Document:

exhibit1026coinvestments

                Hermes Fund Managers Limited  Co-Investment Scheme Rules 2018   Approved by the Remuneration Committee on 19 November 2018                                                             

 

Contents    Contents _____________________________________________________________________________ 1  1.  Eligibility, Nature of Scheme and Definitions ____________________________________________ 2  2.  Other Definitions __________________________________________________________________ 10  3.  Participation Criteria & Selection of Funds  ____________________________________________ 11  4.  Closure & Rebalance of Funds  ______________________________________________________ 13  5.  Making of Awards _________________________________________________________________ 15  6.  Investment Professionals – Allocation of Initial Unit Value to the Funds ____________________ 16  7.  Non-Investment Professionals – Allocation of Initial Unit Value to the Funds ________________ 17  8.  Vesting of Awards _________________________________________________________________ 18  9.  Determination of Final Unit Values ___________________________________________________ 19  10. Cessation of Employment  __________________________________________________________ 20  11. Winding-up _______________________________________________________________________  21  12. No payments until Vesting __________________________________________________________ 22  13. Cash Scheme Only ________________________________________________________________ 23  14. Alterations to the Scheme  __________________________________________________________ 24  15. Relationship with Service Contract and Other Employee Compensation Schemes ___________ 25  16. Withholdings _____________________________________________________________________ 26  17. No Assignment  ___________________________________________________________________ 27  18. Service of Documents ______________________________________________________________ 28  19. Governing Law ____________________________________________________________________ 29  20. US Section 409A __________________________________________________________________ 30  21. Data Protection ___________________________________________________________________ 31  22. Clawback ________________________________________________________________________ 32  Schedule 1 ___________________________________________________________________________ 33  Appendix 2-1 _________________________________________________________________________ 35  Schedule 2 ___________________________________________________________________________ 36  Appendix 2-1 _________________________________________________________________________ 38  Schedule 3 ___________________________________________________________________________ 39  Appendix 3-1 _________________________________________________________________________ 41                                                                                                                      1  

 

1.  Eligibility, Nature of Scheme and Definitions   1.1.   A person who is an Employee, and who is eligible to be considered for a bonus in respect of any         Financial Year ending on or after 31st December 2018 will be required to irrevocably waive and         forego their eligibility to be considered for part of the bonus and be granted an Award.  No other         person shall be entitled to be granted an Award.  1.2.   In these rules the following words and expressions have the following meanings unless inconsistent         with the context:           “Aggregate Bonus”     the aggregate of all bonuses which, but for the Scheme, an Employee                               would have been eligible to receive in respect of a Financial Year;          “AIF”                 an Alternative Investment Fund for the purpose of the AIFM Remuneration                               Code set out in  SYSC 19B of the Financial Conduct Authority Handbook;          “AIFM”                an Alternative Investment Fund Manager for the purpose of the AIFM                               Remuneration Code set out in  SYSC 19B of the Financial Conduct                               Authority Handbook;          “Award”               a right to a cash payment to the Award Holder, pursuant to these Rules;          “Award Holder”        a person holding an Award, or his personal representatives, as the context                               may require;          “Award Notice”        a notice sent to a Participant in respect of an Award in accordance with                               Rule 5.1 in substantially the form as set out in Schedule 2 (for Non-                              Investment Professionals) and Schedule 3 (for Investment Professionals),                               or in such other form as the Remuneration Committee may specify from                               time to time, as revised in accordance with Rule 4.4(d) and/or Rule 4.5(b);          “Bad Leaver”          an Award Holder who ceases to be employed within the Group in                               circumstances where he is not a Good Leaver (or gives or receives notice                               of such cessation) and, for the avoidance of doubt, this shall include where                               cessation is for Cause;          “Cause”               means (i) the Award Holder materially violating the ‘standards of conduct’;                               (ii) the Award Holder violating a term or terms of the Award or any                               employment contract; (iii) the Award Holder being insubordinate or                               engaging in unprofessional conduct directed at clients, customers, co-                              workers or management personnel;  (iv) the Award Holder’s refusal to                               perform their duties in good faith and to the best of their ability (v) any wilful,                               negligent or grossly negligent conduct by the Award Holder which does or                               may result in damage to the professional reputation or capabilities of the                               Company; (vi) any wilfully negligent or grossly negligent conduct by the                               Award Holder which causes the Company to be the subject of scorn,                               disrespect, negative publicity or embarrassment.  For the purposes of this                                                                                                  2  

 

                      definition, the Award Holder shall be in violation of the ‘standard of conduct’                        if they do not abide by all rules, codes of conduct, regulations, policies,                        practices and procedures, which the Company (or, as applicable, another                        Group Company) may operate and may amend from time to time, and all                        applicable compliance, legal and regulatory requirements (whether                        domestic, foreign or local);   “Closed Fund”         any fund specified in an Award Notice (being a Managed Fund or a fund                        which constituted part of the Growth Fund) which has closed at any time                        during the year ending on the commencement of a Rebalancing Period;   “Closure Date”        the date upon which a Closed Fund closed (and in the event of any dispute                        as to such date, the Executive Committee’s determination  shall be final                        and binding on all parties);   “Closure Investment   in respect of a Unit comprised in an Award where any amount of the Initial  Return”               Unit Value is invested in a Closed Fund (including a Closed Fund that is a                        Managed Fund), the Investment Return on such amount as at the Closure                        Date;   "Company"             Hermes Fund Managers Limited;   "Deferred Amount"     an amount calculated in relation to an Aggregate Bonus (and specified in                        the relevant Award Notice) as follows:                                            Has the Remuneration Committee                         Status of Participant exercised discretion under Rule 3.10 Rule                                                 to apply rule 3.2?                            Not a Regulated                                                   No applicable          Rule 3.2                             Employee                          Regulated Employee           Yes                 Rule 3.2                                                                         Rule 3.3 or 3.4                                                       No                                                                       (as appropriate)                                                                                                                                                                                                                                               3  

 

                                                  “Effective Date"      1 April immediately following the end of the Financial Year in respect of                        which the Award Holder’s Aggregate Bonus is subject to Rule 3.1, unless                        another date is specified in the Award Notice;   "Employee"            an employee of the Company or another Group Company (including a US                        Employee);   “Executive            the committee comprising those executive directors as designated from  Committee”            time to time by the Board of Directors of the Company and such other                        individual or individuals as they shall determine;   “Final Unit Value”    an amount ascribed to a Unit relating to an Award in accordance with                        Rule 9, being one of:                        (a)   the amount ascribed to Unit 1 (the “Final Unit 1 Value”);                        (b)   the amount ascribed to Unit 2 (the “Final Unit 2 Value”);                        (c)   the amount ascribed to Unit 3 (the “Final Unit 3 Value”);   “Financial Year”      a financial year of the Company (as determined in accordance with the                        provisions of section 390 of the Companies Act 2006;   “First Vesting Date”  the first anniversary of the Effective Date of an Award;   “Fixed                the amount of an Employee’s Remuneration for a Financial Year that is fixed  Remuneration”         and definite under the terms of their contract of employment;   “Good Leaver”         an Award Holder who ceases to be employed within the Group as a result                        of, redundancy, or ill-health or disability (in either case evidenced to the                        satisfaction of the Remuneration Committee), or death;   "Group"               the Company and its subsidiaries (within the meaning of section 1159 of                        the Companies Act 2006) and “Group Company” shall be construed                        accordingly;   “Growth Fund”         in respect of any Financial Year, the basket of separate funds identified in                        the relevant Investment Preference Form as forming the Growth Fund,                        subject to any rebalancing or other amendment pursuant to Rule 4;                                                                                                                    4  

 

“Initial Unit Value”  an amount ascribed to a Unit relating to an Award in accordance with Rule                        5.4 and specified in the Award Notice, being one of:                        (a)  the amount ascribed to Unit 1 (the “Initial Unit 1 Value”);                         (b)  the amount ascribed to Unit 2 (the “Initial Unit 2 Value”);                         (c)  the amount ascribed to Unit 3 (the “Initial Unit 3 Value”);   "Investment           in respect of an Award made to an Investment Professional, a form  Preference Form"      substantially as set out in Schedule 1, or, in such other form as the                        Executive Committee specifies from time to time;   “Investment           A Participant engaged in portfolio management of funds;  Professional”   “Investment Return”   in respect of any amount of an Initial Unit Value invested in a fund (including                        a Managed Fund) (“Seed Amount”) in relation to a particular Award, the                        amount of money that would be paid out of such fund to the Award Holder                        as at the relevant date proscribed by these Rules (taking into account the                        provisions of Rule 4 and all gains and losses accrued in relation to the Seed                        Amount and net of any management fees) if such fund was closed and, for                        the purpose of this definition, “fund” means any Managed Fund specified in                        the relevant Award Notice and, in relation to the Growth Fund, each                        separate fund set out in the Appendix to the Award Notice, but in all cases,                        taking account of Rule 4.7;   “Managed Funds”       the fund or funds directly managed by an Investment Professional;   “Mandatory            the Remaining Percentage in respect of an Investment Preference Form  Percentage”           divided by the number of Managed Funds specified in it;   “Non-Investment       an Employee who is not an Investment Professional;  Professional”   “Overseas             the equivalent of any sum stipulated in Sterling in these Rules in the  Equivalent”           currency in which the Participant whose Aggregate Bonus is being applied                        for the purpose of Rule 3.2, 3.3 or 3.4 (as the case may be) is normally paid                        using, for this purpose, the 12 month average interbank exchange rate for                        exchanging Sterling into that currency measured over the relevant Financial                        Year or such other rate of exchange as the Executive Committee deems                        appropriate;   “Participant”         an Employee eligible to participate in the Scheme in respect of a Financial                        Year in accordance with Rule 1.1;                                                                                           5  

 

"Participation        the criteria for participation in the Scheme for a Financial Year as set out in  Criteria"             Rule 3;   “Principles of        the principles of proportionality to remuneration policies of AIFM as referred  Proportionality”      to in the AIFM Remuneration Code at  SYSC 19B.1.1A(2) of the Financial                        Conduct Authority Handbook;   “Rebalancing          either:  Period”                         (a)  where the Executive Committee has not exercised its discretion                            pursuant to Rule 4.8, the period of 30 days ending on 1 March; or                         (b)   where the Executive Committee exercises that discretion, the period                            of 30 days commencing on the date determined by the Executive                            Committee pursuant to  Rule 4.8;   “Regulated            any Employee classed as “AIFM Remuneration Code staff” for the purpose  Employee”             of the AIFM Remuneration Code set out in  SYSC 19B of the Financial                        Conduct Authority Handbook, being one whose professional activities have                        a material impact on the risk profiles of either the AIFMs within the                        Company or Group or AIFs that such AIFMs manage, who shall in respect                        of a Financial Year receive either:                         (a) Variable Remuneration of more than 33% of their Total Remuneration;                        or                         (b) Total Remuneration of more than £500,000;                         (including senior management, risk takers, control functions and any                        Employee receiving Total Remuneration that takes them into the same                        Remuneration bracket as senior management and risk takers), in each and                        every case as determined by the Remuneration Committee;   “Remaining            the percentage remaining  after deducting from 100 per cent, the Selected  Percentage”           Percentage specified in an Investment Preference Form (which may be                        zero);   “Remuneration”        any form of an Employee’s remuneration, including salary, discretionary                        pension benefits and benefits of any kind payable to them by virtue of their                        employment by any Group Company;   "Remuneration         the Remuneration Committee of the Board of Directors of the Company;  Committee"                                                                                           6  

 

“Replacement Fund”    a fund selected at the sole discretion of the Executive Committee to replace                        a Closed Fund;   “Repudiatory Event”   any one or more of the following:                         (a)  the Award Holder has participated in or was responsible for conduct                                                which resulted in significant losses to a Group Company;                        (b)  the Award Holder has failed to meet appropriate standards of fitness                            and propriety;                        (c)  the Company has reasonable evidence of fraud or material dishonesty                            by the Award Holder;                         (d)  the Company has become aware of any material wrongdoing on the                            part of the Award Holder;                        (e)  the Award Holder has acted in any manner which in the opinion of the                            Remuneration Committee has brought or is likely to bring any Group                            Company into material disrepute or is materially adverse to the                            interests of any Group Company;                        (f)  there is a breach of the Award Holder’s employment contract that is a                            potentially fair reason for dismissal;                        (g)  the Award Holder is in breach of a fiduciary duty owed to any Group                            Company or any client or customer of any Group Company;                         (h)  the Award Holder participates in a ‘lift out’ of a team or group of                            Employees, or whether alone or with others entices or otherwise                            encourages a team or group of Employees to move to another firm;                        (i)  an Award Holder who has ceased to be an Employee was in breach                            of his or her employment contract or fiduciary duties in a manner that                            would have prevented the grant or Vesting of the Award had the                            Company been aware (or fully aware) of that breach, and which the                            Company was not aware (or not fully aware) until after both:                            (i)  the Award Holder’s ceasing to be an Employee; and                            (ii)  the time Award Vested; or                        (j)  there was a material error in determining:                            (i)  whether the Award should be granted; or                            (ii)  the size and nature of the Award.                        (k)  a Group Company mis-stated any financial information (whether or not                            audited) for any part of any financial year that was taken into account                            in determining:                            (i)  whether the Award should be made; or                            (ii)  the Deferred Amount of the Award; or                                                                                           7  

 

                      (l)  a Group Company or business unit that employs or employed the                            Award Holder, or for which the Award Holder is responsible, has                            suffered a material failure of risk management;   “Rules”               the rules of the Scheme as set out herein and as may be amended from                        time to time;   "Scheme"              the co-investment scheme described by the Rules;   “Second Vesting       the second anniversary of the Effective Date of an Award;  Date”   "Section 409A"        Section 409A of the U.S. Internal Revenue Code of 1986, as amended, and                        the regulations issued thereunder;   “Selected             a percentage (not exceeding fifty per cent) of a Participant’s Deferred  Percentage”           Amount specified by them in an Investment Preference Form pursuant to                        Rule 3.7, to be notionally invested in the Growth Fund (or zero, if no                        percentage is specified);   “Subsisting”          an Award shall be treated as subsisting to the extent that it has not Vested                        or lapsed in respect of any Unit, and “Subsist” and “Subsisted” shall be                        construed accordingly;   “Third Vesting Date”  the third anniversary of the Effective Date of an Award;   “Total                an Employee’s total Remuneration in respect of a Financial Year;  Remuneration”   “Unit”                a notional unit subject to an Award for the purpose of determining the                        amount of the cash payment that may be made to the Award Holder on                        Vesting of the Award being, as the context requires, any of the following:                         (a) Unit 1;                          (b) Unit 2;                         (c) Unit 3;                        and references to  “each of the Units” shall be construed as meaning each                        of Unit 1, Unit  2 and Unit 3;   “US Employees”        Employees or Award Holders resident in or subject to taxation under the                        laws of the United States of America;                                                                                           8  

 

“Variable             in relation to an Employee, such amount of his Remuneration in respect of  Remuneration”         a Financial Year as does not constitute Fixed Remuneration;   “Vest”                in relation to an Award, means the Award Holder becoming entitled to a                        payment in respect of the Award (by reference to one or more Units                        comprised in it) in accordance with the Scheme, and “Vested” and “Vesting”                        shall be construed accordingly;   “Vesting Date”        in relation to an Award, means a date on which an Award Vests, being any                        of the First Vesting Date, the Second Vesting Date or the Third Vesting                        Date (according to the context) or any other date on which it Vests and                        “Vesting Dates” shall be construed accordingly.                                                                                                                9  

