ARRANGERS' COMMITMENT LETTER
31 May 2000
Koninklijke Numico N.V.
Rokkeveenseweig 49
2712 PJ Zoetermeer
PO Box 1
Zoetermeer
The Netherlands
Attention: Philip van Randwijk
Dear Sirs,
EURO 1,050,000,000 SHORT TERM BRIDGE FACILITY (THE "FACILITY")
COMMITMENT LETTER
You have advised us that Koninklijke Numico N.V. (the "PARENT") desires
to establish the Facility, the proceeds of which will be used by the Parent as a
bridge loan for:
(a) the proposed issue of new ordinary shares in the
Parent for an amount of approximately Euro 450,000,000 (the "EQUITY ISSUE"); and
(b) the Euro denominated convertible subordinated bonds
convertible into depositary receipts of shares of and issued by the Parent in a
principal amount of approximately Euro 700,000,000 (the "CONVERTIBLE BOND").
1. COMMITMENT TERMS. Deutsche Bank AG ("DEUTSCHE BANK"), ING Bank
N.V. ("ING") and Salomon Brothers International Limited ("SBIL") (each an
"ARRANGER" and together the "ARRANGERS") are pleased to inform you of each of
their agreement to act as arrangers of the Facility and ING, Deutsche Bank and
Citibank, N.A. ("CITIBANK") are pleased to inform you of their commitments to
provide, either by themselves or by one of their affiliates (as set out below)
(each an "UNDERWRITER" and together the "UNDERWRITERS"), the entire amount of
the Facility, subject to the terms and conditions described in this Commitment
Letter and the attached Summary of Terms and Conditions (the "TERMS AND
CONDITIONS"). This Commitment Letter should be read in conjunction with the fee
letter (the "FEE LETTER") and the agency fee letter (the "AGENCY FEE LETTER")
each dated the same date as this Commitment Letter (together the "FEE LETTERS").
This Commitment Letter, the Terms and Conditions, the Fee Letter and the Agency
Fee Letter are referred to collectively as the "COMMITMENT DOCUMENTS". Terms
defined in the Terms and Conditions shall unless otherwise defined, have the
same meaning herein.
Each Underwriter severally commits to underwrite the amount set forth
below:
UNDERWRITER FACILITY
Citibank Euro 350,000,000
Deutsche Bank Euro 350,000,000
ING Euro 350,000,000
TOTAL Euro 1,050,000,000
The commitment of each Underwriter is several and failure by one
Underwriter to perform its obligations hereunder shall not prejudice the rights
of any other Underwriter. Each Underwriter may, except as otherwise stated,
enforce its rights separately. No Underwriter shall be responsible for the
obligations of any other Underwriter.
2. CONDITIONS PRECEDENT. Each of the Arrangers' respective
agreement and each of the Underwriters' respective commitment hereunder is
subject to: (i) the preparation, execution and delivery of mutually acceptable
loan documentation, including a credit agreement (the "CREDIT AGREEMENT")
incorporating, INTER ALIA, the terms and conditions outlined in the Terms and
Conditions (which set out the material commercial terms of the Credit
Agreement); (ii) in the Arrangers' and the Underwriters' collective opinion, the
absence of a material adverse change in (A) the business, financial condition or
prospects of the Parent or the Parent and its subsidiaries taken as a whole
since 31 December 1999 and (B) the loan syndication, financial or capital market
conditions generally that, in the Arrangers' and the Underwriters' collective
opinion, would materially impair syndication of the Facility; (iii) the accuracy
and completeness in all material respects of the factual information contained
in the package of written information provided to each of the Arrangers and the
Underwriters and of all written factual information provided to the Arrangers
and the Underwriters hereafter and your compliance with the terms of the
Commitment Documents; (iv) the payment in full of all fees, expenses and other
amounts due and payable under the Fee Letters; and (v) in the opinion of each
Arranger and each Underwriter satisfactory arrangements have been put in place
in relation to the Equity Issue and the Convertible Bond.
