Exhibit 2.1
DESCRIPTION OF SECURITIES REGISTERED UNDER SECTION 12 OF THE EXCHANGE ACT
As of December 31, 2020, AstraZeneca PLC (“AZ,” the “Company,” “we,” “us” and “our”) had the following series of securities registered pursuant to Section 12(b) of the Act:
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Title of each class
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Trading symbol(s)
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Name of each exchange on which registered
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American Depositary Shares, each representing one half of an Ordinary Share of 25¢ each
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AZN
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The Nasdaq Stock Market LLC
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Ordinary Shares of 25¢ each
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The Nasdaq Stock Market LLC *
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2.375% Notes due 2022
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AZN 22A
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The Nasdaq Stock Market LLC
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Floating Rate Notes due 2022
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AZN 22B
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The Nasdaq Stock Market LLC
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3.500% Notes due 2023
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AZN 23
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The Nasdaq Stock Market LLC
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7.000% Notes due 2023
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AZN / 23
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The Nasdaq Stock Market LLC
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Floating Rate Notes due 2023
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AZN 23A
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The Nasdaq Stock Market LLC
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3.375% Notes due 2025
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AZN 25
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The Nasdaq Stock Market LLC
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0.700% Notes due 2026
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AZN 26
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The Nasdaq Stock Market LLC
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3.125% Notes due 2027
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AZN 27A
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The Nasdaq Stock Market LLC
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4.000% Notes due 2029
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AZN 29
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The Nasdaq Stock Market LLC
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1.375% Notes due 2030
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AZN 30
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The Nasdaq Stock Market LLC
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6.450% Notes due 2037
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AZN 37
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The Nasdaq Stock Market LLC
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4.000% Notes due 2042
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AZN 42
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The Nasdaq Stock Market LLC
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4.375% Notes due 2045
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AZN 45
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The Nasdaq Stock Market LLC
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4.375% Notes due 2048
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AZN 48
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The Nasdaq Stock Market LLC
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2.125% Notes due 2050
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AZN 50
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The Nasdaq Stock Market LLC
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* Not for trading, but only in connection with the registration of American Depositary Shares representing such Ordinary Shares pursuant to the requirements of the Securities and Exchange Commission.
Capitalized terms used but not defined herein have the meanings given to them in AZ’s annual report on Form 20-F for the fiscal year ended December 31, 2020.
ORDINARY SHARES
The following description of our ordinary shares is a summary and does not purport to be complete. It is subject to and qualified in its entirety by AZ’s articles of association as adopted at the Annual General Meeting (“AGM”) on May 18, 2018, and by the Companies Act 2006 and any other applicable English law concerning companies, as amended from time to time.
A copy of AZ’s articles of association is filed as an exhibit to AZ’s annual report on Form 20-F for the fiscal year ended December 31, 2020, as Exhibit 1.1.
General
As at December 31, 2020 there were 1,312,668,724 ordinary shares of 25¢ each and 50,000 redeemable preference shares in issue. The ordinary shares represent 99.99% and redeemable preference shares represent 0.01% of the Company’s total share capital. Our ordinary shares are listed on the London Stock Exchange (LSE) and on the Nasdaq Stockholm. AZ ADSs (as further described below), representing 0.5 AZ ordinary shares each, are listed on the Nasdaq Stock Market LLC (Nasdaq) under the symbol “AZN”.
Under English law, persons who are neither residents nor nationals of the United Kingdom may freely hold, vote and transfer AZ’s ordinary shares in the same manner and under the same rules as UK residents or nationals.
Dividend rights
Holders of AZ’s ordinary shares may, by ordinary resolution, declare dividends but may not declare dividends in excess of the amount recommended by the board. The directors may also pay interim dividends if it
appears to the board that they are justified by the profits of the Company available for distribution. Except as otherwise provided by the rights attached to shares, all dividends shall be declared and paid according to the amounts paid up on the shares on which the dividend is paid; but no amount paid on a share in advance of the date on which a call is payable shall be treated as paid on the share. Dividends may be paid in any currency or currencies and such dividends will be calculated using an appropriate market exchange rate as determined by the directors in accordance with AZ’s articles of association.
If a dividend has not been claimed, the directors may invest the dividend or use it in some other way for the benefit of AZ until the dividend is claimed. If a dividend, an amount treated as an unclaimed dividend or other amount payable in respect of a share remains unclaimed for 12 years after the date such dividend, amount treated as an unclaimed dividend or amount payable in respect of a share was declared or became due for payment, it will be forfeited and ceases to remain owing by AZ (unless the directors decide otherwise). AZ may stop sending dividend cheques, warrants or similar financial instruments by post or otherwise to a holder if those instruments have been returned undelivered to, or left uncashed by, that holder on at least two consecutive occasions, or, following one such occasion, reasonable enquiries have failed to establish the holder’s new address. This entitlement of AZ ceases if the holder claims a dividend or cashes a dividend warrant, cheque or similar financial instrument.
AZ’s articles of association permit payment or satisfaction of a dividend wholly or partly by distribution of assets, including, without limitation, paid up shares or debentures of any other body corporate. Such action must be directed by the general meeting which declared the dividend and upon the recommendation of the directors.
The redeemable preference shares carry no rights to receive dividends.
Voting rights
Shareholders holding ordinary shares directly are entitled to attend and vote at the AGM or may submit a proxy voting instruction in advance, by following the instructions in the notice of AGM. If a shareholder holds shares listed in Stockholm or holds ADRs, information relating to voting and attendance will be included in the relevant notice of AGM. If a shareholder holds his or her shares through a nominee, the nominee provider will be able to advise the shareholder of their arrangements in relation to voting and attendance. AGMs require 21 clear days’ notice to shareholders. Subject to the Companies Act 2006, other general meetings require 14 clear days’ notice.
The necessary quorum is two shareholders present in person or by proxy or corporate representative, representing at least one-third in nominal value of the issued shares of the class (excluding any shares of that class held as treasury shares) or, at any adjourned meeting of such shareholders, one shareholder present in person or by proxy or corporate representative, whatever the amount of such shareholder’s holding, who shall be deemed to constitute a meeting.
A resolution put to the vote at a general meeting held partly by means of electronic facility or facilities, unless the chairman of the meeting determines that it will be decided on a show of hands, will be decided on a poll. A resolution put to the vote at a general meeting will be decided on a show of hands unless before, or on the declaration of the result of, a vote on the show of hands, or on the withdrawal of any other demand for a poll, a poll is duly demanded.
A poll may be demanded by any of the following:
· the chairman of the general meeting;
· at least five shareholders present in person or by proxy having the right to vote on the resolution;
· any shareholder or shareholders present in person or by proxy representing not less than one-tenth of the total voting rights of all the members having the right to vote on the resolution (excluding any voting rights attached to any shares held as treasury shares); or
· any shareholder or shareholders present in person or by proxy holding shares conferring a right to vote on the resolution, being shares on which an aggregate sum has been paid up equal to not less than one-tenth of the total sum paid up on all the shares conferring that right (excluding any shares conferring a right to vote on the resolution which are held as treasury shares).
The holders of redeemable preference shares have no rights to receive notices of, attend or vote at general meetings except in certain limited circumstances. They have one vote for every 50,000 redeemable preference shares held.
Subject to the provisions of the Companies Act and without prejudice to any special rights previously conferred on the holders of any shares or class of shares for the time being issued, any share in the Company may be classified and be issued in any currency with such preferred, deferred or other special rights, or subject to such restrictions, whether as regards dividend, return of capital, voting or otherwise, as the Company may from time to time by ordinary resolution determine (or, in the absence of any such determination, as the board may classify and determine) and the Company may issue any shares which are, or at the option of the Company or the holder are liable to be redeemed on such terms and in such manner as may be provided by these Articles.
There are no limitations under English law or the articles on the right of non-resident or foreign owners to be the registered holders of, or to exercise voting rights in relation to, ordinary shares or ADRs or to be registered holders of notes or debentures of AZ or its wholly owned subsidiary, Zeneca Wilmington Inc.
AZ is not aware of any agreements between holders of shares that may result in restrictions on the transfer of shares or that may result in restrictions on voting rights.
Directors
AZ’s articles of association provide for a board of directors, consisting (unless otherwise determined by an ordinary resolution of shareholders) of not fewer than 5 directors and not more than 14 directors, in which all powers to manage the business of AZ are vested. Directors may be elected by the members in a general meeting or appointed by AZ’s board. All directors must retire from office at the company’s AGM each year and may present themselves for election or re-election. Directors are not prohibited, upon reaching a particular age, from submitting themselves for election or re-election. Directors may also be removed before the expiration of their term of office in accordance with the provisions of the Companies Act.
The quorum for meetings of the board is a majority of the board, of whom at least four must be non-executive directors. In the absence of a quorum, the directors do not have power to determine compensation arrangements for themselves or any member of the board.
Liquidation rights
On a distribution of AZ’s assets, on a winding-up or other return of capital (subject to certain exceptions), the holders of redeemable preference shares have priority over the holders of ordinary shares to receive the capital paid up on those shares.
Pre-emption rights and new issues of shares
Subject to the provisions of the Companies Act, and without prejudice to any rights attached to any existing shares or class of shares, shares may be issued which are to be redeemed or are to be liable to be redeemed at the option of the Company or the holder. The board may determine the terms, conditions and manner of redemption of shares provided that it does so before the shares are allotted. Subject to the provisions of the Companies Act 2006, AZ has the right to redeem the redeemable preference shares at any time on giving not less than seven days’ written notice.
Subject to the provisions of the Companies Act relating to authority, pre-emption rights or otherwise and of any resolution of the Company in general meeting passed pursuant to those provisions, and, in the case of redeemable shares, the paragraph above: (a) the board has general authority to exercise all the powers of the Company to allot shares and to grant rights to subscribe for and to convert any security into shares; (b) all shares shall be at the disposal of the board; and (c) the board may reclassify, allot (with or without conferring a right of renunciation), grant options over, or otherwise dispose of them to such persons on such terms and conditions and at such times as it thinks fit.
Disclosures of interests in AZ’s shares
There are no provisions in our articles of association whereby persons acquiring, holding or disposing of a certain percentage of AZ’s shares are required to make disclosure of their ownership percentage.
Variation of rights
If, at any time, AZ’s share capital is divided into different classes of shares, the rights attached to any class of shares may be varied, subject to the provisions of the Companies Act, either with the consent in writing of the holders of not less than three-quarters in nominal value of the issued shares of that class or with the sanction of a special resolution passed at a general meeting of such holders.
Class rights are not deemed to be varied by the creation or issue of new share ranking equally with or subsequent to that share or class of shares or by the purchase or redemption by AZ of its own shares, or AZ permitting, in accordance with the Uncertificated Securities Regulations 2001 (including any modification or re-enactment of them for the time being in force), the holding of and transfer of title to shares of that or any other class in uncertificated form by means of a relevant system.
Repurchase of shares
Having regard for business investment, funding the progressive dividend policy and meeting our debt service obligations, the AZ’s board currently believes it is appropriate to continue the suspension of the share repurchase programme which was announced in 2012.
Restrictions on transfers of shares
There are no specific restrictions on the transfer of shares in the Company, which is governed by AZ’s articles of association and prevailing legislation.
AMERICAN DEPOSITARY SHARES
General
The ordinary shares of AZ may be issued in the form of American depositary shares, or ADSs. Each ADS represents 0.5 ordinary share of AZ.
Deutsche Bank Trust Company Americas is the depositary (the “Depositary”) with respect to the ADSs, which are evidenced by American depositary receipts, or ADRs. Each ADS represents a beneficial interest in 0.5 ordinary share deposited with the custodian, as agent of the Depositary, under the Deposit Agreement dated February 6, 2020 between AZ, the Depositary and owners and beneficiaries of the ADRs (the “Deposit Agreement”).
The principal executive office of Depositary and the office at which the ADRs will be administered is currently located at 60 Wall Street, New York, NY 10005, United States of America. The Depositary is a national banking association organized under the laws of the United States. The custodian will be Deutsche Bank AG (London Branch) (the “Custodian”) and its duties will be administered from its principal London office, currently located at Winchester House, 1 Great Winchester Street, London EC2N 2DB, United Kingdom.
The holders of ADSs may hold ADSs either directly by having an ADS registered in their name on the books of the Depositary or indirectly through their broker or other financial institution (the “Holders”). If the Holders hold the ADSs through their broker or financial institution nominee, they must rely on the procedures of such broker or financial institution to assert the rights described in this section. The Holders should consult with their broker or financial institution to find out what those procedures are.
AZ will not treat the Holders as shareholders and the Holders will not have shareholder rights. The Depositary will be the holder of the ordinary shares underlying the ADSs. The Holders will have ADR holder rights, which are set out in the Deposit Agreement. The Deposit Agreement also sets out the rights and obligations of the Depositary.
The following is a summary of the material terms of the Deposit Agreement. Because it is a summary, it does not contain all the information that may be important to the Holders. For more complete information, the Holders should read the entire form of Deposit Agreement and the form of ADR, which contain the terms of the ADSs.
Please refer to Exhibit A on Form F-6 (File no. 333-236014) filed with the Securities and Exchange Commission on February 6, 2020 and available at www.sec.gov. Copies of the Deposit Agreement are also available for inspection at the offices of the Depositary.
Share Dividends and Other Distributions
Whenever the Depositary receives confirmation from the Custodian of receipt of any cash dividend or other cash distribution on any Deposited Securities, or receives proceeds from the sale of any Shares, rights securities or other entitlements under the Deposit Agreement, the Depositary will, if at the time of receipt thereof any amounts received in a Foreign Currency can, in the judgment of the Depositary (upon the terms of the Deposit Agreement), be converted on a practicable basis, into Dollars transferable to the United States, promptly convert or cause to be converted such dividend, distribution or proceeds into Dollars and will distribute promptly the amount thus received (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) to the Holders of record as of the ADS Record Date in proportion to the number of ADSs representing such Deposited Securities held by such Holders respectively as of the ADS Record Date. The Depositary shall distribute only such amount, however, as can be distributed without attributing to any Holder a fraction of one cent. Any such fractional amounts shall be rounded down to the nearest whole cent and so distributed to Holders entitled thereto. Holders and Beneficial Owners understand that in converting Foreign Currency, amounts received on conversion are calculated at a rate which exceeds the number of decimal places used by the Depositary to report distribution rates. The excess amount may be retained by the Depositary as an additional cost of conversion, irrespective of any other fees and expenses payable or owing hereunder and shall not be subject to escheatment. If the Company, the Custodian or the Depositary is required to withhold and does withhold from any cash dividend or other cash distribution in respect of any Deposited Securities an amount on account of taxes, duties or other governmental charges, the amount distributed to Holders on the ADSs representing such Deposited Securities shall be reduced accordingly. Such withheld amounts shall be forwarded by the Company, the Custodian or the Depositary to the relevant governmental authority. Evidence of payment thereof by the Company shall be forwarded by the Company to the Depositary upon request. The Depositary shall forward to the Company or its agent such information from its records as the Company may reasonably request to enable the Company or its agent to file with governmental agencies such reports as are necessary to obtain benefits under the applicable tax treaties for the Holders and Beneficial Owners of Receipts.
If any distribution upon any Deposited Securities consists of a dividend in, or free distribution of, Shares, the Company shall cause such Shares to be deposited with the Custodian and registered, as the case may be, in the name of the Depositary, the Custodian or their nominees. Upon receipt of confirmation of such deposit, the Depositary shall, subject to and in accordance with the Deposit Agreement, establish the ADS Record Date and either (i) distribute to the Holders as of the ADS Record Date in proportion to the number of ADSs held by such Holders as of the ADS Record Date, additional ADSs, which represent in aggregate the number of Shares received as such dividend, or free distribution, subject to the terms of the Deposit Agreement (including, without limitation, the applicable fees and charges of, and expenses incurred by, the Depositary, and taxes and/or governmental charges), or (ii) if additional ADSs are not so distributed, each ADS issued and outstanding after the ADS Record Date shall, to the extent permissible by law, thenceforth also represent rights and interests in the additional Shares distributed upon the Deposited Securities represented thereby (net of the applicable fees and charges of, and the expenses incurred by, the Depositary, and taxes and/or governmental charges). In lieu of delivering fractional ADSs, the Depositary shall sell the number of Shares represented by the aggregate of such fractions and distribute the proceeds upon the terms set forth in the Deposit Agreement.
In the event that (x) the Depositary determines that any distribution in property (including Shares) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, or, (y) if the Company, in the fulfillment of its obligations under the Deposit Agreement, has either (a) furnished an opinion of U.S. counsel determining that Shares must be registered under the Securities Act or other laws in order to be distributed to Holders (and no such registration statement has been declared effective), or (b) fails to timely deliver the documentation contemplated in the Deposit Agreement, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable, and the Depositary shall distribute the net proceeds of any such sale (after deduction of taxes and/or governmental charges, and fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary) to Holders entitled thereto upon the terms of the Deposit Agreement. The Depositary shall hold and/or distribute any unsold balance of such property in accordance with the provisions of the Deposit Agreement.
Upon timely receipt of a notice indicating that the Company wishes an elective distribution to be made available to Holders upon the terms described in the Deposit Agreement, the Depositary shall, upon provision of all documentation required under the Deposit Agreement, (including, without limitation, any legal opinions the Depositary may request under the Deposit Agreement) determine whether such distribution is lawful and reasonably practicable. If so, the Depositary shall, subject to the terms and conditions of the Deposit Agreement, establish an ADS Record Date hereof and establish procedures to enable the Holder hereof to elect to receive the proposed distribution in cash or in additional ADSs. If a Holder elects to receive the distribution in cash, the dividend shall be distributed as in the case of a distribution in cash. If the Holder hereof elects to receive the distribution in additional ADSs, the distribution shall be distributed as in the case of a distribution in Shares upon the terms described in the Deposit Agreement. If such elective distribution is not lawful or reasonably practicable or if the Depositary did not receive satisfactory documentation set forth in the Deposit Agreement, the Depositary shall, to the extent permitted by law, distribute to Holders, on the basis of the same determination as is made in the United Kingdom, in respect of the Shares for which no election is made, either (x) cash or (y) additional ADSs representing such additional Shares, in each case, upon the terms described in the Deposit Agreement. Nothing herein shall obligate the Depositary to make available to the Holder hereof a method to receive the elective dividend in Shares (rather than ADSs). There can be no assurance that the Holder hereof will be given the opportunity to receive elective distributions on the same terms and conditions as the holders of Shares.
Whenever the Company intends to distribute to the holders of the Deposited Securities rights to subscribe for additional Shares, the Company shall give notice thereof to the Depositary at least 60 days prior to the proposed distribution stating whether or not it wishes such rights to be made available to Holders of ADSs. Upon timely receipt by the Depositary of a notice indicating that the Company wishes such rights to be made available to Holders of ADSs, the Company shall determine whether it is lawful and reasonably practicable to make such rights available to the Holders. The Depositary shall make such rights available to any Holders only if the Company shall have timely requested that such rights be made available to Holders, the Depositary shall have received the documentation required by the Deposit Agreement, and the Depositary shall have determined that such distribution of rights is lawful and reasonably practicable. If such conditions are not satisfied, the Depositary shall sell the rights as described below. In the event all conditions set forth above are satisfied, the Depositary shall establish an ADS Record Date and establish procedures (x) to distribute such rights (by means of warrants or otherwise) and (y) to enable the Holders to exercise the rights (upon payment of the applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges). Nothing herein or in the Deposit Agreement shall obligate the Depositary to make available to the Holders a method to exercise such rights to subscribe for Shares (rather than ADSs). If (i) the Company does not timely request the Depositary to make the rights available to Holders or if the Company requests that the rights not be made available to Holders, (ii) the Depositary fails to receive the documentation required by the Deposit Agreement or determines it is not lawful or reasonably practicable to make the rights available to Holders, or (iii) any rights made available are not exercised and appear to be about to lapse, the Depositary shall determine whether it is lawful and reasonably practicable to sell such rights, and if it so determines that it is lawful and reasonably practicable, endeavour to sell such rights in a riskless principal capacity or otherwise, at such place and upon such terms (including public and/or private sale) as it may deem proper. The Depositary shall, upon such sale, convert and distribute proceeds of such sale (net of applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) upon the terms hereof and in the Deposit Agreement. If the Depositary is unable to make any rights available to Holders or to arrange for the sale of the rights upon the terms described above, the Depositary shall allow such rights to lapse. The Depositary shall not be responsible for, and the Company shall not be liable to Holders or Beneficial Owners for (i) any failure to determine that it may be lawful or practicable to make such rights available to Holders in general or any Holders in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or exercise, or (iii) the content of any materials forwarded to the Holders on behalf of the Company in connection with the rights distribution.
Notwithstanding anything herein to the contrary, if registration (under the Securities Act and/or any other applicable law) of the rights or the securities to which any rights relate may be required in order for the Company to offer such rights or such securities to Holders and to sell the securities represented by such rights, the Depositary will not distribute such rights to the Holders (i) unless and until a registration statement under the Securities Act (and such other applicable law) covering such offering is in effect or (ii) unless the Company furnishes to the Depositary opinion(s) of counsel for the Company in the United States and counsel for the Company in the United Kingdom, in each case satisfactory to the Depositary, to the effect that the offering and sale of such securities to Holders and Beneficial Owners are exempt from, or do not require registration under, the provisions of the Securities Act or any other applicable laws. In the event that the Company, the Depositary
or the Custodian shall be required to withhold and does withhold from any distribution of property (including rights) an amount on account of taxes and/or other governmental charges, the amount distributed to the Holders shall be reduced accordingly. In the event that the Depositary determines that any distribution in property (including Shares and rights to subscribe therefor) is subject to any tax or other governmental charges which the Depositary is obligated to withhold, the Depositary may dispose of all or a portion of such property (including Shares and rights to subscribe therefor) in such amounts and in such manner, including by public or private sale, as the Depositary deems necessary and practicable to pay any such taxes and/or charges.
There can be no assurance that Holders generally, or any Holder in particular, will be given the opportunity to exercise rights on the same terms and conditions as the holders of Shares or to exercise such rights. Nothing herein shall obligate the Company to file any registration statement in respect of any rights or Shares or other securities to be acquired upon the exercise of such rights or otherwise to register or qualify the offer or sale of such rights or securities under the applicable law of any other jurisdiction for any purpose.
Upon receipt of a notice regarding property other than cash, Shares or rights to purchase additional Shares, to be made to Holders of ADSs, the Depositary shall determine, after consultation with the Company, whether such distribution to Holders is lawful and reasonably practicable. The Depositary shall not make such distribution unless (i) the Company shall have timely requested the Depositary to make such distribution to Holders, (ii) the Depositary shall have received the documentation required by the Deposit Agreement, and (iii) the Depositary shall have determined that such distribution is lawful and reasonably practicable. Upon satisfaction of such conditions, the Depositary shall distribute the property so received to the Holders of record as of the ADS Record Date, in proportion to the number of ADSs held by such Holders respectively and in such manner as the Depositary may deem practicable for accomplishing such distribution (i) upon receipt of payment or net of the applicable fees and charges of, and expenses incurred by, the Depositary, and (ii) net of any taxes and/or governmental charges. The Depositary may dispose of all or a portion of the property so distributed and deposited, in such amounts and in such manner (including public or private sale) as the Depositary may deem practicable or necessary to satisfy any taxes (including applicable interest and penalties) or other governmental charges applicable to the distribution.
If the conditions above are not satisfied, the Depositary shall sell or cause such property to be sold in a public or private sale, at such place or places and upon such terms as it may deem proper and shall distribute the proceeds of such sale received by the Depositary (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the Holders upon the terms hereof and of the Deposit Agreement. If the Depositary is unable to sell such property, the Depositary may dispose of such property in any way it deems reasonably practicable under the circumstances.
Withdrawal and Cancellation
Upon surrender, at the Corporate Trust Office of the Depositary, of ADSs evidenced by this Receipt for the purpose of withdrawal of the Deposited Securities represented thereby, and upon payment of (i) the fees and charges of the Depositary for the making of withdrawals of Deposited Securities and cancellation of Receipts and (ii) all fees, taxes and/or governmental charges payable in connection with such surrender and withdrawal, and, subject to the terms and conditions of the Deposit Agreement, the Memorandum and Articles of Association and the provisions of or governing the Deposited Securities and other applicable laws, the Holder of the American Depositary Shares evidenced hereby is entitled to Delivery, to him or upon his order, of the Deposited Securities represented by the ADS so surrendered. ADS may be surrendered for the purpose of withdrawing Deposited Securities by Delivery of a Receipt evidencing such ADS (if held in registered form) or by book entry delivery of such ADS to the Depositary.
A Receipt surrendered for such purposes shall, if so required by the Depositary, be properly endorsed in blank or accompanied by proper instruments of transfer in blank, and if the Depositary so requires, the Holder thereof shall execute and deliver to the Depositary a written order directing the Depositary to cause the Deposited Securities being withdrawn to be Delivered to or upon the written order of a person or persons designated in such order. Thereupon, the Depositary shall direct the Custodian to Deliver (without unreasonable delay) at the designated office of the Custodian or through a book-entry delivery of the Shares (in either case subject to the terms and conditions of the Deposit Agreement, to the Memorandum and Articles of Association, and to the provisions of or governing the Deposited Securities and applicable laws, now or hereafter in effect), to or upon the written order of the person or persons designated in the order delivered to the Depositary as provided above, the Deposited Securities represented by such ADSs, together with any certificate or other
proper documents of or relating to title for the Deposited Securities or evidence of the electronic transfer thereof (if available) as the case may be to or for the account of such person. In the case of surrender of a Receipt evidencing a number of ADSs representing other than a whole number of Shares, the Depositary shall cause ownership of the appropriate whole number of Shares to be Delivered in accordance with the terms hereof, and shall, at the discretion of the Depositary, either (i) issue and Deliver to the person surrendering such Receipt a new Receipt evidencing American Depositary Shares representing any remaining fractional Share, or (ii) sell or cause to be sold the fractional Shares represented by the Receipt so surrendered and remit the proceeds thereof (net of (a) applicable fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and (b) taxes and/or governmental charges) to the person surrendering the Receipt. At the request, risk and expense of any Holder so surrendering a Receipt, and for the account of such Holder, the Depositary shall direct the Custodian to forward (to the extent permitted by law) any cash or other property (other than securities) held in respect of, and any certificate or certificates and other proper documents of or relating to title to, the Deposited Securities represented by such Receipt to the Depositary for Delivery at the Corporate Trust Office of the Depositary, and for further Delivery to such Holder. Such direction shall be given by letter or, at the request, risk and expense of such Holder, by cable, telex or facsimile transmission. Upon receipt of such direction by the Depositary, the Depositary may make delivery to such person or persons entitled thereto at the Corporate Trust Office of the Depositary of any dividends or cash distributions with respect to the Deposited Securities represented by such Receipt, or of any proceeds of sale of any dividends, distributions or rights, which may at the time be held by the Depositary.
Voting Rights
Subject to the next sentence, as soon as practicable after receipt of notice of any meeting at which the holders of Deposited Securities are entitled to vote, or of solicitation of consents or proxies from holders of Deposited Securities, the Depositary shall fix the ADS Record Date in respect of such meeting or such solicitation of consents or proxies. The Depositary shall, if requested by the Company in writing in a timely manner (the Depositary having no obligation to take any further action if the request shall not have been received by the Depositary at least 30 Business Days prior to the date of such vote or meeting) and at the Company’s expense, and provided no U.S. legal prohibitions exist, mail by regular, ordinary mail delivery (or by electronic mail or as otherwise may be agreed between the Company and the Depositary in writing from time to time) or otherwise distribute as soon as practicable after receipt thereof to Holders as of the ADS Record Date: (a) such notice of meeting or solicitation of consent or proxy; (b) a statement that the Holders at the close of business on the ADS Record Date will be entitled, subject to any applicable law, the provisions of this Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities (which provisions, if any, shall be summarized in pertinent part by the Company), to instruct the Depositary as to the exercise of the voting rights, if any, pertaining to the Deposited Securities represented by such Holder’s American Depositary Shares; and (c) a brief statement as to the manner in which such voting instructions may be given to the Depositary. Voting instructions may be given only in respect of a number of American Depositary Shares representing an integral number of Deposited Securities. Upon the timely receipt of voting instructions of a Holder on the ADS Record Date in the manner specified by the Depositary, the Depositary shall endeavor, insofar as practicable and permitted under applicable law, the provisions of this Deposit Agreement, the Company’s Memorandum and Articles of Association and the provisions of or governing the Deposited Securities, to vote or cause the Custodian to vote the Deposited Securities (in person or by proxy) represented by American Depositary Shares evidenced by such Receipt in accordance with such voting instructions.
Neither the Depositary nor the Custodian shall, under any circumstances exercise any discretion as to voting, and neither the Depositary nor the Custodian shall vote, attempt to exercise the right to vote, or in any way make use of for purposes of establishing a quorum or otherwise, Deposited Securities represented by ADSs except pursuant to and in accordance with such written instructions from Holders. Deposited Securities represented by ADSs for which (i) no timely voting instructions are received by the Depositary from the Holder, or (ii) timely voting instructions are received by the Depositary from the Holder but such voting instructions fail to specify the manner in which the Depositary is to vote the Deposited Securities represented by such Holder’s ADSs, shall be voted in the manner provided under the previous paragraph.
There can be no assurance that Holders or Beneficial Owners generally or any Holder or Beneficial Owner in particular will receive the notice described above with sufficient time to enable the Holder to return voting instructions to the Depositary in a timely manner.
Notwithstanding the above, save for applicable provisions of the laws of England and Wales, and in accordance with the Standard of Care of the Deposit Agreement, the Depositary shall not be liable for any failure to carry out any instructions to vote any of the Deposited Securities or the manner in which such vote is cast or the effect of such vote.
Reports and Other Communications
The Company is subject to the periodic reporting requirements of the Exchange Act applicable to foreign private issuers (as defined in Rule 405 of the Securities Act) and accordingly files certain information with the Commission. These reports and documents can be inspected and copied at the public reference facilities maintained by the Commission located at 100 F Street, N.E., Washington D.C. 20549, U.S.A. The Depositary shall make available during normal business hours on any Business Day for inspection by Holders at its Corporate Trust Office any reports and communications, including any proxy soliciting materials, received from the Company which are both (a) received by the Depositary, the Custodian, or the nominee of either of them as the holder of the Deposited Securities and (b) made generally available to the holders of such Deposited Securities by the Company.
Reclassifications, Recapitalizations and Mergers
Upon any change in par value, split-up, subdivision, cancellation, consolidation or any other reclassification of Deposited Securities, or upon any recapitalization, reorganization, merger, amalgamation or consolidation or sale of assets affecting the Company or to which it otherwise is a party, any securities which shall be received by the Depositary or a Custodian in exchange for, or in conversion of or replacement or otherwise in respect of, such Deposited Securities shall, to the extent permitted by law, be treated as new Deposited Securities under the Deposit Agreement, and the Receipts shall, subject to the provisions of the Deposit Agreement and applicable law, evidence ADSs representing the right to receive such additional securities. Alternatively, the Depositary may, with the Company’s approval, and shall, if the Company shall so requests, subject to the terms of the Deposit Agreement and receipt of satisfactory documentation contemplated by the Deposit Agreement, execute and deliver additional Receipts as in the case of a stock dividend on the Shares, or call for the surrender of outstanding Receipts to be exchanged for new Receipts, in either case, as well as in the event of newly deposited Shares, with necessary modifications to this form of Receipt specifically describing such new Deposited Securities and/or corporate change. Notwithstanding the foregoing, in the event that any security so received may not be lawfully distributed to some or all Holders, the Depositary may, with the Company’s approval, and shall if the Company requests, subject to receipt of satisfactory legal documentation contemplated in the Deposit Agreement, sell such securities at public or private sale, at such place or places and upon such terms as it may deem proper and may allocate the net proceeds of such sales (net of fees and charges of, and expenses incurred by, the Depositary and/or a division or Affiliate(s) of the Depositary and taxes and/or governmental charges) for the account of the Holders otherwise entitled to such securities and distribute the net proceeds so allocated to the extent practicable as in the case of a distribution received in cash pursuant to the Deposit Agreement. The Depositary shall not be responsible for (i) any failure to determine that it may be lawful or feasible to make such securities available to Holders in general or any Holder in particular, (ii) any foreign exchange exposure or loss incurred in connection with such sale, or (iii) any liability to the purchaser of such securities.