 

2.  Other Definitions      In these Rules:         (a)  words denoting the singular shall include the plural and vice versa;         (b)  references to 'business days' are to business days when banks are open in London;          (c)  references to 'Schedule' are to the Schedules to these Rules;         (d)  references to a Rule are a reference to a rule of this Scheme;         (e)  descriptive headings to Rules are for convenience only, have no legal effect and shall be ignored             in interpreting of these Rules; and          (f)  the expression, “ceases to be a Service Provider” shall, subject to Rule 20, be construed as             meaning an Employee ceasing to be an employee within the Group.                                                                                                 10  

 

3.  Participation Criteria & Selection of Funds  3.1.   For any Financial Year for which a Participant is eligible to participate in the Scheme (including where         they receive Variable Remuneration), they shall irrevocably waive and forego (so as to have no         entitlement to receive) the Deferred Amount of their Aggregate Bonus before any part of that         Aggregate Bonus is received by them (or deemed to have been received by them for tax purposes).         References in this Rule to Aggregate Amount, Deferred Amount, Participant and Variable         Remuneration shall be construed accordingly.   3.2. Subject to Rule 3.5, the Deferred Amount for any Participant who is not a Regulated Employee         (irrespective of whether they are an Investment Professional or a Non-Investment Professional), is the         sum of the Column 3 Deferred Percentages of the corresponding Co-Investment Thresholds stated in         Column 2 for each of the First Row, the Second Row and the Third Row of the Table below.         .            Column 1     Column 2: Co-Investment Thresholds    Column 3: Deferred Percentage                         Any part of the Aggregate Bonus not exceeding          First Row                                                          10%                       £150,000 (or the Overseas Equivalent)                        Any part of the Aggregate Bonus exceeding          Second Row   £150,000 (or the Overseas Equivalent) but not         30%                       exceeding £300,000 (or the Overseas Equivalent)                        Any part of the Aggregate Bonus exceeding          Third Row                                                          50%                       £300,000 (or the Overseas Equivalent)          so that, for example (and as an aid to the interpretation of this Rule), an Investment Professional not         being a Regulated Employee who would otherwise have been entitled to an Aggregate Bonus of         £500,000 would irrevocably waive and forego £160,000 of that Aggregate Bonus, being the sum of         £15,000 (First Row), £45,000 (Second Row) and £100,000 (Third Row).  3.3. Subject to Rules 3.5 and 3.10, where a Participant is a Regulated Employee (irrespective of whether         they are an Investment Professional or a Non-Investment Professional) and they receive Variable         Remuneration of less than £500,000, their Deferred  Bonus is the higher of:          a)    the amount determined by applying Rule 3.2 to their Aggregate Bonus; or         b)    40% of their Aggregate Bonus.  3.4. Subject to Rules 3.5 and 3.10, where a Participant  is a Regulated Employee (irrespective of whether         they are an Investment Professional or a Non-Investment Professional) and they receive Variable         Remuneration of £500,000 or more, the Deferred Amount is the higher of:          a)    the amount determined by applying Rule 3.2 to their Aggregate Bonus; or         b)    60% of their Aggregate Bonus.  3.5. Notwithstanding Rules 3.2, 3.3 and 3.4, the minimum Deferred Amount shall, in all cases be £7,500         (or the Overseas Equivalent), so that, for the avoidance of doubt, if applying Rule 3.2, 3.3 or 3.4 results         in a Deferred Amount of less than £7,500 (or the Overseas Equivalent), any waiver of that Deferred         Amount shall be ignored and no Award shall be granted in respect of the Aggregate Bonus.                                                                                                  11  

 

Selection of Funds by Investment Professionals  3.6.   Each Participant who is an Investment Professional will receive an Investment Preference Form from         the Company. They must:         a)   complete their Investment Preference Form in accordance with Rule 3.7; and         b)   return it to the Company within the period that the Executive Committee notifies to them.  3.7.   An Investment Professional may (but does not have to) specify in their Investment Preference Form,         a percentage (not exceeding 50%) of their Deferred Amount which they wish to invest into the Growth         Fund.  Selection of Funds for Non-Investment Professionals  3.8.   Each Participant who is a Non-Investment Professional will have 100% of their Deferred Amount         invested into the Growth Fund.  No change of investment choice permitted by Investment Professionals   3.9.   For the avoidance of doubt, once an Investment Professional Participant has submitted a validly         executed Investment Preference Form to the Company (or has been subject to Rule 6.2 by virtue of         not having done so), they shall in no circumstances be entitled to, or permitted to, alter the decisions         made on that Investment Preference Form (or deemed to have been made pursuant to Rule 6.2) as         to the allocation of the Deferred Amount as between the relevant funds. Any attempt by a Participant         to alter the decisions made on their Investment Preference Form (or pursuant to Rule 6.2, as the case         may be) shall be null and void for all purposes.  Proportionality   3.10.  If a Participant is a Regulated Employee, the Remuneration Committee may, in its discretion, having         regard to the Principles of Proportionality, determine that Rule 3.2 shall apply for the purpose of         determining their Deferred Amount instead of Rule 3.3 or 3.4.                                                                                                         12  

 

4.     Closure & Rebalance of Funds  4.1. Notwithstanding Rule 3.9, at any time during a Rebalancing Period, the Executive Committee may, in         its sole discretion:         a)    replace any Closed Fund with a Replacement Fund; and/or         b)    rebalance the Growth Fund in accordance with Rule 4.2  4.2.   The Executive Committee may change the percentage allocation as between each of the funds         comprised in the Growth Fund in any way it deems fit, provided always, that the aggregate of all such         percentage allocations after such change, is 100 per cent.  4.3.   For the avoidance of doubt, and notwithstanding any other Rule,:         a)    no Closed Fund may be replaced with a Replacement Fund pursuant to Rule 4.1(a);  and          b)    no change of the percentage allocations in respect of the Growth Fund pursuant to Rule 4.2               shall take place          except during a Rebalancing Period.  4.4. Notwithstanding Rule 3.9, if a fund specified in an Award Notice becomes a Closed Fund:         a)    the Closure Investment Return shall be calculated;         b)    if during the relevant Rebalancing Period, the Executive Committee determines that it shall               replace the Closed Fund with a Replacement Fund in accordance with Rule 4.1(a), an amount               equal to the Closure Investment Return (referred to in Rule 4.4(a)) will be invested in the               Replacement Fund as soon as reasonably practicable (but in any event during the relevant               Rebalancing Period);         c)    if during the relevant Rebalancing Period, the Executive Committee fails to determine a               Replacement Fund for that Closed Fund in accordance with Rule 4.1(a), an amount equal to               the Closure Investment Return (referred to in Rule 4.4(a)) shall be divided by the number of               funds (other than the Closed Fund) specified in that Award Notice which remain in existence at               the Closure Date (provided that there is one or more such funds) and the resulting sum invested,               for and on behalf of the Award Holder, in each and every one of such remaining funds with effect               from the last day of the relevant Rebalancing Period, save that where the Closed Fund is a fund               which constituted part of the equities comprising the Growth Fund, an amount equal to the               Closure Investment Return (referred to in  Rule 4.4(a)) shall be divided by the number of equity               funds (other than the Closed Fund) comprised within the Growth Fund, as the case may be,               specified in the Award Notice concerned which remain in existence at the Closure Date of the               Closed Fund and the resulting sum invested, for and on behalf of the Award Holder, in each and               every one of such remaining equity funds with effect from the last day of the relevant               Rebalancing Period; and         d)    the Company shall issue each Award Holder whose Award is affected by this Rule 4.4 with a               revised Award Notice reflecting the closure of the Closed Fund (including any adjustment to the               percentage allocations of the monies invested as between the remaining funds) and the revised               Award Notice shall, immediately following its issue, (and unless and until replaced pursuant to               this Rule 4.4(d) or 4.5(b)) be treated as the relevant and only Award Notice in respect of the               Award.  4.5.   If the Executive Committee determines that there should be a rebalancing pursuant to Rule 4.2, then         in respect of each Award affected:         a)    the Investment Return for each and every fund specified in the Award Notice shall be calculated               as at the date of that determination and the aggregate of the Investment Returns for all those               funds shall immediately thereafter be treated as invested in the funds concerned in accordance               with the percentages determined by the Executive Committee pursuant to Rule 4.2; and                                                                                                 13  

 

       b)    the Company shall issue each Award Holder whose Award is affected by the foregoing               provisions of this Rule 4.5 with a revised Award Notice setting out the revisions necessary to               reflect the rebalancing and such revised Award Notice shall, immediately thereafter (unless and               until replaced pursuant to this Rule 4.5(b) or 4.4(d)) be treated for all purposes as the only               Award Notice in respect of the Award.  4.6.   For the avoidance of doubt, the references to “each and every one of such remaining funds” in Rule         4.4 and the reference to “each and every fund specified in the Award Notice”, in Rule 4.5(a) shall, in         relation to the Growth Fund, be taken to mean each fund specified as being comprised in it (including         each separate sub-fund comprising its equity element) as the case may be in the Appendix to the         Award Notice.   4.7.   Notwithstanding any other provision of these Rules, if a fund becomes a Closed Fund, unless and until         its Closure Investment Return is dealt with in accordance with either Rule 4.4(b) or 4.4(c), the Closure         Investment Return shall be used for all purposes under the Scheme, including but not limited to the         determination of any payment to be made to an Award Holder on the Vesting of an Award.  4.8.   Where a fund specified in an Award Notice (being a Managed Fund or a fund which constituted part         of the Growth Fund) has closed, the Executive Committee may, in its sole discretion, decide to         commence a Rebalancing Period on any date following the Closure Date. If it commences in relation         to a particular Closed Fund, then for the avoidance of doubt, any Rebalancing Period which         commences after the Closure Date shall not trigger a further operation of Rule 4.4. The Executive         Committee shall not be obliged to exercise its discretion pursuant to this Rule 4.8 in any Award         Holder’s favour and whether or not such discretion is exercised is a matter which shall be solely and         absolutely determined by the Executive Committee.                                                                                                 14  

 

5.  Making of Awards  5.1.   Following receipt by the Company of a completed Investment Preference Form from an Investment         Professional Participant (or, as the case may be, following the expiry of the period set out in Rule         3.6(b) for delivering a completed Investment Preference Form), the Company will issue an Award         Notice to them.  5.2.   Each Award shall be granted over three Units, being Unit 1, Unit 2 and Unit 3.  5.3.   The Deferred Amount in respect of an Award shall be subdivided into three equal amounts.   5.4.   Each of the three amounts determined in accordance with Rule 5.3 shall be notionally ascribed to a         particular Unit subject to the Award.                                                                                                 15  

 

6.  Investment Professionals – Allocation of Initial Unit Value to the      Funds  6.1.   The following provisions apply in relation to Units comprised in an Award made for a Financial Year to         an Investment Professional.   6.2.   Where the Investment Professional has returned an Investment Preference Form complying with Rule         3.7 and expressing their wishes in accordance with Rule 3.6:          a)    an amount equal to the Selected Percentage of the Initial Unit Value for each Unit relating to               that Award will be notionally invested in the Growth Fund in accordance with those wishes; and          b)    in relation to each of the Managed Funds set out in the Investment Preference Form, an amount               equal to the Mandatory Percentage of the Initial Unit Value will be notionally invested in that               Managed Fund.  6.3.   Where the Investment Professional has failed to return an Investment Preference Form on or before         the date specified in Rule 3.6(b) and/or such Investment Preference Form does not comply with Rule         3.7:          a)    the Initial Unit Value for each Unit shall be divided by the number of Managed Funds (as set out               in the Investment Preference Form); and         b)    in respect of each such Managed Fund an amount equal to the sum resulting from such               calculation shall be the amount that is invested into that Managed Fund for the purpose of the               Award.                                                                                                 16  

 

7.  Non-Investment Professionals – Allocation of Initial Unit Value to the      Funds         In relation to Units comprised in an Award made to a Non-Investment Professional for a Financial Year         in accordance with Rule 3.8, the Initial Unit Value for each Unit shall be invested in the Growth Fund.                                                                                                 17  

 

8.  Vesting of Awards   8.1.   Except as otherwise set forth in the Scheme, an Award shall Vest as follows:         (a)   in respect of Unit 1, on the First Vesting Date;         (b)   in respect of Unit 2, on the Second Vesting Date; and         (c)   in respect of Unit 3, on the Third Vesting Date.  8.2.   The Company shall, subject to Rule 22, make a cash payment to the Award Holder whose Award had         Vested as soon as reasonably practicable after the date that the Final Unit Values relating to the Units         in respect of which Vesting has taken effect, are determined by the Executive Committee. The payment         shall be subject to deductions or withholdings pursuant to Rule 16.                                                                                                 18  

 

9.  Determination of Final Unit Values         Each Final Unit Value relating to a Unit comprised in an Award shall, subject to Rule 4.7, be an         amount equal to the aggregate of the Investment Return for each and every fund in which part of the         Initial Unit Value relating to the same Unit is invested as at the last day of the month immediately         preceding the Vesting Date.                                                                                                 19  

 

10.    Cessation of Employment  10.1.  If an Award Holder is a Good Leaver, all their Subsisting Award’s shall immediately Vest.  10.2.  If an Award Holder is a Bad Leaver, all their Subsisting Awards  shall immediately lapse.                                                                                                 20  

 

11.    Winding-up         If:          (a)  the Company passes a resolution for a voluntary winding-up of the Company; or          (b)  an order is made for the compulsory winding up of the Company,         all Subsisting Awards shall Vest.                                                                                                 21  

 

12.    No payments until Vesting         No payment shall be due pursuant to an Award, and no payment shall be made under the Scheme in         respect of it, until it has Vested.                                                                                                  22  

 

13.    Cash Scheme Only          For the avoidance of doubt, an Award does not give the Award Holder an interest in any fund or an         actual right to acquire an interest in any fund nor any right to demand a cash payment in respect of his         Award other than in accordance with the Rules.                                                                                                 23  

 

14.    Alterations to the Scheme  14.1. Subject to Rule 14.5 and Rule 20, the Remuneration Committee may at any time alter or add to any         of the provisions of this Scheme in any respect PROVIDED THAT, no such alteration or addition shall         take effect so as to materially adversely affect the existing rights of any person other than the Company         in relation to any Awards which have already been made.   14.2.  The Executive Committee may from time to time establish procedures for the administration and         implementation of this Scheme as it thinks fit and in the event of any dispute or disagreement as to         the interpretation of this Scheme or of any such rules, regulations or procedures or as to any question         or right arising from or related to this Scheme, the decision of the Executive Committee shall be final         and binding upon all persons.   14.3.  As soon as reasonably practicable after any alteration or addition is made under this Rule 14, the         Executive Committee shall give notice in writing thereof to any Award Holder thereby affected.   14.4.  The Company may at any time resolve to terminate the Scheme in which event no further Awards shall         be granted but the provisions of the Scheme shall, in relation to Subsisting Awards, continue in full         force and effect.   14.5. Notwithstanding Rule 14.1, and subject to Rule 20, the Remuneration Committee may make any         alteration or addition to any of the provisions of the Scheme without obtaining the consent of any Award         Holder, if such amendment is a minor alteration or addition to benefit the administration of the Scheme         or is to take account of a change in legislation or is for the purpose of obtaining or maintaining         favourable tax, exchange control or regulatory treatment for any Award Holder, the Company or any         member of its Group, provided always that with respect to Award Holders who are US Employees, no         such alteration or addition shall result in the Award violating Section 409A.                                                                                                 24  

