ARRANGERS' COMMITMENT LETTER
31 May 2000
Koninklijke Numico N.V.
Rokkeveenseweg 49
2712 PJ Zoetermeer
The Netherlands
Attention: Philip van Randwijk
Dear Sirs,
EURO 1,000,000,000 AND US$1,450,000,000 CREDIT FACILITY (INCORPORATING A EURO
1,000,000,000 364 DAY TERM LOAN WITH A ONE YEAR EXTENSION OPTION, A
US$1,150,000,000 FIVE YEAR TERM LOAN AND A US$300,000,000 FIVE YEAR REVOLVING
CREDIT 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 or
any of the Parent's wholly-owned subsidiaries (the "PARENT GROUP") to finance
the acquisition of Rexall Sundown, Inc. ("PROJECT PLANET") and/or to refinance
existing indebtedness of the Parent Group and Rexall Sundown Inc. and its
subsidiaries and for general corporate purposes (including, but not limited to,
the reorganisation of the Dutch subsidiaries of the Parent).
1. COMMITMENT TERMS. Deutsche Bank AG ("DEUTSCHE BANK"), Fortis
Bank N.V. ("FORTIS"), ING Bank N.V. ("ING"), Rabobank International ("RABOBANK")
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 AC Financial Services Dublin ("AC
FINANCIAL"), ING, Deutsche Bank, Rabobank 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 TRANCHE A TRANCHE B TRANCHE C
AC Financial Euro 200,000,000 $230,000,000 $60,000,000
Citibank Euro 200,000,000 $230,000,000 $60,000,000
Deutsche Bank Euro 200,000,000 $230,000,000 $60,000,000
ING Euro 200,000,000 $230,000,000 $60,000,000
Rabobank Euro 200,000,000 $230,000,000 $60,000,000
Total Euro 1,000,000,000 $1,150,000,000 $300,000,000
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 Arranger's respective
agreements and each of the Underwriter's respective commitments 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 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 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
Underwriters and of all written factual information provided to the Arrangers
and Underwriters hereafter and your compliance with the terms of the Commitment
Documents; and (iv) the payment in full of all fees, expenses and other amounts
due and payable under the Fee Letters.
3. SYNDICATION.
3.1 The Arrangers and the Underwriters reserve the right
from 9 June 2000, such date being the "SYNDICATION DATE", until the earlier of
the date upon which the Arrangers and the Underwriters declare that syndication
has closed or 31 December 2000, such date being the "SYNDICATION CLOSING DATE",
to syndicate all or a portion of their commitment to one or more other financial
institutions (the financial institutions becoming parties to the Credit
Agreement being collectively referred to herein as the "LENDERS").
3.2 The Arrangers will act as arrangers with respect to
the Facility and will manage all aspects of the syndication in consultation with
you. You understand that the Arrangers intend to commence syndication efforts
promptly from the Syndication Date.
2
3.3 You agree to take all action as the Arrangers and the
Underwriters may reasonably request to assist it in forming a syndicate
acceptable to it. Your assistance in forming such a syndicate shall include but
not be limited to: (i) making senior management and representatives of you
available to participate in information meetings with potential Lenders at such
times and places as may be mutually agreed; (ii) using your reasonable efforts
to ensure that the syndication efforts benefit from your lending relationships
and (iii) providing the Arrangers and the Underwriters with all information of a
type commonly provided or made available to successfully complete the
syndication of credit facilities including, without limitation, the preparation
of an Information Memorandum in respect of the Facility for distribution to
potential Lenders.
3.4 To ensure an orderly and effective syndication of the
Facility, you agree that until the Syndication Closing Date, you will not, and
will not permit any of your subsidiaries to, syndicate or issue, attempt to
syndicate or issue, announce or authorise the announcement of the syndication or
issuance of, or engage in discussions concerning the syndication or issuance of,
any debt facility (including the establishment of a series of bilateral
arrangements) or debt securities (including any renewals thereof) in the
commercial bank (or capital) markets other than:
(i) the proposed Bridge Loan in an amount of
Euro 1,050,000,000;
(ii) the proposed Convertible Bond in an amount
of approximately Euro 700,000,000 (being subordinated to the Facility
and with a maturity greater than the Facility);
(iii) the renewal of existing overdraft facilities
(including in Rexall Sundown, Inc.);
(iv) the existing Belgian commercial paper
program; or
(v) with the prior written consent of the
Arrangers.
