Document:

Exhibit 10.40

AMENDED AND RESTATED

EMPLOYMENT AGREEMENT

This AMENDED AND RESTATED EMPLOYMENT AGREEMENT (the “Agreement”) between Kindred Healthcare Operating, Inc., a Delaware corporation (the “Company”), David A. Causby (the “Executive”) and, solely for the purpose of Sections 4, 5 and 7, Kindred Healthcare, Inc., a Delaware corporation (“Parent”), is made on February 1, 2015, with the intent that it be effective as of and only upon the date of consummation of the merger (the “Merger”) contemplated by the Agreement and Plan of Merger among Gentiva Health Services, Inc. (“Gentiva”), Parent and Kindred Healthcare Development 2, Inc., dated October 9, 2014 (the “Merger Agreement” and such date of consummation of the Merger, the “Effective Date”). This Agreement amends and restates and is intended to replace in its entirety that certain Employment Agreement between the Company, the Executive and Parent dated as of November 5, 2014.

W I T N E S S E T H:

WHEREAS, the Company, a wholly-owned subsidiary of Parent, desires to employ the Executive as of and following the Effective Date and desires to memorialize the terms and conditions of such employment in this Agreement; 

WHEREAS, the Executive Compensation Committee of the Board of Directors of the Parent has determined that it is in the best interests of the Company and Parent to enter into this Agreement;

NOW, THEREFORE, in consideration of the premises and the respective covenants and agreements contained herein, and intending to be legally bound hereby, the Company and Executive agree as follows:

1.      Employment. The Company hereby agrees to employ Executive and Executive hereby agrees to be employed by the Company on the terms and conditions herein set forth. The initial term of this Agreement shall be for a one-year period commencing on the Effective Date.  The term shall be automatically extended by one additional day for each day beyond the Effective Date that the Executive remains employed by the Company until such time as the Company elects to cease such extension by giving written notice of such election to the Executive (the “Term”).  In such event, the Agreement shall terminate on the first anniversary of the effective date of such election notice.

2.      Duties.  Executive is engaged by the Company as Executive Vice President and President of Kindred at Home. The Executive, in carrying out his duties under this Agreement, shall report directly to the Chief Executive Officer of the Company (the “CEO”) for not less than the first twenty-four (24) months of the Term. 

3.      Extent of Services.  Executive, subject to the direction and control of the CEO and the Board of Directors of Parent (the “Board”), shall have the power and authority commensurate with his executive status and necessary to perform his duties hereunder.  During the Term, Executive shall devote his entire working time, attention, labor, skill and energies to the business of the Company, and shall not, without the consent of the Company, be actively engaged in any other business activity, whether or not such business activity is pursued for gain, profit or other pecuniary advantage.

4.      Compensation. As compensation for services hereunder rendered, Executive shall receive during the Term:

(a)     A base salary (“Base Salary”) of $550,000 per year payable in equal installments in accordance with the Company’s normal payroll procedures.  Executive may receive increases in his Base Salary from time to time, as approved by the Board.

(b)     In addition to Base Salary, Executive shall be entitled to receive bonuses and other incentive compensation as the Board may approve from time to time, including participation in the Company’s annual short-term incentive compensation plan and long-term incentive compensation plan, in accordance with the terms and conditions of such plans as may be in effect from time to time, subject to the following:  

(1)      For 2015, the Executive’s target bonus under the short-term incentive plan shall be 60% of Base Salary and his maximum bonus under the short-term incentive plan shall be 101.25% of Base Salary; 

(2)      For 2015, the Executive’s target bonus under the long-term incentive plan shall be 50% of Base Salary and his maximum bonus under the long-term incentive plan shall be 100% of Base Salary.

(c)     During the one-year period immediately following the Effective Date, Executive shall be eligible to receive the following performance-based cash bonus awards (each a “Performance Bonus”) based on the achievement of specific performance metrics to be determined by the Board or its designee: (i) a bonus of $500,000 for leadership of a successful integration of Gentiva into Parent; (ii) a bonus of $250,000 for achievement of one-year synergies expected to be achieved in 

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connection with the Merger; and (iii) a bonus of $250,000 for attainment of 2015 Gentiva budget targets. Each Performance Bonus shall be paid to Executive within sixty (60) days of the one-year anniversary of the Effective Date; provided Executive is actively employed by the Company through the one-year anniversary of the Effective Date.   

(d)      In consideration for the provisions relating to non-competition, non-solicitation and confidentiality set forth in Sections 12, 13 and 14 of this Agreement, upon the Effective Date, Executive shall be entitled to a one-time, non-refundable lump-sum cash payment of One Million Dollars ($1,000,000) which shall be paid by the Company within thirty (30) days following the Effective Date. Kindred Healthcare, Inc. hereby guarantees the Company’s obligation to pay Executive this One Million Dollar ($1,000,000) payment, and in the event the Company fails to pay within thirty (30) days of the Effective Date, Kindred Healthcare, Inc. shall make the payment to Executive within five (5) business days.  

(e)      At a meeting of the Board, to take place on or prior to the Effective Date, the CEO will recommend to the Executive Compensation Committee that the Executive Compensation Committee make a one-time grant to Executive of 135,940 restricted stock units of Kindred Healthcare, Inc., with such grant to be effective on the Effective Date, which shall be governed by the terms and conditions of the applicable equity plan of the Company and the award agreement related thereto, a form of which is attached as Exhibit A hereto (the “RSU Award Agreement”).

(f)      The grant of the restricted stock units contemplated in Section 4(e) shall be in lieu of any treatment of Executive’s In-the-Money Options (as defined in the Merger Agreement) and Performance Cash Awards (as defined in the Merger Agreement) contemplated under the Merger Agreement and, for the avoidance of doubt, all unvested In-the-Money Options and Performance Cash Awards held by Executive as of the Effective Date shall be cancelled. 

(g)     Each Company Restricted Share Award (as defined in the Merger Agreement) held by Executive as of immediately prior to the consummation of the Merger shall be treated in accordance with Section 2.01(e) of the Merger Agreement, provided that, notwithstanding Section 2.01(e) of the Merger Agreement to the contrary, the Parent Restricted Cash Award and the Parent Restricted Share Award (as such terms are defined in the Merger Agreement) received by Executive in connection therewith shall be subject to immediate, automatic, and full accelerated vesting without any further action by any party in the event Executive’s employment with the Company is terminated (i) by the Company for any reason (including Cause), (ii) by the Executive for Good Reason, or (iii) by reason of Executive’s death or Disability. In furtherance of the foregoing, the parties acknowledge and agree that Executive’s Company Restricted Share Awards collectively consist of 73,800 shares of restricted stock of Gentiva, and that as the result of the operation of this Section 4(g) and Section 2.01(e) of the Merger Agreement, Executive shall receive 18,966 shares of Parent Common Stock (as defined in the Merger Agreement) as the collective Parent Restricted Share Award and $1,070,111.50 as the total Parent Restricted Cash Award.

5.       Benefits.  

(a)      Executive shall be entitled to participate in any and all pension benefit, welfare benefit (including, without limitation, medical, dental, disability and group life insurance coverages) and fringe benefit plans from time to time in effect for officers of the Company and its affiliates.

(b)      Executive shall be entitled to participate in such bonus, stock option, or other incentive compensation plans of the Company and its affiliates in effect from time to time for officers of the Company.  At the next regularly scheduled meeting of the Board following the Effective Date, the CEO will recommend to the Executive Compensation Committee that the Executive Compensation Committee make a grant of an equity stock award to Executive with a grant date fair value, as reasonably determined by the Executive Compensation Committee, of 150% of Base Salary, which shall be in the form of fifty percent (50%) restricted stock units and fifty percent (50%) performance stock units that will, in each case, be subject to the terms and conditions (including, without limitation, vesting) of the Kindred Healthcare, Inc. 2011 Stock Incentive Plan, Amended and Restated, and the applicable award agreement related thereto. Subject to share availability, following the first anniversary of the Effective Date, the Company will recommend to the Executive Compensation Committee that Executive receive annual equity grants based on market total direct compensation, internal pay equity and individual performance.

(c)      Executive shall be entitled to paid time off each year, subject to the Company’s policies as in effect from time to time for the Company’s executive officers (except that for calendar year 2015 the Executive shall be entitled to receive paid holidays and paid time off in accordance with Gentiva’s 2015 policies regarding paid holidays and paid time off). Executive shall schedule the timing of such vacations in a reasonable manner. Executive also may be entitled to such other leave, with or without compensation, as shall be mutually agreed by the Company and Executive.

(d)      Executive may incur reasonable expenses for promoting the Company’s business, including expenses for entertainment, travel and similar items.  The Company shall reimburse Executive for all such reasonable expenses in accordance with the Company’s reimbursement policies and procedures, as may be in effect from time to time.

(e)      Executive shall not be required to relocate his permanent residence to Louisville, Kentucky unless Executive agrees to do so.  Executive’s refusal to relocate his permanent resident to Louisville, Kentucky shall not be grounds for a “For Cause” termination.  In the event Executive agrees to relocate his permanent residence to Louisville, Kentucky and the 

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Company desires that Executive relocate, the Company shall reimburse all reasonable travel and relocation expenses incurred by Executive in accordance with the Company’s Vice President Relocation Policy. The material terms of any such relocation shall be discussed prior to the beginning of the relocation process. In the event Executive voluntarily terminates his employment with the Company without Good Reason within one year from the Effective Date, Executive will reimburse the Company for the pro rata amount of Executive’s relocation expenses and other amounts paid under the Company’s Vice President Relocation Policy or this Section 5(e).

(f)      As soon as reasonably practicable following the first anniversary of the Effective Date and subject to Executive remaining an active employee of the Company through such date, Executive and the Company will enter into the Company’s standard form of Change in Control Severance Agreement (the “Change in Control Severance Agreement”) as then in effect. 

6.       Termination of Employment.

(a)      Death or Disability.  Executive’s employment shall terminate automatically upon Executive’s death during the Term.  If the Company determines in good faith that the Disability of Executive has occurred during the Term (pursuant to the definition of Disability set forth below) it may give to Executive written notice of its intention to terminate Executive's employment.  In such event, Executive’s employment with the Company shall terminate effective on the thirtieth (30th) day after receipt of such notice by Executive (the “Disability Effective Date”), provided that, within the thirty (30) days after such receipt, Executive shall not have returned to full-time performance of Executive’s duties. For purposes of this Agreement, “Disability” shall mean Executive’s absence from his full-time duties hereunder for a period of ninety (90) days due to disability as defined in the Company’s long-term disability plan as in effect from time to time.