3. COMMITMENT TERMINATION. Each Arrangers' respective agreement
and each Underwriters' respective commitment set forth under paragraph 1 of this
Commitment Letter will terminate on (a) if the Offer is not extended, the
earlier of the execution of the Credit Agreement and 9 June 2000 and (b) if the
Offer is extended, the earlier of the execution of the Credit Agreement and 21
Business Days after 3 June 2000. Prior to such date, this Commitment Letter may
be terminated (i) by you at any time at your option after payment of all fees,
expenses and other amounts then payable under the Commitment Documents or (ii)
by the Arrangers and the Underwriters if the Arrangers and the Underwriters
believe collectively that any condition set forth in paragraph 2 can no longer
be satisfied. The provisions of the Fee Letter and paragraphs 3, 4, 5 and 7
shall survive the expiration or termination of this Commitment Letter.
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4. INDEMNIFICATION.
4.1 Whether or not the Facility is consummated you hereby
indemnify and agree to hold harmless each Arranger, each Underwriter and each of
their affiliates and each of their respective officers, directors, employees,
agents, advisors and representatives (each, an "INDEMNIFIED PARTY") from and
against any and all claims, damages, losses, liabilities, costs and expenses
(including, without limitation, reasonable fees and disbursements of counsel),
joint or several, that may be incurred by or asserted or awarded against any
Indemnified Party by reason of that party acting in its capacity as an Arranger
or Underwriter (as the case may be), in each case arising out of or in
connection with or relating to any investigation, litigation or proceeding or
the preparation of any defence with respect thereto (each a "PROCEEDING"),
arising out of or in connection with or relating to the Commitment Documents,
whether or not such investigation, litigation or proceeding is brought by you,
any of your shareholders or creditors, an Indemnified Party or any other person,
or an Indemnified Party is otherwise a party thereto, except to the extent such
claim, damage, loss, liability, cost or expense results from such Indemnified
Party's negligence, wilful misconduct or any breach of the Commitment Documents
by the Indemnified Party.
4.2 Any Indemnified Party intending to invoke paragraph
4.1 shall give prompt notice in writing to you upon it becoming aware of any
actual or potential claim, damage, loss, cost or expense, and you shall
thereafter be entitled to be joined as party in any proceeding and/or to give
directions to the relevant Indemnified Party in relation to the conduct of such
proceeding PROVIDED THAT (i) you give prompt notice in writing of your intention
to give such directions to the Indemnified Party, (ii) you give such directions
taking into account at all times the business sensitivities and franchise
position of the Indemnified Party and (iii) you do not give directions in
respect of regulatory or supervisory proceedings of any governmental authority
or other similar proceedings.
4.3 No Indemnified Party shall settle, compromise,
consent to the entry of any judgement in or otherwise seek to terminate (each a
"SETTLEMENT") any such proceeding without your prior written consent (such
consent not to be unreasonably withheld or delayed, taking into account without
limitation the cost to you and that Indemnified Party of continuing, the likely
outcome of that proceeding and the adverse effects (actual or potential) on the
business interests and/or reputation of you and that Indemnified Party of not
settling). You shall not be liable to indemnify any Indemnified Party for any
settlement of any proceeding made or effected without your prior written
consent.
4.4 You will lose your right to give directions in
relation to any proceedings if (i) you breach any obligations hereunder or (ii)
at the written request of the Indemnified Party, and in respect of (ii) your
obligation to indemnify the Indemnified Party will cease on the date of such
request.
4.5 You further agree that no Indemnified Party shall
have any liability (whether direct or indirect, in contract, tort or otherwise)
to you or any of your shareholders or creditors for or in connection with the
transactions referred to above, except to the extent such liability results
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from such Indemnified Party's negligence, wilful misconduct or any breach of the
Commitment Documents by the Indemnified Party.
4.6 The Contracts (Rights of Third Parties) Act 1999
shall only apply to this paragraph 4 and only for the benefit of the Indemnified
Parties.
5. CONFIDENTIALITY.
5.1 You agree that the Commitment Documents are for your
confidential use only and that neither their existence nor the terms thereof
will be disclosed by you to any person other than your officers, directors,
employees, accountants, lawyers and other advisors, or those parties (and their
officers, directors, employees, accountants, lawyers and other advisors)
involved in the Project Planet negotiations, and then only on a "need to know"
basis in connection with the transactions contemplated thereby and on a
confidential basis. Notwithstanding the foregoing, following your return of your
executed copies of the Commitment Documents to the Agent as provided below, you
may make such other public disclosures of the terms and conditions hereof as (i)
you are required by applicable law or regulation (whether of the Amsterdam Stock
Exchange or otherwise) to make; (ii) are otherwise publicly available; or (iii)
are necessary to maintain your rights under the Commitment Documents.
