of any such liens or encumbrances shall not be deemed objections to title if Seller shall comply with the foregoing requirements.
7.2.2.2        A countersigned counterpart of the Assignment.
7.2.2.3        A closing statement executed by Purchaser.
7.2.2.4        Such other documents as are reasonably necessary to consummate the transactions herein contemplated in accordance with the terms of this Purchase Contract, including, without limitation, documents requested by Title Insurer.
ARTICLE 8
REPRESENTATIONS, WARRANTIES AND COVENANTS OF SELLER, MORROW, PROPERTY OWNER, DAVIS AND PURCHASER
8.1    Representations and Warranties of Property Owner and Morrow.
8.1.1    For the purpose of inducing Purchaser to enter into this Purchase Contract and to consummate the sale and purchase of the Property in accordance herewith, Property Owner and Morrow, on a joint and several basis, represent and warrant to Purchaser the following as of the Effective Date and as of the Closing Date:
8.1.1.1        Property Owner, as applicable, is lawfully and duly organized, and in good standing under the laws of the state of Georgia and is authorized to transact business in the State of Texas. Property Owner has all requisite power and authority to own, operate and lease its property and to carry on its businesses in Georgia and Texas.  

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8.1.1.2        Fairfield holds title to the Fairfield Property, including all real property contained therein required to be sold to Purchaser, subject only to the Permitted Exceptions.  Northpointe holds title to the Northpointe Property, including all real property contained therein required to be sold to Purchaser, subject only to the Permitted Exceptions.
8.1.1.3        Except for the Permitted Exceptions and Leases, there are no adverse or other parties in possession of the Property.
8.1.1.4        Property Owner has no judgments outstanding against it.   There are no actions, proceedings, litigation or governmental investigations or condemnation actions either pending or threatened against the Property, as applicable.
8.1.1.5        Property Owner has no knowledge of any claims for labor performed, materials furnished or services rendered in connection with constructing, improving or repairing any of the Property, as applicable, caused by Property Owner and which remain unpaid beyond the date for which payment was due and in respect of which liens may or could be filed against any of the Property, as applicable, except for repairs, materials or services furnished in the ordinary course of business (for which Seller shall make the necessary arrangements with the Title Insurer such that these matters shall not be title exceptions in the Title Commitment as of Closing).
8.1.1.6        The rent roll (the “Rent Roll”) and the operating statements (the “Financial Statements”) delivered to Purchaser by Property Owner in connection with this Purchase Contract are true, complete and correct in all material respects and the Rent Roll contains all of the Leases and tenancies of the Improvements as of the Effective Date, which leases have not been modified or amended except as indicated on the Rent Roll (such Rent Roll to be updated as of Closing so as to be true, complete and correct in all material respects).
8.1.1.7        Property Owner, as applicable, has made, or will make, available to Purchaser true, correct and complete copies of all Leases (including all modifications thereof) and all other documents or instruments which create possessory rights in all or any portion of the Improvements.  
8.1.1.8        Property Owner and Morrow have not received any notice of any violation, or alleged violation, of any laws, regulations or any other requirements of any governmental agency or authority having jurisdiction over the Property, to include, without limitation, notice of the violation, or alleged violation, of any Environmental Laws (hereinafter defined) related to the Property or the presence or release of Hazardous Materials (hereinafter defined) on or from the Property except as disclosed in any environmental reports in Seller’s possession which will be delivered to Buyer as a part of the Materials.  The term “Environmental Laws” shall include, without limitation, the Clean Air Act, 42 U.S.C. § 7401 et seq.; the Clean Water Act, 33 U.S.C. §  1251 et seq., and the Water Quality Act of 1987; the Federal Insecticide, Fungicide, and Rodenticide Act (“FIFRA”), 7 U.S.C. § 136 et seq.; the Marine Protection, Research, and Sanctuaries Act, 33 U.S.C. § 1401 et seq.; the National Environmental Policy Act, 42 U.S.C. §4321 et seq.; the Noise Control Act, 42 U.S.C. § 4901 et seq., the Occupational Safety and Health Act, 29 U.S.C. §  651 et seq.; the Resource Conservation and Recovery Act (“RCRA”) 42 U.S.C. § 6901 et seq., as amended by the Hazardous and Solid Waste amendments of 1984; the Safe Drinking Water Act, 42 U.S.C §  300f et seq.; the Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA”), 42 U.S.C. §  9601 et seq.; as amended by the Superfund Amendments and Reauthorization Act, and the Emergency Planning and Community Right-to-Know Act; the Toxic Substance Control Act (“TSCA”), 15 U.S.C. § 2601 et seq.; and the Atomic Energy Act, 42 U.S.C. § 2011 et seq.; all as may be amended as of the date of the Contract, together with their 

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implementing regulations and guidelines as of the date of this Contract. The term “Environmental Laws” shall also include all state, regional, county, municipal and other local laws, regulations, and ordinances that are equivalent or similar to the federal laws recited above or that purport to regulate Hazardous Materials.  The term “Hazardous Materials” shall include, without limitation, any hazardous substance, pollutant, or contaminant regulated under CERCLA; oil and petroleum products and natural gas, natural gas liquids, liquefied natural gas, and synthetic gas usable for fuel; pesticides regulated under FIFRA; asbestos, polycholorinated byphenyls, and other substances regulated under TSCA; source material; special nuclear material, and byproduct materials regulated under the Atomic Energy Act; industrial process and pollution control wastes to the extent regulated under applicable Environmental Laws, and any and all substances and materials which may pose a threat of  harm to human health or the environment or which may be regulated by any Environmental Laws.
8.1.1.9        There are no material service or maintenance contracts or other contracts now in force between the Property Owner and any other party with respect to or affecting the Property, except for the Property Contracts set forth on Exhibit 8.1.1.9 attached hereto and by reference incorporated herein, and Seller has delivered or will deliver to Purchaser true, correct and complete copies of all of the Property Contracts and all amendments thereto set forth on Exhibit 8.1.1.9 in accordance with the terms of this Purchase Contract. For purposes of this representation and warranty, “material” service or maintenance contracts are contracts having payments of less than $300 per month individually or $10,000 in the aggregate.

8.1.1.10    Except as set forth on the Rent Roll, aged delinquency detail report and residence history report (the “Tenant Reports”), no rental under any of the Leases has been collected more than one (1) month in advance, and, except as disclosed on the Tenant Reports, there are no concessions, bonuses, free months’ rental, rebates, or other matters affecting the rental under any of the Leases. To the best of Property Owner’s knowledge and except as disclosed in the Tenant Reports, no tenant under any of the Leases has any outstanding amounts owned to Seller under their respective Lease.
8.1.1.11    As of Closing, to the best of Property Owner’s knowledge, Property Owner will have performed all of its material obligations under the Property Contracts and neither Property Owner nor the other party to any of the Property Contracts will be in default thereunder.  
8.1.1.12    Property Owner is not a "foreign person" but is a "United States person" as such terms are defined in the Foreign Investment in Real Property Tax Act of 1980 and §§ 1445 and 7701 of the Internal Revenue Code (the “Code”).
8.1.1.13    Morrow is lawfully and duly organized, and in good standing under the laws of the state of Georgia and is authorized to transact business in the State of Texas as may be required under applicable Texas law. Morrow has all requisite power and authority to serve as the Manager of Property Owner, to enter into and perform its obligations under this Purchase Contract and to carry on its businesses in Georgia and Texas.  
8.1.1.14    The Fixtures and Tangible Personal Property are free and clear of any liens, charges and encumbrances benefiting persons or entities claiming by, through or under Property Owner, other than liens, charges and encumbrances to be canceled at or prior to Closing.    
8.1.2    Except for the representations and warranties expressly set forth above in Section 8.1.1, the Property is expressly purchased and sold “AS IS,” “WHERE IS,” and “WITH ALL 

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FAULTS.”  The Purchase Price and the terms and conditions set forth herein are the result of arm’s‐length bargaining between entities familiar with transactions of this kind, and said price, terms and conditions reflect the fact that Purchaser shall have the benefit of, and, except as otherwise provided in this Purchase Contract, is not relying upon any information provided by Property Owner or statements, representations or warranties, express or implied, made by or enforceable directly against Seller or Property Owner, including, without limitation, any relating to the value of the Property, the physical or environmental condition of the Property, any state, federal, county or local law, ordinance, order or permit; or the suitability, compliance or lack of compliance of the Property with any regulation, or any other attribute or matter of or relating to the Property (other than any covenants of title contained in the deeds conveying the Property and the representations set forth above).  Except as otherwise expressly provided otherwise in this Purchase Contract, if Seller or Property Owner provides or has provided any documents, summaries, opinions or work product of consultants, surveyors, architects, engineers, title companies, governmental authorities or any other person or entity with respect to the Property, Purchaser and Seller agree that Seller has done so or shall do so only for the convenience of both parties, Purchaser shall not rely thereon and the reliance by Purchaser upon any such documents, summaries, opinions or work product shall not create or give rise to any liability of or against Seller, Seller’s partners, members, or affiliates or any of their respective partners, officers, directors, participants, employees, contractors, attorneys, consultants, representatives, agents, successors, assigns or predecessors‐in‐interest.  Except for the warranties and representations of Property Owner herein, Purchaser shall rely only upon any title insurance obtained by Purchaser with respect to title to the Property.  Purchaser acknowledges and agrees that no representation has been made and no responsibility is assumed by Seller with respect to current and future applicable zoning or building code requirements or the compliance of the Property with any other laws, rules, ordinances or regulations, the financial earning capacity or expense history of the Property, the continuation of contracts, continued occupancy levels of the Property, or any part thereof, or the continued occupancy by tenants of any Leases or, without limiting any of the foregoing, occupancy at Closing.  Prior to Closing, Seller or Property Owner shall have the right, but not the obligation, to enforce its rights against any and all Property occupants, guests or tenants.  
8.1.3    The representations and warranties made by the Seller and Morrow in this Section 8.1 shall survive the closing and shall constitute Surviving Obligations for a period of nine (9) months from the Closing Date.
8.1.4    Representations and warranties above made to the knowledge of Seller or Property Owner shall not be deemed to imply any duty of inquiry.  For purposes of this Purchase Contract, the term Property Owner’s “knowledge” shall mean and refer only to the collective actual knowledge of the Designated Representative (as hereinafter defined) of the Property Owner. For purposes of this Purchase Contract, the term Property Owner’s “knowledge” shall not be construed to refer to the knowledge of any other partner, officer, director, agent, employee or representative of the Property Owner, or any affiliate of the Property Owner, or to impose upon such Designated Representative any duty to investigate the matter to which such actual knowledge or the absence thereof pertains, or to impose upon such Designated Representative any individual personal liability.  As used herein, the term Designated Representative shall refer to Lee Little, Regional Manager and Fred Hazel, Vice President.
8.2    Representations and Warranties of Seller and Morrow (Interests).  
8.2.1    Seller and Morrow, on a joint and several basis, represent and warrant to Purchaser as follows as of the Effective Date and as of the Closing Date:

