Exhibit (b)(1)
CONFORMED COPY
AGREEMENT
DATED 14th February, 2002
U.S.$300,000,000
CREDIT FACILITY
FOR
SMITH & NEPHEW PLC
ARRANGED BY
LLOYDS TSB CAPITAL MARKETS
WITH
LLOYDS TSB BANK plc
as Facility Agent
ALLEN & OVERY
London
INDEX
Clause Page
1. Interpretation........................................................ 1
2. Facilities............................................................ 14
3. Purpose............................................................... 14
4. The Offer............................................................. 15
5. Conditions Precedent.................................................. 19
6. Utilisation - Loans................................................... 19
7. Utilisation - Bills................................................... 20
8. Bills................................................................. 23
9. Optional Currencies................................................... 24
10. Repayment............................................................. 26
11. Prepayment and Cancellation........................................... 26
12. Interest.............................................................. 28
13. Terms................................................................. 29
14. Market Disruption..................................................... 30
15. Taxes................................................................. 30
16. Increased Costs....................................................... 33
17. Mitigation............................................................ 34
18. Payments.............................................................. 34
19. Representations....................................................... 36
20. Information Covenants................................................. 39
21. Financial Covenants................................................... 40
22. General Covenants..................................................... 43
23. Default............................................................... 47
24. The Administrative Parties............................................ 50
25. Evidence and calculations............................................. 55
26. Fees.................................................................. 55
27. Indemnities and Break Costs........................................... 56
28. Expenses.............................................................. 57
29. Amendments and Waivers................................................ 57
30. Changes to the Parties................................................ 59
31. Disclosure of Information............................................. 61
32. Set-off............................................................... 62
33. Pro rata Sharing...................................................... 62
34. Severability.......................................................... 63
35. Counterparts.......................................................... 63
36. Notices............................................................... 64
37. Language.............................................................. 65
38. Governing Law......................................................... 65
39. Enforcement........................................................... 65
Schedules
1. Original Parties.................................................. 67
2. Conditions Precedent Documents.................................... 68
3. Form of Request................................................... 69
4. Calculation of the Mandatory Cost................................. 70
5. Form of Transfer Certificate...................................... 72
6. Form of Compliance Certificate.................................... 73
7. Form of Bill...................................................... 74
8. Form of Syndication Agreement..................................... 75
9. Form of Power of Attorney for Bills............................... 88
10. Form of legal opinion of Allen & Overy............................ 87
Signatories................................................................ 90
THIS AGREEMENT is dated 14th February, 2002
BETWEEN:
(1) SMITH & NEPHEW PLC (registered number 324357) (the "Company");
(2) LLOYDS TSB CAPITAL MARKETS as arranger (in this capacity the "Arranger");
(3) THE FINANCIAL INSTITUTION listed in Schedule 1 (Original Parties) as
original lender (the "Original Lender"); and
(4) LLOYDS TSB BANK plc as facility agent (in this capacity the "Facility
Agent").
IT IS AGREED as follows:
1. Interpretation
1.1 Definitions
In this Agreement:
"Administrative Party"
means the Arranger or the Facility Agent.
"Affiliate"
means a Subsidiary or a Holding Company of a person or any other Subsidiary
of that Holding Company.
"Availability Period"
means:
(a) in the case of any Offer Loan, the period from and including the date
of this Agreement to and including the date falling six months after
the date of this Agreement; and
(b) in the case of any Loan other than an Offer Loan, the period from and
including the date of this Agreement to and including:
(i) in the case of Facility A, the date falling 364 days after the
date of this Agreement; and
(ii) in the case of Facility B, the Final Maturity Date.
"Bidco"
means the wholly owned subsidiary of the Company that makes the Offer.
2
"Bill"
means a Sterling bill of exchange substantially in the form of Schedule 7
(Form of Bill).
"Break Costs"
means the amount (if any) which a Lender is entitled to receive under this
Agreement as compensation if any part of a Loan or overdue amount is
prepaid.
"Business Day"
means a day (other than a Saturday or a Sunday) on which banks are open for
general business in London and:
(a) if on that day a payment in or a purchase of a currency (other than
euro) is to be made, the principal financial centre of the country of
that currency; or
(b) if on that day a payment in or a purchase of euro is to be made, which
is also a TARGET Day.
"Commitment"
means a Commitment, as so designated, of a Lender under a particular
Facility.
"Compliance Certificate"
has the meaning given to it in Clause 20.2 (Compliance Certificate).
"Credit"
means a Loan or a Bill.
"Default"
means:
(a) an Event of Default; or
(b) an event which would be (with the expiry of a grace period or the
giving of notice under the Finance Documents or any combination of
them) an Event of Default.
"euro"
means the single currency of the Participating Member States.
"EURIBOR"
means for a Term of any Loan or overdue amount in euro:
(a) the applicable Screen Rate; or
(b) if no Screen Rate is available for that Term of that Loan or overdue
amount, the arithmetic mean (rounded upward to four decimal places) of
the rates as supplied to
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the Facility Agent at its request quoted by the Reference Banks to
leading banks in the European Interbank market,
as of 11.00 a.m. (Brussels time) on the Rate Fixing Day for the offering of
deposits in euro for a period comparable to that Term.
"Event of Default"
means an event specified as such in this Agreement.
"Facilities"
means Facility A and Facility B.
"Facility A"
means the multi-currency revolving credit and Sterling acceptance facility
referred to in Clause 2.1 (Facility A).
"Facility A Commitment"
means:
(a) for the Original Lender, the amount set opposite its name in Schedule
1 (Original Parties) under the heading "Facility A Commitment" and the
amount of any other Facility A Commitment it acquires; and
(b) for any other Lender, the amount of any other Facility A Commitment it
acquires,
to the extent not cancelled, transferred or reduced under this Agreement.
"Facility A Margin"
means the rate set out as the Facility A Margin in the Fee Letter between
the Arranger and the Company.
"Facility B"
means the multi-currency revolving credit and Sterling acceptance facility
referred to in Clause 2.2 (Facility B).
"Facility B Commitment"
means:
(a) for the Original Lender, the amount set opposite its name in Schedule
1 (Original Parties) under the heading "Facility B Commitment" and the
amount of any other Facility B Commitment it acquires; and
(b) for any other Lender, the amount of any other Facility B Commitment it
acquires,
to the extent not cancelled, transferred or reduced under this Agreement.
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"Facility B Margin"
means 0.40 per cent. per annum.
"Facility Office"
means the office(s) notified by a Lender to the Facility Agent:
(a) on or before the date it becomes a Lender; or
(b) by not less than five Business Days' notice,
as the office(s) through which it will perform its obligations under this
Agreement.
"Fee Letter"
means any letter entered into by reference to this Agreement between one or
more Administrative Parties and the Company setting out the amount of
certain fees referred to in this Agreement.
"Final Maturity Date"
means the fifth anniversary of the date of this Agreement.
"Finance Document"
means:
(a) this Agreement;
(b) a Fee Letter;
(c) a Bill;
(d) a Transfer Certificate;
(e) the Syndication Agreement;
(f) the Syndication Letter; and
(g) any other document designated as such by the Facility Agent and the
Company.
"Finance Party"
means a Lender or an Administrative Party.
"Financial Indebtedness"
means any indebtedness (without double counting) for or in respect of:
(a) moneys borrowed;
(b) any acceptance credit;
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(c) any bond, note, debenture, loan stock or other similar instrument;
(d) any finance or capital lease as defined in accordance with the
accounting principles applied in connection with the Original
Financial Statements;
(e) receivables sold or discounted (otherwise than on a non-recourse
basis);
(f) the acquisition cost of any asset to the extent payable after its
acquisition or possession by the party liable where the deferred
payment is arranged primarily as a method of raising finance or
financing the acquisition of that asset;
(g) any derivative transaction protecting against or benefiting from
fluctuations in any rate or price (and at any time the then marked to
market value of the derivative transaction will be used to calculate
its amount, such marked to market value being determined by reference
to the documentation of that transaction or, if there is no such
provision in the documentation, determined by the Company acting
reasonably and on the basis of quotations from the relevant
counterparty);
(h) any other transaction (including any forward sale or purchase
agreement) which has the commercial effect of a borrowing;
(i) any counter-indemnity obligation in respect of any guarantee,
indemnity, bond, letter of credit or any other instrument issued by a
bank or financial institution; or
(j) any guarantee, indemnity or similar assurance against financial loss
of any person in respect of any item referred to in paragraphs (a) to
(i) above.
"Group"
means the Company and its Subsidiaries.
"Holding Company"
means a holding company within the meaning of section 736 of the Companies
Act 1985.
"IBOR"
means LIBOR or EURIBOR.
"Increased Cost"
means:
(a) an additional or increased cost;
(b) a reduction in the rate of return under a Finance Document or on the
overall capital of a Finance Party or any of its Affiliates; or
(c) a reduction of an amount due and payable under any Finance Document,
which is incurred or suffered by a Finance Party or any of its Affiliates
but only to the extent attributable to that Finance Party having entered
into any Finance Document or funding or performing its obligations under
any Finance Document.
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"Lender"
means:
(a) an Original Lender; or
(b) any person which becomes a Lender after the date of this Agreement.
"LIBOR"
means for any Loan or overdue amount:
(a) the applicable Screen Rate; or
(b) if no Screen Rate is available for the relevant currency or Term of
that Loan or overdue amount, the arithmetic mean (rounded upward to
four decimal places) of the rates, as supplied to the Facility Agent
at its request, quoted by the Reference Banks to leading banks in the
London interbank market,
as of 11.00 a.m. on the Rate Fixing Day for the offering of deposits in the
currency of that Loan or overdue amount for a period comparable to its
Term.
"Loan"
means, unless otherwise stated in this Agreement, the principal amount of
each borrowing under this Agreement or the principal amount outstanding of
that borrowing.
"Majority Lenders"
means, at any time, at least three Lenders:
(a) whose share in the outstanding Credits and whose undrawn Commitments
then aggregate 66 2/3 per cent. or more of the aggregate of all the
Credits and the undrawn Commitments of all the Lenders;
(b) if there is no Credit then outstanding, whose undrawn Commitments then
aggregate 66 2/3 per cent. or more of the Total Commitments; or
(c) if there is no Credit then outstanding and the Total Commitments have
been reduced to zero, whose Commitments aggregated 66 2/3 per cent. or
more of the Total Commitments immediately before the reduction.
"Mandatory Cost"
means the cost of complying with certain regulatory requirements, expressed
as a percentage rate per annum and calculated by the Facility Agent under
Schedule 4 (Calculation of the Mandatory Cost).
"Margin"
means the Facility A Margin or the Facility B Margin, as the case may be.
7
"Material Adverse Effect"
means a material adverse effect on the ability of the Company to comply
with its payment obligations under this Agreement and its obligations under
Clause 21.3 (Gearing) and Clause 21.4 (Interest cover/Cashflow).
"Material Subsidiary"
means, at any time, a Subsidiary of the Company:
(a) whose gross assets (excluding intra-Group items) then equal or exceed
15 per cent. of the gross assets of the Group; or
(b) whose earnings before interest and tax (excluding intra-Group items)
then equal or exceed 15 per cent. of the earnings before interest and
tax of the Group.
For this purpose:
(i) the gross assets or earnings before interest and tax of a Subsidiary
of the Company will be determined from its financial statements
(consolidated if it has Subsidiaries) upon which the latest audited
financial statements of the Group have been based;
(ii) if a Subsidiary of the Company becomes a member of the Group after
the date on which the latest audited financial statements of the
Group have been prepared, the gross assets or earnings before
interest and tax of that Subsidiary will be determined from its
latest financial statements;
(iii) the gross assets or earnings before interest and tax of the Group
will be determined from its latest audited financial statements,
adjusted (where appropriate) to reflect the gross assets or earnings
before interest and tax of any company or business subsequently
acquired or disposed of; and
(iv) if a Material Subsidiary disposes of all or substantially all of its
assets to another Subsidiary of the Company, it will immediately
cease to be a Material Subsidiary and the other Subsidiary (if it is
not already) will immediately become a Material Subsidiary; the
subsequent financial statements of those Subsidiaries and the Group
will be used to determine whether those Subsidiaries are Material
Subsidiaries or not.
If there is a dispute as to whether or not a company is a Material
Subsidiary, a certificate of the auditors of the Company will be, in the
absence of manifest error, conclusive.
"Maturity Date"
means, for a Credit, the last day of its Term.
"Merger"
means the merger of Bidco with and into the Target on the terms set out in
the Merger Agreement.
8
"Merger Agreement"
means the Agreement and Plan of Merger dated on or about the date of this
Agreement between Bidco, Target and Smith & Nephew Inc., as the same may be
amended or revised from time to time (with the consent of the Majority
Lenders if required under this Agreement).
"Offer"
means the tender offer for the Shares made by Bidco on the terms and
conditions referred to in the Merger Agreement and set out in the Offer
Documents.
"Offer Documents"
means the offer to purchase, related materials, including the letter of
transmittal to be used for tendering shares, the
solicitation/recommendation statement on Schedule 14D-9, and the exhibits
thereto, to be filed with the SEC with respect to the Offer.
"Offer Expiry Date"
means the date upon which the Offer lapses, terminates or is withdrawn.
"Offer Loan"
means any Loan the purpose of which is to finance directly or indirectly
the acquisition of Shares tendered into the Offer.
"Original Financial Statements"
means the audited consolidated financial statements of the Company for the
year ended 31st December, 2000.
"Participating Member State"
means a member state of the European Communities that adopts the euro as
its lawful currency under the legislation of the European Union for
European Monetary Union.
"Party"
means a party to this Agreement.
"Power of Attorney"
means a power of attorney, substantially in the form of Schedule 9 (Form of
Power of Attorney) or in any other form agreed by the Company and the
Facility Agent.
"Pro Rata Share"
means on a particular date:
(a) the proportion which a Lender's share of the Credits (if any) bears
to all the Credits;
9
(b) if there is no Credit outstanding on that date, the proportion which
its Commitment bears to the Total Commitments on that date;
(c) if the Total Commitments have been cancelled, the proportion which its
Commitments bore to the Total Commitments immediately before being
cancelled; or
(d) when the term is used in relation to a Facility, the above proportions
but applied only to the Credits and Commitments for that Facility.
For the purpose of paragraph (d) above, the Facility Agent will determine
whether the term in any case relates to a particular Facility.
"Rate Fixing Day"
means:
(a) the first day of a Term for a Loan denominated in Sterling;
(b) the second Business Day before the first day of a Term for a Loan
denominated in any other currency (other than euros); or
(c) the second TARGET Day before the first day of a Term for a Loan
denominated in euros,
or such other day as the Facility Agent determines is generally treated as
the rate fixing day by market practice in the relevant interbank market.
"Reference Banks"
means Lloyds TSB Bank plc and any other bank or financial institution
agreed by the Facility Agent and the Company under this Agreement.
"Repeating Representations"
means the representations which are deemed to be repeated under this
Agreement.
"Request"
means a request for a Credit, substantially in the form of Schedule 3 (Form
of Request).
"Rollover Loan"
means one or more Loans:
(a) to be made on the same day that a maturing Loan is due to be repaid;
(b) the aggregate amount of which is equal to or less than the
maturing Loan;
(c) in the same currency as the maturing Loan; and
(d) to be made for the purpose of refinancing a maturing Loan.
10
"Screen Rate"
means;
(a) for LIBOR, the British Bankers Association Interest Settlement Rate
(if any); and
(b) for EURIBOR, the percentage rate per annum determined by the Banking
Federation of the European Union,
for the relevant currency and Term displayed on the appropriate page of the
Telerate screen selected by the Facility Agent. If the relevant page is
replaced or the service ceases to be available, the Facility Agent (after
consultation with the Company and the Lenders) may specify another page or
service displaying the appropriate rate.
"SEC"
means the United States Securities and Exchange Commission.
"Shares"
means all the outstanding common stock of the Target (including any stock
of the Target issued or to be issued whilst the Offer remains open for
acceptance).
"Sterling" or "(pound)"
means the lawful currency for the time being of the United Kingdom.
"Subsidiary"
means:
(a) a subsidiary within the meaning of section 736 of the Companies Act
1985; and
(b) for the purposes of Clause 20 (Financial covenants), unless the
context otherwise requires, a subsidiary undertaking within the
meaning of section 258 of the Companies Act 1985.
"Syndication"
means the primary syndication by the Arranger of the Facilities.
"Syndication Agreement"
means an agreement between the Company and the Finance Parties for the
purpose of incorporating New Lenders (as defined in Clause 29.3
(Assignments and transfers by Lenders)) in Syndication substantially in the
form set out in Schedule 8.
"Syndication Letter"
means a letter dated the date of this Agreement from the Arranger to the
Company in respect of the primary syndication of the Facilities and other
related matters.
11
"Target"
means Oratec Interventions, Inc., a company incorporated under the laws of
the State of Delaware.
"TARGET Day"
means a day on which the Trans-European Automated Real-time Gross
Settlement Express Transfer payment system is open for the settlement of
payments in euro.
"Tax"
means any tax, levy, impost, duty or other charge or withholding of a
similar nature (including any related penalty or interest).
"Tax Deduction"
means a deduction or withholding for or on account of Tax from a payment
under a Finance Document.