Amendment and Termination
Subject to the terms and conditions of this paragraph, and applicable law, this Receipt and any provisions of the Deposit Agreement may at any time and from time to time be amended or supplemented by written agreement between the Company and the Depositary in any respect which they may deem necessary or desirable without the consent of the Holders or Beneficial Owners. Any amendment or supplement which shall impose or increase any fees or charges (other than the charges of the Depositary in connection with foreign exchange control regulations, and taxes and/or other governmental charges, delivery and other such expenses), or which shall otherwise materially prejudice any substantial existing right of Holders or Beneficial Owners, shall not, however, become effective as to outstanding Receipts until 30 days after notice of such amendment or supplement shall have been given to the Holders of outstanding Receipts. Notice of any amendment to the Deposit Agreement or form of Receipts shall not need to describe in detail the specific amendments effectuated thereby, and failure to describe the specific amendments in any such notice shall not render such notice invalid, provided, however, that, in each such case, the notice given to the Holders identifies a means for Holders and Beneficial Owners to retrieve or receive the text of such amendment (i.e., upon retrieval from the Commission’s, the Depositary’s or the Company’s website or upon request from the Depositary). The parties hereto agree that any amendments or supplements which (i) are reasonably necessary (as agreed by the
Company and the Depositary) in order for (a) the ADSs to be registered on Form F-6 under the Securities Act or (b) the ADSs or Shares to be traded solely in electronic book-entry form and (ii) do not in either such case impose or increase any fees or charges to be borne by Holders, shall be deemed not to materially prejudice any substantial rights of Holders or Beneficial Owners. Every Holder and Beneficial Owner at the time any amendment or supplement so becomes effective shall be deemed, by continuing to hold such ADS, to consent and agree to such amendment or supplement and to be bound by the Deposit Agreement as amended or supplemented thereby. In no event shall any amendment or supplement impair the right of the Holder to surrender such Receipt and receive therefor the Deposited Securities represented thereby, except in order to comply with mandatory provisions of applicable law. Notwithstanding the foregoing, if any governmental body should adopt new laws, rules or regulations which would require amendment or supplement of the Deposit Agreement to ensure compliance therewith, the Company and the Depositary may amend or supplement the Deposit Agreement and the Receipt at any time in accordance with such changed laws, rules or regulations. Such amendment or supplement to the Deposit Agreement in such circumstances may become effective before a notice of such amendment or supplement is given to Holders or within any other period of time as required for compliance with such laws, or rules or regulations.
The Depositary shall, at any time at the written direction of the Company, terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 90 days prior to the date fixed in such notice for such termination provided that, the Depositary shall be reimbursed for any amounts, fees, costs or expenses owed to it in accordance with the terms of the Deposit Agreement and in accordance with any other agreements as otherwise agreed in writing between the Company and the Depositary from time to time, prior to such termination shall take effect. If 90 days shall have expired after (i) the Depositary shall have delivered to the Company a written notice of its election to resign, or (ii) the Company shall have delivered to the Depositary a written notice of the removal of the Depositary, and in either case a successor depositary shall not have been appointed and accepted its appointment as provided herein and in the Deposit Agreement, the Depositary may terminate the Deposit Agreement by mailing notice of such termination to the Holders of all Receipts then outstanding at least 30 days prior to the date fixed for such termination. On and after the date of termination of the Deposit Agreement, each Holder will, upon surrender of such Holder’s Receipt at the Corporate Trust Office of the Depositary, upon the payment of the charges of the Depositary for the surrender of Receipts referred to in Article (2) hereof and in the Deposit Agreement and subject to the conditions and restrictions therein set forth, and upon payment of any applicable taxes and/or governmental charges, be entitled to delivery, to him or upon his order, of the amount of Deposited Securities represented by such Receipt. If any Receipts shall remain outstanding after the date of termination of the Deposit Agreement, the Registrar thereafter shall discontinue the registration of transfers of Receipts, and the Depositary shall suspend the distribution of dividends to the Holders thereof, and shall not give any further notices or perform any further acts under the Deposit Agreement, except that the Depositary shall continue to collect dividends and other distributions pertaining to Deposited Securities, shall sell rights or other property as provided in the Deposit Agreement, and shall continue to deliver Deposited Securities, subject to the conditions and restrictions set forth in the Deposit Agreement, together with any dividends or other distributions received with respect thereto and the net proceeds of the sale of any rights or other property, in exchange for Receipts surrendered to the Depositary (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments). At any time after the expiration of six months from the date of termination of the Deposit Agreement, the Depositary may sell the Deposited Securities then held hereunder and may thereafter hold uninvested the net proceeds of any such sale, together with any other cash then held by it hereunder, in an unsegregated account, without liability for interest for the pro rata benefit of the Holders of Receipts whose Receipts have not theretofore been surrendered. After making such sale, the Depositary shall be discharged from all obligations under the Deposit Agreement with respect to the Receipts and the Shares, Deposited Securities and ADSs, except to account for such net proceeds and other cash (after deducting, or charging, as the case may be, in each case the charges of the Depositary for the surrender of a Receipt, any expenses for the account of the Holder in accordance with the terms and conditions of the Deposit Agreement and any applicable taxes and/or governmental charges or assessments) and except as set forth in the Deposit Agreement. Upon the termination of the Deposit Agreement, the Company shall be discharged from all obligations under the Deposit Agreement except as set forth in the Deposit Agreement. The obligations under the terms of the Deposit Agreement and Receipts of Holders and Beneficial Owners of ADSs outstanding as of the effective date of any termination shall survive such effective date of termination and shall be discharged only when the applicable ADSs are presented by their Holders to the Depositary for cancellation under the terms of the Deposit Agreement and the Holders have each satisfied any and all of their obligations hereunder (including, but not limited to, any payment and/or reimbursement
obligations which relate to prior to the effective date of termination but which payment and/or reimbursement is claimed after such effective date of termination).
Limitation on Obligations and Liability to ADR Holders
None of the Depositary, the Custodian or the Company shall be obligated to do or perform any act which is inconsistent with the provisions of the Deposit Agreement or shall incur any liability to Holders, Beneficial Owners or any third parties (i) if the Depositary, the Custodian or the Company or their respective controlling persons or agents shall be prevented or forbidden from, or subjected to any civil or criminal penalty or restraint on account of, or delayed in, doing or performing any act or thing required by the terms of the Deposit Agreement and this Receipt, by reason of any provision of any present or future law or regulation of the United States, England and Wales or any other country, or of any other governmental authority or regulatory authority or stock exchange, or by reason of any provision, present or future of the Memorandum and Articles of Association or any provision of or governing any Deposited Securities, or by reason of any act of God or war or other circumstances beyond its control, (including, without limitation, nationalization, expropriation, currency restrictions, work stoppage, strikes, civil unrest, revolutions, rebellions, explosions and computer failure), (ii) by reason of any exercise of, or failure to exercise, any discretion provided for in the Deposit Agreement or in the Memorandum and Articles of Association or provisions of or governing Deposited Securities, (iii) for any action or inaction of the Depositary, the Custodian or the Company or their respective controlling persons or agents in reliance upon the advice of or information from legal counsel, accountants, any person presenting Shares for deposit, any Holder, any Beneficial Owner or authorized representative thereof, or any other person believed by it in good faith to be competent to give such advice or information, (iv) for any inability by a Holder or Beneficial Owner to benefit from any distribution, offering, right or other benefit which is made available to holders of Deposited Securities but is not, under the terms of the Deposit Agreement, made available to Holders of ADS or (v) for any special, consequential, indirect or punitive damages for any breach of the terms of the Deposit Agreement or otherwise. The Depositary, its controlling persons, its agents (including without limitation, the Agents), any Custodian and the Company, its controlling persons and its agents may rely and shall be protected in acting upon any written notice, request, opinion or other document believed by it to be genuine and to have been signed or presented by the proper party or parties. No disclaimer of liability under the Securities Act or the Exchange Act is intended by any provision of the Deposit Agreement.
Books of Depositary
The Depositary or the Registrar, as applicable, shall keep books for the registration of Receipts and transfers of Receipts which at all reasonable times shall be open for inspection by the Company and by the Holders of such Receipts, provided that such inspection shall not be, to the Depositary’s or the Registrar’s knowledge, for the purpose of communicating with Holders of such Receipts in the interest of a business or object other than the business of the Company or other than a matter related to the Deposit Agreement or the Receipts.
The Depositary or the Registrar, as applicable, may close the transfer books with respect to the Receipts, at any time or from time to time, when deemed necessary or advisable by it in good faith in connection with the performance of its duties hereunder, or at the reasonable written request of the Company subject, in all cases, to Regulatory Compliance and compliance with U.S. Securities Laws.
DEBT SECURITIES
Each series of notes listed on the Nasdaq Stock Market LLC and set forth on the cover page to AZ’s annual report on Form 20-F for the fiscal year ended December 31, 2020 has been issued by AstraZeneca PLC. Each of these series of notes was issued pursuant to an effective registration statement and a related prospectus and prospectus supplement (if applicable) setting forth the terms of the relevant series of notes.
The following table sets forth the dates of the registration statements, dates of the base prospectuses and dates of issuance for each relevant series of notes (the “Notes”).
1
|
Series
|
|
Registration Statement
|
|
Date of Base Prospectus
|
|
Date of Issuance
|
|
2.375% Notes due 2022
|
|
333-214756
|
|
November 22, 2016
|
|
June 12, 2017
|
|
Floating Rate Notes due 2022
|
|
333-214756
|
|
November 22, 2016
|
|
June 12, 2017
|
|
3.500% Notes due 2023
|
|
333-214756
|
|
November 22, 2016
|
|
August 17, 2018
|
|
7.000% Notes due 2023
|
|
33-71046
|
|
November 9, 1993
|
|
November 9, 1993
|
|
Floating Rate Notes due 2023
|
|
333-214756
|
|
November 22, 2016
|
|
August 17, 2018
|
|
3.375% Notes due 2025
|
|
333-192551
|
|
November 26, 2013
|
|
November 16, 2015
|
|
0.700% Notes due 2026
|
|
333-234586
|
|
November 8, 2019
|
|
August 6, 2020
|
|
3.125% Notes due 2027
|
|
333-214756
|
|
November 22, 2016
|
|
June 12, 2017
|
|
4.000% Notes due 2029
|
|
333-214756
|
|
November 22, 2016
|
|
August 17, 2018
|
|
1.375% Notes due 2030
|
|
333-234586
|
|
November 8, 2019
|
|
August 6, 2020
|
|
6.450% Notes due 2037
|
|
333-145848
|
|
August 31, 2007
|
|
September 12, 2007
|
|
4.000% Notes due 2042
|
|
333-171306
|
|
December 21, 2010
|
|
September 18, 2012
|
|
4.375% Notes due 2045
|
|
333-192551
|
|
November 26, 2013
|
|
November 16, 2015
|
|
4.375% Notes due 2048
|
|
333-214756
|
|
November 22, 2016
|
|
August 17, 2018
|
|
2.125% Notes due 2050
|
|
333-234586
|
|
November 8, 2019
|
|
August 6, 2020
|
The following descriptions of our Notes are summaries and do not purport to be complete and are qualified in their entirety by the full terms of the applicable Notes.
The Prospectus Supplement sections below describe the specific financial and legal terms of the respective Notes, and supplements the more general descriptions under “Description of Debt Securities” in the applicable Base Prospectus of the respective Notes. To the extent that the Prospectus Supplement description is inconsistent with the terms described under “Description of Debt Securities” in the applicable Base Prospectus, the description in the Prospectus Supplement supersedes that in the applicable Base Prospectus.
A. 2.375% Notes due 2022, 3.125% Notes due 2027 and Floating Rate Notes due 2022
Prospectus Supplement:
DESCRIPTION OF NOTES
General
We offered $1,000,000,000 initial aggregate principal amount of 2.375% Notes due 2022 (the “2022 Notes”), $750,000,000 initial aggregate principal amount of 3.125% Notes due 2027 (the “2027 Notes” and, together with the 2022 Notes, the “Fixed Rate Notes”) and $250,000,000 initial aggregate principal amount of Floating Rate Notes due 2022 (the “Floating Rate Notes” and, together with the Fixed Rate Notes, the “notes”), each as a separate series of notes under the Indenture, and, as such, each series of notes vote and act, and may be redeemed, separately. The notes are governed by New York law.
The notes are unsecured, unsubordinated indebtedness of AstraZeneca PLC and rank equally with all of AstraZeneca PLC’s other unsecured and unsubordinated indebtedness from time to time outstanding.
There is no sinking fund for any series of notes. We have listed the notes on the Nasdaq Stock Market LLC.
Interest Payments and Maturity
For purposes of the description below, “business day” means any day which is not, in London, England or New York, New York, or the place of payment of amounts payable in respect of the notes, a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law, regulation or executive order to close. A “London business day” is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
Fixed Rate Notes
Maturity. The entire principal amount of the 2022 Notes and the 2027 Notes will mature and become due and payable, together with any accrued and unpaid interest, on June 12, 2022 and June 12, 2027, respectively.
Interest Rate. Each of the 2022 Notes and the 2027 Notes will bear interest from their respective original issue date until their principal amount is paid or made available for payment, at a rate equal to 2.375% and 3.125% per annum, respectively, calculated on the basis of a 360-day year and twelve 30-day months.
Interest Payment Dates. Interest on the Fixed Rate Notes will be paid semi-annually in arrears on June 12 and December 12 of each year, commencing December 12, 2017 (each a “Fixed Rate Interest Payment Date”). However, if a Fixed Rate Interest Payment Date would fall on a day that is not a business day, the Fixed Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, but no additional interest shall be paid unless we fail to make payment on such date.
Interest Periods. The first interest period for the Fixed Rate Notes will be the period from and including the issue date to but excluding the first Fixed Rate Interest Payment Date. Thereafter, the interest periods for the Fixed Rate Notes will be the periods from and including the Fixed Rate Interest Payment Dates to but excluding the immediately succeeding Fixed Rate Interest Payment Date (together with the first interest period, each a “Fixed Rate Interest Period”). The final Fixed Rate Interest Period will be the period from and including the Fixed Rate Interest Payment Date immediately preceding the maturity date to the maturity date.
Floating Rate Notes
Maturity. The entire principal amount of the Floating Rate Notes will mature and become due and payable, together with any accrued and unpaid interest, on June 10, 2022.
Interest Rate. The interest rate for the Floating Rate Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on June 8, 2017 plus the Spread. Thereafter, the interest rate for each Floating Rate Interest Period other than the first Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is 62 basis points for the Floating Rate Notes.
Interest Payment Dates. Interest on the Floating Rate Notes will be paid quarterly in arrears on March 10, June 10, September 10 and December 10 of each year, commencing September 10, 2017 (each a “Floating Rate Interest Payment Date”). However, if a Floating Rate Interest Payment Date would fall on a day that is not a business day, the Floating Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day. In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods (as defined below) and the Interest Reset Dates will be adjusted accordingly to calculate the amount of interest payable on the Floating Rate Notes.
Interest Reset Dates. The interest rate will be reset on March 10, June 10, September 10 and December 10 of each year, commencing September 10, 2017 (each, an “Interest Reset Date”). However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.
Interest Periods. The first interest period will be the period from and including the original issue date to but excluding the immediately succeeding Interest Reset Date. Thereafter, the interest periods will be the periods from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date (together with the first interest period, each a “Floating Rate Interest Period”). However, the final Interest Period will be the period from and including the Interest Reset Date immediately preceding the maturity date to the maturity date.
Interest Determination Date. The calculation agent will determine the LIBOR (as defined below) for each Floating Rate Interest Period on the second London business day prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”). LIBOR for the first Floating Rate Interest Period will be determined on June 8, 2017.
“LIBOR” means, with respect to any Interest Determination Date, the offered rate for deposits of US dollars having a maturity of three months that appears on the Bloomberg Screen BBAL display page, or any successor page, on Bloomberg or any successor service (or any such other service(s) as may be nominated by ICE Benchmark Administration Limited (“IBA”) or its successor or such other entity assuming the responsibility of IBA or its successor in calculating the London Interbank Offered Rate in the event IBA or its successor no longer does so) (the “Designated LIBOR Page”).
If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in US dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the calculation agent, after consultation with us, for a term of three months and in a principal amount equal to an amount that in the judgment of the calculation agent is representative for a single transaction in US dollars in such market at such time (a “Representative Amount”). The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five-millionths of a percentage point rounded upwards) of such quotations. If fewer than two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five millionths of a percentage point rounded upwards) of the rates quoted at approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with us, for loans in US dollars to leading European banks, for a term of three months and in a Representative Amount; provided, however, that if the banks so selected are not quoting as mentioned above, the then-existing LIBOR rate will remain in effect for such Floating Rate Interest Period.
The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by law.
Redemption
As explained below, under certain circumstances we may redeem the notes before they mature. This means that we may repay them early. If we redeem one series of notes we will have no obligation to redeem any other series. The security holder has no right to require us to redeem the notes. Notes will stop bearing interest on the redemption date, even if the security holder does not collect his or her money. We will give notice to DTC of any redemption we propose to make at least 30 days, but no more than 60 days, before the redemption date. Notice by DTC to participating institutions and by these participants to street name holders of indirect interests in the notes will be made according to arrangements among them and may be subject to statutory or regulatory requirements. Subject to the optional tax redemption described below, we may not redeem the Floating Rate Notes prior to maturity.
Optional Redemption
We may redeem the Fixed Rate Notes, in whole or in part, from time to time as follows: (i) prior to the Par Call Date (as set forth below), at a redemption price equal to the greater of (A) 100% of the principal amount of the Fixed Rate Notes to be redeemed, and (B) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Fixed Rate Notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the Make-Whole Spread (as set forth below) and (ii) on or after the Par Call Date, at a redemption price equal to 100% of the principal amount of the Fixed Rate Notes to be redeemed, plus, in each case, accrued interest thereon to but excluding the date of redemption.
In connection with such optional redemption, the following defined terms apply:
· “Comparable treasury issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the applicable series of Fixed Rate Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such series of Fixed Rate Notes (assuming for this purpose that such series of Fixed Rate Notes matured on the applicable Par Call Date).
· “Comparable treasury price” means, with respect to any redemption date, (i) the average, as determined by the Quotation Agent, of the reference treasury dealer quotations for such redemption date, after excluding the highest and lowest such reference treasury dealer quotations, or (ii) if the Quotation Agent obtains fewer than three such reference treasury dealer quotations, the average of all such quotations.
· “Make-Whole Spread” means, with respect to, (i) the 2022 Notes, 10 basis points and (ii) the 2027 Notes, 15 basis points.
· “Par Call Date” means, with respect to (i) the 2022 Notes, May 12, 2022 and (ii) the 2027 Notes, March 12, 2027.
· “Quotation Agent” means the reference treasury dealer appointed by us.
· “Reference treasury dealer” means (i) each of Barclays Capital Inc., HSBC Securities (USA) Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, and their respective successors or affiliates; provided, however, that if the foregoing shall cease to be a primary US government securities dealer in New York City (a “primary treasury dealer”), we shall substitute therefor another primary treasury dealer; and (ii) any other primary treasury dealer selected by us.
· “Reference treasury dealer quotations” means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such reference treasury dealer at 5:00 p.m., Eastern Standard Time, on the third business day preceding such redemption date.
· “Treasury rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the comparable treasury issue, assuming a price for the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.
Optional Tax Redemption
In the event of various tax law changes after the date of this prospectus supplement and other limited circumstances that require us to pay additional amounts, as described below under “— Payment of Additional Amounts”, we may redeem all, but not less than all, of each series of notes at a price equal to 100% of the principal amount of each series of notes plus accrued interest thereon to but excluding the date of redemption. This means we may repay any one or each series of notes early. We discuss our ability to redeem the notes in greater detail under “Description of Debt Securities — Optional Tax Redemption” in the accompanying prospectus.
Further Issuances
We may, without the consent of the holders of any series of notes, issue additional notes of each or any such series having the same ranking and same interest rate, maturity date, redemption terms and other terms as the applicable series of notes described in this prospectus supplement. Any such additional notes, together with the applicable series of notes offered by this prospectus supplement, will constitute a single series of securities under the Indenture. There is no limitation on the amount of notes or other debt securities that we may issue under such indenture.
We may offer additional notes of any series of notes with OID for US federal income tax purposes as part of a further issue. Purchasers of notes of such series after the date of any further issue will not be able to differentiate between notes sold as part of such further issue and previously issued notes. If we were to issue additional notes with OID, purchasers of notes after such further issue may be required to accrue OID with respect to their notes. This may affect the price of outstanding notes of such series following a further issue. Purchasers are advised to consult legal counsel with respect to the implications of any future decision by us to undertake a further issue of notes of any series with OID.
Form, Denomination, Clearance and Settlement
We will issue the notes in fully registered form. Each series of notes will be represented by one or more global securities registered in the name of a nominee of DTC. The security holder will hold beneficial interests in the notes through DTC in book-entry form. The notes will be issued in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. The underwriters expect to deliver the notes through the facilities of DTC on June 12, 2017. Indirect holders trading their beneficial interests in the notes through DTC
must trade in DTC’s same-day funds settlement system and pay in immediately available funds. Secondary market trading through Euroclear and Clearstream, Luxembourg will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg.
Payment of principal of and interest on each series of notes, so long as the notes are represented by global securities, as discussed below, will be made in immediately available funds. Beneficial interests in the global securities will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.
Payment of Additional Amounts
We agree that any amounts to be paid by us under the notes of principal, premium and interest in respect of the notes will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required, provided that we will not have to pay additional amounts if:
(i) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain related parties’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the note or by receiving principal, premium, if any, or interest, if any, on the note, or enforcing the note. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction;
(ii) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the note for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
(iii) the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
(iv) the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant note;
(v) the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning their nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
(vi) the tax, levy, impost or other governmental charge is required by Sections 1471 through 1474 of the Code (“FATCA”), any current or future U.S. Treasury Regulations or rulings promulgated thereunder, any intergovernmental agreement between the United States and any other jurisdiction to implement FATCA (an “IGA”), any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an IGA, or any agreement with the U.S. Internal Revenue Service under or with respect to FATCA; or
(vi) any combination of the taxes referred to in (i) through (vi) above.
In addition, no payments of additional amounts will be made with respect to any payment on a note if the holder of the note is a fiduciary, partnership or a person other than the sole beneficial owner of any payment,
and, by the laws of the jurisdiction in which we are resident for tax purposes, that payment would be required for tax purposes to be included in income of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder of the relevant notes.
Defeasance and Discharge
We may release ourselves from any payment or other obligations on each series of notes as described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the Base Prospectus.
Paying and Calculation Agent
The principal corporate trust office of the trustee in The City of New York is designated as the principal paying agent. See “—Trustee” immediately below. We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts. The trustee will also serve as the calculation agent with respect to the Floating Rate Notes pursuant to a Calculation Agency Agreement to be dated as of June 12, 2017 between us and The Bank of New York Mellon.
Trustee
As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon (formerly known as The Bank of New York), effective October 1, 2006, The Bank of New York Mellon is the trustee under the Indenture. The trustee’s address is The Bank of New York Mellon, Corporate Trust Office, 101 Barclay Street, New York, NY 10286. The trustee will also serve as the paying agent for the notes and as the calculation agent with respect to the Floating Rate Notes. See “— Paying and Calculation Agent” immediately above.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
The debt securities are unsecured obligations of AstraZeneca PLC. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
The Trustee
The Bank of New York Mellon (as successor trustee to JPMorgan Chase Bank) is the trustee under the indenture. As trustee, it has two main roles:
· first, it can enforce the security holder’s rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on the security holder’s behalf, described under “Defaults and Related Matters — Remedies if an event of default occurs” below; and
· second, the trustee performs administrative duties for us, such as sending the security holder interest payments and notices.
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series.
The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
· the title of the series of debt securities;
· the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities;
· any stock exchange on which we will list the debt securities;
· the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined;
· any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined;
· the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months;
· the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the trustee in New York, New York;
· the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part;
· any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods within which, the price or prices at which and every other term and condition upon which the debt securities will be redeemed, repaid or purchased;
· the denominations in which debt securities of the series are issuable, if other than denominations of $2,000 and any whole multiple of $1,000 in excess thereof;
· the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount;
· the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars;
· whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election;
· whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series;
· any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued;
· the forms of the series of debt securities;
· the applicability of the provisions described later under “— Satisfaction, Discharge and Defeasance”;
· any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee;
· if applicable, a discussion of any additional or alternative material US federal income and UK tax considerations; and
· any other special features of the series of debt securities.
We may issue the debt securities as original issue discount securities, which are debt securities offered and sold at a substantial discount to their stated principal amount.
Overview of the Remainder of this Description
The remainder of this description summarizes:
· Additional mechanics relevant to the debt securities under normal circumstances, such as how the security holder transfers ownership and where we make payments.
· The security holder’s right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions.
· The security holder’s rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons.
· Covenants contained in the indenture that restrict our ability to incur liens and undertake sale and leaseback transactions. A particular series of debt securities may have different covenants.
· The security holder’s rights if we default.
· The security holder’s rights if we want to modify the indenture.
· Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
The debt securities will be issued only in fully registered form without interest coupons in denominations of $2,000 or whole multiples of $1,000 in excess thereof. The security holder may have his or her debt securities broken into more debt securities of smaller denominations of whole multiples of $1,000 (but not less than a minimum denomination of $2,000) or combined into fewer debt securities of larger denominations of whole multiples of $1,000, as long as the total principal amount is not changed. This is called an exchange.
The security holder may exchange or transfer registered debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities.
The security holder may not exchange his or her registered debt securities for bearer securities.
There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer.
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with the security holder’s proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the security holder if he or she is a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if the security holder no longer owns the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the applicable prospectus supplement.
Unless provided otherwise in the applicable prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York Mellon (as successor paying agent to JPMorgan Chase Bank) in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is located at The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286. At our option, we may pay interest on any debt securities by check mailed to the registered holders.
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York. Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee.
Payment of Additional Amounts
Unless provided otherwise in the applicable prospectus supplement, we agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required.
The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the applicable prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain related parties’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
· the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security;
· the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
· the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
· the tax, levy, impost or other governmental charge is imposed by the US or any political subdivision or taxing authority thereof or therein;
· the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder; or
· any combination of the exceptions listed above.
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the UK, the US or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey our property as an entirety or substantially as an entirety to such other entity. Our ability to take some of these actions is restricted in the following ways:
· any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture; and
· if the succeeding entity is not organized under the laws of the UK or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “— Payment of Additional Amounts”.
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a principal property of ours or of a restricted subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “— Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
Optional Tax Redemption
Unless provided otherwise in the applicable prospectus supplement, we have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give the security holder between 30 and 60 days’ notice before redeeming the debt securities.
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “—Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities (or if no such date is specified, the first date on which debt securities of such series were issued). If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the preceding sentence.
The second situation is where our independent legal advisor has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “—Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures available to us. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including the security holder and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any principal property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
· Restricted subsidiary means any wholly-owned subsidiary:
· with substantially all of its property located within the UK or the US; and
· which owns a principal property;
but does not include any wholly-owned subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
· A wholly-owned subsidiary means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries.
· A subsidiary, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors.
· Principal property means any manufacturing plant or facility or any research facility owned by us or any restricted subsidiary. A principal property must also be located within the UK or the US and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our consolidated net tangible assets. Principal property does not include:
· any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or
· any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property.
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our consolidated net tangible assets.
· Our consolidated net tangible assets mean AstraZeneca PLC’s consolidated total assets, after deducting:
· all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and
· all goodwill, trade names, trademarks, patents and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders.
This restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
· any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a restricted subsidiary;
· any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price;
· any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries;
· any lien existing at the date of the indenture;
· any lien on a principal property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that principal property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair;
· any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a restricted subsidiary;
· any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
· any lien arising by operation of law over any credit balance or cash held in any account with a financial institution;
· any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any restricted subsidiary;
· any lien incurred or deposits made in the ordinary course of business, including but not limited to:
· any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens;
· any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and
· any easements, rights-of-way, restrictions and other similar charges;
· any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business;\
· any lien securing taxes or assessments or other applicable governmental charges or levies;
· any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and
· any lien in favor of us or any subsidiary of ours.
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
· any liens on property of ours or a restricted subsidiary in favor of the US or any State of the US, or the UK, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens.
Limitation on Sale and Lease-Back Transactions
Neither we nor any of our restricted subsidiaries will enter into any sale and lease-back transaction involving a principal property without complying with this covenant.
A sale and lease-back transaction is an arrangement between us or a restricted subsidiary and any person in which we or the restricted subsidiary leases back for a term of more than three years a principal property that we or the restricted subsidiary has sold or transferred to that person.
We and our restricted subsidiaries may enter into sale and lease-back transactions provided that the total amount of attributable debt attributable to all sale and lease-back transactions plus other debt of ours or any of our restricted subsidiaries that is secured by liens (but excluding debt secured by liens on property that we or a restricted subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the debt securities offered by this prospectus as described under “— Limitation on Liens” above) does not exceed 15% of consolidated net tangible assets.
This restriction does not apply to any sale and lease-back transaction if:
· we or the restricted subsidiary seeking to enter into the sale and lease-back could incur, assume or guarantee debt secured by a lien on the principal property to be leased without equally and ratably securing the debt securities offered by this prospectus as a result of one or more of the exceptions to the limitation on liens as described under “— Limitation on Liens” above;
· within twelve months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a restricted subsidiary, we apply, an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the principal property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to
· the retirement of indebtedness for money borrowed, incurred or assumed by us or any restricted subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such debt, or
· investment in any principal property or principal properties.
This restriction on sale and lease-back transactions also does not apply to any transaction between us and a restricted subsidiary, or between restricted subsidiaries.
Attributable debt means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the indenture, compounded semi-annually) of our or a restricted subsidiary’s obligation for rental payments for the remaining term of any lease in a sale and lease-back transaction.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
· Interest — default for 30 days in the payment of any installment of interest on the series of debt securities;
· Principal — default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise;
· Sinking Fund Installment — default in the payment of any sinking fund installment as and when such installment becomes due and payable by the specific terms of the series of debt securities or beyond any period of grace;
· Covenant — breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for ninety days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series;
· Bankruptcy — certain events of bankruptcy, insolvency or reorganization affecting us; or
· Other — any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series.
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met.
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class). Default in the payment of principal of or interest on or any sinking fund installment of debt securities of any series or a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each debt security affected may only be modified or amended with the consent of such holder.
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture.
Before the security holder bypasses the trustee and brings his or her own lawsuit or other formal legal action or takes other steps to enforce his or her rights or protects his or her interests relating to the debt securities, the following must occur:
· the security holder must give the trustee written notice that an event of default has occurred and remains uncured;
· the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and
· the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period.
These limitations do not apply to a suit instituted by the security holder for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists.
For any series of debt securities that is a series of original issue discount securities the applicable prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. The security holder’s consent is not required to do any of the following:
· to transfer or pledge any property or assets to the trustee as security for any series of the debt securities;
· to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above;
· to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees;
· to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities;
· to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or
· to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect.
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires a vote in favor by holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below.
Changes requiring the security holder’s approval. Third, there are changes that cannot be made to the security holder’s debt securities without the specific approval of each affected holder. The security holder’s consent is required before we could do any of the following:
· extend the final maturity of a debt security;
· reduce the principal amount of a debt security;
· reduce the rate or extend the time of payment of any interest on a debt security;
· reduce any amount payable on redemption of a debt security;
· reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount;
· impair the security holder’s right to sue for payment;
· impair any right of repayment at the option of the holder;
· reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or
· change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments.
Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
· we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series; or
· we have delivered to the trustee for cancellation all outstanding debt securities of any series; or
· all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name; and
· we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any, and paid all other sums payable under the indenture.
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for the security holder:
· we must deposit in trust for the security holder’s benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and
· we must deliver to the trustee a legal opinion of our counsel to the effect that the holders of the debt securities of that series will not recognize gain or loss for US federal income tax purposes as a result of the defeasance and will be subject to the same US federal income tax as would be the case if the defeasance did not occur.
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
· to register the transfer and exchange of debt securities and our right of optional redemption, if any;
· to replace mutilated, defaced, destroyed, lost or stolen debt securities;
· to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee;
· immunities of the trustee; and
· to hold money for payment in trust.
Government obligation means securities that are:
· direct obligations of the US or any foreign government of a sovereign state for the payment of which is pledged by the full faith and credit of the US or such foreign government; or
· obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the US or any foreign government of a sovereign state the payment of which is unconditionally guaranteed as a full faith and credit obligation of the US or such foreign government;
and are not callable or redeemable at the option of the issuer. Government obligation also includes:
· a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt.
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records.
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year period, the security holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
The Bank of New York Mellon acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
B. 7.000% Notes due 2023
Prospectus Supplement:
DESCRIPTION OF NOTES
General
The Debentures are unsecured obligations of the Issuer, are unconditionally guaranteed by the Company as to payment of principal and interest thereon, are limited to $300,000,000 aggregate principal amount and will mature on November 15, 2023. The Debentures rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Issuer and the Guarantees rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Company, except, in each case, indebtedness given preference by applicable law. The Indenture does not limit the amount of securities which may be issued thereunder. The Debentures have been issued in the form of fully registered Global Debentures. Global Debentures have been deposited with, or on behalf of, The Depository Trust Company (the “Depository”), New York, New York and registered in the name of the Depository’s nominee. The Debentures will bear interest at the rate per annum shown on the front cover of this Prospectus from November 15, 1993 or from the most recent interest payment date for which interest has been paid or provided for, payable semiannually on May 15 and November 15 of each year, commencing May 15, 1994, to the holders of record (the “Holders”) at the close of business on the record date relating thereto, which will be the preceding May 1 or November 1, as the case may be. Such interest will be computed on the basis of a 360-day year of twelve 30-day months.
The general provisions of the Indenture and the instruments governing the rights of the holders of the Company’s other senior indebtedness do not afford the Holders or such holders, respectively, any protection in
the event of a highly leveraged or other similar transaction involving the Company that may adversely affect the Holders or such other holders, respectively.
Book-Entry System
Upon issuance, the Debentures have been represented by one or more Global Debentures. Each global security representing the Global Debentures has been deposited with, or on behalf of, the Depository, and registered in the name of a nominee of the Depository. Except under the circumstances described below, Global Debentures will not be exchangeable at the option of the Holder for certificated Debentures and Global Debentures will not otherwise be issuable in definitive form.