5.2 You should be aware that each Arranger and/or
Underwriter may be providing financing or other services to parties whose
interests may conflict with yours. Be assured, however, that consistent with
each Arrangers' and each Underwriters' longstanding policy to hold in confidence
the affairs of its customers, no Arranger nor any Underwriter will furnish
confidential information obtained from you to any of its other customers. By the
same token, none of the Arrangers nor any of the Underwriters will make
available to you confidential information that it obtained or may obtain from
any other customer.
6. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. You
represent and warrant to each Arranger and each Underwriter that (i) all written
information provided to each Arranger and each Underwriter, and any further
written information provided to each Arranger and each Underwriter after the
date hereof by you or your representatives in connection with the transactions
contemplated hereby is and will be complete and correct in all material respects
and does not and will not contain any untrue statement of a material fact or
omit to state a material fact necessary in order to make the statements
contained therein not misleading in light of the circumstances under which such
statements were or are made, (ii) all financial projections, (if any), that have
been or will be prepared by the Arrangers or the Underwriters and approved by
the Parent are based upon assumptions considered by you to be reasonable (it
being understood that such projections are subject to significant uncertainties
and contingencies, many of which are beyond your control, and that no assurance
can be given that the projections will be realised) and (iii) you are not in
possession of any information which would result in you concluding that the
latest published financial statements of Rexall Sundown Inc. are not true and
accurate in any material respect.
7. GOVERNING LAW/JURISDICTION. The Commitment Documents shall be
governed by, and construed in accordance with, the laws of England and Wales.
The parties hereto
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submit to the non-exclusive jurisdiction of the English court and waive any
defence of inconvenient forum which may be available.
8. ENTIRE AGREEMENT. The Commitment Documents set forth the
entire agreement between the parties with respect to the matters addressed
therein and supersede all prior communications, written or oral, with respect
thereto and may only be modified in writing. Delivery of an executed signature
page to any Commitment Document by facsimile shall be as effective as delivery
of a manually executed document.
Please indicate your acceptance of the provisions hereof by signing the
enclosed copy of this Commitment Letter, the Fee Letter and the Agency Fee
Letter and returning them to Digna Hiel at ING Bank N.V. at or before 5:00 p.m.
(London time) on 31 May 2000, the time at which the commitment offer of each
Underwriter set forth above (if not so accepted prior thereto) will expire. If
you elect to deliver the above documents by facsimile, please arrange for the
executed originals to follow by next-day courier.
Yours faithfully,
DEUTSCHE BANK AG ING BANK N.V.
By: /s/ Olivir Cebelieu By: /s/ Digna Hiel
--------------------------- -------------------------------
Title: Vice President Title: Assistant Director
By: /s/ Goetz Laue By: /s/ N.J. Klein
--------------------------- -------------------------------
Title: Director Title: Senior Relationship Manager
SALOMON BROTHERS
INTERNATIONAL LIMITED (AS
ARRANGER) CITIBANK, N.A. (AS UNDERWRITER)
By: /s/ John Stafford By: /s/ John Stafford
--------------------------- ------------------------------
Title: Director Title: Vice President
We agree and accept the above.
KONINKLIJKE NUMICO N.V.
By: /s/ A.H. Eenink
--------------------------
Title: Director Date: 31 May 2000
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PROJECT PLANET
KONINKLIJKE NUMICO N.V.
BRIDGE LOAN
SUMMARY OF TERMS AND CONDITIONS
BORROWERS: Koninklijke Numico N.V. (the "PARENT"),
Nutricia International B.V., Numico
Nationaal B.V. and Pharmafoods B.V.
GUARANTORS: Koninklijke Numico N.V., Nutricia
International B.V., Numico Nationaal B.V.
and Pharmafoods B.V.
AMOUNTS: Euro 1,050,000,000.
FACILITY: A committed Euro 1,050,000,000 bridge loan
maturing on 31 July 2000.
PURPOSE: To serve as a bridge loan for the Equity
Issue and the Convertible Bond in an
aggregate amount of Euro 1,050,000,000.
ARRANGERS: Deutsche Bank AG, ING Bank N.V. and Salomon
Brothers International Ltd.
UNDERWRITERS AND LENDERS: Citibank, N.A., Deutsche Bank AG and ING
Bank N.V.