"Tax Payment"
means a payment made by the Company to a Finance Party in any way relating
to a Tax Deduction.
"Term"
means each period determined under this Agreement:
(a) by reference to which interest on a Loan or an overdue amount is
calculated; or
(b) for which a Bill is to be outstanding.
"Total A Commitments"
means the aggregate of the Facility A Commitments of all the Lenders, being
the total amount specified as such in Schedule 1 (Original Parties) at the
date of this Agreement.
"Total B Commitments"
means the aggregate of the Facility B Commitments of all the Lenders, being
the total amount specified as such in Schedule 1 (Original Parties) at the
date of this Agreement.
"Total Commitments"
means the aggregate of the Commitments of all the Lenders.
"Transaction Documents"
means the Finance Documents, the Offer Documents and the Merger Agreement.
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"Transfer Certificate"
means a certificate in the form of Schedule 5 (Form of Transfer
Certificate) with such amendments as the Facility Agent may approve or
reasonably require or any other form agreed between the Facility Agent and
the Company.
"U.K."
means the United Kingdom.
"U.S. Dollars" or "U.S.$"
means the lawful currency for the time being of the United States of
America.
"Utilisation Date"
means the date on which any Facility is utilised.
1.2 Construction
(a) In this Agreement, unless the contrary intention appears, a reference to:
(i) an "amendment" includes a supplement, novation, restatement or
re-enactment and "amended" is to be construed accordingly;
"assets" includes present and future properties, revenues and rights
of every description;
an "authorisation" includes an authorisation, consent, approval,
resolution, licence, exemption, filing, registration or notarisation;
"indebtedness" includes any obligation (whether incurred as principal
or as surety) for the payment or repayment of money;
a "person" includes any individual, company, corporation,
unincorporated association or body (including a partnership, trust,
joint venture or consortium), government, state, agency, organisation
or other entity whether or not having separate legal personality;
a "regulation" includes any regulation, rule, official directive,
request or guideline (whether or not having the force of law but, if
not having the force of law, being of a type with which any person to
which it applies is accustomed to comply) of any governmental,
inter-governmental or supranational body, agency, department or
regulatory, self-regulatory or other authority or organisation;
(ii) a currency is a reference to the lawful currency for the time being
of the relevant country;
(iii) a Default being "outstanding" means that it has not been remedied or
waived;
(iv) a provision of law is a reference to that provision as extended,
applied, amended or re-enacted and includes any subordinate
legislation;
13
(v) a Clause, a Subclause or a Schedule is a reference to a clause or
subclause of, or a schedule to, this Agreement;
(vi) a person includes its successors in title, permitted assigns and
permitted transferees;
(vii) a Finance Document or another document is a reference to that
Finance Document or other document as amended; and
(viii) a time of day is a reference to London time.
(b) Unless the contrary intention appears, a reference to a "month" or "months"
is a reference to a period starting on one day in a calendar month and
ending on the numerically corresponding day in the next calendar month or
the calendar month in which it is to end, except that:
(i) if the numerically corresponding day is not a Business Day, the
period will end on the next Business Day in that month (if there is
one) or the preceding Business Day (if there is not);
(ii) if there is no numerically corresponding day in that month, that
period will end on the last Business Day in that month; and
(iii) notwithstanding sub-paragraph (i) above, a period which commences on
the last Business Day of a month will end on the last Business Day
in the calendar month in which it is to end.
(c) (i) Unless expressly provided to the contrary in a Finance Document, a
person who is not a party to a Finance Document may not enforce any
of its terms under the Contracts (Rights of Third Parties) Act 1999.
(ii) Notwithstanding any term of any Finance Document, the consent of any
third party is not required for any variation (including any release
or compromise of any liability under) or termination of that Finance
Document.
(d) A reference to a Party will not include that Party if it has ceased to be a
Party under this Agreement.
(e) Unless the contrary intention appears:
(i) a term used in any other Finance Document or in any notice given in
connection with any Finance Document has the same meaning in that
Finance Document or notice as in this Agreement;
(ii) any non-payment obligation of the Company under the Finance
Documents remains in force for so long as any payment obligation is
or may be outstanding under the Finance Documents;
(iii) the headings in this Agreement do not affect its interpretation; and
(iv) if there is an inconsistency between this Agreement and any other
Finance Document, the other Finance Document will prevail.
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2. FACILITIES
2.1 Facility A
(a) Subject to the terms of this Agreement, the Lenders make available to the
Company a multi-currency revolving credit facility in an aggregate amount
equal to the Total A Commitments.
(b) Facility A may also be utilised by way of Bills.
2.2 Facility B
(a) Subject to the terms of this Agreement, the Lenders make available to the
Company a multi-currency revolving credit facility in an aggregate amount
equal to the Total B Commitments.
(b) Facility B may also be utilised by way of Bills.
2.3 Nature of a Finance Party's rights and obligations
Unless otherwise agreed by all the Finance Parties:
(a) the obligations of a Finance Party under the Finance Documents are
several. Failure by a Finance Party to perform its obligations does
not affect the obligations of any other Party under the Finance
Documents; nNo Finance Party is responsible for the obligations of any
other Finance Party under the Finance Documents; and
(b) the rights of a Finance Party under the Finance Documents are separate
and independent rights, and a debt arising under the Finance Documents
to a Finance Party is a separate and independent debt; a Finance Party
may, except as otherwise stated in the Finance Documents, separately
enforce those rights.
3. PURPOSE
3.1 Credits
Each Credit may only be used in or towards the financing or refinancing of:
(a) the acquisition by Bidco of the Shares pursuant to the Offer;
(b) the purchase of any share options over the Shares purchased in
connection with the Offer;
(c) the fees, costs and expenses associated with the Offer,
and for the general corporate purposes of the Group, including (without
limitation) financing the acquisition of assets or businesses, share
buy-backs or special dividend payments.
3.2 No obligation to monitor
No Finance Party is bound to monitor or verify the utilisation of any
Facility.
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4. THE OFFER
4.1 Defined terms
In this Subclause:
"Certain Funds Period"
means the period beginning on the date of this Agreement and ending on the
earliest of:
(a) the date on which Bidco has paid the consideration monies for all the
Shares subject to the Offer to the entity acting as depositary;
(b) the date on which the Merger has been completed in accordance with the
terms of the Merger Agreement;
(c) the date falling 6 months after the date of this Agreement; and
(d) the date falling 7 days after the date of this Agreement unless the
Company has issued the Press Release.
"Clean-Up Period"
means the period commencing on the earlier of:
(a) the date on which Target becomes a Subsidiary of the Company; and
(b) the date on which the Merger completes in accordance with the Merger
Agreement,
and ending on the date which is 120 days after that date.
"Closing Date"
means the date on which the Offer expires (being either its scheduled
expiration date or any extended expiration date) and on which there have
been validly tendered in accordance with the terms of the Offer and not
withdrawn, a number of shares of the common stock of the Target that,
together with the shares then beneficially owned by the Company, represent
at least a majority of the shares of the common stock of the Target on a
fully diluted basis.
"Major Breach"
means a breach of:
(a) Clause 22.4 (Pari passu ranking);
(b) Clause 22.5 (Negative pledge);
(c) Clause 22.6 (Disposals);
(d) Clause 22.7 (Financial Indebtedness);
(e) Clause 22.9 (Mergers); or
16
(f) Clause 4 (The Offer).
"Major Default"
means any of the following Events of Default:
(a) Clause 23.2 (Non-payment);
(b) Clause 23.3 (Breach of other obligations) but only insofar as it
relates to a Major Breach;
(c) Clause 23.4 (Misrepresentation)
but only insofar as it relates to a Major Representation;
(d) Clauses 23.6 (Insolvency) and 23.7 (Insolvency proceedings); or
(e) Clause 23.10 (Effectiveness of Finance Documents).
"Major Representation"
means any of the following representations contained in this Agreement:
(a) 19.2 (Status);
(b) 19.3 (Powers and authority);
(c) 19.4 (Legal validity); or
(d) 19.5 (Non conflict).
"Press Release"
means the press release to be made by or on behalf of the Company
announcing the Offer.
"Target Group"
means the Target and its Subsidiaries.
4.2 Press releases
Unless required by any law or regulation or to give effect to the
Offer, the Company must not make any statement or announcement (other
than the Press Release) containing any information or statement
concerning the Finance Documents or the Finance Parties without the
prior approval of the Arranger. The approval of the Arranger must not
be unreasonably withheld or delayed.
4.3 Additional conditions precedent
(a) A Request for an Offer Loan may not be given until the Facility Agent
has notified the Company and the Lenders that it has received all of
the documents and evidence set out in paragraph (b) below. The Facility
Agent must give this notification as soon as reasonably practicable.
17
(b) The documents and evidence referred to in paragraph (a) above are as
follows:
(i) the Press Release, substantially in the form agreed by the
Facility Agent on or prior to the date of this Agreement;
(ii) the Merger Agreement, in a form which substantially reflects
the Press Release;
(iii) a copy of any subsequent amendment to the Merger Agreement;
(iv) a certificate from the Company confirming that:
(A) the Closing Date has occurred;
(B) no material term or condition of the Offer has been waived
or amended in any respect other than as may be permitted in
accordance with this Agreement;
(C) all conditions of the Offer have been satisfied, except to
the extent waived in accordance with sub-paragraph (B)
above; and
(D) the Merger Agreement is in full force and effect and has
not been terminated;
(v) evidence that all necessary filings have been made, clearances
have been obtained, or relevant waiting or other time periods
under any applicable law or regulation of any jurisdiction
(including the U.S. Hart-Scott Rodino Anti-Trust Improvement Act
of 1976) have expired, lapsed or terminated; and
(vi) evidence that all other necessary authorisations or requirements
of the SEC in connection with the Offer have been obtained.
4.4 Certain Funds
(a) Notwithstanding any term of this Agreement, during the Certain
Funds Period no Lender is entitled to:
(i) refuse to participate in or make available any Offer Loan;
(ii) cancel its Commitment;
(iii) exercise any right of rescission or similar right or remedy
which it may have in relation to any Offer Loan; or
(iv) accelerate or cause repayment of any Offer Loan,
except as provided below in this Subclause.
(b) Paragraph (a) does not apply if the entitlement arises because:
(i) the Company has not delivered all of the documents required
under this Clause or Schedule 2 (Conditions precedent
documents);
(ii) a Major Representation is not correct or will not be correct
immediately after the Offer Loan is made;
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(iii) a Major Default is outstanding or will result from the making of
the Offer Loan; or
(iv) it is unlawful for the Lender to perform any of its obligations
under the Finance Documents.
(c) Nothing in this Subclause will affect the rights of any Finance Party in
respect of any outstanding Default upon expiry of the Certain Funds
Period irrespective of whether that Default occurred during the Certain
Funds Period or not.
4.5 Clean-Up Period
Notwithstanding any term of this Agreement, during the Clean-Up Period
references to the Group or any member of the Group in the following
Subclauses will not include any company which is a member of the Target
Group as at the Closing Date:
(a) Clause 4 (The Offer);
(b) Clause 22.5 (Negative pledge);
(c) Clause 22.6 (Disposals);
(d) Clause 22.7 (Financial Indebtedness);
(e) Clause 22.10 (Environmental matters);
(f) Clause 22.11 (Insurance); and
(g) Clause 23.5 (Cross-default).
4.6 Compliance
The Company must ensure that Bidco complies, in all material respects
with all rules and regulations of the SEC applicable to the Offer and
the Merger and all other laws and regulations applicable to the Offer
and the Merger.
4.7 Information
The Company must promptly supply to the Facility Agent:
(a) copies of all material documents, notices or announcements
received or issued by it in relation to the Offer after the date
of this Agreement; and
(b) any other information regarding the Offer as the Facility Agent
may reasonably request.
4.8 Increase in Offer
(a) Except as provided below, except with the prior consent of the Arranger
the Company must not increase the purchase price for the Shares
specified in the Press Release for the Shares.
(b) Paragraph (a) above does not apply to any increase in the purchase price
for the Shares equal to 15 per cent. or less of the purchase price for
the Shares specified in the Press Release.
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4.9 Amendments and waivers of the Offer
(a) Except as provided below, the Company must not waive or amend any
condition of the Offer in any material respect without the consent of
the Majority Lenders.
(b) Paragraph (a) above does not apply to:
(i) any amendment to the purchase price for the Shares permitted under
Clause 4.8 (Increase in Offer); or
(ii) any extension of the time period within which the Offer may be
accepted provided that such time period does not extend beyond the
date falling six months after the date of this Agreement.
5. CONDITIONS PRECEDENT
5.1 Conditions precedent documents
A Request may not be given until the Facility Agent has notified the
Company and the Lenders that it has received all of the documents and
evidence set out in Schedule 2 (Conditions precedent documents) in form
and substance satisfactory to the Facility Agent. The Facility Agent
must give this notification as soon as reasonably practicable.
5.2 Further conditions precedent
The obligations of each Lender to participate in any Credit are subject
to the further conditions precedent that on both the date of the
Request and the Utilisation Date for that Credit:
(a) the Repeating Representations are correct in all material respects;
and
(b) no Event of Default and, in the case of a Loan other than a
Rollover Loan, no Default, is outstanding or would result from the
Credit.
5.3 Maximum number
Unless the Facility Agent agrees, a Request may not be given if, as a
result, there would be more than 30 Credits outstanding.
6. UTILISATION - LOANS
6.1 Giving of Requests
(a) The Company may borrow a Loan by giving to the Facility Agent a duly
completed Request.
(b) Unless the Facility Agent otherwise agrees and subject to Clause 7.6(a)
(Revocation), the latest time for receipt by the Facility Agent of a
duly completed Request is 11.00 a.m. one Business Day before the Rate
Fixing Day for the proposed borrowing.
(c) Each Request is irrevocable.
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6.2 Completion of Requests
A Request will not be regarded as having been duly completed unless:
(a) it identifies the Facility the Loan applies to;
(b) the Utilisation Date is a Business Day falling within the relevant
Availability Period for that Loan; and
(c) the proposed currency, amount and Term comply with this Agreement.
Only one Loan may be requested in a Request.
6.3 Amount of Loan
(a) Except as provided below, the amount of the Loan must be a minimum of
U.S.$5,000,000 and an integral multiple of U.S.$1,000,000, or their
equivalents in accordance with Clause 9 (Optional Currencies).
(b) The amount of the Loan may also be the balance of the relevant undrawn
Total Facility Commitments or such other amount as the Facility Agent
or the Lenders may agree.
(c) For this purpose, "Total Facility Commitments" means the aggregate of
the Commitments of all the Lenders under a Facility.
(d) The amount of each Lender's share of the Loan will be its Pro Rata share
Share on the proposed Utilisation Date.
6.4 Advance of Loan
(a) The Facility Agent must promptly notify each Lender of the details of
the requested Loan and the amount of its share in that Loan.
(b) No Lender is obliged to participate in a Loan if as a result:
(i) its share in the Credits under a Facility would exceed its
Commitment for that Facility; or
(ii) the Credits would exceed the Total Commitments.
(c) If the conditions set out in this Agreement have been met, each Lender
must make its share in the Loan available to the Facility Agent for the
Company on the Utilisation Date.
7. UTILISATION - BILLS
7.1 Giving of Requests
(a) The Company may draw Bills by giving to the Facility Agent a duly
completed Request.
(b) Unless the Facility Agent otherwise agrees, the latest time for receipt
by the Facility Agent of a duly completed Request is 11.00 a.m. one
Business Day before the proposed Utilisation Date.
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(c) Each Request is irrevocable.
7.2 Completion of Requests
A Request for Bills will not be regarded as being duly completed unless:
(a) it specifies that it is for Bills;
(b) the Utilisation Date is a Business Day falling within the
Availability Period;
(c) the amount requested is:
(i) a minimum of(pound)3,000,000;
(ii) in respect of Facility A, the balance of the undrawn Total
A Commitments;
(iii) in respect of Facility B, the balance of the undrawn Total
B Commitments; or
(iv) such other amount as the Facility Agent or the Lenders may
agree; and
(d) only one Term is specified which:
(i) does not overrun the last day of the applicable
Availability Period; and
(ii) is a period of between 14 and 187 days.
7.3 Amount of Bills
The aggregate principal amount of the Bills to be accepted by a Lender
will be its Pro Rata Share of those Bills on the proposed Utilisation
Date.
7.4 Acceptance of Bills
(a) The Facility Agent must promptly:
(i) notify each Lender of the details of the requested Bills and the
aggregate principal amount of the Bills to be accepted by t; and
(ii) send to each Lender Bills completed in accordance with this
Agreement.
(b) No Lender is obliged to accept any Bill if, as a result:
(i) its share in the Credits under a Facility would exceed its
Commitment for that Facility; or
(ii) the Credits would exceed the Total Commitments.
(c) Subject to Clause 7.7 (Loans as an alternative), if the conditions set
out in this Agreement have been met, each Lender must accept the Bills
sent to it under paragraph (a) above.
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7.5 Payment of proceeds
(a) The Facility Agent must, not later than 11.30 a.m. on the applicable
Utilisation Date, notify the Company and each Lender of the applicable
EBDR.