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8.2.1.1        Seller, collectively, are the record and beneficial owners and holders of one hundred percent (100%) of the membership interests of Property Owner.  Other than any encumbrances imposed by the operating agreement of the Property Owner (the “Operating Agreement”), the Interests are owed by Seller free and clear of any and all encumbrances and liens.  Other than this Purchase Contract, there are no presently existing contracts relating to the issuance, sale, or transfer of any membership interest or any other equity interest of the Property Owner.  Other than this Purchase Contract, there exist no outstanding or existing rights, warrants or options to acquire any of the Interest or other membership or equity interest of the Property Owner.  None of the Interests are certificated and the Property Owner has not elected to opt into Article 8 of the Uniform Commercial Code. Seller has the power and authority to sell and convey the Interests and to execute the documents to be executed by Seller and the consummation of the transactions contemplated hereby will not require the consent, approval or authorization of any other party not so received.
8.2.1.2          The copies of the Amended and Restated Operating Agreements of Property Owner, as applicable, previously provided by Seller to Purchaser are true, correct and complete copies in effect on the Effective Date of this Purchase Contract.
8.2.1.3         The copies of the organizational documents of Morrow, including, without limitation, its articles of incorporation and bylaws, provided by Seller to Purchaser as a part of the Materials are true, correct and complete copies in effect on the Effective Date of this Purchase Contract.
8.2.1.4      The Property Owner does not engage, and has never engaged, in any business other than the ownership, maintenance and operation of the Property and has no direct or indirect ownership interest in any other party and neither owns, leases nor has any tangible property other than the Property.
8.2.1.5         There are no restrictions on the sale of the Interests to Purchaser, and, on or before the Closing Date, there will be no security agreements, pledges, options, equities, charges, restrictions, mortgages, judgments, financing statements or other liens or encumbrances against the Interests.  The Interests will be conveyed and assigned by Seller at Closing free and clear of any liens, claims and encumbrances.
8.2.1.6        The Property Owner has filed or caused to be filed (on a timely basis) all tax returns that are or were required to be filed by or with respect to the Property Owner pursuant to applicable legal requirements. Property Owner (i) has at all times been treated as partnership for federal income tax purposes, and, (ii) has paid all taxes, fees, charges, levies or other assessments, including, without limitation, income, gross receipts, excise, real and personal property, sales, transfer, license, payroll and franchise taxes, and all interest, penalties and additions to tax relating thereto, imposed by any governmental authority (collectively, "Taxes") and due or assessed against it. No taxing authority has taken a position inconsistent with treatment as a partnership.  None of the Seller, Morrow or Property Owner nor any other party has taken any action, or failed to take any action, that would cause the Property Owner to be treated as an association taxable as a corporation for income tax purposes. Nothwithstanding the three (3) year survival period prescribed for the representations and warranties contained in this Section 8.2, the representations and warranties contained in this Section 8.2.1.6 shall survive the Closing Date for a period of four (4) years.
8.2.1.7        All tax and informational returns filed by, for or in connection with the Property Owner are true, correct, and complete. No deficiencies for federal, state or other applicable Taxes have been claimed, assessed or, to Seller’s or Morrow’s knowledge, proposed against the Property 

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Owner by any governmental authority.  There are no pending or, to Seller’s and Morrow’s knowledge, threatened audits, investigations or claims for or relating to any liability in respect of federal, state or other applicable Taxes, and there are no matters under discussion with any governmental authorities with respect to Federal, state or other applicable Taxes that could result in an assessment of Federal, state or other applicable Taxes against the Property Owner. Neither Property Owner, Seller nor Morrow has been notified that any taxing authority intends to audit a Federal, state or other applicable tax return for any other period for the Property Owner. Nothwithstanding the three (3) year survival period prescribed for the representations and warranties contained in this Section 8.2, the representations and warranties contained in this Section 8.2.1.7 shall survive the Closing Date for a period of four (4) years.
8.2.1.8          There are no defined benefit plans or defined contribution plans covering any person or employee of the Property Owner, if any, including, but not limited to, 401(k) plans, profit sharing plans, purchase money pension plans. The Property Owner has not put in place and is not subject to any VEBA, health plan, insurance benefit plan, nonqualified pension plan, mult-employer plan, Title IV plan, or any plan covered by or subject to ERISA.
8.2.1.9        Property Owner has no subsidiaries.
8.2.1.10       All policies or binders of insurance of any kind or nature covering the Property Owner or any of its properties or assets shall be terminated by Property Owner at Closing. 
8.2.1.11   Other than the existing construction loans secured by the Property and ordinary and customary operating expenses, Property Owner has no material liability or obligation whatsoever, whether accrued, absolute, contingent or otherwise. For purposes of this representation and warranty, a “material” liability or obligation is one that exceeds $500 individually or $1,500 in the aggregate.
8.2.1.12       There is no pending, threatened or unasserted legal or administrative proceeding by or against Property Owner.  The Property Owner has complied with all applicable equal employment, worker compensation and labor laws, statutes, ordinances, rules and regulations.  
8.2.1.13       Seller has no knowledge of any violation by Seller, Property Owner or, without any inquiry, by the entity which has held title to the Property during the five years preceding the Closing Date of (a) the PATRIOT Act, Pub. L. No. 107-56, the Bank Secrecy Act, 31 U.S.C. § 5311 et seq., the Money Laundering Control Act of 1986, and laws relating to the prevention and detection of money laundering in 18 U.S.C. §§ 1956 and 1957; (b) the Export Administration Act (50 U.S.C. §§ 2401-2420), the International Emergency Economic Powers Act (50 U.S.C. § 1701, et seq.), the Arms Export Control Act (22 U.S.C. §§ 2778-2994), the Trading With The Enemy Act (50 U.S.C. app. §§ 1-44), and 13 U.S.C. Chapter 9; (c) the Foreign Asset Control Regulations contained in 31 C.F.R., Subtitle B, Chapter V; and (d) any other civil or criminal federal or state laws, regulations, or orders of similar import.  Seller is not an entity with whom Purchaser is prohibited from engaging in this transaction due to any United States government embargos, sanctions, or terrorism or money laundering laws, including, without limitation, due to Seller or any party that has ownership in or control over Seller (each, a “Seller Party”) being (1) subject to United States government embargos or sanctions, (2) in violation of terrorism or money laundering laws, or (3) listed on a published United States government list (e.g., Specially Designated Nationals and Blocked Persons List maintained by the Office of Foreign Assets Control or other lists of similar import).

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8.2.1.14         There are no actions, suits, judgments, summonses or proceedings pending against Seller or Property Owner relating to or arising out of any actual or alleged violation or breach of any code, law, rule, requirement or regulation of any entity or authority having jurisdiction over the Property, or arising out of Property Owner’s ownership of the Property, except for a mechanic’s lien filed against the Property for which a bond to discharge lien has been posted to remove the lien as an encumbrance of the Property; neither Seller nor Property Owner has received any notice of any alleged violation of any codes, ordinances, laws, rules, regulations or private restrictions affecting the Property, or any notice of a complaint filed against Property Owner in a civil action, and, to the knowledge of Seller, no action for any such alleged violation or filing of a complaint in a civil action has been threatened; and Seller shall cause Property Owner to promptly deliver any such notice or complaint, whether received prior to or after Closing, to Property Owner.
8.2.1.15        No Bankruptcy, insolvency, rearrangement or similar action involving Property Owner or Seller, whether voluntary or involuntary, is pending or threatened, and neither Property Owner nor Seller has ever:
(i)    filed a voluntary petition in bankruptcy;
		
	(ii)
	been adjudicated a bankrupt or insolvent or filed a petition or action seeking any reorganization, arrangement, recapitalization, readjustment, liquidation, dissolution or similar relief under any Federal bankruptcy act or any other laws;

		
	(iii)
	sought or acquiesced in the appointment of any trustee, receiver or liquidator of all or any substantial part of its properties, the Land and Improvements, personal property or any portion thereof, or

		
	(iv)
	made an assignment for the benefit of creditors or admitted in writing its inability to pay its debts generally as the same become due.