The Depository has advised the issuer, the Company and the Underwriters as follows: The Depository is a limited-purpose trust company organized under the Banking Law of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of section 17A of the Exchange Act. The Depository was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The Depository’s participants include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own the Depository. Access to the Depository’s book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.
Upon issuance of the Global Debentures, the Depository has credited, on its book-entry registration and transfer system, the respective principal amounts of the Debentures represented by such Global Debentures to the accounts of institutions that have accounts with the Depository or its nominee (“participants”). The accounts to be credited have been designated by the Underwriters. Ownership of ‘beneficial interests in the Global Debentures will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in such Global Debentures will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depository or its nominee (with respect to participants’ interests) for such Global Debentures or by participants or persons that hold through participants. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in the Global Debentures.
So long as the Depository, or its nominee, is the registered owner of the Global Debentures, such Depository or such nominee, as the case may be, will be considered the sole owner or Holder of the Global Debentures for all purposes under the Indenture. Except as set forth below, owners of beneficial interests in such Global Debentures will not be entitled to have the Debentures represented by such Global Debentures registered in their names, will not receive or be entitled to receive physical delivery of Debentures in definitive form and will not be considered the owner or Holders thereof under the Indenture. Accordingly, each person owning a beneficial interest in the Global Debentures must rely on the procedures of the Depository and, if such person is not a participant, on the procedures of the participant through which such person owns its interests, to exercise any rights of a Holder under the Indenture. The Issuer and the Company understand that under existing industry practice, in the event that the Issuer or the Company requests any action of Holders or a beneficial owner desires to take any action a Holder is entitled to take, the Depository would authorize the participants to take such action and that the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.
Principal and interest payments on Global Debentures registered in the name of or held by a Depository or its nominee will be made to the Depository or its nominee, as the case may be, as the registered owner or Holder of the Global Debentures. Neither the Issuer, the Company, the Trustee, nor any paying agent for such Global Debentures will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in Global Debentures or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The Issuer and the Company expect that the Depository, upon receipt of any payments of principal or interest in respect of the Global Debentures, will credit immediately the accounts of the related participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Debentures as shown on the records of the Depository. The Issuer and the Company also expect that payments
by participants to owners of beneficial interests in such Global Debentures held through such participants wit) be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such participants.
Unless and until it is exchanged in whole or in part for Debentures in definitive form in accordance with the terms of the Debentures, the Global Debentures may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository.
Definitive Debentures
Global Debentures will not be exchangeable for definitive Debentures except (i) if the Depository notifies the Issuer and the Company that it is unwilling or unable to continue to hold the Global Debentures or if the Depository ceases to be a clearing agency registered under the Exchange Act and a successor depository is not appointed by the Issuer, (ii) if an Event of Default has occurred and is continuing or (iii) if at any time the Issuer in its sole discretion determines that the Global Debentures shall be so exchangeable. Any Global Debenture that is exchangeable for Debentures pursuant to the preceding sentence shall be exchangeable for Debentures issuable in denominations of $1,000 and foregoing, a Global Debenture shall not be exchangeable, except for a Global Debenture of like denomi- nation to be registered in the name of such Depository or its nominee.
Guarantees
The Company unconditionally guarantees the due and punctual payment of the principal of and interest on the Debentures, when and as the same becomes due and payable, whether by declaration thereof or otherwise. The Company will further agree that any amounts to be paid by the Company under the Guarantees will be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the United Kingdom or any political subdivision or taxing authority thereof or therein or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the United Kingdom or any such subdivision or authority, the Company will (subject to compliance by the Holders of such Debentures with any relevant administrative requirements) pay such additional amounts in respect of principal and interest as may be necessary in order that the net amounts paid to the Holders of the Debentures or the Trustee pursuant to the Guarantees, after such deduction or withholding, will equal the respective amounts of principal and interest to which the Holders or the Trustee are entitled; provided, however, that the foregoing will not apply to:
(i) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the fact that the Holder of the relevant Debenture (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) is or has been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in, the United Kingdom or such political subdivision or otherwise having or having had some connection with the United Kingdom or such political subdivision other than the holding or ownership of a Debenture, or the collection of principal of, and interest on, or the enforcement of, a Debenture or Guarantee,
(ii) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required, the relevant Debenture was presented more than thirty days after the date on which such payment became due or was provided for, whichever is later,
(iii) any estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge,
(iv) any present or future tax, levy, impost or other governmental charge which is payable otherwise than by deduction or withholding from payments on or in respect of the relevant Debenture,
(v) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the United Kingdom or
any political subdivision thereof of the Holder or beneficial owner of the relevant Debenture, if compliance is required by treaty or by statute, regulation or administrative practice of the United Kingdom or such political subdivision as a condition to relief or exemption from such tax, levy, impost or other governmental charge or
(vi) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected if the beneficial owner of the relevant Debenture had been the Holder of such Debenture or which, if the beneficial owner of the relevant Debenture had been the Holder of such Debenture, would have been excluded pursuant to clauses (i) through (v).
UK Taxation
In the then opinion of Graeme H.R. Musker, the then Company’s Group Solicitor, under English law and UK Inland Revenue practice as applied and interpreted on the date of this Prospectus and on the basis of the United Kingdom/United States Double Taxation Treaty (the “Treaty”) in force at the time of issuance of the Debenture, no taxes, levies, imposts or other governmental charges of the UK or any political subdivision or taxing authority thereof or therein would be required to be deducted or withheld from any payment to a beneficial owner of the Debentures who is a resident of the US (who is not also a resident of the UK), made (i) by the Issuer pursuant to the Debentures or (ii) by the Company (x) pursuant to the Guarantees or (y) to the Issuer to enable the Issuer to make any payment of principal or interest in respect of the Debentures, provided that, in respect of payments made by the Company to a beneficial owner of the Debentures who is a resident of the US (who is not also a resident of the UK), as regards the portion of any such payment which represents interest due from the Issuer that:
(A) that portion constitutes “interest” (as such term is defined in Article 11 (3) of the Treaty) or is exempt from taxation in the UK under Article 22;
(B) the holder is entitled to and has claimed the benefit of the Treaty in respect of such payment; and
(C) the Company has received from the UK Inland Revenue a direction allowing payment to be made without deduction of UK tax pursuant to the Treaty.
With regard to (A) above, although the matter is not totally free from doubt, the better view is that the portion of any payment made by the Company under the Guarantees which represents interest due from the Issuer should constitute “interest” (as defined in the Treaty). If this view is incorrect, it is arguable that the portion of the payment would be subject to UK withholding tax except where exemption has been obtained under Article 22 of the Treaty. Even if (C) above is not satisfied so that tax is withheld by the Company, a person entitled to exemption under the Treaty may claim repayment of such tax from the UK Inland Revenue.
Redemption
Except as provided below, the Debentures will not be subject to redemption at the option of the Issuer, in whole or in part, at any time prior to maturity.
If as the result of any change in or any amendment to the laws or any regulations or rulings thereunder of the United Kingdom or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of an amendment to, any treaty or treaties affecting taxation to which the United Kingdom or any political subdivision or taxing authority thereof or therein is a party, which change, amendment, application, interpretation or execution becomes effective on or after the date of this Prospectus, it is determined by the Issuer or the Company that (i) the Company would be required to make additional payments in respect of principal or interest on the next succeeding date for the payment thereof, (ii) any tax would be imposed (whether by way of deduction, withholding or otherwise) by the United Kingdom or by any political subdivision or taxing authority thereof or therein, upon or with respect to any interest payments received or receivable by the Issuer from the Company or (iii) based upon an opinion of independent counsel to the Issuer or the Company, as the case may be, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer or the Company), which action is taken or brought on or after the date of this Prospectus, the circumstances described in clause (i) or (ii) above would exist, and the payment of such additional amounts in the case of (i) or (iii) above or the imposition of such tax in the case of (ii) or (iii) above cannot be avoided by the use of any reasonable measures
available to the Issuer or the Company, the Issuer or the Company may, at its option, redeem the Debentures in whole at any time at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption.
If (1) there has been an amalgamation, reconstruction, consolidation, merger or other transaction concerning the Company or an assumption of the Issuer’s obligations under the Indenture and the Debentures by the Company or any Subsidiary (as defined below) of the Company, as permitted under the Indenture and described under “Consolidation, Merger and Sale of Assets” below and (2) as the result of any change in or any amendment to the laws or any regulations or rulings thereunder of the jurisdiction in which such successor Issuer or successor Company is incorporated or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of an amendment to, any treaty or treaties affecting taxation to which such jurisdiction or any political subdivision or taxing authority thereof or therein is a party which change, amendment, application, interpretation or execution becomes effective on or after the date of such transaction or assumption, it is determined by the successor issuer or the successor Company that (i) the successor Company would be required to make additional payments In respect of principal or interest pursuant to an agreement made by such successor Company in a supplemental indenture or the successor Issuer would be required to make additional payments in respect of principal or interest on the next succeeding date for payment thereof pursuant to an agreement made by such successor Issuer in a supplemental indenture, (ii) any tax would be imposed (whether by way of deduction, withholding or otherwise) by such jurisdiction or by any political subdivision or taxing authority thereof or therein, upon or with respect to any interest payments received or receivable by the Issuer or the successor Issuer from the successor Company or the Company, as the case may be, or (iii) based upon an opinion of independent counsel to the successor Issuer or the successor Company, as the case may be, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in such jurisdiction or any political subdivision thereof (whether or not such action was taken or brought with respect to the successor Issuer or the successor Company), which action is taken or brought on or after the date of such transaction or assumption, the circumstances described in clause (i) or (ii) would exist, and the payment of such additional amounts in the case of (i) or (iii) above or the imposition of such tax in the case of (ii) or (iii) above cannot be avoided by the use of any reasonable measures available to the successor Issuer or the successor Company, the successor Issuer or the successor Company may, at its option, redeem the Debentures in whole at any time at a redemption price equal to 100 per cent of the principal amount thereof plus accrued interest to the date fixed for redemption.
If the Issuer or the Company elects to redeem the Debentures as described in any of the two preceding paragraphs, notice of such redemption shall be given to the Holders of the Debentures by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to the Holders of the Debentures at their last addresses as they shall appear upon the registry books. The notice of redemption shall specify the date fixed for redemption, the principal amount to be redeemed, the place or places of payment, that payment will be made upon presentation and surrender of the Debentures to be redeemed, whether such redemption is pursuant to Section 11.6(a) or Section 11.6(b) of the Indenture, respectively, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon will cease to accrue. The notice of redemption shall be given by the Issuer or the Company or, at the Issuer’s or the Company’s request, by the Trustee in the name and at the expense of the Issuer or the Company, as the case may be.
Limitation on Liens
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries (as defined below) to, incur, assume or guarantee indebtedness for money borrowed (“Debt”) secured by a mortgage, pledge, security interest or lien (“mortgage” or “mortgages”) upon any Principal Property (as defined below) or upon any shares of stock of or indebtedness of any Restricted Subsidiary, without effectively providing that the Guarantees (together with, if the Company so determines, any other Debt of the Company or such Restricted Subsidiary then existing or thereafter created ranking equally with the Guarantees) will be secured equally and ratably with (or prior to) such Debt, so long as such Debt will be so secured, except that this restriction will not apply to Debt secured by (a) mortgages on property, shares of stock or indebtedness of any corporation existing at the time such corporation becomes a Restricted Subsidiary of the Company; (b) mortgages on property or shares of stock existing at the time of acquisition thereof or to secure the payment of all or any part of the purchase price thereof or to secure any Debt incurred prior to, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of such shares and, in the case of property, the later of the acquisition, the completion of construction (including any improvements on an existing property) or
the commencement of commercial operation of such property, which Debt is incurred for the purpose of financing all or any part of the purchase price thereof; (c) mortgages on any Principal Property (or any proceeds of the sale thereof) or on shares of stock of any Restricted Subsidiary the principal assets of which consist, or are to consist, of producing property or properties (including leases, rights or other authorizations to conduct operations over any producing property or properties) to secure all or any part of the cost of exploration, drilling, mining, development, improvement, construction, alteration or repair of any part of such Principal Property, such producing property or properties (whether production therefrom or operation thereof be actual or prospective) or another property (including construction of facilities for field processing of minerals) or to secure any Debt incurred to finance or refinance all or any part of such cost; (d) mortgages which secure Debt owing to the Company or to any of its Restricted Subsidiaries by any of the Company’s Restricted Subsidiaries or the Company; (e) mortgages existing at the date of the Indenture; (f) mortgages on any Principal Property not otherwise permitted by clause (c) above to secure Debt incurred to finance all or part of the cost of the improvement, construction, alteration or repair of any building, equipment or facilities or of any other improvements on, all or any part of such Principal Property, if such Debt is incurred prior to, during or within twelve months after completion of, such improvement, construction, alteration or repair; (g) mortgages on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, in either case existing at the time such corporation is merged into or consolidated or amalgamated with either the Company or a Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a corporation as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary; (h) mortgages arising by operation of law and not securing amounts more than ninety (90) days overdue or otherwise being contested in good faith; (i) mortgages arising solely by operation of law over any credit balance or cash held in any account with a financial institution; (j) rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for the benefit of the Company and/or any Restricted Subsidiary; (k) mortgages incurred or deposits made in the ordinary course of business, including, but not limited to, (i) any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other like mortgages, (ii) any mortgages securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security, and (iii) any easements, rights-of-way, restrictions and other similar charges; (I) mortgages incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of like nature incurred in the ordinary course of business; (m) mortgages securing taxes or assessments or other applicable governmental charges or levies; (n) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any mortgage permitted under the foregoing clauses (a) to (m), inclusive, or of any Debt secured thereby, provided that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement mortgage shall be limited to all or any part of the same property or shares of stock that secured the mortgage extended, renewed or replaced (plus improvements on such property), or property received or shares of stock Issued in substitution or exchange therefor; and (o) mortgages in favor of the Company or any Subsidiary of the Company. Notwithstanding the foregoing, the Company or any of its Restricted Subsidiaries may incur, assume or guarantee Debt secured by a mortgage or mortgages which would otherwise be subject to the foregoing restrictions In an aggregate amount which, together with all other such Debt of the Company and its Restricted Subsidiaries and their Attributable Debt (as defined below) in respect of Sale and Lease-Back Transactions (as defined below) existing at such time (other than Attributable Debt in respect of Sale and Lease-Back Transactions permitted because the Company or any Restricted Subsidiary would be entitled to incur, assume or guarantee such Debt secured by a mortgage on the property to be leased without equally and ratably securing the Guarantees pursuant to the next preceding sentence and other than Sale and Lease-Back Transactions, the proceeds of which have been applied as provided in clause (b) under “Limitation on Sale and Lease-Back” below), does not at the time exceed 15% of Consolidated Net Tangible Assets.
The following types of transactions, among others, shall not be deemed to create Debt secured by a mortgage: (a) the sale or other transfer, by way of security or otherwise, of (i) oil, gas or other minerals in place or at the wellhead or a right or license granted by any governmental authority to explore for, drill, mine, develop, recover or get such oil, gas or other minerals (whether such license or right is held with others or not) for a period of time until, or in an amount such that, the purchaser will realize therefrom a specified amount of money (however determined) or a specified amount of such minerals, or (ii) any other interest in property of the character commonly referred to as a “production payment”; and (b) mortgages or property of the Company or any of its Restricted Subsidiaries in favor of the United States or any State thereof, or the United Kingdom, or any other country, or any political subdivision of any of the foregoing, or any department, agency or instrumentality of any of the foregoing, to secure partial, progress, advance or other payments pursuant to the provisions of any contract or statute including, without limitation, mortgages to secure Debt of the pollution
control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to such mortgages.
Limitation on Sale and Lease-Back Transactions
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Lease-Back Transactions unless, after giving effect thereto, the aggregate amount of all Attributable Debt with respect to all such Sale and Lease-Back Transactions plus all Debt of the Company or any of its Restricted Subsidiaries incurred, assumed or guaranteed and secured by a mortgage or mortgages (with the exception of Debt secured by a mortgage or mortgages on property that the Company or a Restricted Subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the Guarantees pursuant to the provisions of the Indenture referred to under “Limitation on Liens”) does not exceed 15% of Consolidated Net Tangible Assets. This restriction shall not apply to any Sale and Lease-Back Transaction if (a) the Company or such Restricted Subsidiary would be entitled to incur, assume or guarantee Debt secured by a mortgage or mortgages on the Principal Property to be leased without equally and ratably securing the Guarantees pursuant to the provisions of the Indenture referred to under “Limitations on Liens” above or (b) the Company within the twelve months preceding the sale or transfer or the twelve months following the sale or transfer, regardless of whether such sale or transfer may have been made by the Company or by any of its Restricted Subsidiaries, applies, in the case of the sale or transfer for cash, an amount equal to the net proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair value of the Principal Property so leased at the time of entering into such arrangement (as determined by the Board of Directors of the Company), (i) to the retirement (other than any retirement of Debt owed to the Company or any of its Restricted Subsidiaries or any retirement of Debt subordinated to the Guarantees) for indebtedness for money borrowed, incurred or assumed by the Company or any Restricted Subsidiary which by its terms matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such Debt or (ii) to investment in any Principal Property or Principal Properties.
Definition of Certain Terms
The term “Attributable Debt” in respect of a Sale and Lease-Back Transaction is defined to mean, as of any particular time, the lesser of (x) the fair value of the property subject to the Sale and Lease-Back Transaction (as determined by the Board of Directors of the Company) and (y) the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the Indenture, including the Debentures, compounded semi-annually) of the obligation of the Company or a Restricted Subsidiary for rental payments during the remaining term of any lease in respect of a Sale and Lease-Back Transaction, including in each case any period for which any such lease has been extended. Such rental payments shall not include amounts payable by or on behalf of the lessee for maintenance and repairs, insurance, taxes, assessments, water rates and similar charges.
The term “Consolidated Net Tangible Assets” of the Group is defined to mean the aggregate amount of consolidated total assets of the Group, after deducting therefrom (a) all liabilities due within one year (other than (x) short-term borrowings and (y) long-term debt due within one year) and (b) all goodwill, trade names, trademarks, patents and other like intangibles, as shown on the audited consolidated balance sheet contained in the latest annual report to shareholders of the Company (or, until the Company’s annual report for the year ending December 31, 1993 is available, as shown on the unaudited consolidated balance sheet of the Group as at June 30, 1993).
The term “Principal Property” is defined to mean any manufacturing plant or facility or any research facility owned by the Company or any Restricted Subsidiary which is located within the United Kingdom or the United States the gross book value (without deduction of any depreciation reserve) of which on the date as of which the determination is being made exceeds 2% of Consolidated Net Tangible Assets, except (i) any such plant or facility or research facility which, in the opinion of the Board of Directors of the Company, is not of material importance to the total business conducted by the Company and its Subsidiaries considered as a whole or (ii) any portion of any such property which, in the opinion of the Board of Directors of the Company, is not of material importance to the use or operation of such property.
The term “Restricted Subsidiary” is defined to mean any Wholly Owned Subsidiary of the Company (i) substantially all the property of which is located within the United Kingdom or the United States and (ii) which owns a Principal Property, but not including any Wholly Owned Subsidiary which is principally
engaged in leasing or in financing instalment receivables or which is principally engaged in financing the Group’s operations.
The term “Sale and Lease-Back Transaction” is defined to mean any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of any Principal Property (except a lease for a temporary period not to exceed three years and except for leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries) which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person.
The term “Subsidiary” of the Company is defined to mean any corporation at least a majority of the outstanding stock of which having by the terms thereof ordinary voting power (not dependent upon the happening of a contingency) to elect a majority of the board of directors of such corporation is at the time owned or controlled directly or indirectly by the Company.
The term “Wholly Owned Subsidiary” of the Company is defined to mean any corporation of which all of the outstanding stock (other than directors’ qualifying shares, if any) having by the terms thereof ordinary voting power (not dependent upon the happening of a contingency) to elect the board of directors of such corporation is at the time owned or controlled directly or indirectly by the Company, or by one or more Wholly Owned Subsidiaries of the Company or by the Company and one or more Wholly Owned Subsidiaries of the Company.
Guarantees to be Secured in Certain Events
If, upon any amalgamation, reconstruction, consolidation or merger of the Company with or into any other corporation, or upon any sale or conveyance of the property of the Company as an entirety or substantially as an entirety to any other corporation, any Principal Property of the Company or of any of its Restricted Subsidiaries or any shares of stock or indebtedness of any such Restricted Subsidiary would thereupon become subject to any mortgage, pledge or lien which would be prohibited under “Limitation on Liens” above, the Company, prior to such event, will secure the Guarantees (equally and ratably with any other obligations of the Company then entitled thereto) by a direct lien on all such property equally and ratably with all such mortgages, pledges or liens.
Consolidation, Merger and Sale of Assets
The Issuer or the Company, without the consent of the Holders, may consolidate or merge with or into, or sell or convey its properties and assets as an entirety or substantially as an entirety to any corporation if, in the case of the Issuer, the successor corporation is incorporated under the laws of any . State of the United States, and, in the case of the Company, any corporation, provided that (i) any successor corporation assumes the Issuer’s obligations on the Debentures and under the Indenture or the Company’s obligations on the Guarantees and under the Indenture (except, in each case, for conveyances by way of a temporary lease in the ordinary course of business), and (ii) certain other conditions are satisfied (including, if the successor Company is incorporated under the laws of a jurisdiction other than the United Kingdom or the United States, the agreement of such successor Company to pay additional amounts pursuant to the Guarantees in respect of any taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of such jurisdiction or any political subdivision or taxing authority thereof or therein, on the same terms and subject to the same exceptions as the Company’s obligation to pay additional amounts on the Guarantees described under “Guarantees” above).
The Company or any of its Subsidiaries may assume the obligations of the Issuer under the Debentures and the Indenture without the consent of the Holders provided that certain conditions are satisfied (including, if the Company or such Subsidiary is incorporated under the laws of a jurisdiction other than the United States, the agreement of the Company or such Subsidiary to pay additional amounts pursuant to the Debentures in respect of any taxes, levies, imposts, or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of such jurisdiction or any political subdivision or taxing authority thereof or therein, on the same terms and subject to the same exceptions as the Company’s obligation to pay additional amounts on the Guarantees described under “Guarantees” above).
A consolidation, merger, sale of assets or other transaction concerning the Issuer or the Company or an assumption by the Company of the Issuer’s obligations under the Debentures might be deemed for United States Federal income tax purposes to be an exchange of the Debentures by the Holders for new securities, resulting in recognition of taxable gain or loss for such purposes and possibly certain other adverse tax consequences.
Events of Default
Each of the following will constitute an Event of Default with respect to the Debentures under the Indenture: (a) default for thirty days in the payment of any instalment of interest on the Debentures; (b) default in the payment of any principal of the Debentures; (c) default by the Issuer or the Company in the performance, or breach, of any of the other covenants or warranties in respect of the Debentures which shall not have been remedied for a period of 90 days after written notice to the Issuer and the Company by the Trustee or to the Issuer, the Company and the Trustee by the Holders of not less than 25% in principal amount of the Debentures then outstanding; or (d) certain events of bankruptcy, insolvency or reorganization of the Issuer or of the Company.
The Indenture provides that if an Event of Default under clause (a), (b), or (c) (but only if, in the case of clause (c), the Event of Default is with respect to less than all series of securities then issued pursuant to the Indenture and outstanding) above shall have occurred and be continuing with respect to the Debentures, either the Trustee or the Holders of not less than 25% in aggregate principal amount of the then outstanding Debentures may declare the principal of all the Debentures, together with any accrued interest, to be due and payable immediately. If an Event of Default under clause (c) (if the Event of Default under clause (c) is with respect to all of the series of securities then issued pursuant to the Indenture and outstanding) or (d) above shall have occurred and be continuing, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the securities then issued pursuant to the Indenture and outstanding, including the Debentures (voting as one class) may declare the principal of all securities then issued pursuant to the Indenture and outstanding, including the Debentures, together with any accrued interest, to be due and payable immediately. Upon certain conditions such declaration (including a declaration caused by a default in the payment of principal or interest, the payment for which has subsequently been provided) may be annulled by the Holders of a majority in aggregate principal amount of the Debentures then outstanding or, as the case may be, by the Holders of a majority in aggregate principal amount of all securities then issued pursuant to the Indenture and outstanding, including the Debentures (voting as one class). In addition, past defaults may be waived by the Holders of a majority in aggregate principal amount of the Debentures then outstanding or, as the case may be, by the Holders of a majority in aggregate principal amount of all securities then issued pursuant to the Indenture and outstanding, including the Debentures (voting as one class), except a default in the payment of principal of or interest on the Debentures or in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each Debenture affected.
The Indenture contains a provision entitling the Trustee, subject to the duty of the Trustee during the continuance of an Event of Default to act with the required standard of care, to be indemnified by the Holders of Debentures before proceeding to exercise any right or power under the Indenture at the request of such Holders. The Indenture also provides that the Holders of a majority in aggregate principal amount of the Outstanding Debentures may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debentures, subject to certain exceptions.
The Indenture contains covenants that the Issuer and the Company will file annually with the Trustee a certificate as to the absence of certain defaults or specifying any default that exists.
Modification of the Indenture and Waiver
The Indenture contains provisions permitting the Issuer, the Company and the Trustee, with the consent of the Holders of not less than 66 2/3% in aggregate principal amount of the Debentures then outstanding, to enter into supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the Holders of the Debentures, except that no such supplemental indenture may, among other things, (i) extend the final maturity of any Debenture, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on any redemption thereof, or impair or affect the right of any Holder to institute suit for the payment thereof without the consent of the Holder of each Debenture so affected, (ii) reduce the aforesaid percentage of the Debentures, the Holders of which are required to consent to any such supplemental indenture, without the consent of the Holder of each Debenture so affected or (iii) change in any manner adverse to the Holders of the Debentures the terms and conditions of the obligations of the Company in respect of the due and punctual payment of the principal thereof and interest thereon without the consent of the Holder of each Debenture so affected.
The Indenture also permits the Issuer, the Company and the Trustee to amend the Indenture in certain circumstances without the consent of the Holders of Debentures (i) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Debentures any property or assets, (ii) to evidence the succession of another corporation to the Issuer or the Company and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer or the Company, as the case may be, pursuant to the provisions of the Indenture described under “Consolidation, Merger and Sale of Assets” above, (iii) to evidence and provide for the acceptance of appointment under the Indenture by a successor trustee with respect to the Debentures, (iv) to add to the covenants of the Issuer or the Company for the benefit of the Holders of the Debentures or to add additional Events of Default; and (v) to cure any ambiguity or to correct or supplement any provision of the Indenture which may be defective or inconsistent with any other provision of the Indenture or to make any other provisions with respect to matters or questions arising under the Indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of Holders of the Debentures in any material respect.
Defeasance
The Indenture provides that the Issuer and the Company, at the Company’s or the Issuer’s option, (a) will be deemed to have paid and be discharged from any and all obligations in respect of the Debentures (except for certain obligations to register the transfer of or exchange Debentures, to replace stolen, lost, destroyed, or mutilated Debentures upon satisfaction of certain requirements (including, without limitation, providing such security or indemnity as the Trustee, the Company or the Issuer may require), to maintain paying agencies and to hold certain moneys in trust for payment) or (b) need not comply with certain restrictive covenants of the Indenture (including those described under “Limitation of Liens” and “Limitation on Sale and Lease-back Transactions”), in each case if the Issuer or the Company deposits in trust with the Trustee money, or Government Obligations (as defined below) in the currency in which the Debentures are denominated, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money, in an amount sufficient to pay all the principal of and interest on the outstanding Debentures on the dates such payments are due. In the case of discharge pursuant to clause (a) above, the Issuer or the Company is required to deliver to the Trustee either (i) an opinion of counsel to the effect that the Holders of the Debentures will not recognize income, gain or loss for Federal income tax purposes as a result of the exercise of the option under clause (a) above and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case if such option had not been exercised, or (ii) a ruling to that effect received from or published by the United States Internal Revenue Service.
The term “Government Obligations” is defined to mean securities that are (i) direct obligations of the United States or any foreign government of a sovereign state for the payment of which its full faith and credit is pledged or (ii) obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the United States or such foreign government the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or such foreign government, as the case may be, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof, and also includes a depositary receipt issued by a bank or trust company as custodian with respect to any such government obligation or specific payment of interest on or principal of any such government obligation held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the government obligation or the specific payment of interest on or principal of the government obligation evidenced by such depositary receipt.
In the event that the Issuer and the Company fail to comply with certain covenants of the Indenture with respect to the Debentures as described above and the maturity of the Debentures is accelerated because of the occurrence of any Event of Default, the amount of money and Government Obligations on deposit with the Trustee will be sufficient to pay amounts due on the Debentures at the time of their stated maturity, or a redemption date designated by the Company, but may not be sufficient to pay amounts due on the Debentures at the time of the acceleration resulting from such Event of Default. The Issuer and the Company, however, shall remain liable in respect of such payments.
Notices
Notices in respect of the Debentures will be given to Holders of Debentures by mail at their registered addresses.
Governing Law
The Debentures, the Guarantees and the Indenture are governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
U.S. Bank National Association, as successor to Morgan Guaranty Trust Company of New York, is Trustee under the Indenture. The Group maintains deposit accounts and conducts other banking transactions with the Trustee in the ordinary course of business.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
The Debentures and the Guarantees will be issued under an indenture dated as of June 1,1993 (the “Indenture”) among the Issuer, the Company and U.S. Bank National Association, as successor to Morgan Guaranty Trust Company of New York, as trustee (the “Trustee”), a copy of which has been filed as an exhibit to the Registration Statement of which this Prospectus is a part. The following summaries of certain provisions of the Indenture do not purport to be complete and are subject to, and are qualified in their entirety by reference to, all the provisions of the Indenture, including the definition therein of certain terms. Section references are to sections of the Indenture.
General
The Debentures will be unsecured obligations of the Issuer, will be unconditionally guaranteed by the Company as to payment of principal and interest thereon, will be limited to $300,000,000 aggregate principal amount and will mature on November, 2023. The Debentures will rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Issuer and the Guarantees will rank pari passu in right of payment with all other unsecured and unsubordinated indebtedness of the Company, except, in each case, indebtedness given preference by applicable law. The Indenture does not limit the amount of securities which may be issued thereunder. The Debentures will be issued in the form of fully registered Global Debentures. Global Debentures will be deposited with, or on behalf of, The Depository Trust Company (the “Depository”), New York, New York and registered in the name of the Depository’s nominee. The Debentures will bear interest at the rate per annum shown on the front cover of this Prospectus from, 1993 or from the most recent interest payment date for which interest has been paid or provided for, payable semiannually on and of each year, commencing, 1994, to the holders of record (the “Holders”) at the close of business on the record date relating thereto, which will be the preceding or, as the case may be. Such interest will be computed on the basis of a 360-day year of twelve 30-day months.
The general provisions of the Indenture and the instruments governing the rights of the holders of the Company’s other senior indebtedness do not afford the Holders or such holders, respectively, any protection in the event of a highly leveraged or other similar transaction involving the Company that may adversely affect the Holders or such other holders, respectively.
Book-Entry System
Upon issuance, the Debentures will be represented by one or more Global Debentures. Each global security representing the Global Debentures will be deposited with, or on behalf of, the Depository, and registered in the name of a nominee of the Depository. Except under the circumstances described below, Global Debentures will not be exchangeable at the option of the Holder for certificated Debentures and Global Debentures will not otherwise be issuable in definitive form.
The Depository has advised the Issuer, the Company and the Underwriters as follows: The Depository is a limited-purpose trust company organized under the Banking Law of the State of New York, a member of the Federal Reserve System, a “clearing corporation” within the meaning of the New York Uniform Commercial Code and a “clearing agency” registered pursuant to the provisions of section 17A of the Exchange Act. The Depository was created to hold securities of its participants and to facilitate the clearance and settlement of securities transactions among its participants in such securities through electronic book-entry changes in accounts of the participants, thereby eliminating the need for physical movement of securities certificates. The
Depository’s participants include securities brokers and dealers (including the Underwriters), banks, trust companies, clearing corporations and certain other organizations, some of whom (and/or their representatives) own the Depository. Access to the Depository’s book-entry system is also available to others, such as banks, brokers, dealers and trust companies that clear through or maintain a custodial relationship with a participant, either directly or indirectly.
Upon issuance of the Global Debentures, the Depository will credit, on its book-entry registration and transfer system, the respective principal amounts of the Debentures represented by such Global Debentures to the accounts of institutions that have accounts with the Depository or Its nominee (“participants”). The accounts to be credited shall be designated by the Underwriters. Ownership of beneficial interests in the Global Debentures will be limited to participants or persons that may hold interests through participants. Ownership of beneficial interests in such Global Debentures will be shown on, and the transfer of that ownership will be effected only through, records maintained by the Depository or its nominee (with respect to participants’ interests) for such Global Debentures or by participants or persons that hold through participants. The laws of some jurisdictions require that certain purchasers of securities take physical delivery of such securities in definitive form. Such laws may impair the ability to transfer beneficial interests in the Global Debentures.