(b) "EBDR" means the arithmetic mean (rounded upwards to four decimal
places) of the rates supplied by the Reference Banks to the Facility
Agent as its request at or about 10.30 a.m. on the applicable
Utilisation Date) at which Sterling bills eligible for rediscounting at
the Bank of England of an equivalent tenor can be discounted in the
London discount market at or about that time.
(c) Subject to the terms of this Agreement, each Lender must pay to the
Facility Agent for the Company an amount equal to:
(i) the amount which the Lender would have received as the proceeds
of discounting if it had discounted the Bills accepted by it at
the applicable EBDR; less
(ii) acceptance commission calculated, at any time, at a rate equal
to the then applicable Margin and on the aggregate principal
amount of those Bills.
(d) Acceptance commission is calculated on the basis of the number of days
in the relevant Term and a year of 365 days.
7.6 Revocation
(a) If no or only one Reference Bank supplies a rate in accordance with
Clause 7.5 (Payment of proceeds) by 11.30 a.m. on the Utilisation Date;
or
(b) if the Facility Agent determines that any Bills do not comply with the
then current Bank of England regulations for Sterling bankers'
acceptances, then:
(i) the Facility Agent must promptly notify the Company; and
(ii) the relevant Bills will not be accepted.
(c) If either of the events referred to in paragraph (a) or (b) occurs, the
Company shall be entitled to deliver a Request for a Loan in Sterling
in a principal amount equal to the aggregate principal amount of the
Bills which it would otherwise have been obliged to accept under this
Clause and for a Term equal to the Term of those Bills. Such Request
shall be delivered by no later than 5.00 p.m. on the day on which the
Facility Agent has given the notification to the Company under
sub-paragraph (i) above and shall specify a Utilisation Date for that
Loan which is no earlier than the Business Day following the date on
which that Request is delivered (or if such notification is received
by the Company after 4.30 p.m. on that day, the Request may be
delivered by no later 9.15 a.m. on the next succeeding Business Day
and the Utilisation Date can be the same date as that Request).
7.7 Loans as an alternative
(a) If as a result of any law or regulation, a Lender (acting reasonably)
determines that it may not be able to accept any Bills or to discount
Bills at EBDR, then it may notify the Facility Agent by no later than
4.00 p.m. on the Business Day before the proposed Utilisation Date
that, subject to paragraph (b) below, it elects not to accept any
Bills.
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(b) If a Lender notifies the Facility Agent under paragraph (a) above,
then, subject to the terms of this Agreement, the Lender must instead
make a Loan in Sterling on the relevant Utilisation Date in a principal
amount equal to the aggregate principal amount of the Bills which it
would otherwise have been obliged to accept under this Clause and for a
Term equal to the Term of those Bills.
8. BILLS
8.1 Repayment/prepayment
(a) The Company repays or prepays a Bill drawn by it by paying an amount
equal to the principal amount of that Bill to the Facility Agent for
the Lender that accepted that Bill.
(b) A reference in this Agreement to:
(i) a principal amount of a Bill will be construed as a reference to
its face amount;
(ii) to a Lender's share in the Credits includes all outstanding Bills
accepted by that Lender; and
(iii) amounts outstanding under this Agreement includes the face amount
of any outstanding Bill.
8.2 Holding and completion of Bills
(a) The Company must ensure that the Facility Agent has a Power of Attorney
which is in full force and effect, before delivering a Request for
Bills.
(b) If the Power of Attorney is then still in force, the Facility Agent
must, subject to the terms of this Agreement:
(i) on behalf of the Company, draw and endorse sufficient Bills to
fulfil each Request for Bills;
(ii) date each such Bill with its Utilisation Date;
(iii) insert in each such Bill the name of the Lender on which it is
drawn, its face amount and its Maturity Date; and
(iv) send the requisite number of completed Bills to the Lenders for
acceptance under this Agreement.
8.3 Rounding
The Facility Agent may round the principal amount of the Bills to be
accepted by each Lender to ensure that each Bill has a principal amount
of an integral multiple of (pound)10,000, being not less than
(pound)250,000 nor more than (pound)5,000,000.
8.4 Discounting
Each Lender may arrange for a Bill accepted by it to be discounted on
its behalf in the London discount market or elsewhere or discount the
Bill itself.
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8.5 Eligible Bills
The Company must ensure that each Bill drawn by it and accepted by a
Lender is, assuming that the accepting Lender is a bank whose
acceptances are then being treated as eligible acceptances by the Bank
of England, eligible for rediscounting at the Bank of England.
9. OPTIONAL CURRENCIES
9.1 General
In this Clause:
(a) "Agent's Dollar Rate of Exchange"
means the Facility Agent's spot rate of exchange for the purchase
of the relevant currency in the London foreign exchange market
with U.S. Dollars at or about 11.00 a.m. on a particular day.
(b) "Committed Currency"
means Sterling, euro, Yen and Swiss Francs.
(c) "Optional Currency"
means any currency (other than U.S. Dollars) in which a Loan may
be denominated under this Agreement.
9.2 Selection
(a) The Company may select the currency of a Loan in its Request.
(b) Unless the Facility Agent otherwise agrees, the Loans may not be
denominated at any one time in more than 10 currencies.
9.3 Conditions relating to Optional Currencies
(a) A Loan may be denominated in an Optional Currency for a Term if:
(i) that Optional Currency is readily available in the amount
required and freely convertible into U.S. Dollars in the relevant
interbank market on the Rate Fixing Day and the first day of that
Term; and
(ii) that Optional Currency is euro, Sterling, Yen, Swiss Francs or
has been previously approved by the Facility Agent (acting on the
instructions of all the Lenders).
(b) If the Facility Agent has received a request from the Company for a
currency to be approved as an Optional Currency, the Facility Agent
must, within five Business Days, confirm to the Company:
(i) whether or not the Lenders have given their approval; and
(ii) if approval has been given, the minimum amount (and, if required,
integral multiples) for any Loan in that currency.
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(c) If the euro is an Optional Currency at any time, a Loan in that
Optional Currency will only be made available in the euro unit.
9.4 Revocation of currency
(a) Notwithstanding any other term of this Agreement, if before 9.30 a.m.
on any Rate Fixing Day the Facility Agent receives notice from a
Lender that:
(i) the Optional Currency (other than a Committed Currency) requested
is not readily available to it in the relevant interbank market
in the amount and for the period required; or
(ii) participating in a Loan in the proposed Optional Currency might
contravene any law or regulation applicable to it,
the Facility Agent must give notice to the Company to that effect
promptly and in any event before 11.00 a.m. on that day.
(b) In this event:
(i) that Lender must participate in a Loan in U.S. Dollars; and
(ii) the share of that Lender in the Loan and any other similarly
affected Lender(s) will be treated as a separate Loan denominated
in U.S. Dollars during that Term.
(c) Any part of a Loan treated as a separate Loan under this Subclause will
not be taken into account for the purposes of any limit on the number
of Loans or currencies outstanding at any one time.
(d) A Loan will still be treated as a Rollover Loan if it is not
denominated in the same currency as the maturing Loan by reason only of
the operation of this Subclause.
9.5 Optional Currency equivalents
(a) The equivalent in U.S. Dollars of a Loan or part of a Loan in an
Optional Currency for the purposes of calculating:
(i) whether any limit under this Agreement has been exceeded;
(ii) the amount of a Loan;
(iii) the share of a Lender in a Loan;
(iv) the amount of any repayment of a Loan; or
(v) the undrawn amount of a Lender's Commitment,
is its Dollar Amount.
(b) The "Dollar Amount" of a Loan or part of a Loan means:
(i) if the Loan is denominated in U.S. Dollars, its amount; or
26
(ii) if the Loan is denominated in an Optional Currency for a Term, its
equivalent in U.S. Dollars calculated on the basis of the Agent's
Dollar Rate of Exchange one Business Day before the Rate Fixing Day
for that Term.
9.6 Notification
The Facility Agent must notify the Lenders and the Company of the relevant
Dollar Amount (and the applicable Agent's Dollar Rate of Exchange) promptly
after they are ascertained.
10. REPAYMENT
10.1 Repayment of Loans
(a) The Company must repay each Loan in full on its Maturity Date.
(b) Subject to the other terms of this Agreement, any amounts repaid under
paragraph (a) above may be re-borrowed or redrawn (whether as a Loan or a
Bill or both).
10.2 Payment of Bills
(a) The Company must pay an amount equal to the principal amount of each Bill
on its Maturity Date.
(b) Subject to the other terms of this Agreement, any amounts repaid under
paragraph (a) above may be re-borrowed or redrawn (whether as a Loan or a
Bill or both).
11. PREPAYMENT AND CANCELLATION
11.1 Mandatory prepayment - illegality
(a) A Lender must notify the Company promptly if it becomes aware that it is
unlawful in any jurisdiction for that Lender to perform any of its
obligations under a Finance Document or to fund or maintain its share in
any Credit.
(b) After notification under paragraph (a) above:
(i) the Company must repay or prepay the share of that Lender in each
Credit on the date specified in paragraph (c) below; and
(ii) the Commitments of that Lender will be immediately cancelled.
(c) The date for repayment or prepayment of a Lender's share in a Credit will
be:
(i) within three Business Days following receipt by the Company of notice
from the Facility Agent; or
(ii) if allowed by the relevant law, the last day of the current Term of
that Credit.
11.2 Mandatory prepayment - change of control
(a) The Company must promptly notify the Facility Agent if it becomes aware of
any person or group of persons acting in concert which acquires control of
the Company.
27
(b) After notification under paragraph (a) above, each Lender may by notice to
the Company:
(i) cancel its Commitments; and
(ii) demand that its participation in all outstanding Credits, together
with accrued interest and all other amounts accrued under the Finance
Documents be immediately due and payable.
Any such notice will take effect in accordance with its terms.
(c) In paragraph (a) above:
"control" has the meaning given to it in section 416 of the Income and
Corporation Taxes Act 1988; and
"acting in concert" has the meaning given to it in the City Code on
Takeovers and Mergers.
11.3 Voluntary prepayment
(a) The Company may, by giving not less than 5 Business Days' prior notice to
the Facility Agent, prepay any Credit at any time in whole or in part.
(b) A prepayment of part of a Credit must be in a minimum amount of
U.S.$5,000,000 (or its equivalent) and an integral multiple of
U.S.$1,000,000 (or its equivalent).
11.4 Automatic cancellation
The Commitment of each Lender will be automatically cancelled at the close
of business on the last day of the relevant Availability Period.
11.5 Voluntary cancellation
(a) The Company may, by giving not less than 5 Business Days' prior notice to
the Facility Agent, cancel the unutilised amount of the Commitments in
respect of a specified Facility in whole or in part.
(b) Partial cancellation of the Commitments under a specified Facility must be
in a minimum amount of U.S.$5,000,000 and an integral multiple of
U.S.$1,000,000.
(c) Any cancellation in part will be applied against the Commitment of each
Lender pro rata.
11.6 Involuntary prepayment and cancellation
(a) If the Company is, or will be, required to pay to a Lender a Tax Payment or
an Increased Cost, the Company may, while the requirement continues, give
notice to the Facility Agent requesting prepayment and cancellation in
respect of that Lender.
(b) After notification under paragraph (a) above:
(i) the Company must repay or prepay that Lender's share in each Credit
made to it on the date specified in paragraph (c) below; and
(ii) the Commitments of that Lender will be immediately cancelled.
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(c) The date for repayment or prepayment of a Lender's share in a Credit will
be the last day of the current Term for that Credit or, if earlier, the
date specified by the Company in its notification.
11.7 Re-borrowing of Loans and Bills
Any voluntary prepayment of a Loan or Bill may be re-borrowed on the terms
of this Agreement. Any mandatory or involuntary prepayment of a Loan or
Bill may not be re-borrowed.
11.8 Miscellaneous provisions
(a) Any notice of prepayment and/or cancellation under this Agreement is
irrevocable and must specify the relevant date(s) and the affected Credits
and Commitments. The Facility Agent must notify the Lenders promptly of
receipt of any such notice.
(b) All prepayments under this Agreement must be made with accrued interest on
the amount prepaid. No premium or penalty is payable in respect of any
prepayment except for Break Costs.
(c) The Majority Lenders may agree a shorter notice period for a voluntary
prepayment or a voluntary cancellation.
(d) No prepayment or cancellation is permitted except in accordance with the
express terms of this Agreement.
(e) No amount of the Total Commitments cancelled under this Agreement may
subsequently be reinstated.
12. INTEREST
12.1 Calculation of interest
The rate of interest on each Loan for each Term is the percentage rate per
annum equal to the aggregate of the applicable:
(a) Margin;
(b) LIBOR or (in the case of a Loan denominated in euro) EURIBOR; and
(c) Mandatory Cost.
12.2 Payment of interest
Except where it is provided to the contrary in this Agreement, the Company
must pay accrued interest on each Loan made to it on the last day of each
Term and also, if the Term is longer than six months, on the dates falling
at six-monthly intervals after the first day of that Term.
12.3 Interest on overdue amounts
(a) If the Company fails to pay any amount payable by it under the Finance
Documents, it must immediately on demand by the Facility Agent pay interest
on the overdue amount from its due date up to the date of actual payment,
both before, and after judgment.
29
(b) Interest on an overdue amount is payable at a rate determined by the
Facility Agent to be one per cent. per annum above the rate which would
have been payable if the overdue amount had, during the period of
non-payment, constituted a Loan in the currency of the overdue amount. For
this purpose, the Facility Agent may (acting reasonably):
(i) select successive Terms of any duration of up to three months; and
(ii) determine the appropriate Rate Fixing Day for that Term.
(c) Notwithstanding paragraph (b) above, if the overdue amount is a principal
amount of a Loan and becomes due and payable prior to the last day of its
current Term, then:
(i) the first Term for that overdue amount will be the unexpired portion
of that Term; and
(ii) the rate of interest on the overdue amount for that first Term will be
1 per cent. per annum above the rate then payable on that Loan.
After the expiry of the first Term for that overdue amount, the rate on the
overdue amount will be calculated in accordance with paragraph (b) above.
(d) Interest (if unpaid) on an overdue amount will be compounded with that
overdue amount at the end of each of its Terms but will remain immediately
due and payable.
12.4 Notification of rates of interest
The Facility Agent must promptly notify each relevant Party of the
determination of a rate of interest under this Agreement.
13. TERMS
13.1 Selection
(a) Each Loan has one Term only.
(b) The Company will select the Term for a Loan in the relevant Request.
(c) Subject to the following provisions of this Clause, each Term for a Loan
will be one, two, three or six months or any other period agreed by the
Company and the Lenders.
13.2 No overrunning the Final Maturity Date
If a Term would otherwise overrun the Final Maturity Date, it will be
shortened so that it ends on the Final Maturity Date.
13.3 Other adjustments
The Facility Agent and the Company may enter into such other arrangements
as they may agree for the adjustment of Terms and the consolidation and/or
splitting of Loans.
13.4 Notification
The Facility Agent must notify the Company and the Lenders of the duration
of each Term promptly after ascertaining its duration.
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14. MARKET DISRUPTION
14.1 Failure of a Reference Bank to supply a rate
If IBOR is to be calculated by reference to the Reference Banks but a
Reference Bank does not supply a rate by 12.00 noon (local time) on a Rate
Fixing Day, the applicable IBOR will, subject as provided below, be
calculated on the basis of the rates of the remaining Reference Banks.
14.2 Market disruption
(a) In this Clause, each of the following events is a "market disruption
event":
(i) IBOR is to be calculated by reference to the Reference Banks but no,
or only one, Reference Bank supplies a rate by 12.00 noon (local
time) on the Rate Fixing Day; or
(ii) the Facility Agent receives by close of business on the Rate Fixing
Day notification from Lenders whose shares in the relevant Loan
exceed 50 per cent. of that Loan that the cost to them of obtaining
matching deposits in the relevant interbank market is in excess of
IBOR for the relevant Term.
(b) The Facility Agent must promptly notify the Company and the Lenders of a
market disruption event.
(c) After notification under paragraph (b) above, the rate of interest on each
Lender's share in the affected Loan for the relevant Term will be the
aggregate of the applicable:
(i) Margin;
(ii) rate notified to the Facility Agent by that Lender as soon as
practicable to be that which expresses as a percentage rate per
annum the cost to that Lender of funding its share in that Loan from
whatever source it may reasonably select; and
(iii) Mandatory Cost.
14.3 Alternative basis of interest or funding
(a) If a market disruption event occurs and the Facility Agent or the Company
so requires, the Company and the Facility Agent must enter into
negotiations for a period of not more than thirty (30) days with a view to
agreeing an alternative basis for determining the rate of interest and/or
funding for the affected Loan and any future Loan.
(b) Any alternative basis agreed will be, with the prior consent of all the
Lenders, binding on all the Parties.
15. TAXES
15.1 General
In this Clause:
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"Qualifying Lender"
means a Lender which is:
(a) a U.K. Lender; or
(b) a Treaty Lender.
"Tax Credit"
means a credit against any Tax or any relief or remission for Tax (or its
repayment).
"Tax Deduction"
means a deduction or withholding for or on account of Tax from a payment
under a Finance Document.