     8.2.1.16         Seller is not a "foreign person" but is a "United States person" as such terms are defined in the Foreign Investment in Real Property Tax Act of 1980 and §§ 1445 and 7701 of the Internal Revenue Code (the “Code”).
8.2.2    Except for the representations and warranties expressly set forth above in Section 8.2.1, the Interest is expressly purchased and sold “AS IS,” “WHERE IS,” and “WITH ALL FAULTS.”  The Purchase Price and the terms and conditions set forth herein are the result of arm’s‐length bargaining between entities familiar with transactions of this kind, and said price, terms and conditions reflect the fact that Purchaser shall have the benefit of, and, except as otherwise provided in this Purchase Contract, is not relying upon any information provided by Property Owner or statements, representations or warranties, express or implied, made by or enforceable directly against Seller or Morrow, including, without limitation, any relating to the value of the Property, the physical or environmental condition of the Property, any state, federal, county or local law, ordinance, order or permit; or the suitability, compliance or lack of compliance of the Property with any regulation, or any other attribute or matter of or relating to the Property (other than any covenants of title contained in the deeds conveying the Property and the representations set forth above).  Except as otherwise expressly provided otherwise in this Purchase Contract, if Morrow, Seller or Property Owner provides or has provided any documents, summaries, opinions or work product of consultants, surveyors, architects, engineers, title companies, governmental authorities or any other person or entity with respect to the Property, Purchaser and Seller agree that Morrow, Seller or Property Owner 

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has done so or shall do so only for the convenience of both parties, Purchaser shall not rely thereon and the reliance by Purchaser upon any such documents, summaries, opinions or work product shall not create or give rise to any liability of or against Seller or Morrow, Seller’s partners, members, or affiliates or any of their respective partners, officers, directors, participants, employees, contractors, attorneys, consultants, representatives, agents, successors, assigns or predecessors‐in‐interest.  Except for the warranties and representations of Seller in this Purchase Contract, Purchaser shall rely only upon any title insurance obtained by Purchaser with respect to title to the Property.  Except as otherwise expressly provided otherwise in this Purchase Contract, Purchaser acknowledges and agrees that no representation has been made and no responsibility is assumed by Seller with respect to current and future applicable zoning or building code requirements or the compliance of the Property with any other laws, rules, ordinances or regulations, the financial earning capacity of the Property Owner, the continuation of contracts, continued occupancy levels of the Property, or any part thereof, or the continued occupancy by tenants of any Leases or, without limiting any of the foregoing, occupancy at Closing.  Prior to Closing, Seller or Property Owner shall have the right, but not the obligation, to enforce its rights against any and all Property occupants, guests or tenants.
8.2.3    The representations and warranties made by the Seller and Morrow in this Section 8.2 shall survive the Closing and shall constitute Surviving Obligations for a period of three (3) years from the Closing Date.  Any claim brought for a breach of this Section 8.2 must be brought within three (3) years of the Closing Date for the Seller and Morrow to have liability.  
8.3    Representations and Warranties of Purchaser
8.3.1    For the purpose of inducing Seller to enter into this Purchase Contract and to consummate the sale and purchase of the Property in accordance herewith, Purchaser represents and warrants to Seller the following as of the Effective Date and as of the Closing Date:
8.3.2    With respect to Purchaser and its business, Purchaser represents and warrants, in particular, that:
8.3.2.1     Purchaser is a limited partnership duly organized, validly existing and in good standing under the laws of Delaware.  Purchaser is sophisticated and experienced in the acquisition, ownership, and operation of multi-family housing projects similar to the Property, and has full knowledge of all applicable federal, state and local laws, rules, regulations, and ordinances in connection therewith.
8.3.2.2         Purchaser, acting through any of its or their duly empowered and authorized officers, joint venturers, partners, managers, or members, has all necessary power and authority to own and use its properties and to transact the business in which it is engaged, and has full power and authority to enter into this Purchase Contract and to perform its obligations hereunder; and no consent of any of Purchaser’s officers, joint venturers, partners, managers, or members are required to so empower or authorize Purchaser to enter into this Purchase Contract.  Prior to Closing, Purchaser shall have all necessary power and authority to execute and deliver the documents and instruments required of Purchaser at Closing.  
8.3.3.3        No pending or, to the knowledge of Purchaser, threatened litigation exists which if determined adversely would restrain the consummation of the transactions contemplated by this Purchase Contract or would declare illegal, invalid or non-binding any of Purchaser’s obligations or covenants to Seller.

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8.3.3.4        Purchaser is duly authorized to execute and deliver, acting through its duly empowered and authorized officers, joint venturers, partners, managers, and members, respectively, and perform this Purchase Contract, and such execution, delivery and performance by Purchaser does not (i) violate any of the provisions of their respective articles of incorporation or organization, operating agreements, partnership agreements or bylaws, (ii) violate any provision of any law, governmental rule or regulation currently in effect, (iii) violate any judgment, decree, writ, injunction, award, determination or order currently in effect that names or is specifically directed at Purchaser or its property, and (iv) require the consent, approval, order or authorization of, or any filing with or notice to, any court or other governmental authority.
8.3.3.5        The joinder of no person or entity other than Purchaser is necessary to consummate the transactions to be performed by Purchaser and Purchaser has all necessary right and authority to perform such acts as are required and contemplated by this Purchase Contract.  
ARTICLE 9
CONDITIONS PRECEDENT TO CLOSING
9.1    Purchaser’s obligation to close under this Purchase Contract shall be subject to and conditioned upon the fulfillment in all material respects of each and all of the following conditions precedent:
9.1.1    All of the documents required to be delivered by Seller to Purchaser at the Closing pursuant to the terms and conditions hereof shall have been delivered and shall be in form and substance required by this Purchase Contract.
9.1.2    Seller’s representations and warranties set forth in this Purchase Contract shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date and as of the Effective Date as though such representations and warranties were made at and as of such date and time.
9.1.3    Seller shall have complied with, fulfilled and performed, in each case in all material respects, each of the covenants, terms and conditions to be complied with, fulfilled or performed by Seller hereunder.
9.1.4    There shall not be pending or, to the knowledge of either Purchaser or Seller, any litigation or threatened litigation which, if determined adversely, would restrain the consummation of any of the transactions contemplated by this Purchase Contract or declare illegal, invalid or nonbinding any of the covenants or obligations of the Purchaser.
9.1.5   The Improvements (including, but not limited to, the mechanical systems, plumbing, electrical, wiring, appliances, fixtures, heating, air conditioning and ventilating equipment, elevators, boilers, equipment, roofs, structural members and furnaces) shall be at Closing in substantially the same condition as on the Effective Date of this Purchase Contract except for normal wear and tear and such damage from casualty or condemnation that is waived or accepted under ARTICLE 13 hereof.
9.1.6    The conversion of the Property Owner from a Georgia limited liability company to a Delaware limited liability company in accordance with the laws of the State of Delaware on or prior to the Closing Date. Seller hereby agrees to reasonably cooperate (at no third party cost to Seller) with Purchaser in effecting such conversion. 

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9.2    Without limiting any of the rights of Seller elsewhere provided for in this Purchase Contract, Seller’s obligation to close with respect to conveyance of the Property under this Purchase Contract shall be subject to and conditioned upon the fulfillment of each and all of the following conditions precedent:
9.2.1    Purchaser’s representations and warranties set forth in this Purchase Contract shall have been true and correct in all material respects when made, and shall be true and correct in all material respects on the Closing Date and as of the Effective Date as though such representations and warranties were made at and as of such date and time.
9.2.2    Purchaser shall have complied with, fulfilled and performed, in each case in all material respects, each of the covenants, terms and conditions to be complied with, fulfilled or performed by Purchaser hereunder. 
ARTICLE 10
BROKERAGE
10.1    Except for Colliers International (“Broker”), Seller and Purchaser each represents and warrants to the other that it has not dealt with or utilized the services of any other real estate broker, sales person or finder in connection with this Purchase Contract, and each party agrees to indemnify the other party from and against all claims for brokerage commissions and finder’s fees arising from or attributable to the acts of omissions of the indemnifying party. The provisions of this Section shall survive the Closing or termination of this Purchase Contract. 
10.2    At Closing Seller agrees to pay Broker a commission according to the terms of a separate agreement.  Broker shall not be deemed a party or third party beneficiary of this Purchase Contract.
ARTICLE 11
POSSESSION
11.1    Possession of the Property subject to the Permitted Exceptions and the Leases shall be delivered to Purchaser at the Closing.
ARTICLE 12DEFAULTS AND REMEDIES
12.1    If Purchaser terminates this Purchase Contract (for any reason other than a Seller default hereunder or termination expressly permitted herein) or Purchaser materially defaults hereunder on or prior to the Closing Date not cured by the Closing Date and consummation of the Closing does not occur by reason of such termination or material default by Purchaser, Seller and Purchaser agree that it would be impractical and extremely difficult to estimate the damages which Seller may suffer.  Therefore, Seller and Purchaser hereby agree that, except for the Purchaser’s obligations to Seller under Section 5.3 hereof, the reasonable estimate of the total net detriment that Seller would suffer in the event that Purchaser terminates this Purchase Contract or materially defaults hereunder on or prior to the Closing Date is and shall be, and Seller’s sole remedy (whether at law or in equity) shall be, the right to receive from the Title Insurer and retain the full amount of the Deposit as liquidated damages.  The payment and performance of the above as liquidated damages is not intended as a forfeiture or penalty within the meaning of applicable law and is intended to settle all issues and questions about the amount of damages suffered by Seller in the applicable event, except only for damages under Purchaser’s Surviving Obligations, irrespective of the time when the inquiry about such damages may take place.  Upon any 