3.5 You agree that the Arrangers will act as the sole
arrangers for the Facility, that ING will act as Facility Agent and as
documentation agent and Deutsche Bank and SBIL will act as bookrunners and that
no additional arrangers, co-arrangers or agents will be appointed, or other
titles conferred, without the Arrangers' consent. You agree that no Lender will
receive any compensation of any kind for its participation in the Facility,
except as expressly provided for in the Fee Letter, the Agency Fee Letter or in
the Terms and Conditions.
3.6 The agreements of the Arrangers and Underwriters
hereunder and of any Lender that issues a commitment to provide financing under
the Facility are made solely for the benefit of you and may not be relied upon
by any other person.
4. MARKET CONDITIONS. You agree that, without prejudice to the
provisions hereof, the Arrangers and Underwriters have the right at any time
from the date of this Commitment Letter up to and including the Syndication
Closing Date to change the pricing and the tenor of the Facility if such change
is advisable in the judgment of the Arrangers and the Underwriters to ensure
3
a successful syndication of the Facility (successful syndication being for these
purposes that each of the Underwriters as a result of such syndication, has
reduced its underwriting commitment to Euro 250,000,000 (or less)). If the
Arrangers and Underwriters determine that such changes are necessary, they will
consult with you for a period of up to 5 days about such changes.
5. COMMITMENT TERMINATION. Each Arranger's agreement and each
Underwriter's 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
Underwriters if the Arrangers and 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, 6, 7 and 9 shall survive the expiration or
termination of this Commitment Letter.
6. INDEMNIFICATION.
6.1 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.
6.2 Any Indemnified Party intending to invoke paragraph
1.1 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.
6.3 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
4
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.
6.4 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.
6.5 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 from
such Indemnified Party's negligence, wilful misconduct or any breach of the
Commitment Documents by the Indemnified Party.
6.6 The Contracts (Rights of Third Parties) Act 1999
shall only apply to this paragraph 6 and only for the benefit of the Indemnified
Parties.
7. CONFIDENTIALITY.
7.1 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 Facility 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.
7.2 You should be aware that each Arranger and/or each
Underwriter may be providing financing or other services to parties whose
interests may conflict with yours. Be assured, however, that consistent with
each Arranger's and each Underwriter's 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 Underwriter will make available to you
confidential information that it obtained or may obtain from any other customer.
8. REPRESENTATIONS AND WARRANTIES OF THE COMPANY. You
represent and warrant to each Arranger and each Underwriter that (i) all written
information provided
5
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. You agree, as close as is reasonably practicable to the
Syndication Closing Date, to supplement the information and projections from
time to time so that the representations and warranties contained in this
paragraph remain correct.
9. GOVERNING LAW/JURISDICTION. The Commitment Documents shall be
governed by, and construed in accordance with, the laws of England and Wales.
The parties hereto submit to the non-exclusive jurisdiction of the English court
and waive any defence of inconvenient forum which may be available.
10. 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/ Olivier 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
6
SALOMON BROTHERS
INTERNATIONAL LIMITED (AS
ARRANGER) CITIBANK, N.A. (AS UNDERWRITER)
By: /s/ John Stafford By: /s/ John Stafford
-------------------------------- -------------------------------
Title: Director Title: Vice President
AC FINANCIAL SERVICES DUBLIN
FORTIS BANK N.V. (AS ARRANGER) (AS UNDERWRITER)
By: /s/ Marie-Victoire Vranckx By: /s/ Marie-Victoire Vranckx
-------------------------------- --------------------------------
Title: Deputy Director Title: By Power of Attorney
COOPERATIEVE CENTRALE
RAIFFEISEN-BOERENLEENBANK
B.A. (TRADING AS RABOBANK
INTERNATIONAL)
By: /s/ Rick Llewellyn By: /s/ Robert Halcrow
-------------------------------- --------------------------------
Title: Associate Director Title: Managing Director
We agree and accept the above.