 

15.    Relationship with Service Contract and Other Employee       Compensation Schemes  15.1.  The grant of an Award does not form part of an Award Holder’s contract of employment with any Group         Company or his entitlement to remuneration or benefits pursuant to his contract of employment or         other terms of engagement and it shall not confer on them any legal or equitable rights (other than         those constituting the Awards themselves) against any Group Company, directly or indirectly, or give         rise to any cause of action in law or in equity against any Group Company, nor does the existence of         a contract of employment between any person and any Group Company give such person any right         or entitlement to receive an Award or any expectation that an Award might be granted to them whether         subject to any conditions or at all.  15.2.  The rights and obligations of any person under the terms of their contract of employment with the         Company (or any other Group Company) shall not be affected by his participation in the Scheme.  15.3.  The benefits to Participants under the Scheme shall not form any part of their wages or remuneration         or count as pay or remuneration for pensionable pay or other purposes (except as required by law).  15.4.  An Award Holder who ceases to be an Employee for any reason whatsoever shall not be entitled to         any rights or additional rights to compensation or damages in respect of any loss of the opportunity to         benefit from any rights or entitlement, whether existing or prospective, arising under or relating to this         Scheme (whether or not such cessation is ultimately held to be wrongful or unfair).  15.5.  By accepting the grant of an Award, an Award Holder shall be deemed to have agreed to the foregoing         provisions of this Rule 15.                                                                                                 25  

 

16.    Withholdings          Where, in relation to an Award, any Group Company (or company that was a Group Company) is         liable, or is in accordance with current practice believed by the Company to be liable, to deduct and/or         account to any revenue or other authority for any sum in respect of any liability of the Award Holder         for tax or employee’s national insurance contributions and/or other social security payments, any of         those companies shall be entitled to deduct (or procure a deduction) from any payment to the Award         Holder (whether pursuant to the Scheme or otherwise), an amount in respect of such liability before         the payment is made.                                                                                                 26  

 

17.    No Assignment         The benefit of an Award may not be assigned to any person.  If an Award Holder attempts to assign,         charge or pledge any Award held by him, the Award shall immediately lapse and the Award Holder         shall not be entitled any rights or entitlements whatsoever in respect of that Award.                                                                                                 27  

 

18.    Service of Documents   18.1.  Except as otherwise provided in these Rules, any notice or document to be given by, or on behalf of,         the Company to any person in accordance or in connection with the Scheme shall be in writing and         shall be duly given by:          a)    delivering it to him at his place of work;          b)    sending it through the post to the address last known to the Company to be his address and, if               so sent, it shall be deemed to have been duly given on the date of posting;         c)    sending it by email to that person’s work email address (or personal email address provided by               them to any Group Company for this purpose or in connection.  18.2.  Any notice in writing or document to be submitted or given to the directors of the Company or to the         Company in accordance or in connection with this Scheme may be delivered by hand or sent by post         or facsimile transmission but shall not in any event be duly given unless it is actually received by the         secretary of the Company or such other individual as may from time to time be nominated by the         directors of the Company and whose name and address is notified in writing to Participants.                                                                                                 28  

 

19.    Governing Law          Except as set forth below, the formation, existence, construction, performance, validity and all         aspects whatsoever of the Scheme, any term of the Scheme and any Award granted under it shall         be governed by English law.  The English courts shall have jurisdiction to settle any disputes which         may arise out of or in connection with the Scheme.                                                                                                 29  

 

20.    US Section 409A / Foreign Jurisdictions            20.1   To the extent applicable to a Participant, Awards under the Plan are intended to be excepted from         Section 409A under the short-term deferral exception as specified in Treas. Reg. § 1.409A-1(b)(4),         and shall be administered, interpreted and construed in a manner necessary to comply with such         exception (or disregarded to the extent such provision cannot be so administered, interpreted or         construed).  To the extent the Remuneration Committee agrees to pay an incentive award in         connection with a Participant’s termination of employment, or under any other circumstance where         such compensation becomes vested and is no longer subject to a substantial risk of forfeiture, any         such payment shall be made within the “applicable 21⁄2 month period” specified in Treas. Reg. §1.409A-        1(b)(4).  For this purpose, the applicable 21⁄2 month period (commonly referred to as the “short-term         deferral period”) is the period ending on the later of (i) the 15th day of the third month following the end         of the Participant’s first taxable year in which the right is no longer subject to a substantial risk of         forfeiture, or (ii) the 15th day of the third month following the end of the Company’s taxable year in         which the right is no longer subject to a substantial risk of forfeiture.           20.2   Notwithstanding the foregoing provisions of the Rule 20, if any benefit provided under the Plan is         subject to the provisions of Section 409A (and not excepted therefrom), the provisions of the Plan and         any applicable Award Notice shall be administered, interpreted and construed in a manner necessary         to comply with Section 409A (or disregarded to the extent such provision cannot be so administered,         interpreted, or construed), and the following provisions shall apply, as applicable:                  (a)    For purposes of Section 409A of the Code, it is intended that distribution events qualify as         permissible distribution events for purposes of Section 409A and shall be administered, interpreted         and construed accordingly.  With respect to payments payable upon a termination of employment or         service, such payment shall only be made to the extent the Participant has experienced a separation         from service (within the meaning of Section 409A). Whether a Participant has experienced a         separation from service shall be determined based on all of the facts and circumstances and in         accordance with the guidance issued under Section 409A.          (b)    If a Participant is a “specified employee” (as defined in Section 409A and determined in         accordance with the procedures established by the Company) and a payment to the Participant is due         upon separation from service, such payment shall be delayed for a period of six (6) months after the         date of the Participant’s separation from service (or, if earlier, the death of the Participant).  Any         payment that would otherwise have been due or owing during such six-month period will be paid         immediately following the end of the six-month period in the month following the month containing the         6-month anniversary of the date of separation from service unless another compliant date is specified         in the applicable award agreement.   20.3   The Company reserves the right to amend the Plan or Award Notice, without the consent of the         Participant, issued thereunder to the extent it determines such amendment is necessary in order to         comply with Section 409A of the Code (or exception thereto). In no event shall the Company, a Group         Company or any of their officers, employees, directors, shareholders or affiliates, including, but not         limited to, any member of the Remuneration Committee or the Executive Committee, have any liability         to any Participant (or any other person) due to the failure of the Plan or any benefit provided thereunder         to satisfy the requirements of Section 409A or any other applicable law.    20.4   In order to facilitate participation in the Plan by Employees who are subject to the tax laws of the United         States or other foreign jurisdictions , the Remuneration Committee may approve such addenda,         subplans and/or supplemental terms and conditions as the Remuneration Committee shall deem         necessary or desirable to accommodate differences in the substantive laws and customs of a foreign         jurisdiction.                                                                                                 30  

 

21.    Data Protection          Personal data relating to Participants and any individuals who may be eligible to participate in the         Scheme may be collected, processed and transferred for any purpose relating to the operation of the         Plan in compliance with any Applicable Laws and any data privacy notice and/or policies of any Group         Member in force from time to time. For this purpose, "Applicable Laws" means the Listing Rules         published by the Financial Conduct Authority, the City Code on Takeovers and Mergers, the Market         Abuse Regulation (EU) 596/2014 or any other relevant UK or overseas regulation or enactment.                                                                                                 31  

 

22.    Clawback   22.1   Notwithstanding any other provision of this Scheme, if:         (a)   a Repudiatory Event occurs at any time during the Relevant Period; or          (b)   a Repudiatory Event (at any time during the Relevant Period) first comes to the attention of the               Remuneration Committee during the Relevant Period,         the following provisions of this Rule 22 shall apply.  22.2   In relation to the Award Holder concerned:         (a)   all Subsisting Awards held by them shall lapse immediately upon the occurrence of the               Repudiatory Event or upon the Remuneration Committee first becoming aware of the               Repudiatory Event, as the case may be;         (b)   where the Repudiatory Event occurs or otherwise comes to the attention of the Remuneration               Committee following Vesting of an Award but prior to any consequent payment of cash to the               Award Holder, the Award Holder shall, notwithstanding any other provision of this Scheme,               loose his entitlement to receive the cash payment to which he would have been entitled pursuant               to that Vesting. In such circumstances, the Award Holder shall not be entitled to receive any               payment in respect of the Award unless the Remuneration Committee determines, in its sole               discretion, that a reduced payment should be made having regard to the damage (on such basis               as the Remuneration Committee considers appropriate in all the circumstances) caused to the               Group as a result the Repudiatory Event;         (c)   where the Repudiatory Event occurs or otherwise comes to the attention of the Executive         (d)   Committee after payment of any cash to the Award Holder pursuant to the Vesting of an Award,               the Award Holder shall, upon receiving a written demand to do so from the Company,               immediately be liable to pay to the Company (or another Group Company if the Company so               directs) the full amount of the cash payment received by them on that Vesting after deducting               any income tax and employee’s national insurance contributions thereon unless the               Remuneration Committee determines, in its sole discretion, that the damage (on such basis as               it considers appropriate in all the circumstances) caused to the Group by the Repudiatory Event               would be sufficiently compensated by a lesser payment, in which case, the demand shall specify               the lesser payment and the Award Holder will be liable to pay it to the Company (or another               Group Company if the Company so directs). The Award Holder must make that payment within               14 days following the date of issue of the written demand.  22.3   For the avoidance of doubt, the provisions in Rule 22.2 shall apply equally to each and every Award         held by the Award Holder concerned (and each any every Vesting of any of such Award), so that:         (a)   if the Award Holder holds more than one Award when the Repudiatory Event occurs or it first               comes to the attention of the Remuneration Committee, all such Awards would lapse in               accordance with Rule 22.2(a);         (b)   if at the time of the Repudiatory Event or it coming to the attention of the Remuneration               Committee, the Award Holder has not yet received cash payments pursuant to the Vesting of               more than one Award,  all cash payments due to them pursuant to such Vesting will be subject               to Rule 22.2(b); and         (c)   if the Repudiatory Event occurs or otherwise comes to the attention of the Remuneration               Committee after the payment of any cash to the Award Holder pursuant to the Vesting of more               than one Award, the provisions of Rule 22.2(c) shall apply to all those payments.                                                                                                    32  

 

Schedule 1  Investment Preference Form for Investment Professionals     [Letterhead of the Company]   To: [Employee]    Date: [               ]   Dear [Name]   Hermes Fund Managers Limited  Co-Investment Scheme (the “Scheme”)  2018 Investment Preference Form  You have been selected to receive an Award in accordance with the Rules of the Scheme in respect of the  Financial Year [year]. A copy of the Rules is attached.  The Deferred Amount will be [£/US$] [amount]. This will be notionally invested in funds as described below  (there will be no actual investment in the funds).  PLEASE READ THE WHOLE OF THIS FORM BEFORE COMPLETING IT    Investment in the Growth Fund  The Growth Fund consists of the basket of funds described in Appendix 2-1.  You may select in a percentage (not exceeding 50%) of the Deferred Amount that you wish to have notionally  invested in the Growth Fund. If you do not make a selection, it will all be invested in the Managed Funds as  described below.                                 Percentage of the Deferred Amount to be invested in the Growth fund             Table 1                                                                                                  %   Investment in the Managed Funds  You are involved in the management of the funds listed in Table 2 below. Equal parts of any amount of the  Deferred Amount that is not notionally invested in the Growth Fund will notionally be invested in each of  those Managed Funds.           Table 2           [Name of Managed Fund]           [Name of Managed Fund]           [Name of Managed Fund]           [Name of Managed Fund]                                                                                                33  

 

All decisions set out in this form are subject to the Participation Criteria. The rules of the Scheme govern  the constitution and weighting of the Growth Fund and provide for replacement funds to be appointed if a  fund closes or for the rebalancing of the funds constituting the Growth Fund. Please refer to the Scheme  Rules for further details.   Unless otherwise stated or the context requires otherwise, terms used in this Investment Preference Form  have the same meaning as in the Scheme Rules.   Before returning this form, please check that you have completed Table 1 above and then sign and date the  form where indicated below.  I hereby authorise and direct the Company (or, if different, my employer or ex-employer) to deduct from any  amount payable to me any income tax and employee’s NI contributions payable in respect of any sums  payable to me pursuant to the Scheme and any Clawback amount.   I have read and agree to be bound by the Rules of the Scheme.      ____________________________             _________________________  Employee’s signature              Date   ONCE YOU HAVE COMPLETED TABLE 1 ABOVE, YOU MUST RETURN THIS FORM DULY SIGNED  AND DATED BY YOU ABOVE, TO BE RECEIVED BY THE COMPANY BY NO LATER THAN 20  BUSINESS DAYS AFTER THE DATE STATED AT THE TOP OF THIS FORM.   A copy of this Form has is enclosed for your personal records.  Yours sincerely,     For and on behalf of  Hermes Fund Managers Limited                                                                                                 34  

 

Appendix 2-1   The Growth Fund is the basket of funds consisting of:               [45% Equities]              [25% Credit (split as to 20% High Yield and 10% Investment Grade)]              [15% Real Asset]              [15% Multi Asset]   Where such Equities are comprised as to:              [20% Hermes Global Equity Fund]              [10% Global SMID]              [5% European Alpha]              [5% Asia]              [5% GEMs]   subject always to any rebalancing or amendment pursuant to the rules of the Scheme.                                                                                                                              35  

 

Schedule 2  Form of Award Notice for Non-Investment Professionals     [On Company Letterhead]   To:  [Employee]   Date: [             ]  Dear [Name]   Hermes Fund Managers Limited Co-Investment Scheme 2018 (the “Scheme”)  Year [year] Award Notice  You have been granted an Award subject to the Rules of the Scheme. Further details are set out below  Effective Date: [1 March  ●])    Deferred Amount:     £/$●    Initial Unit 1 Value:  £/$● (1/3rd of the Deferred Amount)   Initial Unit 2 Value:  £/$● (1/3rd of the Deferred Amount)   Initial Unit 3 Value:  £/$● (1/3rd of the Deferred Amount)  Investment in respect of the Unit 1 Value:                Fund                            Initial Unit 1 Value Allocated to Fund             Growth Fund                      £/$●/%   Investment in respect of the Unit 2 Value:              Fund                            Initial Unit 2 Value Allocated to Fund             Growth Fund                      £/$●/%   Investment in respect of the Unit 3 Value:                Fund                            Initial Unit 3 Value Allocated to Fund              Growth Fund                     £/$●/%     First Vesting Date (1/3 of the Award): [1 March  ●]   Second Vesting Date (1/3 of the Award): [1 March  ●]   Third Vesting Date (1/3 of the Award): [1 March  ●]                                                                                                  36  

 

  Your Business Unit         ●   Each of the separate funds comprised in the Growth Fund and the percentage which they represent in terms  of the overall Growth Fund are set out in the Appendix 3-1 overleaf.  Unless otherwise stated, used in this Award Notice have the same meaning as in the Rules of the Scheme.     Yours sincerely,    For and on behalf of   Hermes Fund Managers Limited                                                                                                   37  

 