(b)      Cause.  The Company may terminate Executive’s employment during the Term for Cause.  For purposes of this Agreement, “Cause” shall mean the Executive’s (i) conviction of or plea of nolo contendere to a crime involving moral turpitude; or (ii) willful and material breach by Executive of his duties and responsibilities, which is committed in bad faith or without reasonable belief that such breaching conduct is in the best interests of the Company and its affiliates, but with respect to (ii) only if the Board adopts a resolution by a vote of at least seventy-five percent (75%) of its members so finding after giving the Executive and his attorney an opportunity to be heard by the Board and a reasonable opportunity of not less than thirty (30) days to remedy or correct the purported breaching conduct. Any act, or failure to act, based upon authority given pursuant to a resolution duly adopted by the Board or based upon advice of counsel for the Company shall be conclusively presumed to be done, or omitted to be done, by Executive in good faith and in the best interests of the Company.

(c)      Good Reason. Executive’s employment may be terminated during the Term by Executive for Good Reason.  “Good Reason” shall exist upon the occurrence, without Executive’s express written consent, of any of the following events:

(i)      a material adverse change in Executive’s authority, duties or responsibilities (including, without limitation, the Company assigning to Executive duties of a substantially nonexecutive or nonmanagerial nature) (other than any such change directly attributable to the fact that the Company is no longer publicly owned); provided, however, that in no event shall any requirement that Executive report directly to the Company’s Chief Operating Officer rather than directly to the Company’s CEO following the expiration of the first twenty four (24) months of the Term constitute Good Reason for purposes of this Agreement or otherwise;

(ii)      the Company shall materially reduce the Base Salary set forth in Section 4(a) hereof or Executive’s annual bonus opportunity set forth in Section 4(b) hereof; 

(iii)      other than as provided in Section 5(e) with respect to the relocation to Louisville, Kentucky, the Company shall require Executive to relocate Executive’s principal business office more than 30 miles from its location on the Effective Date; or

(iv)      a material breach by the Company of Section 5(a) or Section 9(c) of this Agreement.

For purposes of this Agreement, “Good Reason” shall not exist until after Executive has given the Company notice of the applicable event within ninety (90) days of the initial occurrence of such event and which is not remedied within thirty (30) days after receipt of written notice from Executive specifically delineating such claimed event and setting forth Executive's intention to terminate employment if not remedied; provided, that if the specified event cannot reasonably be remedied within such thirty (30) day period and the Company commences reasonable steps within such thirty (30) day period to remedy such event and diligently continues such steps thereafter until a remedy is effected, such event shall not constitute “Good Reason” provided that such event is remedied within sixty (60) days after receipt of such written notice.

(d)      Notice of Termination.  Any termination by the Company for Cause, or by Executive for Good Reason, shall be communicated by Notice of Termination given in accordance with this Agreement.  For purposes of this Agreement, a “Notice of Termination” means a written notice which (i) indicates the specific termination provision in this Agreement relied upon, (ii) sets forth in reasonable detail the facts and circumstances claimed to provide a basis for termination of Executive’s employment under the provision so indicated and (iii) specifies the intended termination date (which date, in the 

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case of a termination for Good Reason, shall be not more than thirty days after the giving of such notice).  The failure by Executive or the Company to set forth in the Notice of Termination any fact or circumstance which contributes to a showing of Good Reason or Cause shall not waive any right of Executive or the Company, respectively, hereunder or preclude Executive or the Company, respectively, from asserting such fact or circumstance in enforcing Executive’s or the Company’s rights hereunder.

(e)      Date of Termination.  “Date of Termination” means (i) if Executive’s employment is terminated by the Company for Cause, or by Executive for Good Reason, the later of the date specified in the Notice of Termination or the date that is one day after the last day of any applicable cure period, (ii) if Executive’s employment is terminated by the Company other than for Cause or Disability, or Executive resigns without Good Reason, the Date of Termination shall be the date on which the Company or Executive notified Executive or the Company, respectively, of such termination and (iii) if Executive’s employment is terminated by reason of death or Disability, the Date of Termination shall be the date of death of Executive or the Disability Effective Date, as the case may be.

7.      Obligations of the Company Upon Termination.  Following any termination of Executive’s employment hereunder, the Company shall pay Executive his Base Salary through the Date of Termination, any unreimbursed business expenses, accrued but unused vacation time,  and any amounts owed to Executive pursuant to the terms and conditions of the benefit plans and programs of the Company at the time such payments are due.  In addition, subject to Section 7(e) hereof and the conditions set forth below, Executive shall be entitled to the following additional payments:

(a)      Death or Disability.  If, during the Term, Executive’s employment shall terminate by reason of Executive’s death or Disability, the Company shall pay to Executive (or his designated beneficiary or estate, as the case may be) the prorated portion of any Target Bonus (as defined below) Executive would have received for the year of termination of employment.  Such amount shall be paid on the date when such amounts would otherwise have been payable to the Executive if Executive’s employment with the Company had not terminated as determined in accordance with the terms and conditions of the applicable short-term incentive plan of the Company. 

For purposes of this Agreement: “Target Bonus” shall mean the full amount of the targeted annual short-term incentive bonus that would be payable to the Executive, assuming the targeted performance criteria on which such annual short-term incentive bonus is based were deemed to be satisfied, in respect of services for the calendar year in which the date in question occurs. 

(b)      Termination Other Than For Cause or Resignation For Good Reason on or after the First Anniversary of the Effective Date.  If, on or after the first anniversary of the Effective Date and prior to the expiration of the Term, the Company shall terminate Executive’s employment other than for Cause (but not for death or Disability), or the Executive shall terminate his employment for Good Reason:

(1)      Within fourteen (14) days following Executive’s Date of Termination, the Company shall pay to Executive a cash severance payment in an amount equal to 1.5 times the sum of the Executive’s Base Salary and Target Bonus as of the Date of Termination.

(2)      For a period of eighteen (18) months following the Date of Termination (the “Benefit Continuation Period”), the Executive shall be treated as if he had continued to be an Executive for all purposes under the Company’s health insurance plan and dental insurance plan; or if the Executive is prohibited from participating in such plans, the Company shall otherwise provide such benefits.  Executive shall be responsible for any employee contributions for such insurance coverage.  For purposes of clarification, the portion of the premiums in respect of such insurance plans for which Executive and Company are responsible, respectively, shall be the same as the portion for which the Executive and Company are responsible, respectively, immediately prior to the Date of Termination.  Following the Benefit Continuation Period, the Executive shall be entitled to receive continuation coverage under Part 6 of Title I or ERISA (“COBRA Benefits”) by treating the end of this period as the applicable qualifying event (i.e., as a termination of employment) for purposes of ERISA Section 603(2)) and with the concurrent loss of coverage occurring on the same date, to the extent allowed by applicable law.

(3)      For the Benefit Continuation Period, Company shall maintain in force, at its expense, the Executive’s life insurance in effect under the Company’s voluntary life insurance benefit plan as of the Date of Termination. Executive shall be responsible for any employee contributions for such insurance coverage.  For purposes of clarification, the portion of the premiums in respect of such voluntary life insurance for which Executive and Company are responsible, respectively, shall be the same as the portion for which Company and Executive are responsible, respectively, immediately prior to the Date of Termination.

(4)      For the Benefit Continuation Period, the Company shall provide short-term and long-term disability insurance benefits to Executive equivalent to the coverage that the Executive would have had if he had remained employed under the disability insurance plans applicable to Executive on the Date of Termination.  Executive shall be responsible for any employee contributions for such insurance coverage. Should Executive become disabled 

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during such period, Executive shall be entitled to receive such benefits, and for such duration, as the applicable plan provides.  For purposes of clarification, the portion of the premiums in respect of such short-term and long-term disability benefits for which Executive and Company are responsible, respectively, shall be the same as the portion for which Executive and Company are responsible, respectively, immediately prior to the Date of Termination.

(5)      Within fifteen (15) days after the Date of Termination, the Company shall pay to Executive a cash payment in an amount, if any, necessary to compensate Executive for the Executive's unvested interests under the Company's retirement savings plan which are forfeited by Executive in connection with the termination of Executive's employment.

(6)      Company may adopt such amendments to its executive benefit plans, if any, as are necessary to effectuate the provisions of this Agreement.

(7)      Any outstanding unvested stock options, stock performance units or similar equity awards (other than restricted stock awards) held by Executive on the Date of Termination shall continue to vest in accordance with their original terms (including any related performance measures) for the duration of the Benefit Continuation Period as if Executive had remained an employee of the Company through the end of such period and any such stock option, stock performance unit or other equity award (other than restricted stock awards) that has not vested as of the conclusion of such Benefit Continuation Period  shall be immediately cancelled and forfeited as of such date.  In addition, Executive shall have the right to continue to exercise any outstanding vested stock options held by Executive during the Benefit Continuation Period; provided that in no event shall Executive be entitled to exercise any such option beyond the original expiration date of such option.  Except as otherwise expressly provided pursuant to Section 4(g) hereof or the RSU Award Agreement, any outstanding restricted stock award held by Executive as of the Date of Termination that would have vested during the Benefit Continuation Period had Executive remained an employee of the Company through the end of such period shall be immediately vested as of the Date of Termination and any restricted stock award that would not have vested as of the conclusion of such period shall be immediately cancelled and forfeited as of such date. 

(8)      Notwithstanding anything in this Agreement to the contrary, in no event shall the provision of in-kind benefits pursuant to this Section 7 during any taxable year of Executive affect the provision of in-kind benefits pursuant to this Section 7 in any other taxable year of Executive.

(c)      Cause; Other than for Good Reason; Without Cause or for Good Reason before the First Anniversary of the Effective Date.  If Executive’s employment shall be terminated by the Company for Cause anytime or without Cause before the first anniversary of the Effective Date or Executive terminates employment without Good Reason (and other than due to such Executive’s death) anytime or for Good Reason before the first anniversary of the Effective Date, in each case, during the Term, then the severance provisions of Section 7(b) shall not apply and this Agreement shall terminate without further additional obligations to Executive under this Agreement (except as otherwise expressly provided pursuant to Section 4(g) hereof or the RSU Award Agreement). 

(d)      Death after Termination.  In the event of the death of Executive during the period Executive is receiving payments pursuant to this Agreement, Executive’s designated beneficiary shall be entitled to receive the balance of the payments; or in the event of no designated beneficiary, the remaining payments shall be made to Executive’s estate.

