[LETTERHEAD OF BARCLAYS GREENWICH NATWEST CITIBANK
SCHRODER SALOMON SMITH BARNEY]
18 June, 2000
Old Mutual plc
3rd Floor
Lansdowne House
57 Berkeley Square
London W1X 5DH
Attention: Don Hope
Dear Sirs,
COMMITMENT LETTER RELATING TO US$ 2BILLION MULTICURRENCY REVOLVING CREDIT
FACILITY (THE "FACILITY")
You have advised us that you, Old Mutual plc ("YOU" or "THE BORROWER"), wish to
establish the Facility, the proceeds of which would be used to provide part of
the finance required for the acquisition (the "ACQUISITION") of United Asset
Management Corporation (the "TARGET" or "CAPE") and the refinancing of your
existing (pound)300 million revolving credit facility dated 18th August, 1999,
and to pay fees, costs and other expenses incurred by you in connection with the
Acquisition; and, in addition a sub-facility would be available for general
working capital purposes.
1. COMMITMENT TERMS
Barclays Bank PLC, Citibank, N.A. and National Westminster Bank Plc
(together the "UNDERWRITERS") are pleased to inform you of each of their
respective commitments to provide in aggregate the entire amount of the
Facility, and Barclays Capital (the investment banking division of
Barclays Bank PLC), Greenwich NatWest and Salomon Brothers International
Limited (together the "JOINT LEAD ARRANGERS") are pleased to inform you
of their agreement to act as arrangers of the Facility, in each case
subject to the terms and conditions described in this letter and the
attached Annex I. This letter and Annex I are referred to collectively as
the "COMMITMENT DOCUMENTS". The Joint Lead Arrangers and Underwriters are
together referred to as the "BANKS".
Each Underwriter severally commits to underwrite the following amounts:
one third of the amount of the Facility.
The commitment of each Underwriter hereunder is several and no
Underwriter shall be responsible for the performance of the obligations
of another Underwriter. The failure of a Bank to perform its obligations
hereunder shall not prejudice the rights or obligations of any other
Bank.
2. CONDITIONS PRECEDENT
The Underwriters' Commitments and the Joint Lead Arrangers' agreements
hereunder are subject to:
Barclays Capital - the investment banking division of Barclays Bank PLC
Registered in England 1026167. Registered office 54 Lombard Street, London EC3P
3AH Regulated by SFA and member of the London Stock Exchange
Citibank, N.A.
'r' Registered mark of Citibank, N.A.
Incorporated with limited liability under the National Bank Act of the U.S.A.,
registered at the office of the Comptroller of the Currency, U.S. Department of
Treasury under Charter No. 1461 with its Head Office at 399 Park Avenue, New
York, NY 10043, U.S.A. Having in Great Britain a branch registered at Cardiff
with No. BR001018 under Schedule 21 A Companies Act 1985 with its principal
office location at 336 Strand London WC2R 1HB. Citibank, N.A. is regulated by
SFA and IMRO. VAT No: GB 429 6256 29. Ultimately owned by Citigroup Inc., New
York, USA.
Greenwich Natwest Limited 135 Bishopsgate London EC2M 3UR Switchboard 0171 375
5000 Fax 0171 375 5050 Telex 913000 Regulated by SFA Registered in England
Number 2279591 Registered Office 135 Bishopsgate London EC2M 3UR
(i) the preparation and execution of mutually acceptable facility
documentation ("FACILITY DOCUMENTATION") including a facility
agreement incorporating, inter alia, substantially the terms and
conditions outlined in Annex I;
(ii) in the opinion of at least two of the Underwriters, no material
adverse change having occurred (or event which is likely result in
a material adverse change) in any of (A) the business or financial
condition of any of you and your subsidiaries taken as a whole
since the date of your last published audited results, and (B) the
commercial bank, loan syndication, financial or capital market
conditions generally that, in the opinion of at least two of the
Underwriters, can reasonably be expected to prejudice the
successful syndication of the Facility; and (C) the political,
financial or economic climate of South Africa which, in the
opinion of any two of the Underwriters can reasonably be expected
to prejudice the successful syndication of the Facilities;
(iii) the accuracy and completeness of all representations that you make
to any of the Banks and all information that you furnish to us and
your compliance with the terms of the Commitment Documents;
(iv) the payment in full of all fees, expenses and other amounts
payable under the Commitment Documents;
(v) you obtaining all governmental, judicial, regulatory and
anti-trust clearances which are necessary from all relevant
authorities in all jurisdictions for completion of the
Acquisition; and
(vi) a review by the Banks of and satisfaction with due diligence
relating to the Target and the Acquisition, including without
limitation, of a confirmation by the Borrower of the accuracy of
the Base Case Financial Model and Borrower's and the Target's pro
forma consolidated financial statements and tax, (if reasonably
required) environmental, and legal due diligence reports on the
Target and the Acquisition.