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such failure by Purchaser hereunder, this Purchase Contract shall be terminated, and neither party shall have any further rights or obligations hereunder, each to the other, except for the Purchaser’s obligations to Seller under Purchaser’s Surviving Obligations, and the right of Seller to collect such liquidated damages to the extent not theretofore paid by Purchaser.   
12.2    Provided that Purchaser has not terminated this Purchase Contract and is not otherwise in material default hereunder, if the Closing does not occur as a result of Seller’s material default hereunder, Purchaser’s sole remedy shall be (i) to elect to terminate this Purchase Contract and receive reimbursement of the Deposit and be paid by Seller (A) Purchaser’s actual and verifiable out-of-pocket third party costs and expenses paid to unrelated and unaffiliated third party consultants in connection with the performance of examinations, inspections and/or investigations pursuant to this Purchase Contract, and Purchaser’s attorneys in connection with negotiation of this Purchase Contract and matters related thereto, in an aggregate amount not to exceed $150,000.00, and (B) Purchaser’s actual and verifiable application or commitment fee, rate lock or other non-refundable fee paid to any prospective lender in an amount not to exceed $1,100,000.00; or (ii) to seek specific performance of this Purchase Contract.  
ARTICLE 13
RISK OF LOSS OR CASUALTY
13.1    The risk of loss of damage to the Property by reason of any insured or uninsured casualty during the period through and including the Closing Date shall be borne by Seller.  Seller and Property Owner covenant and agree to maintain all of its existing insurance coverage upon the Property in full force and effect until the Closing Date, without material modification thereto.  In the event of any “material damage,” as hereinafter defined, to or destruction of the Property or any portion thereof, Purchaser may, at its option, by Notice given to Seller within ten (10) days after Purchaser is notified of such material damage or destruction: (i) unilaterally terminate this Purchase Contract except the Surviving Obligations shall survive and the Deposit shall be immediately returned to Purchaser; or (ii) proceed under this Purchase Contract with no reduction in the Purchase Price, receive any insurance proceeds due Seller or Property Owner as a result of such damage or destruction (including any rent loss insurance applicable to the period from and after the Closing Date), together with the amount of any deductible with respect to such insurance proceeds, and assume responsibility for repair of the Property.  If the Property is not materially damaged, then Purchaser shall not have the right to terminate this Purchase Contract, but all insurance proceeds (including any rent loss insurance applicable to the period from and after the Closing Date), together with the amount of any deductible with respect to such insurance proceeds, shall be paid or assigned to Purchaser and Purchaser shall assume responsibility for such repair.  For purposes of this paragraph, “material damage” means damages reasonably estimated to exceed $250,000.00 to repair, as determined by an independent insurance claims adjuster doing business in the county in which the Land is located, which claims adjuster shall be reasonably satisfactory to Seller and Purchaser.

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ARTICLE 14

14.1    In the event that at the time of Closing all or any part of the Property is (or has previously been) acquired, or is about to be acquired, by authority of any governmental agency (or in the event that at such time there is any notice of any such acquisition or intent to acquire by any such governmental agency), Purchaser shall have the right, at Purchaser’s option, to terminate this Purchase Contract (except the Surviving Obligations shall survive) by giving written Notice within fifteen (15) days of Purchaser’s receipt from Seller of written Notice of the occurrence of such event and recover the Deposit hereunder, or to settle in accordance with the terms of this Purchase Contract for the full Purchase Price and receive the full benefit or any condemnation award.  It is expressly agreed between the parties hereto that this paragraph shall in no way apply to customary dedications for public purposes that may be necessary for the development of the Property.
ARTICLE 15
MISCELLANEOUS
15.1    Exhibits and Riders
All Exhibits and Riders annexed hereto are a part of this Purchase Contract for all purposes.  In the event any Riders are annexed hereto and there are any conflicts between the terms of this Purchase Contract and the Riders, the terms of the Riders shall supersede and control.  
15.2    Assignability
Subject to Section 15.19 hereof, except for an assignment to a wholly owned subsidiary of Purchaser or to a single purpose entity formed and controlled by one or more affiliates of Purchaser, in which event, the consent of Seller shall not be required provided Purchaser promptly notifies Seller of such assignment, this Purchase Contract is not assignable by any party hereto without first obtaining the prior written approval of the non-assigning party.  If Seller permits Purchaser to assign this Purchase Contract or if Purchaser assigns this Purchase Contract to a wholly owned subsidiary of Purchaser or to a single purpose entity formed and controlled by one or more affiliates of Purchaser in accordance with the terms of this Section 15.2, Purchaser shall not be relieved of any liability hereunder.
15.3    Binding Effect
This Purchase Contract shall be binding upon and inure to the benefit of Seller and Purchaser, and their respective heirs, personal representatives, successors and permitted assigns.
15.4    Captions
The captions, headings, and arrangements used in this Purchase Contract are for convenience only and do not in any way affect, limit, amplify, or modify the terms and provisions hereof.
15.5    Number and Gender of Words
Whenever herein the singular number is used, the same shall include the plural where appropriate, and words of any gender shall include each other gender where appropriate.

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15.6    Notices
All notices, demands, requests and other communications required pursuant to the provisions of this Purchase Contract (“Notice”) shall be in writing and shall be deemed to have been properly given or served for all purposes (i) if sent by Federal Express or any other nationally recognized overnight carrier for next business day delivery, on the first business day following deposit of such Notice with such carrier, (ii) if personally delivered, on the actual date of delivery, (iii) if sent by certified mail, return receipt requested postage prepaid, on the fifth (5th) business day following the date of mailing, or (iv) if sent by facsimile or electronic mail, on the date of delivery provided the sender maintain a copy of evidence of successful transmission and also delivers the Notice via overnight delivery addressed as follows:

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If to Seller:

c/o Davis Development
403 Corporate Center Drive
Suite 201
Stockbridge, Georgia 30281
Telephone (770) 474-4345
Facsimile (770) 474-5213
Email: fred@davisdevga.com
Attention: Fred S. Hazel

With a copy to:

Davis Development
403 Corporate Center Drive
Suite 201
Stockbridge, Georgia 30281
Telephone (770) 474-4345
Facsimile (770) 474-5213
Email: lance.chernow@davisdevga.com
Attention: Lance A. Chernow

	If to Purchaser:
Preferred Apartment Communities
3284 Northside Parkway
Suite 150
Atlanta, Georgia 30327
Telephone:  (770) 818-4108
Email: jsprain@pacapts.com
Attention:  Jeffrey R. Sprain

Preferred Apartment Communities
3284 Northside Parkway
Suite 150
Atlanta, Georgia 30327
Telephone:  (770) 818-4124
Email: jsherman@pacapts.com
Attention:  Jeff Sherman

	 

	With a copy to:

SFW Advisors, P.C.
1775 Woodstock Road
Suite 100
Roswell, Georgia 30075
Telephone:  (678) 507-1020
Email:  swhite@sfwadvisors.com
Attention:  Stephen F. White

Any of the parties may designate a change of address by Notice in writing to the other parties. Whenever in this Purchase Contract the giving of Notice by mail or otherwise is required, the giving of such Notice may be waived in writing by the person or persons entitled to receive such Notice.  The respective attorneys for the Seller and Purchaser may give and receive Notices on behalf of their respective clients.

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15.7    Governing Law And Venue
The laws of the state in which the Land is situated shall govern the validity, construction, enforcement, and interpretation of this Purchase Contract, unless otherwise specified herein except for the conflict of law provisions thereof.  All claims, disputes and other matters in question arising out of or relating to this Purchase Contract, or the breach thereof, shall be decided by proceedings instituted and litigated in a court for the district in which the Land is situated, and the parties hereto expressly consent to the venue and jurisdiction of such court.
15.8    Entirety And Amendments; Survival
This Purchase Contract embodies the entire Purchase Contract between the parties and supersedes all prior purchase contracts and understandings, if any, relating to the Property, and may be amended or supplemented only by an instrument in writing executed by the party against whom enforcement is sought.  All terms and provisions of this Purchase Contract shall be merged into the Closing documents and shall not survive Closing, unless expressly set forth to the contrary in this Purchase Contract.  Seller authorizes Morrow to amend this Purchase Contract without the need for signatures from each Seller.  
15.9    Severability
If any provision of this Purchase Contract is held to be illegal, invalid, or unenforceable under present or future laws, such provision shall be fully severable.  The Purchase Contract shall be construed and enforced as if such illegal, invalid, or unenforceable provision had never comprised a part of this Purchase Contract; and the remaining provisions of this Purchase Contract shall remain in full force and effect and shall not be affected by the illegal, invalid, or unenforceable provision or by its severance from this Purchase Contract.  In lieu of such illegal, invalid, or unenforceable provision, there shall be added automatically as a part of this Purchase Contract a provision as similar in terms to such illegal, invalid, or unenforceable provision as may be possible to make such provision legal, valid, and enforceable.
15.10    Multiple Counterparts
This Purchase Contract may be executed in a number of identical counterparts.  If so executed, each of such counterparts is to be deemed an original for all purposes and all such counterparts shall, collectively, constitute one Purchase Contract.  In making proof of this Purchase Contract, it shall not be necessary to produce or account for more than one such counterparts.
15.11    Further Acts
In addition to the acts and deeds recited herein and contemplated and performed, executed and/or delivered by Seller and Purchaser, Seller and Purchaser agree to perform, execute and/or deliver or cause to be performed, executed and/or delivered any and all such further acts, deeds, and assurances as may be necessary to, and to use their respective best efforts to consummate the transactions contemplated hereby.
15.12    Construction
No provision of this Purchase Contract shall be construed in favor of, or against, any particular party by reason of any presumption with respect to the drafting of this Purchase Contract; both parties, being represented by counsel, having fully participated in the negotiation of this instrument.