(e)      General Release of Claims.  Notwithstanding anything herein to the contrary, all amounts payable pursuant to this Section 7 are subject to the condition that Executive has delivered to the Company an executed copy of an irrevocable general release of claims in a form satisfactory to the Company within the sixty (60) day period immediately following the Executive’s separation from service (the “Release Period”).  Any payment that otherwise would be made prior to Executive’s delivery of such executed release pursuant to this Section 7 shall be paid on the first business day following the conclusion of the Release Period; provided that in-kind benefits provided pursuant to subsections (b)(2), (3) and (4) of this Section 7 shall continue in effect after separation from service pending the execution and delivery of such release for a period not to exceed sixty (60) days; provided further that if such release is not executed and delivered within such sixty (60) day period, Executive shall reimburse the Company for the full cost of coverage during such period.

(f)      Six Month Delay for Specified Employees.  Notwithstanding anything herein to the contrary, if at the time of Executive’s separation from service Executive is a “specified employee” as defined in Section 409A of the Internal Revenue Code of 1986, as amended and the regulations promulgated thereunder (the “Code”) and the deferral of the payment payable pursuant to Section 7(b)(1) is necessary in order to prevent any accelerated or additional tax under Section 409A of the Code, then the payment to which Executive would otherwise be entitled during the first six (6) months following his separation from service shall be deferred and accumulated (without any reduction in such payment ultimately paid to Executive) for a period of six (6) months from the date of separation from service and paid in a lump sum on the first day of the seventh (7th) month following such separation from service (or, if earlier, the date of Executive’s death), together with interest during such period at a rate computed by adding 2.00% to the Prime Rate as published in the Money Rates section of the Wall Street Journal, or other equivalent publication if the Wall Street Journal no longer publishes such information, on the first 

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publication date of the Wall Street Journal or equivalent publication after the date of Executive’s separation from service (provided that if more than one such Prime Rate is published on any given day, the highest of such published rates shall be used).

8.      Disputes.  Any dispute or controversy arising under, out of, or in connection with this Agreement shall, at the election and upon written demand of either party, be finally determined and settled by binding arbitration in the City of Louisville, Kentucky, in accordance with the Labor Arbitration rules and procedures of the American Arbitration Association, and judgment upon the award may be entered in any court having jurisdiction thereof.  The Company shall pay all costs of the arbitration and all reasonable attorneys’ and accountants’ fees of the Executive in connection therewith, including any litigation to enforce any arbitration award, as such costs and attorneys’ and accountants’ fees are incurred.

9.      Successors.

(a)      This Agreement is personal to Executive and without the prior written consent of the Company shall not be assignable by Executive otherwise than by will or the laws of descent and distribution.  This Agreement shall inure to the benefit of and be enforceable by Executive’s legal representatives.

(b)      This Agreement shall inure to the benefit of and be binding upon the Company and its successors and assigns.

(c)      The Company shall require any successor (whether direct or indirect, by purchase, merger, consolidation or otherwise) to all or substantially all of the business and/or assets of the Company, or any business of the Company for which Executive’s services are principally performed, to assume expressly and agree to perform this Agreement in the same manner and to the same extent that the Company would be required to perform it if no such succession had taken place.  As used this Agreement, “Company” shall mean the Company as hereinbefore defined and any successor to its business and/or assets as aforesaid which assumes and agrees to perform this Agreement by operation of law, or otherwise.

10.      Other Severance Benefits.  Executive hereby agrees that in consideration for the payments to be received under Section 7(b) of this Agreement, Executive waives any and all rights to any payments or benefits under any severance plans or arrangements of the Company or their respective affiliates that specifically provide for severance payments, other than the Change in Control Severance Agreement to be executed pursuant to Section 5(f) hereof between the Company and Executive (if ultimately executed); provided that any payments payable to Executive under Section 7(b) hereof shall be offset by any payments payable under the Change in Control Severance Agreement. Subject to the remaining provisions of this Section 10, effective as of the Effective Date, the Executive hereby waives any and all rights to any payments or benefits under any employment agreement, change in control agreement, severance agreement, plan or other arrangement between the Executive and Gentiva existing prior to the Effective Date, including, but not limited to, the Severance Agreement between Executive and Gentiva, dated March 25, 2011 and the Change in Control Agreement between Executive and Gentiva, dated February 26, 2014 (collectively, the “Gentiva Payments and Benefits”).  Notwithstanding any provision of this Agreement to the contrary, the effectiveness of Executive’s waiver of his rights to the Gentiva Payments and Benefits is subject to the condition that, on or before the Effective Date, the Executive Compensation Committee shall have granted to Executive the restricted stock units described in Section 4(e) above. If this condition has not been fulfilled by the Effective Date, then Executive shall have the option to (i) waive such condition in a writing delivered to the Company, or (ii) rescind this Agreement pursuant to a writing delivered to the Company, in which event this Agreement shall, automatically and without any further action of the parties, be rescinded and become null and void (except for this sentence, which shall survive and be enforceable), the parties shall be restored to the status quo as it existed prior to the execution of the Agreement, Executive shall not have waived any of his rights to receive any of the Gentiva Payments and Benefits, and Executive shall continue to be fully entitled to receive all of such Gentiva Payments and Benefits.

11.      Withholding.  All payments to be made to Executive hereunder will be subject to all applicable required withholding of taxes.

12.      Non-Competition.  The provisions of this Section 12 and any related provisions shall survive termination of this Agreement and/or Executive’s employment with the Company and do not supersede, but are in addition to and not in lieu of, any other agreements signed by Executive concerning non-competition, confidentiality, solicitation of employees, or trade secrets. Executive acknowledges and agrees that these provisions are essential elements of the consideration for the Company entering into this Agreement and agreeing to employ Executive as described herein.

(a)      Non-Compete.  

(1)      During the Term and during the period beginning on the Date of Termination and ending one (1) year thereafter (the “Non-Compete Period”), the Executive shall not, without prior written approval of the Board, become an officer, employee, agent, partner, or director of, or provide any services or advice to or for or on behalf of, any business enterprise in substantial direct competition (as defined in Section 12(a)(2)) with the Company.  The 

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above constraint shall not prevent the Executive from making passive investments, not to exceed five percent (5%) of the total equity value, in any enterprise where Executive’s services or advice is not required or provided.  

(2)      For purposes of this Section 12(a), a business enterprise with which the Executive becomes associated as an officer, employee, agent, partner, or director of, or provide any services or advice to or for or on behalf of, shall be considered in substantial direct competition with the Company if such entity owns, operates or manages long-term acute care hospitals, nursing facilities, inpatient rehabilitation hospitals, or provides contract rehabilitation therapy services, home health services or hospice services within any state or country where the Company or any of its direct or indirect subsidiaries or affiliates has any such hospital or facility or provides any such services as of the Date of Termination.

(3)      During the Executive’s employment with the Company and during the Non-Compete Period, the Executive shall not, without prior written approval of the Board, directly or indirectly, solicit, provide to, take away, or attempt to take away or provide to any customer or solicited prospect of the Company or any of its direct or indirect subsidiaries any business of a type which the Company or such subsidiary provides or markets or which is in substantial direct competition with any business then engaged in (or product or services marketed or planned to be marketed) by the Company or any of its direct or indirect subsidiaries; or induce or attempt to induce any such customer to reduce such customer’s business with that business entity, or divert any such customer’s business from the Company and its direct or indirect subsidiaries; or discuss that subject with any such customer.

13.      Non-solicitation.  During the Term and the Non-Compete Period, Executive shall not directly or indirectly, individually or on behalf of any person other than the Company, aid or endeavor to solicit or induce any of the Company’s or its affiliates’ employees to leave their employment with the Company or such affiliates in order to accept employment with Executive or any other person, corporation, limited liability company, partnership, sole proprietorship or other entity; provided, however, that the foregoing shall not restrict Executive or any other person from conducting general solicitations or advertisements not directed specifically at employees of the Company or its affiliates, or from employing any employee who responds to any such general solicitation or advertisement or who otherwise initiates a request for employment.  

14.      Confidential Information.  At no time shall Executive divulge, furnish or make accessible to anyone any confidential or proprietary knowledge or information about the Parent, Company or any of their affiliates including, without limitation, any confidential or proprietary information concerning the operations, plans or methods of the Company (except as required by law or order of court or other governmental agency) or any of the employees, clients, patients, customers or suppliers of the Parent or Company or any of their affiliates.  For purposes of this Section 14, “confidential or proprietary information” shall mean any information, whether in writing or disclosed orally to Executive, which is not generally available to the public.

15.      Provisions Relating To Non-Competition, Non-Solicitation and Confidentiality.  The provisions of Sections 12, 13 and 14 shall survive the termination of Executive’s employment and this Agreement and shall not be affected by any subsequent changes in employment terms, positions, duties, responsibilities, authority, or employment termination, permitted or contemplated by this Agreement.  To the extent that any restrictive covenant set forth in Sections 12, 13 and 14 of this Agreement shall be determined to be invalid or unenforceable such restrictive covenant shall be modified so that the scope of the restrictive covenant is reduced only to the minimum extent necessary to render the modified covenant valid, legal and enforceable as will grant the Company the maximum protection and restrictions on the Executive’s activities permitted by applicable law in such circumstances.  The Company shall have the right to advise any prospective or then current employer of Executive of the provisions of Sections 12, 13 and 14 without liability.  The Company’s right to enforce the provisions of Sections 12, 13 and 14 shall not be affected by the existence, or non-existence, of any other similar agreement for any other executive, or by the Company’s failure to exercise any of its rights under Sections 12, 13 and 14 or any other similar agreement or to have in effect a similar agreement for any other employee.  Given the potential irreparable harm to the Parent, Company or their affiliates, Executive expressly acknowledges and agrees that Parent and Company shall have the right to seek injunctive relief, a restraining order or such other equitable relief, including, but not limited to, specific performance (without the requirement to post bond) to restrain any breach or threatened breach of any provisions in Sections 12, 13 and 14 in addition to pursuing all appropriate legal relief, including but not limited to attorneys’ fees, costs, and damages. If the Company shall institute any action or proceeding to enforce the provisions in Sections 12, 13 and 14, the Executive hereby waives the claim or defense that the Company has an adequate remedy at law and agrees not to assert in any such action or proceeding the claim or defense that the Company has an adequate remedy at law.  The parties hereby agree that the Non-Compete Period shall be extended by any period during which the Executive is found by an arbitrator or court to be in violation of, or to have violated, any provisions in Sections 12, 13 and 14.

16.      No Mitigation.  Executive shall have no duty to mitigate his damages by seeking other employment and, should Executive actually receive compensation from any such other employment, the payments required hereunder (including, without limitation, the provision of in-kind benefits provided under Section 7(b) hereof) shall not be reduced or offset by any such compensation.  Further, the Company’s and Parent’s obligations to make any payments hereunder shall not be subject to or affected by any setoff, counterclaims or defenses which the Company or Parent may have against Executive or others.