"Treaty Lender"
means a Lender which, on the date a payment of interest falls due under
this Agreement:
(a) is resident (as defined in the appropriate double taxation agreement)
in a country with which the U.K. has a double taxation agreement
giving residents of that country exemption from U.K. taxation on
interest; and
(b) does not carry on a business in the U.K. through a permanent
establishment with which the payment is effectively connected.
"U.K. Lender"
means a Lender which is within the charge to U.K. corporation tax in
respect of, and beneficially entitled to, a payment of interest on a Loan
made by a person that was a bank for the purpose of section 349 of the
Income and Corporation Taxes Act 1988 (as currently defined in section 840A
of the Income and Corporation Taxes Act) at the time the Loan was made.
15.2 Tax gross-up
(a) The Company must make all payments to be made by it under the Finance
Documents without any Tax Deduction, unless a Tax Deduction is required by
law.
(b) If:
(i) a Lender is not, or ceases to be, a Qualifying Lender; or
(ii) the Company or a Lender is aware that the Company must make a Tax
Deduction (or that there is a change in the rate or the basis of a Tax
Deduction),
it must promptly notify the Facility Agent. The Facility Agent must then
promptly notify the affected Parties.
(c) Except as provided below, if a Tax Deduction is required by law to be made
by the Company or the Facility Agent, the amount of the payment due from
the Company will be increased to
32
an amount which (after making the Tax Deduction) leaves an amount equal to
the payment which would have been due if no Tax Deduction had been
required.
(d) The Company is not required to make an increased payment under paragraph
(c) above to a Lender for a Tax Deduction from a payment of interest, if:
(i) that Lender is not or has ceased to be a Qualifying Lender in respect
of that payment, unless the altered status results from any change
after the date of this Agreement in (or in the interpretation,
administration, or application of) any law or double taxation
agreement or any published practice or concession of any relevant
taxing authority; or
(ii) that Lender is a Treaty Lender and the Company is able to demonstrate
that the Tax Deduction would not have been made if the Lender had
complied with its obligations under paragraph (g) below.
(e) If the Company is required to make a Tax Deduction, it must make the
minimum Tax Deduction and must make any payment required in connection with
that Tax Deduction within the time allowed by law.
(f) Within thirty (30) days of making either a Tax Deduction or a payment
required in connection with a Tax Deduction, the Company must deliver to
the Facility Agent for the relevant Finance Party evidence satisfactory to
that Finance Party (acting reasonably) that the Tax Deduction has been made
or (as applicable) the appropriate payment has been paid to the relevant
taxing authority.
(g) A Treaty Lender must co-operate with the Company in completing any
procedural formalities necessary for the Company to obtain authorisation to
make that payment without a Tax Deduction.
15.3 Tax indemnity
(a) Except as provided below, the Company must indemnify a Finance Party
against any loss or liability which that Finance Party (in its absolute
discretion) determines will be or has been suffered (directly or
indirectly) by that Finance Party for or on account of Tax in relation to a
payment received or receivable (or any payment deemed to be received or
receivable) under a Finance Document.
(b) Paragraph (a) above does not apply to any Tax assessed on a Finance Party
under the laws of the jurisdiction in which:
(i) that Finance Party is incorporated or, if different, the jurisdiction
(or jurisdictions) in which that Finance Party is treated as resident
for tax purposes; or
(ii) that Finance Party's Facility Office is located in respect of amounts
received or receivable in that jurisdiction,
if that Tax is imposed on or calculated by reference to the net income
received or receivable by that Finance Party. However, any payment deemed
to be received or receivable, including any amount treated as income but
not actually received by the Finance Party, such as a Tax Deduction, will
not be treated as net income received or receivable for this purpose.
(c) A Finance Party making, or intending to make, a claim under paragraph (b)
above must promptly notify the Company of the event which will give, or has
given, rise to the claim.
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15.4 Tax Credit
If the Company makes a Tax Payment and the relevant Finance Party (in its
absolute discretion) determines that:
(a) a Tax Credit is attributable to that Tax Payment; and
(b) it has used that Tax Credit,
the Finance Party must pay an amount to the Company which that Finance
Party determines (in its absolute discretion) will leave it (after that
payment) in the same after-tax position as it would have been in if the Tax
Payment had not been made by the Company.
15.5 Stamp taxes
The Company must pay and indemnify each Finance Party against any stamp
duty, registration or other similar Tax payable in connection with the
entry into, performance or enforcement of any Finance Document, except for
any such Tax payable in connection with the entry into of a Transfer
Certificate.
15.6 Value added taxes
(a) Any amount (including costs and expenses) payable under a Finance Document
by the Company is exclusive of any Tax (including value added tax) which
might be chargeable in connection with that amount. If any such Tax is
chargeable, the Company must pay to the Finance Party (in addition to and
at the same time as paying that amount) an amount equal to the amount of
that Tax.
(b) The obligation of the Company under paragraph (a) above will be reduced to
the extent that the Finance Party is entitled to repayment or a credit in
respect of the relevant Tax.
16. INCREASED COSTS
16.1 Increased Costs
Except as provided below in this Clause, the Company must pay to a Finance
Party the amount of any Increased Cost incurred by that Finance Party or
any of its Affiliates as a result of:
(a) the introduction of, or any change in, or any change in the
interpretation or application of, any law or regulation; or
(b) compliance with any law or regulation made after the date of this
Agreement.
16.2 Exceptions
The Company need not make any payment for an Increased Cost to the extent
that the Increased Cost is:
(a) compensated for under another Clause, or would have been but for an
exception to that Clause;
(b) a tax on the overall net income of a Finance Party or any of its
Affiliates; or
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(c) attributable to a Finance Party or its Affiliate wilfully or grossly
negligently failing to comply with any law or regulation.
16.3 Claims
A Finance Party intending to make a claim for an Increased Cost must notify
the Company promptly of the circumstances giving rise to, and the amount
of, the claim.
17. MITIGATION
17.1 Mitigation
(a) Each Finance Party must, in agreement with the Company, take all reasonable
steps to mitigate any circumstances which arise and which result or would
result in:
(i) any Tax Payment, any claim under Clause 15.3 (Tax indemnity) or
Increased Cost being payable to that Finance Party; or
(ii) that Finance Party being able to exercise any right of prepayment
and/or cancellation under this Agreement by reason of any illegality,
including transferring its rights and obligations under the Finance
Documents to an Affiliate or changing its Facility Office.
(b) The Company must indemnify each Finance Party for all costs and expenses
reasonably incurred by that Finance Party as a result of any step taken by
it under this Subclause.
(c) A Finance Party is not obliged to take any step under this Subclause if, in
the opinion of that Finance Party (acting reasonably), to do so might be
prejudicial to it.
17.2 Conduct of business by a Finance Party
No term of this Agreement will:
(a) interfere with the right of any Finance Party to arrange its affairs
(Tax or otherwise) in whatever manner it thinks fit;
(b) oblige any Finance Party to investigate or claim any credit, relief,
remission or repayment available to it in respect of Tax or the
extent, order and manner of any claim; or
(c) oblige any Finance Party to disclose any information relating to its
affairs (Tax or otherwise) or any computation in respect of Tax.
18. PAYMENTS
18.1 Place
Unless a Finance Document specifies that payments under it are to be made
in another manner, all payments by a Party (other than the Facility Agent)
under the Finance Documents must be made to the Facility Agent to its
account at such office or bank:
(a) in the principal financial centre of the country of the relevant
currency; or
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(b) in the case of euro, in the principal financial centre of a
Participating Member State or London,
as it may notify to that Party for this purpose by not less than five
Business Days' prior notice.
18.2 Funds
Payments under the Finance Documents to the Facility Agent must be made for
value on the due date at such times and in such funds as the Facility Agent
may specify to the Party concerned as being customary at the time for the
settlement of transactions in the relevant currency in the place for
payment.
18.3 Currency
(a) Unless a Finance Document specifies that payments under it are to be made
in a different manner, the currency of each amount payable under the
Finance Documents is determined under this Clause.
(b) Interest is payable in the currency in which the relevant amount in respect
of which it is payable is denominated.
(c) A repayment or prepayment of any principal amount is payable in the
currency in which that principal amount is denominated
on its due date.
(d) Amounts payable in respect of costs and expenses are payable in the
currency in which they are incurred.
(e) Each other amount payable under the Finance Documents is payable in
Sterling.
18.4 Distribution
(a) Each payment received by the Facility Agent under the Finance Documents for
another Party must, except as provided below, be made available by the
Facility Agent to that Party by payment (as soon as practicable after
receipt) to its account with such office or bank:
(i) in the principal financial centre of the country of the relevant
currency; or
(ii) in the case of euro, in the principal financial centre of a
Participating Member State or London, as it may notify to the Facility
Agent for this purpose by not less than five Business Days' prior
notice.
(b) The Facility Agent may (with the consent and at the expense of the Company)
apply any amount received by it for the Company in or towards payment (as
soon as practicable after receipt) of any amount due from the Company under
the Finance Documents or in or towards the purchase of any amount of any
currency to be so applied.
(c) Where a sum is paid to the Facility Agent under this Agreement for another
Party, the Facility Agent is not obliged to pay that sum to that Party
until it has established that it has actually received it. However, the
Facility Agent may assume that the sum has been paid to it, and, in
reliance on that assumption, make available to that Party a corresponding
amount. If it transpires that the sum had not been made available, that
Party must immediately on demand
36
by the Facility Agent refund any corresponding amount made available to it
together with interest on that amount from the date of payment to the date
of receipt by the Facility Agent at a rate calculated by the Facility Agent
to reflect its cost of funds.
18.5 No set-off or counterclaim
All payments made by the Company under the Finance Documents must be made
without set-off or counterclaim.
18.6 Business Days
(a) If a payment under the Finance Documents is due on a day which is not a
Business Day, the due date for that payment will instead be the next
Business Day in the same calendar month (if there is one) or the preceding
Business Day (if there is not).
(b) During any extension of the due date for payment of any principal under
this Agreement interest is payable on that principal at the rate payable on
the original due date.
18.7 Partial payments
(a) If the Facility Agent receives a payment insufficient to discharge all the
amounts then due and payable by the Company under the Finance Documents,
the Facility Agent must apply that payment towards the obligations of the
Company under the Finance Documents in the following order:
(i) first, in or towards payment pro rata of any unpaid fees, costs and
expenses of the Facility Agent under the Finance Documents;
(ii) secondly, in or towards payment pro rata of any accrued interest or
fee due but unpaid under this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal amount due
but unpaid under this Agreement; and
(iv) fourthly, in or towards payment pro rata of any other sum due but
unpaid under the Finance Documents.
(b) The Facility Agent must, if so directed by all the Lenders, vary the order
set out in sub-paragraphs (a)(ii) to (iv) above.
(c) This Subclause will override any appropriation made by the Company.
18.8 Timing of payments
If a Finance Document does not provide for when a particular payment is
due, that payment will be due within three Business Days of demand by the
relevant Finance Party.
19. REPRESENTATIONS
19.1 Representations
(a) The representations set out in this Clause are made by the Company to each
Finance Party.
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(b) The representations set out in this Clause which relate to Bidco shall not
apply to Bidco after completion of the Merger.
19.2 Status
(a) It is a limited liability company, duly incorporated and validly existing
under the laws of its jurisdiction of incorporation.
(b) It and each of its Subsidiaries has the power to own its assets and carry
on its business as it is being conducted.
19.3 Powers and authority
It has the power to enter into and perform, and has taken all necessary
corporate action to authorise the entry into and performance of, the
Transaction Documents to which it is or will be a party and the
transactions contemplated by those Transaction Documents.
19.4 Legal validity
Subject to any general principles of law limiting its obligations and
referred to in any legal opinion required under this Agreement, each
Finance Document to which it is a party is its legally binding, valid and
enforceable obligation.
19.5 Non-conflict
The entry into and performance by it and Bidco of, and the transactions
contemplated by, the Transaction Documents do not conflict with:
(a) any law or regulation applicable to it; or
(b) its constitutional documents; or
(c) at the date of this Agreement, any document which is binding upon it
or any of its Material Subsidiaries or any of its or its Material
Subsidiaries' assets.
19.6 No default
(a) No Default is outstanding or will result from the execution of, or the
performance of any transaction contemplated by, any Finance Document; and
(b) no other event is outstanding which constitutes a default under any
document which is binding on it or any of its Subsidiaries or any of its or
its Subsidiaries' assets to an extent or in a manner which is reasonably
likely to have a Material Adverse Effect.
19.7 Authorisations
All authorisations required by it in connection with the entry into,
performance, validity and enforceability of, and the transactions
contemplated by, the Finance Documents have been, or in the case of the
other Transaction Documents will have been by the Closing Date, obtained or
effected (as appropriate) and are, or will be by the Closing Date in the
case of the other Transaction Documents, in full force and effect.
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19.8 Financial statements
Its audited consolidated financial statements most recently delivered to
the Facility Agent (which, at the date of this Agreement, are the Original
Financial Statements):
(a) have been prepared in accordance with accounting principles and
practices generally accepted in its jurisdiction of incorporation,
consistently applied; and
(b) give a true and fair view of its consolidated financial condition as
at the date to which they were drawn up,
except, in each case, as disclosed to the contrary in those financial
statements.
19.9 No material adverse change
There has been no material adverse change in its consolidated financial
condition since the date to which the audited consolidated financial
statements most recently delivered to the Facility Agent were drawn up.
19.10 Litigation
No litigation, arbitration or administrative proceedings are current or,
to its knowledge, pending or threatened in writing, which, if adversely
determined, are reasonably likely to have a Material Adverse Effect.
19.11 Information
(a) All material factual information supplied by the Company to any
Finance Party in writing was accurate in all material respects as at
the date to which it was prepared;
(b) as at its date and to the best of its knowledge, the opinions,
projections and forecasts supplied by the Company to any Finance
Party and the assumptions on which they were based were arrived at
after due and careful consideration and genuinely represented its
views; and
(c) to the best of its knowledge there are no material facts or
circumstances which have not been disclosed to the parties to this
Agreement by the Company prior to the date of this Agreement and
which would make any of the information, opinions, projections,
forecasts or assumptions supplied by the Company inaccurate or
misleading in any material respect.
19.12 Times for making representations
(a) The representations set out in this Clause are made by the Company on the
date of this Agreement.
(b) Unless a representation is expressed to be given at a specific date, each
representation is deemed to be repeated by the Company on the date of each
Request and the first day of each Term.
(c) When a representation is repeated, it is applied to the circumstances
existing at the time of repetition.
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20. INFORMATION COVENANTS
20.1 Financial statements
(a) The Company must supply to the Facility Agent in sufficient copies for all
the Lenders:
(i) its audited consolidated financial statements for each of its
financial years; and
(ii) its interim financial statements for the first half-year of each of
its financial years.
(b) All financial statements must be supplied as soon as they are available
and:
(i) in the case of the Company's audited consolidated financial
statements, within 180 days; and
(ii) in the case of the Company's interim financial statements, within 120
days, of the end of the relevant financial period.
20.2 Compliance Certificate
(a) The Company must supply to the Facility Agent a Compliance Certificate with
each set of its financial statements, sent to the Facility Agent under this
Agreement.
(b) A "Compliance Certificate" is a certificate substantially in the form of
Schedule 6 setting out, among other things, calculations of the financial
covenants.
(c) A Compliance Certificate must be signed by two authorised signatories of
the Company.
20.3 Form of financial statements
(a) The Company must ensure that each set of financial statements supplied
under this Agreement fairly represents its financial condition
(consolidated or otherwise) as at the date to which those financial
statements were drawn up.
(b) The Company must notify the Facility Agent of any change to the basis on
which its audited consolidated financial statements are prepared.
(c) If requested by the Facility Agent, the Company must supply to the Facility
Agent:
(i) a full description of any change notified under paragraph (b) above;
and
(ii) sufficient information to enable the Finance Parties to make a proper
comparison between the financial position shown by the set of
financial statements prepared on the changed basis and its most recent
audited consolidated financial statements delivered to the Facility
Agent under this Agreement.
(d) If requested by the Facility Agent, the Company must enter into discussions
for a period of not more than 30 days with a view to agreeing any
amendments required to be made to this Agreement to place the Company and
the Lenders in the same position as they would have been in if the change
had not happened. Any agreement between the Company and the Facility Agent
will be, with the prior consent of the Majority Lenders, binding on all the
Parties.
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(e) If no agreement is reached under paragraph (d) above on the required
amendments to this Agreement, the Company must supply with each set of its
financial statements another set of its financial statements prepared on
the same basis as the Original Financial Statements.
20.4 Information - miscellaneous
The Company must supply to the Facility Agent:
(a) copies of all documents despatched by the Company to its shareholders
(or any class of them) or its creditors generally at the same time as
they are despatched;
(b) promptly upon becoming aware of them, details of any litigation,
arbitration or administrative proceedings which:
(i) are current, threatened in writing or pending;
(ii) are reasonably likely to be adversely determined; and
(iii) would, if adversely determined, have a Material Adverse Effect;
(c) promptly on request, a list of the then current Material
Subsidiaries; and
(d) promptly on request, such further information regarding the financial
condition and operations of the Group as any Finance Party through
the Facility Agent may reasonably request.
20.5 Notification of Default
(a) The Company must notify the Facility Agent of any Event of Default (and the
steps, if any, being taken to remedy it) promptly upon becoming aware of
its occurrence.