Appendix 2-1  The Growth Fund is the basket of funds consisting of:               [45% Equities]              [25% Credit (split as to 20% High Yield and 10% Investment Grade)]              [15% Commodities]              [15% Real Estate]   Where such Equities are comprised as to:              [20% Hermes Global Equity Fund]              [10% Global SMID]              [5% European Alpha]              [5% Asia]              [5% GEMs]   subject always to any rebalancing or amendment pursuant to the Rules of the Scheme.                                                                                                                              38  

 

Schedule 3  Form of Award Notice for Investment Professionals  [On Company Letterhead]   To:  [Employee]       Date: [             ]    Dear [Name]   Hermes Fund Managers Limited Co-Investment Scheme 2018 (the “Scheme”)  Year [year] Award Notice  You have been granted an Award subject to the Rules of the Scheme. Further details are set out below.  [Each of the separate funds comprised in the Growth Fund and the percentage which they represent in  terms of the overall Growth Fund are set out in Appendix 3-1 overleaf.]   Effective Date: [1 March  ●])    Deferred Amount:     £/$●    Initial Unit 1 Value:  £/$● (1/3rd of the Deferred Amount)   Initial Unit 2 Value:  £/$● (1/3rd of the Deferred Amount)   Initial Unit 3 Value:  £/$● (1/3rd of the Deferred Amount)  Investment in respect of the Unit 1 Value:              Fund                            Initial Unit 1 Value Allocated to Fund             Growth Fund                      £/$●/%   Investment in respect of the Unit 2 Value:              Fund                            Initial Unit 2 Value Allocated to Fund             Growth Fund                      £/$●/%   Investment in respect of the Unit 3 Value:                Fund                            Initial Unit 3 Value Allocated to Fund             Growth Fund                      £/$●/%   [Each of the separate funds comprised in the Growth Fund and the percentage which they represent in  terms of the overall Growth Fund are set out in the Appendix overleaf.]  First Vesting Date (1/3 of the Award): [1 March  ●]   Second Vesting Date (1/3 of the Award): [1 March  ●]                                                                                                39  

 

Third Vesting Date (1/3 of the Award): [1 March  ●]    Your Business Unit         ● Unless otherwise stated, any defined terms set out in this Award Notice shall  have the same meaning as set out in the Rules of the Scheme.   This Award will be held by you on and subject to the Rules of the Scheme.   IN ALL CASES THE AWARD MAY ONLY BE EXERCISED OVER A UNIT TO THE EXTENT THAT IT HAS  VESTED IN RESPECT OF SUCH UNIT UNDER THE SCHEME RULES      Yours sincerely,    For and on behalf of  Hermes Fund Managers Limited                                                                                                    40  

 

Appendix 3-1  The Growth Fund is the basket of funds consisting of:               [45% Equities]              [25% Credit (split as to 20% High Yield and 10% Investment Grade)]              [15% Commodities]              [15% Real Estate]   Where such Equities are comprised as to:              [20% Hermes Global Equity Fund]              [10% Global SMID]              [5% European Alpha]              [5% Asia]              [5% GEMs]   subject always to any rebalancing or amendment pursuant to the rules of the Scheme.                                                                                                                              41Exhibit

Exhibit 10.2
		
	To:
	LivaNova PLC (the "Company")

20 Eastbourne Terrace, London, W2 6LG
For the attention of: Chief Financial Officer
25 February 2019
Dear Sirs,
Commitment Letter - USD 350,000,000 term loan facility of which USD 116,666,667 equivalent can be provided in euros (the “Facility”) for LivaNova PLC as the borrower
We Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas, London Branch and Intesa Sanpaolo S.p.A (the "Mandated Lead Arrangers"), Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas, London Branch and Intesa Sanpaolo S.p.A (the "Bookrunners") and Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas, London Branch and Intesa Sanpaolo S.p.A (the "Underwriters") are pleased to set out in this letter the terms and conditions on which we are willing to arrange and underwrite the Facility.
In this letter:
"Affiliate" means in relation to a person, a subsidiary or holding company of that person, a subsidiary of any such holding company.
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and Milan.
"Facility Documents" means a facility agreement and related documentation (based on the terms set out in the Term Sheet and this letter) in form and substance satisfactory to the Mandated Lead Arrangers, Bookrunners and Underwriters.
"Fee Letter" means any fee letter between any of the Mandated Lead Arrangers, the Bookrunners, the Underwriters, the Documentation Agent and Coordinator and/or the Agent and the Company dated on or about the date of this letter or on or about the date of the facility agreement in relation to the Facility.
"Mandate Documents" means this letter, the Term Sheet and any Fee Letter.
"Term Sheet" means the term sheet attached to this letter as an appendix.
"Underwriting Proportion" means, in relation to an Underwriter, the underwriting proportion set out opposite its name in paragraph 3.1.
Unless a contrary indication appears, a term defined in any Mandate Document has the same meaning when used in this letter.
		
	1.
	Appointment

EU-DOCS\23679229.8

		
	1.1
	The Company appoints:

		
	(a)
	the Mandated Lead Arrangers as exclusive arrangers of the Facility;

		
	(b)
	the Underwriters as exclusive underwriters of the Facility;

		
	(c)
	 the Bookrunners as exclusive bookrunners; 

		
	(d)
	Bank of America Merrill Lynch International DAC as documentation agent and coordinator in connection with the Facility (the "Documentation Agent and Coordinator"); and

		
	(e)
	Barclays Bank PLC as facility agent in connection with the Facility. 

		
	1.2
	Until this mandate terminates in accordance with paragraph 12 (Termination):

		
	(a)
	no other person shall be appointed as mandated lead arranger, underwriter, bookrunner, documentation agent and coordinator or facility agent;

		
	(b)
	no other titles shall be awarded; and

		
	(c)
	except as provided in the Mandate Documents, no other compensation shall be paid to any person,

in connection with the Facility without the prior written consent of each of the Mandated Lead Arrangers.
		
	1.3
	Any of the Mandated Lead Arrangers, Bookrunners and Underwriters may delegate by written notice to the Company any or all of its rights and obligations under this letter to any of its subsidiaries or affiliates (each a "Delegate") and may designate any Delegate as responsible for the performance of any of its appointed functions under this letter.  Following designation, a Delegate may rely on this letter.

		
	2.
	Conditions

		
	2.1
	This offer to arrange and underwrite the Facility is made on the terms of the Mandate Documents and is subject to satisfaction of the following conditions:

		
	(a)
	compliance by the Company with all the terms of each Mandate Document;

		
	(b)
	each of the representations and warranties made by the Company or any other member of the Group in connection with the transaction contemplated in the Mandate Documents (including, but not limited to, those set out in paragraph 6 (Information)) being correct; 

		
	(c)
	the preparation, execution and delivery of the Facility Documents by no later than the date falling 60 days after the date of this letter or any later date agreed between the Company and each of the Mandated Lead Arrangers and Underwriters; and

- 2 -    

EU-DOCS\23679229.8

		
	(d)
	completion by each of the Mandated Lead Arrangers and Underwriters of client identification procedures (including, if necessary, identification of directors and major shareholders of the Company) in compliance with applicable money laundering rules.

		
	3.
	Underwriting Proportions

		
	3.1
	The underwriting proportions of each of the Underwriters in respect of the Facility are as follows:

	
			
	Underwriter
	Underwriting Proportion (%)
	Amount (USD)

	Bank of America Merrill Lynch International DAC
	25
	87,500,000

	Barclays Bank PLC
	25
	87,500,000

	BNP Paribas, London Branch
	25
	87,500,000

	Intesa Sanpaolo S.p.A
	25
	87,500,000

	Total
	100
	350,000,000

		
	3.2
	The obligations of the Mandated Lead Arrangers, Bookrunners and the Underwriters under the Mandate Documents are several.  No Mandated Lead Arranger is responsible for the obligations of any other Mandated Lead Arranger.  No Bookrunner is responsible for the obligations of any other Bookrunner.  No Underwriter is responsible for the obligations of any other Underwriter.

		
	4.
	Fees, Costs and Expenses

		
	4.1
	All fees shall be paid in accordance with the Fee Letter(s) or as set out in the Term Sheet.

		
	4.2
	The Company shall promptly on demand pay the Agent, the Mandated Lead Arrangers, the Bookrunners and the Underwriters the amount of all costs and expenses (including legal fees) reasonably incurred by any of them in connection with the negotiation, preparation, printing and execution of the Facility Documents and the Mandate Documents whether or not the Facility Documents are signed.The Company acknowledges that each or any of the Mandated Lead Arrangers may receive a benefit, including without limitation, a discount, credit or other accommodation, from any relevant legal counsel based on the legal fees such legal counsel may receive on account of their relationship with the Mandated Lead Arrangers including, without limitation, fees paid pursuant to the Mandate Documents.

		
	5.
	Payments

All payments to be made under the Mandate Documents:
		
	(a)
	shall be paid in the currency of invoice and in immediately available, freely transferable cleared funds to such account(s) with such bank(s) as the Mandated Lead Arrangers, the Agent, the Bookrunners or the Underwriters (as applicable) notify to the Company;

- 3 -    

EU-DOCS\23679229.8

		
	(b)
	shall be paid without any deduction or withholding for or on account of tax (a "Tax Deduction") unless a Tax Deduction is required by law.  If a Tax Deduction is required by law to be made, the amount of the payment due shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required; and

		
	(c)
	are exclusive of any value added tax or similar charge ("VAT").  If VAT is chargeable, the Company shall also and at the same time pay to the recipient of the relevant payment an amount equal to the amount of the VAT.

		
	6.
	Information

		
	6.1
	The Company represents and warrants that:

		
	(a)
	any factual information provided to the Mandated Lead Arrangers or the Bookrunners by or on behalf of it or any other member of the Group (the "Information") is true and accurate in all material respects as at the date it is provided or as at the date (if any) at which it is stated;

		
	(b)
	nothing has occurred or been omitted and no information has been given or withheld that results in the Information being untrue or misleading in any material respect; and

		
	(c)
	any financial projections contained in the Information have been prepared in good faith on the basis of recent historical information and on the basis of reasonable assumptions.

		
	6.2
	The representations and warranties set out in paragraph 6.1 are deemed to be made by the Company daily by reference to the facts and circumstances then existing commencing on the date of this letter and continuing until the date the Facility Documents are signed.

		
	6.3
	The Company shall immediately notify the Mandated Lead Arrangers and the Bookrunners in writing if any representation and warranty set out in paragraph 6.1 is incorrect or misleading and agrees to supplement the Information promptly from time to time to ensure that each such representation and warranty is correct when made.

		
	6.4
	The Company acknowledges that the Mandated Lead Arrangers, the Bookrunners and the Underwriters will be relying on the Information without carrying out any independent verification.

		
	7.
	Indemnity

7.1    
		
	(a)
	Whether or not the Facility Documents are signed, the Company shall within three Business Days of demand indemnify each Indemnified Person against any cost, expense, loss or liability (including without limitation legal fees) incurred by or awarded against that Indemnified Person in each case arising out of or in connection with any action, claim, investigation or proceeding commenced or 

- 4 -    

EU-DOCS\23679229.8

threatened (including, without limitation, any action, claim, investigation or proceeding to preserve or enforce rights) in relation to:
		
	(i)
	the use of the proceeds of the Facility;

		
	(ii)
	any Mandate Document or any Facility Document; and/or

		
	(iii)
	the arranging or underwriting of the Facility.

		
	(b)
	The Company will not be liable under paragraph (a) above for any cost, expense, loss or liability (including without limitation legal fees) incurred by or awarded against an Indemnified Person if that cost, expense, loss or liability results directly from any breach by that Indemnified Person of any Mandate Document or any Facility Document which is in each case finally judicially determined to have resulted directly from the gross negligence or wilful misconduct of that Indemnified Person.

		
	(c)
	For the purposes of this paragraph 7:

"Indemnified Person" means each Mandated Lead Arranger, each Bookrunner, each Underwriter, the Documentation Agent and Coordinator, the Agent, each Lender, in each case, any of their respective Affiliates and each of their (or their respective Affiliates') respective directors, officers, employees and agents.
		
	7.2
	No Mandated Lead Arranger, Bookrunner or Underwriter shall have any duty or obligation, whether as fiduciary for any Indemnified Person or otherwise, to recover any payment made or required to be made under paragraph 7.1.

7.3    
		
	(a)
	The Company agrees that no Indemnified Person shall have any liability (whether direct or indirect, in contract or tort or otherwise) to the Company or any of its Affiliates for or in connection with anything referred to in paragraph 7.1 above except, following the Company's agreement to the Mandate Documents, for any such cost, expense, loss or liability incurred by the Company that results directly from any breach by that Indemnified Person of any Mandate Document or any Facility Document which is in each case finally judicially determined to have resulted directly from the gross negligence or wilful misconduct of that Indemnified Person.

		
	(b)
	Notwithstanding paragraph (a) above, no Indemnified Person shall be responsible or have any liability to the Company or any of its Affiliates or anyone else for consequential losses or damages.

		
	(c)
	The Company represents to the Mandated Lead Arrangers, the Bookrunners and Underwriters that:

		
	(i)
	it is acting for its own account and it has made its own independent decisions to enter into the transaction contemplated in the Mandate Documents (the "Transaction") and as to whether the Transaction is 

- 5 -    

EU-DOCS\23679229.8

appropriate or proper for it based upon its own judgement and upon advice from such advisers as it has deemed necessary;
		
	(ii)
	it is not relying on any communication (written or oral) from any or all of the Mandated Lead Arrangers, the Bookrunners or Underwriters as investment advice or as a recommendation to enter into the Transaction, it being understood that information and explanations related to the terms and conditions of the Transaction shall not be considered investment advice or a recommendation to enter into the Transaction.  No communication (written or oral) received from any or all of the Mandated Lead Arrangers, Bookrunners or Underwriters shall be deemed to be an assurance or guarantee as to the expected results of the Transaction;

		
	(iii)
	it is capable of assessing the merits of and understanding (on its own behalf or through independent professional advice), and understands and accepts, the terms, conditions and risks of the Transaction.  It is also capable of assuming, and assumes, the risks of the Transaction; and

		
	(iv)
	no Mandated Lead Arranger, Bookrunner or Underwriter is acting as a fiduciary for or as an adviser to it in connection with the Transaction.

		
	7.4
	The Contracts (Rights of Third Parties) Act 1999 shall apply to this paragraph 7 but only for the benefit of the other Indemnified Persons, subject always to the terms of paragraphs 15.2 and 17 (Governing Law and Jurisdiction).

		
	8.
	Confidentiality

The Company acknowledges that the Mandate Documents are confidential and the Company shall not, and shall ensure that no other member of the Group shall, without the prior written consent of each of the Mandated Lead Arrangers, the Bookrunners and Underwriters, disclose the Mandate Documents or their contents to any other person except:
		
	(a)
	as required by law or by any applicable governmental or other regulatory authority or by any applicable stock exchange; and

		
	(b)
	to its employees or professional advisers for the purposes of the Facility who have been made aware of and agree to be bound by the obligations under this paragraph or are in any event subject to confidentiality obligations as a matter of law or professional practice.

		
	9.
	Publicity/Announcements

		
	9.1
	All publicity in connection with the Facility shall be managed by the Mandated Lead Arrangers in consultation with the Company.

		
	9.2
	No announcements regarding the Facility or any roles as arranger, underwriter, bookrunner, lender or agent shall be made without the prior written consent of the Company and each of the Mandated Lead Arrangers, Bookrunners and Underwriters.