KONINKLIJKE NUMICO N.V.
By: /s/ A.H. Eenink
--------------------------------
Title: Director Date: 31 May 2000
7
PROJECT PLANET
KONINKLIJKE NUMICO N.V.
LONG TERM FACILITY
SUMMARY OF TERMS AND CONDITIONS
BORROWERS: Koninklijke Numico N.V. (the "PARENT"), Numico
Nationaal B.V., Nutricia International B.V.,
Pharmafoods B.V. and any other wholly owned
subsidiaries of the Parent (not including any
subsidiaries incorporated in the UK) which it may
designate from time to time.
GUARANTORS: Koninklijke Numico N.V., Nutricia International B.V.,
Numico Nationaal B.V., Pharmafoods B.V. and any other
wholly owned subsidiaries of the Parent (not
including any subsidiaries incorporated in the UK)
which it may designate from time to time.
AMOUNTS: Euro 1,000,000,000 and US$1,450,000,000 (or its
equivalent in euro, or any other freely available
euro-currency, subject to all Lenders' availability
provided that only euros and pounds sterling are
available under Tranche C).
FACILITY: The Facility will be divided into three tranches:
TRANCHE A: A committed Euro 1,000,000,000 364 day
term loan with a one year extension
option, (which may be exercised at any
time up to 10 days prior to day 364 (the
"EXTENSION DATE")), available by way of
cash advances ("ADVANCES").
TRANCHE B: A committed $1,150,000,000 5 year
amortising term loan, available by way
of Advances.
TRANCHE C: A committed $300,000,000 5 year
revolving credit facility, available by
way of Advances.
PURPOSE: (1) To finance the acquisition of a majority of
the Common Stock of Rexall Sundown Inc.
("PROJECT PLANET").
(2) For refinancing of existing indebtedness of
the Parent and its subsidiaries and Rexall
Sundown Inc and its subsidiaries.
(3) For general corporate purposes including,
but not limited to, the refinancing of
the Dutch operating subsidiaries.
ARRANGERS: Deutsche Bank AG, Fortis Bank N.V., ING Bank N.V.,
Rabobank International and Salomon Brothers
International Ltd.
UNDERWRITERS: AC Financial Services Dublin, Citibank, N.A.,
Deutsche Bank AG, ING Bank N.V. and Rabobank
International.
FACILITY AGENT AND
DOCUMENTATION AGENT: ING Bank N.V.
LENDERS: Syndicate of financial institutions acceptable to the
Arrangers.
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.
AVAILABILITY PERIOD: (FOR TRANCHE A): 5 months after Closing Date.
Any Commitments undrawn by
that date will be cancelled.
(FOR TRANCHE B): 5 months after Closing Date.
Any commitments undrawn by
that date will be cancelled.
(FOR TRANCHE C): One month prior to the Final
Maturity Date.
FINAL MATURITY DATE: (FOR TRANCHE A): 364 days from the Closing
Date provided that if the
extension option is
exercised it will be one
year after the Extension
Date.
2
(FOR TRANCHES B AND C): The earlier of, the fifth
anniversary of the Closing
Date or the date at least 3
months prior to the maturity
date for the proposed
Convertible Bond.
REPAYMENT SCHEDULE: (FOR TRANCHE B) REPAYMENT DATE AMOUNT
Year 1 $225,000,000
Year 2 $225,000,000
Year 3 $225,000,000
Year 4 $225,000,000
Year 5 $250,000,000
Each of the above shall be made in equal semi-annual
instalments commencing 6 months after the Closing
Date.
BORROWINGS: Advances under Tranches A and B shall be in minimum
principal amounts of Euro/$100,000,000 (as
applicable) or, if greater, integral multiples
thereof. Advances under Tranche C shall be in
minimum principal amounts of $25,000,000 or integral
multiples of $5,000,000. All Advances shall be made
by the Lenders rateably in proportion to their
respective commitments. After Completion of
Syndication, Advances will be available upon notice
no later than 10:00 a.m. (Amsterdam time) four
business days before the date of drawing. No more
than 3 separate Advances may be outstanding at any
time under each of Tranches A and B and no more than
10 separate Advances under Tranche C may be
outstanding at any time.
