NAMA BUSINESS PLAN – VERSION 2 LEGAL CONSIDERATIONS

1. NAMA BUSINESS PLAN – VERSION 2LEGAL CONSIDERATIONS March 2011

2. NAMA Debtor Business Plan Requirements • Important statement in NAMA Debtor Business Plan Requirements introduction section: • “The Business Plan documentation should be completed in utmost good faith with full disclosure of full facts, assumptions and issues likely to influence NAMA in reaching a decision on a course of action regarding a business/property/asset/loan facility”* • Serious statement of obligations imposed upon NAMA Debtors (and their advisers) in-completing Business Plans. *Debtor Business Plan Version 2 – Guidance Note 2

3. Definitions • “Debtor” • “a person who is or was indebted or obligated to a Participating Institution under or in connection with a credit facility” [Section 4 of NAMA Act] • “Group” • Insofar as it relates to a Debtor, includes all entities wherever resident, whether wholly or partly owned that share the same Ultimate Beneficial Owner as the Debtor.

4. Definitions • “Ultimate Beneficial Owner” • Same meaning as in anti-money-laundering provisions* • An individual ultimately holding (directly or indirectly) 25% of the voting rights or capital of an entity (corporate, partnership or trust) or who otherwise exercises control over Management of the entity = Control = Beneficial Ownership. • It is intended to look through trusts, trustees, fund structures, joint ventures, partnerships, connected and related parties and similar to identify the ultimate controlling beneficiary(ies). *see Sections 26, 27 and 28 of the Criminal Justice (Money Laundering and Terrorist Financing) Act 2010 (ROI) and Regulation 6 of The Money Laundering Regulations 2007 (UK)

5. Definitions • “NAMA Loans” • loans to Debtors by Participating Institutions. • “Non-NAMA Loans” • loans to Debtors by Non-Participating Institutions.

6. Definitions • “Related Parties” - includes but not limited to: • family members such as spouses, parents, brothers, sisters, and/or children; • persons related through marriage to the Debtor; • spousal equivalent persons; • persons acting as trustees of any trust, the principal beneficiaries of which are the Debtor, the Debtor’s spouse or any of his/her children or any body corporate which he/she controls; • persons in partnership or joint venture with the Debtor, bodies corporate controlled by the Debtor and any subsidiaries or related companies of such bodies corporate, any shareholders in such companies

7. Asset Description and location Asset Description and location Bank Bank Debt (Limit and drawn balance) Debt (Limit and drawn balance) Value (Basis and date) Value (Basis and date) Net Value Net Value Derivative details/ exposure Derivative details/ exposure Annual Income Annual Income Annual debt servicing (IRU/IO/C&I) Annual debt servicing (IRU/IO/C&I) Property Costs Property Costs Surplus Cash Surplus Cash Ownership/ Debtor % Ownership/ Debtor % Statement of Affairs • Largely a consolidation of other information detailed elsewhere in the business plan, namely: • 1. NAMA held assets and liabilities • 2. Other bank/lender held assets and liabilities

8. Total Value Total Liability Net Value Total Income Total Repayment Total Property Costs Surplus Cash Statement of Affairs • Unencumbered assets including pension funds – Same information as 1&2 (excluding debt information). • Any other assets (and liabilities) in which Debtor or related entity has legal or beneficial interest (same information as 1 & 2). • Other income (all other income not identified in tables above) – Surplus Cash • Overall connection net worth and liquidity position • Contingent liabilities (including personal/corporate guarantees)

9. Statement of Affairs • Other liabilities (Tax, Creditor, Other) • Asset transfers (property, cash, shares in private companies, etc) to third parties in the past five years • Excluding arm’s-length transactions • in good faith • to independent unconnected third parties • for valuable consideration at full open market value • Including all transfers to family and/or Related Parties)

10. Statement of Affairs Statutory Declaration • Solemn and sincere declaration • Statutory Declarations Act 1938 (ROI) • Statutory Declarations Act 1835 (UK) • Made to best of Debtor’s knowledge and belief having undertaken all prudent and diligent enquiries to establish such knowledge and belief

11. Statutory Declaration confirms that SOA contains full and accurate details of: • assets owned by Debtor or in which Debtor holds any form of ownership interest whatsoever, whether partial, beneficial, legal or otherwise and whether encumbered in any form or unencumbered, including pension funds; and • liabilities incurred or owing by Debtor of whatsoever nature, whether actual, contingent, deferred or otherwise; and • transfers of assets of whatsoever nature within the past 5 years (save for cases where assets have transferred at arm’s length, to independent, unconnected third parties and for valuable consideration at full open market value) from Debtor in whatsoever capacity to or from third parties and/or Related Parties

12. Statement of Affairs Statutory Declaration (cont’d) Debtor satisfied that: • there are no assets, liabilities, forms of income or otherwise of whatsoever nature to which Debtor is entitled or which have been incurred by Debtor other than those disclosed in SOA • there have been no further transfers of assets (save for arm’s length transfers, as above) to or from Debtor within the past five years • All particulars given in SOA “are true and accurate and stated correctly and comprehensively”