- 6 -    

EU-DOCS\23679229.8

		
	10.
	Conflicts

		
	10.1
	The Company and each Mandated Lead Arranger, Bookrunner and Underwriter acknowledges that the Mandated Lead Arrangers or their Affiliates, the Bookrunners or their Affiliates and the Underwriters or their Affiliates may provide debt financing, equity capital or other services to other persons with whom the Company or its Affiliates may have conflicting interests in respect of the Facility in this or other transactions.

		
	10.2
	The Company and each Mandated Lead Arranger, Bookrunner and Underwriter acknowledges that the Mandated Lead Arrangers or their Affiliates, the Bookrunners or their Affiliates and the Underwriters or their Affiliates may act in more than one capacity in relation to this transaction and may have conflicting interests in respect of such different capacities.

		
	10.3
	The Mandated Lead Arrangers, Bookrunners and Underwriters shall not use confidential information obtained from the Company or its Affiliates for the purposes of the Facility in connection with providing services to other persons or furnish such information to such other persons.

		
	10.4
	The Company acknowledges that the Mandated Lead Arrangers, Bookrunners and Underwriters have no obligation to use any information obtained from another source for the purposes of the Facility or to furnish such information to the Company or its Affiliates.

		
	11.
	Assignments

		
	11.1
	The Company shall not assign any of its rights or transfer any of its rights or obligations under the Mandate Documents without the prior written consent of each of the Mandated Lead Arrangers, the Bookrunners and Underwriters.

		
	12.
	Termination

		
	12.1
	If the Company does not accept the offer made by each of the Mandated Lead Arrangers, Bookrunners and Underwriters in this letter by countersigning this letter and the Fee Letter setting out the Upfront Fee referred to in the Term Sheet before close of business in London on the date falling five Business Days after the date of this letter, such offer shall terminate on that date.

		
	12.2
	Any Mandated Lead Arranger, Bookrunner or Underwriter may terminate its obligations under this letter with immediate effect by notifying the Company and the other Mandated Lead Arranger(s), Bookrunner(s) and Underwriter(s) if in its opinion, any of the conditions set out in paragraph 2 (Conditions) is not satisfied; 

		
	13.
	Survival

		
	13.1
	Except for paragraphs 2 (Conditions), 3 (Underwriting Proportions) and 12 (Termination) the terms of this letter shall survive and continue after the Facility Documents are signed.

- 7 -    

EU-DOCS\23679229.8

		
	13.2
	Without prejudice to paragraph 13.1, paragraphs 4 (Fees, Costs and Expenses), 5 (Payments), 7 (Indemnity), 8 (Confidentiality), 9 (Publicity/Announcements), 10 (Conflicts) and 12 (Termination) to 17 (Governing Law and Jurisdiction) inclusive shall survive and continue after any termination of the obligations of any Mandated Lead Arranger, Bookrunner or Underwriter under the Mandate Documents.

		
	14.
	Entire Agreement

		
	14.1
	The Mandate Documents set out the entire agreement between the Company, the Mandated Lead Arrangers, the Bookrunners and the Underwriters as to arranging and underwriting the Facility and supersede any prior oral and/or written understandings or arrangements relating to the Facility.

		
	14.2
	Any provision of a Mandate Document may only be amended or waived in writing signed by the Company and each of the Mandated Lead Arrangers, Bookrunners and Underwriters.

		
	15.
	Third Party Rights

		
	15.1
	Unless expressly provided to the contrary in this letter, a person who is not a party to this letter has no right under the Contracts (Rights of Third Parties) Act 1999 to enforce or to enjoy the benefit of any of its terms.

		
	15.2
	Notwithstanding any term of this letter, the consent of any person who is not a party to this letter is not required to rescind or vary this letter at any time.

		
	16.
	Counterparts

This letter may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this letter.
		
	17.
	Governing Law and Jurisdiction

		
	17.1
	This letter (including the agreement constituted by your acknowledgement of its terms) (the "Letter") and any non-contractual obligations arising out of or in connection with it (including any non-contractual obligations arising out of the negotiation of the transaction contemplated by this Letter) are governed by English law.

		
	17.2
	The courts of England have non-exclusive jurisdiction to settle any dispute arising out of or in connection with this Letter (including a dispute relating to any non-contractual obligation arising out of or in connection with either this Letter or the negotiation of the transaction contemplated by this Letter).

If you agree to the above, please acknowledge your agreement and acceptance of the offer by signing and returning the enclosed copy of this letter to Jason Rapley at jason.rapley@baml.com.
Yours faithfully

 

/s/ David Pepper            
For and on behalf of
Bank of America Merrill Lynch International DAC
as Mandated Lead Arranger

/s/ David Pepper            
For and on behalf of
Bank of America Merrill Lynch International DAC
as Bookrunner

/s/ David Pepper            
For and on behalf of
Bank of America Merrill Lynch International DAC
as Underwriter

/s/ Michael Joyner
For and on behalf of
Barclays Bank PLC
as Mandated Lead Arranger

/s/ Michael Joyner
For and on behalf of
Barclays Bank PLC
as Bookrunner

/s/ Michael Joyner
For and on behalf of
Barclays Bank PLC
as Underwriter

/s/ Michael Redferne
For and on behalf of
BNP Paribas, London Branch
as Mandated Lead Arranger

/s/ Michael Redferne
For and on behalf of
BNP Paribas, London Branch
as Bookrunner

/s/ Michael Redferne
For and on behalf of
BNP Paribas, London Branch
as Underwriter

	
		
	/s/ Stefano Boniello
For and on behalf of
Intesa Sanpaolo S.p.A
as Mandated Lead Arranger
Name: Stefano Boniello
Title: Global Relationship manager

	/s/ Guido Austoni
For and on behalf of
Intesa Sanpaolo S.p.A
as Mandated Lead Arranger
Name: Guido Austoni 
Title: Global Head of Basic Materials & Healthcare

	 
	 

	/s/ Stefano Boniello
For and on behalf of
Intesa Sanpaolo S.p.A
as Bookrunner
Name: Stefano Boniello
Title: Global Relationship manager

	/s/ Guido Austoni
For and on behalf of
Intesa Sanpaolo S.p.A
as Bookrunner
Name: Guido Austoni 
Title: Global Head of Basic Materials & Healthcare

	

/s/ Stefano Boniello
For and on behalf of
Intesa Sanpaolo S.p.A
as Underwriter

Name: Stefano Boniello
Title: Global Relationship manager

	

/s/ Guido Austoni
For and on behalf of
Intesa Sanpaolo S.p.A
as Underwriter

Name: Guido Austoni 
Title: Global Head of Basic Materials & Healthcare

/s/ Jason Rapley
For and on behalf of
Bank of America Merrill Lynch International DAC
as Documentation Agent and Coordinator

/s/ Michael Joyner
For and on behalf of
Barclays Bank PLC
as Agent

We acknowledge and agree to the above:

/s/ Thad Huston
For and on behalf of
LivaNova PLC
as the Company

Name:  Thad Huston
Title:  Chief Financial Officer
Date:  25 February 2019

APPENDIX
Term Sheet

TERM SHEET
USD350,000,000 FACILITY FOR LIVANOVA PLC
	
	
	The provision of the Facility is subject to the terms and conditions of the Commitment Letter and satisfactory documentation.

PARTIES
	
		
	Company:
	LivaNova PLC

	Borrower:
	The Company

	Mandated Lead Arrangers and Bookrunners:
	Bank of America Merrill Lynch International DAC, Barclays Bank PLC, BNP Paribas, London Branch and Intesa Sanpaolo S.p.A.

	Lenders:
	As selected by the Mandated Lead Arrangers in consultation with the Company.

	Documentation Agent and Coordinator:
	Bank of America Merrill Lynch International DAC

	Agent:
	Barclays Bank PLC.

	Group:
	The Company and its Subsidiaries for the time being.

THE FACILITY
	
		
	Facility:
	Multicurrency term loan facility.

	Amount:
	USD350,000,000 to be made available in two tranches (each a “Tranche”) (i) USD233,333,333 (the “USD Tranche”) and (ii) EUR equivalent of USD116,666,667 to be determined prior to the date of the Agreement (the “EUR Tranche”); provided that the amounts utilised shall be in a ratio of 2/3 USD Tranche and 1/3 EUR Tranche (calculated using the same exchange rate used in determining the EUR equivalent of USD116,666,667 as referred to above in (ii)).

	Termination Date:
	3 years after the date of the Agreement.

	Purpose:
	General corporate purposes (excluding acquisitions, dividends and share buybacks).

	Availability Period:
	From the date of the Agreement to the date which is 12 months after the date of the Agreement.

	Minimum Amount of each Loan:
	USD 4,000,000 / EUR equivalent of USD 2,000,000 as applicable.

	Maximum Number of  
Loans:
	No more than 5 Loans in respect of the USD Tranche and no more than 5 Loans in respect of the EUR Tranche, being an aggregate of 10 Loans, may be outstanding.

	Repayment:
	The Company shall repay the Loans in instalments by repaying on each Repayment Date an amount equal to the percentage of the outstanding principal amount of the Loans under the relevant Tranche as at the last day of the Availability Period set opposite that Repayment Date below:

	 
	 

	Voluntary Prepayment:
	Loans may be prepaid after the last day of the Availability Period in whole or in part on five Business Days' (or such shorter period as the Agent may agree) prior notice (but, if in part, by a minimum of USD4,000,000 / EUR equivalent of USD2,000,000 (as applicable)).  Any prepayment shall be made with accrued interest on the amount prepaid and, subject to breakage costs, without premium or penalty.

	 
	Any amount prepaid may not be redrawn and shall be applied pro rata against scheduled repayments of Loans outstanding; provided that the Loans prepaid shall be in a ratio 2/3 USD Tranche and 1/3 EUR Tranche.

PRICING
	
		
	Upfront Fee:
	1 per cent of the aggregate principal amount of the Facility as at the date of the Commitment Letter payable pursuant to the Upfront Fee Letter between the Company and the Mandated Lead Arrangers dated on or about the date of the Commitment Letter.

	Documentation Agent and Coordinator Fee:
	To be agreed between the Company and the Documentation Agent and Coordinator in a separate Fee Letter.

	Agency Fee:
	To be agreed between the Company and the Agent in a separate Fee Letter.

	Commitment Fee:
	35 per cent. of the applicable Margin on the unused and uncancelled amount of relevant Tranche for the Availability Period.  Accrued commitment fee is payable quarterly in arrear during the Availability Period, on the last day of the Availability Period and on the cancelled amount of the relevant Tranche at the time a full cancellation is effective.

	Margin:
	In relation to the USD Tranche, 1.60 per cent. per annum; and
In relation to the EUR Tranche, 1.40 per cent. per annum.

	Interest Periods for Loans:
	Three months or any other period agreed between the Company, the Agent and the Lenders (in relation to the relevant Loan).

	Interest on Loans:
	The aggregate of the applicable:

	 
	(a)    Margin; and

	 
	(b)    interest rate benchmark.

	Interest rate benchmarks:
	In relation to any Loan in EUR, EURIBOR and, in relation to any Loan in USD, LIBOR set, in each case, by reference to Thomson Reuters (and, if necessary, the use of linear interpolation) or, if not available, by reference to specified fallbacks and if the rate is less than zero, it shall be deemed to be zero.

	 
	Any interest rate benchmark which is not available by reference to Thomson Reuters may be replaced with the consent of the Majority Lenders and the Company.
Interest rate benchmarks shall be set by reference to Thomson Reuters without taking account of any correction, recalculation or republication of the originally published rate by the administrator.

	Payment of Interest on Loans:
	Interest is payable on the last day of each Interest Period (and, in the case of Interest Periods of longer than six months, on the dates falling at six-monthly intervals after the first day of the Interest Period).

OTHER TERMS
	
		
	Documentation:
	The Facility will be made available under a facility agreement based on the current recommended form of multicurrency syndicated term facility agreement (investment grade) of the LMA, this Term Sheet and otherwise in form and substance satisfactory to the Mandated Lead Arrangers acting reasonably and having regard to the USD 170,000,000 bridge facility agreement dated 14 February 2018 and entered into between the Company and Bank of America Merrill Lynch International Limited to resolve any disputes.

	Prepayment and Cancellation:
	(a)    Illegality
A Lender may cancel its Commitment and require prepayment of its share of the Loans.

	 
	(b)    Change of Control
If a Change of Control occurs:

	 
	(1)   a Lender shall not be obliged to fund a Loan; and

	 
	(2)   a Lender may by not less than 30 days' notice cancel its Commitment and require repayment of all its share of the Loans.
“Change of Control” means:
(1)   any person or group of persons acting in concert gain direct or indirect control of the Company; or
(2)   the Company ceases to be the beneficial owner directly or indirectly through wholly owned subsidiaries, of more than 50 per cent of the issued share capital of the Italian Subsidiary
“acting in concert” means acting together pursuant to an agreement or understanding (whether formal or informal).
“control” means the power to direct the management and policies of an entity, whether through the ownership of more than 50 per cent of entire voting capital, by contract or otherwise

	 
	(c)    Increased Costs, Tax Gross Up and Tax Indemnity
The Company may cancel the Commitment of and prepay any Lender that makes a claim under these provisions.

	 
	(d)    Voluntary Cancellation
The Company may, on not less than five Business Days' (or such shorter period as the Agent may agree) prior notice, cancel the whole or any part (being a minimum of USD4,000,000 / EUR equivalent of USD2,000,000) of the Available Facility.
The Available Facility shall, if cancelled in part, be cancelled in a ratio of 2/3 USD Tranche and 1/3 EUR Tranche.

	Representations:
	The Company will make the representations set out in Schedule 1 (Representations) to this Term Sheet (i) on the date of the Agreement (except for representations and warranties in paragraph 11(a) and (b) of Schedule 1 (Representations) to this Term Sheet which shall be made on the date such information or projections are delivered) and (ii) in the case of paragraphs 1 to 6, 10(a), 12(d), 19, 20 and 24 of Schedule 1 (Representations) to this Term Sheet, on the date of each Utilisation Request and the first day of each Interest Period

	Information Undertakings:
	The Company shall supply each of the following:

	 
	(a)    as soon as they become available, but in any event within 180 days of the end of its financial years its audited consolidated financial statements for that financial year

	 
	(b)    as soon as they become available, but in any event within 90 days of the end of each of its financial half years ending 30 June its consolidated financial statements for that financial half year

	 
	(c)    with each set of consolidated financial statements, a compliance certificate setting out (in reasonable detail) computations as to compliance with the financial covenants as at the date at which those financial statements were drawn up

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

	 
	(e)    promptly upon becoming aware of them, the details of any material litigation, arbitration or administrative proceedings which are current, threatened or pending against any member of the Group, and which are likely to be adversely determined and if adversely determined, would have a Material Adverse Effect

	 
	(f)    promptly, such further information regarding the financial condition, assets, business and operations of any member of the Group as any Finance Party may reasonably request

	 
	(g)    promptly, notify the Agent upon becoming aware of the occurrence of any Default 
(h)    promptly upon request by the Agent, certificate signed by two of its directors or senior officers that no Default is continuing or if a Default is continuing specifying the Default and the steps (if any) being taken to remedy it

	 
	On the introduction of or any change in law, a change in the status of the Company  or a proposed assignment or transfer by a Lender to a party that is not an existing Lender, which obliges a Lender to comply with "know your customer" or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Agent or any Lender supply such documentation and other evidence as is reasonably requested by the Agent (for itself and on behalf of any Lender) or any Lender (or prospective new Lender) in order for the Agent or such Lender (or prospective new Lender) to carry out and be satisfied with the results of all necessary "know your customer" or other checks in relation to the transactions contemplated in the Finance Documents.