CURRENCY REVALUATION: If any term loan is outstanding in an optional
currency, the outstanding amount will be revalued
against the US Dollar amount of the loan at the
start of each interest period and an adjustment will
be made if the actual amount of the loan exceeds the
original US Dollar amount, subject to a tolerance
level of 5%.
TRANCHE C AVAILABILITY: From the Closing Date and prior to the end of the
relevant Availability Period, a Borrower may,
subject to the terms of the Facility, borrow, repay
and reborrow.
APPLICABLE MARGIN: 0.75% p.a. for the period commencing on the Closing
Date and ending on the later of either the day
falling 3 months
3
after the Closing Date or the day the Equity Package
has been completed, thereafter 0.55% p.a.
In addition, starting on the date that the Facility
Agent receives the audited financial statements for
the financial year ending 31 December 2000, the
Applicable Margin will be subject to revision (for
the avoidance of doubt, by way of an increase as
well as a decrease) in relation to outstanding
Advances in accordance with the following grid by
reference to the most recently delivered financial
statements and compliance certificates (tested on a
rolling 12 month basis):
If
Total Senior Net Debt/EBITDA < 3.00:1 greater than
or equal to 2.5:1 0.50% p.a.
Total Senior Net Debt/EBITDA < 2.5:1 0.40% p.a.
INTEREST RATES: Advances will bear interest at a rate per annum
equal to EURIBOR (or in currencies other than euro,
LIBOR) plus the Applicable Margin plus mandatory
costs. EURIBOR, or as the case may be, LIBOR shall
be determined by reference to the relevant Telerate
screen or, if not available, as quoted by the
Reference Banks for the relevant currency and
interest period, averaged and rounded up to 4
decimal places.
REFERENCE BANKS: ING Bank N.V., together with Deutsche Bank AG and
Citibank N.A.
INTEREST PERIODS: One, two, three or six months at the relevant
Borrower's option or such other periods as agreed by
the Facility Agent. The Facility Agent shall
determine Interest Periods until the Syndication
Closing Date.
INTEREST PAYMENTS: Interest on Advances will be payable in arrears at
the end of each Interest Period and semi-annually in
the case of Interest Periods in excess of 6 months.
Interest to be computed on a 360 day basis for US
Dollars, Euros and optional currencies (save for
pounds sterling where it shall be a 365 day basis)
and the number of actual days elapsed.
OPTIONAL COMMITMENT A Borrower will have the right, upon at least 5
REDUCTION: business days' notice, to terminate or cancel, in
whole or in part, the unused portion of Tranche C,
provided that each partial reduction shall be in an
amount of $10,000,000 or an integral
4
multiple or $5,000,000. Commitment reductions shall
be applied rateably to all Lenders' Commitments. Once
terminated, a Commitment cannot be reinstated.
REPAYMENTS: Each Tranche C Advance shall be repaid in full at
the end of each Interest Period. No Advances will
mature after the Final Maturity Date.
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 relevant
Tranche. If any amount of Tranches A or B is
prepaid, no part thereof may be reborrowed.
COMMITMENT FEE: (TRANCHES A, B AND C): 50%of Applicable Margin.
Calculated on a 360-day basis and on the unused
portion of the Facility, commencing 10 days after
the Closing Date in relation to Tranches A and B and
on the Closing Date in relation to Tranche C.
Payable quarterly in arrears, and on the date of
termination of the Commitments.
ARRANGEMENT AND As set forth in the Fee Letter between the Arrangers,
UNDERWRITING FEE: the Underwriters and the Parent.
ANNUAL AGENCY FEE: As set forth in the Agency Fee Letter between the
Facility 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.
5
CONDITIONS PRECEDENT TO - Payment of all accrued fees and expenses in
INITIAL ADVANCE: accordance with the provisions of the Fee
Letters.
- 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 Borrowers 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.
- Confirmation of the cancellation and
repayment of the existing syndicated
facility.