(b) Promptly on request by the Facility Agent, the Company must supply to the
Facility Agent a certificate, signed by two of its authorised signatories
on its behalf, certifying that no Default is outstanding or, if a Default
is outstanding, specifying the Default and the steps, if any, being taken
to remedy it.
20.6 Year end
The Company must not change its financial year end without the prior
written consent of the Majority Lenders such consent not to be unreasonably
withheld or delayed.
21. FINANCIAL COVENANTS
21.1 Definitions
In this Clause:
"Consolidated Cash and Cash Equivalents"
means, at any time:
(a) cash in hand or on deposit with any acceptable bank, which, in either case,
is not subject to any security interest and is readily remittable to the
U.K;
41
(b) certificates of deposit, maturing within one year after the relevant date
of calculation, issued by an acceptable bank;
(c) any investment in marketable obligations issued or guaranteed by the
government of the United States of America or the U.K. or by an
instrumentality or agency of the government of the United States of America
or the U.K. having an equivalent credit rating;
(d) any investment in debt instruments permitting cash withdrawals on not more
than one month's notice and which have a rating of AA or higher by Standard
and Poor's or Aa2 or higher by Moody's;
(e) open market commercial paper:
(i) for which a recognised trading market exists;
(ii) issued in the United States of America or the U.K.;
(iii) which matures within one year after the relevant date of calculation;
and
(iv) which has a credit rating of either A-1 by Standard & Poor's or IBCA
or P-1 by Moody's, or, if no rating is available in respect of the
commercial paper or indebtedness, the issuer of which has, in respect
of its long-term debt obligations, an equivalent rating;
(f) sterling bills of exchange eligible for rediscount at the Bank of England
and accepted by an acceptable bank; or
(g) any other instrument, security or investment approved by the Majority
Lenders,
in each case, to which any member of the Group is beneficially entitled at that
time and which is capable of being applied against Consolidated Total
Borrowings. An "acceptable bank" for this purpose is a commercial bank or trust
company which has a rating of A or higher by Standard & Poor's or IBCA or A-2 or
higher by Moody's or a comparable rating from a nationally recognised credit
rating agency for its long-term debt obligations.
"Consolidated EBITA"
means Consolidated EBITDA for a Measurement Period adjusted by deducting
depreciation.
"Consolidated EBITDA"
means the consolidated net pre-taxation profits of the Group for a Measurement
Period, adjusted by:
(a) adding back Consolidated Interest Payable;
(b) taking no account of any exceptional or extraordinary item;
(c) excluding any amount attributable to minority interests;
(d) adding back depreciation and amortisation;
42
(e) including the net pre-taxation profits of a member of the Group acquired
during that Measurement Period for the part of that Measurement Period when
it was not a member of the Group; and
(f) excluding the net pre-taxation profit attributable to any business sold
during that Measurement Period.
"Consolidated Interest Payable"
means all interest and periodic financing charges including acceptance
commission, commitment fee and the interest element of rental payments or
finance or capital leases (whether, in each case, paid, payable or capitalised),
incurred by the Group in effecting, servicing or maintaining Total Consolidated
Borrowings during a Measurement Period.
"Consolidated Net Interest Payable"
means Consolidated Interest Payable less all financing charges received or
receivable by the Group during the relevant Measurement Period.
"Consolidated Total Borrowings"
means, in respect of the Group, at any time the aggregate of the following:
(a) the outstanding principal amount of any moneys borrowed;
(b) the outstanding principal amount of any acceptance under any acceptance
credit;
(c) the outstanding principal amount of any bond, note, debenture, loan stock
or other similar instrument;
(d) the capitalised element of indebtedness under a finance or capital lease;
(e) the outstanding principal amount of all moneys owing in connection with the
sale or discounting of receivables (otherwise than on a non-recourse
basis);
(f) the outstanding principal amount of any indebtedness arising from any
deferred payment agreements arranged primarily as a method of raising
finance or financing the acquisition of an asset;
(g) any fixed or minimum premium payable on the repayment or redemption of any
instrument referred to in paragraph (c) above;
(h) the outstanding principal amount of any indebtedness arising in connection
with any other transaction (including any forward sale or purchase
agreement) which has the commercial effect of a borrowing; and
(i) the outstanding principal amount of any indebtedness of any person of a
type referred to in paragraphs (a) - (h) above which is the subject of a
guarantee, indemnity or similar assurances against financial loss.
Any amount outstanding in a currency other than Sterling is to be taken into
account at its Sterling equivalent calculated on the basis of:
43
(i) the Facility Agent's spot rate of exchange for the purchase of the
relevant currency in the London foreign exchange market with Sterling
at or about 11.00 a.m. on the day the relevant amount falls to be
calculated; or
(ii) if the amount is to be calculated on the last day of a financial
period of the Company, the rate of exchange used by the Company in its
financial statements for that period.
"Consolidated Total Net Borrowings"
means at any time Consolidated Total Borrowings less Consolidated Cash and
Cash Equivalents.
"Measurement Period"
means a period of 12 months ending on the last day of a financial year or
financial half-year of the Company.
21.2 Interpretation
(a) Except as provided to the contrary in this Agreement, an accounting term
used in this Clause is to be construed in accordance with the principles
applied in connection with the Original Financial Statements.
(b) No item must be credited or deducted more than once in any calculation
under this Clause.
21.3 Gearing
The Company must ensure that Consolidated Total Net Borrowings are not, at
the end of each Measurement Period ending after 31st December, 2001, more
than 2.5 times Consolidated EBITDA.
21.4 Interest cover/Cashflow
The Company must ensure that the ratio of Consolidated EBITA to
Consolidated Net Interest Payable is not, at the end of each Measurement
Period ending after 31st December, 2001, less than 3.5 to 1.
22. GENERAL COVENANTS
22.1 General
The Company agrees to be bound by the covenants set out in this Clause
relating to it and, where the covenant is expressed to apply to each member
or to specified members of the Group, the Company must ensure that each of
its Subsidiaries to which the covenant relates performs that covenant.
22.2 Authorisations
The Company must promptly obtain, maintain and comply with the terms of any
authorisation required under any law or regulation to enable it to perform
its obligations under, or for the validity or (subject to any general
principles of law limiting its obligations and referred to in any legal
opinion required under this Agreement) enforceability of, any Finance
Document.
22.3 Compliance with laws
Each member of the Group must comply in all respects with all regulations
to which it is subject where failure to do so is reasonably likely to have
a Material Adverse Effect.
22.4 Pari passu ranking
The Company must ensure that its payment obligations under the Finance
Documents rank at least pari passu with all its other present and future
unsecured payment obligations, except for obligations mandatorily preferred
by law applying to companies generally.
22.5 Negative pledge
(a) In this Subclause, "Security Interest" means any mortgage, pledge, lien,
charge, assignment, hypothecation or security interest.
(b) Except as provided below, no member of the Group may create or allow to
exist any Security Interest on any of its assets.
(c) Paragraph (b) does not apply to:
(i) any Security Interest comprising a netting, set-off or lien
arrangement entered into by a member of the Group in the ordinary
course of its banking arrangements for the purpose of netting debit
and credit balances;
(ii) any lien arising by operation of law and in the ordinary course of
business;
(iii) any Security Interest on an asset, or an asset of any person,
acquired by a member of the Group after the date of this Agreement to
the extent that the principal amount secured by that Security
Interest has not been incurred or increased in contemplation of, or
since, the acquisition;
(iv) any Security Interest arising under any contract for the purchase of
goods entered into in the normal course of trading pursuant to a
supplier's normal terms and conditions; and
(v) any Security Interest securing indebtedness the amount of which (when
aggregated with the amount of assets or receivables sold, transferred
or disposed of under paragraph (d) below) does not exceed 10 per
cent. of the consolidated gross assets of the Group as shown in the
most recent audited consolidated financial statements of the Company
delivered to the Facility Agent pursuant to Clause 20.1 (Financial
statements) (being as at the date of this Agreement the Original
Financial Statements).
(d) No member of the Group may:
(i) sell, transfer or otherwise dispose of any of its assets on terms
where it is or may be leased to or re-acquired or acquired by a
member of the Group or any of its related entities; or
(ii) sell, transfer or otherwise dispose of any of its receivables on
recourse terms,
45
in circumstances where the transaction is entered into primarily as a
method of raising Financial Indebtedness or of financing the acquisition of
an asset unless the amount of assets or receivables sold, transferred or
disposed of under this paragraph (including any assets the subject of any
such arrangement on the date of this Agreement) (when aggregated with the
amount of indebtedness secured under Subclause 22.5(c)(vi) above) does not
exceed 10 per cent. of the consolidated gross assets of the Group as shown
in the most recent audited consolidated financial statements of the Company
delivered to the Facility Agent pursuant to Clause 20.1 (Financial
statements) (being as at the date of this Agreement the Original Financial
Statements).
22.6 Disposals
(a) In this Subclause, "disposal" means a sale, transfer, grant, lease or other
disposal, whether voluntary or involuntary, and "dispose" will be construed
accordingly.
(b) Except as provided below, the Company will not, and will procure that no
Subsidiary will, either in a single transaction or in a series of
transactions and whether related or not, dispose of all or any part of its
assets.
(c) Paragraph (b) does not apply to any disposal:
(i) made in the ordinary course of trading of the disposing entity;
(ii) of assets which are exchanged within 180 days for other assets
comparable or superior as to type, value and quality;
(iii) by one company in the Group (other than the Company) to another
company in the Group; or
(iv) of machinery of plant at or nearly at the end of their useful life or
period of depreciation;
(v) of obsolete equipment owned by a member of the Group no longer
required for the purposes of the business carried on by that member
of the Group; or
(vi) which would not be deemed to be a class 1 transaction under the
Listing Rules of the Financial Services Authority or which would not
require the approval of the shareholders of the Company in general
meeting.
22.7 Financial Indebtedness
(a) Except as provided below no member of the Group (other than the Company)
may incur any Financial Indebtedness.
(b) Paragraph (a) does not apply to:
(i) any Financial Indebtedness of any person acquired by a member of the
Group which is incurred under arrangements in existence at the date of
acquisition, but only for a period of 6 months from the date of
acquisition;
(ii) any derivative transaction protecting against or benefiting from
fluctuations in any rate or price entered into in the ordinary course
of business;
46
(iii) the capital element of any liability under finance or capital leases
up to a maximum amount not exceeding (pound)10,000,000 (or the
equivalent in any other currency) or any higher amount which is
approved in writing by the Facility Agent acting on the instructions
of the Majority Lenders; or
(iv) foreign exchange, interest rate or similar hedging arrangements
entered into only for the purposes of managing the interest rate and
foreign exchange rates of the Group and not for any speculative
purpose or pursuant to any financial trading; or
(v) any other Financial Indebtedness which in aggregate does not
exceed(pound)125,000,000 or its equivalent at any time.
22.8 Change of business
The Company must ensure that no material change is made to the general
nature of the business of the Company or the Group from that carried on at
the date of this Agreement.
22.9 Mergers
The Company must not enter into any amalgamation, demerger, merger or
reconstruction otherwise than under an intra-Group re-organisation on a
solvent basis or other transaction agreed by the Majority Lenders.
22.10 Environmental matters
(a) In this Subclause:
"Environmental Approval"
means any authorisation required by an Environmental Law.
"Environmental Claim"
means any claim by any person in connection with:
(i) a breach, or alleged breach, of an Environmental Law;
(ii) any accident, fire, explosion or other event of any type involving
an emission or substance which is capable of causing harm to any
living organism or the environment; or
(iii) any other environmental contamination,
which might result in any liability on any Party.
"Environmental Law"
means any law or regulation concerning:
(i) the protection of health and safety;
(ii) the environment; or
47
(iii) any emission or substance which is capable of causing harm to any
living organism or the environment.
(b) Each member of the Group must comply with all Environmental Law and
Environmental Approvals applicable to it if failure to do so is reasonably
likely to have a Material Adverse Effect.
(c) The Company must promptly upon becoming aware notify the Facility Agent
of:
(i) any Environmental Claim current or to its knowledge, pending or
threatened in writing; or
(ii) any circumstances reasonably likely to result in an Environmental
Claim, which, if substantiated, is reasonably likely either to have a
Material Adverse Effect or result in any liability for a Finance
Party.
22.11 Insurance
Each member of the Group must (subject to market availability on
reasonably commercial terms) insure its business and assets with insurance
companies to such an extent and against such risks as companies engaged in
a similar business normally insure.
23. DEFAULT
23.1 Events of Default
(a) Each of the events set out in this Clause is an Event of Default.
(b) In this Clause:
"Material Group Member"
means the Company or a Material Subsidiary; and
"Permitted Transaction"
means:
(i) an intra-Group re-organisation of a Material Subsidiary on a solvent
basis; or
(ii) any other transaction agreed by the Majority Lenders.
23.2 Non-payment
The Company does not pay on the due date any amount payable by it under
the Finance Documents in the manner required under the Finance Documents,
unless the non-payment:
(a) is caused by administrative or technical error; and
(b) is remedied within three Business Days (in the case of principal
amounts due under this Agreement) and within five Business Days (in
the case of any other amount due under this Agreement) of its due
date.
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23.3 Breach of other obligations
(a) The Company does not comply with any term of Clause 21 (Financial
covenants); or
(b) the Company does not comply with any other term of the Finance Documents
not already referred to in this Clause, unless the non-compliance:
(i) is capable of remedy; and
(ii) is remedied within twenty Business Days of the earlier of the Facility
Agent giving notice and the Company becoming aware of the
non-compliance.
23.4 Misrepresentation
A representation made or repeated by the Company in any Finance Document or
in any document delivered by or on behalf of the Company under any Finance
Document is incorrect in any material respect when made or deemed to be
repeated unless the circumstances giving rise to the misrepresentation:
(a) are capable of remedy; and
(b) are remedied within twenty Business Days or the earlier of the
Facility Agent giving notice and the Company becoming aware of the
misrepresentation.
23.5 Cross-default
Any of the following occurs in respect of a member of the Group:
(a) any of its Financial Indebtedness is not paid when due (after the
expiry of any originally applicable grace period);
(b) any of its Financial Indebtedness:
(i) becomes prematurely due and payable; or
(ii) is placed on demand,
in each case, as a result of an event of default (howsoever
described); or
(c) any commitment for its Financial Indebtedness is cancelled or
suspended as a result of an event of default (howsoever described),
unless the aggregate amount of Financial Indebtedness falling within
paragraphs (a)-(c) above is less than (pound)10,000,000 or its equivalent.
23.6 Insolvency
Any of the following occurs in respect of a Material Group Member:
(a) it is or is deemed for the purposes of Section 123 of the Insolvency
Act 1986 (but as if the figure of (pound)750 in paragraph (a) was
replaced with the figure of (pound)1,000,000) to be unable to pay its
debts as they fall due;
49
(b) it admits its inability to pay its debts as they fall due;
(c) it suspends making payments on its debts generally or announces an
intention to do so;
(d) by reason of actual or anticipated financial difficulties, it begins
negotiations with creditors generally or any class of them for the
rescheduling of any of its indebtedness; or
(e) a moratorium is declared in respect of its indebtedness generally.
23.7 Insolvency proceedings
(a) Except as provided below, any of the following occurs in respect of a
Material Group Member:
(i) any step is taken with a view to a composition, assignment or similar
arrangement with its creditors generally;
(ii) a meeting of it is convened for the purpose of considering any
resolution for (or to petition for) its winding-up, administration or
dissolution or any such resolution is passed;
(iii) any person presents a petition for its winding-up, administration or
dissolution;
(iv) an order for its winding-up, administration or dissolution is made;
(v) any liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or similar
officer is appointed in respect of it;
(vi) its directors or other officers request the appointment of a
liquidator, trustee in bankruptcy, judicial custodian, compulsory
manager, receiver, administrative receiver, administrator or similar
officer; or
(vii) any other analogous step or procedure is taken in any jurisdiction.
(b) Paragraph (a) does not apply to:
(i) any step or procedure which is part of a Permitted Transaction; or
(ii) a petition for winding-up presented by a creditor which is being
contested in good faith and with due diligence and is discharged or
struck out within fourteen days.
23.8 Creditors' process
Any attachment, sequestration, distress, execution or analogous event
affects any asset(s) of a Material Group Member, having an aggregate value
of (pound)5,000,000, and is not discharged within fourteen days or is being
contested in good faith to the satisfaction of the Facility Agent acting
reasonably.
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23.9 Cessation of business
A Material Group Member ceases, or threatens to cease, to carry on
business except:
(a) as part of a Permitted Transaction; or
(b) as a result of any disposal allowed under this Agreement.
23.10 Effectiveness of Finance Documents
(a) It is or becomes unlawful for the Company to perform any of its
obligations under the Finance Documents.
(b) The Company repudiates a Finance Document or purports to repudiate a
Finance Document.
23.11 Material adverse change
Any event or series of events occurs which will have a Material Adverse
Effect.
23.12 Acceleration
If an Event of Default is outstanding, the Facility Agent may, and must
if so directed by the Majority Lenders, by notice to the Company:
(a) cancel the Total Commitments; and/or
(b) declare that all or part of any amounts outstanding under the Finance
Documents are:
(i) immediately due and payable; and/or
(ii) payable on demand by the Facility Agent acting on the
instructions of the Majority Lenders.