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15.13    Confidentiality
Purchaser, Seller and their respective agents shall not disclose the terms and conditions contained in this Purchase Contract and shall keep the same confidential; provided, however, that notwithstanding the foregoing, Purchaser may disclose the terms and conditions of this Purchase Contract (i) as required by law, (ii) to undertake its due diligence hereunder and to consummate the transactions contemplated by this Purchase Contract or any financing relating thereto, or (iii) to Purchaser’s or Seller’s lenders, attorneys and accountants.  Neither party hereto shall make any public statements or announcements, or issue any press releases, relating to the transactions contemplated hereby without the prior approval of the other party hereto (unless such statement, announcement, or press release is required by any applicable securities law or any rule or regulation of the New York Stock Exchange, in which case such prior approval is not required). Notwithstanding the foregoing, Purchaser shall have the right after the expiration of the Feasibility Period to release a press notice containing only such information as Purchaser is required to include in its filing of Form 8-K with the Securities and Exchange Commission reporting the entry of a “Material Definitive Agreement” immediately following the full execution of this Purchase Contract by the parties. Any information provided by Seller to Purchaser under the terms of this Purchase Contract is for informational purposes only.  In providing such information to Purchaser, except as set forth herein, Seller makes no representation or warranty, express, written, oral, statutory, or implied, and all such representations and warranties are hereby expressly excluded.  Except as set forth herein, Purchaser shall not in any way be entitled to rely upon the accuracy of such information.  Such information is also confidential and, except as set forth herein, Purchaser shall be prohibited from making such information public to any other person or entity other than its agents and legal representatives, without Seller’s prior written authorization, which may be granted or denied in Seller’s sole discretion.  The provisions of this Section shall survive the Closing or termination of this Purchase Contract.
15.14    Non-Solicitation of Employees
Purchaser acknowledges and agrees that, without the consent of Seller, neither Purchaser nor any of Purchaser’s employees, affiliates or agents shall solicit or contact any of Property Owner’s employees for potential employment, other than employees located at the Property for potential employment at the Property following Closing.
15.15    Time of The Essence
It is expressly agreed by the parties hereto that time is of the essence with respect to this Purchase Contract.
15.16    Cumulative Remedies And Waiver
Except as expressly provided otherwise in this Purchase Contract, no remedy herein conferred or reserved is intended to be exclusive of any other available remedy or remedies herein conferred or referred, but each and every such remedy shall be cumulative and shall be in addition to every other remedy given under this Purchase Contract.  No delay or omission to exercise any right or power accruing upon any default, omission, or failure of performance hereunder shall impair any right or power or shall be construed to be a waiver thereof, but any such right and power may be exercised from time to time and as often as may be deemed expedient.  No waiver, amendment, release, or modification of this Purchase Contract shall be established by conduct, custom, or course of dealing.

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15.17    Litigation Expenses
In the event either party hereto commences litigation against the other to enforce its rights hereunder, the prevailing party in such litigation shall be entitled to recover from the other party its reasonable attorneys’ fees and expenses incidental to such litigation.
15.18    Time Periods
Should the last day of a time period fall on a weekend or legal holiday, the next Business Day thereafter shall be considered the end of the time period.  
15.19    Exchange

Either party may consummate the purchase or sale (as applicable) of the Property as part of a so-called like kind exchange (an “Exchange”) pursuant to § 1031 of the Code, provided that:  (a) the Closing shall not be delayed or affected by reason of the Exchange nor shall the consummation or accomplishment of an Exchange be a condition precedent or condition subsequent to the exchanging party’s obligations under this Agreement, (b) the exchanging party shall effect its Exchange through an assignment of this Agreement, or its rights under this Agreement, to a qualified intermediary, (c) neither party shall be required to take an assignment of the purchase agreement for the relinquished or replacement property or be required to acquire or hold title to any real property for purposes of consummating an Exchange desired by the other party; and (d) the exchanging party shall pay any additional costs that would not otherwise have been incurred by the non-exchanging party had the exchanging party not consummated the transaction through an Exchange.  Neither party shall by this Agreement or acquiescence to an Exchange desired by the other party have its rights under this Agreement affected or diminished in any manner or be responsible for compliance with or be deemed to have warranted to the exchanging party that its Exchange in fact complies with § 1031 of the Code.
15.20    Liability of Individuals
Purchaser acknowledges that, except as otherwise provided in this Section 15.20, Beaver Creek Trust, Fred S. Hazel, Lance A. Chernow, Keli J. Hazel, Jeffrey S. Greene, Stephen Michael Davis, Blake Miguel Davis Trust and Blake Miguel Davis Trust 2012 (the “Exempt Parties”) shall have no personal liability under this Purchase Contract or any document executed in connection with the transactions contemplated by this Purchase Contract.  The Exempt Parties shall have personal liability for the representations and warranties contained in Section 8.2.1 hereof to the extent that such representations and warranties survive the Closing.  Except for the specific obligation to assign the Interests, Purchaser agrees that any and all claims relating to this Purchase Contract shall be brought against Morrow and not the Exempt Parties, except for any claims relating to this Purchase Contract arising out of the willful misconduct or fraudulent acts of the Exempt Parties.  
15.21    Net Worth Requirement

Morrow and Davis hereby represent and warrant to Purchaser that (i) Morrow has, as of the Effective Date and the Closing Date, a liquid net worth of at least Ten Million Dollars ($10,000,000), and (ii) the letter written and signed by David Deeter of Frazier & Deeter, LLC delivered to Purchaser as a part of the Materials presents fairly the financial condition and liquidity of Morrow and Davis as of the Effective Date. Further, Morrow and Davis covenant and agree that for a period of three (3) years after the Closing Date, Morrow shall maintain a liquid net worth of at least Ten Million Dollars ($10,000,000). The aforesaid representation, warranty and covenant of Morrow and Davis shall constitute 

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Surviving Obligations for a period of three (3) years from the Closing Date, and notwithstanding anything to the contrary contained herein, any and all claims relating to a breach of the aforesaid representation, warranty and covenant shall be brought against Morrow and/or Davis.  

15.22    Indemnified Matters
Morrow agrees to protect, defend, indemnify and hold harmless Purchaser, Property Owner and Purchaser’s members, partners, legal representatives, successors, assigns, agents, stockholders, officers, directors, employees and affiliates (the “Indemnified Parties”) from any and all losses, damages, expenses, fees (including, without limitation, reasonable attorneys’ and experts’ fees and expenses), causes of action (whether in tort or contract, in law or in equity), court costs, suits, judgments, disbursements, charges, assessments, liability, claims and demands whatsoever in law or in equity (collectively “Claims”), incurred or suffered by the Indemnified Parties arising out of or in connection with the Indemnified Matters (as defined below).  Morrow, at its expense, must assume on behalf of the Indemnified Parties and conduct with due diligence and in good faith the defense of any Indemnified Matter.  The defense must be by counsel satisfactory to the Purchaser, but Purchaser agrees not to unreasonably withhold or delay its approval of such counsel.  Purchaser further agrees to cooperate in Morrow's defense of any action or proceeding brought by a person or entity in connection with any Indemnified Matter.  Any final settlement by Morrow of any action or proceeding in connection with any Indemnified Matter shall be subject to approval by Purchaser, which approval may not be unreasonably withheld or delayed.  Each Indemnified Party has the right, at its option, to be represented by advisory counsel of its own selection and at its own expense.  If Morrow fails to fully perform its indemnification, hold harmless, and defense obligations, each Indemnified Party, at its option, and without relieving Morrow of their obligations under this Section, may so perform, but Morrow must reimburse such Indemnified Party for all costs and expenses so incurred, together with interest at the maximum contractual rate permitted at law. The provisions of this Section 15.22 hereof shall survive the Closing or termination of this Purchase Contract.  “Indemnified Matters” means the following:
(a)    all obligations, liabilities and matters arising and relating to persons who were employees of Property Owner for periods prior to the Closing Date, including, without limitation, any of the following related to such persons: social security withholding, compensation, back pay, workers compensation, penalties, benefits, and unemployment amounts, taxes, 401(k) plans, profit sharing plans, purchase money pension plans and similar matters; 
(b)    actions, proceedings, litigation or governmental investigations filed against Property Owner relating to matters occurring prior to the Closing Date;
(c)    the Leases and Property Contracts as to events occurring prior to the Closing Date;
(d)    any existing or prior financing entered into by Property Owner or secured by the Property;
(e)    bodily injury (including illness, disability, and death, and provided that such bodily injury occurred or manifested itself prior to the Closing Date), property damage (including trespass, nuisance, wrongful eviction, and deprivation of the use of real property), or other damage of or to any Person, including any employee or former employee of Property Owner, in any way arising from or allegedly arising from any acts of the Property Owner or the operation of the Property by the Property Owner on or prior to the Closing Date.
15.23    Audited Financial Statements