	Financial Covenants:
	The financial undertakings set out in Schedule 2 (Financial Undertakings) to this Term Sheet will be included in the Agreement

	General Undertakings:
	The undertakings set out in Schedule 3 (General Undertakings) to this Term Sheet will be included in the Agreement in respect of the Company and, where applicable, in relation to the Group

	Events of Default:
	Each of the events or circumstances set out in Schedule 4 (Events of Default) to this Term Sheet will be included in the Agreement in respect of the Company and, if appropriate, any member of the Group

	Majority Lenders:
	662⁄3% of Total Commitments.

	Assignments and Transfers by Lenders:
	Subject to the following paragraph, a Lender may assign any of its rights or transfer by novation any of its rights and obligations to another bank or financial institution or to a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets.

	 
	The consent of the Company will be required (not to be unreasonably withheld or delayed) unless the transfer or assignment is to another Lender or an Affiliate or a Related Fund of a Lender or is made at a time when an Event of Default is continuing, provided that no transfer or assignment shall be made to any person whose business is similar or related to the business carried on by the Group as a whole (or to an Affiliate of any such person or any such person acting on behalf of or on the instructions of any such person) or to a Distressed Fund without the prior written consent of the Borrower (at its sole discretion).  The Company will be deemed to have given its consent if no express refusal is received within 5 Business Days.

	Conditions Precedent:
	These will include the documents and other evidence set out in Schedule 5 (Conditions Precedent) to this Term Sheet in form and substance satisfactory to the Agent

	Miscellaneous Provisions:
	The Agreement will contain provisions relating to, among other things, default interest, market disruption, breakage costs, tax gross up and indemnities including FATCA, increased costs (including Basel III and CRDIV), set-off, replacement of screen rate, bail-in and administration.

	Costs and Expenses:
	Subject to any agreed caps, all costs and expenses (including legal fees) reasonably incurred by the Agent and the Mandated Lead Arrangers in connection with the preparation, negotiation, printing, execution and syndication of the Agreement and any other document referred to in it shall be paid by the Company promptly on demand whether or not the Agreement is signed.

	Governing Law:
	English.

	Jurisdiction:
	Courts of England.

	Definitions:
	Terms defined in the current recommended form of mulitcurrency syndicated term facility agreement (investment grade) of the LMA have the same meaning in this Term Sheet unless given a different meaning in this Term Sheet (including in Schedule 6 (Certain Definitions) to this Term Sheet).

Schedule 1
Representations 
		
	1.
	Status

		
	(a)
	It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.

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

		
	2.
	Binding obligations

The obligations expressed to be assumed by it in each Finance Document are, subject to the Legal Reservations, legal, valid, binding and enforceable obligations.
		
	3.
	Non‐conflict with other obligations

Subject to the Legal Reservations, the entry into and performance by it of, and the transactions contemplated by, the Finance Documents do not and will not conflict with: 
		
	(a)
	any law or regulation applicable to it;

		
	(b)
	its or any of its Subsidiaries' constitutional documents; or

		
	(c)
	any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries' assets.

		
	4.
	Power and authority

It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents and the transactions contemplated by those Finance Documents.
		
	5.
	Validity and admissibility in evidence

All Authorisations required:
		
	(a)
	to enable it lawfully to enter into, exercise its rights and comply with its obligations in the Finance Documents; and

		
	(b)
	to make the Finance Documents admissible in evidence in its jurisdiction of incorporation,

have been obtained or effected and are in full force and effect.
		
	6.
	Governing law and enforcement

Subject to the Legal Reservations:
		
	(a)
	the choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation; and

		
	(b)
	any judgment obtained in England in relation to a Finance Document will be recognised and enforced in its jurisdiction of incorporation.

		
	7.
	Insolvency

No:
		
	(a)
	corporate action, legal proceeding or other procedure or step described in paragraph 7(a) of Schedule 4 (Events of Default) to this Term Sheet; or

		
	(b)
	creditors' process described in paragraph 8 (Creditor’s process) of Schedule 4 (Events of Default) to this Term Sheet,

has been taken or, to its knowledge, threatened in relation to the Borrower or any Material Subsidiary; and none of the circumstances described in paragraph 6 (Insolvency) of Schedule 4 (Events of Default) to this Term Sheet applies to a the Borrower or any Material Subsidiary.
		
	8.
	No filing or stamp taxes

Under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents or the transactions contemplated by the Finance Documents.
		
	9.
	Deduction of Tax

It is not required to make any Tax Deduction from any payment it may make under any Finance Document to any Lender.
		
	10.
	No default

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

		
	(b)
	No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Material Subsidiaries or to which its (or any of its Material Subsidiaries') assets are subject which would have a Material Adverse Effect.

		
	11.
	No misleading information

		
	(a)
	Any material factual information provided by any member of the Group to any Finance Party was true and accurate in all material respects as at the date it was provided or as at the date (if any) at which it is stated.

		
	(b)
	The financial projections provided by the Group to any Finance Party have been prepared on the basis of recent historical information and on the basis of reasonable assumptions.

		
	(c)
	Nothing has occurred since the date that any such information was provided or been omitted from such information provided and no information has been given or withheld that results in the information provided being untrue or misleading in any material respect.

The representations and warranties in this paragraph are made by the Borrower only so far as it is aware having made due and careful enquiries.
		
	12.
	Financial statements

		
	(a)
	Its Original Financial Statements were prepared in accordance with the Accounting Principles consistently applied (other than any differences arising between IFRS, as used in the preparation of the Original Financial Statements, and the Accounting Principles).

		
	(b)
	Its Original Financial Statements fairly represent its financial condition as at the end of the relevant financial year during the relevant financial year (consolidated in the case of the Borrower).

		
	(c)
	There has been no material adverse change in the business or consolidated financial condition of the Group since the date of its Original Financial Statements.

		
	(d)
	Its most recent financial statements required to be delivered in accordance with the Term Sheet:

		
	(i)
	have been prepared in accordance with the Accounting Principles as applied to the Original Financial Statements (other than any differences arising between IFRS, as used in the preparation of the Original Financial Statements, and the Accounting Principles); and

		
	(ii)
	fairly represent in all material respects its consolidated financial condition as at the end of, and consolidated results of operations for, the period to which they relate.

		
	13.
	No proceedings pending or threatened

No litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, are reasonably likely to have a Material Adverse Effect has or have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
		
	14.
	No breach of laws

		
	(a)
	It has not (and none of its Subsidiaries has) breached any law or regulation which breach has or is reasonably likely to have a Material Adverse Effect.

		
	(b)
	No labour disputes are current or, to the best of its knowledge and belief (having made due and careful enquiry), threatened against any member of the Group which have or are reasonably likely to have a Material Adverse Effect.

		
	15.
	Environmental laws

		
	(a)
	Each member of the Group is in compliance with paragraph 3 (Environmental Compliance) of Schedule 3 (General Undertakings) to this Term Sheet and to the best of its knowledge and belief (having made due and careful enquiry) no circumstances have occurred which would prevent such compliance in a manner or to an extent which has or is reasonably likely to have a Material Adverse Effect.

		
	(b)
	No Environmental Claim has been commenced or (to the best of its knowledge and belief (having made due and careful enquiry)) is threatened against any member of the Group where that claim has or is reasonably likely, if determined against that member of the Group, to have a Material Adverse Effect.

		
	(c)
	The cost to the Group of compliance with Environmental Laws (including Environmental Permits) is (to the best of its knowledge and belief, having made due and careful enquiry) adequately provided for.

		
	16.
	Taxation

		
	(a)
	It is not (and none of its Material Subsidiaries is) materially overdue in the filing of any Tax returns and it is not (and none of its Material Subsidiaries is) overdue in the payment of any material amount in respect of Tax unless and only to the extent that:

		
	(i)
	such payment is being contested, postponed or compromised in good faith;

		
	(ii)
	adequate reserves are being maintained for those Taxes and the costs required to contest, postpone or compromise them; and

		
	(iii)
	such payment can be lawfully withheld and failure to pay those Taxes does not have, or to the Borrower's knowledge, would not reasonably be expected to have a Material Adverse Effect.

		
	(b)
	No claims or investigations that are not provided for in its latest financial statements are being made or conducted against it (or any of its Material Subsidiaries) with respect to Taxes such that a liability of the Borrower or any Material Subsidiary of USD 20,000,000 (or its equivalent in any other currency) or more is reasonably likely to arise upon a final determination of that claim or investigation.

		
	(c)
	It is resident for Tax purposes only in England and Wales.

		
	17.
	Security and Financial Indebtedness

		
	(a)
	No Security exists over all or any of the present or future assets of any member of the Group other than as permitted by the Agreement.

		
	(b)
	No member of the Group has any Financial Indebtedness outstanding that is prohibited under paragraph 18 (Financial Indebtedness) of Schedule 3 (General Undertakings) to this Term Sheet.

		
	18.
	Pari passu ranking

Subject to the Legal Reservations, its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
		
	19.
	Good title to assets

It and each of its Subsidiaries has a good, valid and marketable title to, or valid leases or licences of, and all appropriate Authorisations to use, the assets necessary to carry on its business as presently conducted other than where a failure to do so could not reasonably be expected to have a Material Adverse Effect.
		
	20.
	Legal and beneficial ownership

It and each of its Subsidiaries is the sole legal and beneficial owner of the assets which are material in the context of its business and which are required by it in order to carry on its business as it is being conducted, other than where a failure to be so could not reasonably be expected to have a Material Adverse Effect.
		
	21.
	Intellectual Property

It and each of its Subsidiaries:
		
	(a)
	is the sole legal and beneficial owner of or has licensed to it on normal commercial terms all the Intellectual Property which is material in the context of its business and which is required by it in order to carry on its business as it is being conducted;

		
	(b)
	does not (nor does any of its Subsidiaries), in carrying on its businesses, infringe any Intellectual Property of any third party in any respect; and

		
	(c)
	has taken all formal or procedural actions (including payment of fees) required to maintain any material Intellectual Property owned by it,

other than where a failure to be or do so could not reasonably be expected to have a Material Adverse Effect.
		
	22.
	Accounting Reference Date

The Accounting Reference Date of each member of the Group is 31 December.
		
	23.
	No adverse consequences

		
	(a)
	It is not necessary under the laws of its Relevant Jurisdictions:

		
	(i)
	in order to enable any Finance Party to enforce its rights under any Finance Document; or

		
	(ii)
	by reason of the execution of any Finance Document or the performance by it of its obligations under any Finance Document,

that any Finance Party should be licensed, qualified or otherwise entitled to carry on business in any of its Relevant Jurisdictions.
		
	(b)
	No Finance Party is or will be deemed to be resident, domiciled or carrying on business in its Relevant Jurisdictions by reason only of the execution, performance and/or enforcement of any Finance Document.

		
	24.
	Centre of main interests and establishments

For the purposes of The Council of the European Union Regulation No 2015/848 on Insolvency Proceedings (recast) (the "Regulation"), its centre of main interest (as that term is used in Article 3(1) of the Regulation) is situated in England and Wales and it has no "establishment" (as that term is used in Article 2(h) of the Regulation) in any other jurisdiction (other than Italy). 
		
	25.
	Anti‐corruption and anti-money laundering law

To the best of its knowledge and belief (after due and careful enquiry), each member of the Group has conducted its businesses in compliance with applicable anti‐corruption laws and all applicable laws and regulations that relate to anti-money laundering, counter-terrorist financing or record keeping or reporting requirements relating to anti-money laundering or counter-terrorist financing, and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
		
	26.
	Sanctions

		
	(a)
	To the best of its knowledge and belief (after due and careful enquiry), neither it nor any of its Subsidiaries, nor any directors, officers or employees of it or any of its Subsidiaries:

		
	(i)
	is a Restricted Party or is engaging in or has engaged in any transaction or conduct that could result in it becoming a Restricted Party;

		
	(ii)
	is subject to any claim, proceeding, formal notice or investigation with respect to Sanctions;

		
	(iii)
	is engaging in any transaction that evades or avoids, or has the purpose of evading or avoiding, or breaches or attempts to breach, directly or indirectly, any Sanctions applicable to it; or

		
	(iv)
	is engaging, directly or indirectly, in any trade, business or other activities with or for the benefit of any Restricted Party where such trade, business or activity is in breach of Sanctions.

		
	(b)
	No Utilisation, nor the proceeds from any Utilisation, has been used, directly or (knowingly) indirectly, to lend, contribute, provide or has otherwise been made to fund or finance any business activities or transactions:

		
	(i)
	of or with a Restricted Party; or

		
	(ii)
	in any other manner which would result in any member of the Group, any Finance Party being in breach of any Sanctions or becoming a Restricted Party.

Schedule 2
Financial Undertakings
The financial undertakings set out in this Schedule shall remain in force from the date of the Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force (unless indicated otherwise). 
		
	1.
	Financial condition

		
	(a)
	Consolidated Net Financial Indebtedness to Consolidated EBITDA: The Company shall ensure that Consolidated Net Financial Indebtedness as at any Accounting Date shall not be more than 2.50 times the Consolidated EBITDA for the Test Period ending on that Accounting Date.

		
	(b)
	Consolidated EBITDA to Consolidated Total Net Interest Payable: Consolidated EBITDA for the Test Period ending on an Accounting Date shall not be lower than 6.30 times the Consolidated Total Net Interest Payable for that Test Period.

		
	(c)
	Consolidated Net Financial Indebtedness to Consolidated Net Worth: Consolidated Net Financial Indebtedness as at any Accounting Date shall not be more than 0.50 times the Consolidated Net Worth as at that Accounting Date.

		
	(d)
	Consolidated Net Worth: the Consolidated Net Worth shall at no time be lower than USD 725,000,000.

		
	2.
	Financial covenant calculations

The financial ratio shall be calculated in accordance with US GAAP and tested by reference to each of the financial statements each compliance certificate to be delivered as set out in this Term Sheet.
		
	3.
	Definitions

In this Schedule:
"Consolidated EBITDA" shall mean in relation to the Group the consolidated profit and loss statement of the Group and determined in accordance with US GAAP: the amount of the consolidated operating income of the Group:
		
	(a)
	plus depreciation and amortization expenses for plant, property and equipment; and

		
	(b)
	plus amortization of intangible assets and impairment losses; and

		
	(c)
	plus restructuring, merger and integration expenses; and

		
	(d)
	plus litigation expenses; and

		
	(e)
	plus extraordinary and non-cash items of expense, but only to the extent such items have been deducted in the determination of operating income;

		
	(f)
	minus extraordinary and non-cash items of income, but only to the extent such items are included in the operating income.

"Consolidated Net Financial Indebtedness" shall mean at any time: 
		
	(a)
	the aggregate at that time of Financial Indebtedness of the members of the Group from sources external to the Group (including guarantees for an aggregate amount exceeding USD 40,000,000.00 (forty million US dollars) at that time); less 

		
	(b)
	the aggregate amount at that time of: (i) cash; (ii) debt securities issued or guaranteed by any member state of the OECD that benefit from an investment grade rating; and (iii) receivables from any derivative transaction entered into in connection with protection against or benefit from fluctuation in any rate or price.