Any notice given under this Subclause will take effect in accordance with
its terms.
24. THE ADMINISTRATIVE PARTIES
24.1 Appointment and duties of the Facility Agent
(a) Each Finance Party (other than the Facility Agent) irrevocably appoints
the Facility Agent to act as its agent under the Finance Documents.
(b) Each Finance Party irrevocably authorises the Facility Agent to:
(i) perform the duties and to exercise the rights, powers and discretions
that are specifically given to it under the Finance Documents,
together with any other incidental rights, powers and discretions;
and
(ii) execute each Finance Document expressed to be executed by the
Facility Agent.
(c) The Facility Agent has only those duties which are expressly specified
in the Finance Documents. Those duties are solely of a mechanical and
administrative nature.
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24.2 Role of the Arranger
Except as specifically provided in the Finance Documents, the Arranger has
no obligations of any kind to any other Party in connection with any
Finance Document.
24.3 No fiduciary duties
Except as specifically provided in a Finance Document, nothing in the
Finance Documents makes an Administrative Party a trustee or fiduciary for
any other Party or any other person. No Administrative Party need hold in
trust any moneys paid to it for a Party or be liable to account for
interest on those moneys.
24.4 Individual position of an Administrative Party
(a) If it is also a Lender, each Administrative Party has the same rights
and powers under the Finance Documents as any other Lender and may
exercise those rights and powers as though it were not an
Administrative Party.
(b) Each Administrative Party may:
(i) carry on any business with the Company or its related entities
(including acting as an agent or a trustee for any other financing);
and
(ii) retain any profits or remuneration it receives under the Finance
Documents or in relation to any other business it carries on with the
Company or its related entities.
24.5 Reliance
The Facility Agent may:
(a) rely on any notice or document believed by it to be genuine and
correct and to have been signed by, or with the authority of, the
proper person;
(b) rely on any statement made by any person regarding any matters which
may reasonably be assumed to be within his knowledge or within his
power to verify;
(c) engage, pay for and rely on professional advisers selected by it
(including those representing a Party other than the Facility Agent);
and
(d) act under the Finance Documents through its personnel and agents.
24.6 Majority Lenders' instructions
(a) The Facility Agent is fully protected if it acts on the instructions of the
Majority Lenders in the exercise of any right, power or discretion or any
matter not expressly provided for in the Finance Documents. Any such
instructions given by the Majority Lenders will be binding on all the
Lenders. In the absence of instructions, the Facility Agent may act as it
considers to be in the best interests of all the Lenders.
(b) The Facility Agent is not authorised to act on behalf of a Lender
(without first obtaining that Lender's consent) in any legal or
arbitration proceedings in connection with any Finance Document.
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(c) The Facility Agent may require the receipt of security satisfactory to it,
whether by way of payment in advance or otherwise, against any liability or
loss which it may incur in complying with the instructions of the Majority
Lenders.
24.7 Responsibility
(a) No Administrative Party is responsible to any other Finance Party for the
adequacy, accuracy or completeness of:
(i) any Finance Document or any other document; or
(ii) any statement or information (whether written or oral) made in or
supplied in connection with any Finance Document.
(b) Without affecting the responsibility of the Company for information
supplied by it or on its behalf in connection with any Finance Document,
each Lender confirms that it:
(i) has made, and will continue to make, its own independent appraisal of
all risks arising under or in connection with the Finance Documents
(including the financial condition and affairs of the Company and its
related entities and the nature and extent of any recourse against any
Party or its assets); and
(ii) has not relied exclusively on any information provided to it by any
Administrative Party in connection with any Finance Document.
24.8 Exclusion of liability
(a) The Facility Agent is not liable to any other Finance Party for any action
taken or not taken by it in connection with any Finance Document, unless
directly caused by its gross negligence or wilful misconduct.
(b) No Party may take any proceedings against any officer, employee or agent of
the Facility Agent in respect of any claim it might have against the
Facility Agent or in respect of any act or omission of any kind by that
officer, employee or agent in connection with any Finance Document. Any
officer, employee or agent of the Facility Agent may rely on this Subclause
and enforce its terms under the Contracts (Rights of Third Parties) Act
1999.
24.9 Default
(a) The Facility Agent is not obliged to monitor or enquire whether a Default
has occurred. The Facility Agent is not deemed to have knowledge of the
occurrence of a Default.
(b) If the Facility Agent:
(i) receives notice from a Party referring to this Agreement, describing a
Default and stating that the event is a Default; or
(ii) is aware of the non-payment of any principal or interest or any fee
payable to a Lender under this Agreement,
it must promptly notify the Lenders.
53
24.10 Information
(a) The Facility Agent must promptly forward to the person concerned the
original or a copy of any document which is delivered to the Facility
Agent by a Party for that person.
(b) Except where a Finance Document specifically provides otherwise, the
Facility Agent is not obliged to review or check the adequacy, accuracy
or completeness of any document it forwards to another Party.
(c) Except as provided above, the Facility Agent has no duty:
(i) either initially or on a continuing basis to provide any Lender with
any credit or other information concerning the risks arising under or
in connection with the Finance Documents (including any information
relating to the financial condition or affairs of the Company or its
related entities or the nature or extent of recourse against any Party
or its assets) whether coming into its possession before, on or after
the date of this Agreement; or
(ii) unless specifically requested to do so by a Lender in accordance with
a Finance Document, to request any certificate or other document from
the Company.
(d) In acting as the Facility Agent, the agency division of the Facility
Agent is treated as a separate entity from its other divisions and
departments. Any information acquired by the Facility Agent which, in
its opinion, is acquired by it otherwise than in its capacity as the
Facility Agent may be treated as confidential by the Facility Agent and
will not be treated as information possessed by the Facility Agent in
its capacity as such.
(e) The Company irrevocably authorises the Facility Agent to disclose to
the other Finance Parties any information which, in its opinion, is
received by it in its capacity as the Facility Agent.
24.11 Indemnities
(a) Without limiting the liability of the Company under the Finance
Documents, each Lender must indemnify the Facility Agent for that
Lender's Pro Rata Share of any loss or liability incurred by the
Facility Agent in acting as the Facility Agent, except to the extent
that the loss or liability is caused by the Facility Agent's gross
negligence or wilful misconduct.
(b) The Facility Agent may deduct from any amount received by it for a
Lender any amount due to the Facility Agent from that Lender under a
Finance Document but unpaid.
24.12 Compliance
The Facility Agent may refrain from doing anything (including the
disclosure of any information) which might, in its opinion, constitute
a breach of any law or regulation or be otherwise actionable at the
suit of any person, and may do anything which, in its opinion, is
necessary or desirable to comply with any law or regulation.
24.13 Resignation of the Facility Agent
(a) The Facility Agent may resign and appoint any of its Affiliates as
successor Facility Agent by giving notice to the Lenders and the
Company.
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(b) Alternatively, the Facility Agent may resign by giving notice to the
Lenders and the Company, in which case the Majority Lenders may appoint a
successor Facility Agent.
(c) If no successor Facility Agent has been appointed under paragraph (b)
above within 30 days after notice of resignation was given, the Facility
Agent may appoint a successor Facility Agent.
(d) The person(s) appointing a successor Facility Agent must, if practicable,
consult with the Company prior to the appointment for a period of not less
than 30 days. Any successor Facility Agent must have an office in the U.K.
(e) The resignation of the Facility Agent and the appointment of any successor
Facility Agent will both become effective only when the successor Facility
Agent notifies all the Parties that it accepts its appointment. On giving
the notification, the successor Facility Agent will succeed to the
position of the Facility Agent and the term "Facility Agent" will mean the
successor Facility Agent.
(f) The retiring Facility Agent must, at its own cost, make available to the
successor Facility Agent such documents and records and provide such
assistance as the successor Facility Agent may reasonably request for the
purposes of performing its functions as the Facility Agent under the
Finance Documents.
(g) Upon its resignation becoming effective, this Clause will continue to
benefit the retiring Facility Agent in respect of any action taken or not
taken by it in connection with the Finance Documents while it was the
Facility Agent, and, subject to paragraph (f) above, it will have no
further obligations under any Finance Document.
(h) The Majority Lenders may, by notice to the Facility Agent, require it to
resign under paragraph (b) above.
24.14 Relationship with Lenders
(a) The Facility Agent may treat each Lender as a Lender, entitled to payments
under this Agreement and as acting through its Facility Office(s) until it
has received not less than five Business Days' prior notice from that
Lender to the contrary.
(b) The Facility Agent may at any time, and must if requested to do so by the
Majority Lenders, convene a meeting of the Lenders.
(c) The Facility Agent must keep a register of all the Parties and supply any
other Party with a copy of the register on request. The register will
include each Lender's Facility Office(s) and contact details for the
purposes of this Agreement.
24.15 Notice period
Where this Agreement specifies a minimum period of notice to be given to
the Facility Agent, the Facility Agent may, at its discretion, accept a
shorter notice period.
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25. EVIDENCE AND CALCULATIONS
25.1 Accounts
Accounts maintained by a Finance Party in connection with this Agreement
are prima facie evidence of the matters to which they relate for the
purpose of any litigation or arbitration proceedings.
25.2 Certificates and determinations
Any certification or determination by a Finance Party of a rate or amount
under the Finance Documents will be, in the absence of manifest error,
conclusive evidence of the matters to which it relates.
25.3 Calculations
Any interest or fee accruing under this Agreement accrues from day to day
and is calculated on the basis of the actual number of days elapsed and a
year of 360 or 365 days or otherwise, depending on what the Facility Agent
determines is market practice.
26. FEES
26.1 Facility Agent's fee
The Company must pay to the Facility Agent for its own account an agency
fee in the manner agreed in the Fee Letter between the Facility Agent and
the Company.
26.2 Arrangement fee
The Company must pay to the Arranger for its own account an arrangement fee
in the manner agreed in the Fee Letter between the Arranger and the
Company.
26.3 Facility A Commitment fee
(a) The Company must pay a commitment fee computed at the rate set out in the
Fee Letter between the Arranger and the Company on the undrawn, uncancelled
amount of each Lender's Facility A Commitment.
(b) Accrued commitment fee is payable quarterly in arrear. Accrued commitment
fee is also payable to the Facility Agent for a Lender on the date its
Facility A Commitment is cancelled in full.
26.4 Facility B Commitment fee
(a) The Company must pay a commitment fee computed at the rate of 0.175 per
cent. per annum on the undrawn, uncancelled amount of each Lender's
Facility B Commitment.
(b) Accrued commitment fee is payable quarterly in arrear. Accrued commitment
fee is also payable to the Facility Agent for a Lender on the date its
Facility B Commitment is cancelled in full.
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27. INDEMNITIES AND BREAK COSTS
27.1 Currency indemnity
(a) The Company must, as an independent obligation, indemnify each Finance
Party against any loss or liability which that Finance Party incurs as a
consequence of:
(i) that Finance Party receiving an amount in respect of the Company's
liability under the Finance Documents; or
(ii) that liability being converted into a claim, proof, judgment or order,
in a currency other than the currency in which the amount is expressed to
be payable under the relevant Finance Document.
(b) Unless otherwise required by law, the Company waives any right it may have
in any jurisdiction to pay any amount under the Finance Documents in a
currency other than that in which it is expressed to be payable.
27.2 Other indemnities
(a) The Company must indemnify each Finance Party against any loss or liability
which that Finance Party incurs as a consequence of:
(i) the occurrence of any Event of Default;
(ii) any failure by the Company to pay any amount due under a Finance
Document on its due date, including any resulting from any
distribution or redistribution of any amount among the Lenders under
this Agreement;
(iii) (other than by reason of negligence or default by that Finance Party)
a Loan not being made after a Request has been delivered for that
Loan; or
(iv) a Loan (or part of a Loan) not being prepaid in accordance with a
notice of prepayment.
The Company's liability in each case includes any loss or expense on
account of funds borrowed, contracted for or utilised to fund any amount
payable under any Finance Document, any amount repaid or prepaid or any
Loan.
(b) The Company must indemnify the Facility Agent against any loss or liability
incurred by the Facility Agent as a result of:
(i) investigating any event which the Facility Agent reasonably believes
to be a Default; or
(ii) acting or relying on any notice which it reasonably believes to be
genuine, correct and appropriately authorised.
27.3 Break Costs
(a) The Company must pay to each Lender its Break Costs.
57
(b) Break Costs are the amount (if any) determined by the relevant Lender by
which:
(i) the interest which that Lender would have received for the period from
the date of receipt of any part of its share in a Loan or an overdue
amount to the last day of the applicable Term for that Loan or overdue
amount if the principal or overdue amount received had been paid on
the last day of that Term;
exceeds
(ii) the amount which that Lender would be able to obtain by placing an
amount equal to the amount received by it on deposit with a leading
bank in the appropriate interbank market for a period starting on the
Business Day following receipt and ending on the last day of the
applicable Term.
(c) Each Lender must supply to the Facility Agent for the Company details of
the amount of any Break Costs claimed by it under this Subclause.
28. EXPENSES
28.1 Initial costs
The Company must pay to each Administrative Party the amount of all costs
and expenses (including reasonable legal fees) reasonably incurred by it in
connection with the negotiation, preparation, printing, execution and
syndication of the Finance Documents.
28.2 Subsequent costs
The Company must pay to the Facility Agent the amount of all costs and
expenses (including legal fees) reasonably incurred by it in connection
with:
(a) the negotiation, preparation, printing and execution of any Finance
Document (other than a Transfer Certificate) executed after the date
of this Agreement; and
(b) any amendment, waiver or consent requested by or on behalf of the
Company or specifically allowed by this Agreement.
28.3 Enforcement costs
The Company must pay to each Finance Party the amount of all costs and
expenses (including legal fees) incurred by it in connection with the
enforcement of, or the preservation of any rights under, any Finance
Document.
29. AMENDMENTS AND WAIVERS
29.1 Procedure
(a) Except as provided in this Clause, any term of the Finance Documents may be
amended or waived with the agreement of the Company and the Majority
Lenders. The Facility Agent may effect, on behalf of any Finance Party, an
amendment or waiver allowed under this Clause.
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(b) The Facility Agent must promptly notify the other Parties of any amendment
or waiver effected by it under paragraph (a) above. Any such amendment or
waiver is binding on all the Parties.
29.2 Exceptions
(a) An amendment or waiver which relates to:
(i) the definition of "Majority Lenders" in Clause 1.1 (Definitions);
(ii) an extension of the date of payment of any amount to a Lender under
the Finance Documents;
(iii) a reduction in the Margin or a reduction in the amount of any
payment of principal, interest, fee or other amount payable to a
Lender under the Finance Documents;
(iv) an increase in, or an extension of, a Commitment;
(v) a release of the Company;
(vi) a term of a Finance Document which expressly requires the consent of
each Lender;
(vii) the right of a Lender to assign or transfer its rights or
obligations under the Finance Documents; or
(viii) this Clause,
may only be made with the consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of an
Administrative Party may only be made with the consent of that
Administrative Party.
29.3 Change of currency
If a change in any currency of a country occurs (including where there is
more than one currency or currency unit recognised at the same time as the
lawful currency of a country), this Agreement will be amended to the extent
the Facility Agent (acting reasonably and after consultation with the
Company) determines is necessary to reflect the change.
29.4 Waivers and remedies cumulative
The rights of each Finance Party under the Finance Documents:
(a) may be exercised as often as necessary;
(b) are cumulative and not exclusive of its rights under the general
law; and
(c) may be waived only in writing and specifically.
Delay in exercising or non-exercise of any right is not a waiver of that
right.
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30. CHANGES TO THE PARTIES
30.1 General
In this Clause:
"Transfer Certificate"
means a transfer certificate in the form of Schedule 5 (Form of Transfer
Certificate), in each case with such amendments as the Facility Agent may
approve or reasonably require or, in the case of a Transfer Certificate,
any other form agreed between and the Company; and
"Transfer Date"
means:
(a) for a Transfer Certificate, the later of:
(i) the proposed Transfer Date specified in that Transfer
Certificate; and
(ii) the date on which the Facility Agent executes that Transfer
Certificate; and
(b) for a Syndication Agreement, the Effective Date specified in that
Syndication Agreement.
30.2 Assignments and transfers by the Company
The Company may not assign or transfer any of its rights and obligations
under the Finance Documents without the prior consent of all the Lenders.
30.3 Assignments and transfers by Lenders
(a) A Lender (the "Existing Lender") may, subject to the following provisions
of this Subclause, at any time assign or transfer (including by way of
novation) any of its rights and obligations under this Agreement to another
bank or financial institution which is a Qualifying Lender, as defined in
Clause 15.1 (General) (the "New Lender").
(b) A transfer of part of a Commitment must be in a minimum amount of at least
U.S.$10,000,000 and an integral multiple of U.S.$5,000,000.
(c) The consent of the Company is required for any assignment or transfer
unless the New Lender is another Lender or an Affiliate of a Lender. The
consent of the Company must not be unreasonably withheld or delayed. The
Company will be deemed to have given its consent ten Business Days after
the Company is given notice of the request unless it is expressly refused
by the Company within that time.