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Seller hereby agrees (i) to reasonably cooperate (at no third party cost to Seller) with Purchaser during the term of this Purchase Contract and subsequent to Closing in the preparation by Purchaser and its advisors, at Purchaser’s sole cost and expense, of audited financial statements of the Property for the most recent completed fiscal year of Seller and the current fiscal year-to-date that comply with Form 8-K filing requirements and Rule 3-14 of Regulation S-X, both as promulgated by the United States Securities and Exchange Commission, including current and historical operating statements and information regarding the Property, and (ii) deliver to Purchaser an audit representation letter in the form attached hereto and made a part hereof as Exhibit 15.23. The provisions of this Section 15.23 hereof shall survive the Closing until such time as all filing requirements of Purchaser regarding Purchaser’s acquisition of the Interests have been satisfied.  
15.24    Tax Matters
Seller shall prepare or cause to be prepared and file or cause to be filed all tax returns for Property Owner for all periods ending on or prior to the Closing Date which are filed after the Closing Date. All such tax returns shall be prepared in a manner consistent with all prior tax returns. Seller shall provide Purchaser with any such tax returns at least thirty (30) days prior to filing, shall permit Purchaser to review and comment upon such Tax Returns prior to filing and shall reflect all reasonable comments of Purchaser in such tax returns. The provisions of this Section 15.24 hereof shall survive the Closing or termination of this Purchase Contract.  
ARTICLE 16
OPERATION OF THE PROPERTY
16.1    After the Effective Date, Seller and Morrow covenant that Property Owner (a) shall only enter into new Leases or renew existing Leases provided that same are made at arm’s length, at the rents and with no concessions other than as set forth on Exhibit 16.1 attached hereto and made a part hereof, for a term of not less than nine (9) months and not more than thirteen (13) months and in accordance with Property Owner’s customary leasing procedures, such leasing procedures being delivered to Purchaser as a part of the Materials, (b) shall only modify, terminate (upon a tenant default) or accept the surrender or forfeiture of any of the Leases in the ordinary course of business and (c) shall not modify any of the Property Contracts without first obtaining the written consent of Purchaser, which consent shall be given or  withheld in Purchaser’s sole discretion. 
16.2    Except as specifically set forth in this ARTICLE 16, Morrow and Seller shall (a) cause the Property Owner to operate the Property after the Effective Date in the ordinary course of business and (b) maintain the Improvements in their condition as of the Effective Date, ordinary wear and tear excluded, and (c) manage and market the lease up of the Property in a manner consistent with prudent business practices, including, without limitation, maintaining the same levels of staffing and personnel at the Property as currently maintained on the Property.  Except as necessary in the Seller’s or Morrow’s sole discretion to address any life or safety issue at the Property, Seller and Morrow covenant that Property Owner will not make any material alterations to the Property or remove any of the Fixtures and Tangible Personal Property without the prior written consent of Purchaser which consent shall not be given or withheld in Purchaser’s sole discretion. Seller and Morrow shall cause Property Owner to comply with or cure all notices of violation of present and hereafter issued all applicable federal, state, municipal and other governmental laws, ordinances, requirements, rules, regulations, notices and orders, and all  agreements, covenants, conditions, easements and restrictions relating to the Property.  Morrow and Seller shall cause Property Owner not to sell, further pledge, encumber or otherwise transfer or dispose of all or any part of any Property (except for such items of Fixtures and Tangible Personal Property as become obsolete or are disposed of in the ordinary course and only if replaced by an item 

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of like quality and functionally unless same is no longer necessary for the operation of the Property).  Morrow and Seller shall cause Property Owner not to initiate, consent to, approve or otherwise take any action with respect to zoning or any other governmental rules or regulations presently applicable to all or any portion of the Property.
16.3    Any new Property Contract entered into after the date hereof shall be subject to the covenants, representations and warranties set forth in this Purchase Contract and applicable to Property Contracts.
16.4    Morrow and Seller shall cause the Property Owner to maintain in full force and effect property insurance on the Property, which insurance provides for casualty insurance covering the full replacement value of the Property. 
16.5    On the Closing Date, all vacant units within the Property shall be in “rent ready condition,” except those units which were occupied and which became vacant within five (5) Business Days prior to the Closing Date.  With respect to any such units becoming vacant within the five (5) Business Day period prior to the Closing Date that are not “rent-ready” on the Closing date, Seller shall provide Purchaser with a credit against the Purchase Price at Closing of Eight Hundred and 00/100 ($800.00) Dollars per unit.  The term “rent-ready condition” shall mean:  interior carpets have been cleaned or replaced as necessary, freshly painted interior walls, working kitchen appliances (and water heaters and HVAC to the extent such items serve only the individual vacant unit(s)), and no material damage to the doors, walls, ceilings, floors or windows inside such vacant units.

 [THE REMAINDER OF THIS PAGE WAS INTENTIONALLY LEFT BLANK.]

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NOW WHEREFORE, the parties hereto have caused this Purchase Contract to be executed and delivered as of the date first set forth above.
                        
	
		
	

Date of Execution:
December 1, 2014
	

PROPERTY OWNER:
NORTHPOINTE INVESTORS, LLC, a 
Georgia limited liability company

By:   Morrow Investors, Inc., a Georgia
             corporation, Its Manager
   
             By:_/s/ Fred S. Hazel____________
         Fred S. Hazel, Vice President
  

	

December 1, 2014
	

VILLAS FAIRFIELD PARTNERS, LLC, a 
Georgia limited liability company

By:   Morrow Investors, Inc., a Georgia
             corporation, Its Manager
   
             By:_/s/ Fred S. Hazel____________
                  Fred S. Hazel, Vice President
  

[SIGNATURES CONTINUED ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

        
	
		
	

Date of Execution:
 December 1, 2014
	

MORROW:
MORROW INVESTORS, INC., a 
Georgia Corporation

   
By:_/s/ Fred S. Hazel_____________
      Fred S. Hazel, Vice President
  

	December 1, 2014
	DAVIS:

/s/ Migueal B. Davis_____________
Migueal B. Davis

(For purpose of the representation, warranty and covenant made in Section 15.21 hereof)

	 
	 

 [SIGNATURES CONTINUED ON NEXT PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE

Date of Execution:    SELLER:

December 1, 2014                BEAVER CREEK TRUST
                        
By:    Briarcliff Management, LLC, a 
Nevada limited liability company,
Trustee

By: /s/ Fred S. Hazel    _______________
     Fred S. Hazel, Member

By: /s/ Stephen Michael Davis_________
     Stephen Michael Davis, Member

By: /s/ David A. Deeter_______________
     David A. Deeter, Member    

                        
December 1, 2014                /s/ Fred S. Hazel                
Fred S. Hazel

December 1, 2014                /s/ Lance A. Chernow                
Lance A. Chernow 
                        
December 1, 2014                /s/ Keli J. Hazel                
Keli J. Hazel

December 1, 2014                /s/ Jeffrey S. Greene____________________
Jeffrey S. Greene

December 1, 2014                /s/ Stephen Michael Davis________________
Stephen Michael Davis

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

December 1, 2014                BLAKE MIGUEL DAVIS TRUST  

By: /s/ David A. Deeter___________________
     David A. Deeter, Co-Trustee

By: /s/ Stephen Michael Davis______________
      Stephen Michael Davis, Co-Trustee
    

December 1, 2014                BLAKE MIGUEL DAVIS TRUST (2012)

By: /s/ David A. Deeter___________________
     David A. Deeter, Co-Trustee

By: /s/ Stephen Michael Davis______________
      Stephen Michael Davis, Co-Trustee

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

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[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

		
	Date of Execution:
	PURCHASER:

		
	December 1, 2014
	PREFERRED APARTMENT COMMUNITIES OPERATINGPARTNERSHIP, L.P., a Delaware limited partnership

By: Preferred Apartment Advisors, LLC, a Delaware limited liability company, its Agent

By: _/s/  Jeffrey R. Sprain________
Jeffrey R. Sprain,
its General Counsel

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EXHIBIT A

_____________________________

Members of Northpointe Investors, LLC and Villas Fairfield Partners, LLC:

Beaver Creek Trust
Fred S. Hazel
Lance A. Chernow
Keli J. Hazel
Jeffrey S. Greene
Stephen Michael Davis
Blake Miguel Davis Trust
Blake Miguel Davis Trust 2012

EXHIBIT 1.1.10
LEGAL DESCRIPTION OF THE FAIRFIELD LAND
[On File with Company]

EXHIBIT 1.1.25
LEGAL DESCRIPTION OF THE NORTHPOINTE LAND
[On file with Company]

EXHIBIT 3.1.2
FORM OF ESCROW AGREEMENT
Project Name:        
                     The Avenues at Northpointe
                                                                                                          Avenues at Cypress 

This Escrow Agreement (this “Agreement”), dated as of December ___, 2014, by and among the parties listed on Exhibit A attached thereto and made a part hereof (collectively, Seller”), PREFERRED APARTMENT COMMUNITIES OPERATING PARTNERSHIP, L.P., a Delaware limited partnership (“Purchaser”) and CHICAGO TITLE INSURANCE COMPANY (“Escrow Agent”);

WITNESSETH:

WHEREAS, Purchaser has entered into a Purchase and Sale Contract dated December ___, 2014 (the “Contract”) with Seller, whereby Seller has agreed to sell and Purchaser has agreed to buy certain premises described on Exhibit B attached hereto and made a part hereof (the “Premises”); and

WHEREAS, pursuant to the provisions of the Contract, Seller and Purchaser have requested that Escrow Agent act as escrow agent under the Contract, and Purchaser has tendered good funds to Escrow Agent in the amount of $1,000,000.00  representing the Initial Deposit; and

WHEREAS, on or before two (2) business days after the expiration of the Feasibility Period, Purchaser is required to deliver to Escrow Agent $1,000,000.00 representing the Second Deposit;

WHEREAS, the Initial Deposit and Additional Deposit are collectively referred to as the “Deposit;” and

WHEREAS, Purchaser, Escrow Agent and Seller wish to more particularly set forth and define the rights, obligations and duties of Escrow Agent in and to the Deposit as set forth in this Agreement.