7

17.      Notices.  Any notice required or permitted to be given under this Agreement shall be in writing and shall be deemed to have been duly given when delivered or sent by telephone facsimile transmission, personal or overnight couriers, or registered mail with confirmation or receipt, addressed as follows:

If to Executive:

David Causby

at the address on file with the Company

If to Company:

Kindred Healthcare Operating, Inc.

680 South Fourth Street

Louisville, KY  40202

Attn:  General Counsel 

18.      Waiver of Breach and Severability.  The waiver by either party of a breach of any provision of this Agreement by the other party shall not operate or be construed as a waiver of any subsequent breach by either party.  In the event any provision of this Agreement is found to be invalid or unenforceable, it may be severed from the Agreement and the remaining provisions of the Agreement shall continue to be binding and effective.

19.      Effectiveness Conditioned on Merger. In the event that the Merger is not consummated, this Agreement shall be of no further force and effect and shall be deemed to be null and void ab initio and the parties shall have no further obligations hereunder.

20.      Entire Agreement; Amendment.  This instrument contains the entire agreement of the parties with respect to the subject matter hereof and supersedes all prior agreements, promises, covenants, arrangements, communications, representations and warranties between them, whether written or oral with respect to the subject matter hereof.  No provisions of this Agreement may be modified, waived or discharged unless such modification, waiver or discharge is agreed to in writing signed by Executive and such officer of the Company specifically designated by the Board.

21.      Governing Law.  This Agreement shall be construed in accordance with and governed by the laws of the State of Delaware.

22.      Headings.  The headings in this Agreement are for convenience only and shall not be used to interpret or construe its provisions.

23.      Counterparts.  This Agreement may be executed in two or more counterparts, each of which shall be deemed an original but all of which together shall constitute one and the same instrument.

24.      Section 409A.  If any provision of this Agreement (or any award of compensation or benefits provided under this Agreement) would cause Executive to incur any additional tax or interest under Section 409A of the Code, the Company shall reform such provision to comply with 409A and agrees to maintain, to the maximum extent practicable without violating 409A of the Code, the original intent and economic benefit to Executive of the applicable provision; provided that nothing herein shall require the Company to provide Executive with any gross-up for any tax, interest or penalty incurred by Executive under Section 409A of the Code.  Furthermore, notwithstanding anything herein to the contrary, no payment or benefit payable under this Agreement shall be required to be paid or provided in any calendar year if the payment of such payment or benefit would constitute an impermissible acceleration under Section 409A of the Code and the transition guidance thereunder and such payment shall instead be paid as soon as practicable in the next calendar year, without interest.

25.      Section 280(G).  If Executive determines that any provision of this Agreement (or any award or compensation or benefits provided under this Agreement) would cause Executive to incur any additional tax, penalty, or interest under IRC § 280(G), Executive shall have the right to waive any such provision or forego any such award, compensation, benefits so as to comply with Section 280(G) without additional tax, penalty or interest.  

[Remainder of page is intentionally blank. Signature page follows.]

 

 

 

8

 

IN WITNESS WHEREOF, the parties have executed this Amended and Restated Employment Agreement as of the date first above written.

 

	
KINDRED HEALTHCARE OPERATING, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Paul J. Diaz

	
 
	
 
	
Paul J. Diaz

	
 
	
 
	
Chief Executive Officer

	
 

	
Solely for the purpose of Sections 4, 5 and 7: 

	
 

	
KINDRED HEALTHCARE, INC.

	
 
	
 
	
 

	
By:
	
 
	
/s/ Paul J. Diaz

	
 
	
 
	
 Paul J. Diaz

	
 
	
 
	
 Chief Executive Officer

	
 
	
 
	
 

	
/s/ David A. Causby

	
DAVID A. CAUSBY

 

 

 

9

 

Exhibit A

Form of Restricted Stock Unit Award Agreement

See attached.

 

 

 

10

 

RESTRICTED STOCK UNIT AWARD AGREEMENT

THIS AGREEMENT (this “Agreement”) is made as of this 2nd day of February, 2015 between Kindred Healthcare, Inc., a Delaware corporation and its successors (the “Company”), and David A. Causby (the “Participant”).

WHEREAS, the Company adopted and maintains the Kindred Healthcare, Inc. 2011 Stock Incentive Plan, Amended and Restated (the “Plan”);

WHEREAS, the Plan provides for the award to participants in the Plan of restricted stock units in such amounts and subject to such terms and conditions as may be determined by the Company’s Executive Compensation Committee (being the “Committee”, as that term is defined in the Plan);

WHEREAS, Gentiva Health Services, Inc., the Company and Kindred Healthcare Development 2, Inc. entered into the Agreement and Plan of Merger, dated as of October 9, 2014 (the “Merger Agreement”);

WHEREAS, on February 1, 2015, Kindred Healthcare Operating, Inc. (“KHO”), the Company and the Participant entered into an amended and restated employment agreement (the “Employment Agreement”), with the intent that it be effective as of and only upon the date of consummation of the merger contemplated by the Merger Agreement (such date, the “Effective Date”);

WHEREAS, Section 4(e) of the Employment Agreement provides that the Company may make a one-time grant to the Participant of 135,940 restricted stock units of the Company;

WHEREAS, the award of 135,940 restricted stock units of the Company will be divided into the following three categories: (a) in lieu of certain change-in-control severance benefits the Participant could otherwise have received, 53,077 restricted stock units of the Company (the “New RSUs”), (b) in lieu of the Participant’s outstanding and unvested Performance Cash Awards (as defined in the Merger Agreement), 57,051 restricted stock units of the Company (the “Performance Cash Replacement RSUs”), and (c) in lieu of all outstanding and unvested In-the-Money Options (as defined in the Merger Agreement) held by the Participant as of immediately prior to the consummation of the Merger, 25,812 restricted stock units of the Company (the “Option Replacement RSUs”, and together with the Performance Cash Replacement RSUs, the “Replacement RSUs”, with the Replacement RSUs and the New RSUs being referred to together as the “RSUs”); 

WHEREAS, upon the execution of this Agreement and the Company’s grant of the RSUs to the Participant, the outstanding and unvested Performance Cash Awards and In-the-Money Options held by the Participant immediately prior to the consummation of the Merger shall be cancelled, and the Participant shall have no further rights with respect thereto;

NOW THEREFORE, in consideration of the premises and the mutual covenants hereinafter set forth, the parties hereto hereby agree as follows:

1.     Grant of Restricted Stock Units.  Pursuant and subject to the terms and conditions set forth herein and in the Plan, and subject to the effectiveness of the Employment Agreement, the Company hereby grants to the Participant the right to receive (a) 53,077 New RSUs, (b) 57,051 Performance Cash Replacement RSUs, and (c) 25,812 Option Replacement RSUs. The RSUs will vest in accordance with the provisions of this Agreement. All capitalized terms used herein and not defined herein shall have the meanings assigned to them in the Plan.

2.     Vesting and Settlement.   Notwithstanding any provision of the Plan to the contrary, but subject to the provisions of Section 4 below:

(a)     The New RSUs shall vest in equal annual installments on each of the first three anniversaries of the Effective Date, provided that the Participant remains continuously employed by KHO through each applicable vesting date. 

(b)     The Replacement RSUs shall vest as set forth below, provided that the Participant remains continuously employed by KHO through each applicable vesting date: 

1.      The Performance Cash Replacement RSUs shall vest on the respective dates the Performance Cash Awards were originally scheduled to vest, which are as follows:

a.      21,795 shall vest on February 19, 2016; and

1

 

b.      35,256 shall vest on February 19, 2017.

2.      The Option Replacement RSUs shall vest on the respective dates the In-the-Money Options were originally scheduled to vest, which are as follows:

a.      9,664 shall vest on February 19, 2015;

b.      9,664 shall vest on February 19, 2016; and

c.      6,484 shall vest on February 19, 2017.

(c)      Each RSU will be settled and paid to the Participant as soon as reasonably practicable following the vesting date of such RSU, but in no event later than March 15th of the calendar year immediately following the year in which the vesting date occurs. The Committee may determine, in its sole and absolute discretion, at the time of payment hereunder whether such payment shall be made (a) in cash (equal to the Fair Market Value of a share of the common stock of the Company, par value $0.25 per share (a “Share”), as of the vesting date of such RSUs multiplied by the number of such vested RSUs), (b) in Shares (with the number of Shares to be issued being equal to the number of such vested RSUs) or (c) in a combination of cash and Shares (as calculated above).

3.      Non-Transferability. No RSUs shall be assignable or transferable otherwise than by will or the laws of descent and distribution. Any purported or attempted transfer of an RSU in contravention of this Section 3 shall be null and void.  

4.      Effect of Termination of Employment. Notwithstanding any provision of the Plan or Section 2 above to the contrary, in the event that the Participant’s employment with KHO is terminated by KHO for any reason (including Cause (as defined in the Employment Agreement)), by the Participant for Good Reason (as defined in the Employment Agreement) or by reason of the Participant’s death or Disability (as defined in the Employment Agreement), to the extent not already vested and paid, the RSUs shall immediately and automatically become fully vested; provided that such vested RSUs shall be settled and paid (as per the last sentence of Section 2(c) above) as soon as reasonably practicable following the effective date of such termination of employment but in no event later than March 15th of the calendar year immediately following the calendar year in which such termination occurs.

5.      Modification and Waiver.  Neither this Agreement nor any provision hereof can be changed, modified, amended, discharged, terminated or waived orally or by any course of dealing or purported course of dealing, but only by an agreement in writing signed by the Participant and the Company.  No such agreement shall extend to or affect any provision of this Agreement not expressly changed, modified, amended, discharged, terminated or waived or impair any right consequent on such a provision.  The waiver of or failure to enforce any breach of this Agreement shall not be deemed to be a waiver or acquiescence in any other breach thereof.

6.      Voting and Dividends; Dividend Equivalents.  The Participant does not have a right to vote any RSUs, receive dividends with respect to any RSUs before the RSUs are settled and paid in Shares, or receive any dividend equivalents with respect to any RSUs.

7.      Governing Law.  This Agreement shall be governed by and construed in accordance with the laws of the State of Kentucky.

8.      Participant Acknowledgment.  The Participant hereby acknowledges receipt of a copy of the Plan and a Plan prospectus.  The Participant hereby acknowledges that all decisions, determinations and interpretations of the Committee in respect of the Plan shall be final and conclusive. The Participant hereby acknowledges that the outstanding and unvested Performance Cash Awards and In-the-Money Options held by the Participant immediately prior to the consummation of the Merger shall be cancelled, and the Participant shall have no further rights with respect thereto.