(d) A transfer of obligations will be effective only if either:
(i) the obligations are novated in accordance with the following
provisions of this Clause; or
(ii) the New Lender confirms to the Facility Agent and the Company in form
and substance satisfactory to the Facility Agent that it is bound by
the terms of this
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Agreement as a Lender. On the transfer becoming effective in this
manner the Existing Lender will be released from its obligations under
this Agreement to the extent that they are transferred to the New
Lender.
(e) Unless the Facility Agent otherwise agrees, the New Lender must pay to the
Facility Agent for its own account, on or before the date any assignment or
transfer occurs, a fee of(pound)1,000.
(f) Any reference in this Agreement to a Lender includes a New Lender but
excludes a Lender if no amount is or may be owed to or by it under this
Agreement.
30.4 Procedure for transfer by way of novations
(a) A novation is effected if:
(i) the Existing Lender and the New Lender deliver to the Facility Agent a
duly completed Transfer Certificate and the Facility Agent executes
it; and
(ii) a Syndication Agreement is executed by all the Administrative Parties,
the Lenders and the Company.
The Facility Agent must execute as soon as reasonably practicable a
Transfer Certificate delivered to it and which appears on its face to be in
order.
(b) Each Party (other than the Existing Lender and the New Lender) irrevocably
authorises the Facility Agent to execute any duly completed Transfer
Certificate on its behalf.
(c) On the Transfer Date:
(i) the New Lender will assume the rights and obligations of the Existing
Lender expressed to be the subject of the novation in the Transfer
Certificate in substitution for the Existing Lender; and
(ii) the Existing Lender will be released from those obligations and cease
to have those rights.
30.5 Limitation of responsibility of Existing Lender
(a) Unless expressly agreed to the contrary, an Existing Lender is not
responsible to a New Lender for the legality, validity, adequacy, accuracy,
completeness or performance of:
(i) any Finance Document or any other document; or
(ii) any statement or information (whether written or oral) made in or
supplied in connection with any Finance Document,
and any representations or warranties implied by law are excluded.
(b) Each New Lender confirms to the Existing Lender and the other Finance
Parties that it:
(i) has made, and will continue to make, its own independent appraisal of
the financial condition and affairs of the Company and its related
entities in connection with its participation in this Agreement; and
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(ii) has not relied exclusively on any information supplied to it by the
Existing Lender in connection with any Finance Document.
(c) Nothing in any Finance Document requires an Existing Lender to:
(i) accept a re-transfer from a New Lender of any of the rights and
obligations assigned or transferred under this Clause; or
(ii) support any losses incurred by the New Lender by reason of the
non-performance by the Company of its obligations under any Finance
Document or otherwise.
30.6 Costs resulting from change of Lender or Facility Office
If:
(a) a Lender assigns or transfers any of its rights and obligations under
the Finance Documents or changes its Facility Office; and
(b) as a result of circumstances existing at the date the assignment,
transfer or change occurs, the Company would be obliged to pay a Tax
Payment or an Increased Cost,
then, unless the assignment, transfer or change is made by a Lender to
mitigate any circumstances giving rise to the Tax Payment, Increased Cost
or right to be prepaid and/or cancelled by reason of illegality, the
Company need only pay that Tax Payment or Increased Cost to the same extent
that it would have been obliged to if no assignment, transfer or change had
occurred.
30.7 Changes to the Reference Banks
If a Reference Bank (or, if a Reference Bank is not a Lender, the Lender of
which it is an Affiliate) ceases to be a Lender, the Facility Agent must
(with the agreement of the Company) appoint another Lender or an Affiliate
of a Lender to replace that Reference Bank.
31. DISCLOSURE OF INFORMATION
(a) Each Finance Party must keep confidential any information supplied to it by
or on behalf of the Company in connection with the Finance Documents.
However, a Finance Party is entitled to disclose information:
(i) which is publicly available, other than as a result of a breach by
that Finance Party of this Clause;
(ii) in connection with any legal or arbitration proceedings;
(iii) if required to do so under any law or regulation;
(iv) to a governmental, banking, taxation or other regulatory authority;
(v) to its professional advisers provided that its professional advisers
are made aware that that information must be kept confidential in
accordance with the terms of this Clause;
(vi) to the extent allowed under paragraph (b) below; or
62
(vii) with the agreement of the Company.
(b) A Finance Party may disclose to an Affiliate or any person with whom it may
enter, or has entered into, any kind of transfer, participation or other
agreement in relation to this Agreement (a "participant"):
(i) a copy of any Finance Document; and
(ii) any information which that Finance Party has acquired under any
Finance Document.
However, before a participant may receive any confidential information, it
must agree with the relevant Finance Party to keep that information
confidential on the terms of paragraph (a) above.
(c) This Clause supersedes any previous confidentiality undertaking given by a
Finance Party in connection with this Agreement prior to it becoming a
Party.
32. SET-OFF
A Finance Party may set off any matured obligation owed to it by the
Company under the Finance Documents (to the extent beneficially owned by
that Finance Party) against any obligation (whether or not matured) owed by
that Finance Party to the Company, regardless of the place of payment,
booking branch or currency of either obligation. If the obligations are in
different currencies, the Finance Party may convert either obligation at a
market rate of exchange in its usual course of business for the purpose of
the set-off.
33. PRO RATA SHARING
33.1 Redistribution
If any amount owing by the Company under this Agreement to a Lender (the
"recovering Lender") is discharged by payment, set-off or any other manner
other than through the Facility Agent under this Agreement (a "recovery"),
then:
(a) the recovering Lender must, within three Business Days, supply
details of the recovery to the Facility Agent;
(b) the Facility Agent must calculate whether the recovery is in excess
of the amount which the recovering Lender would have received if the
recovery had been received by the Facility Agent under this
Agreement; and
(c) the recovering Lender must pay to the Facility Agent an amount equal
to the excess (the "redistribution").
33.2 Effect of redistribution
(a) The Facility Agent must treat a redistribution as if it were a payment by
the Company under this Agreement and distribute it among the Lenders
accordingly.
(b) When the Facility Agent makes a distribution under paragraph (a) above, the
recovering Lender will be subrogated to the rights of the Finance Parties
which have shared in that redistribution.
63
(c) If and to the extent that the recovering Lender is not able to rely on any
rights of subrogation under paragraph (b) above, the Company will owe the
recovering Lender a debt which is equal to the redistribution, immediately
payable and of the type originally discharged.
(d) If:
(i) a recovering Lender must subsequently return a recovery, or an amount
measured by reference to a recovery, to the Company; and
(ii) the recovering Lender has paid a redistribution in relation to that
recovery,
each Finance Party must reimburse the recovering Lender all or the
appropriate portion of the redistribution paid to that Finance Party,
together with interest for the period while it held the re-distribution. In
this event, the subrogation in paragraph (b) above will operate in reverse
to the extent of the reimbursement.
33.3 Exceptions
Notwithstanding any other term of this Clause, a recovering Lender need not
pay a redistribution to the extent that:
(a) it would not, after the payment, have a valid claim against the
Company in the amount of the redistribution; or
(b) it would be sharing with another Finance Party any amount which the
recovering Lender has received or recovered as a result of legal or
arbitration proceedings, where:
(i) the recovering Lender notified the Facility Agent of those
proceedings; and
(ii) the other Finance Party had an opportunity to participate in
those proceedings but did not do so or did not take separate
legal or arbitration proceedings as soon as reasonably
practicable after receiving notice of them.
34. SEVERABILITY
If a term of a Finance Document is or becomes illegal, invalid or
unenforceable in any jurisdiction, that shall not affect:
(a) the validity or enforceability in that jurisdiction of any other term
of the Finance Documents; or
(b) the validity or enforceability in other jurisdictions of that or any
other term of the Finance Documents.
35. COUNTERPARTS
Each Finance Document may be executed in any number of counterparts. This
has the same effect as if the signatures on the counterparts were on a
single copy of the Finance Document.
64
36. NOTICES
36.1 In writing
(a) Any formal communication in connection with a Finance Document must be in
writing and, unless otherwise stated, may be given in person, by post,
telex or fax approved by the Facility Agent.
(b) Unless it is agreed to the contrary, any consent or agreement required
under a Finance Document must be given in writing.
36.2 Contact details
(a) Except as provided below, the contact details of each Party for all
communications in connection with the Finance Documents are those notified
by that Party for this purpose to the Facility Agent on or before the date
it becomes a Party.
(b) The contact details of the Company for this purpose are:
Smith & Nephew plc
15 Adam Street
London WC2N 6LA
Fax: 0207 930 3353
For the attention of: The Company Secretary
(c) The contact details of the Facility Agent for this purpose are:
Lloyds TSB Bank Plc
Bank House
Wine Street
Bristol BS1 2AN
Telex: 88301 LOYDLN
Fax: 0117 923 3367
For the attention of: Loans Administration Department
(d) Any Party may change its contact details by giving five Business Days'
notice to the Facility Agent or (in the case of the Facility Agent) to the
other Parties.
(e) Where a Party nominates a particular department or officer to receive a
communication, a communication will not be effective if it fails to specify
that department or officer.
36.3 Effectiveness
(a) Except as provided below, any communication in connection with a Finance
Document will be deemed to be given as follows:
(i) if delivered in person, at the time of delivery;
(ii) if posted, five days after being deposited in the post, postage
prepaid, in a correctly addressed envelope;
(iii) if by telex, when despatched, but only if, at the time of
transmission, the correct answerback appears at the start and at the
end of the sender's copy of the notice;
65
(iv) if by fax, when received in legible form.
(b) A communication given under paragraph (a) above but received on a
non-working day or after business hours in the place of receipt will only
be deemed to be given on the next working day in that place.
(c) A communication to the Facility Agent will only be effective on actual
receipt by it.
36.4 The Company
All formal communication under the Finance Documents to or from the Company
must be sent through the Facility Agent.
37. LANGUAGE
(a) Any notice given in connection with a Finance Document must be in English.
(b) Any other document provided in connection with a Finance Document must be:
(i) in English; or
(ii) (unless the Facility Agent otherwise agrees) accompanied by a
certified English translation. In this case, the English translation
prevails unless the document is a statutory or other official
document.
38. GOVERNING LAW
This Agreement is governed by English law.
39. ENFORCEMENT
39.1 Jurisdiction
(a) The English courts have exclusive jurisdiction to settle any dispute in
connection with any Finance Document.
(b) The English courts are the most appropriate and convenient courts to settle
any such dispute.
(c) This Clause is for the benefit of the Finance Parties only. To the extent
allowed by law, a Finance Party may take:
(i) proceedings in any other court; and
(ii) concurrent proceedings in any number of jurisdictions.
39.2 Waiver of trial by jury
EACH PARTY WAIVES ANY RIGHT IT MAY HAVE TO A JURY TRIAL OF ANY CLAIM OR
CAUSE OR ACTION IN CONNECTION WITH ANY FINANCE DOCUMENT OR ANY TRANSACTION
CONTEMPLATED BY ANY FINANCE DOCUMENT. THIS AGREEMENT MAY BE FILED AS A
WRITTEN CONSENT TO TRIAL BY COURT.
66
This Agreement has been entered into on the date stated at the beginning of
this Agreement.
67
SCHEDULE 1
ORIGINAL PARTIES
Name of Original Lender Facility A Commitments
Lloyds TSB Bank plc U.S.$100,000,000
------------------
Total A Commitments U.S.$100,000,000
------------------
Name of Original Lender Facility B Commitments
Lloyds TSB Bank plc U.S.$200,000,000
------------------
Total B Commitments U.S.$200,000,000
------------------
68
SCHEDULE 2
CONDITIONS PRECEDENT DOCUMENTS
Company
1. A copy of the constitutional documents of the Company.
2. A copy of a resolution of the board of directors or a committee of the
board of directors of the Company approving the terms of, and the
transactions contemplated by, this Agreement.
3. If applicable, a copy of a resolution of the board of directors of the
Company establishing the committee referred to in paragraph 2 above.
4. A specimen of the signature of each person authorised on behalf of the
Company to execute or witness the execution of any Finance Document or
to sign or send any document or notice in connection with any Finance
Document.
5. A certificate of an authorised signatory of the Company:
(a) confirming that utilising the Total Commitments in full would
not breach any limit binding on it; and
(b) certifying that each copy document specified in this Schedule
is correct, complete and in full force and effect as at a date
no earlier than the date of this Agreement.
Legal opinions
A legal opinion of Allen & Overy, legal advisers to the Arranger and the
Facility Agent, substantially in the form of Schedule 10, addressed to the
Finance Parties.
69
SCHEDULE 3
FORM OF REQUEST
To: LLOYDS TSB PLC as Facility Agent
From: SMITH & NEPHEW PLC
Date: [ ], 2002
SMITH & NEPHEW PLC-U.S $300,000,000 Credit Agreement
dated [ ] February, 2002 (the "Agreement")
1. We refer to the Agreement. This is a Request.
2. We wish to [borrow a/an [Offer] Loan/draw Bills]* [under Facility
A/Facility B]* on the following terms:
(a) Utilisation Date: [ ]
(b) Amount/currency: [ ]
(c) Term: [ ].
3. Our payment instructions are: [ ].
4. We confirm that each condition precedent under the Agreement which must
be satisfied on the date of this Request is so satisfied.
5. This Request is irrevocable.
By:
SMITH & NEPHEW PLC
__________________________________
* Delete as appropriate
70
SCHEDULE 4
CALCULATION OF THE MANDATORY COST
1. General
The Mandatory Cost is the weighted average of the rates calculated
below by the Facility Agent on the first day of a Term. The Facility
Agent must distribute each amount of Mandatory Cost among the Lenders
on the basis of the rate for each Lender.
2. For a Lender lending from a Facility Office in the U.K.
(a) The relevant rate for a Lender lending from a Facility Office in the
U.K. is the arithmetic mean of the rates notified by each of the
Reference Banks to the Facility Agent and calculated in accordance with
the following formulae:
for a Loan in Sterling:
AB + C(B-D)+ E x 0.01
---------------------- per cent. per annum
100-(A+C)
for any other Loan:
E x 0.01
-------- per cent. per annum
300
where on the day of application of the formula:
A is the percentage of the Reference Bank's eligible liabilities
(in excess of any stated minimum) which the Bank of England
requires it to hold on a non-interest-bearing deposit account
in accordance with its cash ratio requirements;
B is LIBOR for that Term;
C is the percentage of the Reference Bank's eligible liabilities
which the Bank of England requires it to place as a special
deposit;
D is the interest rate per annum allowed by the Bank of England
on a special deposit; and
E is the charge payable by the Reference Bank to the Financial
Services Authority under the fees rules (but, for this
purpose, calculated by the Facility Agent on a notional basis
as being the average of the fee tariffs within fee-block
Category A1 (Deposit acceptors) of the fee rules, applying any
applicable discount and ignoring any minimum fee required
under the fees rules) and expressed in pounds per (pound)1
million of the tariff base of that Reference Bank.
(b) For the purposes of this paragraph 2:
71
(i) "eligible liabilities" and "special deposit" have the meanings
given to them at the time of application of the formula by
the Bank of England;
(ii) "fees rules" means the then current rules on periodic fees in
the Supervision Manual of the FSA Handbook; and
(iii) "tariff base" has the meaning given to it in the fees rules.
(c) (i) In the application of the formulae, A, B, C and D are
included as figures and not as percentages, e.g. if A = 0.5% and
B = 15%, AB is calculated as 0.5 x 15. A negative result
obtained by subtracting D from B is taken as zero.
(ii) Each rate calculated in accordance with a formula is, if
necessary, rounded upward to four decimal places.
(d) (i) Each Reference Bank must supply to the Facility Agent the
information required by it to make a calculation of the rate for
that Reference Bank. The Facility Agent may assume that this
information is correct in all respects.
(ii) If a Reference Bank fails to do so, the Facility Agent may
assume that the Reference Bank's obligations in respect of cash
ratio deposits, special deposits and the fees rules are the same
as those of a typical bank from its jurisdiction of
incorporation with a Facility Office in the same jurisdiction as
its Facility Office.
(iii) The Facility Agent has no liability to any Party if its
calculation over or under compensates any Lender.
3. For a Lender lending from a Facility Office in a Participating Member
State
(a) The relevant rate for a Lender lending from a Facility Office in a
Participating Member State is the percentage rate per annum notified by
that Lender to the Facility Agent as its cost of complying with the
minimum reserve requirements of the European Central Bank.
(b) If a Lender fails to specify a rate under paragraph (a) above, the
Facility Agent will assume that the Lender has not incurred any such
cost.
4. Changes
The Facility Agent may, after consultation with the Company and the
Lenders, notify all the Parties of any amendment to this Schedule which
is required to reflect:
(a) any change in law or regulation; or
(b) any requirement imposed by the Bank of England, the Financial
Services Authority or the European Central Bank (or, in any
case, any successor authority).
Any notification will be, in the absence of manifest error, conclusive and
binding on all the Parties.
72
SCHEDULE 5
FORM OF TRANSFER CERTIFICATE
To: LLOYDS TSB BANK plc as Facility Agent
From: [THE EXISTING LENDER] (the "Existing Lender") and [THE NEW LENDER] (the
"New Lender")
Date: [ ]
SMITH & NEPHEW PLC - US$300,000,000 Credit Agreement
dated [ ] February, 2002 (the "Agreement")
We refer to the Agreement. This is a Transfer Certificate.