"Consolidated Net Worth" in respect of the Group shall mean the consolidated net worth of the Group determined in accordance with US GAAP.
"Consolidated Total Net Interest Payable" shall mean for a period in relation to the Group: 
		
	(a)
	interest accrued during such period as an obligation of any member of the Group (whether or not paid or capitalised during or deferred for payment after such period); less 

		
	(b)
	any interest received or receivable by any member of the Group (after deducting any applicable withholding tax) in such period.

"Test Period" shall mean a period of six or, as the case may be, twelve months starting on 1 January of a financial year and ending on an Accounting Date in that financial year. 

Schedule 3
General Undertakings 
		
	1.
	Authorisations

The Borrower shall promptly:
		
	(a)
	obtain, comply with and do all that is necessary to maintain in full force and effect; and

		
	(b)
	supply certified copies to the Agent of, 

any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.
		
	2.
	Compliance with laws

The Borrower shall comply in all respects with all laws to which it may be subject, if failure so to comply would materially impair its ability to perform its obligations under the Finance Documents to which it is a party or would reasonably be expected to have a Material Adverse Effect.
		
	3.
	Environmental compliance

The Borrower shall (and it shall ensure that each other member of the Group will):
		
	(a)
	comply with all Environmental Law;

		
	(b)
	obtain, maintain and ensure compliance with all requisite Environmental Permits;

		
	(c)
	implement procedures to monitor compliance with and to prevent liability under any Environmental Law,

where failure to do so has or is reasonably likely to have a Material Adverse Effect.
		
	4.
	Environmental claims

The Borrower shall, promptly upon becoming aware of the same, inform the Agent in writing of:
		
	(a)
	any Environmental Claim against any member of the Group which is current, pending or threatened; and

		
	(b)
	any facts or circumstances which are reasonably likely to result in any Environmental Claim being commenced or threatened against any member of the Group,

where the claim, if determined against that member of the Group, has or is reasonably likely to have a Material Adverse Effect.
		
	5.
	Pari passu ranking

The Borrower shall ensure that at all times any unsecured and unsubordinated claims of a Finance Party against it under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors except those creditors whose claims are mandatorily preferred by laws of general application to companies.
		
	6.
	Insurance

		
	(a)
	The Borrower shall (and it shall ensure that each other member of the Group will) maintain insurances on and in relation to its business and assets against those risks and to the extent as is usual for companies carrying on the same or substantially similar business.

		
	(b)
	All insurances must be with reputable independent insurance companies or underwriters.

		
	7.
	Intellectual Property

The Borrower shall (and it shall procure that each other member of the Group will):
		
	(a)
	preserve and maintain the subsistence and validity of its material Intellectual Property necessary for the business of the relevant Group member;

		
	(b)
	use reasonable endeavours to prevent any infringement in any material respect of such Intellectual Property;

		
	(c)
	make registrations and pay all registration fees and taxes necessary to maintain such Intellectual Property in full force and effect and record its interest in that Intellectual Property;

		
	(d)
	not use or permit such Intellectual Property to be used in a way or take any step or omit to take any step in respect of that Intellectual Property which may materially and adversely affect the existence or value of such Intellectual Property or imperil the right of any member of the Group to use such property; and

		
	(e)
	not discontinue the use of such Intellectual Property,

where failure to do so, in the case of paragraph 7(a) and 7(b), or, in the case of paragraph 7(d) and 7(e), such use, permission to use, omission or discontinuation, is reasonably likely to have a Material Adverse Effect.
		
	8.
	Access

If an Event of Default is continuing or the Agent reasonably suspects an Event of Default is continuing, the Borrower shall, and it shall ensure that each Material Subsidiary will permit the Agent and/or its accountants or other professional advisers and contractors free access at all reasonable times and on reasonable notice at the risk and cost of the Borrower (provided such access shall be at the cost of the Lenders if such access is granted and it transpires that an Event of Default is not continuing) to (a) the premises, assets, books, accounts and records of the Borrower and each Material Subsidiary and (b) meet and discuss matters with senior management.
		
	9.
	Preservation of assets

The Borrower shall (and it shall ensure that each other member of the Group will) maintain in good working order and condition (ordinary wear and tear excepted) all of its assets necessary or desirable in the conduct of its business where a failure to do so would have or would be reasonably likely to have a Material Adverse Effect.
		
	10.
	Taxation

		
	(a)
	The Borrower shall (and it shall ensure that each other member of the Group will) pay and discharge all Taxes of a material amount imposed upon it or its assets within the time period allowed without incurring penalties unless and only to the extent that:

		
	(i)
	such payment is being contested in good faith;

		
	(ii)
	adequate reserves are being maintained for those Taxes and the costs required to contest them which have been disclosed in its latest financial statements required to be delivered to the Agent in accordance with the Term Sheet; and

		
	(iii)
	such payment can be lawfully withheld and failure to pay those Taxes does not have or is not reasonably likely to have a Material Adverse Effect.

		
	(b)
	The Borrower shall not (and it shall ensure that each member of the Group will not) change its residence for Tax purposes.

		
	11.
	Anti‐corruption and anti-money laundering law

		
	(a)
	The Borrower shall not (and it shall ensure that no other member of the Group will) directly or indirectly use the proceeds of the Facilities for any purpose which would breach the Bribery Act 2010, the United States Foreign Corrupt Practices Act of 1977 or other similar legislation in other jurisdictions.

		
	(b)
	The Borrower shall (and it shall ensure that each other member of the Group will):

		
	(i)
	conduct its businesses in compliance with:

		
	(A)
	(other than in respect of matters referred to in paragraph (B) below) applicable anti‐corruption laws and all applicable anti-money laundering and counter-terrorist financing laws and regulations; and

		
	(B)
	all record keeping or reporting requirements required pursuant to any applicable anti-money laundering or counter-terrorist financing laws or regulations in each case in all material respects; and

		
	(ii)
	maintain policies and procedures designed to promote and achieve compliance with such laws.

		
	12.
	Sanctions

The Borrower shall ensure that no member of the Group may:
		
	(a)
	use, lend, contribute or otherwise make available any part of the proceeds of any Utilisation or other transaction contemplated:

		
	(i)
	for the purpose of financing any trade, business or other activities involving, or for the benefit of, any Restricted Party; or

		
	(ii)
	in any other manner that would result in any person being in breach of any Sanctions or becoming a Restricted Party;

		
	(b)
	knowingly engage in any transaction that evades or avoids or breaches directly or indirectly, any Sanctions applicable to it; or

		
	(c)
	knowingly fund all or part of any payment in connection with a Finance Document out of proceeds derived from business or transactions with a Restricted Party, or from any action which is in breach of any Sanctions.

		
	13.
	Negative pledge

		
	(a)
	The Borrower shall not (and it shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.

		
	(b)
	The Borrower shall not (and it shall ensure that no other member of the Group will):

		
	(i)
	sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re‐acquired by the Borrower or any other member of the Group;

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

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

		
	(iv)
	enter into any other preferential arrangement having a similar effect,

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

		
	(c)
	Paragraphs 13(a) and 13(b) do not apply to any Permitted Security: 

		
	14.
	Loans or credit

		
	(a)
	Except as permitted under paragraph 14(b), the Borrower shall not (and it shall ensure that no other member of the Group will) be a creditor in respect of any Financial Indebtedness.

		
	(b)
	Paragraph 14(a) does not apply to a Permitted Loan.

		
	15.
	Acquisitions

		
	(a)
	Except as permitted under paragraph 15(b), the Borrower shall not (and it shall ensure that no other member of the Group will) acquire a company or any shares or securities or a business or undertaking (or any interest in any of them).

		
	(b)
	Paragraph 15(a) does not apply to an acquisition that is a Permitted Acquisition.

		
	16.
	Merger

		
	(a)
	The Borrower shall not (and it shall ensure that no other member of the Group will) enter into any amalgamation, demerger, merger or corporate reconstruction.

		
	(b)
	Paragraph 16(a) does not apply to any Permitted Transaction.

		
	17.
	No Guarantees or indemnities

		
	(a)
	Except as permitted under paragraph 17(b), the Borrower shall not (and it shall ensure that no other member of the Group will) incur or allow to remain outstanding any guarantee in respect of any obligation of any person.

		
	(b)
	Paragraph 17(a) does not apply to a guarantee which is a Permitted Guarantee. 

		
	18.
	Financial Indebtedness

		
	(a)
	The Borrower shall ensure that the Subsidiary Financial Indebtedness does not exceed at any time 35 per cent of Group Financial Indebtedness. 

		
	(b)
	For the purposes of this paragraph 18:

"Group Financial Indebtedness" means the Financial Indebtedness of the Group excluding, in each case, Financial Indebtedness of the Group incurred under any Excluded Guarantee; and
"Subsidiary Financial Indebtedness" means the aggregate Financial Indebtedness of each Subsidiary excluding, in each case, the Financial Indebtedness of the Borrower, any Financial Indebtedness comprising of guarantees of Financial Indebtedness of the Borrower granted by the Italian Subsidiary and the Financial Indebtedness of the Group incurred under any Excluded Guarantee. 
		
	(c)
	For the avoidance of doubt and notwithstanding anything to the contrary, intra‐group debt shall not constitute or in any way be included in the definition of Financial Indebtedness or Subsidiary Financial Indebtedness.

		
	19.
	Disposal of assets

		
	(a)
	Except as permitted under paragraph 19(b), the Borrower shall not (and it shall ensure that no other member of the Group will) enter into a single transaction or a series of transactions (whether related or not) and whether voluntary or involuntary to sell, lease, transfer or otherwise dispose of any asset. 

		
	(b)
	Paragraph 19(a) does not apply to any sale, lease, transfer or other disposal for fair market value and at arm’s length:

		
	(i)
	made in the ordinary course of trading of the disposing entity;

		
	(ii)
	of assets in exchange of other assets comparable or superior as to type, value and quality;

		
	(iii)
	of obsolete or redundant vehicles, plant and equipment for cash;

		
	(iv)
	of receivables being part of Permitted Receivables Disposals; or

		
	(v)
	of assets not falling within paragraphs 19(b)(i) to 19(b)(iv), provided that over the life of the Facility the aggregate value of the disposed assets and other disposals of assets not falling within paragraphs 19(b)(i) to 19(b)(iv), shall not exceed 10 per cent of the total assets of the Group as reports in the latest audited consolidated financial statements.

		
	20.
	Change of business

The Borrower shall procure that no substantial change is made to the general nature of the business of the Borrower or the Group from that carried on at the date of this Agreement.
		
	21.
	Arm's length basis

The Borrower shall not (and it shall ensure that no other member of the Group will) enter into any material transaction with any person except on arm's length terms and for full market value.
		
	22.
	Amendments

		
	(a)
	The Borrower shall not (and it shall ensure that no other member of the Group will) amend, vary, novate, supplement, supersede, waive or terminate any term of any document delivered to the Agent pursuant to Schedule 5 (Conditions Precedent) to this Term Sheet except in writing:

		
	(i)
	in accordance with the Agreement;

		
	(ii)
	prior to or on the first Utilisation Date, with the prior written consent of the Lenders; or

		
	(iii)
	after the first Utilisation Date, in a way which could not be reasonably expected materially and adversely to affect the interests of the Lenders.

		
	(b)
	The Borrower shall promptly supply to the Agent a copy of any document relating to any of the matters referred to in paragraphs 22(a)(i) to 22(a)(iii).

		
	23.
	Accounting practices

The Borrower shall not change its Accounting Reference Date nor materially change its accounting policies, in each case unless required to do so in order to comply with US GAAP.

Schedule 4 
Events of Default
		
	1.
	Non‐payment

The Borrower does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:
		
	(a)
	its failure to pay is caused by:

		
	(i)
	administrative or technical error; or

		
	(ii)
	a Disruption Event; and

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

		
	2.
	Financial covenants

Any requirement of Schedule 2 (Financial undertakings) to this Term Sheet is not satisfied.
		
	3.
	Other obligations

		
	(a)
	The Borrower does not comply with any provision of the Finance Documents (other than those referred to in paragraph 1 (Non-payment) and Schedule 2 (Financial undertakings)) to this Term Sheet. 

		
	(b)
	No Event of Default under paragraph 3(a) will occur if the failure to comply is capable of remedy and is remedied within 15 Business Days, of the earlier of (A) the Agent giving notice to the Borrower and (B) the Borrower becoming aware of the failure to comply.

		
	4.
	Misrepresentation

Any representation or statement made or deemed to be made by the Borrower in the Finance Documents or any other document delivered by or on its behalf under or in connection with any Finance Document is or proves to have been incorrect or misleading in any material respect when made or deemed to be made.
		
	5.
	Cross default

		
	(a)
	Any Financial Indebtedness of the Borrower or any Material Subsidiary is not paid when due nor within any originally applicable grace period.

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

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

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

		
	(e)
	No Event of Default will occur under this paragraph 5 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs 5(a) to 5(d) is less than USD 7,500,000 (or its equivalent in any other currency or currencies).

		
	6.
	Insolvency

		
	(a)
	The Borrower or any Material Subsidiary:

		
	(i)
	is unable or admits inability to pay its debts as they fall due;

		
	(ii)
	suspends making payments on any of its debts; or

		
	(iii)
	by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding the Lenders) with a view to rescheduling any of its indebtedness.

		
	(b)
	The value of the assets of any the Borrower or any Material Subsidiary is less than its liabilities (taking into account contingent and prospective liabilities).

		
	(c)
	A moratorium is declared in respect of any indebtedness of the Borrower or any Material Subsidiary.

		
	7.
	Insolvency proceedings

		
	(a)
	Any corporate action, legal proceedings or other procedure or step is taken in relation to:

		
	(i)
	the suspension of payments, a moratorium of any indebtedness, winding‐up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement or otherwise) of the Borrower or any Material Subsidiary other than a solvent liquidation or reorganisation of any Material Subsidiary;

		
	(ii)
	a composition, compromise, assignment or arrangement with any creditor of  the Borrower or any Material Subsidiary;

		
	(iii)
	the appointment of a liquidator (other than in respect of a solvent liquidation of a Material Subsidiary), receiver, administrative receiver, administrator, compulsory manager or other similar officer in respect of the Borrower or any Material Subsidiary or any of its assets; or

		
	(iv)
	enforcement of any Security over any assets of the Borrower or any Material Subsidiary,

or any analogous procedure or step is taken in any jurisdiction.
		
	(b)
	This paragraph 7 shall not apply to any winding‐up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 10 Business Days of commencement.

		
	8.
	Creditors' process

Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of the Borrower or any Material Subsidiary and is not discharged within 10 Business Days of commencement.
		
	9.
	Unlawfulness and invalidity

		
	(a)
	It is or becomes unlawful for the Borrower to perform any of its obligations under the Finance Documents.

		
	(b)
	Any obligation or obligations of the Borrower under any Finance Documents are not (subject to the Legal Reservations) or cease to be legal, valid, binding or enforceable.

		
	(c)
	Any Finance Document ceases to be in full force.

		
	10.
	Cessation of business

Any Material Subsidiary suspends or ceases to carry on (or threatens to suspend or cease to carry on) all or a material part of its business.
		