9.      Incorporation of Plan.  All terms and provisions of the Plan are incorporated herein and made part hereof as if stated herein.  If any provision hereof and of the Plan shall be in conflict, the terms of the Plan shall govern, except to the extent that a provision of this Agreement (not including the terms and provisions of the Plan) provides that it shall apply and/or govern notwithstanding any provision of the Plan to the contrary.

2

 

10.      Entire Agreement.  This Agreement, the applicable provisions of the Employment Agreement, and the Plan (i) represent the final, complete and total agreement of the parties hereto respecting the RSUs and the matters discussed herein and (ii) supersede any and all previous agreements and understandings, whether written, oral or otherwise, relating to the RSUs and such matters.

11.      No Contract of Employment.  This Agreement shall not confer upon the Participant any right with respect to the continuation of such Participant’s employment by the Company or prohibit the Company at any time from terminating such employment or increasing or decreasing the base salary or other compensation for such Participant.

12.      Code Section 409A.  Each RSU is intended not to be subject to Section 409A of the Code by reason of being a short-term deferral and shall be interpreted accordingly.  In the event any of the payments provided to the Participant pursuant to this Agreement would result in a violation of Section 409A of the Code (including any regulations promulgated thereunder), the Company will use its reasonable best efforts to amend this Agreement in the least restrictive manner necessary in order, where applicable (i) to ensure that such compensation is not considered “nonqualified deferred compensation” for purposes of Section 409A of the Code, or (ii) to comply with the provisions of Section 409A, in each case, where possible, without any diminution in the value of the compensation to be paid or provided to the Participant pursuant to this Agreement; provided, that nothing in this Agreement shall require the Company to provide any gross-up or other tax reimbursement to the Participant in connection with any violation of Section 409A or otherwise.

13.      Recoupment.  The Participant acknowledges and agrees that the Company will be entitled to recoup compensation of whatever kind paid by the Company hereunder pursuant to Section 23 of the Plan.  

 

 

 

3

 

IN WITNESS WHEREOF, the Company has caused this Agreement to be duly executed by its duly authorized officer and said Participant has hereunto signed this Agreement on the Participant’s own behalf, thereby representing that the Participant has carefully read and understands this Agreement and the Plan, as of the day and year first above written.

 

	
KINDRED HEALTHCARE, INC.

	
 
	
 
	
 

	
 
	
 
	
 

	
By:
	
 
	
Stephen R. Cunanan

	
Title:
	
 
	
Chief People Officer

	
 
	
 
	
 

	
 
	
 
	
 

	
 
	
 
	
David A. Causby

 

4NRF 12.31.2014 Exhibit 10.32 SEB

 

	
					
	 
	UMBRELLA AGREEMENT
Project Prime 

	 

	 
	 
	 
	 
	 

	 
	 
	DATED 22.12.2014
	 
	 

	 
	

SEB Investment GmbH
SEB Investment GmbH, Filiale di Milano 
SEB Investment GmbH, French BranchAltair Issy S.A.S.
Balni bvba (SPRL)
- Sellers -
	 

	 
	Prime Holdco C –T S.à r.l.
Prime GER Drehbahn – T S.à r.l.
Prime GER Valentinskamp – T S.à r.l.
Trias Pool II A – T S.à r.l.
- Purchasers -

	 

	 
	 
	 

	 
	 
	 

1

CONTENTS
	
				
	1.
	DOWN PAYMENT, GUARANTEE, ESCROW AGREEMENT
	8
	

	2.
	AGREEMENTS
	9
	

	3.
	COOPERATION
	10
	

	4.
	TERMINATION, LONG STOP
	11
	

	5.
	MERGER CONTROL CLEARANCE
	12
	

	6.
	COSTS, TRANSFER TAX
	13
	

	7.
	NOTIFICATIONS
	13
	

	8.
	CONFIDENTIALITY, ANNOUNCEMENTS
	16
	

	9.
	DISPUTE RESOLUTION
	16
	

	10.
	MISCELLANEOUS
	17
	

	11.
	REFERENCE DEED
	20
	

2

This umbrella agreement (the “Umbrella Agreement”) is entered into on 22 December 2014 by and between
		
	(1)
	SEB Investment GmbH, a company duly organised and existing under the laws of Germany and registered in the commercial register of the local court of Frankfurt am Main under HRB 75345 with its registered office at Rotfelder-Ring 7 in 60327 Frankfurt am Main being registered with and supervised by the German Federal Financial Service Authority (Bundesanstalt für Finanzdienstleistungsaufsicht, "BaFin") as capital management company (Kapitalverwaltungsgesellschaft) within the meaning of the German Capital Investment Act (Kapitalanlagegesetzbuch) (hereinafter referred to as “SEB-GER”)

SEB-GER is the management company (Kapitalverwaltungsgesellschaft) of, inter alia, the German open-ended real estate investment funds SEB ImmoInvest, SEB ImmoPortfolio Target Return Fund and SEB Global Property Fund (together hereinafter referred to as “Funds”) and, therefore, acting on the account of the Funds.
		
	(2)
	SEB Investment GmbH, Filiale di Milano, a branch company of SEB-GER with its registered office in Milano, Via della Chiusa 2, 20123 Milano, Italy (hereinafter referred to as “SEB-ITA”)

		
	(3)
	SEB Investment GmbH, French Branch SEB Investment GmbH, a branch company of SEB-GER with its registered office in Succursale, 112, Av. Kleber, 75116 Paris, France (hereinafter referred to as “SEB-FRA”)

SEB-GER, SEB-ITA and SEB-FRA together hereinafter referred to as “SEB”; and
		
	(4)
	Altair Issy S.A.S., a company duly organised and existing under the laws of France and registered in the Paris Trade and Companies’ Register under number 428 095 095 (hereinafter referred to as “Altair”), with its registered office at 27, avenue de l’Opéra, 75001 Paris; and

		
	(5)
	Balni bvba (SPRL), (bvba being the Dutch and SPRL the French abbreviation of the same legal entity) registered with the Crossroad Databank for Undertakings under number 0453.711.659 (hereinafter referred to as “Balni”), with its registered office at Boulevard Auguste Reyers 207-209, 1030 Brussels, Belgium;

- SEB-GER, SEB-ITA, SEB-FRA, Altair and Balni each a “Seller” and collectively referred to as “Sellers” –
and
		
	(6)
	Prime Holdco C –T S.à r.l., Société à responsabilité limitée, Siège social: 6A route de Trèves, L-2633 Senningerberg (hereinafter referred to as “HoldCo” or "Investor"),

		
	(7)
	Prime GER Drehbahn – T S.à r.l., Société à responsabilité limitée, Siège social: 6A route de Trèves, L-2633 Senningerberg (hereinafter referred to as “Drehbahn Purchaser”)

		
	(8)
	Prime GER Valentinskamp – T S.à r.l., Société à responsabilité limitée, Siège social: 6A route de Trèves, L-2633 Senningerberg (hereinafter referred to as “Valentinskamp Purchaser”,and

3

		
	(9)
	Trias Pool II A – T S.à r.l., Société à responsabilité limitée Siège social: 6A route de Trèves, L-2633 Senningerberg (hereinafter referred to as “Dammtor Purchaser”), 

- HoldCo, Drehbahn Purchaser, Valentinskamp Purchaser and Dammtor Purchaser hereinafter collectively referred to as “Purchasers” –
PREAMBLE
		
	(A)
	The Sellers are directly or indirectly the legal owners and holders of title to the 12 properties described in Annex P1 of this UA. 

		
	(B)
	The properties listed in Annex P1 under nos. 1 to 6, 8 and 9 are directly owned by SEB. SEB further is the bare owner of the soil and full owner of the underground of the property listed in Annex P1 under no 7 (together hereinafter called the “Properties”). 

		
	(C)
	The building developed on the property listed in Annex P1 under no. 7 is indirectly owned by SEB and directly owned by Chrysalis. The shares in Chrysalis are held and owned by SEB, holding 870,083 of 870,084 shares and by Balni holding and owning 1 share, whereas 749 of 750 shares in Balni are held and owned by SEB and 1 share is held and owned by Chrysalis. The property listed in Annex P1 under no. 10 is indirectly owned by the SEB and SEB owns and holds title to all shares of the property company SEB ImmoInvest Lindholmen Science Park AB (“Lindholmen AB”). The property listed in Annex P1 under no. 11 is directly owned by Altair. SEB holds the properties and the shares in Lindholmen AB and Altair and Chrysalis on account of the real estate funds set out in Annex P2 (the shares in Lindholmen AB and Chrysalis are together referred to as the “Shares”).

		
	(D)
	In this Umbrella Agreement, SEB is acting on account of said respective real estate investment funds as follows (i) SEB-GER acting on behalf of SEB ImmoPortfolio Target Return Fund with respect to the real estate described in Schedule 3.1 of the Umbrella SPA (ii) SEB-GER acting on behalf of SEB ImmoPortfolio Target Return Fund with respect to the real estate described in Schedule 3.2 of the Umbrella SPA (iii) SEB-FRA with respect to the real estate described in Schedule 3.3 of the Umbrella SPA (iv) SEB-GER acting on behalf of SEB ImmoInvest with respect to the real estate described in Schedule 3.4 of the Umbrella SPA (v) SEB-GER acting on behalf of SEB ImmoInvest with respect to the real estate described in Schedule 3.5 of the Umbrella SPA (vi) SEB-ITA acting on behalf of SEB ImmoInvest with respect to the real estate described in Schedule 3.6 of the Umbrella SPA (vii) SEB-GER acting on behalf of SEB ImmoInvest with respect to the real estate described in Schedule 3.7.1 of the Umbrella SPA (viii) SEB-GER acting on behalf of SEB ImmoInvest with respect to the real estate described in Schedule 3.8 (a) of the Umbrella SPA (ix) SEB-GER acting on behalf of SEB ImmoInvest with respect to the real estate described in Schedule 3.8 (b) of the Umbrella SPA (x) SEB-GER acting on behalf of SEB Global Property Fund with respect to the real estate described in Schedule 3.9 (xI) SEB-GER holds the Shares in Lindholmen AB on account of SEB ImmoInvest, which is the beneficial owner of such shares and SEB-GER holds its shares in Chrysalis on account of SEB ImmoInvest, which is the beneficial owner of such shares.

4

		
	(E)
	The Sellers desire to sell and transfer the Properties and the Shares (hereinafter also called the “Portfolio”) to the Purchasers. Purchasers desire to acquire the Properties and the Shares.

		
	(F)
	The Purchasers and/or, as the case may be certain affiliates of the Investor (for further reference cf. Section 2.1.1 - such affiliates also referred to as the “Propcos”) desire to instruct SEB-GER as the asset manager of the Portfolio and to enter into an asset management agreement with SEB-GER.