AGENT: ING Bank N.V.
MATERIAL SUBSIDIARIES: Subsidiaries of the Parent (direct or
indirect) whose gross assets or net sales
represent not less than 5% of the
consolidated gross assets or, as the case
may be, consolidated net sales of the Group.
CLOSING DATE: The date on which the loan documentation is
to be signed, anticipated to occur on or
prior to 9 June 2000.
COMMITMENT TERMINATION DATE: 10 days from the Closing Date or such later
date as may be agreed for the purposes of
the Offer. Any commitments undrawn by that
date will be cancelled.
FINAL MATURITY DATE: 31 July 2000.
BORROWINGS: Advances shall be in minimum principal
amounts of Euro 100,000,000 or, if greater,
integral multiples of Euro
50,000,000. All Advances shall be made by
the Lenders rateably in proportion to their
respective commitments. Advances will be
available upon notice periods to be agreed.
No more than two separate Advances may be
outstanding at any time.
APPLICABLE MARGIN: 0.75% p.a.
INTEREST RATES: Advances will bear interest at a rate per
annum equal to Euribor plus the Applicable
Margin plus mandatory costs. Euribor shall
be determined by reference to the relevant
Telerate screen or, if not available, as
quoted by the Reference Banks for Euro for
the relevant interest period, averaged and
rounded up to 4 decimal places.
REFERENCE BANKS: Citibank, N.A., Deutsche Bank AG and ING
Bank N.V.
INTEREST PERIODS: One or two weeks or at least 3 days at the
Borrower option or such other periods as
agreed by the Agent provided that no
Interest Period shall end after the Final
Maturity Date.
INTEREST PAYMENTS: Interest on Advances will be payable in
arrears at the end of each Interest Period.
Interest to be computed on a 360 day basis
and the actual number of days elapsed.
OPTIONAL COMMITMENT A Borrower will have the right, upon at
REDUCTION: least 5 business days' notice, to terminate
or cancel, in whole or in part, the unused
portion of the Facility, provided that each
partial reduction shall be in an amount of
Euro 100,000,000 or an integral multiple of
Euro 50,000,000. Commitment reductions shall
be applied rateably to all Lenders'
Commitments. Once terminated, a Commitment
cannot be reinstated.
OPTIONAL PREPAYMENTS: Advances may be prepaid without penalty,
in an amount of Euro 100,000,000 or integral
multiples of Euro 50,000,000 on 5 business
days' notice, subject to reimbursement by
the relevant Borrower for any broken funding
losses suffered by the Lenders. Prepayments
shall be applied rateably to all Lenders'
Advances in respect of the Facility. If any
amount of the Facility is prepaid, no part
thereof may be reborrowed.
MANDATORY PREPAYMENT: The net proceeds of the Equity Issue and the
Convertible Bond shall be used to prepay the
Loan. Also, a Borrower shall prepay in full
upon a change of control.
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ARRANGEMENT FEE: As set forth in the Fee Letter between the
Arrangers, the Underwriters and the Parent.
ANNUAL AGENCY FEE: As set forth in the Agency Fee Letter
between the Agent and the Parent.
LOAN DOCUMENTATION: The Facility will be subject to preparation,
execution and delivery of mutually
acceptable loan documentation which will
contain conditions precedent,
representations and warranties, covenants,
events of default and other provisions
customarily found in the standard loan
documentation for similar financings but
based upon the Parent's existing syndication
loan documentation entered into in November
1999 together, in relation to the US
acquisition provisions, with the provisions
of the syndicated loan agreement dated
August 1999 where appropriate, including,
but not limited to, those set out below.
Thresholds and baskets for covenants to be
agreed in the light of Project Planet.
CONDITIONS PRECEDENT TO INITIAL - Payment of all accrued fees and
ADVANCE: expenses in accordance with the
provisions of the Fee Letter.
- The execution and delivery of the
following, in form and substance
satisfactory to the Lenders: (i) board
resolutions or other evidence of
corporate authorisation; (ii)
authorised signatory list; and (iii)
legal opinions from counsel for the
Borrower and counsel for the Arrangers.
- Copy of all Offer Documents and
confirmation that no amendments or
waivers thereto in respect of extension
of offer period, change in offer price
and acceptance levels.