	11.
	Change of ownership 

The Borrower ceases to be the beneficial owner directly or indirectly through wholly owned subsidiaries of more than 50 fifty per cent of the issued share capital of the Italian Subsidiary.
		
	12.
	Audit qualification

The Borrower's auditors qualify the audited annual consolidated financial statements of the Borrower on the grounds of inadequate or unreliable information or being unable to prepare the accounts on a going concern basis, in each case which would have or would be reasonably likely to have a Material Adverse Effect.
		
	13.
	Expropriation

The authority or ability of any Material Subsidiary to conduct its business is limited or wholly or substantially curtailed by any seizure, expropriation, nationalisation, intervention, restriction or other action by or on behalf of any governmental, regulatory or other authority or other person in relation to any Material Subsidiary or any of its assets where such limitation or curtailment has or is reasonably likely to have a Material Adverse Effect.
		
	14.
	Repudiation and rescission of agreements

The Borrower rescinds or purports to rescind or repudiates or purports to repudiate a Finance Document or evidences an intention to rescind or repudiate a Finance Document.
		
	15.
	Litigation

Any litigation, arbitration, administrative, governmental, regulatory or other investigations, proceedings or disputes are commenced or threatened in relation to the Transaction Documents or the transactions contemplated in the Transaction Documents or against the Borrower or any Material Subsidiary or its assets which have or are reasonably likely to have a Material Adverse Effect.
		
	16.
	Material adverse change

Any event or circumstance occurs which has or will have a Material Adverse Effect.

Schedule 5
Conditions Precedent
		
	1.
	The Company

		
	(a)
	A copy of the constitutional documents of the Company.

		
	(b)
	A copy of a resolution of the board of directors of the Company:

		
	(i)
	approving the terms of, and the transactions contemplated by, the Finance Documents and resolving that it execute the Finance Documents;

		
	(ii)
	authorising a specified person or persons to execute the Finance Documents on its behalf; and

		
	(iii)
	authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request) to be signed and/or despatched by it under or in connection with the Finance Documents.

		
	(c)
	A specimen of the signature of each person authorised by the resolution referred to in paragraph 1(b).

		
	(d)
	A certificate of the Company (signed by an authorised signatory) confirming that borrowing the Commitment would not cause any borrowing or similar limit binding on it to be exceeded.

		
	(e)
	A certificate of an authorised signatory of the Company certifying that each copy document relating to it specified in this Schedule 5 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.

		
	2.
	Legal opinion

A legal opinion of Latham & Watkins, legal advisers to the Mandated Lead Arrangers in England, substantially in the form distributed to the Mandated Lead Arrangers prior to signing this Agreement.
		
	3.
	Other documents and evidence

		
	(a)
	The Original Financial Statements of the Group.

		
	(b)
	Evidence that the fees, costs and expenses then due from the Company pursuant to have been paid or will be paid by the first Utilisation Date.

		
	(c)
	Evidence of satisfaction of any customary or required “know your customer” checks or other similar checks under all applicable laws and regulations in respect of the Company.

		
	(d)
	Evidence that the USD70,000,000 revolving facility made available to the Company pursuant to an amendment and restatement agreement dated 10 April 2018 between the Company as borrower and Barclays Bank PLC as lender will be irrevocably and unconditionally repaid (and permanently cancelled) in full on or before the first Utilisation Date.

Schedule 6 
Certain Definitions
"Accounting Date" means each 30 June and 31 December;
"Accounting Principles" means generally accepted accounting principles in the United States of America, being US GAAP;
"Business Day" means a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York;
"Distressed Fund" means a fund whose investment strategy includes purchasing debt for the purpose of actively managing that debt holding to obtain ownership of equity in or gain control of the relevant borrower(s) and/or to exploit holdout or blocking positions;
"Environment" means humans, animals, plants and all other living organisms including the ecological systems of which they form part and the following media:
		
	(a)
	air (including, without limitation, air within natural or man‐made structures, whether above or below ground);

		
	(b)
	water (including, without limitation, territorial, coastal and inland waters, water under or within land and water in drains and sewers); and

		
	(c)
	land (including, without limitation, land under water);

"Environmental Claim" means any claim, proceeding, formal notice or investigation by any person in respect of any Environmental Law;
"Environmental Law" means any applicable law or regulation which relates to:
		
	(a)
	the pollution or protection of the Environment;

		
	(b)
	the conditions of the workplace; or

		
	(c)
	the generation, handling, storage, use, release or spillage of any substance which, alone or in combination with any other, is capable of causing harm to the Environment, including, without limitation, any waste;

"Environmental Permits" means any permit and other Authorisation and the filing of any notification, report or assessment required under any Environmental Law for the operation of the business of any member of the Group conducted on or from the properties owned or used by any member of the Group;
"Excluded Guarantee" means:
		
	(a)
	any counter‐indemnity obligation in respect of a performance or similar bond guaranteeing performance by a member of the Group under any public tender or other contract entered into in the ordinary course of trade; or

		
	(b)
	any guarantee or indemnity granted or arising under legislation relating to tax or corporate law under which any member of the Group assumes general liability for the obligations of another member of the Group;

"Intellectual Property" means:
		
	(a)
	any patents, trade marks, service marks, designs, business names, copyrights, database rights, design rights, domain names, moral rights, inventions, confidential information, knowhow and other intellectual property rights and interests (which may now or in the future subsist), whether registered or unregistered; and

		
	(b)
	the benefit of all applications and rights to use such assets of each member of the Group (which may now or in the future subsist).

"Italian Subsidiary" means Sorin Group Italia srl, a company incorporated in Italy;
"Legal Reservations" means:
		
	(a)
	the principle that equitable remedies may be granted or refused at the discretion of a court and the limitation of enforcement by laws relating to insolvency, reorganisation and other laws generally affecting the rights of creditors;

		
	(b)
	the time barring of claims under the Limitation Acts, the possibility that an undertaking to assume liability for or indemnify a person against non‐payment of UK stamp duty may be void and defences of set‐off or counterclaim;

		
	(c)
	similar principles, rights and defences under the laws of any jurisdiction in which the Borrower conducts its business; and

		
	(d)
	any other matters which are set out as qualifications or reservations as to matters of law of general application specifically referred to in any legal opinion referred to in Schedule 5 (Conditions Precedent) to this Term Sheet;

"Material Adverse Effect" means a material adverse effect on:
		
	(a)
	the business, operations, property or financial condition of the Group taken as a whole; or

		
	(b)
	the ability of the Borrower to perform its payment obligations under the Finance Documents and/or its obligations under Schedule 2 (Financial Undertakings) to this Term Sheet; or

		
	(c)
	the validity or enforceability of the Finance Documents or the rights or remedies of any Finance Party under any of the Finance Documents;

"Material Subsidiaries" means, at any time, a Subsidiary of the Borrower which:
		
	(a)
	is listed in Schedule 7 (Material Companies) to this Term Sheet; or

		
	(b)
	has an operating profit representing 10 per cent or more of the consolidated operating profit of the Group (determined in accordance with US GAAP) or has turnover (excluding intra‐group items) representing 10 per cent, or more of the turnover of the Group, calculated on a consolidated basis.

Compliance with the conditions set out in paragraph (b) above shall be determined by reference to the latest consolidated financial statements of the Group.  However, if a Subsidiary has been acquired since the date as at which the latest consolidated financial statements of the Group were prepared, the financial statements shall be deemed to be adjusted in order to take into account the acquisition of that Subsidiary;
"Original Financial Statements" means the audited consolidated financial statements of the Group for the financial year ended 31 December [2017/2018];
"Permitted Acquisition" means:
		
	(a)
	a Permitted Share Buyback; 

		
	(b)
	an acquisition for cash consideration of all or the majority of the issued share capital of a limited liability company, but only if:

		
	(i)
	no Event of Default is continuing on the closing date for the acquisition or would occur as a result of the acquisition;

		
	(ii)
	the acquired company, business or undertaking is engaged in a business substantially the same as (or ancillary or related to) that carried on by the Group; 

		
	(iii)
	the consideration (including associated costs and expenses) for the acquisition and any Financial Indebtedness or other assumed actual or contingent liability, remaining in the acquired company (or any such business) at the date of acquisition (the "Individual Purchase Price") when aggregated with the consideration (including associated costs and expenses) for any other acquisition permitted under this Agreement and any Financial Indebtedness or other assumed actual or contingent liability, remaining in any such acquired companies or businesses at the time of acquisition (the "Total Purchase Price")) does not exceed USD 280,000,000 or its equivalent in aggregate over the life of the Facility.

Any acquisition whose Individual Purchase Price exceeds USD 75,000,000 or its equivalent will only be permitted under paragraph (b) above if the Borrower has delivered to the Agent not later than 30 Business Days before legally committing to make such acquisition a certificate signed by two directors of the Borrower to which is attached a copy of the latest audited accounts (or if not available, management accounts) of the target company or business.
Such certificate must give calculations showing in reasonable detail that the Borrower would have remained in compliance with the financial covenants set out in Schedule 2 (Financial Undertakings) to this Term Sheet if the covenant test was recalculated for the relevant period ending on the most recent Accounting Date consolidating the financial statements of the target company (consolidated if it has Subsidiaries) or business with the financial statements of the Group for such period on a pro forma basis and as if the consideration for the proposed acquisition had been paid at the start of that period.
"Permitted Guarantee" means:
		
	(a)
	any guarantee comprising a netting or set‐off arrangements entered into by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances;

		
	(b)
	any indemnity given in the ordinary course of the documentation of an acquisition which is a Permitted Acquisition which indemnity is in a customary form and subject to customary limitations;

		
	(c)
	the guarantee of any Financial Indebtedness permitted by this Agreement; or

		
	(d)
	any Excluded Guarantee;

"Permitted Loan" means any Financial Indebtedness or loan made by a member of the Group:
		
	(a)
	to another member of the Group; or

		
	(b)
	to any other entity (i) in which a member of the Group holds a beneficial interest and (ii) which carries on the same or substantially similar business to the Group, provided such Financial Indebtedness or loans are approved by the board of directors of the Borrower and, in aggregate for those made in any financial year, do not exceed USD 50,000,000 or its equivalent;

"Permitted Receivables Disposal" means:
		
	(a)
	any factoring programme with recourse (pro solvendo) or without recourse (pro soluto) of receivables of the Group which is in existence at the date hereof; 

		
	(b)
	any securitisation and/or factoring programme of the receivables of the Group consented to by Agent (acting on the instructions of the Majority Lenders (acting reasonably));  and/or

		
	(c)
	any disposal of receivables  not otherwise permitted under paragraphs (a) or (b) above where the net consideration receivable (when aggregated with the consideration for all such other receivables disposed of) does not exceed USD 40,000,000 in any financial year;

"Permitted Security" means:
		
	(a)
	any Security listed in Schedule 8 (Existing Security) to this Term Sheet except to the extent the principal amount secured by that Security exceeds the amount stated in that schedule;

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

		
	(c)
	any payment or close out netting or set‐off arrangement pursuant to any hedging transaction entered into by a member of the Group for the purpose of:

		
	(i)
	hedging any risk to which any member of the Group is exposed in its ordinary course of trading; or

		
	(ii)
	its interest rate or currency management operations which are carried out in the ordinary course of business and for non‐speculative purposes only,

excluding, in each case, any Security under a credit support arrangement in relation to a hedging transaction;
		
	(d)
	any lien arising by operation of law and in the ordinary course of trading;

		
	(e)
	any Security over or affecting any asset acquired by a member of the Group after the date of this Agreement if:

		
	(i)
	the Security was not created in contemplation of the acquisition of that asset by a member of the Group;

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

		
	(iii)
	the Security is removed or discharged within two months of the date of acquisition of such asset;

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

		
	(i)
	the Security was not created in contemplation of the acquisition of that company;

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

		
	(iii)
	the Security is removed or discharged within two months of that company becoming a member of the Group;

		
	(g)
	any Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a member of the Group in the ordinary course of trading and on the supplier's standard or usual terms and not arising as a result of any default or omission by any member of the Group; or

		
	(h)
	any Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any permitted under paragraphs (a) to (g) above) does not exceed USD 15,000,000 (or its equivalent in another currency or currencies);

“Permitted Share Buyback” means any share buyback occurring at any time on or after the date falling 18 Months after the date of the Agreement provided that at that time (a) the aggregate principal amount of the Loans outstanding does not exceed USD 200,000,000 and (b) the ratio of Consolidated Net Financial Indebtedness to Consolidated EBITDA does not exceed 1.5 times.
"Permitted Transaction" means:
		
	(a)
	a merger between the Borrower and any Subsidiary that is consolidated within the consolidated financial statements of the Borrower, provided that the Borrower is the surviving entity;

		
	(b)
	any solvent amalgamation or merger among members of the Group which are not the Borrower; or

		
	(c)
	the solvent liquidation or reorganisation of any member of the Group which is not the Borrower so long as any payments or assets distributed as a result of such liquidation or reorganization are distributed to other members of the Group;

"Restricted Party" means a person that is:
		
	(a)
	listed on, or owned or controlled by a person listed on, a Sanctions List, or a person acting on behalf of such a person;

		
	(b)
	located in or organised under the laws of a country or territory that is the subject of country‐wide or territory‐wide Sanctions, or a person who is owned or controlled by, or acting on behalf of such a person; or

		
	(c)
	otherwise a subject of Sanctions;

"Sanctions" means any trade, economic or financial sanctions laws, regulations, embargoes or restrictive measures administered, enacted or enforced by a Sanctions Authority;
"Sanctions Authority" means:
		
	(a)
	the United Nations;

		
	(b)
	the United States of America;

		
	(c)
	the European Union;

		
	(d)
	the United Kingdom of Great Britain and Northern Ireland; and

		
	(e)
	the governments and official institutions or agencies of any of paragraphs (a) to (d) above, including OFAC, the US Department of State, and Her Majesty's Treasury;

"Sanctions List" means the Specially Designated Nationals and Blocked Persons list maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by Her Majesty's Treasury, or any similar list maintained by, or public announcement of a Sanctions designation made by, a Sanctions Authority, each as amended, supplemented or substituted from time to time;
"Subsidiary" means in relation to any company or corporation, a company or corporation:
		
	(a)
	which is controlled, directly or indirectly, by the first mentioned company or corporation;

		
	(b)
	more than half the issued share capital (which gives rise to voting rights) of which is beneficially owner, directly or indirectly, by the first mentioned company or corporation; or

		
	(c)
	with is a Subsidiary of another Subsidiary of the first mentioned company or corporation,

and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs, exercise a dominant influence over it and/or to control the composition of its board of directors or equivalent body and is fully consolidated in the consolidated financial statements on a line‐by‐line basis for such period;
"US GAAP" means generally accepted accounting principles in the United States of America, as promulgated, from time to time, by the Financial Accounting Standards Board;
Schedule 7 
Material Companies
LIVANOVA USA INC, USA
SORIN GROUP ITALIA SRL
LIVANOVA JAPAN K.K.
LIVANOVA AUSTRALIA PTY LIMITED
LIVANOVA CANADA CORP.

Schedule 8
Existing Security
	
			
	GROUP MEMBER
	SECURITY
	TOTAL PRINCIPAL AMOUNT OF INDEBTEDNESS SECURED

	Sorin Group Italia Srl
	Mortgage
	€210,526

	Sorin Group Italia Srl
	Mortgage
	€325,926

- 8 -    

EU-DOCS\23679229.8

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