13. Statement of Affairs Statutory Declaration - Consequences of non-disclosure • Statutory Declaration verifying SOA content has serious legal implications • Any person who knowingly and wilfully makes a statement in a statutory declaration which is false in a material respect shall be guilty of an offence which potentially gives rise to a criminal prosecution resulting in the imposition of a fine or a term or imprisonment (max. 2 years), or both.* • NAMA response to false SOA? *Perjury (Northern Ireland) Order 1979, Article 10

14. Statement of Affairs • Notes on completion of SOA • Additional rows to tables may be added as necessary to ensure full declaration • Unencumbered assets are assets that do not have debt attaching and (a) which have not been provided as security to any other body and (b) are not listed in SOA under “NAMA Held Assets & Liabilities” or “Other Bank/Lender Held Assets & Liabilities” • Pension funds are to be detailed under “Unencumbered Assets”. Pension funds are deemed to be any pension or retirement fund that is approved by (ROI) Pensions Board and/or Financial Regulator – but remember “utmost good faith” requirement

15. Statement of Affairs • Notes on completion of SOA • All monetary amounts to be stated in Euro/€ - in Notes to SOA, the exchange rate used should be highlighted • Assets are not limited to property assets and are to include any legal or beneficial interest that the Debtor or Related Party may have in any other asset, whether or not that asset is deemed to have a value in the current market. Assets include, but are not limited to, property/land, shareholdings (private or public), pension funds, trust funds, cash/securities/bonds, family home, chattels, artwork

16. Statement of Affairs • Where assets have been transferred, in the past five years, to third parties (save for arm’s length transactions, as above) NAMA requires SOA for the beneficiary of the transfer to be provided • Additional explanatory notes can be appended to the SOA to provide further information on specific assets/liabilities as considered necessary. NAMA reserves the right to seek such further explanatory notes as it deems appropriate Comment: SOA = self assessment, but with teeth.

17. Legal Considerations – BPv2 Template Section 10 • Debtor must provide: • “10.1 A detailed legal structure chart for the Debtor, including any holding companies, all wholly and partially owned subsidiaries and holdings in other structures such as joint ventures, consortiums, partnerships etc, if any. The chart should list the correct legal name of entity, the entity number assigned in the NAMA Information Pack, its jurisdiction of incorporation and ownership percentage, incorporating the ultimate beneficial owner, related entities and assets. • 10.2 All security, (including, but not limited to: debentures, mortgages/charges and guarantees) the Debtor and related entities have granted, and the parties to whom they have granted such security. This information should be mapped onto the legal structure chart referenced in point 10.1 above.

18. Legal Considerations – Section 10 • 10.3 A schedule of each jurisdiction in which the Debtor conducts business and where companies incorporated in such jurisdictions are used, evidence of due incorporation/registration in that jurisdiction, together with (if available) any legal opinions confirming the ability of such companies to grant security. • 10.4 Details of any insolvency or similar proceedings that have already commenced, or are expected to commence or have been threatened with regard to the Debtor, any holding companies, its subsidiaries/related entities or any of its shareholders or directors. Whether any advice has been sought with regard to the above (either legal or insolvency specific).”

19. Legal Themes Running Through Business Plan • Litigation pending or threatened. • Insolvency action pending or threatened by creditors. • Details of Advice (legal and insolvency) received on creditor pressure. • Taxation issues including resting on contract, SPV, offshore structures, etc. • Details of personal guarantees given on NAMA and Non-NAMA loans. • Details of sales by group entities in last five years for benefit of UBO. • Details of director’s loans and borrowings of directors secured on assets of or guaranteed by Debtor – compliance with Company Law?

20. Legal Themes Running Through Business Plan • Relevant legal title analysis reports of significance to be furnished as part of the Business Plan • Details on Pensions. • Companies Registration Office (or equivalent) information on all corporate members of Debtor group. • Details of all security (debentures, mortgages, charges, guarantees) granted by Debtor and connected parties mapped into legal structure chart. • Details of any Court Judgments registered against any legal entity comprised within the Debtor group.

21. Other Provisions of NAMA Act Likely to be Relevant • Section 99 – NAMA to have rights of credit institutions after acquisition of Bank Assets. • Section 101 - Enforcement of representations, consents, undertakings, obligations (“RCUO”) in favour of Debtor. • Non-disclosure to NAMA in writing during DD process. • Not reduced to writing on P.I.’s file • RCUO would affect creditor’s rights against the asset then RCUO unenforceable against or by NAMA, but enforceable against P.I.

22. Other Provisions of NAMA Act Likely to be Relevant • Section 172 – Disposal of Land • Section 172(1) – Notice to NAMA of certain land dealings. • Applies to NAMA debtor • Who wishes to sell other land which is of material benefit to the land charged to NAMA. • Must give reasonable prior notice of disposal to NAMA. • Failure to give notice potentially renders transaction voidable except against a bona fide purchaser for value.

23. Other Provisions of NAMA Act Likely to be Relevant • Section 211 – Avoidance of certain transactions. • Asset of debtor, etc. disposed of. • Effect of disposition was to defeat delay or hinder NAMA acquisition of assets or the value of assets, etc. • High Court may declare disposals void if just and equitable but having regard to interests of bona fide purchaser for value. • Other creditor protection provisions of Companies and Insolvency legislation.

24. Thank you Rowan White, Partner +44 28 9026 2665 rowan.white@arthurcox.com