- Receipt of the proceeds of the Bridge
Loan in an amount of Euro 1,050,000,000.
CONDITIONS PRECEDENT TO - All repeated representations and warranties
ALL DRAWINGS: 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.
- Potential Events of Default to be defined
as events which will become (with the
expiry of any grace period, the giving of
notice, the making of any determination
under the Agreement or any combination
thereof) Events of Default.
6
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.
- Environmental Compliance.
- Environmental Claims.
- Licences and Consents.
- No deduction or withholding.
- Ownership of the Borrowers.
- Acquisition funding.
- Acquisition Terms.
7
- Use of proceeds.
- Intellectual Property.
- Certain representations to be repeated
from time to time.
- Clean-up periods.
COVENANTS: - Financial covenants (determined on the
basis of the Parent's consolidated
statements):
(i) EBITDA to Net Interest Expense
Period ending 31 December 2000 4.00:1
Period ending 31 December 2001 4.50:1
Thereafter 4.50:1
(ii) Total Senior Net Debt to EBITDA
Period ending 31 December 2000 3.25:1
Period ending 31 December 2001 2.75:1
Period ending 31 December 2002 2.50:1
Thereafter 2.50:1
Such ratios shall be tested for the first time on
delivery of financial statements of the Parent for
the year ending 31 December 2000 and thereafter to
be tested (on a rolling 12 month basis)
semi-annually or (if available) quarterly.
- Information to include:
- annual audited financial
statements;
- semi annual financial
statements;
- quarterly financial
statements to the extent
prepared and published;
- compliance certificate;
- other information.
- Ranking of Obligations.
- Legality of Performance.
8
- Negative Pledge.
- Disposal of Assets.
- Acquisitions.
- Carry on Business.
- Compliance with laws.
- Insurance.
- Variation or waiver.
- Offer.
- Syndication.
- Use of proceeds.
- Intellectual property.
- Issuer of Convertible Bonds will be
the Parent and subordination
thereof.
- Information.
- Notification of Events of Default.
- Material Litigation.
- Environmental Compliance.
- Until the delivery of the Compliance
Certificate for the annual audited
financial statements for the year
ending 31 December 2000, no
Incurrence of Additional Financial
Indebtedness in the Group in excess
of the sum of (i) Euro 100,000,000;
and (ii) (without double-counting)
the proposed Convertible Bond in an
amount of approximately Euro
700,000,000.
- Non Obligors shall not incur
Additional Financial Indebtedness
beyond amounts to be agreed.
9
- Completion of the merger within a
time period to be agreed.
- To implement agreed hedging policy
described in writing to the Facility
Agent.
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.
MANDATORY PREPAYMENT: (a) In full on any merger or change of
control, with appropriate notice
periods; and
(b) out of the net proceeds of certain
permitted disposals subject to
certain de minimis amounts depending
on the Total Net Debt to EBITDA
ratio at the time of such disposal;
and
10
(c) any public debt capital markets
issues with a tenor of greater than
2 years, other than the Equity Issue
and the Convertible Bonds,
in the case of (b) to prepay Tranche B in
inverse order of maturity and then Tranche A
and in the case of (c) to prepay Tranche A and
then Tranche B in inverse order of maturity.
OTHER: Loan documentation will include:
- Indemnification of Facility Agent
and Lenders and the 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 to transfer or
assign to one or more persons all or a portion
of its rights and obligations under the
Facility. Upon such transfer or assignment, the
transferee or assignee shall become a Lender
for all purposes of the loan documentation. Any
transferee shall pay to the Facility Agent a
fee of Euro 1,000.
No transfers will be accepted until the
Arrangers have declared the close of
Syndication.
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 Parent
will indemnify the Lenders and the Facility
Agent for such taxes paid by the Lenders or the
Facility Agent.
Yield protection for increased capital and
liquidity costs and broken funding costs will
also be included.
11
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 Facility Agent and/or the Arrangers in
connection with the preparation, execution,
delivery, modification, amendment, syndication
and administration of the loan documentation
(including reasonable fees and expenses of
counsel to the Facility Agent) or (ii) by the
Facility 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 Borrowers'
account.
12