		
	(G)
	Therefore, the Sellers, the Purchasers and certain Propcos intend to enter into an umbrella sale and purchase agreement (“USPA”) providing for the provisions of the intended transactions together with twelve local sale and purchase agreements implementing the sale and transfer of the Properties and the Shares (each an “Individual Transfer”) as well as an asset management services agreement (“AMA”). 

		
	(H)
	The terms and conditions of the USPA are set out in the draft umbrella sale and purchase agreement between the Sellers, the Investor and certain Propcos as attached hereto as Annex 2.1. The terms and conditions of the Individual Transfers are set out in the Schedules 3.1 to 3.11 to the USPA. 

		
	(I)
	The terms and conditions of the AMA are set out in the Draft Asset Management Services Agreement between the Sellers, the Investor and certain Propcos as attached hereto as Annex 2.2.

		
	(J)
	It is the common intention of the Parties to execute the drafts of the USPA, the Individual Transfers and the AMA together with all annexes and schedules thereto by no later than 19 February 2015.

		
	(K)
	It is thus the mutual understanding of the Parties to herewith enter into this Umbrella Agreement and to create the binding obligation (Vorvertrag) to enter into the USPA with the Individual Transfers and the AMA, in each case including all annexes and schedules referenced in the agreements as required for the implementation of the envisaged transaction (“Transaction”) it being understood that the Dammtor Purchaser, the Drehbahn Purchaser and the Valentinskamp Purchaser with respect to the USPA shall only be obliged to enter into the USPA and the Individual Transfers to which they are a Party under the USPA.

Now, therefore Sellers and Investors (herein also referred to each as a “Party” and jointly as the “Parties”) agree as follows:
DEFINITIONS
Except as otherwise expressly provided in this Umbrella Agreement, capitalized terms used in this Umbrella Agreement, shall have the following meaning. 
In the Annexes to this Umbrella Agreement, defined terms shall have the meanings as given therein, if not or otherwise defined in this Umbrella Agreement. 

5

	
	
	"Agreement" means this Umbrella Agreement;
“AMA” means the asset management services agreement as described in Section 2.2;

	“Business Day” shall mean any day other than a Saturday, Sunday or a public holiday in Frankfurt am Main (Federal Republic of Germany), Luxembourg, London (U.K.) and New York (USA) on which banks are open for usual business during usual hours;

	“Chrysalis” means Chrysalis Invest S.A (N.V) ((N.V being the Dutch and S.A. the French abbreviation of the same legal entity), a company duly organized and existing under the laws of Belgium and registered with the Crossroad Databank for Undertakings under number 0463.603.184 with its registered office at boulevard Auguste Reyers 207-209, 5th floor, 1030 Brussels;

	“Dispute Meeting” shall have the meaning as defined in Section 9.1.1;

	“Dispute Notice” shall have the meaning as defined in Section 9.1.1;

	“Dispute Representative” shall have the meaning as defined in Section 9.1.2;

	“Down Payment” shall have the meaning as defined in Section 1.1;

	“Escrow Agreement” means the agreement between the Investor and the German Notary and SEB attached hereto as Annex 1.1;

	“Funds” shall have the meaning as defined in the Caption;

	“German Notary” shall have the meaning as defined in Section 11 and shall include his official substitute or his successor in office;

	“Guarantee” means the first demand payment guarantee in the amount of EUR 25,000,000 a copy of which is attached as Annex 1.2;

	“Investor” shall have the meaning as defined in the caption;
"Notarization Date" shall mean the date of the notarization of this Umbrella Agreement.

	“Long Stop Date” means 19 February 2015 including that day (24.00) or as the case may be the deferred date pursuant to Section 4.2.1;

	“Propcos” shall have the meaning as defined in the Preamble (E)

	“Schedules” means any attachments incorporated by reference into this Umbrella Agreement.

	“SEB” shall mean SEB-GER, SEB-ITA and SEB-FRA collectively;

	“SEB-FRA” shall have the meaning as defined in the caption;

	“SEB-GER” shall have the meaning as defined in the caption;

6

	
	
	“SEB-ITA” shall have the meaning as defined in the caption;

	“Transaction” shall have the meaning as defined in the Preamble (J)

	“Umbrella Agreement” means this Umbrella Agreement together with its schedules and annexes;

	“Umbrella Sale and Purchase Agreement” or “USPA” means the agreement attached hereto as Annex 2.1 with all schedules and referenced therein;

INTERPRETATIONS
Throughout the Agreement, unless the context requires otherwise,
		
	(a)
	headings are for convenience only and shall not affect the interpretation of the Agreement;

		
	(b)
	references to any term in the singular shall also include the plural and vice versa;

		
	(c)
	references to one gender shall include all genders;

		
	(d)
	references to a Seller and/or a Investor shall mean a reference to the relevant Seller and the relevant Purchase in relation to one particular Purchase Object; 

		
	(e)
	“including”, “in particular”, “e. g.” or “or” shall be read non-exclusive;

		
	(f)
	references to EUR or Euro are references to the lawful currency of the member states of the European Union;

		
	(g)
	where a German term has been inserted in quotation marks or italics, it alone (and not the English term to which it relates) shall be authoritative for the purpose of the interpretation of the relevant English term in the Agreement;

		
	(h)
	references to any German legal term for any action, remedy, method of judicial proceeding, legal document, legal status, court, official or any other legal concept shall, in respect of any jurisdiction other than Germany, be interpreted to include the legal concept which most closely corresponds in that jurisdiction to the German legal term; and

		
	(i)
	references to any statute or statutory provision shall be construed as a reference to the same as it has been in force as of the date of the notarisation of the Agreement.

7

		
	1.
	DOWN PAYMENT, GUARANTEE, ESCROW AGREEMENT

		
	1.1
	Down Payment  

An amount of EUR 25,000,000 (Euro: twenty five million) (“Down Payment”) has been paid by the Investor into the account at Commerzbank, IBAN DE22500800000402583006, SWIFT: DRESDEFFXXX held by the German Notary (“Escrow Account”) in accordance with the agreement attached hereto as Annex 1.1 (“Escrow Agreement”).
		
	1.2
	Corporate Guarantee 

The Investor has furthermore provided the German Notary with the Corporate Guarantee in the amount of EUR 25,000,000 (Euro: twenty five million) issued by NorthStar Realty Finance Corporation (“Guarantee”) together with a legal opinion issued by Clifford Chance opining on the legality and the enforceability of the Guarantee.
		
	1.3
	Confirmation of the German Notary

The German Notary hereby confirms to the Parties that the Down Payment was fully paid into the Escrow Account, that he holds a copy of the Guarantee and that he will hold, from the date of this Agreement the Down Payment and the copy of the Guarantee in escrow according to the joint instructions of the Parties under this Agreement and, as the case may be, the USPA.
The Investor has handed over the signed original of the Guarantee to Mayer Brown LLP in New York. The Notary is hereby irrevocably instructed to take the necessary actions to have the Guarantee couriered to his attention and – after receipt - to take the original of the Guarantee in escrow. The Notary shall inform the Parties about receipt of the original of the Guarantee in writing.
		
	1.4
	Releases from the Escrow Account and Release of the Guarantee/Contractual Penalty

		
	1.4.1
	Prior to the notarisation of the USPA, the Sellers and the Purchasers herewith irrevocably instruct the German Notary to release the Guarantee and pay out the whole Down Payment from the Escrow Account 

		
	(a)
	to the Investor if

		
	(i)
	Purchasers rescind in accordance with Section 4.2.1 

		
	(ii)
	either Party rescinds in accordance with Section 4.2.3 or 4.2.4

and
		
	(b)
	to the Seller as a Contractual Penalty to which the Seller shall be entitled, if the Seller rescinds in accordance with Section 4.2.1.; the Seller shall also be entitled to demand immediate payment of an amount of EUR 25,000,000 under the Guarantee.

In all cases, Interest accrued on the Down Payment shall be paid out to the Investor. The Parties agree that Purchaser shall not be liable and not be obliged to pay the Contractual 

8

Penalty and the Sellers shall not be entitled to demand payment under the Guarantee in the event that merger control clearance is not granted for the Transaction.
		
	1.4.2
	Other payments out of the Escrow Account or return or release of the Guarantee shall exclusively be made upon a joint written instruction executed by or on behalf of the Sellers and the Investor and delivered to the German Notary (Fax sufficient).

		
	1.4.3
	As from the date of the notarisation of the USPA, the Sellers and the Investor herewith irrevocably instruct the German Notary to release and pay out any funds out of the Escrow Account and to release the Guarantee only in accordance with the provisions of the USPA.

		
	2.
	AGREEMENTS 

The Parties herewith undertake to each other the following:
		
	2.1
	Umbrella Sale and Purchase Agreement

		
	2.1.1
	The HoldCo shall incorporate all relevant entities – namely the Propcos and their direct and indirect shareholders as may be required at Investor's sole discretion – in order to have the USPA, the Individual Transfers and the AMA executed by such entities. To the extent no further entities including the other Purchasers are incorporated, the Investor undertakes to enter into the USPA, the Individual Transfers and, as the case may be, the AMA itself.

		
	2.1.2
	The Parties herewith instruct the German Notary, and the German Notary undertakes to make available all relevant information to other notaries or authorities involved in the Individual Transfers as is required for the due and binding execution and timely implementation of the Individual Transfers.

		
	2.1.3
	The Sellers and the Purchasers (and/or, as the case may be any entities established and notified to the German Notary and the Sellers in accordance with Section 2.1.1) irrevocably undertake (verpflichten sich) to enter into the USPA together with the Individual Transfers in the form and substance as attached hereto as Annex 2.1 and are mutually obliged to agree on final execution versions of all documents within due course.

		
	2.1.4
	With respect to the Properties listed as nos. 8a and 8b in Annex P1 only the aggregate Purchase Price is agreed. The parties will agree on the allocation of the Purchase Price per Property prior to Signing as reasonably determined by the Investor.

		
	2.1.5
	The Sellers shall, at the written request of the Purchasers, and at the Purchasers' cost, take all necessary legal and factual steps to assist in procuring a full transfer of the contractual relationship under this Umbrella Agreement referable to a Purchase Object/Shares as defined in the USPA from the Purchasers to, or the assignment or novation of the corresponding benefits and obligations to, or the nomination of, an affiliated entity of the Purchasers (“Internal Designee”). Affiliated entity is determined according to Secs. 15 et seq. German Stock Corporation Act (Aktiengesetz) accordingly and it being understood that in interpreting this German law concept the specifics of other jurisdictions shall reasonably be taken into account. A transfer under this clause would 

9

lead to a complete exchange of the contractual position on the Purchaser’s side, i.e. only the Internal Designee would from then on be entitled and obliged under this Umbrella Agreement (or the relevant part as the case may be) and the relevant Individual Transfers  corresponding to the Purchase Objects/Shares.
		