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3. SYNDICATION
3.1 The Underwriters reserve the right, prior to or after the
execution of definitive Facility Documentation, to syndicate all
or a portion of their commitments to one or more other financial
institutions (the financial institutions becoming parties to the
Facility Documentation being collectively referred to herein as
the "LENDERS"). Such syndication will be managed by the Joint Lead
Arrangers or affiliates who will act as the only Joint Lead
Arrangers with respect to the Facility (unless the Underwriters
otherwise agree) and will manage all aspects of the syndication in
consultation with you, including the timing of all offers to
potential Lenders, the acceptance of commitments, and the
determination of the amounts offered and the compensation
provided. You understand that, subject to prior consultation with
you as to timing and the identity of the banks to be approached,
the Underwriters may choose to commence syndication efforts
promptly and that they may elect to appoint one or more additional
arrangers to direct the syndication efforts on their behalf.
3.2 You agree to take all action as the Banks may reasonably request
to assist them in forming a syndicate acceptable to them. Your
assistance in forming such a syndicate shall include but not be
limited to: (i) making your senior management and representatives
available to participate in information meetings with potential
Lenders at such times and places as the Banks may reasonably
request; (ii) using your best efforts to ensure that the
syndication efforts benefit from your lending relationships and
(iii) providing the Banks with all information in your possession
(but subject to the terms of any confidentiality agreements to
which you are a party) reasonably deemed necessary by them to
complete the syndication successfully.
3.3 With the exception of (a) Nedcor Ltd. and its subsidiaries and Old
Mutual Bank which are permitted to raise debt finance in the
domestic debt markets, (b) Nedcor Ltd. which is permitted to raise
debt finance in the international markets (on a bilateral basis)
and (c) borrowings by members of the group carrying out investment
or banking business in the Ordinary Course of Business subject to
such borrowings being within existing limits and on a bilateral
basis, during the period between your countersignature of this
letter and the later of (i) signing of the Facility Documentation,
and (ii) the general syndicate of Lenders having entered into the
Facility Documentation, neither you nor any member of your group
shall raise or attempt to raise any debt finance in the
international or domestic debt markets, whether of a syndicated or
bilateral nature, without the prior written agreement of the Joint
Lead Arrangers, not to be unreasonably withheld or delayed.
3.4 You agree that one of the Banks (or an affiliate) will act as the
sole agent for the Facility and that no additional agents,
co-agents or arrangers will be appointed, or other titles
conferred, without the consent of all of the Banks. You agree that
no Lender will receive any compensation of any kind for its
participation in the Facility, except as expressly provided for in
paragraph 8 hereof or Annex I.
3.5 The agreements of the Banks hereunder and of any Lender that
issues a commitment to provide financing under the Facility are
made solely for your benefit and may not be assigned or
transferred by you or otherwise relied upon by any other person.
3.6 If either (a) as a result of the normal syndication process of the
Facility, the hold position for each Underwriter is not reduced to
or below US$125 million by 31 August 2000; or (b) any of the Joint
Lead Arrangers reasonably determines that adjustments to the
pricing or any of the other terms and conditions of the offer of
the Underwriters and Joint Lead Arrangers as set out in the
Commitment Documents are advisable to achieve such a hold
position, then you agree to make such adjustments upon
notification by such Joint Lead Arranger. If you do not make such
adjustments after the expiry of a 5 day period from the date of
notification, each of the Banks shall be entitled to terminate
their commitments and agreements hereunder in accordance with
paragraph 4 hereof.
