Cap. 505 ст. 5include the of each of the Adjusted Guarantor is for of the relevant shall, pending repayment of all balance of the which Borrowers and their issuance of under this a Borrower of a available to meet issued by Guarantors which Adjusted the shortfall, and that additional 5(3). approve and appropriate

CREDIT ENHANCEMENT, LIQUIDITY AND TREASURY

(1) The credit enhancement for the EFSF Programme shall following elements:

(a) the Guarantees and, in particular, the fact that the participation Guarantor in issuing Guarantees shall be made on the basis Contribution Key Percentage and that the Guarantee issued by each 120% of its Adjusted Contribution Key Percentage of the amounts Funding Instruments;

(b) the Cash Reserve shall act as a cash buffer. The Cash Reserve its use, be invested in high quality liquid debt instruments. Upon Loans made by EFSF and Funding Instruments issued by EFSF, the Cash Reserve shall be used firstly to repay any amounts paid by Guarantors have not been repaid out of recoveries from the relevant underlying secondly, shall be paid to the Guarantors as consideration for Guarantees under this Agreement as described in Article 2(9); and

(c) such other credit enhancement mechanisms as may be approved Article 5.

(2) In the event that there is a delay or failure to pay by payment under a Loan and accordingly there is a shortfall in funds a scheduled payment of interest or principal under a Funding Instrument EFSF then EFSF shall:

(a) first, make a demand on a pro rata pari passu basis on the have guaranteed such Funding Instrument up to 120% of their respective Contribution Key Percentage of the amount due but unpaid;

(b) second, if the steps taken in Article 5(2)(a) do not fully cover to release an amount from the Cash Reserve to cover such shortfall;

(c) third, take such other steps as may be available in the event credit enhancement mechanisms have been approved under Article

(3) The euro-area Member States may by unanimous decision adopt such other credit enhancement mechanisms as they consider the case may be, modify the existing credit enhancement mechanisms enhance or to maintain the creditworthiness of the Funding Instruments Guarantor has failed to make a payment which is due and payable in Guarantee and, as a consequence EFSF makes a withdrawal from the cover the shortfall pursuant to Article 5(2)(b) then such Guarantor such amount to EFSF on first written demand together with interest at a rate equal to one month EURIBOR plus 500 basis points from amount is withdrawn from the Cash Reserve to the date such Guarantor amount to EFSF together with such accrued interest. EFSF shall reimbursed amounts (and the interest accrued thereon) to replenish the to facilitate the availability of adequate liquidity for the funding euro-area Member State will ensure that EFSF will be eligible for counterparty limit for cash management operations of the debt operations of the debt management agency of such euro-area Member euro-area Member State shall co-operate to assist EFSF to ensure that Instruments comply with applicable criteria to be eligible as collateral in operations. to minimise any negative-carry costs in the event of any Diversified EFSF shall be entitled to make deposits or other placements which, with the investment strategy agreed by the board of directors of EFSF, of a funding mis-match or negative-carry costs. CLAIMS UNDER A GUARANTEE

becomes aware that it has not received in full a scheduled payment and such shortfall will give rise to a shortfall in available funds to payment of principal or interest under Funding Instruments issued scheduled payment due from EFSF under any other instrument or benefits from a Guarantee issued under this Agreement, it shall notify in writing the Chairman of the Eurogroup Working Group, the each Guarantor and inform each Guarantor of its share of the the terms of this Agreement and the relevant Guarantee and demand Guarantor to remit to EFSF its share of such shortfall on the date (the Payment Date") which is at least two (2) Business Days prior to the for payment of the relevant amounts by EFSF (an "EFSF Guarantee

Guarantor shall remit to EFSF (or, if so specified in the relevant to the paying agent of the relevant Funding Instrument) its share of demanded in the EFSF Guarantee Demand addressed to it by EFSF in the Guarantee Payment Date.

event that EFSF fails to pay a scheduled payment of interest or a payment of principal on a date when such amount is due and payable Funding Instrument issued by EFSF then the relevant Noteholder shall be entitled to demand in writing (a "Noteholder Guarantee Demand") the Guarantors (with a copy to EFSF) to pay amount of such scheduled payment of interest and/or such scheduled principal. Similarly, in the event of a failure by EFSF to pay a scheduled entitled to demand in writing (a "Counterparty Guarantee Guarantors (with a copy to EFSF) the unpaid amount of such scheduled the event of receipt by the Guarantors and EFSF of a Noteholder Guarantee Demand or a Counterparty Guarantee Demand each Guarantor accordance with the terms of its Guarantee remit in cleared funds amount duly demanded in such Noteholder Representative Guarantee the case may be such Counterparty Guarantee Demand. The detailed mechanics for co-ordinating payments under the Guarantees shall documentation for the issue of Funding Instruments and the related

