ARCHIVED: this Practice Note is no longer maintained as it covers the implementation of EU free movement law in the UK prior to IP completion day, on which date domestic legislation implementing EU free movement law was revoked, subject to certain savings and modifications. For further details, including of the relevant savings and the position of CJEU case law, see Practice Note: Brexit and the end of EU free movement law in the UK. The Practice Note has been retained in archived form for historical interest, because EU law as previously implemented in the UK remains relevant in certain limited situations. For historical versions of the Immigration (European Economic Area) Regulations 2016, SI 2016/1052, including immediately prior to revocation, see Legislation.gov.uk. For the ongoing development of EU free movement law in EU Member States, see: Immigration, employment & share incentives (EU Law)—overview. This Practice Note covers the circumstances where PR can be acquired early by European Economic Area (EEA) nationals and their family members residing in the UK under EU free movement law. Throughout

A supply of goods, or a transaction treated as a supply of goods, which involves the removal of goods from one EU member state to another.

An accounting methodology where a buyer incorporates acquired assets and liabilities in its balance sheet at the date of acquisition, with any difference between the price paid and the fair value of the net assets acquired being purchased goodwill.

Acquisition agreements are intended for use in circumstances where a company is acquiring from the owner of a film the rights in a number of separate media for a designated territory.

ARCHIVED: This Practice Note has been archived and is not maintained. The Investigatory Powers Act 2016 (IPA 2016) provides the main legal framework governing the use of covert surveillance by public bodies. The provisions which govern the acquisition and disclosure of communications data are contained within IPA 2016, Pts 2 and 3 and repealed the provisions relating to the interception and acquisition of communications data contained in Regulation of Investigatory Powers Act 2000 (RIPA 2000). For information on the acquisition and use of communications data under IPA 2016, see Practice Notes: Acquisition, retention and disclosure of communications data under the Investigatory Powers Act 2016 and Interception of communications under the Investigatory Powers Act 2016. For information on the scope of IPA 2016 generally, see Practice Note: The regulation of intelligence gathering—an introductory guide. Communications data Regulation of Investigatory Powers Act 2000 (RIPA 2000) set out a framework for the requisition, provision and handling of communications data. This statutory framework places duties on those who deal with communication data. The

This Practice Note is part of the Lexis+® UK Corporate Private equity buyout transaction collection. Timing Preparation of a first draft of the share purchase agreement (SPA) can begin at any time after the main commercial transaction terms have been agreed and the heads of terms (for the acquisition component of the transaction) have been signed. The due diligence and disclosure process will run concurrently with the drafting and negotiation of the SPA. The earlier that substantive due diligence is conducted by the private equity investor, the sooner the findings of the due diligence can inform the negotiation of appropriate warranty and indemnity cover in the SPA for the buyer. Generally, save in situations of an auction sale, the investor's lawyers will prepare the first draft of the SPA and submit it to the seller's lawyers for mark-up. Drafts will pass to and fro up until exchange (signing of the SPA), which will be in advance of completion if there are conditions to completion or simultaneous with completion if there are no conditions

Those expenses incurred by the life company in the prospecting and establishment of its new business policies.

A source of external finance obtained by the acquiring company to fund an acquisition. This can be in the form of bank debt and/or equity, such as a share issue.

On an acquisition finance transaction, the borrowing group, in addition to the debt (whether loans or bonds) required to fund the transaction, will typically need other types of bank facilities. These may include, for example, an overdraft, stand-by letter of credit facility or foreign exchange facility and can often all be provided under the umbrella of a revolving credit facility (RCF) in the senior facilities agreement (SFA). The RCF will normally be able to be drawn in three different ways: • in cash (in the form of revolving loans) • as syndicated non-cash facilities, eg letters of credit—these will be specified in the documentation, and • in the form of bilateral facilities known as ancillary facilities Unlike a revolving credit facility drawn in cash, ancillary facilities are not normally of a type that would be suitable for dividing up amongst several lenders. The documentation therefore caters for them to be provided bilaterally. For more information on the revolving credit facility, in particular how revolving loans work, see Practice Note: Senior facilities. This

Any transaction that involves more than one class of creditor will typically need an intercreditor agreement to be put in place. The arrival of different kinds of financing structures and types of debt, including bank/bond structures and unitranche facilities, has given rise to a greater variety of intercreditor arrangements. This Practice Note: • gives a basic introduction to the common creditor classes in leveraged finance transactions • explains their key rights and controls under a typical leveraged intercreditor agreement, and • sets out some common structures and creditor combinations The Loan Market Association (LMA) intercreditor agreements are often used as a starting point for documenting intercreditor arrangements in leveraged finance transactions. The LMA had developed intercreditor agreements for: • leveraged finance transactions involving senior and mezzanine debt • leveraged finance transactions involving a super senior revolving facility and senior secured notes • leveraged finance transactions involving a super senior revolving facility and both senior secured and high yield notes, and • leveraged finance transactions involving a super senior revolving facility and term

This Practice Note provides a basic introduction to the key parties and documents involved in an acquisition finance transaction together with links for more detailed information. For an introductory guide to acquisition finance, see Practice Note: Introductory guide to acquisition finance. For a glossary of acquisition finance terms and jargon, see the Glossary of acquisition finance terms and jargon. Key parties in an acquisition finance transaction The parties to an acquisition finance transaction will depend on the nature and structure of the transaction and how it is funded. This Practice Note provides information on: • the buyer, ie the private equity house (sponsor) and special purpose vehicles (SPV) through which it makes the purchase • seller • debt providers, and • the target and its subsidiaries Purchaser Sponsor The sponsor is the private equity firm that provides the equity portion of the funding needed for the purchase. The sponsor may be captive, ie part of a large institution such as a bank. Alternatively, it can be independent, ie owned and managed by senior

It is common for facility agreements to require the borrower(s) to prepay all or part of the facility on the occurrence of certain events, known as mandatory prepayment events. For a general discussion of common mandatory prepayment events, see Practice Note: Repayment, prepayment and cancellation. Leveraged facilities agreements have traditionally contained a more extensive list of mandatory prepayment events than an investment grade loan agreement. Mandatory prepayment events on leveraged finance transactions have typically included: • illegality—where it becomes illegal for a lender to continue to fund its participation, this triggers mandatory prepayment of that lender's participation • change of control/exit—where the sponsor(s) no longer controls the business, this triggers mandatory prepayment of all the facilities (see Acquisition finance—mandatory and voluntary prepayment clauses below) • receipt by the group of disposal proceeds, proceeds of insurance claims and proceeds of claims under acquisition documents (proceeds)—this obliges the group to apply the proceeds towards prepayment of the facilities (subject to exceptions) (see Proceeds below), and • excess cashflow in the group as evidenced