	2.1.6
	With respect to the Property listed in Schedule P1 under no. 7 the Parties agree that the relevant Purchaser and SEB shall agree the terms and conditions of a lease agreement to be entered into between Chrysalis and SEB based on the agreed commercial terms as set out in Part A of Annex 2.1.6. The lease shall then replace Part A of Annex 15.7 of te USPA.

		
	2.2
	Asset Management Services Agreement

		
	2.2.1
	SEB-GER and the Purchasers (and/or, as the case may be any entities established and notified to the German Notary and the Sellers in accordance with Section 2.1.1) irrevocably undertake (verpflichten sich) to enter into the AMA in the form and substance as attached hereto as Annex 2.2 and are mutually obliged to agree on final execution versions of all documents as soon as reasonably practicable.

		
	2.2.2
	Sellers and Purchasers agree to start the discussions regarding the Operational Memorandum to be agreed as part of the AMA no later than mid January 2015. Such discussions and negotiations shall be conducted in good faith with the aim to finalize the Operational Memorandum as soon as reasonably possible, however, no later than on the Starting Date as defined in the AMA. The Parties agree that the finalizing of the Operational Memorandum shall not be a condition for the Signing of the USPA or the AMA.

		
	2.2.3
	The Investor shall procure that any affiliate nominated in accordance with Section 2.1.4 above shall enter into the AMA in respect of the relevant Property as defined in the USPA.

		
	3.
	COOPERATION

The Parties shall cooperate acting reasonably and properly in all respects with each other including timely exchange of execution copies of the documentation and execution logistics and formalities and shall use their best efforts to achieve a notarisation of the USPA and the relevant Individual Transfers as well as the AMA until the Long Stop Date.
The Parties shall at all times act in good faith and shall not hinder the timely execution and completion of any of the USPA and/or the Individual Transfers and/or the AMA.
If following the notarization of this Agreement a change to any agreement, clause, annex or other document which has already been attached as a draft to this Agreement is requested by any Party and such change cannot be agreed by and between the Parties, then the version of the relevant agreement, clause, annex or other document as attached hereto shall apply. In case of doubt, Section 10.6 (Severability) sentence 4 of this Agreement shall apply accordingly.

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	4.
	TERMINATION, LONG STOP

		
	4.1
	Termination

This Umbrella Agreement cannot be terminated by either Party unless otherwise agreed below. 
		
	4.2
	Long Stop Date/Rescission

		
	4.2.1
	If the Parties have not signed the USPA, the relevant Individual Transfers and the AMA (each in the form annexed and as required under applicable law) together with all annexes and schedules by the Long Stop Date either Party shall be entitled to rescind this Umbrella Agreement together with all transactions contemplated by this Umbrella Agreement but strictly subject to the limitations in Section 4.2.2.

		
	4.2.2
	A Party (the "Notifying Party") shall not be entitled to rescind this Umbrella Agreement unless

		
	(a)
	it (the Notifying Party) has notified the other Party (the "Receiving Party") that it (i.e. the Notifying Party) is ready, willing and able to sign the USPA , the relevant Individual Transfers and the AMA (in each case together with all annexes and schedules) and

		
	(b)
	the Receiving Party defaults in signing the USPA, the relevant Individual Transfers and the AMA until the Long Stop Date.

The right to rescind can only be exercised within a time period of two weeks following the Long Stop Date.
In the event of a rescission by the Purchaser the Purchaser shall be entitled to damages. 
In the event of a rescission by the Seller, the Seller shall be entitled to the Contractual Penalty which shall be in full and final settlement of all claims that the Seller may have.
		
	4.2.3
	If on the Long Stop Date neither Party has served a notice pursuant to Section 4.2.1 then following a grace period of 5 Business Days either Party shall be entitled to rescind this Agreement and neither party shall have any claims against the other.

		
	4.2.4
	If Merger Control Clearance is denied by the Cartel Authorities without possibility to appeal (bestandskräftig), either Party shall be entitled to rescind this Agreement and neither party shall have any claims against the other.

		
	4.2.5
	Any rescission shall be made by way of a written declaration to the German Notary. The Sellers and the Purchasers herewith irrevocably entitle the German Notary to receive such declarations on their behalf.

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	5.
	MERGER CONTROL CLEARANCE

		
	5.1
	Filings

The Purchasers (and SEB, to the extent any filing cannot be made by the Purchasers on behalf of SEB or on behalf of the other Sellers under applicable law) shall use reasonable endeavours to make any filings necessary in connection with the merger control clearance and any other filings with, or notifications to, any governmental authority required in connection with the Agreement as soon as possible after 5 January 2015.. Any filings made by the Purchasers shall require the prior written consent of SEB (and vice versa) which shall not be unreasonably withheld, conditioned or delayed. The Purchaser may withdraw (zurücknehmen) any filing or agree to the extension of any examination period only with the express prior written consent of SEB, which shall not unreasonably be withheld.
		
	5.2
	Cooperation

In order to obtain all requisite approvals for the transactions contemplated by this Umbrella SPA, the Parties shall (i) reasonably cooperate in all respects with each other in the preparation of any filing or notification and in connection with any submission, investigation or inquiry including timely exchange of drafts in order to give reasonable opportunity to comment on such drafts, (ii) supply to any competent authority promptly (unverzüglich) any additional information requested pursuant to any applicable laws and take all other procedural actions required in order to obtain any necessary clearance or to cause any applicable waiting periods to commence or expire, (iii) promptly provide each other with copies of any written communication received or sent (or written summaries of any non-written communication) in connection with any proceeding and (iv) give each other and their respective advisers the opportunity to participate in all meetings and conferences with any competent authority.
		
	5.3
	Merger Control Clearance

The obligations pursuant to Sections 2.1.3 and 2.2.1 are subject to the condition precedent of merger control authority (“Merger Control Clearance”) The Parties assume that the Federal Cartel Office (Bundeskartellamt) (“FCO”) is competent.
Merger Control Clearance is deemed to have occurred, if (i) the FCO notifies the Parties in writing that the Transaction contemplated under this Agreement does not trigger merger control under the German Act Against Restrictions of Competition (Gesetz gegen Wettbewerbsbeschränkungen) (“ARC”) or (ii) in the case of statutory fiction of Merger Control Clearance. The Parties can mutually waive the condition precedent of Merger Control Clearance in writing. 
		
	5.4
	Charges, Conditions

If a prohibition order of the Federal Cartel Office is to be anticipated or is actually issued, the Parties shall endeavour what can be reasonably be expected to remedy the circumstances preventing the clearance; any liability of the Purchaser in this context is excluded. The Purchaser 

12

is entitled to lodge an appeal against the prohibition order in co-operation with the Seller, and at its own expense.
		
	6.
	INTERIM PERIOD UNTIL TRANSFER OF POSSESSION

		
	6.1
	Sellers Undertakings

		
	6.1.1
	With respect to the time period between Signing of this UA and Merger Control Clearance, Sellers shall not do any actions or give any declarations that are outside the ordinary course of business without Purchasers' prior written consent.

		
	6.1.2
	With respect to the time period between Merger Control Clearance and the Signing of the USPA, Sections 14.1, 14.2 and 14.3 of the USPA shall apply in relation between the Sellers and the Purchasers mutatis mutandis.

		
	6.1.3
	To the extent any actions of Sellers require confirmation or consent of the Purchasers pursuant to these Seller's above undertakings, the Purchasers hereby agree that the persons listed under Sections 8.3.1(b)(ii) and 8.3.1(b)(iii) shall be the contact persons for the Sellers and that any confirmation or consent given by any of these contact persons shall be deemed a confirmation or consent of the Purchasers. Any confirmation or consent shall be deemed granted if Purchasers do not otherwise instruct within a 5 Business Day period commencing on the receipt of the written request.

		
	6.2
	Material Adverse Change

Purchasers shall be entitled to rescind from their obligations under this Umbrella Agreement to enter into the USPA and Individual Transfers to the extent that circumstances occur that would entitle the Purchasers under Section 14.4.3  and 14.4.4 of the USPA to rescind from any such Individual Transfer under the USPA. Sections 14.4.5 and 14.4.6 of the USPA shall apply mutatis mutandis. Section 4.2.4 applies to such rescission.
		
	7.
	COSTS, TRANSFER TAX

All costs and transfer taxes connected with this Umbrella Agreement, its Schedules and Annexes including the costs of the Escrow Account shall be borne by the Investors.
Each Party shall, however, bear the costs of its own legal and other advisors and agents.
		
	8.
	NOTIFICATIONS

		
	8.1
	Purchasers’ Agent

		
	8.1.1
	Each Purchaser by its execution of this Umbrella Agreement irrevocably appoints

Prime HoldCo C-T S.à r.l., 
 6A Route De Treves - 6th Floor, 

13

 Senningerberg,  
L 2633 Luxembourg
to act on its behalf as its agent (“Purchaser’s Agent”) in relation to this Umbrella Agreement and irrevocably authorizes on its behalf to give and receive all notices and instructions, to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Purchaser notwithstanding that they may affect the Purchaser without further reference to or the consent of that Purchaser; and in each case the Purchaser shall be bound as though the Purchaser itself had given or received the notices and instructions or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
		
	8.1.2
	Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made or received by the Purchasers’ Agent or given to the Purchasers’ Agent under this Agreement on behalf of another Purchaser or by a Seller or in connection with this Agreement shall be binding for all purposes on that Purchaser as if that Purchaser had expressly made, given, received or concurred with it. In the event of any conflict between any notices or other communications of the Purchasers’ Agent and any other Purchaser, those of the Purchasers’ Agent shall prevail.

		
	8.1.3
	Each Purchaser hereby – to the extent applicable and legally possible - exempts the Purchaser’s Agent from the restrictions provided for in Section 181 of the German Civil Code.

		
	8.1.4
	Purchaser’s Agent must not cease to be a Purchasers’ Agent unless a replacement Purchasers’ Agent has been appointed to the reasonable satisfaction of the Sellers.