So long as the Depository, or its nominee, is the registered owner of the Global Debentures, such Depository or such nominee, as the case may be, will be considered the sole owner or Holder of the Global Debentures for all purposes under the Indenture. Except as set forth below, owners of beneficial interests in such Global Debentures will not be entitled to have the Debentures represented by such Global Debentures registered in their names, will not receive or be entitled to receive physical delivery of Debentures in definitive form and will not be considered the owner or Holders thereof under the Indenture. Accordingly, each person owning a beneficial interest in the Global Debentures must rely on the procedures of the Depository and, if such person is not a participant, on the procedures of the participant through which such person owns its interests, to exercise any rights of a Holder under the Indenture. The Issuer and the Company understand that under existing industry practice, in the event that the Issuer or the Company requests any action of Holders or a beneficial owner desires to take any action a Holder is entitled to take, the Depository would authorize the participants to take such action and that the participants would authorize beneficial owners owning through such participants to take such action or would otherwise act upon the instructions of beneficial owners owning through them.
Principal and interest payments on Global Debentures registered in the name of or held by a Depository or its nominee will be made to the Depository or its nominee, as the case may be, as the registered owner or Holder of the Global Debentures. Neither the Issuer, the Company, the Trustee, nor any paying agent for such Global Debentures will have any responsibility or liability for any aspect of the records relating to or payments made on account of beneficial ownership interests in Global Debentures or for maintaining, supervising or reviewing any records relating to such beneficial ownership interests.
The Issuer and the Company expect that the Depository, upon receipt of any payments of principal or interest in respect of the Global Debentures, will credit immediately the accounts of the related participants with payments in amounts proportionate to their respective beneficial interests in the principal amount of such Global Debentures as shown on the records of the Depository. The Issuer and the Company also expect that payments by participants to owners of beneficial interests in such Global Debentures held through such participants will be governed by standing instructions and customary practices, as is now the case with securities held for the accounts of customers in bearer form or registered in “street name,” and will be the responsibility of such participants.
Unless and until it is exchanged in whole or in part for Debentures in definitive form in accordance with the terms of the Debentures, the Global Debentures may not be transferred except as a whole by the Depository to a nominee of the Depository or by a nominee of the Depository to the Depository or another nominee of the Depository.
Definitive Debentures
Global Debentures will not be exchangeable for definitive Debentures except (i) if the Depository notifies the Issuer and the Company that it is unwilling or unable to continue to hold the Global Debentures or if the Depository ceases to be a clearing agency registered under the Exchange Act and a successor depository is not appointed by the Issuer, (ii) if an Event of Default has occurred and is continuing or (iii) if at any time the Issuer in its sole discretion determines that the Global Debentures shall be so exchangeable. Any Global Debenture that is exchangeable for Debentures pursuant to the preceding sentence shall be exchangeable for Debentures
issuable in denominations of $1,000 and integral multiples thereof and registered in such names as the Depository shall direct. Subject to the foregoing, a Global Debenture shall not be exchangeable, except for a Global Debenture of like denomination to be registered in the name of such Depository or its nominee.
Guarantees
The Company will unconditionally guarantee the due and punctual payment of the principal of and interest on the Debentures, when and as the same becomes due and payable, whether by declaration thereof or otherwise. The Company will further agree that any amounts to be paid by the Company under the Guarantees will be paid without deduction or withholding for any and all present and future taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of the United Kingdom or any political subdivision or taxing authority thereof or therein or if deduction or withholding of any such taxes, levies, imposts or other governmental charges shall at any time be required by the United Kingdom or any such subdivision or authority, the Company will (subject to compliance by the Holders of such Debentures with any relevant administrative requirements) pay such additional amounts in respect of principal and interest as may be necessary in order that the net amounts paid to the Holders of the Debentures or the Trustee pursuant to the Guarantees, after such deduction or withholding, will equal the respective amounts of principal and interest to which the Holders or the Trustee are entitled; provided, however, that the foregoing will not apply to:
(i) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the fact that the Holder of the relevant Debenture (or a fiduciary, settlor, beneficiary, member or shareholder of, or possessor of a power over, such Holder, if such Holder is an estate, trust, partnership or corporation) is or has been a domiciliary, national or resident of, or engaging or having been engaged in a trade or business or maintaining or having maintained a permanent establishment or being or having been physically present in, the United Kingdom or such political subdivision or otherwise having or having had some connection with the United Kingdom or such political subdivision other than the holding or ownership of a Debenture, or the collection of principal of, and interest on, or the enforcement of, a Debenture or Guarantee, (ii) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the fact that, where presentation is required, the relevant Debenture was presented more than thirty days after the date on which such payment became due or was provided for, whichever is later,
(iii) any estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge,
(iv) any present or future tax, levy, impost or other governmental charge which is payable otherwise than by deduction or withholding from payments on or in respect of the relevant Debenture,
(v) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected but for the failure to comply with any certification, identification or other reporting requirements concerning the nationality, residence, identity or connection with the United Kingdom or any political subdivision thereof of the Holder or beneficial owner of the relevant Debenture, if compliance is required by treaty or by statute, regulation or administrative practice of the United Kingdom or such political subdivision as a condition to relief or exemption from such tax, levy, impost or other governmental charge or
(vi) any present or future tax, levy, impost or other governmental charge which would not have been so imposed, assessed, levied or collected if the beneficial owner of the relevant Debenture had been the Holder of such Debenture or which, if the beneficial owner of the relevant Debenture had been the Holder of such Debenture, would have been excluded pursuant to clauses (i) through (v).
UK Taxation
In the then opinion of Graeme H.R. Musker, the then Company’s Group Solicitor, under English law and UK Inland Revenue practice as applied and interpreted on the date of this Prospectus and on the basis of the United Kingdom/United States Double Taxation Treaty (the “Treaty”) in force at the time of issuance of the Debenture, no taxes, levies, imposts or other governmental charges of the UK or any political subdivision or taxing authority thereof or therein would be required to be deducted or withheld from any payment to a beneficial owner of the Debentures who is a resident of the US (who is not also a resident of the UK), made (i) by the Issuer pursuant to the Debentures or (ii) by the Company (x) pursuant to the Guarantees or (y) to the
Issuer to enable the Issuer to make any payment of principal or interest in respect of the Debentures, provided that, in respect of payments made by the Company to a beneficial owner of the Debentures who is a resident of the US (who is not also a resident of the UK), as regards the portion of any such payment which represents interest due from the Issuer that:
(A) that portion constitutes “interest” (as such term is defined in Article 11 (3) of the Treaty) or is exempt from taxation in the UK under Article 22;
(B) the holder is entitled to and has claimed the benefit of the Treaty in respect of such payment; and
(C) the Company has received from die UK Inland Revenue a direction allowing payment to be made without deduction of UK tax pursuant to the Treaty.
With regard to (A) above, although the matter is not totally free from doubt, the better view is that the portion of any payment made by the Company under the Guarantees which represents interest due from the issuer should constitute “interest” (as defined in the Treaty). If this view is incorrect, it is arguable that the portion of the payment would be subject to UK withholding tax except where exemption has been obtained under Article 22 of the Treaty. Even if (C) above is not satisfied so that tax is withheld by the Company, a person entitled to exemption under the Treaty may claim repayment of such tax from the UK Inland Revenue.
Redemption
Except as provided below, the Debentures will not be subject to redemption at the option of the Issuer, in whole or in part, at any time prior to maturity.
If as the result of any change in or any amendment to the laws or any regulations or rulings thereunder of the United Kingdom or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of an amendment to, any treaty or treaties affecting taxation to which the United Kingdom or any political subdivision or taxing authority thereof or therein is a party, which change, amendment, application, interpretation or execution becomes effective on or after the date of this Prospectus, it Is determined by the Issuer or the Company that (i) the Company would be required to make additional payments in respect of principal or interest on the next succeeding date for the payment thereof, (ii) any tax would be imposed (whether by way of deduction, withholding or otherwise) by the United Kingdom or by any political subdivision or taxing authority thereof or therein, upon or with respect to any interest payments received or receivable by the Issuer from the Company or (iii) based upon an opinion of independent counsel to the Issuer or the Company, as the case may be, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in, the United Kingdom or any political subdivision thereof (whether or not such action was taken or brought with respect to the Issuer or the Company), which action is taken or brought on or after the date of this Prospectus, the circumstances described in clause (i) or (ii) above would exist, and the payment of such additional amounts in the case of (i) or (iii) above or the imposition of such tax in the case of (ii) or (iii) above cannot be avoided by the use of any reasonable measures available to the Issuer or the Company, the issuer or the Company may, at its option, redeem the Debentures in whole at any time at a redemption price equal to 100% of the principal amount thereof plus accrued interest to the date fixed for redemption.
If (1) there has been an amalgamation, reconstruction, consolidation, merger or other transaction concerning the Company or an assumption of the Issuer’s obligations under the Indenture and the Debentures by the Company or any Subsidiary (as defined below) of the Company, as permitted under the Indenture and described under “Consolidation, Merger and Sale of Assets” below and (2) as the result of any change in or any amendment to the laws or any regulations or rulings thereunder of the jurisdiction in which such successor Issuer or successor Company is incorporated or of any political subdivision or taxing authority thereof or therein affecting taxation, or any change in an application or interpretation of such laws, regulations or rulings, or any change in an application or interpretation of, or any execution of an amendment to, any treaty or treaties affecting taxation to which such jurisdiction or any political subdivision or taxing authority thereof or therein is a party which change, amendment, application, interpretation or execution becomes effective on or after the date of such transaction or assumption, it is determined by the successor Issuer or the successor Company that (i) the successor Company would be required to make additional payments in respect of principal or interest pursuant to an agreement made by such successor Company in a supplemental indenture or the successor Issuer would be required to make additional payments in respect of principal or interest on the next succeeding date for payment
thereof pursuant to an agreement made by such successor Issuer in a supplemental indenture, (ii) any tax would be imposed (whether by way of deduction, withholding or otherwise) by such jurisdiction or by any political subdivision or taxing authority thereof or therein, upon or with respect to any interest payments received or receivable by the Issuer or the successor Issuer from the successor Company or the Company, as the case may be, or (iii) based upon an opinion of independent counsel to the successor Issuer or the successor Company, as the case may be, as a result of any action taken by any taxing authority of, or any action brought in a court of competent jurisdiction in such jurisdiction or any political subdivision thereof (whether or not such action was taken or brought with respect to the successor Issuer or the successor Company), which action is taken or brought on or after the date of such transaction or assumption, the circumstances described in clause (i) or (ii) would exist, and the payment of such additional amounts in the case of (i) or (iii) above or the imposition of such tax in the case of (ii) or (iii) above cannot be avoided by the use of any reasonable measures available to the successor Issuer or the successor Company, the successor Issuer or the successor Company may, at its option, redeem the Debentures in whole at any time at a redemption price equal to 100 per cent of the principal amount thereof plus accrued interest to the date fixed for redemption.
If the Issuer or the Company elects to redeem the Debentures as described in any of the two preceding paragraphs, notice of such redemption shall be given to the Holders of the Debentures by mailing notice of such redemption by first class mail, postage prepaid, at least 30 days and not more than 60 days prior to the date fixed for redemption to the Holders of the Debentures at their last addresses as they shall appear upon the registry books. The notice of redemption shall specify the date fixed for redemption, the principal amount to be redeemed, the place or places of payment, that payment will be made upon presentation and surrender of the Debentures to be redeemed, whether such redemption is pursuant to Section 11.6(a) or Section 11.6(b) of the Indenture, respectively, that interest accrued to the date fixed for redemption will be paid as specified in such notice and that on and after said date interest thereon will cease to accrue. The notice of redemption shall be given by the Issuer or the Company or, at the Issuer’s or the Company’s request, by the Trustee in the name and at the expense of the issuer or the Company, as the case may be.
Limitation on Liens
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries (as defined below) to, incur, assume or guarantee indebtedness for money borrowed (“Debt”) secured by a mortgage, pledge, security interest or lien (“mortgage” or “mortgages”) upon any Principal Property (as defined below) or upon any shares of stock of or indebtedness of any Restricted Subsidiary, without effectively providing that the Guarantees (together with, if the Company so determines, any other Debt of the Company or such Restricted Subsidiary then existing or thereafter created ranking equally with the Guarantees) will be secured equally and ratably with (or prior to) such Debt, so long as such Debt will be so secured, except that this restriction will not apply to Debt secured by (a) mortgages on property, shares of stock or indebtedness of any corporation existing at the time such corporation becomes a Restricted Subsidiary of the Company; (b) mortgages on property or shares of stock existing at the time of acquisition thereof or to secure the payment of all or any part of the purchase price thereof or to secure any Debt incurred prior to, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of such shares and, in the case of property, the later of the acquisition, the completion of construction (including any improvements on an existing property) or the commencement of commercial operation of such property, which Debt is incurred for the purpose of financing ail or any part of the purchase price thereof; (c) mortgages on any Principal Property (or any proceeds of the sale thereof) or on shares of stock of any Restricted Subsidiary the principal assets of which consist, or are to consist, of producing property or properties (including leases, rights or other authorizations to conduct operations over any producing property or properties) to secure all or any part of the cost of exploration, drilling, mining, development, improvement, construction, alteration or repair of any part of such Principal Property, such producing property or properties (whether production therefrom or operation thereof be actual or prospective) or another property (including construction of facilities for field processing of minerals) or to secure any Debt incurred to finance or refinance all or any part of such cost; (d) mortgages which secure Debt owing to the Company or to any of its Restricted Subsidiaries by any of the Company’s Restricted Subsidiaries or the Company; (e) mortgages existing at the date of the Indenture; (f) mortgages on any Principal Property not otherwise permitted by clause (c) above to secure Debt incurred to finance all or part of the cost of the improvement, construction, alteration or repair of any building, equipment or facilities or of any other improvements on, all or any part of such Principal Property, if such Debt Is incurred prior to, during or within twelve months after completion of, such improvement, construction, alteration or repair; (g) mortgages on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, in either case existing at the time such corporation is merged into or consolidated or amalgamated with either the Company or a Restricted Subsidiary or at the time of a sale, lease or other disposition of the properties of a
corporation as an entirety or substantially as an entirety to the Company or a Restricted Subsidiary; (h) mortgages arising by operation of law and not securing amounts more than ninety (90) days overdue or otherwise being contested In good faith; (i) mortgages arising solely by operation of law over any credit balance or cash held in any account with a financial institution; (j) rights of financial institutions to offset credit balances In connection with the operation of cash management programs established for the benefit of the Company and/or any Restricted Subsidiary; (k) mortgages Incurred or deposits made in the ordinary course of business, including, but not limited to, (i) any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other like mortgages, (ii) any mortgages securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security, and (iii) any easements, rights-of-way, restrictions and other similar charges; (I) mortgages incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return-of-money bonds and other obligations of like nature incurred in the ordinary course of business; (m) mortgages securing taxes or assessments or other applicable governmental charges or levies; (n) any extension, renewal or replacement (or successive extensions, renewals or replacements), in whole or in part, of any mortgage permitted under the foregoing clauses (a) to (m), Inclusive, or of any Debt secured thereby; provided that the principal amount of Debt secured thereby shall not exceed the principal amount of Debt so secured at the time of such extension, renewal or replacement, and that such extension, renewal or replacement mortgage shall be limited to all or any part of the same property or shares of stock that secured the mortgage extended, renewed or replaced (plus improvements on such property), or property received or shares of stock issued in substitution or exchange therefor; and (o) mortgages in favor of the Company or any Subsidiary of the Company. Notwithstanding the foregoing, the Company or any of its Restricted Subsidiaries may incur, assume or guarantee Debt secured by a mortgage or mortgages which would otherwise be subject to the foregoing restrictions in an aggregate amount which, together with all other such Debt of the Company and its Restricted Subsidiaries and their Attributable Debt (as defined below) in respect of Sale and Lease-Back Transactions (as defined below) existing at such time (other than Attributable Debt in respect of Sale and Lease-Back Transactions permitted because the Company or any Restricted Subsidiary would be entitled to incur, assume or guarantee such Debt secured by a mortgage on the property to be leased without equally and ratably securing the Guarantees pursuant to the next preceding sentence and other than Sale and Lease-Back Transactions, the proceeds of which have been applied as provided in clause (b) under “Limitation on Sale and Lease-Back’’ below), does not at the time exceed 15% of Consolidated Net Tangible Assets.
The following types of transactions, among others, shall not be deemed to create Debt secured by a mortgage: (a) the sale or other transfer, by way of security or otherwise, of (i) oil, gas or other minerals in place or at the wellhead or a right or license granted by any governmental authority to explore for, drill, mine, develop, recover or get such oil, gas or other minerals (whether such license or right is held with others or not) for a period of time until, or in an amount such that, the purchaser will realize therefrom a specified amount of money (however determined) or a specified amount of such minerals, or (ii) any other interest in property of the character commonly referred to as a “production payment’’; and (b) mortgages or property of the Company or any of its Restricted Subsidiaries in favor of the United States or any State thereof, or the United Kingdom, or any other country, or any political subdivision of any of the foregoing, or any department, agency or instrumentality of any of the foregoing, to secure partial, progress, advance or other payments pursuant to the provisions of any contract or statute including, without limitation, mortgages to secure Debt of the pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to such mortgages.
Limitation on Sale and Lease-Back Transactions
The Indenture provides that the Company will not, and will not permit any of its Restricted Subsidiaries to, enter into any Sale and Lease-Back Transactions unless, after giving effect thereto, the aggregate amount of all Attributable Debt with respect to all such Sale and Lease-Back Transactions plus all Debt of the Company or any of its Restricted Subsidiaries incurred, assumed or guaranteed and secured by a mortgage or mortgages (with the exception of Debt secured by a mortgage or mortgages on property that the Company or a Restricted Subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the Guarantees pursuant to the provisions of the Indenture referred to under “Limitation on Liens”) does not exceed 15% of Consolidated Net Tangible Assets. This restriction shall not apply to any Sale and Lease-Back Transaction if (a) the Company or such Restricted Subsidiary would be entitled to incur, assume or guarantee Debt secured by a mortgage or mortgages on the Principal Property to be leased without equally and ratably securing the Guarantees pursuant to the provisions of the Indenture referred to under “Limitations on Liens” above or (b) the Company within the twelve months preceding the sale or transfer or the twelve months following the sale or transfer, regardless of whether such sale or transfer may have been made by the Company or by any of its
Restricted Subsidiaries, applies, in the case of the sale or transfer for cash, an amount equal to the net proceeds thereof and, in the case of a sale or transfer otherwise than for cash, an amount equal to the fair value of the Principal Property so leased at the time of entering into such arrangement (as determined by the Board of Directors of the Company), (i) to the retirement (other than any retirement of Debt owed to the Company or any of its Restricted Subsidiaries or any retirement of Debt subordinated to the Guarantees) for indebtedness for money borrowed, incurred or assumed by the Company or any Restricted Subsidiary which by its terms matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such Debt or (ii) to investment in any Principal Property or Principal Properties.
Definition of Certain Terms
The term “Attributable Debt” in respect of a Sale and Lease-Back Transaction is defined to mean, as of any particular time, the lesser of (x) the fair value of the property subject to the Sale and Lease-Back Transaction (as determined by the Board of Directors of the Company) and (y) the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the Indenture, including the Debentures, compounded semi-annually) of the obligation of the Company or a Restricted Subsidiary for rental payments during the remaining term of any lease in respect of a Sale and Lease-Back Transaction, including in each case any period for which any such lease has been extended. Such rental payments shall not include amounts payable by or on behalf of the lessee for maintenance and repairs, insurance, taxes, assessments, water rates and similar charges,
The term “Consolidated Net Tangible Assets” of the Group is defined to mean the aggregate amount of consolidated total assets of the Group, after deducting therefrom (a) all liabilities due within one year (other than (x) short-term borrowings and (y) long-term debt due within one year) and (b) all goodwill, trade names, trademarks, patents and other like intangibles, as shown on the audited consolidated balance sheet contained in the latest annual report to shareholders of the Company (or, until the Company’s annual report for the year ending December 31, 1993 is available, as shown on the unaudited consolidated balance sheet of the Group as at June 30, 1993).
The term “Principal Property” is defined to mean any manufacturing plant or facility or any research facility owned by the Company or any Restricted Subsidiary which is located within the United Kingdom or the United States the gross book value (without deduction of any depreciation reserve) of which on the date as of which the determination is being made exceeds 2% of Consolidated Net Tangible Assets, except (i) any such plant or facility or research facility which, in the opinion of the Board of Directors of the Company, is not of material importance to the total business conducted by the Company and its Subsidiaries considered as a whole or (ii) any portion of any such property which, in the opinion of the Board of Directors of the Company, is not of material importance to the use or operation of such property.
The term “Restricted Subsidiary” is defined to mean any Wholly Owned Subsidiary of the Company (i) substantially all the property of which is located within the United Kingdom or the United States and (ii) which owns a Principal Property, but not including any Wholly Owned Subsidiary which is principally engaged in leasing or in financing installment receivables or which is principally engaged in financing the Group’s operations.
The term “Sale and Lease-Back Transaction” is defined to mean any arrangement with any Person providing for the leasing by the Company or any Restricted Subsidiary of any Principal Property (except a lease for a temporary period not to exceed three years and except for leases between the Company and a Restricted Subsidiary or between Restricted Subsidiaries) which has been or is to be sold or transferred by the Company or such Restricted Subsidiary to such Person.
The term “Subsidiary” of tine Company is defined to mean any corporation at least a majority of the outstanding stock of which having by the terms thereof ordinary voting power (not dependent upon the happening of a contingency) to elect a majority of the board of directors of such corporation is at the time owned or controlled directly or indirectly by the Company.
The term “Wholly Owned Subsidiary” of the Company is defined to mean any corporation of which all of the outstanding stock (other than directors’ qualifying shares, if any) having by the terms thereof ordinary voting power (not dependent upon the happening of a contingency) to elect the board of directors of such corporation is
at the time owned or controlled directly or indirectly by the Company, or by one or more Wholly Owned Subsidiaries of the Company or by the Company and one or more Wholly Owned Subsidiaries of the Company.
Guarantees to be Secured In Certain Event*
If, upon any amalgamation, reconstruction, consolidation or merger of the Company with or into any other corporation, or upon any sale or conveyance of the property of the Company as an entirety or substantially as an entirety to any other corporation, any Principal Property of the Company or of any of its Restricted Subsidiaries or any shares of stock or indebtedness of any such Restricted Subsidiary would thereupon become subject to any mortgage, pledge or lien which would be prohibited under “Limitation on Liens” above, the Company, prior to such event, will secure the Guarantees (equally and ratably with any other obligations of the Company then entitled thereto) by a direct lien on all such property equally and ratably with all such mortgages, pledges or liens.
Consolidation, Merger and Sale of Assets
The Issuer or the Company, without the consent of the Holders, may consolidate or merge with or into, or sell or convey its properties and assets as an entirety or substantially as an entirety to any corporation if, in the case of the Issuer, the successor corporation is incorporated under the laws of any State of the United States, and, in the case of the Company, any corporation, provided that (i) any successor corporation assumes the Issuer’s obligations on the Debentures and under the Indenture or the Company’s obligations on the Guarantees and under the indenture (except, in each case, for conveyances by way of a temporary lease in the ordinary course of business), and (ii) certain other conditions are satisfied (including, if the successor Company is incorporated under the laws of a jurisdiction other than the United Kingdom or the United States, the agreement of such successor Company to pay additional amounts pursuant to the Guarantees in respect of any taxes, levies, imposts or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of such jurisdiction or any political subdivision or taxing authority thereof or therein, on the same terms and subject to the same exceptions as the Company’s obligation to pay additional amounts on the Guarantees described under “Guarantees” above).
The Company or any of its Subsidiaries may assume the obligations of the Issuer under the Debentures and the Indenture without the consent of the Holders provided that certain conditions are satisfied (including, if the Company or such Subsidiary is incorporated under the laws of a jurisdiction other than the United States, the agreement of the Company or such Subsidiary to pay additional amounts pursuant to the Debentures in respect of any taxes, levies, imposts, or other governmental charges whatsoever imposed, assessed, levied or collected by or for the account of such jurisdiction or any political subdivision or taxing authority thereof or therein, on the same terms and subject to the same exceptions as the Company’s obligation to pay additional amounts on the Guarantees described under “Guarantees” above).
A consolidation, merger, sale of assets or other transaction concerning the Issuer or the Company or an assumption by the Company of the Issuer’s obligations under the Debentures might be deemed for United States Federal income tax purposes to be an exchange of the Debentures by the Holders for new securities, resulting in recognition of taxable gain or loss for such purposes and possibly certain other adverse tax consequences.
Events of Default
Each of the following will constitute an Event of Default with respect to the Debentures under the Indenture: (a) default for thirty days in the payment of any installment of Interest on the Debentures; (b) default in the payment of any principal of the Debentures; (c) default by the Issuer or the Company in the performance, or breach, of any of the other covenants or warranties in respect of the Debentures which shall not have been remedied for a period of 90 days after written notice to the Issuer and the Company by the Trustee or to the Issuer, the Company and the Trustee by the Holders of not less than 25% in principal amount of the Debentures then outstanding; or (d) certain events of bankruptcy, insolvency or reorganization of the Issuer or of the Company.
The Indenture provides that if an Event of Default under clause (a), (b), or (c) (but only if, in the case of clause (c), the Event of Default is with respect to less than all series of securities then issued pursuant to the Indenture and outstanding) above shall have occurred and be continuing with respect to the Debentures, either the Trustee or the Holders of not less than 25% In aggregate principal amount of the then outstanding Debentures may deciare the principal of all the Debentures, together with any accrued interest, to be due and
payable immediately. If an Event of Default under clause (c) (if the Event of Default under clause (c) is with respect to all of the series of securities then issued pursuant to the Indenture and outstanding) or (d) above shall have occurred and be continuing, either the Trustee or the Holders of not less than 25% in aggregate principal amount of all the securities then issued pursuant to the indenture and outstanding, including the Debentures (voting as one class) may declare the principal of all securities then issued pursuant to the Indenture and outstanding, including the Debentures, together with any accrued interest, to be due and payable immediately. Upon certain conditions such declaration (including a declaration caused by a default in the payment of principal or interest, the payment for which has subsequently been provided) may be annulled by the Holders of a majority in aggregate principal amount of the Debentures then outstanding or, as the case may be, by the Holders of a majority in aggregate principal amount of all securities then issued pursuant to the Indenture and outstanding, including the Debentures (voting as one class). In addition, past defaults may be waived by the Holders of a majority in aggregate principal amount of the Debentures then outstanding or, as the case may be, by the Holders of a majority in aggregate principal amount of all securities then issued pursuant to the Indenture and outstanding, including the Debentures (voting as one class), except a default in the payment of principal of or interest on the Debentures or in respect of a covenant or provision of the Indenture which cannot be modified or amended without the consent of the Holder of each Debenture affected.
The Indenture contains a provision entitling the Trustee, subject to the duty of the Trustee during the continuance of an Event of Default to act with the required standard of care, to be indemnified by the Holders of Debentures before proceeding to exercise any right or power under the Indenture at the request of such Holders. The Indenture also provides that the Holders of a majority in aggregate principal amount of the Outstanding Debentures may direct the time, method and place of conducting any proceeding for any remedy available to the Trustee, or exercising any trust or power conferred on the Trustee, with respect to the Debentures, subject to certain exceptions.
The Indenture contains covenants that the issuer and the Company will file annually with the Trustee a certificate as to the absence of certain defaults or specifying any default that exists.
Modification of the indenture and Waiver
The Indenture contains provisions permitting the Issuer, the Company and the Trustee, with the consent of the Holders of not less than 66%% in aggregate principal amount of the Debentures then outstanding, to enter into supplemental indentures adding any provisions to or changing or eliminating any of the provisions of the Indenture or modifying the rights of the Holders of the Debentures, except that no such supplemental indenture may, among other things, (i) extend the final maturity of any Debenture, or reduce the principal amount thereof, or reduce the rate or extend the time of payment of interest thereon, or reduce any amount payable on any redemption thereof, or impair or affect the right of any Holder to institute suit for the payment thereof without the consent of the Holder of each Debenture so affected, (ii) reduce the aforesaid percentage of the Debentures, the Holders of which are required to consent to any such supplemental indenture, without the consent of the Holder of each Debenture so affected or (iii) change in any manner adverse to the Holders of the Debentures the terms and conditions of the obligations of the Company in respect of the due and punctual payment of the principal thereof and interest thereon without the consent of the Holder of each Debenture so affected.
The Indenture also permits the Issuer, the Company and the Trustee to amend the Indenture in certain circumstances without the consent of the Holders of Debentures (i) to convey, transfer, assign, mortgage or pledge to the Trustee as security for the Debentures any property or assets, (ii) to evidence the succession of another corporation to the Issuer or the Company and the assumption by the successor corporation of the covenants, agreements and obligations of the Issuer or the Company, as the case may be, pursuant to the provisions of the Indenture described under “Consolidation, Merger and Sale of Assets’* above, (iii) to evidence and provide for the acceptance of appointment under the Indenture by a successor trustee with respect to the Debentures, (iv) to add to the covenants of the issuer or the Company for the benefit of the Holders of the Debentures or to add additional Events of Default; and (v) to cure any ambiguity or to correct or supplement any provision of the Indenture which may be defective or inconsistent with any other provision of the Indenture or to make any other provisions with respect to matters or questions arising under the Indenture as the Board of Directors may deem necessary or desirable and which shall not adversely affect the interests of Holders of the Debentures in any material respect.
Defeasance
The Indenture provides that the Issuer and the Company, at the Company’s or the Issuer’s option, (a) will be deemed to have paid and be discharged from any and all obligations in respect of the Debentures (except for certain obligations to register the transfer of or exchange Debentures, to replace stolen, lost, destroyed, or mutilated Debentures upon satisfaction of certain requirements (including, without limitation, providing such security or indemnity as the Trustee, the Company or the Issuer may require), to maintain paying agencies and to hold certain moneys in trust for payment) or (b) need not comply with certain restrictive covenants of the Indenture (including those described under “Limitation of Liens” and “Limitation on Sale and Lease-back Transactions”), in each case if the Issuer or the Company deposits in trust with the Trustee money, or Government Obligations (as defined below) in the currency in which the Debentures are denominated, which through the payment of interest thereon and principal thereof in accordance with their terms will provide money, in an amount sufficient to pay all the principal of and interest on the outstanding Debentures on the dates such payments are due. In the case of discharge pursuant to clause (a) above, the Issuer or the Company is required to deliver to the Trustee either (i) an opinion of counsel to the effect that the Holders of the Debentures will not recognize income, gain or loss for Federal income tax purposes as a result of the exercise of the option under clause (a) above and will be subject to Federal income tax on the same amount and in the same manner and at the same times as would have been the case If such option had not been exercised, or (ii) a ruling to that effect received from or published by the United States Internal Revenue Service.
The term “Government Obligations” is defined to mean securities that are (i) direct obligations of the United States or any foreign government of a sovereign state for the payment of which its full faith and credit is pledged or (ii) obligations of an entity controlled or supervised by and acting as an agency or Instrumentality of the United States or such foreign government the payment of which is unconditionally guaranteed as a full faith and credit obligation by the United States or such foreign government, as the case may be, which, in either case under clauses (i) or (ii) are not callable or redeemable at the option of the issuer thereof, and also includes a depositary receipt issued by a bank or trust company as custodian with respect to any such government obligation or specific payment of interest on or principal of any such government obligation held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deduction from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of the government obligation or the specific payment of interest on or principal of the government obligation evidenced by such depositary receipt.
In the event that the Issuer and the Company fall to comply with certain covenants of the Indenture with respect to the Debentures as described above and the maturity of the Debentures is accelerated because of the occurrence of any Event of Default, the amount of money and Government Obligations on deposit with the Trustee will be sufficient to pay amounts due on the Debentures at the time of their stated maturity, or a redemption date designated by the Company, but may not be sufficient to pay amounts due on the Debentures at the time of the acceleration resulting from such Event of Default. The Issuer and the Company, however, shall remain liable in respect of such payments.
Notices
Notices in respect of the Debentures will be given to Holders of Debentures by mail at their registered addresses.
Governing Law
The Debentures, the Guarantees and the Indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
U.S. Bank National Association, as successor to Morgan Guaranty Trust Company of New York, is Trustee under the Indenture. The Group maintains deposit accounts and conducts other banking transactions with the Trustee in the ordinary course of business.
C. 3.500% Notes due 2023, 4.000% Notes due 2029, 4.375% Notes due 2048 and Floating Rate Notes due 2023
Prospectus Supplement:
DESCRIPTION OF NOTES
General
We offered $850,000,000 initial aggregate principal amount of 3.500% Notes due 2023 (the “2023 Notes”), $400,000,000 Floating Rate Notes due 2023 (the “Floating Rate Notes”), $1,000,000,000 initial aggregate principal amount of 4.000% Notes due 2029 (the “2029 Notes”) and $750,000,000 initial aggregate principal amount of 4.375% Notes due 2048 (the “2048 Notes”, and together with the 2023 Notes and the 2029 Notes, the “Fixed Rate Notes”, and the Fixed Rate Notes together with the Floating Rate Notes, the “Notes”), each as a separate series of Notes under the Indenture, and, as such, each series of Notes vote and act, and may be redeemed, separately. The Notes are governed by New York law.
The Notes are unsecured, unsubordinated indebtedness of AstraZeneca PLC and rank equally with all of AstraZeneca PLC’s other unsecured and unsubordinated indebtedness from time to time outstanding.