1. The Existing Lender transfers by novation to the New Lender the Existing
Lender's rights and obligations referred to in the Schedule below in
accordance with the terms of the Agreement.
2. The proposed Transfer Date is [ ].
3. The administrative details of the New Lender for the purposes of the
Agreement are set out in the Schedule.
4. This Transfer Certificate is governed by English law.
THE SCHEDULE
Rights and obligations to be transferred by novation
[insert relevant details, including applicable Commitment (or part)]
Administrative details of the New Lender
[insert details of Facility Office,
address for notices and payment details etc.]
[EXISTING LENDER] [NEW LENDER]
By: By:
The Transfer Date is confirmed by the Facility Agent as [ ].
LLOYDS TSB BANK plc
By
73
SCHEDULE 6
FORM OF COMPLIANCE CERTIFICATE
To: LLOYDS TSB BANK plc as Facility Agent
From: SMITH & NEPHEW PLC
Date: [ ]
SMITH & NEPHEW PLC - US$300,000,000 Credit Agreement
dated [ ] February, 2002 (the "Agreement")
1. We refer to the Agreement. This is a Compliance Certificate.
2. We confirm that as at [relevant testing date]:
(a) Consolidated EBITDA was [ ]; and
Consolidated Total Net Borrowings are [ ]; therefore, Consolidated
Total [Net] Borrowings are [ ] x Consolidated EBITDA; and
(b) Consolidated EBITA was [ ] and Consolidated Net Interest Payable was
[ ]; therefore, the ratio of Consolidated EBITA to Consolidated Net
Interest Payable was [ ] to 1.
3. We set out below calculations establishing the figures in paragraph 2
above:
[ ].
4. [We confirm that no Default is outstanding as at [relevant testing date].**
SMITH & NEPHEW PLC
By:
[insert applicable certification language]
- ----------
** If this statement cannot be made, the certificate should identify any
Default that is outstanding and the steps, if any, being taken to remedy
it.
74
SCHEDULE 7
FORM OF BILL
Face of Bill
No. for(pound)............
................ 20...
To
On ..............20.. pay against this Bill of Exchange to our order the sum of
.............. for value received against [ ].
Accepted by:
For
[ACCEPTING LENDER] [COMPANY]
.................... ....................
Authorised Signatory Authorised Signatory
Reverse of Bill
For
[COMPANY]
....................
Authorised Signatory
75
SCHEDULE 8
FORM OF SYNDICATION AGREEMENT
SYNDICATION AGREEMENT
DATED [ ], 2002
relating to a US$300,000,000 Credit Facility
dated [ ] February, 2002
for
SMITH & NEPHEWPLC
arranged by
LLOYDS TSB CAPITAL MARKETS
ALLEN & OVERY
London
76
THIS AGREEMENT is dated [ ], 2002
BETWEEN:
(1) SMITH & NEPHEW PLC (registered number 324357) (the "Company");
(2) LLOYDS TSB CAPITAL MARKETS as arranger (in this capacity the "Arranger");
(3) THE FINANCIAL INSTITUTIONS listed in Part I of Schedule 1 (Lenders) as the
lender party to the Credit Agreement (as defined below) as at the date of
this Agreement (the "Existing Lender");
(4) THE FINANCIAL INSTITUTIONS listed in Part II Schedule 1 (Lenders) as the
lenders who wish to accede to the Credit Agreement as Lenders (the "New
Lenders"); and
(5) LLOYDS TSB BANK plc as Facility Agent (the "Facility Agent").
IT IS AGREED as follows:
1. INTERPRETATION
1.1 Definitions
In this Agreement:
"Credit Agreement"
means the credit agreement dated [ ] February, 2002 between, among others,
the Company, the Arranger and the Facility Agent.
"Effective Date"
means [ ].
1.2 Construction
(a) Capitalised terms defined in the Credit Agreement have, unless expressly
defined in this Agreement, the same meaning in this Agreement.
(b) The provisions of Clause 1.2 (Construction) of the Credit Agreement apply
to this Agreement as though they were set out in full in this Agreement
except that if references to the Credit Agreement are to be construed as
references to this Agreement.
2. CONSENT AND CONFIRMATION
The Company, the Arranger, the Existing Lender and the Facility Agent
consent to the New Lenders becoming Lenders and confirm that, except as
provided in this Agreement, the Finance Documents will continue in full
force and effect.
3. REPRESENTATIONS
(a) In this Clause "Information Memorandum" means [ ].
77
(b) The Company represents and warrants to each other party to this
Agreement that:
(i) as at its date the material factual information relating to the
Group contained in the Information Memorandum was accurate in
all material respects;
(ii) as at its date and to the best of its knowledge, the opinions,
projections and forecasts contained in the Information
Memorandum and the assumptions on which they are based were
arrived at after due and careful consideration and genuinely
represented its views; and
(iii) to the best of its knowledge there are no material facts or
circumstances which have not been disclosed to the parties to
this Agreement by the Information Memorandum or otherwise
prior to the date of this Agreement and which would make any
of the information, opinions, projections, forecasts or
assumptions contained in the Information Memorandum
incomplete, inaccurate or misleading in any material respect.
4. TRANSFER OF COMMITMENTS
On the Effective Date (regardless of whether a Default is outstanding):
(a) each New Lender will become a Lender under the Credit
Agreement with a Facility B Commitment set opposite its name
in Schedule 2 (Lenders and Facility B Commitments);
(b) the Facility B Commitments of the Existing Lender will be
reduced to the amount set opposite its name in Schedule 2
(Lenders and Facility B Commitments); and
(c) each New Lender obtains and undertakes to perform all of the
rights and obligations of a Lender in connection with the
Finance Documents in respect of the rights and obligations
transferred to it under this Clause.
5. [TRANSFER OF PARTICIPATIONS
5.1 Definitions
"Participation"
means, for a Lender, the amount of its share in the Credits under
Facility B, being the amount set out opposite its name in Schedule 3
(Lenders and Participations).
5.2 Participation
On the Effective Date (regardless of whether a Default is outstanding):
(a) each New Lender will become a Lender under the Credit Agreement
with a Participation set opposite its name in Schedule 3
(Lenders and Participations);
(b) the Participation of the Existing Lender will be reduced to the
amount set opposite its name in Schedule 3 (Lenders and
Participations);
78
(c) each New Lender obtains and undertakes to perform all of the
rights and obligations of a Lender in connection with the
Finance Documents in respect of the rights and obligations
transferred to it under this Clause;
(d) the Existing Lender will pay to each New Lender the amount
notified to it by the Facility Agent, being the amount
necessary to ensure that after the payment the amount of each
Lender's Participation is equal to the amount set opposite its
name in Schedule 3 (Lenders and Participations);
(e) each New Lender will pay to the Facility Agent, an amount
equal to its Participation in the currency specified by the
Facility Agent and in immediately available and freely
transferable funds, to be received for value on the Effective
Date; and
(f) the Facility Agent will pay to the Existing Lender an amount
equal to the amount it received from the New Lenders under
paragraph (e) above up to a maximum amount equal to the
difference between the Existing Lender's Participation
immediately prior to the date of this Agreement and the amount
of its Participation set opposite its name in Schedule 3
(Lenders and Participations).]/1/
6. EFFECTIVE DATE
6.1 Amounts due on or before the Effective Date
Any amounts payable to the Existing Lender by the Company on or prior
to the Effective Date in respect of any period ending prior to the
Effective Date will be for the account of the Existing Lender, and none
of the New Lenders will have any interest in, or any rights in respect
of, those amounts.
6.2 [Credit on the Effective Date
If any Credit falls to be utilised on the Effective Date:
(a) the Facility Agent will promptly notify each New Lender of the
amount of its participation in that Credit;
(b) the Existing Lender and each New Lender must participate in
that Credit (subject to the terms of the Credit Agreement) as
if the transfer of the Facility B Commitments under this
Agreement had taken effect prior to opening of business on the
Business Day before the Effective Date; and
(c) the Company acknowledges that the Existing Lender will not be
obliged to participate in that Credit to any greater extent.]
7. NATURE OF THIS AGREEMENT
The transfer of Commitments and rights and obligations contemplated by
this Agreement will take effect as a novation and clause 30.4
(Procedure for transfer by way of novations) of the Credit Agreement
will apply to the Commitments, rights and obligations transferred, as
if this Agreement were a Transfer Certificate.
__________________________
/1/ Required if transfer during a Term of any Credit.
79
8. PAYMENTS
8.1 Claw-back
The Facility Agent is not obliged to pay any amount to the Existing
Lender under this Agreement until it has established that it has
actually received a related amount from a New Lender. However, the
Facility Agent may assume the sum has been paid to it and, in reliance
on that assumption, make available to the Existing Lender a
corresponding amount. If it transpires that the sum had not been made
available, the Existing Lender will within five Business Days of demand
by the Facility Agent refund the relevant amount together with interest
on that amount from the date of payment to the date of receipt by the
Facility Agent, at a rate calculated by the Facility Agent to reflect
its cost of funds.
8.2 Administrative details
Each New Lender confirms that it has delivered to the Facility Agent
its initial details for the purposes of clause 36 (Notices) of the
Credit Agreement.
8.3 Administrative details
The Reference Banks are, subject to Clause 30.7 (Changes to the
Reference Banks) of the Credit Agreement, [ ], [ ] and
[ ].
9. GOVERNING LAW
This Agreement is governed by English law.
This Agreement has been entered into on the date stated at the beginning of this
Agreement.
80
SCHEDULE 1
LENDERS
PART I
THE EXISTING LENDER
Lloyds TSB Bank plc
81
PART II
THE NEW LENDERS
[ ]
82
SCHEDULE 2
LENDERS AND FACILITY B COMMITMENTS
Name of Lender Facility B
Commitment
-----------
Total Facility B Commitments [ ]
83
SCHEDULE 3
LENDERS AND PARTICIPATIONS
Name of Lender Facility B Participation
84
SIGNATORIES
Company
SMITH & NEPHEW PLC
By:
Arranger
LLOYDS TSB CAPITAL MARKETS
By:
Existing Lender
LLOYDS TSB BANK plc
By:
New Lenders
[ ]
By:
Facility Agent
LLOYDS TSB BANK plc
By:
85
SCHEDULE 9
FORM OF POWER OF ATTORNEY FOR BILLS
To: LLOYDS TSB BANK PLC as Facility Agent
From: SMITH & NEPHEW PLC
Date: [ ]
SMITH & NEPHEW PLC - U.S.$300,000,000 Credit Agreement
dated [ ] February, 2002 (the Agreement)
1. We refer to the Agreement. This is a Power of Attorney.
2. Terms defined in the Agreement have the same meaning when used in this
Power of Attorney.
3. We appoint you as our attorney to draw, complete, clause, endorse and
deliver Bills in our name and on our behalf in accordance with the
Agreement.
4. The powers conferred on you under this Power of Attorney are exercisable
jointly by any two of your authorised signatories.
5. In exercising those powers, your authorised signatories will:
(a) act as your agents in your capacity as our attorney under this
Power of Attorney;
(b) sign as follows:
"For [Name of Company] by [Name of Facility Agent] as Attorney.
___________________________________
___________________________________
Authorised Signatories"; and
(c) take any other steps they in good faith consider necessary to
enable the Company to fulfil its obligations in respect of a
Request for Bills and for the Agent to fulfil its obligations
under Clause 8.2 (Holding and completion of Bills) of the
Agreement.
6. Any Bill drawn and delivered in accordance with this Power of Attorney
will be binding upon us. We:
(a) indemnify you against any loss or liability incurred by you in
acting as our attorney; and
(b) agree to ratify anything done by you on our behalf under this Power
of Attorney.
86
7. Except as provided below, this Power of Attorney remains in force until
you receive a notice in writing signed by us, addressed to [ ]
and delivered to your offices at [ ] expressly revoking it (a
revocation notice).
8. A revocation notice will not be effective for any Bills drawn pursuant
to a Request made before your receipt of that revocation notice.
9. This Power of Attorney is governed by English law.
This Power of attorney has been entered into as a deed on the date stated at the
beginning of this Power of Attorney.
Executed as a deed )
On behalf of )
SMITH & NEPHEW PLC )
By:
__________________________
Director
__________________________
Director/Secretary
87
SCHEDULE 10
FORM OF LEGAL OPINION OF ALLEN & OVERY
To: The Finance Parties named as
original parties to the Agreement
(as defined below)
[ ], 2002
Dear Sirs,
SMITH & NEPHEW PLC - US$300,000,000 Agreement
dated [ ] February, 2002 (the "Agreement")
We have received instructions from the Facility Agent in connection with the
Agreement.
Defined Terms
Terms defined in the Agreement have the same meaning in this opinion.
Documents and searches
For the purposes of this opinion we have examined the following documents:
(a) a signed copy of the Agreement;
(b) a certified copy of the memorandum and articles of association and
certificate of incorporation of the Company;
(c) a certified copy of the minutes of a meeting of a committee of the
board of directors of the Company held on[ ];
(d) a certified copy of the minutes of a meeting of the board of directors
of the Company held on[ ]; and
(e) a certificate of the Company confirming, amongst other things, that the
entry into and performance of the Agreement will not contravene any
borrowing limit contained in the articles of association of the
Company.
On [ ] we carried out a search of the Company at the Companies
Registry. On [ ] we made a telephone search of the Company at the
winding-up petitions at the Companies court.
The above are the only documents or records we have examined and the only
searches and enquiries we have carried out for the purposes of this opinion.
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Assumptions
We assume that:
(a) the Company is not unable to pay its debts within the meaning of
section 123 of the Insolvency Act, 1986 at the time it enters into the
Agreement and will not as a result of the Agreement be unable to pay
its debts within the meaning of that section;
(b) no step has been taken to wind up the Company or appoint a receiver in
respect of it or any of its assets although the searches of the
Companies Registry referred to above gave no indication that any
winding-up order or appointment of a receiver has been made;
(c) all signatures and documents are genuine;
(d) all documents are and remain up-to-date;
(e) the correct procedure was carried out at all the board meetings
referred to above; for example, there was a valid quorum, all relevant
interests of directors were declared and the resolutions were duly
passed at each meeting;
(f) any restrictions on the ability of the Company to borrow contained in
its Articles of Association would not be contravened by the entry into
and performance by it of the Agreement;
(g) the Agreement has been duly executed on behalf of the Company by the
person(s) authorised by the resolutions passed at the relevant meeting
referred to above;
(h) the Agreement is a legally binding, valid and enforceable obligation of
each Finance Party; and
(i) no foreign law affects the conclusions stated below.
Opinion
Subject to the qualifications set out below and to any matters not disclosed to
us, it is our opinion that, so far as the present laws of England are concerned:
1. Status: The Company is a company incorporated with limited liability
under the laws of England and is not in liquidation.
2. Powers and authority: The Company has the corporate power to enter into
and perform the Agreement and has taken all necessary corporate action
to authorise the execution, delivery and performance of the Agreement.
3. Legal validity: The Agreement constitutes a legally binding, valid and
enforceable obligation of the Company.
4. Non-conflict: The entry into and performance by the Company of the
Agreement will not violate any provision of (i) any existing English
law applicable to companies generally, or (ii) its memorandum or
articles of association.
89
5. Consents: No authorisations of governmental, judicial or public bodies
or authorities in England are required by the Company in connection
with the performance, validity or enforceability of its payment
obligations under the Agreement.
6. Taxes: All payments due from the Company under the Agreement may be
made without deduction of any U.K. Taxes, if, in the case of interest:
(a) (i) the person that advanced the participation in the Loan to
which the interest relates was a bank for the purpose of
Section 349 of the Income and Corporation Taxes Act 1988
(as currently defined in section 840A of the Income
Corporation Taxes Act 1988) at the time the Loan was
made; and
(ii) the person beneficially entitled to that interest is
within the charge to U.K. corporation tax as regards that
interest at the time the interest is paid; or
(b) the interest is payable to a Treaty Lender and the Financial
Intermediaries and Claims Office has given the necessary
exemption authorisation.
7. Registration requirements: It is not necessary or advisable to file,
register or record the Agreement in any public place or elsewhere in
England.
8. Stamp duties: No stamp, registration or similar tax or charge is
payable in England in respect of the Agreement.
Qualifications
This opinion is subject to the following qualifications:
(a) This opinion is subject to all insolvency and other laws affecting the
rights of creditors generally.
(b) No opinion is expressed on matters of fact.
(c) The term "enforceable" means that a document is of a type and form
enforced by the English courts. It does not mean that each obligation
will be enforced in accordance with its terms. Certain rights and
obligations may be qualified by the non-conclusivity of certificates,
doctrines of good faith and fair conduct, the availability of equitable
remedies and other matters, but in our view these qualifications would
not defeat your legitimate expectations in any material respect.
This opinion is given for your sole benefit and may not be relied upon by or
disclosed to any other person.
Yours faithfully
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SIGNATORIES
Company
SMITH & NEPHEW PLC
By: P.HOOLEY C.J. O'DONNELL
Arranger
LLOYDS TSB CAPITAL MARKETS
By: ROBERT GREENE
Original Lender
LLOYDS TSB BANK plc
By: DAVID BORAN
Facility Agent
LLOYDS TSB BANK plc
By: DAVID BORAN