		
	8.2
	Declarations or notifications to the Sellers 

		
	8.2.1
	Declarations or notifications to the any of the Sellers shall be made in writing and be addressed to:

SEB Investment GmbH 
Rotfeder-Ring 7 
D – 60327 Frankfurt am Main 
Attn.: Mr. Nils Hübener 
Email: nils.huebener@sebam.de 
Attn.: Mr. Peter Rocker 
Email: peter.rocker@sebam.de
With a copy to:
Dr Jens Ortmanns,  
McDermott Will & Emery  
Stadttor 1  
40219 Düsseldorf  
Germany 
Email: jens.ortmanns@mwe.com

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	8.3
	Declarations or notifications to the Purchaser’s Agent 

		
	8.3.1
	Declarations or notifications to the Purchaser’s Agent shall be made in writing and be addressed to:

		
	(a)
	Purchaser’s Agent and

		
	(b)
	For all Purchasers to:

		
	(i)
	c/o NorthStar Asset Management Group, attn. General Counsel, 6A Route de Trèves, 6th Floor, 2633 Luxembourg, Luxembourg, Email: legal@nsamgroup.com

and
		
	(ii)
	c/o NorthStar Asset Management Group, attn. Shawana McGee, 6A Route de Trèves, 6th Floor, 2633 Luxembourg, Luxembourg, Email: smcgee@nsamgroup.eu

and
		
	(iii)
	 c/o NorthStar Realty Finance Corp., attn. Ronald J. Lieberman, Esq., 399 Park Avenue, 18th Floor, New York, NY 10022, USA, Fax: +1 (212) 547-2704; Email: Rlieberman@nsamgroup.com

With a copy to:
		
	(iv)
	Clifford Chance Deutschland LLP, attn. Thomas Reischauer, Mainzer Landstraße 46, 60325 Frankfurt am Main, Germany, Fax: +49 (0)69 7199 4000; Email: thomas.reischauer@cliffordchance.com

		
	8.4
	Purchasers’ Process Agent

The Purchasers will irrevocably appoint a Process Agent within a reasonable period of time after the date hereof. Such Process Agent shall be situated in Germany. Until such Process Agent is appointed, North Star Asset Management Group, 6A Route de Trèves, 6th Floor, 2633 Luxembourg, Grand Duchy of Luxembourg, attn. of the Persons listed under Sections 8.3.1(b)(i) to 8.3.1(b)(iii), shall serve as Purchasers' Process Agent.
		
	8.5
	Receipt of Notices

		
	8.5.1
	In the absence of evidence of earlier receipt, any notice shall take effect from the time that it is deemed to be received:

		
	(a)
	in the case of a notice left at the address of the addressee, upon delivery at that address; and

		
	(b)
	in the case of a posted letter, on the third day after posting.

		
	8.5.2
	A notice received or deemed to be received in accordance with Section 19.5.1 above on a day which is not a Business Day in the place of receipt or after 5 p.m. on any Business Day, according 

15

to local time in the place of receipt, shall be deemed to be received on the next following Business Day in the place of receipt.
		
	8.5.3
	Each Party undertakes to notify the other Parties by notice served in accordance with this Section 19.5 if the address specified herein is no longer an appropriate address for the service of notices.

		
	9.
	CONFIDENTIALITY, ANNOUNCEMENTS

		
	9.1
	No Disclosure of Confidential Information

Each Party agrees to maintain in confidence the economic terms contained in this Agreement, information and data furnished or made available by Sellers, its agents or representatives in connection with Purchaser's investigation of the Properties and Shares and the transactions contemplated by this Agreement (collectively, the "Confidential Matters"); provided however, that each Party, its agents and representatives may disclose such information and data (i) to such Party's direct and indirect accountants, attorneys, prospective lenders, investment bankers, underwriters, partners, members, investors (prospective and current), employees, affiliates, officers, directors, consultants and advisors (collectively, "Representatives"), in each case, solely to the extent that such Representatives reasonably need to know such information in connection with assisting Purchaser in connection with the Transaction, and Purchaser shall be liable to the Sellers for any action or omission prohibited under this Agreement by any of its Representatives; (ii) to the extent required by an applicable statute, law, regulation, governmental authority or securities exchange; (iii) to the extent required by Purchaser's reporting requirements under the rules and regulations of the Securities and Exchange Commission, including, without limitation, the necessity of filing Form 8-k  disclosure with respect to the transaction contemplated hereby or as required by any securities exchange, (iv) if in the opinion of counsel to the disclosing Party, disclosure is required to comply with any mandatory provision of law, of any directive from a government recognized stock exchange, or of a binding decision from a court or another government body, (v) with respect to generic disclosures about business and pipeline of the Purchaser or any affiliate of the Purchaser made in the ordinary course of business that would not reasonably be expected to identify Seller with the specific transaction contemplated hereby; or (vi) if required by subpoena issued in connection with any litigation or proceeding.
		
	9.2
	Announcements

Each Party shall use reasonable efforts to notify the other of impending press-releases regarding the conclusion of this Agreement and the Individual Transfers; provided that the Sellers shall not release any press releases or otherwise publically announce in advance of the Purchaser without the Purchaser’s prior written consent; provided further that substantially similar press-releases shall not require additional notification.  The Parties shall so far as reasonably practicable, coordinate with each other to achieve consistency in the factual content of any press-releases.
		
	10.
	DISPUTE RESOLUTION

		
	10.1
	Disputes

16

The Parties shall attempt in good faith to resolve any dispute by mutual agreement by the following procedure:
		
	10.1.2
	In the event of any dispute between the Parties arising out of or relating to this Umbrella Agreement, the responsible representatives of the Parties shall, within fifteen (15) Business Days of a written notice from one Party to the other Party (the "Dispute Notice"), hold a meeting (the "Dispute Meeting") in an effort to resolve the dispute in fair dealing and good faith. In the absence of agreement to the contrary the Dispute Meeting shall be held at the registered office for the time being of SEB.

		
	10.1.3
	Each Party shall use all reasonable efforts to send a senior representative who has authority to settle the dispute to attend the Dispute Meeting (the "Dispute Representative"). Each Party shall give notice of the appointment of its Dispute Representative to the other Party. The Dispute Representatives shall use all reasonable efforts to resolve disputes arising out of this Umbrella Agreement or Individual Transfers by amicable settlement.

		
	10.1.4
	Any dispute which is not resolved within forty (40) Business Days after the service of a Disputes Notice/ the service of the first notice of the appointment of a Dispute Representative, whether or not a Dispute Meeting has been held, shall, at the request of either Party be referred to the dispute resolution procedure pursuant to Section 21.2.

		
	10.1.5
	Nothing in this Section 21.1 and the following Section 21.2 shall limit the right of the Parties to request conservatory or interim measures, such as preliminary injunctions, from the competent national courts, the pre-arbitral referee and/or the arbitral tribunal. If a claim in a dispute may become time barred due to a statute of limitation being applicable, the Parties shall agree in an appropriate way that the application of such statute of limitation shall be suspended by the time period of the settlement efforts made by the Dispute Representatives and/or the dispute resolution procedure pursuant to Section 21.2. If the Parties cannot reach an appropriate agreement on such suspension sufficiently in advance of time bar of the claim becoming effective, the Party whose claim may become time barred may initiate the dispute resolution procedure pursuant to Section 21.2 irrespective of the prerequisites of this Section 21.1.

		
	10.2
	Litigation

In the event that a dispute cannot be settled pursuant to Section 21.1, the Parties agree that the Courts of Frankfurt am Main shall have exclusive jurisdiction over any and all disputes unless required otherwise by mandatory law. 
		
	11.
	MISCELLANEOUS

		
	11.1
	Restrictions on Assignment

Claims of any of the Investors arising out of or in connection with the Agreement may only be assigned with the prior written consent of SEB-GER except assignments to intra-group companies of the Investors or to debt or equity providers.

17

		
	11.2
	Payments, Bank Accounts

Any payment under the Agreement must be made free of all taxes, bank charges and other deductions by wire transfer of immediately available funds. Any such payment shall be deemed to have been duly made only upon the irrevocable and unconditional crediting of the amount payable (without deduction of any costs or charges) to the relevant bank account on, and on a value date no later than, the relevant due date.
		
	11.3
	Liability of Sellers

No Seller shall be liable for any obligations of another Seller acting on behalf of a different real estate fund (several liability, Ausschluss der gesamtschuldnerischen Haftung). Within the same real estate fund, Sellers shall be jointly and severally liable for any obligations hereunder (gesamtschuldnerische Haftung).
		
	11.4
	Joint and Several Liability of Investors 

Any Investor shall be jointly liable together with all other Investors and assumes to fulfill all obligations by any other Investor and assignee under this Umbrella Agreement (gesamtschuldnerische Haftung der Käufer).
		
	11.5
	Amendments

Any amendments to the Agreement shall be in writing, signed by each of the Parties to be valid and require the explicit reference to the Agreement but need to be notarised if this is required by mandatory law. This is also applicable for an amendment of this Section 10.5.
		
	11.6
	Severability

Should a provision of the Agreement or a provision later on included in the Agreement be or become null and void as a whole or in part, or should a gap in the Agreement become evident, this does not affect the validity of the remaining provisions. The Parties are aware of the German Federal Supreme Court's (Bundesgerichtshof) decision according to which a severability Section merely reverses the burden of proof. However, it is the express intention of the Parties to maintain the validity of the remaining provisions at all events and thus to exclude the applicability of section 139 BGB as a whole. Instead of the null and void provision, or in order to fill the gap, such valid and practicable regulation is deemed to be agreed with effect ex tunc that in legal and economic terms comes closest to what the Parties intended or would have intended in accordance with the purpose of the Agreement if they had considered the point at the time of conclusion of the Agreement. If the nullity of a provision is due to a degree of performance or time (period or deadline) laid down in this provision, then the provision is deemed to be agreed with a legally permissible degree that comes closest to the original degree. If the nullity or gap relates to a provision requiring notarisation, the regulation pursuant to sentence 4 or the provision pursuant to sentence 5 must be agreed in notarised form. However, in derogation of sentences 1 to 5, the Agreement 

18

is null and void as a whole if it is null and void in relation to individual Parties or if the partial nullity concerns the contractual main performance obligations or a part of them.
		
	11.7
	Governing Law

		
	11.7.1
	The Umbrella Agreement shall be exclusively governed by and construed in accordance with the law of the Federal Republic of Germany applicable to parties residing within the Federal Republic of Germany without regard to the conflicts of law provisions of the law of the Federal Republic of Germany.  

		
	11.8
	Entire Agreement

		
	11.8.1
	The Agreement including all Schedules to the Agreement and all Schedules and Annexes to such Schedules comprises the entire agreement between the Parties concerning the subject matter hereof and supersedes and replaces all prior negotiations, agreements and undertakings of the Parties whether oral or written, with respect to the subject matter hereof. 

		
	11.9
	Further Assurances

Each Party shall from time to time execute and deliver all such further documents and agreements and take all such further actions as the other Party may reasonably require and which are not inconsistent with any other provisions of the Agreement in order to effectively consummate the Agreement as provided herein.
		
	11.10
	No Contract for the Benefit of a Third Party

The Agreement shall not grant any rights to, and is not intended to operate for, the benefit of third parties unless otherwise explicitly provided for herein.

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