NOW, THEREFORE, in consideration of the foregoing and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, Purchaser, Seller and Escrow Agent hereby agree as follows:

1.All capitalized terms not defined herein shall have the same meaning set forth in Contract.

2.The Deposit is to be held in an interest-bearing account, pursuant to the Contract, with interest payable to Purchaser. Purchaser’s Federal Tax Identification Number is 27-2609875. The 

wire transfer instructions for Escrow Agent are set forth on Exhibit C attached hereto and made a part hereof.

3.Both Purchaser and Seller shall give notice to Escrow Agent at least two (2) business days prior to Closing pursuant to the Contract.  Such notice shall also include instructions for disbursement of the Deposit and the documents to be signed and delivered by Seller and Purchaser at Closing in accordance with the Contract.

4.Upon notice from Purchaser to Escrow Agent that it has terminated the Contract pursuant to the terms of Section 5.2 of the Contract, the Initial Deposit shall immediately be returned to Purchaser and no notice from Seller shall be required.  Both Purchaser and Seller shall give notice to Escrow Agent for the disbursement of the Deposit in all other instances as provided in the Contract, except in a notice of default in which case unilateral notice may be given.  In the event Escrow Agent receives such unilateral notice of default, Escrow Agent shall promptly notify the party alleged to have defaulted and if such party fails to notify Escrow Agent of its dispute of a default within ten (10) days of receipt of Escrow Agent’s notice, then Escrow Agent may disburse the Deposit in accordance with the unilateral notice of the party claiming default.  If Escrow Agent does receive notice disputing a claim of default within said ten (10) day period, then Escrow Agent may treat such as a dispute between Purchaser and Seller and act in accordance with the terms of Paragraph 6 hereof.

5.Purchaser and Seller agree that (i) Escrow Agent is a mere stakeholder with respect to the Deposit and/or other monies payable to Escrow Agent as escrow agent under the Contract and/or this Escrow Agreement, and (ii) Escrow Agent has no liability with respect to said Deposit and other monies, except for gross negligence and/or willful neglect on the part of Escrow Agent.

6.In the event of a dispute between Purchaser and Seller with respect to the Deposit and/or other monies payable to Escrow Agent as escrow agent under the Contract and/or this Escrow Agreement, Escrow Agent has the right, at its exclusive discretion, to deposit the Deposit into any court having jurisdiction over the dispute between Purchaser and Seller.  In the event Escrow Agent exercises its rights under this paragraph, (a) all reasonable costs incurred by Escrow Agent (including but not limited to reasonable attorney’s fees actually incurred) shall be borne equally by Seller and Purchaser, and (b) all obligations of Escrow Agent under the Contract and/or this Escrow Agreement shall terminate (except for liability of Escrow Agent for gross negligence and/or willful neglect as aforesaid).

7.All reasonable costs incurred by Escrow Agent as escrow agent under the Contract and/or this Escrow Agreement (except costs or liabilities arising from Escrow Agent’s gross negligence and/or willful neglect) shall be borne equally by Seller and Purchaser, and each such party agrees to indemnify and hold harmless Escrow Agent to the extent of such party’s respective liability for any loss, costs, claim against Escrow Agent as escrow agent under the Contract and/or this Escrow Agreement (except for Escrow Agent’s gross negligence and/or willful neglect).

8.All notices, demands, requests and other communications required pursuant to the provisions of this Agreement (“Notice”) shall be in writing and shall be deemed to have been properly given or served for all purposes (i) if sent by Federal Express or any other nationally recognized overnight carrier for next business day delivery, on the first business day following deposit of such Notice with such carrier, (ii) if personally delivered, on the actual date of delivery, (iii) if sent by certified mail, return receipt requested postage prepaid, on the fifth (5th) business day following the date of mailing, or (iv) if sent by facsimile or electronic mail, on the date of delivery provided the sender maintain a copy of evidence of successful transmission and also delivers the Notice via overnight delivery addressed as follows:

	
	
	If to Seller:

c/o Davis Development
403 Corporate Center Drive
Suite 201
Stockbridge, Georgia 30281
Telephone (770) 474-4345
Facsimile (770) 474-5213
Email: fred@davisdevga.com
Attention: Fred S. Hazel

With a copy to:

Davis Development
403 Corporate Center Drive
Suite 201
Stockbridge, Georgia 30281
Telephone (770) 474-4345
Facsimile (770) 474-5213
Email: lance.chernow@davisdevga.com
Attention: Lance A. Chernow

	If to Purchaser:
Preferred Apartment Communities
3284 Northside Parkway
Suite 150
Atlanta, Georgia 30327
Telephone:  (770) 818-4108
Email: jsprain@pacapts.com
Attention:  Jeffrey R. Sprain

	 

	Preferred Apartment Communities
3284 Northside Parkway
Suite 150
Atlanta, Georgia 30327
Telephone:  (770) 818-4124
Email: jsherman@pacapts.com
Attention:  Jeff Sherman 

With a copy to:

SFW Advisors, P.C.
1775 Woodstock Road
Suite 100
Roswell, Georgia 30075
Telephone:  (678) 507-1020
Email:  swhite@sfwadvisors.com
Attention:  Stephen F. White

        

If to Escrow Agent:

Chicago Title Insurance Company
5565 Glenridge Connector
Suite 300
Atlanta, Georgia 30342
Telephone (404) 303-3203
Facsimile (404) 419-3205
Email: chris.valentine@ctt.com 
Attention: Christopher J. Valentine

9.This Escrow Agreement may be executed in counterparts.  This Escrow Agreement shall be governed by the laws of the state in which the Premises are located.

10.Escrow Agent shall not charge an escrow fee for the holding and disbursement of the Deposit pursuant to the Contract.

[SIGNATURES COMMENCE ON FOLLOWING PAGE]

IN WITNESS WHEREOF, this Escrow Agreement has been duly executed by the parties hereto, to be effective as of the date above written.

                            
PURCHASER:

                            
PREFERRED APARTMENT                                     COMMUNITIES OPERATING                                     PARTNERSHIP, L.P., a Delaware                                     limited partnership

By: Preferred Apartment Advisors,                                            LLC, a Delaware limited liability                                        company, its Agent

By: __________________________ 
		
	     
	         Jeffrey R. Sprain, its General                                              Counsel

[SIGNATURES CONTINUED ON NEXT PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

    

SELLER:

BEAVER CREEK TRUST

By:    Briarcliff Management, LLC, a Nevada
limited liability company, Trustee    

By:_______________________________
     Fred S. Hazel, Member

By: _______________________________
      Stephen Michael Davis, Member

By: _______________________________
      David A. Deeter, Member
                            
                                                
Fred S. Hazel

                                                
Lance A. Chernow 
                        
                                                
Keli J. Hazel

____________________________________
Jeffrey S. Greene

____________________________________
Stephen Michael  Davis

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]    

BLAKE MIGUEL DAVIS TRUST

By: __________________________________
     David A. Deeter, Co-Trustee

By: __________________________________
      Stephen Michael Davis, Co-Trustee

BLAKE MIGUEL DAVIS TRUST (2012)

By: __________________________________
     David A. Deeter, Co-Trustee

By: __________________________________
      Stephen Michael Davis, Co-Trustee

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

ESCROW AGENT:

Chicago Title Insurance Company
    
By:                        
Print Name:                    
Title:                        

EXHIBIT A

       SELLERS:

Beaver Creek Trust
Fred S. Hazel
Lance A. Chernow
Keli J. Hazel
Jeffrey S. Greene
Stephen Michael Davis
Blake Miguel Davis Trust
Blake Miguel Davis Trust 2012

EXHIBIT B

LEGAL DESCRIPTION

EXHIBIT C

ESCROW AGENT’S WIRING INSTRUCTIONS

ABA#:                    

BANK:                

ACCOUNT #:                

CREDIT TO:    

CONTACT:            
PHONE:      
EMAIL:

PLEASE REFERENCE:        THE AVENUES AT NORTHPOINTE
AVENUES AT CYPRESS

EXHIBIT 5.5
THE MATERIALS 

		
	1.
	Rent roll for the Property (when available and upon request) together with the form lease currently in use at the Property, copies of tenant leases and copies of tenant files.

		
	2.
	Licenses and Permits (excluding construction).

		
	3.
	Copies of the most current real estate or personal property ad valorem tax statements for the Property.

		
	4.
	Copies of all property contracts (even those not terminable within 90 days).

		
	5.
	Personal Property Inventory.

		
	6.
	Insurance loss runs, if any.

		
	7.
	Occupancy Reports.

		
	8.
	Architectural, mechanical, electrical, plumbing, drainage, construction, and similar plans, specifications and blueprints relating to the Improvements.

		
	9.
	Operating statements itemizing income and expense items for the Property (when available and upon request).  

		
	10.
	Existing Title Policy and Recorded Exceptions.

		
	11.
	Existing ALTA/ACSM As-Built Survey.

		
	12.
	Organizational Documents.

		
	13.
	2012 and 2013 Federal Tax Return.