(4) In the event that a shortfall of receipts under a Loan gives EFSF Guarantee Demand and a Noteholder Representative Guarantee Counterparty Guarantee Demand) the relevant Guarantors shall make one payment under their respective Guarantees, without double

(5) The Parties acknowledge and agree that each Guarantor shall make payment in respect of any EFSF Guarantee Demand, Representative Guarantee Demand or Counterparty Guarantee appears to be valid on its face without any reference by it to EFSF or or any other investigation or enquiry. EFSF irrevocably authorises each comply with any Guarantee Demand.

(6) EFSF and each of the other Parties acknowledges and Guarantor:

(i) is not obliged to carry out any investigation or seek any confirmation to paying a claim;

(ii) is not concerned with:

(1) the legality of a claim or any underlying transaction defence or counterclaim which may be available to any

(2) any amendment to any underlying document; or

(3) any unenforceability, illegality or invalidity of any security.

(7) EFSF shall be liable to reimburse each Guarantor in respect paid in respect of a Guarantee and shall indemnify each Guarantor loss or liability incurred by a Guarantor in respect of a Guarantee. reimbursement obligation is subject to and limited to the extent received from the underlying Borrowers in respect of the Loans which shortfall of funds.

(8) In addition to the reimbursement obligation of EFSF under Guarantor makes a payment under its Guarantee, EFSF shall assign the relevant Guarantor an amount of EFSF’s rights and interests under Loan corresponding to the shortfall in payments made by the Borrower related payment made by the Guarantor under the Guarantee. EFSF servicer of such portion of the Loan which has been assigned and relevant Guarantor so as to facilitate the co-ordinated management the treatment of all Guarantors on a pari passu basis.

(9) All Guarantors shall rank equally and pari passu amongst particular in respect of reimbursement of amounts paid by them under Article 7(1) in priority to being applied to reimburse such

CONTRIBUTION BETWEEN GUARANTORS

Guarantor meets claims or demands in respect of any Guarantee it incurs costs, losses, expenses or liabilities in connection therewith Liabilities"), and the aggregate amount of Guarantee Liabilities it exceeds its Required Proportion for the given Guarantee then it shall indemnified and receive contribution, upon first written demand, Guarantors, in respect of such Guarantee Liabilities such that each ultimately bears only its Required Proportion of such aggregate Guarantee provided that if the aggregate Guarantee Liabilities of any Guarantor in Guarantee is not reduced to its Required Proportion within three (3) the other Guarantors (excluding Stepping-Out Guarantors) shall Guarantor in an amount such that the excess over the Required allocated to each of the Guarantors (excluding Stepping-Out Guarantors) basis. The "Required Proportion" is equal to the Adjusted Percentage applicable to the relevant Guarantee. Any indemnity or payment from one Guarantor to another under this Article 7 shall bear equal to one month EURIBOR plus 500 basis points which shall date of demand of such payment to the date such payment is Guarantor.

provisions of this Article 7 shall apply mutatis mutandis if a euro-area issues any Guarantees according to an Adjusted Contribution Key excess of that which would apply to it once 100% Total Guarantee have been obtained provided that the term "Guarantor" shall include Member State which has not yet provided its Commitment prior to EFSF issuing or entering into the relevant Funding Instrument. obligations of each Guarantor to make contributions or indemnity this Article are continuing obligations which extend to the ultimate due regardless of any intermediate payment or discharge in whole or indemnity and contribution obligations of any Guarantor under this be affected by any act, omission, matter or thing which, but for this reduce, release or prejudice any of its obligations under this Article limitation and whether or not known to it or any other person) including: waiver or consent granted to, or composition with, any person; release of any person under the terms of any composition or taking, variation, compromise, exchange, renewal or release of, or to perfect, take up or enforce, any rights against, or security over person; or any non-presentation or non-observance of any formality or in respect of any instrument or any failure to realise the full value incapacity or lack of power, authority or legal personality of or change in the members or status of any person;

(vii) any insolvency or similar proceedings.