- Certificate of Parent relating to
Project Planet in a form to be agreed
(including confirmation of the purchase
of a majority of the Common Stock of
Rexall Sundown Inc.).
- Constitutive documents of Obligors.
- Receipt of relevant consents,
regulatory and corporate approvals.
- Process Agent Letters.
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- Confirmation of the cancellation and
repayment of the existing syndicated
facility.
CONDITIONS PRECEDENT TO ALL - All repeated representations and
DRAWINGS: warranties are true on and as of the
date of the drawing/rollover of the
Advance, before and after giving effect
to such and to the application for the
proceeds therefrom, as though made on
and as of such date.
- No Event of Default or Potential Event
of Default has occurred and is
continuing, or would result from the
drawing of new Advances.
REPRESENTATIONS AND WARRANTIES: - Legal status.
- Corporate powers.
- Authorisations.
- Binding obligations.
- Legality and contraventions.
- Borrowing limit.
- No Event of Default or Potential Event
of Default.
- Ranking and obligations.
- Stamp Duty.
- Accounts.
- Litigation.
- No default.
- Change in Business Condition.
- Encumbrances.
- Written Information.
- Winding up.
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- Environmental Compliance.
- Environmental Claims.
- Licences and Consents.
- No deduction or withholding.
- Ownership of the Borrowers.
- Acquisition funding
- Acquisition terms
- Use of proceeds
- Intellectual property
- Clean up period
- Certain representations to be repeated
from time to time.
COVENANTS: - Ranking of Obligations.
- Legality of Performance.
- Negative Pledge.
- Disposal of Assets.
- Acquisitions.
- Carry on Business.
- Compliance with laws.
- Insurance.
- Variation or waiver.
- Offer.
- Use of proceeds.
- Intellectual property.
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- Issuer of Convertible Bonds will be
the Parent and subordination thereof.
- Information.
- Notification of Events of Default.
- Material Litigation.
- Environmental Compliance.
- No incurrence of Additional
Indebtedness in the Group in excess of
the sum of (i) Euro 100,000,000 and
(ii) the Convertible Bond.
EVENTS OF DEFAULT: - Non-payment
- Specific Covenants.
- Other defaults.
- Untrue Statements.
- Cross Default.
- Insolvency and Reorganisation.
- Enforcement of Security.
- Attachment or distress.
- Inability to pay debts
- Insolvency equivalence.
- Unlawfulness or repudiation.
- Material adverse change.
- Litigation.
- Approvals and authorisations.
- Validity.
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OTHER: Loan documentation will include:
- Indemnification of Agent and Lenders
and their respective affiliates,
officers, directors, employees, agents
and advisors.
- Set off.
- Illegality.
- Customary agency language.
- Majority Lenders will be defined as
those holding at least 66-2/3% of
outstandings or, if none, Commitments.
TRANSFERS AND PARTICIPATIONS: Each Lender will have the right, with the
prior consent of the Parent, to transfer or
assign all or part of its rights or
obligations under the Facility to any third
party.
Each Lender will also have the right,
without notice to or consent of the Parent,
to transfer or assign all or part of its
rights or obligations under the loan
documentation to any of its affiliates or to
any third party upon the occurrence of an
Event of Default which is continuing.
YIELD PROTECTION: All payments made free and clear of any
present or future taxes, withholdings or
other deductions whatsoever imposed or
withheld in the Netherlands or any
jurisdiction in or through which payments
are made (other than income taxes in the
jurisdiction of the Lender's applicable
lending office). The Borrower will indemnify
the Lenders and the Agent for such taxes
paid by the Lenders or the Agent.
Yield protection for increased capital and
liquidity costs and broken funding costs
will also be included.
GOVERNING LAW AND JURISDICTION: The Facility will be governed by the
laws of England and the parties will submit
to the non-exclusive jurisdiction of the
English courts.
COUNSEL TO THE ARRANGERS: Clifford Chance.
EXPENSES: All reasonable costs and expenses incurred
(i) by the Agent and/or the Arrangers in
connection with the preparation, execution,
delivery, modification, amendment,
syndication
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and administration of the loan documentation
(including reasonable fees and expenses of
counsel to the Agent) or (ii) by the Agent,
the Arrangers or any Lender in connection
with the enforcement of the loan
documentation (including reasonable fees and
expenses of counsel), are for the Borrower's
account.
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