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3.7 The provisions of this paragraph 3 shall not be superseded by the
terms of the Facility Documentation and shall remain in full force
and effect until the general syndicate of Lenders has entered into
the Facility Documentation.
4. COMMITMENT TERMINATION
The Underwriters' commitments and the Joint Lead Arrangers' agreements
set forth in this letter will automatically terminate on the earlier of
the date of signing of Facility Documentation and 31 August 2000. Prior
to such date, the commitments of the Underwriters and the agreements of
the Joint Lead Arrangers under this letter may be terminated (i) by you
at any time at your option or (ii) by an Underwriter (in respect of its
commitments) or a Joint Lead Arranger (in respect of its agreement) if
(A) any event occurs or information has become available such that, in
its judgement, it believes that any condition set forth in paragraph 2 or
3 is or may not be satisfied or (B) the terms of paragraph 3.6 apply and
the period specified for consultation has expired without your agreement
to the changes required. The provisions of paragraphs 5, 6 and 8 hereof
shall survive the expiration or termination of all or any of the
commitments of the Underwriters and the agreements of the Joint Lead
Arrangers hereunder and all fees, expenses and other amounts payable
under the Commitment Documents shall remain due and payable following
such expiration or termination.
5. INDEMNIFICATION
5.1 Whether or not the Facility Documentation is signed you hereby
indemnify and agree to hold harmless each Bank, each Lender and in
each case each of their affiliates and each of their officers,
directors, employees, agents, advisors and representatives (each,
an "INDEMNIFIED PARTY") from and against any and all claims,
damages, losses, liabilities, costs, legal expenses and other
expenses (all together "LOSSES") that may be incurred by or
awarded against any Indemnified Party, in each case arising out of
or in connection with any claims, investigation, litigation or
proceeding (or the preparation of any defence with respect
thereto) commenced or threatened in relation to the Commitment
Documents or the Facility Documentation (or the transactions
contemplated hereby or thereby) or use of the proceeds of the
Facility, whether or not such claim, 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 you can demonstrate such Losses result from such
Indemnified Party's fraud, negligence or wilful misconduct.
5.2 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 you can demonstrate such liability results from such
Indemnified Party's fraud, negligence or wilful misconduct.
5.3 The Contracts (Rights of Third Parties) Act 1999 (the "ACT")
applies to this letter as set out in this paragraph. The Act shall
apply to this paragraph 5 but only for the benefit of the other
Indemnified Parties, subject always to the terms of paragraph 8
and provided that the Banks and you shall be entitled to agree any
changes to or rescind the Commitment Documents without consent of
such other Indemnified Parties.
6. CONFIDENTIALITY
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6.1 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, attorneys and other advisors,
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 us as provided
below, (i) you may make public disclosure of the existence and
amount of the Underwriters' commitments hereunder and the identity
of the agent bank and the identities of the Joint Lead Arrangers
(subject to prior written approval of the Banks in respect of the
terms of such disclosure), (ii) you may file a copy of this letter
(but not Annex I) in any public record in which it is required by
law to be filed and (iii) you may make such other public
disclosures of the terms and conditions hereof as you are required
by law, in the opinion of your counsel, to make.
6.2 You should be aware that the Banks or one or more of their
affiliates may be providing financing or other services to third
parties whose interests may conflict with yours and by signing
this letter you are (subject to the terms of this paragraph 6.2)
consenting to financing or other services being provided to such
third parties. Be assured, however, that consistent with
longstanding policies of the Banks to hold in confidence the
affairs of their customers, neither the Banks nor any of their
affiliates will furnish confidential information obtained from you
to any of its other customers. By the same token, none of the
Banks nor any of their affiliates will make available to you
confidential information that it obtained or may obtain from any
other customer.