There is no sinking fund for any series of Notes. We have listed the Notes on the Nasdaq Stock Market LLC.
Interest Payments and Maturity
For purposes of the description below, “business day” means any day which is not, in London, England or New York, New York, or the place of payment of amounts payable in respect of the Notes, a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law, regulation or executive order to close. A “London business day” is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
Fixed Rate Notes
Maturity. The entire principal amount of the 2023 Notes, the 2029 Notes and the 2048 Notes will mature and become due and payable, together with any accrued and unpaid interest, on August 17, 2023, January 17, 2029 and August 17, 2048, respectively.
Interest Rate. Each of the 2023 Notes, the 2029 Notes and the 2048 Notes will bear interest from August 17, 2018 until their principal amount is paid or made available for payment, at a rate equal to 3.500%, 4.000% and 4.375% per annum, respectively, calculated on the basis of a 360-day year and twelve 30-day months.
Interest Payment Dates. Interest on the 2023 Notes will be paid semi-annually in arrears on February 17 and August 17 of each year, commencing February 17, 2019 (each, a “2023 Fixed Rate Interest Payment Date”). Interest on the 2029 Notes will be paid semi-annually in arrears on January 17 and July 17 of each year, commencing January 17, 2019 (each, a “2029 Fixed Rate Interest Payment Date”). Interest on the 2048 Notes will be paid semi-annually in arrears on February 17 and August 17 of each year, commencing February 17, 2019 (each, a “2048 Fixed Rate Interest Payment Date”, and together with each 2023 Fixed Rate Interest Payment Date and 2029 Fixed Rate Interest Payment Date, each a “Fixed Rate Interest Payment Date”). However, if a Fixed Rate Interest Payment Date would fall on a day that is not a business day, the Fixed Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, but no additional interest shall be paid unless we fail to make payment on such date.
Interest Periods. The first interest period for the Fixed Rate Notes will be the period from and including the issue date to but excluding the first Fixed Rate Interest Payment Date. Thereafter, the interest periods for the Fixed Rate Notes will be the periods from and including the Fixed Rate Interest Payment Dates to but excluding the immediately succeeding Fixed Rate Interest Payment Date (together with the first interest period, each a “Fixed Rate Interest Period”). The final Fixed Rate Interest Period will be the period from and including the Fixed Rate Interest Payment Date immediately preceding the maturity date to the maturity or the redemption date.
Floating Rate Notes
Maturity. The entire principal amount of the Floating Rate Notes will mature and become due and payable, together with any accrued and unpaid interest, on August 17, 2023.
Interest Rate. The interest rate for the Floating Rate Notes for the first Floating Rate Interest Period (as defined below) will be LIBOR (as defined below) as determined on August 15, 2018 plus the Spread (the “First Interest Rate”). Thereafter, the interest rate for each Floating Rate Interest Period other than the first Floating Rate Interest Period will be LIBOR as determined on the applicable Interest Determination Date (as defined below) plus the Spread, in each case calculated on the basis of a 360-day year and the actual number of days elapsed. The Spread is 66.5 basis points for the Floating Rate Notes.
Interest Payment Dates. Interest on the Floating Rate Notes will be paid quarterly in arrears on February 17, May 17, August 17 and November 17 of each year, commencing November 17, 2018 (each a “Floating Rate Interest Payment Date”). However, if a Floating Rate Interest Payment Date would fall on a day that is not a business day, the Floating Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Floating Rate Interest Payment Date will be the immediately preceding business day. In each such case, except for the Floating Rate Interest Payment Date falling on the maturity date, the Floating Rate Interest Periods (as defined below) and the Interest Reset Dates will be adjusted accordingly to calculate the amount of interest payable on the Floating Rate Notes.
Interest Reset Dates. The interest rate will be reset on February 17, May 17, August 17 and November 17 of each year, commencing November 17, 2018 (each, an “Interest Reset Date”). However, if any Interest Reset Date would otherwise be a day that is not a business day, that Interest Reset Date will be postponed to the next succeeding day that is a business day, except that if the business day falls in the next succeeding calendar month, the applicable Interest Reset Date will be the immediately preceding business day.
Interest Periods. The first interest period will be the period from and including the original issue date to but excluding the immediately succeeding Interest Reset Date. Thereafter, the interest periods will be the periods from and including an Interest Reset Date to but excluding the immediately succeeding Interest Reset Date (together with the first interest period, each a “Floating Rate Interest Period”). However, the final Interest Period will be the period from and including the Interest Reset Date immediately preceding the maturity date to the maturity date.
Interest Determination Date. The calculation agent will determine the LIBOR (as defined below) for each Floating Rate Interest Period on the second London business day prior to the first day of such Floating Rate Interest Period (an “Interest Determination Date”). LIBOR for the first Floating Rate Interest Period will be determined on August 15, 2018.
“LIBOR” means, with respect to any Interest Determination Date, the offered rate for deposits of US dollars having a maturity of three months that appears on the Bloomberg Screen BBAL display page, or any successor page, on Bloomberg or any successor service (or any such other service(s) as may be nominated by ICE Benchmark Administration Limited (“IBA”) or its successor or such other entity assuming the responsibility of IBA or its successor in calculating the London Interbank Offered Rate in the event IBA or its successor no longer does so) (the “Designated LIBOR Page”).
If no rate appears on the Designated LIBOR Page, LIBOR will be determined for such Interest Determination Date on the basis of the rates at approximately 11:00 a.m., London time, on such Interest Determination Date at which deposits in US dollars are offered to prime banks in the London inter-bank market by four major banks in such market selected by the calculation agent, after consultation with us, for a term of three months and in a principal amount equal to an amount that in the judgment of the calculation agent is representative for a single transaction in US dollars in such market at such time (a “Representative Amount”). The calculation agent will request the principal London office of each of such banks to provide a quotation of its rate. If at least two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five-millionths of a percentage point rounded upwards) of such quotations. If fewer than two such quotations are provided, LIBOR for such Floating Rate Interest Period will be the arithmetic mean (rounded, if necessary, to the nearest one-hundred-thousandth of a percentage point, with five millionths of a percentage point rounded upwards) of the rates quoted at approximately 11:00 a.m. in the City of New York on such Interest Determination Date by three major banks in New York City, selected by the calculation agent, after consultation with us, for loans in US dollars to leading European banks, for a term of three months and in a Representative Amount; provided, however, that if the banks so selected are not quoting as mentioned above, LIBOR on the Interest Determination Date will be
LIBOR in effect with respect to the immediately preceding Interest Determination Date, or in the case of the initial Interest Determination Date, the First Interest Rate.
Notwithstanding the above, if we determine on or prior to the relevant Interest Determination Date, after consultation with an independent financial advisor selected by us in our sole discretion, that LIBOR has ceased to be calculated or administered or is no longer viewed as an acceptable benchmark rate in accordance with accepted market practice for debt obligations such as the Floating Rate Notes, then we will appoint in our sole discretion an independent financial advisor (the “IFA”) to determine whether there is a substitute or successor base rate to LIBOR that is consistent with accepted market practice for debt obligations such as the Floating Rate Notes (the “Alternative Rate”). If the IFA determines that there is an Alternative Rate, for each future Interest Determination Date, the calculation agent shall use such Alternative Rate as a substitute for LIBOR in calculating the interest rate on the Floating Rate Notes. As part of such substitution, the calculation agent will make such adjustments to the Alternative Rate or the Spread thereon, as well as the business day convention, Interest Determination Dates, Interest Reset Dates and related provisions and definitions (“Adjustments”), in each case that are consistent with accepted market practice for the use of such Alternative Rate, all as determined and directed by the IFA; provided, however, that the calculation agent shall not be required to implement any such Adjustments that affects its own rights, duties or immunities under the Indenture, the Calculation Agency Agreement or otherwise. If the IFA determines that there is no such Alternative Rate as provided above, LIBOR will be equal to the rate of interest in effect with respect to the immediately preceding Interest Determination Date or, in the case of the initial Interest Determination Date, the rate of interest will be equal to the First Interest Rate.
The interest rate on the Floating Rate Notes will in no event be higher than the maximum rate permitted by law.
Redemption
As explained below, under certain circumstances we may redeem the Notes before they mature. This means that we may repay them early. If we redeem one series of Notes we will have no obligation to redeem any other series. The security holder has no right to require us to redeem the Notes. Notes will stop bearing interest on the redemption date, even if the security holder does not collect his or her money. We will give notice to DTC of any redemption we propose to make at least 15 days, but no more than 30 days, before the redemption date. Notice by DTC to participating institutions and by these participants to street name holders of indirect interests in the Notes will be made according to arrangements among them and may be subject to statutory or regulatory requirements. Subject to the optional tax redemption described below, we may not redeem the Floating Rate Notes prior to maturity.
Optional Redemption
We may redeem the Fixed Rate Notes of each series, in whole or in part, from time to time as follows: (i) prior to the Par Call Date (as set forth below), at a redemption price equal to the greater of (A) 100% of the principal amount of the Fixed Rate Notes to be redeemed, and (B) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Fixed Rate Notes to be redeemed (assuming for this purpose that such series of Fixed Rate Notes matured on the applicable Par Call Date and not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the Make-Whole Spread (as set forth below) and (ii) on or after the Par Call Date, at a redemption price equal to 100% of the principal amount of the Fixed Rate Notes to be redeemed, plus, in each case, accrued interest thereon to but excluding the date of redemption.
In connection with such optional redemption, the following defined terms apply:
· “Comparable treasury issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the applicable series of Fixed Rate Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such series of Fixed Rate Notes (assuming for this purpose that such series of Fixed Rate Notes matured on the applicable Par Call Date).
· “Comparable treasury price” means, with respect to any redemption date, (i) the average, as determined by the Quotation Agent, of the reference treasury dealer quotations for such redemption date, after excluding the highest and lowest such reference treasury dealer quotations, or (ii) if the Quotation Agent obtains fewer than three such reference treasury dealer quotations, the average of all such quotations.
· “Make-Whole Spread” means, with respect to (i) the 2023 Notes, 15 basis points, (ii) the 2029 Notes, 20 basis points and (iii) the 2048 Notes, 25 basis points.
· “Par Call Date” means, with respect to (i) the 2023 Notes, July 17, 2023, (ii) the 2029 Notes, October 17, 2028 and (iii) the 2048 Notes, February 17, 2048.
· “Quotation Agent” means the reference treasury dealer appointed by us.
· “Reference treasury dealer” means (i) each of Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman Sachs & Co. LLC and J.P. Morgan Securities LLC and their respective successors or affiliates; provided, however, that if the foregoing shall cease to be a primary US government securities dealer in New York City (a “primary treasury dealer”), we shall substitute therefor another primary treasury dealer; and (ii) any other primary treasury dealer selected by us.
· “Reference treasury dealer quotations” means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such reference treasury dealer at 5:00 p.m., Eastern Standard Time, on the third business day preceding such redemption date.
· “Treasury rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the comparable treasury issue, assuming a price for the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.
Optional Tax Redemption
In the event of various tax law changes after the date of this prospectus supplement and other limited circumstances that require us to pay additional amounts, as described below under “— Payment of Additional Amounts”, we may redeem all, but not less than all, of each series of Notes at a price equal to 100% of the principal amount of each series of Notes plus accrued interest thereon to but excluding the date of redemption. This means we may repay any one or each series of Notes early. We discuss our ability to redeem the Notes in greater detail under “Description of Debt Securities — Optional Tax Redemption” in the accompanying prospectus.
Further Issuances
We may, without the consent of the holders of any series of Notes, issue additional Notes of each or any such series having the same ranking and same interest rate, maturity date, redemption terms and other terms as the applicable series of Notes described in this prospectus supplement. Any such additional Notes, together with the applicable series of Notes offered by this prospectus supplement, will constitute a single series of securities under the Indenture. There is no limitation on the amount of Notes or other debt securities that we may issue under such Indenture.
Form, Denomination, Clearance and Settlement
We will issue the Notes in fully registered form. Each series of Notes will be represented by one or more global securities registered in the name of a nominee of DTC. The security holder will hold beneficial interests in the Notes through DTC in book-entry form. The Notes will be issued in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. The underwriters expect to deliver the Notes through the facilities of DTC on August 17, 2018. Indirect holders trading their beneficial interests in the Notes through DTC must trade in DTC’s same-day funds settlement system and pay in immediately available funds. Secondary market trading through Euroclear and Clearstream, Luxembourg will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg.
Payment of principal of and interest on each series of Notes, so long as the Notes are represented by global securities, as discussed below, will be made in immediately available funds. Beneficial interests in the global securities will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.
Payment of Additional Amounts
We agree that any amounts to be paid by us under the Notes of principal, premium and interest in respect of the Notes will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required, provided that we will not have to pay additional amounts if:
(i) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain related parties’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the Note or by receiving principal, premium, if any, or interest, if any, on the Note, or enforcing the Note. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction;
(ii) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the Note for payment, if presentation is required, more than 30 days after the Note became due or payment was provided for;
(iii) the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
(iv) the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant Note;
(v) the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner, upon a reasonable request, addressed to the holder, to comply with any certification, identification or other reporting requirement under a reasonable request, addressed to the holder, concerning the holder’s or the beneficial owner’s nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, if compliance is required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
(vi) the tax, levy, impost or other governmental charge is required by Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (“FATCA”), any current or future U.S. Treasury Regulations or rulings promulgated thereunder, any intergovernmental agreement between the United States and any other jurisdiction to implement FATCA (an “IGA”), any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an IGA, or any agreement with the U.S. Internal Revenue Service under or with respect to FATCA; or
(vii) any combination of the taxes referred to in (i) through (vi) above.
In addition, no payments of additional amounts will be made with respect to any payment on a Note if the holder of the Note is a fiduciary, partnership or a person other than the sole beneficial owner of any payment, and, by
the laws of the jurisdiction in which we are resident for tax purposes, that payment would be required for tax purposes to be included in income of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, member or beneficial owner been the holder of the relevant Note.
We will remit the full amount of any taxes withheld to the applicable taxing authorities in accordance with the applicable law. We will also provide the trustee with documentation reasonably satisfactory to the trustee evidencing the payment of any taxes in respect of which we have paid additional amounts. We will provide copies of such documentation to the holders of the Notes upon request.
Any reference in this prospectus supplement, the Indenture or the Notes to principal, premium or interest in respect of the Notes will be deemed also to refer to any additional amounts that may be payable with respect to such principal, premium or interest under the obligations referred to in this subsection.
Defeasance and Discharge
We may release ourselves from any payment or other obligations on each series of Notes as described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the Base Prospectus.
Paying and Calculation Agent
The principal corporate trust office of the trustee in The City of New York is designated as the principal paying agent. See “— Trustee” immediately below. We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts. The trustee will also serve as the calculation agent with respect to the Floating Rate Notes pursuant to a Calculation Agency Agreement to be dated as of August 17, 2018 between us and The Bank of New York Mellon.
Trustee
As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon (formerly known as The Bank of New York), effective October 1, 2006, The Bank of New York Mellon is the trustee under the Indenture. The trustee’s address is The Bank of New York Mellon, Corporate Trust Office, 101 Barclay Street, New York, NY 10286. The trustee will also serve as the paying agent for the Notes and as the calculation agent with respect to the Floating Rate Notes. See “— Paying and Calculation Agent” immediately above.
See “Description of Debt Securities — Concerning the Trustee” and “Description of Debt Securities — Default and Related Matters” in the Base Prospectus below for a description of the trustee’s procedures and remedies available in the event of default.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities using this prospectus. As required by US federal law for all publicly offered corporate bonds and notes, the debt securities are governed by a document called an indenture. The indenture relating to the debt securities issued by us is a contract, dated as of April 1, 2004, between AstraZeneca PLC and JPMorgan Chase Bank, as trustee. As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon effective October 1, 2006, The Bank of New York Mellon is the trustee under the indenture. See “— The Trustee” below.
In this description “the security holder” means direct holders and not street name or other indirect holders of securities. Indirect holders should read the section “Legal Ownership — Street Names and Other Indirect Holders” in the Base Prospectus.
General
This section summarizes the material provisions of the indenture and the debt securities. Because it is a summary, it does not describe every aspect of the indenture or the debt securities. This summary is subject to
and qualified in its entirety by reference to all of the indenture provisions, including some of the terms used and defined in the indenture. We describe the meaning of only the more important terms in this prospectus. We also include references in parentheses to some sections of the indenture. Whenever we refer to particular sections or defined terms of the indenture in this prospectus or in the applicable prospectus supplement, those sections or defined terms are incorporated by reference here or in the prospectus supplement. This summary is also subject to and qualified by reference to the description of the particular terms of the security holder’s series of debt securities described in the prospectus supplement.
The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the debt securities are governed by New York law. The indenture is an exhibit incorporated by reference into this prospectus.
The debt securities are unsecured obligations of AstraZeneca PLC. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
The Trustee
The Bank of New York Mellon (as successor trustee to JPMorgan Chase Bank) is the trustee under the indenture. As trustee, it has two main roles:
· first, it can enforce the security holder’s rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on the security holder’s behalf, described under “Defaults and Related Matters — Remedies if an event of default occurs” below; and
· second, the trustee performs administrative duties for us, such as sending the security holder interest payments and notices.
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series.
The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
· the title of the series of debt securities;
· the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities;
· any stock exchange on which we will list the debt securities;
· the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined;
· any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined;
· the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months;
· the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the trustee in New York, New York;
· the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part;
· any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods within which, the price or prices at which and every other term and condition upon which the debt securities will be redeemed, repaid or purchased;
· the denominations in which debt securities of the series are issuable, if other than denominations of $2,000 and any whole multiple of $1,000 in excess thereof;
· the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount;
· the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars;
· whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election;
· whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series;
· any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued;
· the forms of the series of debt securities;
· the applicability of the provisions described later under “— Satisfaction, Discharge and Defeasance”;
· any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee;
· if applicable, a discussion of any additional or alternative material US federal income and UK tax considerations; and
· any other special features of the series of debt securities.
We may issue the debt securities as original issue discount securities, which are debt securities offered and sold at a substantial discount to their stated principal amount.
Overview of the Remainder of this Description
The remainder of this description summarizes:
· Additional mechanics relevant to the debt securities under normal circumstances, such as how the security holder transfers ownership and where we make payments.
· The security holder’s right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions.
· The security holder’s rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons.
· Covenants contained in the indenture that restrict our ability to incur liens and undertake sale and leaseback transactions. A particular series of debt securities may have different covenants.
· The security holder’s rights if we default.
· The security holder’s rights if we want to modify the indenture.
· Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
The debt securities will be issued only in fully registered form without interest coupons in denominations of $2,000 or whole multiples of $1,000 in excess thereof. The security holder may have his or her debt securities broken into more debt securities of smaller denominations of whole multiples of $1,000 (but not less than a minimum denomination of $2,000) or combined into fewer debt securities of larger denominations of whole multiples of $1,000, as long as the total principal amount is not changed. This is called an exchange.
The security holder may exchange or transfer registered debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities.
The security holder may not exchange his or her registered debt securities for bearer securities.
There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer.
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with the security holder’s proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the security holder if he or she is a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if the security holder no longer owns the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the applicable prospectus supplement.
Unless provided otherwise in the applicable prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York Mellon (as successor paying agent to JPMorgan Chase Bank) in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is located at The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286. At our option, we may pay interest on any debt securities by check mailed to the registered holders.
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York. Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee.
Payment of Additional Amounts
Unless provided otherwise in the applicable prospectus supplement, we agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required.
The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the applicable prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain related parties’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
· the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security;
· the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
· the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or
by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
· the tax, levy, impost or other governmental charge is imposed by the US or any political subdivision or taxing authority thereof or therein;
· the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder; or
· any combination of the exceptions listed above.
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the UK, the US or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey our property as an entirety or substantially as an entirety to such other entity. Our ability to take some of these actions is restricted in the following ways:
· any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture; and
· if the succeeding entity is not organized under the laws of the UK or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “— Payment of Additional Amounts”.
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a principal property of ours or of a restricted subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “— Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
Optional Tax Redemption
Unless provided otherwise in the applicable prospectus supplement, we have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give the security holder between 30 and 60 days’ notice before redeeming the debt securities.
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “—Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities (or if no such date is specified, the first date on which debt securities of such series were issued). If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the preceding sentence.
The second situation is where our independent legal advisor has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “—Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures available to us. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including the security holder and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any principal property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
· Restricted subsidiary means any wholly-owned subsidiary:
· with substantially all of its property located within the UK or the US; and
· which owns a principal property;
but does not include any wholly-owned subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
· A wholly-owned subsidiary means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries.
· A subsidiary, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors.
· Principal property means any manufacturing plant or facility or any research facility owned by us or any restricted subsidiary. A principal property must also be located within the UK or the US and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our consolidated net tangible assets. Principal property does not include:
· any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or
· any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property.
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our consolidated net tangible assets.
· Our consolidated net tangible assets mean AstraZeneca PLC’s consolidated total assets, after deducting:
· all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and
· all goodwill, trade names, trademarks, patents and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders.
This restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
· any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a restricted subsidiary;
· any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price;
· any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries;
· any lien existing at the date of the indenture;
· any lien on a principal property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that principal property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair;
· any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a restricted subsidiary;
· any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
· any lien arising by operation of law over any credit balance or cash held in any account with a financial institution;
· any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any restricted subsidiary;
· any lien incurred or deposits made in the ordinary course of business, including but not limited to:
· any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens;
· any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and
· any easements, rights-of-way, restrictions and other similar charges;
· any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business;
· any lien securing taxes or assessments or other applicable governmental charges or levies;
· any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and
· any lien in favor of us or any subsidiary of ours.
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
· any liens on property of ours or a restricted subsidiary in favor of the US or any State of the US, or the UK, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens.
Limitation on Sale and Lease-Back Transactions
Neither we nor any of our restricted subsidiaries will enter into any sale and lease-back transaction involving a principal property without complying with this covenant.
A sale and lease-back transaction is an arrangement between us or a restricted subsidiary and any person in which we or the restricted subsidiary leases back for a term of more than three years a principal property that we or the restricted subsidiary has sold or transferred to that person.
We and our restricted subsidiaries may enter into sale and lease-back transactions provided that the total amount of attributable debt attributable to all sale and lease-back transactions plus other debt of ours or any of our restricted subsidiaries that is secured by liens (but excluding debt secured by liens on property that we or a restricted subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the debt securities offered by this prospectus as described under “— Limitation on Liens” above) does not exceed 15% of consolidated net tangible assets.
This restriction does not apply to any sale and lease-back transaction if:
· we or the restricted subsidiary seeking to enter into the sale and lease-back could incur, assume or guarantee debt secured by a lien on the principal property to be leased without equally and ratably securing the debt securities offered by this prospectus as a result of one or more of the exceptions to the limitation on liens as described under “— Limitation on Liens” above;
· within twelve months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a restricted subsidiary, we apply, an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the principal property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to
· the retirement of indebtedness for money borrowed, incurred or assumed by us or any restricted subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such debt, or
· investment in any principal property or principal properties.
This restriction on sale and lease-back transactions also does not apply to any transaction between us and a restricted subsidiary, or between restricted subsidiaries.
Attributable debt means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the indenture, compounded semi-annually) of our or
a restricted subsidiary’s obligation for rental payments for the remaining term of any lease in a sale and lease-back transaction.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
· Interest — default for 30 days in the payment of any installment of interest on the series of debt securities;
· Principal — default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise;
· Sinking Fund Installment — default in the payment of any sinking fund installment as and when such installment becomes due and payable by the specific terms of the series of debt securities or beyond any period of grace;
· Covenant — breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for ninety days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series;
· Bankruptcy — certain events of bankruptcy, insolvency or reorganization affecting us; or
· Other — any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series.
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met.
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount
of all the debt securities then issued under the indenture and outstanding (treated as one class). Default in the payment of principal of or interest on or any sinking fund installment of debt securities of any series or a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each debt security affected may only be modified or amended with the consent of such holder.
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture.
Before the security holder bypasses the trustee and bring his or her own lawsuit or other formal legal action or takes other steps to enforce his or her rights or protects his or her interests relating to the debt securities, the following must occur:
· the security holder must give the trustee written notice that an event of default has occurred and remains uncured;
· the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and
· the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period.
These limitations do not apply to a suit instituted by the security holder for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists.
For any series of debt securities that is a series of original issue discount securities the applicable prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. The security holder’s consent is not required to do any of the following:
· to transfer or pledge any property or assets to the trustee as security for any series of the debt securities;
· to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above;
· to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees;
· to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities;
· to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or
· to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect.
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires a vote in favor by holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below.
Changes requiring the security holder’s approval. Third, there are changes that cannot be made to the security holder’s debt securities without the specific approval of each affected holder. The security holder’s consent is required before we could do any of the following:
· extend the final maturity of a debt security;
· reduce the principal amount of a debt security;
· reduce the rate or extend the time of payment of any interest on a debt security;
· reduce any amount payable on redemption of a debt security;
· reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount;
· impair the security holder’s right to sue for payment;
· impair any right of repayment at the option of the holder;
· reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or
· change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments.
Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
· we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series; or
· we have delivered to the trustee for cancellation all outstanding debt securities of any series; or
· all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name; and
· we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any, and paid all other sums payable under the indenture.
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for the security holder:
· we must deposit in trust for the security holder’s benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and
· we must deliver to the trustee a legal opinion of our counsel to the effect that the holders of the debt securities of that series will not recognize gain or loss for US federal income tax purposes as a result of the defeasance and will be subject to the same US federal income tax as would be the case if the defeasance did not occur.
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
· to register the transfer and exchange of debt securities and our right of optional redemption, if any;
· to replace mutilated, defaced, destroyed, lost or stolen debt securities;
· to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee;
· immunities of the trustee; and
· to hold money for payment in trust.
Government obligation means securities that are:
· direct obligations of the US or any foreign government of a sovereign state for the payment of which is pledged by the full faith and credit of the US or such foreign government; or
· obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the US or any foreign government of a sovereign state the payment of which is unconditionally guaranteed as a full faith and credit obligation of the US or such foreign government;
and are not callable or redeemable at the option of the issuer. Government obligation also includes:
· a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt.
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records.
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year period, the security holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
The Bank of New York Mellon acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
D. 3.375% Notes due 2025 and 4.375% Notes due 2045
Prospectus Supplement:
DESCRIPTION OF NOTES
General
We offered $2,000,000,000 initial aggregate principal amount of 3.375% Notes due 2025 (the “2025 Notes”), $1,000,000,000 initial aggregate principal amount of 4.375% Notes due 2045 (the “2045 Notes” and, collectively with the 2025 Notes, the “Fixed Rate Notes” or the “notes”), each as a separate series of notes under the Indenture, and, as such, each series of notes vote and act, and may be redeemed, separately. The notes are governed by New York law.
The notes are unsecured, unsubordinated indebtedness of AstraZeneca PLC and rank equally with all of AstraZeneca PLC’s other unsecured and unsubordinated indebtedness from time to time outstanding.
There is no sinking fund for any series of notes. We have listed the notes on the Nasdaq Stock Market LLC.
Interest Payments and Maturity
For purposes of the description below, “business day” means any day which is not, in London, England or New York, New York, or the place of payment of amounts payable in respect of the notes, a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law, regulation or executive order to close. A “London business day” is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
Fixed Rate Notes
Maturity. The entire principal amount of the 2025 Notes and the 2045 Notes will mature and become due and payable, together with any accrued and unpaid interest, on November 16, 2020, November 16, 2025 and November 16, 2045, respectively.
Interest Rate. Each of the 2025 Notes and the 2045 Notes will bear interest from their respective original issue date until their principal amount is paid or made available for payment, at a rate equal to 2.375%, 3.375% and 4.375% per annum, respectively, calculated on the basis of a 360-day year and twelve 30-day months.
Interest Payment Dates. Interest on the Fixed Rate Notes will be paid semi-annually in arrears on May 16 and November 16 of each year, commencing May 16, 2016 (each a “Fixed Rate Interest Payment Date”). However, if a Fixed Rate Interest Payment Date would fall on a day that is not a business day, the Fixed Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, but no additional interest shall be paid unless we fail to make payment on such date.
Interest Periods. The first interest period for the Fixed Rate Notes will be the period from and including the issue date to but excluding the first Fixed Rate Interest Payment Date. Thereafter, the interest periods for the Fixed Rate Notes will be the periods from and including the Fixed Rate Interest Payment Dates to but excluding the immediately succeeding Fixed Rate Interest Payment Date (together with the first interest period, each a “Fixed Rate Interest Period”). The final Fixed Rate Interest Period will be the period from and including the Fixed Rate Interest Payment Date immediately preceding the maturity date to the maturity date.
Redemption
As explained below, under certain circumstances we may redeem the notes before they mature. This means that we may repay them early. If we redeem one series of notes we will have no obligation to redeem any other series. The security holder has no right to require us to redeem the notes. Notes will stop bearing interest on the redemption date, even if the security holder does not collect his or her money. We will give notice to DTC of any redemption we propose to make at least 30 days, but no more than 60 days, before the redemption date. Notice by DTC to participating institutions and by these participants to street name holders of indirect interests in the notes will be made according to arrangements among them and may be subject to statutory or regulatory requirements.
Optional Redemption
We may redeem the Fixed Rate Notes, in whole or in part, at any time and from time to time at a redemption price equal to the greater of (i) 100% of the principal amount of such series of Fixed Rate Notes, and (ii) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the series of Fixed Rate Notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the Make-Whole Spread (as set forth below) plus, in each case, accrued interest thereon to the date of redemption. In connection with such optional redemption, the following defined terms apply:
· “Treasury rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the comparable treasury issue, assuming a price for the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.
· “Comparable treasury issue” means the United States Treasury security selected by the Quotation Agent as having a maturity comparable to the remaining term of the applicable series of Fixed Rate Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such series of Fixed Rate Notes.
· “Comparable treasury price” means, with respect to any redemption date, (i) the average, as determined by the Quotation Agent, of the reference treasury dealer quotations for such redemption date, after excluding the highest and lowest such reference treasury dealer quotations, or (ii) if the Quotation Agent obtains fewer than three such reference treasury dealer quotations, the average of all such quotations.
· “Quotation Agent” means the reference treasury dealer appointed by us.
· “Reference treasury dealer” means (i) each of Barclays Capital Inc., HSBC Securities (USA) Inc., Merrill Lynch, Pierce, Fenner & Smith Incorporated and Morgan Stanley & Co. LLC, and their respective successors or affiliates; provided, however, that if the foregoing shall cease to be a primary US government securities dealer in New York City (a “primary treasury dealer”), we shall substitute therefor another primary treasury dealer; and (ii) any other primary treasury dealer selected by us.
· “Reference treasury dealer quotations” means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such reference treasury dealer at 5:00 p.m., Eastern Standard Time, on the third business day preceding such redemption date.
· “Make-Whole Spread” means, with respect to, (i) the 2025 Notes, 20 basis points and (ii) the 2045 Notes, 25 basis points.
Optional Tax Redemption
In the event of various tax law changes after the date of this prospectus supplement and other limited circumstances that require us to pay additional amounts, as described below under “— Payment of Additional Amounts”, we may redeem all, but not less than all, of each series of notes at a price equal to 100% of the principal amount of each series of notes plus accrued interest to the date of redemption. This means we may
repay any one or each series of notes early. We discuss our ability to redeem the notes in greater detail under “Description of Debt Securities — Optional Tax Redemption” in the accompanying prospectus.
Further Issuances
We may, without the consent of the holders of any series of notes, issue additional notes of each or any such series having the same ranking and same interest rate, maturity date, redemption terms and other terms as the applicable series of notes described in this prospectus supplement. Any such additional notes, together with the applicable series of notes offered by this prospectus supplement, will constitute a single series of securities under the Indenture. There is no limitation on the amount of notes or other debt securities that we may issue under such indenture.
We may offer additional notes of any series of notes with OID for US federal income tax purposes as part of a further issue. Purchasers of notes of such series after the date of any further issue will not be able to differentiate between notes sold as part of such further issue and previously issued notes. If we were to issue additional notes with OID, purchasers of notes after such further issue may be required to accrue OID with respect to their notes. This may affect the price of outstanding notes of such series following a further issue. Purchasers are advised to consult legal counsel with respect to the implications of any future decision by us to undertake a further issue of notes of any series with OID.
Form, Denomination, Clearance and Settlement
We will issue the notes in fully registered form. Each series of notes will be represented by one or more global securities registered in the name of a nominee of DTC. The security holder will hold beneficial interests in the notes through DTC in book-entry form. The notes will be issued in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. The underwriters expect to deliver the notes through the facilities of DTC on November 16, 2015. Indirect holders trading their beneficial interests in the notes through DTC must trade in DTC’s same-day funds settlement system and pay in immediately available funds. Secondary market trading through Euroclear and Clearstream, Luxembourg will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg.
Payment of principal of and interest on each series of notes, so long as the notes are represented by global securities, as discussed below, will be made in immediately available funds. Beneficial interests in the global securities will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.