		
	14.
	Existing environmental reports and assessments for the Property, including, without limitation, any Phase I or Phase II environmental reports.

EXHIBIT 6.2
TITLE MATTERS 

EXHIBIT 7.2.1.1
ASSIGNMENT AND ASSUMPTION OF INTERESTS

This Assignment and Assumption of Interests (this "Assignment") is made this _________ day of ________, 2015, by and among the parties listed on Exhibit A attached hereto and made a part hereof (collectively, hereinafter referred to as "Assignor") and ______________________________, a _________________ (hereinafter referred to as "Assignee").

Recital of Facts

WHEREAS, Assignor are the sole members of Northpointe Investors, LLC, a Georgia limited liability company, pursuant to that certain Amended and Restated Operating Agreement dated November 1, 2012  (the “Northpointe Operating Agreement”), and are the sole members of Villas Fairfield Partners, LLC, a Georgia limited liability company, pursuant to that certain Amended and Restated Operating Agreement dated November 1, 2012 (the “Fairfield Operating Agreement”)  (Northpointe Investors, LLC and Villas Fairfield Partners, LLC are collectively referred to as the “Company") (the Northpointe Operating Agreement and  the Fairfield Operating Agreement are collectively referred to as the “Organizational Agreement"); 

WHEREAS, Assignor owns and holds a one-hundred percent (100%) interest in the Company (the " Interest"), including, without limitation, all of Assignor’s capital and profits interest in the Company and all of Assignor’s right, title and interest to distributions from, and obligations, liabilities and responsibilities to, the Company, and desires to convey the Interest to Assignee; and

WHEREAS, pursuant to and in accordance with that certain Purchase and Sale Contract (the “Contract”) between and among Assignor, Morrow Investors, Inc., Northpointe Investors, LLC, Villas Fairfield Partners, LLC, Migueal B. Davis and Assignee dated as of December ___, 2014, Assignor desires to assign, and Assignee desires to assume, the Interest.

NOW, THEREFORE, in consideration of the sum of Ten Dollars ($10.00) and the agreements herein and other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged by the parties hereto, the parties hereto agree as follows:

1.    All capitalized terms not defined herein shall have the same meaning set forth in the Contract.

2.    Assignor does hereby assign, transfer and set over to Assignee and Assignee’s successors and assigns, forever, the Interest, including, without limitation, (i) all right, title and interest of Assignor in and to the Company, (ii) all right, title and interest of Assignor pursuant to the Organizational Agreement in and to all real and personal property and every other right, however characterized, now or hereafter held by the Company, and (iii) all of Assignor's respective claims, rights, powers, privileges, security interests, liens and remedies under the Organizational Agreement.

3.    Assignee hereby accepts the assignment and transfer from Assignor of the Interest in the Company and hereby assumes all obligations of Assignor under the Organizational Agreement and otherwise as a Member arising after the date hereof. 

4.    Assignor represents and warrants to Assignee as follows:

a.    Authority. Assignor has the power and authority to sell and convey the             Interest. All actions necessary to confer such power and authority upon the         persons executing this Assignment have been taken.
  
b.    Title.  Assignor owns the Interest free and clear of any security                 agreements, financing statements, liens, encumbrances, security interests             or other claims of any kind, other than liens and encumbrances of record             affecting the real property owned by Property Owner. The Interest                 constitutes all of Assignor’s interest in the Company, and Assignor has not         entered into any side letters or other written instruments relating to                 Assignor’s interest in the Company other than the Organizational                 Agreement.

c.    No Assignment.  Assignor has not conveyed or assigned any of Assignor’s         right, title or interest in the Interest to any third party, including any             affiliates or related parties of Assignor.  Assignor has not granted to any             party any option, contract or other agreement with respect to the Interest             or any portion thereof or any interest therein. To Assignor’s knowledge,             there are no attachments, executions or assignments of Assignor’s rights in         the Interests for the benefit of creditors, or voluntary or involuntary             proceeds in bankruptcy or under any other debtor-relief laws pending or             threatened against Assignor. 

d.    No Breach. The execution and delivery of this Assignment, the                 consummation of the transactions provided for herein and the fulfillment             of the terms hereof will not result in a breach of any of the terms or             provisions of, or constitute a default under, any agreement of Assignor or             any instrument to which Assignor is a party or by which Assignor or any             of Assignor’s property is bound, or any judgment, decree or order of any             court or governmental body, or any applicable law, rule or regulation             applicable to Assignor. 

e.    Binding Agreement.  This Assignment and the provisions hereof are legal,         valid and binding against Assignor in accordance with their terms. 

f.    No Consent.  To Assignor’s knowledge, no consent, approval, order or             authorization of, or registration, qualification, designation, declaration or             filing with, any federal, regional, state or local governmental 

authority on             the part of Assignor is required in connection with the consummation of             the transactions contemplated by this Assignment, or if the same is                 required, such consent, approval, order or authorization has been obtained,         or such registration, qualification, designation, declaration or filing has             been completed and satisfied, and any costs, fees or expenses associated             therewith have been paid in full by Assignor.

5.    Assignor and Assignee agree that this Assignment shall become effective as of the date hereof.
6.    From time to time after the date hereof, Assignor will execute and deliver or cause to be executed and delivered such other instruments of conveyance, assignment, transfer and delivery and will take such other reasonable actions as Assignee may reasonably request in order to effectively transfer, convey, assign and deliver to Assignee the Interest.
7.    This Assignment will be construed under and governed by the laws of the State of Georgia, without giving effect to principles of conflict of laws of that state.  Any action arising from or relating to this Assignment shall be brought in any State of Georgia court or any federal court in Georgia where jurisdiction and venue are proper.
8.    This Assignment shall be binding upon and inure to the benefit of Assignor and Assignee and their respective legal representatives, successors and assigns.
9.    This Assignment may be executed in counterparts, and each counterpart hereof shall be deemed to be an original instrument, but all such counterparts shall constitute but one instrument.

[SIGNATURES COMMENCE ON FOLLOWING PAGE]

IN WITNESS WHEREOF, Assignor and Assignee have executed this Assignment as of the day and year first above written.

ASSIGNOR:                

BEAVER CREEK TRUST

By:    Briarcliff Management, LLC, a
Nevada limited liability company,
Trustee

By: ____________________________
     Fred S. Hazel, Member
 

By: ____________________________
     Stephen Michael Davis, Member

By: ____________________________
      David A. Deeter, Member    

                
                                                
Fred S. Hazel

                                                
Lance A. Chernow 
                        
                                                
Keli J. Hazel

____________________________________
Jeffrey S. Greene

____________________________________
Stephen Michael Davis

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

                        

BLAKE MIGUEL DAVIS TRUST

By: __________________________________
     David A. Deeter, Co-Trustee

By: __________________________________
      Stephen Michael Davis, Co-Trustee

BLAKE MIGUEL DAVIS TRUST (2012)

By: __________________________________
     David A. Deeter, Co-Trustee

By: __________________________________
      Stephen Michael Davis, Co-Trustee

[SIGNATURES CONTINUE ON FOLLOWING PAGE]

[SIGNATURES CONTINUED FROM PREVIOUS PAGE]

ASSIGNEE:    

_________________________, a 
_____________ limited liability company

By: ____________________________
Name: __________________________
Title: ___________________________

EXHIBIT 8.1.1.9 

   PROPERTY CONTRACTS

[On file with the Company]

EXHIBIT 15.23

AUDIT REPRESENTATION LETTER

Audit Representation Letter
____________________________ 
(Acquisition Completion Date)
Dear Sirs:
We are writing at your request to confirm our understanding that your audit of the apartment community operations of “___________________” for the twelve months ended ________________, was made for the purpose of complying with the Securities and Exchange Commission Regulation S-X, subsection 210.3-14 “Special Instructions for Real Estate Operations to Be Acquired”.  In connection with your audit we confirm, to the best of our knowledge and belief, the following representations made to you during your audit:

To our actual knowledge, we have made available to you the financial records and related data described on Exhibit “A” attached hereto for the period under audit.  
There have been no undisclosed:
Irregularities involving any member of management or employees who have significant roles in the internal control structure.
Irregularities involving other persons that could have a material effect on the financial records and related data.
Violations or possible violations of laws or regulations, the effects of which should be considered for disclosure in the financial records and related data.
There are no undisclosed:
Unasserted claims or assessments that our lawyers have advised us are probable of assertion.
Material gain or loss contingencies (including oral and written guarantees).
Material transactions that have not been properly recorded in the financial records and related data.
Material related party transactions and related amounts receivable or payable, including sales, purchases, loans, transfers, leasing arrangements, and guarantees.
Events that have occurred subsequent to the audit period that would require adjustment to or disclosure in the financial records and related data.

All aspects of contractual agreements that would have a material effect on the financial records and related data have been complied with.
To our knowledge and belief, no events have occurred subsequent to December 31, 20__, and through the date this letter is signed that would require adjustment to or disclosure in the Financial Statements. Notwithstanding anything herein or otherwise to the contrary, this letter has been delivered without recourse to the undersigned and in the event of any errors or inconsistencies, you and the Buyer agree not to seek recourse against us (or our partners, officers, employees, agents or advisors) for any loss, cost expense, liability or claim you may suffer or incur as a result thereof.  This letter has been delivered solely, as an accommodation to Buyer and, as a result, is without consideration.

Very truly yours, 

Davis Development, Inc. 
“Seller/Management”

EXHIBIT 16.1

RENT CONCESSIONS

[On file with the Company]

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