7. INFORMATION
You represent and warrant that (i) all information (save information as
to the Target and its group, which you only warrant to the best of your
information, knowledge and belief) (as supplemented from time to time)
that has been or will hereafter be made available to any of the Banks or
any Lender by you or any of your representatives in connection with the
transactions contemplated hereby is and will at all times 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 and (ii) all financial projections, if any, that have been or
will be prepared by you and made available to any of the Banks or any
Lender have been or will be prepared in good faith based upon reasonable
assumptions (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). You agree to supplement the information and
projections from time to time so that the representations and warranties
contained in this paragraph remain correct and acknowledge that the Banks
are acting in reliance on the accuracy of information supplied to them
without independent verification.
8. GOVERNING LAW, JURISDICTION AND PAYMENTS
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.
You hereby agree to pay, or reimburse each Bank on demand for, all costs
and expenses reasonably incurred by it or any of its affiliates in
connection with the Facility (including, without limitation, fees and
disbursements of counsel and negotiation, preparation and syndication of
the Facility) whether incurred before or after the date hereof,
regardless of whether any of the transactions contemplated by the
Commitment Documents are consummated. You also agree to pay all costs and
expenses of each Bank (including, without limitation, fees and
disbursements of counsel) incurred in connection with the enforcement of
any of its rights and remedies under any of the Commitment Documents.
Payment of all amounts due under the Commitment Documents will not be
subject to counterclaim or set-off for, or be otherwise affected by,
any claim or dispute relating to any matter whatsoever and all such
payments shall be made free and clear and without
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deduction for or on account of any present or future taxes, charges,
deductions or withholdings.
9. MISCELLANEOUS
The Underwriters acknowledge that they are aware of, and hereby
consent to, the reduction by the Borrower (pursuant to the Special
Resolution number 11 passed at the Borrower's Annual General Meeting held
on 18 May 2000) of the amount standing to the credit of the Borrower's
share premium account by the sum of (pound)500 million and the
Underwriters will make consent to such reduction a term of the
syndication, if the matter is then still pending.
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 letter and returning it to Anthony Gallen at Barclays Capital
(facsimile 020 7773 4880), Chris Parsons at Greenwich NatWest (020 7334 1011)
and Ashu Khullar at Citibank, N.A. (020 7986 8275) AT OR BEFORE 5 P.M. (LONDON
TIME) ON 19 JUNE, 2000 the time at which the commitment offer of the
Underwriters and agreements of the Banks 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
- -------------------------------- ------------------------------
BARCLAYS BANK PLC AS UNDERWRITER CITIBANK, N.A. AS UNDERWRITER
By: By:
Title: Title:
- --------------------------------
NATIONAL WESTMINSTER BANK PLC AS UNDERWRITER
By:
Title:
- --------------------------------- ----------------------
BARCLAYS CAPITAL (THE INVESTMENT BANKING DIVISION OF GREENWICH NATWEST AS
BARCLAYS BANK PLC) AS JOINT LEAD ARRANGER JOINT LEAD ARRANGER
By: By:
Title: Title:
- ---------------------------------
SALOMON BROTHERS INTERNATIONAL LIMITED AS JOINT LEAD ARRANGER
By:
Title:
ACCEPTED AND AGREED
this day of June, 2000:
OLD MUTUAL PLC
By:
--------------------------------
Title:
---------------------------------
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Chris Parsons Esq
Director, Syndications
Greenwich NatWest Limited
135 Bishopsgate
London
EC2M 3UR
Our Ref: dhl0637/llm
26th June 2000
Dear Chris
COMMITMENT LETTER RELATING TO US$2.0 BILLION MULTI-CURRENCY REVOLVING CREDIT
FACILITY (THE "FACILITY")
We refer to the letter dated 18 June 2000 to which you are a signatory.
We are advising you, as Facility Agent to the above Facility, that the amount
(the "Facility Amount") now sought under the Facility, and the commitment of the
Underwriters, is hereby reduced from US$2,000,000,000 to US$1,600,000,000 as
contemplated in the Outline Terms and Conditions forming Annex I of the above
letter.
As discussed, we may advise you of a further reduction in the Facility Amount of
up to US$200,000,000 prior to the signing of the Facility.
Yours sincerely
DON HOPE
GROUP TREASURER