Payment of Additional Amounts
We agree that any amounts to be paid by us under the notes of principal, premium and interest in respect of the notes will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required, provided that we will not have to pay additional amounts if:
(i) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the note or by receiving principal, premium, if any, or interest, if any, on the note, or enforcing the note. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
(ii) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the note for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
(iii) the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
(iv) the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant note;
(v) the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
(vi) the tax, levy, impost or other governmental charge is required to be made pursuant to the European Union Directive 2003/48/EC on the taxation of savings or any other directive amending, supplementing or replacing such Directive or any law implementing or complying with, or introduced in order to conform to, such Directive or directives;
(vii) the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
(viii) the holder would have been able to avoid such withholding or deduction by presenting the relevant note to another paying agent in a Member State of the EU or elsewhere;
(ix) the tax, levy, impost or other governmental charge is required by Sections 1471 through 1474 of the Code (“FATCA”), any current or future U.S. Treasury Regulations or rulings promulgated thereunder, any intergovernmental agreement between the United States and any other jurisdiction to implement FATCA (an “IGA”), any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an IGA, or any agreement with the U.S. Internal Revenue Service under or with respect to FATCA; or
(x) any combination of the taxes referred to in (i) through (ix) above.
In addition, no payments of additional amounts will be made with respect to any payment on a note if the holder of the note is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder of the relevant notes.
Defeasance and Discharge
We may release ourselves from any payment or other obligations on each series of notes as described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the Base Prospectus.
Paying and Calculation Agent
The principal corporate trust office of the trustee in The City of New York is designated as the principal paying agent. See “— Trustee” immediately below. We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts.
Trustee
As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon (formerly known as The Bank of New York), effective October 1, 2006, The Bank of New York Mellon
is the trustee under the Indenture. The trustee’s address is The Bank of New York Mellon, Corporate Trust Office, 101 Barclay Street, New York, NY 10286. The trustee will also serve as the paying agent for the notes. See “— Paying and Calculation Agent” immediately above.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
The debt securities are unsecured obligations of AstraZeneca PLC. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
The Trustee
The Bank of New York Mellon (as successor trustee to JPMorgan Chase Bank) is the trustee under the indenture. As trustee, it has two main roles:
· first, it can enforce the security holder’s rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on the security holder’s behalf, described under “Defaults and Related Matters - Remedies if an event of default occurs” below; and
· second, the trustee performs administrative duties for us, such as sending the security holder interest payments and notices.
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series.
The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
· the title of the series of debt securities;
· the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities;
· any stock exchange on which we will list the debt securities;
· the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined;
· any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined;
· the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months;
· the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the trustee in New York, New York;
· the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part;
· any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods within which, the price or prices at which and every other term and condition upon which the debt securities will be redeemed, repaid or purchased;
· the denominations in which debt securities of the series are issuable, if other than denominations of $2,000 and any whole multiple of $1,000 in excess thereof;
· the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount;
· the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars;
· whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election;
· whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series;
· any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued;
· the forms of the series of debt securities;
· the applicability of the provisions described later under “- Satisfaction, Discharge and Defeasance”;
· any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee;
· if applicable, a discussion of any additional material US federal income and UK tax considerations; and
· any other special features of the series of debt securities.
Overview of the Remainder of this Description
The remainder of this description summarizes:
· Additional mechanics relevant to the debt securities under normal circumstances, such as how the security holder transfers ownership and where we make payments.
· The security holder’s right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions.
· The security holder’s rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons.
· Covenants contained in the indenture that restrict our ability to incur liens and undertake sale and leaseback transactions. A particular series of debt securities may have different covenants.
· The security holder’s rights if we default.
· The security holder’s rights if we want to modify the indenture.
· Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
The debt securities will be issued only in fully registered form without interest coupons in denominations of $2,000 or whole multiples of $1,000 in excess thereof. The security holder may have his or her debt securities broken into more debt securities of smaller denominations of whole multiples of $1,000 (but not less than a minimum denomination of $2,000) or combined into fewer debt securities of larger denominations of whole multiples of $1,000, as long as the total principal amount is not changed. This is called an exchange.
The security holder may exchange or transfer registered debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities.
The security holder may not exchange his or her registered debt securities for bearer securities.
There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer.
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with the security holder’s proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the security holder if he or she is a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if the security holder no longer owns the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the prospectus supplement.
Unless otherwise specified in the prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York Mellon (as successor paying agent to JPMorgan Chase Bank) in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is located at The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286. At our option, we may pay interest on any debt securities by check mailed to the registered holders.
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York. Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee.
Payment of Additional Amounts
Unless provided otherwise in the applicable prospectus supplement, we agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required.
The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain related parties’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
· the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security;
· the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is imposed on a payment to or for an individual and is required to be made pursuant to the European Union Directive 2003/48/EC on the taxation of savings or any other directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 or any law implementing or complying with, or introduced in order to conform to, such Directive;
· the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
· the tax, levy, impost or other governmental charge is imposed by the United States or any political subdivision or taxing authority thereof or therein;
· the holder would have been able to avoid such withholding or deduction by presenting the relevant debt security to another paying agent in a Member State of the EU or elsewhere;
· the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder; or
· any combination of the exceptions listed above.
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the United Kingdom, the United States or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey our property as an entirety or substantially as an entirety to such other entity. Our ability to take some of these actions is restricted in the following ways:
· any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture;
· if the succeeding entity is not organized under the laws of the United Kingdom or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “- Payment of Additional Amounts”.
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a principal property of ours or of a restricted subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “- Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
Optional Tax Redemption
We have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give the security holder between 30 and 60 days’ notice before redeeming the debt securities.
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “- Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the prospectus supplement.
The second situation is where our independent legal adviser has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “- Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures available to us. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including the security holder and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any principal property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
· Restricted subsidiary means any wholly-owned subsidiary:
· with substantially all of its property located within the UK or the US; and
· which owns a principal property;
but does not include any wholly-owned subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
· A wholly-owned subsidiary means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries.
· A subsidiary, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors.
· Principal property means any manufacturing plant or facility or any research facility owned by us or any restricted subsidiary. A principal property must also be located within the UK or the US and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our consolidated net tangible assets. Principal property does not include:
· any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or
· any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property.
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our consolidated net tangible assets.
· Our consolidated net tangible assets mean AstraZeneca PLC’s consolidated total assets, after deducting:
· all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and
· all goodwill, trade names, trademarks, patents and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders.
This restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
· any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a restricted subsidiary;
· any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price;
· any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries;
· any lien existing at the date of the indenture;
· any lien on a principal property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that principal property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair;
· any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a restricted subsidiary;
· any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
· any lien arising by operation of law over any credit balance or cash held in any account with a financial institution;
· any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any restricted subsidiary;
· any lien incurred or deposits made in the ordinary course of business, including but not limited to:
· any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens;
· any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and
· any easements, rights-of-way, restrictions and other similar charges;
· any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business;
· any lien securing taxes or assessments or other applicable governmental charges or levies;
· any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and
· any lien in favor of us or any subsidiary of ours.
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
· any liens on property of ours or a restricted subsidiary in favor of the US or any State of the US, or the UK, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens.
Limitation on Sale and Lease-Back Transactions
Neither we nor any of our restricted subsidiaries will enter into any sale and lease-back transaction involving a principal property without complying with this covenant.
A sale and lease-back transaction is an arrangement between us or a restricted subsidiary and any person in which we or the restricted subsidiary leases back for a term of more than three years a principal property that we or the restricted subsidiary has sold or transferred to that person.
We and our restricted subsidiaries may enter into sale and lease-back transactions provided that the total amount of attributable debt attributable to all sale and lease-back transactions plus other debt of ours or any of our restricted subsidiaries that is secured by liens (but excluding debt secured by liens on property that we or a restricted subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the debt securities offered by this prospectus as described under “- Limitation on Liens” above) does not exceed 15% of consolidated net tangible assets.
This restriction does not apply to any sale and lease-back transaction if:
· we or the restricted subsidiary seeking to enter into the sale and lease-back could incur, assume or guarantee debt secured by a lien on the principal property to be leased without equally and ratably securing the debt securities offered by this prospectus as a result of one or more of the exceptions to the limitation on liens as described under “- Limitation on Liens” above;
· within twelve months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a restricted subsidiary, we apply, an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the principal property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to
· the retirement of indebtedness for money borrowed, incurred or assumed by us or any restricted subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such debt, or
· investment in any principal property or principal properties.
This restriction on sale and lease-back transactions also does not apply to any transaction between us and a restricted subsidiary, or between restricted subsidiaries.
Attributable debt means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the indenture, compounded semi-annually) of our or
a restricted subsidiary’s obligation for rental payments for the remaining term of any lease in a sale and lease-back transaction.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
· Interest - default for 30 days in the payment of any installment of interest on the series of debt securities;
· Principal - default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise;
· Sinking Fund Installment - default in the payment of any sinking fund installment as and when such installment becomes due and payable by the specific terms of the series of debt securities or beyond any period of grace;
· Covenant - breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for ninety days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series;
· Bankruptcy - certain events of bankruptcy, insolvency or reorganization affecting us; or
· Other - any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series.
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met.
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount
of all the debt securities then issued under the indenture and outstanding (treated as one class). Default in the payment of principal of or interest on or any sinking fund installment of debt securities of any series or a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each debt security affected may only be modified or amended with the consent of such holder.
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture.
Before the security holder bypasses the trustee and brings his or her own lawsuit or other formal legal action or takes other steps to enforce his or her rights or protects his or her interests relating to the debt securities, the following must occur:
· the security holder must give the trustee written notice that an event of default has occurred and remains uncured;
· the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and
· the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period.
These limitations do not apply to a suit instituted by the security holder for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists.
For any series of debt securities that is a series of original issue discount securities the prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. The security holder’s consent is not required to do any of the following:
· to transfer or pledge any property or assets to the trustee as security for any series of the debt securities;
· to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above;
· to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees;
· to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities;
· to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or
· to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect.
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires a vote in favor by holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below.
Changes requiring the security holder’s approval. Third, there are changes that cannot be made to the security holder’s debt securities without the specific approval of each affected holder. The security holder’s consent is required before we could do any of the following:
· extend the final maturity of a debt security;
· reduce the principal amount of a debt security;
· reduce the rate or extend the time of payment of any interest on a debt security;
· reduce any amount payable on redemption of a debt security;
· reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount;
· impair the security holder’s right to sue for payment;
· impair any right of repayment at the option of the holder;
· reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or
· change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments.
Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
· we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series; or
· we have delivered to the trustee for cancellation all outstanding debt securities of any series; or
· all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name; and
· we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any, and paid all other sums payable under the indenture.
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for the security holder:
· we must deposit in trust for the security holder’s benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and
· we must deliver to the trustee a legal opinion of our counsel to the effect that the holders of the debt securities of that series will not recognize gain or loss for US federal income tax purposes as a result of the defeasance and will be subject to the same federal income tax as would be the case if the defeasance did not occur.
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
· to register the transfer and exchange of debt securities and our right of optional redemption, if any;
· to replace mutilated, defaced, destroyed, lost or stolen debt securities;
· to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee;
· immunities of the trustee; and
· to hold money for payment in trust.
Government obligation means securities that are:
· direct obligations of the US or any foreign government of a sovereign state for the payment of which is pledged by the full faith and credit of the US or such foreign government; or
· obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the US or any foreign government of a sovereign state the payment of which is unconditionally guaranteed as a full faith and credit obligation of the US or such foreign government;
and are not callable or redeemable at the option of the issuer. Government obligation also includes:
· a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt.
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records.
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year period, the security holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
The Bank of New York Mellon acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
E. 0.700% Notes due 2026, 1.375% Notes due 2030 and 2.125% Notes due 2050
Prospectus Supplement:
DESCRIPTION OF NOTES
General
We offered $1,200,000,000 initial aggregate principal amount of 0.700% Notes due 2026 (the “2026 Notes”), $1,300,000,000 initial aggregate principal amount of 1.375% Notes due 2030 (the “2030 Notes”) and $500,000,000 initial aggregate principal amount of 2.125% Notes due 20150 (the “2050 Notes”, and together with the 2026 Notes and the 2030 Notes, the “Notes”). The notes are governed by New York law.
The Notes are unsecured, unsubordinated indebtedness of AstraZeneca PLC and rank equally with all of AstraZeneca PLC’s other unsecured and unsubordinated indebtedness from time to time outstanding.
There is no sinking fund for any series of Notes. We have listed the Notes on the Nasdaq Stock Market LLC.
Interest Payments and Maturity
For purposes of the description below, “business day” means any day which is not, in London, England or New York, New York, or the place of payment of amounts payable in respect of the Notes, a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law, regulation or executive order to close. A “London business day” is a day on which dealings in deposits in U.S. dollars are transacted in the London interbank market.
Fixed Rate Notes
Maturity. The aggregate principal amounts of the 2026 Notes, the 2030 Notes and the 2050 Notes will mature and become due and payable, together with any accrued and unpaid interest, on April 8, 2026, August 6, 2030 and August 6, 2050, respectively.
Interest Rate. Each of the 2026 Notes, the 2030 Notes and the 2050 Notes will bear interest from their respective original issue dates until their principal amount is paid or made available for payment, at a rate equal to 0.700%, 1.375% and 2.125%, per annum, respectively, calculated on the basis of a 360-day year and twelve 30-day months.
Interest Payment Dates. Interest on the 2026 Notes will be paid semi-annually in arrears on April 8 and October 8 of each year, commencing April 8, 2021 (each a “2026 Interest Payment Date”). Interest on the 2030 Notes and the 2050 Notes will be paid semi-annually in arrears on February 6 and August 6 of each year, commencing February 6, 2021 (together with each 2026 Interest Payment Date, each an “Interest Payment Date”). However, if an Interest Payment Date would fall on a day that is not a business day, the Interest Payment Date will be postponed to the next succeeding day that is a business day, but no additional interest shall be paid unless we fail to make payment on such date.
Interest Periods. The first interest period for the Notes will be the period from and including the Issue date to but excluding the first Interest Payment Date. Thereafter, the interest periods for the Notes will be the periods from and including the Interest Payment Dates to but excluding the immediately succeeding Interest Payment Date (together with the first interest period, each an “Interest Period”). The final Interest Period will be the
period from and including the Interest Payment Date immediately preceding the maturity date to the maturity date.
Redemption
As explained below, under certain circumstances we may redeem the notes before they mature. This means that we may repay them prior to maturity. The security holder has no right to require us to redeem the Notes. Each series of Notes will stop bearing interest on the applicable redemption date, even if the security holder does not collect his or her money. We will give notice of any redemption we propose to make to DTC at least 15 days, but no more than 60 days, before the applicable redemption date. Notice by DTC to its participants and by these participants to street name holders of indirect interests in the notes will be made according to arrangements among them and may be subject to statutory or regulatory requirements.
Optional Redemption
We may redeem the Notes of any series, in whole or in part, from time to time as follows: (i) prior to the applicable Par Call Date (as set forth below), at a redemption price equal to the greater of (A) 100% of the principal amount of the Notes to be redeemed, and (B) as determined by the Quotation Agent, the sum of the present values of the remaining scheduled payments of principal and interest on the Notes to be redeemed (assuming for this purpose that such series of Notes matured on the applicable Par Call Date and not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the applicable Make-Whole Spread (as set forth below) and (ii) on or after the applicable Par Call Date, at a redemption price equal to 100% of the principal amount of the Notes to be redeemed, plus, in each case, accrued interest thereon to but excluding the date of redemption.
In connection with such optional redemption, the following defined terms apply:
· “Comparable treasury issue” means the United States Treasury security selected by the Quotation Agent as having an actual or interpolated maturity comparable to the remaining term of the applicable series of Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such series of Notes (assuming for this purpose that such series of Notes matured on the applicable Par Call Date).
· “Comparable treasury price” means, with respect to any redemption date, (i) the average, as determined by the Quotation Agent, of the reference treasury dealer quotations for such redemption date, after excluding the highest and lowest such reference treasury dealer quotations, or (ii) if the Quotation Agent obtains fewer than three such reference treasury dealer quotations, the average of all such quotations.
· “Make-Whole Spread” means, with respect to (i) the 2026 Notes, 10 basis points, (ii) the 2030 Notes, 15 basis points and (iii) the 2050 Notes, 15 basis points.
· “Par Call Date” means, with respect to (i) the 2026 Notes, March 8, 2026, (ii) the 2030 Notes, May 6, 2030 and (iii) the 2050 Notes, February 6, 2050.
· “Quotation Agent” means the reference treasury dealer appointed by us.
· “Reference treasury dealer” means (i) each of BofA Securities, Inc., HSBC Securities (USA) Inc. and Mizuho Securities USA LLC and their respective successors or affiliates; provided, however, that if the foregoing shall cease to be a primary US government securities dealer in New York City (a “primary treasury dealer”), we shall substitute therefor another primary treasury dealer; and (ii) any other primary treasury dealer selected by us.
· “Reference treasury dealer quotations” means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the Quotation Agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the Quotation Agent by such Reference Treasury Dealer at 3:30 p.m., Eastern Time, on the third business day preceding such redemption date.
· “Treasury rate” means, with respect to any redemption date, the rate per annum equal to the semi-annual equivalent yield to maturity of the comparable treasury issue, assuming a price for the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.
Optional Tax Redemption
In the event of various tax law changes and other limited circumstances that, in each case, occur after the date of this prospectus supplement and require us to pay additional amounts, as described below under “— Payment of Additional Amounts”, we may redeem all, but not less than all, of the Notes of any series at a price equal to 100% of the principal amount of such series of Notes plus accrued interest thereon to but excluding the date of redemption. This means we may repay any one or each series of Notes prior to maturity. We discuss our ability to redeem the Notes in greater detail under “Description of Debt Securities — Optional Tax Redemption” in the accompanying prospectus.
Further Issuances
We may, at our option, at any time and without the consent of the then existing noteholders, reopen any series of Notes and issue additional Notes in one or more transactions after the date of this prospectus supplement with terms (other than the issuance date and, possibly, first interest payment date, original interest accrual date and issue price) identical to such series of Notes issued hereby. These additional Notes will be deemed to have been part of the applicable series of Notes offered hereby and will provide the holders of these additional Notes the right to vote together with holders of the applicable series of Notes issued hereby; provided, however, that if these additional Notes are not fungible with the applicable series of Notes offered hereby for U.S. federal income tax purposes, these additional Notes will have a different CUSIP or other identifying number.
Form, Denomination, Clearance and Settlement
We will issue the Notes in fully registered form. Each series of Notes will be represented by one or more global securities registered in the name of a nominee of DTC. The security holder will hold beneficial interests in the Notes through DTC in book-entry form. The Notes will be issued in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. The underwriters expect to deliver the Notes through the facilities of DTC on August 6, 2020. Indirect holders trading their beneficial interests in the Notes through DTC must trade in DTC’s same-day funds settlement system and pay in immediately available funds. Secondary market trading through Euroclear and Clearstream, Luxembourg will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg.
Payment of principal of and interest on each series of Notes, so long as the Notes are represented by global securities, as discussed below, will be made in immediately available funds. Beneficial interests in the global securities will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.
Payment of Additional Amounts
We agree that any amounts to be paid by us under the Notes of principal, premium and interest in respect of the Notes will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required, provided that we will not have to pay additional amounts if:
(i) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain beneficial owners’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the Note or by receiving principal, premium, if any, or
interest, if any, on the Note, or enforcing the Note. These connections include where the holder or beneficial owner:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction;
(ii) the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the Note for payment, if presentation is required, more than 30 days after the Note became due or payment was provided for;
(iii) the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
(iv) the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant Note;
(v) the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner, upon a reasonable request, addressed to the holder, to comply with any certification, identification or other reporting requirement, concerning the holder’s or the beneficial owner’s nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, if compliance is required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
(vi) the tax, levy, impost or other governmental charge is required by Sections 1471 through 1474 of the Internal Revenue Code of 1986, as amended (“FATCA”), any current or future U.S. Treasury Regulations or rulings promulgated thereunder, any intergovernmental agreement between the United States and any other jurisdiction to implement FATCA (an “IGA”), any law, regulation or other official guidance enacted in any jurisdiction implementing FATCA or an IGA, or any agreement with the U.S. Internal Revenue Service under or with respect to FATCA; or
(vii) any combination of the taxes referred to in (i) through (vi) above.
In addition, no payments of additional amounts will be made with respect to any payment on a Note if the holder of the Note is a fiduciary, partnership or a person other than the sole beneficial owner of any payment, and, by the laws of the jurisdiction in which we are resident for tax purposes, that payment would be required for tax purposes to be included in income of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, member or beneficial owner been the holder of the relevant Note.
We will remit the full amount of any taxes withheld to the applicable taxing authorities in accordance with the applicable law. We will also provide the trustee with documentation reasonably satisfactory to the trustee evidencing the payment of any taxes in respect of which we have paid additional amounts. We will provide copies of such documentation to the holders of the Notes upon request.
Any reference in this prospectus supplement, the Indenture or the Notes to principal, premium or interest in respect of the Notes will be deemed also to refer to any additional amounts that may be payable with respect to such principal, premium or interest under the obligations referred to in this subsection.
Defeasance and Discharge
We may release ourselves from any payment or other obligations on each series of Notes as described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the Base Prospectus.
Paying Agent
The principal corporate trust office of the trustee in The City of New York is designated as the principal paying agent. See “— Trustee” immediately below. We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts.
Trustee
The Bank of New York Mellon is the trustee under the Indenture. The trustee’s address is The Bank of New York Mellon, Corporate Trust Office, 240 Greenwich Street, New York, NY 10286. The trustee will also serve as the paying agent for the Notes. See “— Paying Agent” immediately above.
See “Description of Debt Securities — Concerning the Trustee” and “Description of Debt Securities — Default and Related Matters” in the Base Prospectus below for a description of the trustee’s procedures and remedies available in the event of default.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities using this prospectus. As required by US federal law for all publicly offered corporate bonds and notes, the debt securities are governed by a document called an indenture. The indenture relating to the debt securities issued by us is a contract, dated as of April 1, 2004, between AstraZeneca PLC and JPMorgan Chase Bank, as trustee. As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon effective October 1, 2006, The Bank of New York Mellon is the trustee under the indenture. See “— The Trustee” below.
In this description “the security holder” means direct holders and not street name or other indirect holders of securities. Indirect holders should read the section “Legal Ownership — Street Names and Other Indirect Holders” in the Base Prospectus.
General
This section summarizes the material provisions of the indenture and the debt securities. Because it is a summary, it does not describe every aspect of the indenture or the debt securities. This summary is subject to and qualified in its entirety by reference to all of the indenture provisions, including some of the terms used and defined in the indenture. We describe the meaning of only the more important terms in this prospectus. We also include references in parentheses to some sections of the indenture. Whenever we refer to particular sections or defined terms of the indenture in this prospectus or in the applicable prospectus supplement, those sections or defined terms are incorporated by reference here or in the prospectus supplement. This summary is also subject to and qualified by reference to the description of the particular terms of the security holder’s series of debt securities described in the prospectus supplement.
The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the debt securities are governed by New York law. The indenture is an exhibit incorporated by reference into this prospectus.
The debt securities are unsecured obligations of AstraZeneca PLC. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
The Trustee
The Bank of New York Mellon (as successor trustee to JPMorgan Chase Bank) is the trustee under the indenture. As trustee, it has two main roles:
· first, it can enforce the security holder’s rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on the security holder’s behalf, described under “Defaults and Related Matters — Remedies if an event of default occurs” below; and
· second, the trustee performs administrative duties for us, such as sending the security holder interest payments and notices.
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series.
The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
· the title of the series of debt securities;
· the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities;
· any stock exchange on which we will list the debt securities;
· the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined;
· any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined;
· the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months;
· the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the trustee in New York, New York;
· the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part;
· any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods within which, the price or prices at which and every other term and condition upon which the debt securities will be redeemed, repaid or purchased;
· the denominations in which debt securities of the series are issuable, if other than denominations of $2,000 and any whole multiple of $1,000 in excess thereof;
· the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount;
· the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars;
· whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election;
· whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series;
· any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued;
· the forms of the series of debt securities;
· the applicability of the provisions described later under “— Satisfaction, Discharge and Defeasance”;
· any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee;
· if applicable, a discussion of any additional or alternative material US federal income and UK tax considerations; and
· any other special features of the series of debt securities.
We may issue the debt securities as original issue discount securities, which are debt securities offered and sold at a substantial discount to their stated principal amount.
Overview of the Remainder of this Description
The remainder of this description summarizes:
· Additional mechanics relevant to the debt securities under normal circumstances, such as how the security holder transfers ownership and where we make payments.
· The security holder’s right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions.
· The security holder’s rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons.
· Covenants contained in the indenture that restrict our ability to incur liens and undertake sale and leaseback transactions. A particular series of debt securities may have different covenants.
· The security holder’s rights if we default.
· The security holder’s rights if we want to modify the indenture.
· Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
The debt securities will be issued only in fully registered form without interest coupons in denominations of $2,000 or whole multiples of $1,000 in excess thereof. The security holder may have his or her debt securities broken into more debt securities of smaller denominations of whole multiples of $1,000 (but not less than a minimum denomination of $2,000) or combined into fewer debt securities of larger denominations of whole multiples of $1,000, as long as the total principal amount is not changed. This is called an exchange.
The security holder may exchange or transfer registered debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities.
The security holder may not exchange his or her registered debt securities for bearer securities.
There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer.
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with the security holder’s proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the security holder if he or she is a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if the security holder no longer owns the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the applicable prospectus supplement.
Unless provided otherwise in the applicable prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York Mellon (as successor paying agent to JPMorgan Chase Bank) in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is located at The Bank of New York Mellon, 240 Greenwich Street, New York, New York 10286. At our option, we may pay interest on any debt securities by check mailed to the registered holders.
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York. Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee.
Payment of Additional Amounts
Unless provided otherwise in the applicable prospectus supplement, we agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required.
The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the applicable prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s (or certain related parties’) connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
· the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security;
· the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
· the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
· the tax, levy, impost or other governmental charge is imposed by the US or any political subdivision or taxing authority thereof or therein;
· the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder; or
· any combination of the exceptions listed above.
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the UK, the US or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey our property as an entirety or substantially as an entirety to such other entity. Our ability to take some of these actions is restricted in the following ways:
· any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture; and
· if the succeeding entity is not organized under the laws of the UK or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “— Payment of Additional Amounts”.
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a principal property of ours or of a restricted subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “— Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
Optional Tax Redemption
Unless provided otherwise in the applicable prospectus supplement, we have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give the security holder between 30 and 60 days’ notice before redeeming the debt securities.
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “—Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities (or if no such date is specified, the first date on which debt securities of such series were issued). If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the preceding sentence.
The second situation is where our independent legal advisor has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “—Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures available to us. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including the security holder and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any principal property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
· Restricted subsidiary means any wholly-owned subsidiary:
· with substantially all of its property located within the UK or the US; and
· which owns a principal property;
but does not include any wholly-owned subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
· A wholly-owned subsidiary means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries.
· A subsidiary, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors.
· Principal property means any manufacturing plant or facility or any research facility owned by us or any restricted subsidiary. A principal property must also be located within the UK or the US and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our consolidated net tangible assets. Principal property does not include:
· any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or
· any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property.
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our consolidated net tangible assets.
· Our consolidated net tangible assets mean AstraZeneca PLC’s consolidated total assets, after deducting:
· all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and
· all goodwill, trade names, trademarks, patents and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders.
This restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
· any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a restricted subsidiary;
· any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price;
· any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries;
· any lien existing at the date of the indenture;
· any lien on a principal property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that principal property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair;
· any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a restricted subsidiary;
· any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
· any lien arising by operation of law over any credit balance or cash held in any account with a financial institution;
· any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any restricted subsidiary;
· any lien incurred or deposits made in the ordinary course of business, including but not limited to:
· any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens;
· any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and
· any easements, rights-of-way, restrictions and other similar charges;
· any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business;
· any lien securing taxes or assessments or other applicable governmental charges or levies;
· any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and
· any lien in favor of us or any subsidiary of ours.
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
· any liens on property of ours or a restricted subsidiary in favor of the US or any State of the US, or the UK, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens.
Limitation on Sale and Lease-Back Transactions
Neither we nor any of our restricted subsidiaries will enter into any sale and lease-back transaction involving a principal property without complying with this covenant.
A sale and lease-back transaction is an arrangement between us or a restricted subsidiary and any person in which we or the restricted subsidiary leases back for a term of more than three years a principal property that we or the restricted subsidiary has sold or transferred to that person.
We and our restricted subsidiaries may enter into sale and lease-back transactions provided that the total amount of attributable debt attributable to all sale and lease-back transactions plus other debt of ours or any of our restricted subsidiaries that is secured by liens (but excluding debt secured by liens on property that we or a restricted subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the debt securities offered by this prospectus as described under “— Limitation on Liens” above) does not exceed 15% of consolidated net tangible assets.
This restriction does not apply to any sale and lease-back transaction if:
· we or the restricted subsidiary seeking to enter into the sale and lease-back could incur, assume or guarantee debt secured by a lien on the principal property to be leased without equally and ratably securing the debt securities offered by this prospectus as a result of one or more of the exceptions to the limitation on liens as described under “— Limitation on Liens” above;
· within twelve months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a restricted subsidiary, we apply, an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the principal property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to
· the retirement of indebtedness for money borrowed, incurred or assumed by us or any restricted subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such debt, or
· investment in any principal property or principal properties.
This restriction on sale and lease-back transactions also does not apply to any transaction between us and a restricted subsidiary, or between restricted subsidiaries.
Attributable debt means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the indenture, compounded semi-annually) of our or a restricted subsidiary’s obligation for rental payments for the remaining term of any lease in a sale and lease-back transaction.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
· Interest — default for 30 days in the payment of any installment of interest on the series of debt securities;
· Principal — default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise;
· Sinking Fund Installment — default in the payment of any sinking fund installment as and when such installment becomes due and payable by the specific terms of the series of debt securities or beyond any period of grace;
· Covenant — breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for ninety days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series;
· Bankruptcy — certain events of bankruptcy, insolvency or reorganization affecting us; or
· Other — any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series.
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met.
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class). Default in the payment of principal of or interest on or any sinking fund installment of debt securities of any series or a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each debt security affected may only be modified or amended with the consent of such holder.
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture.
Before the security holder bypasses the trustee and bring his or her own lawsuit or other formal legal action or takes other steps to enforce his or her rights or protects his or her interests relating to the debt securities, the following must occur:
· the security holder must give the trustee written notice that an event of default has occurred and remains uncured;
· the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and
· the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period.
These limitations do not apply to a suit instituted by the security holder for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists.
For any series of debt securities that is a series of original issue discount securities the applicable prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. The security holder’s consent is not required to do any of the following:
· to transfer or pledge any property or assets to the trustee as security for any series of the debt securities;
· to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above;
· to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees;
· to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities;
· to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or
· to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect.
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires a vote in favor by holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below.
Changes requiring the security holder’s approval. Third, there are changes that cannot be made to the security holder’s debt securities without the specific approval of each affected holder. The security holder’s consent is required before we could do any of the following:
· extend the final maturity of a debt security;
· reduce the principal amount of a debt security;
· reduce the rate or extend the time of payment of any interest on a debt security;
· reduce any amount payable on redemption of a debt security;
· reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount;
· impair the security holder’s right to sue for payment;
· impair any right of repayment at the option of the holder;
· reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or
· change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments.
Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
· we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series; or
· we have delivered to the trustee for cancellation all outstanding debt securities of any series; or
· all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name; and
· we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any, and paid all other sums payable under the indenture.
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for the security holder:
· we must deposit in trust for the security holder’s benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and
· we must deliver to the trustee a legal opinion of our counsel to the effect that the holders of the debt securities of that series will not recognize gain or loss for US federal income tax purposes as a result of the defeasance and will be subject to the same US federal income tax as would be the case if the defeasance did not occur.
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
· to register the transfer and exchange of debt securities and our right of optional redemption, if any;
· to replace mutilated, defaced, destroyed, lost or stolen debt securities;
· to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee;
· immunities of the trustee; and
· to hold money for payment in trust.
Government obligation means securities that are:
· direct obligations of the US or any foreign government of a sovereign state for the payment of which is pledged by the full faith and credit of the US or such foreign government; or
· obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the US or any foreign government of a sovereign state the payment of which is unconditionally guaranteed as a full faith and credit obligation of the US or such foreign government;
and are not callable or redeemable at the option of the issuer. Government obligation also includes:
· a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt.
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records.
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year period, the security holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
The Bank of New York Mellon acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
F. 6.450% Notes due 2037
Prospectus Supplement:
DESCRIPTION OF NOTES
General
We offered $2,750,000,000 initial aggregate principal amount of 6.45% Notes due 2037 (the “2037 Notes”or the “Fixed Rate Notes” or the “notes”). The notes are governed by New York law.
The notes are unsecured, unsubordinated indebtedness of AstraZeneca PLC and rank equally with all of AstraZeneca PLC’s other unsecured and unsubordinated indebtedness.
There is no sinking fund for any series of notes. We have listed the notes on the Nasdaq Stock Market LLC.
Interest Payments and Maturity
For purposes of the description below, “business day” means a London business day on which commercial banks and foreign exchange markets are generally open to settle payments in New York. “London business day” means any day on which dealings in deposits in US dollars are transacted in the London interbank market.
Fixed Rate Notes
Maturity. The principal amount of the 2037 Notes will mature and become due and payable, together with any accrued and unpaid interest, on September 15, 2012, September 15, 2017 and September 15, 2037, respectively.
Interest Rate. The 2037 Notes will bear interest from their respective original issue date until their principal amount is paid or made available for payment, at a rate equal to 6.45% per annum, respectively, calculated on the basis of a 360-day year and twelve 30-day months.
Interest Payment Dates. Interest on the Fixed Rate Notes will be paid semi-annually in arrears on September 15 and March 15 of each year, commencing March 15, 2008 (each a “Fixed Rate Interest Payment Date”). However, if a Fixed Rate Interest Payment Date would fall on a day that is not a business day, the Fixed Rate Interest Payment Date will be postponed to the next succeeding day that is a business day, but no additional interest shall be paid unless we fail to make payment on such date.
Interest Periods. The first interest period for the Fixed Rate Notes will be the period from and including the Issue date to but excluding the first Fixed Rate Interest Payment Date. Thereafter, the interest periods for the Fixed Rate Notes will be the periods from and including the Fixed Rate Interest Payment Dates to but excluding the immediately succeeding Fixed Rate Interest Payment Date (together with the first interest period, each a “Fixed Rate Interest Period”). The final Fixed Rate Interest Period will be the period from and including the Fixed Rate Interest Payment Date immediately preceding the maturity date to the maturity date.
Redemption
As explained below, under certain circumstances we may redeem the notes before they mature. This means that we may repay them early. The security holder has no right to require us to redeem the notes. Notes will stop bearing interest on the redemption date, even if the security holder does not collect his or her money. We will give notice to DTC of any redemption we propose to make at least 30 days, but no more than 60 days, before the redemption date. Notice by DTC to participating institutions and by these participants to street name holders of indirect interests in the notes will be made according to arrangements among them and may be subject to statutory or regulatory requirements.
Optional Redemption
Fixed Rate Notes
We may redeem the Fixed Rate Notes, in whole or in part, at any time and from time to time at a redemption price equal to the greater of (i) 100% of the principal amount of the Fixed Rate Notes, and (ii) as determined by the quotation agent, the sum of the present values of the remaining scheduled payments of principal and interest of the Fixed Rate Notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the Make-Whole Spread (as set forth below) plus, in each case, accrued interest thereon to the date of redemption. In connection with such optional redemption, the following defined terms apply:
· “Treasury rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the comparable treasury issue, assuming a price for the comparable
treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.
· “Comparable treasury issue” means the United States Treasury security selected by the quotation agent as having a maturity comparable to the remaining term of the applicable series of Fixed Rate Notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of such series of Fixed Rate Notes.
· “Comparable treasury price” means, with respect to any redemption date, (i) the average of the reference treasury dealer quotations for such redemption date, after excluding the highest and lowest such reference treasury dealer quotations, or (ii) if the trustee obtains fewer than three such reference treasury dealer quotations, the average of all such quotations.
· “Quotation agent” means the reference treasury dealer appointed by us.
· “Reference treasury dealer” means (i) each of Citigroup Global Markets Inc., Deutsche Bank Securities Inc., Goldman, Sachs & Co., HSBC Securities (USA), and J.P. Morgan Securities Inc., and their respective successors; provided, however, that if the foregoing shall cease to be a primary US government securities dealer in New York City (a “primary treasury dealer”), we shall substitute therefor another primary treasury dealer; and (ii) any other primary treasury dealer selected by us.
· “Reference treasury dealer quotations” means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the quotation agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such reference treasury dealer at 5:00 p.m., Eastern Standard Time, on the third business day preceding such redemption date.
· “Make-Whole Spread” means 30 basis points.
Optional Tax Redemption
In the event of various tax law changes after the date of this prospectus supplement and other limited circumstances that require us to pay additional amounts, as described in the Base Prospectus under “Description of Debt Securities — Payment of Additional Amounts”, we may redeem the notes for redemption at a price equal to 100% of the principal amount of the notes plus accrued interest to the date of redemption. This means we may repay the notes early. We discuss our ability to redeem the notes in greater detail under “Description of Debt Securities — Optional Tax Redemption”.
Repurchase upon Change of Control Repurchase Event
If a Change of Control Repurchase Event (as defined below) occurs with respect to the notes, unless the notes are otherwise subject to redemption as described under “— Redemption” above and we have elected to exercise our right to redeem such notes, we will make an offer to each holder of notes to repurchase all or any part (in integral multiples of $1,000) of that holder’s notes at a repurchase price in cash equal to 101% of the aggregate principal amount of notes repurchased plus any accrued and unpaid interest on the notes repurchased to the date of repurchase. Within 30 days following any Change of Control Repurchase Event or, at our option, prior to any Change of Control (as defined below), but after the public announcement of an impending Change of Control, we will mail a notice to each holder, with a copy to the trustee, describing the transaction or transactions that constitute or may constitute the Change of Control Repurchase Event and offering to repurchase notes on the payment date specified in the notice, which date will be no earlier than 30 days and no later than 60 days from the date such notice is mailed. The notice shall, if mailed prior to the date of consummation of the Change of Control, state that the offer to repurchase is conditioned on the Change of Control Repurchase Event occurring on or prior to the payment date specified in the notice.
We will comply with the requirements of Rule 14e-1 under the Exchange Act and any other securities laws and regulations thereunder, to the extent those laws and regulations are applicable in connection with the repurchase of the notes as a result of a Change of Control Repurchase Event. To the extent that the provisions of any securities laws or regulations conflict with the Change of Control Repurchase Event provisions of the notes,
we will comply with the applicable securities laws and regulations and will not be deemed to have breached our obligations under the Change of Control Repurchase Event provisions of the notes by virtue of such conflict.
On the Change of Control Repurchase Event payment date, we will, to the extent lawful:
· accept for payment all notes or portions of notes (in integral multiples of $1,000) properly tendered pursuant to our offer;
· deposit with the trustee an amount equal to the aggregate repurchase price in respect of all notes or portions of notes properly tendered; and
· deliver or cause to be delivered to the trustee the notes properly accepted, together with an officers’ certificate stating the aggregate principal amount of notes being purchased by us.
The trustee will promptly mail to each holder of notes properly tendered the repurchase price for the notes, and the trustee will promptly authenticate and mail (or cause to be transferred by book-entry) to each holder a new note equal in principal amount to any unpurchased portion of any notes surrendered; provided, that each new note will be in a principal amount of $1,000 or an integral multiple of $1,000 in excess thereof.
We will not be required to make an offer to repurchase the notes upon Change of Control Repurchase Event if a third party makes such an offer in the manner, at the times and otherwise in compliance with the requirements for an offer made by us, and such third party purchases all notes properly tendered and not withdrawn under its offer.
Definitions
“Below Investment Grade Rating Event” means the notes are rated below Investment Grade by each of the Rating Agencies on any date from the date of the public notice of an arrangement that could result in a Change of Control until the end of the 60-day period following public notice of the occurrence of a Change of Control (which period shall be extended so long as the rating of the notes is under publicly announced consideration for possible downgrade by any of the Rating Agencies); provided that a Below Investment Grade Rating Event otherwise arising by virtue of a particular reduction in rating shall not be deemed to have occurred in respect of a particular Change of Control (and thus shall not be deemed a Below Investment Grade Rating Event for purposes of the definition of Change of Control Repurchase Event hereunder) if the Rating Agencies making the reduction in rating to which this definition would otherwise apply do not announce or publicly confirm or inform the trustee in writing at its request that the reduction was the result, in whole or in part, of any event or circumstance comprised of or arising as a result of, or in respect of, the applicable Change of Control (whether or not the applicable Change of Control shall have occurred at the time of the Below Investment Grade Rating Event).
“Change of Control” means the occurrence of any of the following: (1) the direct or indirect sale, transfer, conveyance or other disposition (other than by way of merger or consolidation), in one or a series of related transactions, of all or substantially all of the properties or assets of AstraZeneca PLC and its subsidiaries taken as a whole to any “person” (as that term is used in Section 13(d)(3) of the Exchange Act), other than AstraZeneca PLC or one of its subsidiaries; (2) the consummation of any transaction (including, without limitation, any merger or consolidation) the result of which is that any “person” (as that term is used in Section 13(d)(3) of the Exchange Act) becomes the beneficial owner, directly or indirectly, of more than 50% of the then outstanding number of shares of Astra Zeneca PLC’s Voting Stock; or (3) the first day on which a majority of the members of AstraZeneca PLC’s Board of Directors are not Continuing Directors.
“Change of Control Repurchase Event” means the occurrence of both a Change of Control and a Below Investment Grade Rating Event.
“Continuing Directors” means, as of any date of determination, any member of the Board of Directors of AstraZeneca PLC who (1) was a member of such Board of Directors on the date of the issuance of the notes; or (2) was nominated for election or elected to such Board of Directors with the approval of a majority of the Continuing Directors who were members of such Board of Directors at the time of such nomination or election.
“Investment Grade” means a rating of Baa3 or better by Moody’s (or its equivalent under any successor rating categories of Moody’s) and a rating of BBB— or better by S&P (or its equivalent under any successor
rating categories of S&P); or the equivalent investment grade credit rating from any additional Rating Agency or Rating Agencies selected by us.
“Moody’s” means Moody’s Investors Service Inc.
“Rating Agency” means (1) each of Moody’s and S&P; and (2) if any of Moody’s or S&P ceases to rate the notes or fails to make a rating of the notes publicly available for reasons outside of our control, a “nationally recognized statistical rating organization” within the meaning of Rule 15c3-1(c)(2)(vi)(F) under the Exchange Act, selected by us as a replacement agency for Moody’s or S&P, as the case may be.
“S&P” means Standard & Poor’s Ratings Services, a division of McGraw-Hill, Inc.
“Voting Stock” means AstraZeneca PLC’s issued ordinary share capital.
Further Issuances
We may, without the consent of the holders of notes, issue additional notes having the same ranking and same interest rate, maturity date, redemption terms and other terms as the notes described in this prospectus supplement. Any such additional notes, together with the notes offered by this prospectus supplement, will constitute a single series of securities under the Indenture. There is no limitation on the amount of notes or other debt securities that we may issue under such indenture.
We may offer additional notes of with OID for US federal income tax purposes as part of a further issue. Purchasers of notes after the date of any further issue will not be able to differentiate between notes sold as part of such further issue and previously issued notes. If we were to issue additional notes with OID, purchasers of notes after such further issue may be required to accrue OID (or greater amounts of OID than they would otherwise have accrued) with respect to their notes. This may affect the price of outstanding notes following a further issue. Purchasers are advised to consult legal counsel with respect to the implications of any future decision by us to undertake a further issue of notes of any series with OID.
Form, Denomination, Clearance and Settlement
We will issue the notes in fully registered form. The notes will be represented by one or more global securities registered in the name of a nominee of DTC. The security holder will hold beneficial interests in the notes through DTC in book-entry form. The notes will be issued in minimum denominations of $1,000 and in integral multiples of $1,000. The underwriters expect to deliver the notes through the facilities of DTC on September 12, 2007. Indirect holders trading their beneficial interests in the notes through DTC must trade in DTC’s same-day funds settlement system and pay in immediately available funds. Secondary market trading through Euroclear and Clearstream, Luxembourg will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg.
Payment of principal of and interest on the notes, so long as the notes are represented by global securities, as discussed below, will be made in immediately available funds. Beneficial interests in the global securities will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.
Payment of Additional Amounts
For more information on additional amounts and the situations in which AstraZeneca PLC may be required to pay additional amounts, see “Description of Debt Securities — Payment of Additional Amounts” in the Base Prospectus below.
Defeasance and Discharge
We may release ourselves from any payment or other obligations on the notes as described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the Base Prospectus.
Paying Agent and Calculation Agent
The principal corporate trust office of the trustee in The City of New York is designated as the principal paying agent. See “— Trustee” immediately below. We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts.
Trustee
As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York effective October 1, 2006, The Bank of New York is the trustee under the Indenture. The trustee’s address is The Bank of New York, Corporate Trust Office, 101 Barclay Street, New York, NY 10286. The trustee will also serve as the principal paying agent for the notes. See “— Paying Agent and Calculation Agent” immediately above.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities using this prospectus. As required by US federal law for all publicly offered corporate bonds and notes, the debt securities are governed by a document called an indenture. The indenture relating to the debt securities issued by us is a contract, dated as of April 1, 2004, between AstraZeneca PLC and JPMorgan Chase Bank, as trustee. As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York effective October 1, 2006, The Bank of New York is the trustee under the indenture. See “— The Trustee” below.
In this description “the security holder” means direct holders and not street name or other indirect holders of securities. Indirect holders should read the section “Legal Ownership — Street Names and Other Indirect Holders” in the Base Prospectus.
General
This section summarizes the material provisions of the indenture and the debt securities. Because it is a summary, it does not describe every aspect of the indenture or the debt securities. This summary is subject to and qualified in its entirety by reference to all of the indenture provisions, including some of the terms used and defined in the indenture. We describe the meaning of only the more important terms in this prospectus. We also include references in parentheses to some sections of the indenture. Whenever we refer to particular sections or defined terms of the indenture in this prospectus or in the prospectus supplement, those sections or defined terms are incorporated by reference here or in the prospectus supplement. This summary is also subject to and qualified by reference to the description of the particular terms of the security holder’s series of debt securities described in the prospectus supplement.
The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the debt securities are governed by New York law. The indenture is an exhibit incorporated by reference into this prospectus.
The debt securities are unsecured obligations of AstraZeneca PLC. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
The Trustee
The Bank of New York (as successor trustee to JPMorgan Chase Bank) is the trustee under the indenture. As trustee, it has two main roles:
· first, it can enforce the security holder’s rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on the security holder’s behalf, described under “Defaults and Related Matters — Remedies if an event of default occurs” below; and
· second, the trustee performs administrative duties for us, such as sending the security holder interest payments and notices.
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series.
The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
· the title of the series of debt securities;
· the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities;
· any stock exchange on which we will list the debt securities;
· the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined;
· any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined;
· the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months;
· the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the trustee in New York, New York;
· the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part;
· any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods within which, the price or prices at which and every other terms and conditions upon which the debt securities will be redeemed, repaid or purchased;
· the denominations in which debt securities of the series are issuable, if other than denominations of $1,000 and any multiple of $1,000;
· the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount;
· the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars;
· whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election;
· whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series;
· any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued;
· the forms of the series of debt securities;
· the applicability of the provisions described later under “— Satisfaction, Discharge and Defeasance”;
· any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee;
· if applicable, a discussion of any additional material US federal income and UK tax considerations; and
· any other special features of the series of debt securities.
We may issue the debt securities as original issue discount securities, which are debt securities offered and sold at a substantial discount to their stated principal amount.
Overview of the Remainder of this Description
The remainder of this description summarizes:
· Additional mechanics relevant to the debt securities under normal circumstances, such as how the security holder transfers ownership and where we make payments.
· The security holder’s right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions.
· The security holder’s rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons.
· Covenants contained in the indenture that restrict our ability to incur liens and undertake sale and leaseback transactions. A particular series of debt securities may have different covenants.
· The security holder’s rights if we default.
· The security holder’s rights if we want to modify the indenture.
· Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
Unless otherwise stated in the prospectus supplement, the debt securities will be issued only in fully registered form without interest coupons in denominations of $1,000 or whole multiples of $1,000. The security holder may have his or her debt securities broken into more debt securities of smaller $1,000 denominations or combined into fewer debt securities of larger $1,000 denominations, as long as the total principal amount is not changed. This is called an exchange.
The security holder may exchange or transfer registered debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities.
The security holder may not exchange his or her registered debt securities for bearer securities.
There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer.
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with the security holder’s proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the security holder if he or she is a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if the security holder no longer owns the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the prospectus supplement.
Unless otherwise specified in the prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York (as successor paying agent to JPMorgan Chase Bank) in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is located at The Bank of New York, 101 Barclay Street, New York, New York 10286. At our option, we may pay interest on any debt securities by check mailed to the registered holders.
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York.
Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee.
Payment of Additional Amounts
We agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at anytime required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay the security holder additional amounts as will result in the security holder’s receipt of such amounts as the security holder would have received had no such withholding or deduction been required.
The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
· the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security;
· the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is imposed on a payment to or for an individual and is required to be made pursuant to the European Union Directive 2003/48/EC on the taxation of savings or any other directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 or any law implementing or complying with, or introduced in order to conform to, such Directive;
· the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
· the holder would have been able to avoid such withholding or deduction by presenting the relevant debt security to another paying agent in a Member State of the EU or elsewhere; and
· the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder.
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the United Kingdom, the United States or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey our property as an entirety or substantially as an entirety to such other entity. Our ability to take some of these actions is restricted in the following ways:
· any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture;
· if the succeeding entity is not organized under the laws of the United Kingdom or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “— Payment of Additional Amounts”.
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a principal property of ours or of a restricted subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “— Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
Optional Tax Redemption
We have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give the security holder between 30 and 60 days’ notice before redeeming the debt securities.
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “— Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the prospectus supplement.
The second situation is where our independent legal adviser has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “— Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures available to us. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including the security holder and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any principal property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
· Restricted subsidiary means any wholly-owned subsidiary:
· with substantially all of its property located within the UK or the US; and
· which owns a principal property;
but does not include any wholly-owned subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
· A wholly-owned subsidiary means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries.
· A subsidiary, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors.
· Principal property means any manufacturing plant or facility or any research facility owned by us or any restricted subsidiary. A principal property must also be located within the UK or the US and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our consolidated net tangible assets. Principal property does not include:
· any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or
· any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property.
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our consolidated net tangible assets.
· Our consolidated net tangible assets mean AstraZeneca PLC’s consolidated total assets, after deducting:
· all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and
· all goodwill, trade names, trademarks, patents and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders.
This restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
· any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a restricted subsidiary;
· any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price;
· any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries;
· any lien existing at the date of the indenture;
· any lien on a principal property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that principal property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair;
· any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a restricted subsidiary;
· any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
· any lien arising by operation of law over any credit balance or cash held in any account with a financial institution;
· any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any restricted subsidiary;
· any lien incurred or deposits made in the ordinary course of business, including but not limited to:
· any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens;
· any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and
· any easements, rights-of-way, restrictions and other similar charges;
· any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business;
· any lien securing taxes or assessments or other applicable governmental charges or levies;
· any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and
· any lien in favor of us or any subsidiary of ours.
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
· any liens on property of ours or a restricted subsidiary in favor of the US or any State of the US, or the UK, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens.
Limitation on Sale and Lease-Back Transactions
Neither we nor any of our restricted subsidiaries will enter into any sale and lease-back transaction involving a principal property without complying with this covenant.
A sale and lease-back transaction is an arrangement between us or a restricted subsidiary and any person in which we or the restricted subsidiary leases back for a term of more than three years a principal property that we or the restricted subsidiary has sold or transferred to that person.
We and our restricted subsidiaries may enter into sale and lease-back transactions provided that the total amount of attributable debt attributable to all sale and lease-back transactions plus other debt of ours or any of our restricted subsidiaries that is secured by liens (but excluding debt secured by liens on property that we or a restricted subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the debt securities offered by this prospectus as described under “— Limitation on Liens” above) does not exceed 15% of consolidated net tangible assets.
This restriction does not apply to any sale and lease-back transaction if:
· we or the restricted subsidiary seeking to enter into the sale and lease-back could incur, assume or guarantee debt secured by a lien on the principal property to be leased without equally and ratably securing the debt securities offered by this prospectus as a result of one or more of the exceptions to the limitation on liens as described under “— Limitation on Liens” above;
· within twelve months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a restricted subsidiary, we apply, an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the principal property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to
· the retirement of indebtedness for money borrowed, incurred or assumed by us or any restricted subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such debt, or
· investment in any principal property or principal properties.
This restriction on sale and lease-back transactions also does not apply to any transaction between us and a restricted subsidiary, or between restricted subsidiaries.
Attributable debt means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the indenture, compounded semi-annually) of our or a restricted subsidiary’s obligation for rental payments for the remaining term of any lease in a sale and lease-back transaction.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
· Interest — default for 30 days in the payment of any installment of interest on the series of debt securities;
· Principal — default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise;
· Sinking Fund Installment — default in the payment of any sinking fund installment as and when such installment becomes due and payable by the specific terms of the series of debt securities or beyond any period of grace;
· Covenant — breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for ninety days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series;
· Bankruptcy — certain events of bankruptcy, insolvency or reorganization affecting us; or
· Other — any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series.
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met.
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class). Default in the payment of principal of or interest on or any sinking fund installment of debt securities of any series or a covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each debt security affected may only be modified or amended with the consent of such holder.
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture.
Before the security holder bypasses the trustee and brings his or her own lawsuit or other formal legal action or takes other steps to enforce his or her rights or protects his or her interests relating to the debt securities, the following must occur:
· the security holder must give the trustee written notice that an event of default has occurred and remains uncured;
· the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and
· the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period.
These limitations do not apply to a suit instituted by the security holder for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists.
For any series of debt securities that is a series of original issue discount securities the prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. The security holder’s consent is not required to do any of the following:
· to transfer or pledge any property or assets to the trustee as security for any series of the debt securities;
· to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above;
· to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees;
· to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities;
· to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or
· to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect.
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires a vote in favor by holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below.
Changes requiring the security holder’s approval. Third, there are changes that cannot be made to the security holder’s debt securities without the specific approval of each affected holder. The security holder’s consent is required before we could do any of the following:
· extend the final maturity of a debt security;
· reduce the principal amount of a debt security;
· reduce the rate or extend the time of payment of any interest on a debt security;
· reduce any amount payable on redemption of a debt security;
· reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount;
· impair the security holder’s right to sue for payment;
· impair any right of repayment at the option of the holder;
· reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or
· change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments.
Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
· we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series;
· we have delivered to the trustee for cancellation all outstanding debt securities of any series; or
· all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name, and we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any.
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for the security holder:
· we must deposit in trust for the security holder’s benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and
· we must deliver to the trustee a legal opinion of our counsel to the effect that the holders of the debt securities of that series will not recognize gain or loss for US federal income tax purposes as a result of the defeasance and will be subject to the same federal income tax as would be the case if the defeasance did not occur.
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
· to register the transfer and exchange of debt securities and our right of optional redemption, if any;
· to replace mutilated, defaced, destroyed, lost or stolen debt securities;
· to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee;
· immunities of the trustee; and
· to hold money for payment in trust.
Government obligation means securities that are:
· direct obligations of the US or any foreign government of a sovereign state for the payment of which is pledged by the full faith and credit of the US or such foreign government; or
· obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the US or any foreign government of a sovereign state the payment of which is unconditionally guaranteed as a full faith and credit obligation of the US or such foreign government;
and are not callable or redeemable at the option of the issuer. Government obligation also includes:
· a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt.
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records.
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year period, the security holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
The Bank of New York acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust
Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
G. 4.000% Notes due 2042
Prospectus Supplement:
DESCRIPTION OF NOTES
General
We offered $1,000,000,000 initial aggregate principal amount of 4.00% Notes due 2042 (the “2042 Notes” or the “notes”) The notes are governed by New York law.
The notes are unsecured, unsubordinated indebtedness of AstraZeneca PLC and rank equally with all of AstraZeneca PLC’s other unsecured and unsubordinated indebtedness from time to time outstanding.
There is no sinking fund for any series of notes. We have listed the notes on the Nasdaq Stock Market LLC.
Interest Payments and Maturity
For purposes of the description below, “business day” means any day which is not, in London, England or New York, New York, or the place of payment of amounts payable in respect of the notes, a Saturday, a Sunday, a legal holiday or a day on which banking institutions are authorized or obligated by law, regulation or executive order to close.
Maturity. The principal amount of 2042 Notes will mature and become due and payable, together with any accrued and unpaid interest, on September 18, 2042.
Interest Rate. The 2042 Notes will bear interest from their respective original issue date until their principal amount is paid or made available for payment, at a rate equal to 4.00% per annum, respectively, calculated on the basis of a 360-day year and twelve 30-day months.
Interest Payment Dates. Interest on the notes will be paid semi-annually in arrears on September 18 and March 18 of each year, commencing March 18, 2013 (each an “Interest Payment Date”). However, if an Interest Payment Date would fall on a day that is not a business day, the Interest Payment Date will be postponed to the next succeeding day that is a business day, but no additional interest shall be paid unless we fail to make payment on such date.
Interest Periods. The first interest period for the notes will be the period from and including the Issue date to but excluding the first Interest Payment Date. Thereafter, the interest periods for the notes will be the periods from and including the Interest Payment Dates to but excluding the immediately succeeding Interest Payment Date (together with the first interest period, each an “Interest Period”). The final Interest Period will be the period from and including the Interest Payment Date immediately preceding the maturity date to the maturity date.
Redemption
As explained below, under certain circumstances we may redeem the notes before they mature. This means that we may repay them early. The security holder has no right to require us to redeem the notes. Notes will stop bearing interest on the redemption date, even if the security holder does not collect his or her money. We will give notice to DTC of any redemption we propose to make at least 30 days, but no more than 60 days, before the redemption date. Notice by DTC to participating institutions and by these participants to street name holders of indirect interests in the notes will be made according to arrangements among them and may be subject to statutory or regulatory requirements.
Optional Redemption
We may redeem the notes, in whole or in part, at any time and from time to time at a redemption price equal to the greater of (i) 100% of the principal amount of the notes, and (ii) as determined by the quotation agent, the sum of the present values of the remaining scheduled payments of principal and interest on the notes to be redeemed (not including any portion of such payments of interest accrued as of the date of redemption) discounted to the date of redemption on a semiannual basis (assuming a 360-day year consisting of twelve 30-day months) at the treasury rate plus the Make-Whole Spread (as set forth below) plus, in each case, accrued interest thereon to the date of redemption. In connection with such optional redemption, the following defined terms apply:
· “Treasury rate” means, with respect to any redemption date, the rate per annum equal to the semiannual equivalent yield to maturity of the comparable treasury issue, assuming a price for the comparable treasury issue (expressed as a percentage of its principal amount) equal to the comparable treasury price for such redemption date.
· “Comparable treasury issue” means the United States Treasury security selected by the quotation agent as having a maturity comparable to the remaining term of the notes to be redeemed that would be utilized, at the time of selection and in accordance with customary financial practice, in pricing new issues of corporate debt securities of comparable maturity to the remaining term of the notes.
· “Comparable treasury price” means, with respect to any redemption date, (i) the average, as determined by the Quotation Agent, of the reference treasury dealer quotations for such redemption date, after excluding the highest and lowest such reference treasury dealer quotations, or (ii) if the trustee obtains fewer than three such reference treasury dealer quotations, the average of all such quotations.
· “Quotation agent” means the reference treasury dealer appointed by us.
· “Reference treasury dealer” means (i) each of Goldman, Sachs & Co., HSBC Securities (USA) Inc., J.P. Morgan Securities LLC, and Morgan Stanley & Co. LLC, and their respective successors or affiliates; provided, however, that if the foregoing shall cease to be a primary US government securities dealer in New York City (a “primary treasury dealer”), we shall substitute therefor another primary treasury dealer; and (ii) any other primary treasury dealer selected by us.
· “Reference treasury dealer quotations” means, with respect to each reference treasury dealer and any redemption date, the average, as determined by the quotation agent, of the bid and asked prices for the comparable treasury issue (expressed in each case as a percentage of its principal amount) quoted in writing to the trustee by such reference treasury dealer at 5:00 p.m., Eastern Standard Time, on the third business day preceding such redemption date.
· “Make-Whole Spread” means 20 basis points.
Optional Tax Redemption
In the event of various tax law changes after the date of this prospectus supplement and other limited circumstances that require us to pay additional amounts, as described in the Base Prospectus under “Description of Debt Securities — Payment of Additional Amounts”, we may redeem all, but not less than all, of the notes at a price equal to 100% of the principal amount of the notes plus accrued interest to the date of redemption. This means we may repay the notes early. We discuss our ability to redeem the notes in greater detail under “Description of Debt Securities — Optional Tax Redemption”.
Further Issuances
We may, without the consent of the holders of notes, issue additional notes having the same ranking and same interest rate, maturity date, redemption terms and other terms as the notes described in this prospectus supplement. Any such additional notes, together with the notes offered by this prospectus supplement, will constitute a single series of securities under the Indenture. There is no limitation on the amount of notes or other debt securities that we may issue under such indenture.
We may offer additional notes with OID for US federal income tax purposes as part of a further issue. Purchasers of notes after the date of any further issue will not be able to differentiate between notes sold as part of such further issue and previously issued notes. If we were to issue additional notes with OID, purchasers of notes after such further issue may be required to accrue OID (or greater amounts of OID than they would otherwise have accrued) with respect to their notes. This may affect the price of outstanding notes following a further issue. Purchasers are advised to consult legal counsel with respect to the implications of any future decision by us to undertake a further issue of notes with OID.
Form, Denomination, Clearance and Settlement
We will issue the notes in fully registered form. The notes will be represented by one or more global securities registered in the name of a nominee of DTC. The security holder will hold beneficial interests in the notes through DTC in book-entry form. The notes will be issued in minimum denominations of $2,000 and in integral multiples of $1,000 in excess thereof. The underwriters expect to deliver the notes through the facilities of DTC on September 18, 2012. Indirect holders trading their beneficial interests in the notes through DTC must trade in DTC’s same-day funds settlement system and pay in immediately available funds. Secondary market trading through Euroclear and Clearstream, Luxembourg will occur in the ordinary way following the applicable rules and operating procedures of Euroclear and Clearstream, Luxembourg.
Payment of principal of and interest on the notes, so long as the notes are represented by global securities, as discussed below, will be made in immediately available funds. Beneficial interests in the global securities
will trade in the same-day funds settlement system of DTC, and secondary market trading activity in such interests will therefore settle in same-day funds.
Payment of Additional Amounts
For more information on additional amounts and the situations in which AstraZeneca PLC may be required to pay additional amounts, see “Description of Debt Securities — Payment of Additional Amounts” in the Base Prospectus below.
Defeasance and Discharge
We may release ourselves from any payment or other obligations on the notes as described under “Description of Debt Securities — Satisfaction, Discharge and Defeasance” in the Base Prospectus.
Paying Agent
The principal corporate trust office of the trustee in The City of New York is designated as the principal paying agent. See “—Trustee” immediately below. We may at any time designate additional paying agents or rescind the designation of paying agents or approve a change in the office through which any paying agent acts.
Trustee
As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon (formerly known as The Bank of New York), effective October 1, 2006, The Bank of New York Mellon is the trustee under the Indenture. The trustee’s address is The Bank of New York Mellon, Corporate Trust Office, 101 Barclay Street, New York, NY 10286. The trustee will also serve as the paying agent for the notes. See “— Paying Agent” immediately above.
See “Description of Debt Securities — Concerning the Trustee” and “Description of Debt Securities — Default and Related Matters” in the Base Prospectus below for a description of the trustee’s procedures and remedies available in the event of default.
Base Prospectus:
DESCRIPTION OF DEBT SECURITIES
We may issue debt securities using this prospectus. As required by US federal law for all publicly offered corporate bonds and notes, the debt securities are governed by a document called an indenture. The indenture relating to the debt securities issued by us is a contract, dated as of April 1, 2004, between AstraZeneca PLC and JPMorgan Chase Bank, as trustee. As a result of the transfer of JPMorgan Chase Bank’s corporate trust business to The Bank of New York Mellon (formerly known as The Bank of New York) effective October 1, 2006, The Bank of New York Mellon is the trustee under the indenture. See “— The Trustee” below.
In this description “the security holder” means direct holders and not street name or other indirect holders of securities. Indirect holders should read the section “Legal Ownership — Street Names and Other Indirect Holders” above.
General
This section summarizes the material provisions of the indenture and the debt securities. Because it is a summary, it does not describe every aspect of the indenture or the debt securities. This summary is subject to and qualified in its entirety by reference to all of the indenture provisions, including some of the terms used and defined in the indenture. We describe the meaning of only the more important terms in this prospectus. We also include references in parentheses to some sections of the indenture. Whenever we refer to particular sections or defined terms of the indenture in this prospectus or in the prospectus supplement, those sections or defined terms are incorporated by reference here or in the prospectus supplement. This summary is also subject to and qualified by reference to the description of the particular terms of the security holder’s series of debt securities described in the prospectus supplement.
The indenture and its associated documents contain the full legal text of the matters described in this section. The indenture and the debt securities are governed by New York law. The indenture is an exhibit incorporated by reference into this prospectus.
The debt securities are unsecured obligations of AstraZeneca PLC. The debt securities will rank equally in right of payment with all of our other unsecured and unsubordinated indebtedness except for indebtedness that is preferred under applicable law.
The Trustee
The Bank of New York Mellon (as successor trustee to JPMorgan Chase Bank) is the trustee under the indenture. As trustee, it has two main roles:
· first, it can enforce the security holder’s rights against us if we default on debt securities issued under the indenture. There are some limitations on the extent to which the trustee may act on the security holder’s behalf, described under “Defaults and Related Matters — Remedies if an event of default occurs” below; and
· second, the trustee performs administrative duties for us, such as sending the security holder interest payments and notices.
Types of Debt Securities
The indenture does not limit the amount of debt securities that we can issue. It provides that debt securities may be issued in one or more series up to the aggregate principal amount as we authorize from time to time. All debt securities of one series need not be issued at the same time and we may reopen any series, without the consent of a holder of that series, to issue additional debt securities of the same series.
The prospectus supplement relating to a series of debt securities will describe the following terms of the series:
· the title of the series of debt securities;
· the aggregate principal amount of debt securities and any limit on the aggregate principal amount of the series of debt securities;
· any stock exchange on which we will list the debt securities;
· the date or dates on which we will repay the principal amount of the series of debt securities or the method by which the date or dates will be determined;
· any rate or rates at which the series of debt securities will bear interest or the method by which the interest rate or rates will be determined;
· the date or dates from which any interest on the series of debt securities will accrue, the dates on which interest will be payable and the record dates for interest payments or the method by which such date or dates will be determined and the method by which interest will be calculated if different to a 360-day year of twelve 30-day months;
· the place or places where the principal and any interest on debt securities will be payable if other than the corporate trust office of the trustee in New York, New York;
· the price or prices at which, the period or periods within which, the currency or currencies, currency unit or composite currency in which, and the terms and conditions upon which we may redeem the series of debt securities in whole or in part;
· any right or obligation to redeem, repay or purchase the debt securities as a result of any sinking fund or similar provisions, or at the option of the holder of the debt securities and the period or periods
within which, the price or prices at which and every other term and condition upon which the debt securities will be redeemed, repaid or purchased;
· the denominations in which debt securities of the series are issuable, if other than denominations of $1,000 and any multiple of $1,000;
· the portion of the principal amount of the series of debt securities payable if an acceleration of the maturity of the debt securities is declared, if other than the principal amount;
· the currency, including any composite currency, of payment of the principal, premium, if any, and interest on the series of debt securities if other than US dollars;
· whether we or a holder of debt securities may elect to have the principal, premium, if any, or interest on the series of debt securities paid in a currency or composite currency other than the currency in which the debt securities are stated to be payable, and if so, any election period and the terms and conditions governing such an election;
· whether we will be required to pay additional amounts for withholding taxes or other governmental charges and, if applicable, a related right to an optional tax redemption for such a series;
· any index used to determine the amount of payment of principal, premium, if any, and interest on the series of debt securities and how these amounts will be determined if they are not fixed when the debt securities are issued;
· the forms of the series of debt securities;
· the applicability of the provisions described later under “— Satisfaction, Discharge and Defeasance”;
· any authenticating or paying agents, transfer agents or registrars or any other agents acting in connection with the debt securities other than the trustee;
· if applicable, a discussion of any additional material US federal income and UK tax considerations; and
· any other special features of the series of debt securities.
We may issue the debt securities as original issue discount securities, which are debt securities offered and sold at a substantial discount to their stated principal amount.
Overview of the Remainder of this Description
The remainder of this description summarizes:
· Additional mechanics relevant to the debt securities under normal circumstances, such as how the security holder transfers ownership and where we make payments.
· The security holder’s right to receive payment of additional amounts due to changes in the tax withholding requirements of various jurisdictions.
· The security holder’s rights under several special situations, such as if we merge with another company or if we want to redeem the debt securities for tax reasons.
· Covenants contained in the indenture that restrict our ability to incur liens and undertake sale and leaseback transactions. A particular series of debt securities may have different covenants.
· The security holder’s rights if we default.
· The security holder’s rights if we want to modify the indenture.
· Our relationship with the trustee.
Additional Mechanics
Exchange and Transfer
Unless otherwise stated in the prospectus supplement, the debt securities will be issued only in fully registered form without interest coupons in denominations of $1,000 or whole multiples of $1,000. The security holder may have his or her debt securities broken into more debt securities of smaller $1,000 denominations or combined into fewer debt securities of larger $1,000 denominations, as long as the total principal amount is not changed. This is called an exchange.
The security holder may exchange or transfer registered debt securities at the office of the trustee. The trustee acts as our agent for registering debt securities in the names of holders and for transferring registered debt securities. We may change this appointment to another entity or perform the service ourselves. The entity performing the role of maintaining the list of registered holders is called the security registrar. It will also register transfers of the registered debt securities.
The security holder may not exchange his or her registered debt securities for bearer securities.
There will be no service charge for any exchange or registration of transfer of the debt securities, but we may require payment of an amount sufficient to cover any tax or other governmental charge imposed in connection with any exchange or registration of transfer.
The transfer or exchange of a registered debt security may be made only if the security registrar is satisfied with the security holder’s proof of ownership.
If the debt securities are redeemable and we redeem less than all of the debt securities of a particular series, we may block the transfer or exchange of debt securities during a specified period of time in order to freeze the list of holders to prepare the mailing. The period begins 15 days before the day we first mail the notice of redemption and ends on the day of that mailing. We may also refuse to register transfers or exchanges of debt securities selected or called for redemption. However, we will continue to permit transfers and exchanges of the unredeemed portion of any security being partially redeemed.
Payment and Paying Agents
We will pay interest to the security holder if he or she is a direct holder of debt securities at the close of business on a particular day in advance of each due date for interest, even if the security holder no longer owns the security on the interest due date. That particular day, usually about two weeks in advance of the interest due date, is called the record date and is stated in the prospectus supplement.
Unless otherwise specified in the prospectus supplement, we will pay interest, principal and any other money due on debt securities in registered form at the corporate trust office of The Bank of New York Mellon (as successor paying agent to JPMorgan Chase Bank) in the Borough of Manhattan, The City and State of New York as paying agent for the debt securities. That office is located at The Bank of New York Mellon, 101 Barclay Street, New York, New York 10286. At our option, we may pay interest on any debt securities by check mailed to the registered holders.
Some of the debt securities may be denominated, and payments may be made, in currencies other than US dollars or in composite currencies. A summary of any special considerations which apply to these debt securities is in the applicable prospectus supplement.
Street name and other indirect holders should consult their banks or brokers for information on how they will receive payments.
We may arrange for additional payment offices, or may cancel or change these offices, including our use of the trustee’s corporate trust office. These offices are called paying agents. We may also choose to act as our own paying agent, but must always maintain a paying agency in the Borough of Manhattan, The City and State of New York. Whenever there are changes in the paying agents for any particular series of debt securities we must notify the trustee.
Payment of Additional Amounts
We agree that any amounts to be paid by us under any series of debt securities of principal, premium and interest in respect of the debt securities will be paid without deduction or withholding for, any and all present and future taxes, levies, duties, assessments, imposts or other governmental charges of whatever nature imposed, assessed, levied or collected by or for the account of the government of any jurisdiction in which we are resident for tax purposes (at the time of the issuance, the UK) or any political subdivision or taxing authority of such jurisdiction, unless such withholding or deduction is required by law. If such deduction or withholding is at any time required, we will (subject to compliance by the security holder with any relevant administrative requirements) pay such additional amounts as will result in the receipt of such amounts as would have been received by the holder had no such withholding or deduction been required.
The indenture provides that we will not have to pay additional amounts in certain specified circumstances, and that those circumstances may be modified or supplemented for different series of debt securities. Unless the prospectus supplement for a series of debt securities provides otherwise, debt securities issued using this prospectus will provide that we will not have to pay additional amounts if:
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for the holder’s connection to the jurisdiction in which we are resident for tax purposes, other than by merely holding the debt security or by receiving principal, premium, if any, or interest, if any, on the debt security, or enforcing the debt security. These connections include where the holder or related party:
· is or has been a domiciliary, national or resident of such jurisdiction;
· is or has been engaged in a trade or business in such jurisdiction;
· has or had a permanent establishment in such jurisdiction; or
· is or has been physically present in such jurisdiction.
· the tax, levy, impost or other governmental charge would not have been imposed, assessed, levied or collected but for presentation of the debt security for payment, if presentation is required, more than 30 days after the security became due or payment was provided for;
· the tax, levy, impost or other governmental charge is an estate, inheritance, gift, sale, transfer, personal property or similar tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is payable in a manner that does not involve deduction or withholding from payments on or in respect of the relevant debt security;
· the tax, levy, impost or other governmental charge would not have been imposed or withheld but for the failure of the holder or beneficial owner to comply with any certification, identification or other reporting requirement concerning the nationality, residence, identity or connection with any jurisdiction in which we are resident for tax purposes, as required by any treaty, statute, regulation or administrative practice of such jurisdiction as a condition to relief or exemption from such tax, levy, impost or other governmental charge;
· the tax, levy, impost or other governmental charge is imposed on a payment to or for an individual and is required to be made pursuant to the European Union Directive 2003/48/EC on the taxation of savings or any other directive implementing the conclusions of the ECOFIN Council meeting of 26-27 November 2000 or any law implementing or complying with, or introduced in order to conform to, such Directive;
· the holder would have been able to avoid such withholding or deduction by authorizing the paying agent to report information in accordance with the procedure laid down by the relevant tax authority or by producing, in the form required by the relevant tax authority, a declarative, claim, certificate, document or other evidence establishing exemption therefrom;
· the holder would have been able to avoid such withholding or deduction by presenting the relevant debt security to another paying agent in a Member State of the EU or elsewhere; or
· the holder of the debt security is a fiduciary, partnership or a person other than the sole beneficial owner of any payment that would be required, by the laws of the jurisdiction in which we are resident for tax purposes, to be included in income, for tax purposes, of a beneficiary or settlor with respect to the fiduciary, a member of that partnership or a beneficial owner who would not have been entitled to the additional amounts had that beneficiary, settlor, partner or beneficial owner been the holder.
Mergers and Similar Events
We are generally permitted to consolidate or merge with another company or other entity that is organized under the laws of the United Kingdom, the United States or any other country which is a member of the Organization for Economic Cooperation and Development. We are also generally permitted to sell or convey our property as an entirety or substantially as an entirety to such other entity. Our ability to take some of these actions is restricted in the following ways:
· any entity succeeding us must assume our obligations in relation to the debt securities and under the indenture;
· if the succeeding entity is not organized under the laws of the United Kingdom or a State of the United States, the succeeding entity’s assumption of our obligations in relation to the debt securities and under the indenture must include the obligation to pay any additional amounts as described under “— Payment of Additional Amounts”.
It is possible that the merger, sale, or lease of all or substantially all of our assets would cause a principal property of ours or of a restricted subsidiary of ours or shares of stock or indebtedness of any of our restricted subsidiaries to become subject to a lien giving other lenders preferential rights in that property over holders of debt securities. We have promised to limit these preferential rights on our property, called liens, as discussed under “— Limitation on Liens”. If a merger or other transaction would create any impermissible liens on our property, we must grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
Optional Tax Redemption
We have the option to redeem the debt securities in the two situations described below. The redemption price for the debt securities, other than original issue discount debt securities, will be equal to the principal amount of the debt securities being redeemed plus accrued interest and any additional amounts due on the date fixed for redemption. The redemption price for original issue discount debt securities will be specified in the applicable prospectus supplement. We must give the security holder between 30 and 60 days’ notice before redeeming the debt securities.
The first situation is where, as a result of a change or amendment to any law or related regulation or ruling of the jurisdiction in which we are resident for tax purposes, or any change in an application or interpretation of such laws, regulations or rulings, or any change in application or interpretation of, or any execution of an amendment to, any treaty, we would have to pay additional amounts as described under “— Payment of Additional Amounts”.
This first situation applies only in the case of changes, amendments, applications, interpretations or executions that occur on or after the date specified in the prospectus supplement for the applicable series of debt securities. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes, and the applicable date will be the date such entity became successor, rather than the date specified in the prospectus supplement.
The second situation is where our independent legal adviser has advised us that, as a result of action taken by a taxation authority of, or any action brought in a court of competent jurisdiction in, the jurisdiction in which we are resident for tax purposes, after the date specified in the prospectus supplement for the applicable series of debt securities, we would have to pay additional amounts as described under “— Payment of Additional Amounts” and the payment of such additional amounts cannot be avoided by the use of reasonable measures
available to us. If we are succeeded by another entity, the applicable jurisdiction will be the jurisdiction in which such successor is resident for tax purposes, rather than the jurisdiction in which we are resident for tax purposes and the applicable date will be the date such entity became our successor.
Covenants
Limitation on Liens
Some of our property and the property of our subsidiaries may be subject to a mortgage, pledge, assignment, charge or other legal mechanism that gives a lender preferential rights in that property over other lenders, including the security holder and the other direct holders of the debt securities, or over our general creditors if we fail to repay them. These preferential rights are generally called liens.
We undertake that we and certain of our subsidiaries, which we refer to as “restricted subsidiaries”, will not become obligated on any new debt for borrowed money that is secured by a lien on any principal property or on any shares of stock or indebtedness of any of our restricted subsidiaries unless we grant an equivalent or higher-ranking lien on the same property to the security holder and the other direct holders of the debt securities.
· Restricted subsidiary means any wholly-owned subsidiary:
· with substantially all of its property located within the UK or the US; and
· which owns a principal property;
but does not include any wholly-owned subsidiary principally engaged in leasing or in financing installment receivables or principally engaged in financing the operations of us and our consolidated subsidiaries.
· A wholly-owned subsidiary means any corporation in which control, directly or indirectly, of all of the stock with ordinary voting power to elect the board of directors of that corporation is owned by us, or by one or more of our wholly-owned subsidiaries or by us and one or more of our wholly-owned subsidiaries.
· A subsidiary, with respect to any person, is any corporation in which that person owns or controls directly or indirectly at least a majority of stock with ordinary voting power to elect a majority of the board of directors.
· Principal property means any manufacturing plant or facility or any research facility owned by us or any restricted subsidiary. A principal property must also be located within the UK or the US and have a gross book value (before deducting any depreciation reserve) exceeding 2% of our consolidated net tangible assets. Principal property does not include:
· any plant or facility or research facility which in the opinion of our board of directors is not materially important to the total business conducted by us and our subsidiaries; or
· any portion of a property described above which, in the opinion of our board of directors, is not materially important to the use or operation of the property.
We do not need to comply with this restriction if the amount of all debt that would be secured by liens on our principal properties and the shares of stock or indebtedness of our restricted subsidiaries is no more than 15% of our consolidated net tangible assets.
· Our consolidated net tangible assets mean AstraZeneca PLC’s consolidated total assets, after deducting:
· all liabilities due within one year (other than short-term borrowings and long-term debt due within one year); and
· all goodwill, trade names, trademarks, patents and other similar types of intangible assets as shown on the audited consolidated balance sheet contained in the latest annual report to our shareholders.
This restriction on liens does not apply to debt secured by a number of different types of liens. These types of liens include the following:
· any lien on property, shares of stock or indebtedness of any corporation existing at the time the corporation becomes a restricted subsidiary;
· any lien on property or shares of stock existing at the time of acquisition of that property or those shares of stock, or to secure the payment of all or any part of the purchase price of that property or those shares of stock, or to secure any debt incurred before, at the time of, or within twelve months after, in the case of shares of stock, the acquisition of the shares of stock and, in the case of property, the later of the acquisition, completion of construction (including any improvements on an existing property) or commencement of the commercial operation of the property, where the debt is incurred to finance all or any part of the purchase price;
· any lien securing debt owed to us or to any of our restricted subsidiaries by us or any of our restricted subsidiaries;
· any lien existing at the date of the indenture;
· any lien on a principal property to secure debt incurred to finance all or part of the cost of improving, constructing, altering or repairing any building, equipment or facilities or of any other improvements on all or any part of that principal property, if the debt is incurred before, during, or within twelve months after completing the improvement, construction, alteration or repair;
· any lien on property owned or held by any corporation or on shares of stock or indebtedness of any corporation, where the lien existed either at the time the corporation is merged, consolidated or amalgamated with either us or a restricted subsidiary or at the time of a sale, lease or other disposition of all or substantially all of the property of a corporation to us or a restricted subsidiary;
· any lien arising by operation of law and not securing amounts more than 90 days overdue or otherwise being contested in good faith;
· any lien arising by operation of law over any credit balance or cash held in any account with a financial institution;
· any rights of financial institutions to offset credit balances in connection with the operation of cash management programs established for our benefit and/or the benefit of any restricted subsidiary;
· any lien incurred or deposits made in the ordinary course of business, including but not limited to:
· any mechanics’, materialmen’s, carriers’, workmen’s, vendors’ or other similar liens;
· any liens securing amounts in connection with workers’ compensation, unemployment insurance and other types of social security; and
· any easements, rights-of-way, restrictions and other similar charges;
· any liens incurred or deposits made securing the performance of tenders, bids, leases, statutory obligations, surety and appeal bonds, government contracts, performance and return of money bonds and other obligations of a similar nature incurred in the ordinary course of business;
· any lien securing taxes or assessments or other applicable governmental charges or levies;
· any extension, renewal or replacement or successive extensions, renewals or replacements, in whole or in part, of any lien included in the preceding paragraphs or of any of the debt secured under the preceding paragraphs, so long as the principal amount of debt secured does not exceed the principal
amount of debt secured at the time of the extension, renewal or replacement, and that the extension, renewal or replacement lien is limited to all or any part of the same property or shares of stock that secured the lien extended, renewed or replaced (including improvements on that property), or property received or shares of stock issued in substitution or exchange; and
· any lien in favor of us or any subsidiary of ours.
The following types of transactions will not be deemed to create debt secured by a lien and, therefore, will also not be subject to the restriction on liens:
· any liens on property of ours or a restricted subsidiary in favor of the US or any State of the US, or the UK, or any other country, or any political subdivision of, or any department, agency or instrumentality of, these countries or states, to secure partial, progress, advance or other payments under provisions of any contract or statute including, but not limited to, liens to secure debt of pollution control or industrial revenue bond type, or to secure any indebtedness incurred for the purpose of financing all or any part of the purchase price or cost of construction of the property subject to these liens.
Limitation on Sale and Lease-Back Transactions
Neither we nor any of our restricted subsidiaries will enter into any sale and lease-back transaction involving a principal property without complying with this covenant.
A sale and lease-back transaction is an arrangement between us or a restricted subsidiary and any person in which we or the restricted subsidiary leases back for a term of more than three years a principal property that we or the restricted subsidiary has sold or transferred to that person.
We and our restricted subsidiaries may enter into sale and lease-back transactions provided that the total amount of attributable debt attributable to all sale and lease-back transactions plus other debt of ours or any of our restricted subsidiaries that is secured by liens (but excluding debt secured by liens on property that we or a restricted subsidiary would be entitled to incur, assume or guarantee without equally and ratably securing the debt securities offered by this prospectus as described under “— Limitation on Liens” above) does not exceed 15% of consolidated net tangible assets.
This restriction does not apply to any sale and lease-back transaction if:
· we or the restricted subsidiary seeking to enter into the sale and lease-back could incur, assume or guarantee debt secured by a lien on the principal property to be leased without equally and ratably securing the debt securities offered by this prospectus as a result of one or more of the exceptions to the limitation on liens as described under “— Limitation on Liens” above;
· within twelve months before or after the sale or transfer, regardless of whether the sale or transfer may have been made by us or a restricted subsidiary, we apply, an amount equal to the net proceeds of the sale or transfer (in the case of a sale or transfer for cash), or an amount equal to the fair value of the principal property so leased at the time of entering into the sale or transfer as determined by our board of directors (in the case of a sale or transfer otherwise than for cash), to
· the retirement of indebtedness for money borrowed, incurred or assumed by us or any restricted subsidiary which matures at, or is extendible or renewable at the option of the obligor to, a date more than twelve months after the date of incurring, assuming or guaranteeing such debt, or
· investment in any principal property or principal properties.
This restriction on sale and lease-back transactions also does not apply to any transaction between us and a restricted subsidiary, or between restricted subsidiaries.
Attributable debt means the present value (discounted at a rate equal to the weighted average of the rate of interest on all securities then issued and outstanding under the indenture, compounded semi-annually) of our or a restricted subsidiary’s obligation for rental payments for the remaining term of any lease in a sale and lease-back transaction.
Default and Related Matters
Events of Default
A holder of debt securities of a particular series will have special rights if any event of default occurs with respect to that series and is not cured, as described later in this subsection.
What is an event of default? An event of default means any of the following:
· Interest — default for 30 days in the payment of any installment of interest on the series of debt securities;
· Principal — default in the payment of all or any part of the principal of the series of debt securities when such principal becomes due and payable either at maturity, upon redemption, by acceleration or otherwise;
· Sinking Fund Installment — default in the payment of any sinking fund installment as and when such installment becomes due and payable by the specific terms of the series of debt securities or beyond any period of grace;
· Covenant — breach or default by us in the performance of a covenant or warranty in respect of the debt securities of the relevant series which has not been remedied for ninety days after we receive written notice of the default from the trustee or we and the trustee receive written notice of the default from the holders of at least 25% of the principal amount of the debt securities of all affected series;
· Bankruptcy — certain events of bankruptcy, insolvency or reorganization affecting us; or
· Other — any other event of default provided in any supplemental indenture or resolution of our board of directors under which a particular series is issued or in the form of security for such series.
No event of default described in the provisions above with respect to a particular series of debt securities will necessarily constitute an event of default with respect to any other series of debt securities and the events of default for any specific series may be modified as described in the applicable prospectus supplement.
Remedies if an event of default occurs. If an event of default, other than a “Bankruptcy” default, has occurred (but only if, in the case of a “Covenant” default, the default has occurred for less than all series of debt securities then issued under the indenture and outstanding) and has not been cured, the trustee or the holders of at least 25% of the principal amount of debt securities of the affected series (each affected series voting as a separate class) may declare the principal amount (or, if the debt securities of a series are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all the debt securities of that series, together with any accrued interest, to be due and payable immediately. If an event of default has occurred under “Covenant” default with respect to all of the series of debt securities then issued under the indenture and outstanding, or under “Bankruptcy” default, and has not been cured, the trustee or the holders of at least 25% of the principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class) may declare the principal (or, if any debt securities are original issue discount securities, that portion of the principal amount as may be specified in the terms of that series) of all debt securities then issued under the indenture and outstanding, together with any accrued interest, to be due and payable immediately. This is called a declaration of acceleration of maturity. A declaration of acceleration of maturity may be canceled by the holders of at least a majority in principal amount of the debt securities of the affected series or by at least a majority in principal amount of all the debt securities then issued under the indenture and outstanding (voting as one class), as the case may be, if certain conditions are met.
Before a declaration of acceleration of maturity, past “Covenant” defaults that do not affect all series of debt securities then issued under the indenture and outstanding may be waived by the holders of a majority in principal amount of the debt securities then outstanding of each affected series (each such series voting as a separate class). Past “Covenant” defaults that affect all series of debt securities then issued under the indenture and outstanding and past “Bankruptcy” defaults may be waived by the holders of a majority in principal amount of all the debt securities then issued under the indenture and outstanding (treated as one class). Default in the payment of principal of or interest on or any sinking fund installment of debt securities of any series or a
covenant or provision of the indenture that cannot be modified or amended without the consent of the holder of each debt security affected may only be modified or amended with the consent of such holder.
Except in cases of default, where the trustee has some special duties, the trustee is not required to take any action under the indenture at the request of any holders unless the holders offer the trustee reasonable protection from expenses and liability. This protection is called an indemnity. If reasonable indemnity is provided, the holders of a majority in principal amount of the outstanding debt securities of the relevant series may, subject to certain limitations and conditions, direct the time, method and place of conducting any lawsuit or other formal legal action seeking any remedy available to the trustee. These majority holders may also, subject to certain limitations and conditions, direct the trustee in performing any other action under the indenture.
Before the security holder bypasses the trustee and brings his or her own lawsuit or other formal legal action or takes other steps to enforce his or her rights or protects his or her interests relating to the debt securities, the following must occur:
· the security holder must give the trustee written notice that an event of default has occurred and remains uncured;
· the holders of 25% in principal amount of all outstanding debt securities of the relevant series must make a written request that the trustee take action because of the default, and must offer reasonable indemnity to the trustee against the cost and other liabilities of taking that action; and
· the trustee must have not taken action for 60 days after receipt of the above notice and offer of indemnity and the trustee has not received an inconsistent direction from the holders of a majority in principal amount of all outstanding debt securities of the relevant series during that period.
These limitations do not apply to a suit instituted by the security holder for the enforcement of payment of the principal or interest on a debt security on or after the respective due dates.
We will file annually with the trustee on or before March 31 in each year a written statement of certain of our officers certifying that, to their knowledge, we have not defaulted on our covenants under the indenture or else specifying any default that exists.
For any series of debt securities that is a series of original issue discount securities the prospectus supplement will contain provisions for the acceleration of the maturity of a portion of the principal amount of such original issue discount securities.
Modification of the Indenture and Waiver
There are three types of changes we can make to the indenture and any series of the debt securities.
Changes not requiring approval. The first type of change does not require any vote by holders of debt securities. The security holder’s consent is not required to do any of the following:
· to transfer or pledge any property or assets to the trustee as security for any series of the debt securities;
· to evidence the succession of any successor corporation to us as described under “Mergers and Similar Events” above;
· to evidence the succession of any successor trustee under the indenture or to add to or change any provisions of the indenture as necessary to provide for the appointment of an additional trustee or trustees;
· to add to our covenants or to add additional events of default for the benefit of the holders of any series of the debt securities;
· to cure any ambiguity or to correct or supplement any provision of the indenture that may be defective or inconsistent with any other provision of the indenture; or
· to make any other provisions with respect to matters or questions arising under the indenture as our board of directors may deem necessary or desirable and that shall not adversely affect the interests of holders of any series of the debt securities in any material respect.
Changes requiring the approval of a majority of holders. The second type of change to the indenture and the debt securities requires a vote in favor by holders of debt securities owning at least a majority of the principal amount of all series of debt securities then outstanding and affected by such charge (each affected series voting as a separate class). In this manner, any provision of the indenture or any series of debt securities may be changed or eliminated unless the provision relates to a matter that requires the consent of each affected holder as discussed below.
Changes requiring the security holder’s approval. Third, there are changes that cannot be made to the security holder’s debt securities without the specific approval of each affected holder. The security holder’s consent is required before we could do any of the following:
· extend the final maturity of a debt security;
· reduce the principal amount of a debt security;
· reduce the rate or extend the time of payment of any interest on a debt security;
· reduce any amount payable on redemption of a debt security;
· reduce the amount of principal due and payable upon an acceleration of the maturity or provable in bankruptcy of a debt security issued at an original issue discount;
· impair the security holder’s right to sue for payment;
· impair any right of repayment at the option of the holder;
· reduce the percentage of holders of debt securities whose consent is needed to modify or amend the indenture; or
· change in any manner adverse to the holders of the debt securities our obligations relating to the payment of principal and interest, and sinking fund payments.
Satisfaction, Discharge and Defeasance
We may terminate our repayment and obligations on the debt securities, when:
· we have paid or caused to be paid the principal of and interest, if any, then due and payable on all outstanding debt securities of any series;
· we have delivered to the trustee for cancellation all outstanding debt securities of any series; or
· all the outstanding debt securities of the series that have not been delivered to the trustee for cancellation have become or will become due and payable within one year and we have made arrangements satisfactory to the trustee for the giving of notice of redemption by the trustee in our name, and we have deposited with the trustee sufficient funds to pay and discharge the entire indebtedness on the series of debt securities to pay principal and interest, if any.
We may legally release ourselves from any payment or other obligations on the debt securities, except for various obligations described below, if we, in addition to other actions, put in place the following arrangements for the security holder:
· we must deposit in trust for the security holder’s benefit and the benefit of all other direct holders of the debt securities a combination of money and government obligations that will generate enough cash to make interest, principal and any other payments on the debt securities on their various due dates; and
· we must deliver to the trustee a legal opinion of our counsel to the effect that the holders of the debt securities of that series will not recognize gain or loss for US federal income tax purposes as a result of the defeasance and will be subject to the same federal income tax as would be the case if the defeasance did not occur.
However, even if we take these actions, a number of our obligations relating to the debt securities will remain. These include the following obligations:
· to register the transfer and exchange of debt securities and our right of optional redemption, if any;
· to replace mutilated, defaced, destroyed, lost or stolen debt securities;
· to pay principal and interest, if any, on the original stated due dates and any remaining rights of the holders to receive sinking fund payments, if any, from funds deposited with the trustee;
· immunities of the trustee; and
· to hold money for payment in trust.
Government obligation means securities that are:
· direct obligations of the US or any foreign government of a sovereign state for the payment of which is pledged by the full faith and credit of the US or such foreign government; or
· obligations of an entity controlled or supervised by and acting as an agency or instrumentality of the US or any foreign government of a sovereign state the payment of which is unconditionally guaranteed as a full faith and credit obligation of the US or such foreign government;
and are not callable or redeemable at the option of the issuer. Government obligation also includes:
· a depositary receipt issued by a bank or trust company as custodian for these government obligations, or specific payment of interest on or principal of these government obligations, held by such custodian for the account of the holder of a depositary receipt, provided that (except as required by law) such custodian is not authorized to make any deductions from the amount payable to the holder of such depositary receipt from any amount received by the custodian in respect of these government obligations, or the specific payment of interest on or principal of these government obligations, evidenced by such depositary receipt.
Notices
We and the trustee will send notices only to direct holders, using their addresses registered in the trustee’s records.
Regardless of who acts as paying agent, all money that we pay to a paying agent that remains unclaimed at the end of two years after the amount is due to direct holders of debt securities will be repaid to us. After that two-year
period, the security holder may look only to us for payment and not to the trustee, any other paying agent or anyone else.
Governing Law
The debt securities and the indenture will be governed by and construed in accordance with the laws of the State of New York.
Concerning the Trustee
The Bank of New York Mellon acts as the trustee with respect to certain debt securities of certain of our subsidiaries.
If an event of default occurs, or an event occurs that would be an event of default if the requirements for either giving us notice or our default having to exist for a specified time period were disregarded, the trustee may be considered to have a conflicting interest with respect to the debt securities or the indenture for purposes of the Trust Indenture Act of 1939. In that case, the trustee may be required to resign as trustee under the applicable indenture and we would be required to appoint a successor trustee.
Exhibit 4.7
EXECUTION VERSION
AGREEMENT AND PLAN OF MERGER
dated as of
December 12, 2020
among
ASTRAZENECA PLC,
DELTA OMEGA SUB HOLDINGS INC.,
DELTA OMEGA SUB HOLDINGS INC. 1,
DELTA OMEGA SUB HOLDINGS LLC 2
and
ALEXION PHARMACEUTICALS, INC.
TABLE OF CONTENTS
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Page
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ARTICLE I DEFINITIONS
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2
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Section 1.01
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Definitions
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2
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Section 1.02
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Other Definitional and Interpretative Provisions
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20
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ARTICLE II CLOSING; THE MERGER
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21
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Section 2.01
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Closing
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21
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Section 2.02
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The Mergers
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22
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Section 2.03
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Conversion and Cancellation of Shares in the First Merger
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23
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Section 2.04
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Conversion of Shares in the Second Merger
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23
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Section 2.05
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Surrender and Payment
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24
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Section 2.06
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Dissenting Shares
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27
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Section 2.07
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Company Equity Awards
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27
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Section 2.08
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Adjustments
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29
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Section 2.09
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Fractional ADSs
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30
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Section 2.10
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Withholding Rights
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30
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Section 2.11
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Lost Certificates
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30
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Section 2.12
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Further Assurances
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30
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ARTICLE III ORGANIZATIONAL DOCUMENTS; DIRECTORS AND OFFICERS
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30
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Section 3.01
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Certificate of Incorporation and Bylaws of the First Surviving Corporation; Certificate of Formation and Limited Liability Company Agreement of the Surviving Company
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30
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Section 3.02
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Directors and Officers of the First Surviving Corporation and Surviving Company
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31
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ARTICLE IV REPRESENTATIONS AND WARRANTIES OF THE COMPANY
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31
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Section 4.01
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Corporate Existence and Power
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31
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Section 4.02
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Corporate Authorization
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32
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Section 4.03
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Governmental Authorization
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32
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Section 4.04
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Non-contravention
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32
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Section 4.05
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Capitalization
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33
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Section 4.06
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Subsidiaries
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34
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Section 4.07
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SEC Filings and the Sarbanes-Oxley Act
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34
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Section 4.08
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Financial Statements and Financial Matters
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36
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Section 4.09
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Disclosure Documents
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36
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Section 4.10
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Absence of Certain Changes
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37
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Section 4.11
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No Undisclosed Material Liabilities
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38
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Section 4.12
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Litigation
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38
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Section 4.13
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Permits
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38
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Section 4.14
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Compliance with Laws
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39
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Section 4.15
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Regulatory Matters
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39
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Section 4.16
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Material Contracts
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42
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Section 4.17
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Taxes
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45
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i
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Section 4.18
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Employees and Employee Benefit Plans
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46
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Section 4.19
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Labor Matters
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48
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Section 4.20
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Intellectual Property
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49
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Section 4.21
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Properties
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51
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Section 4.22
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Environmental Matters
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52
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Section 4.23
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FCPA; Anti-Corruption; Sanctions
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52
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Section 4.24
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Insurance
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53
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Section 4.25
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Transactions with Affiliates
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53
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Section 4.26
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Antitakeover Statutes
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53
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Section 4.27
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Opinions of Financial Advisors
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53
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Section 4.28
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Finders’ Fees
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54
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Section 4.29
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No Ownership of Parent Ordinary Shares
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54
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Section 4.30
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No Other Representations and Warranties
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54
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ARTICLE V REPRESENTATIONS AND WARRANTIES OF PARENT, BIDCO AND MERGER SUBS
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55
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Section 5.01
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Corporate Existence and Power
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55
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Section 5.02
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Corporate Authorization
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55
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Section 5.03
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Governmental Authorization
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56
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Section 5.04
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Non-contravention
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57
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Section 5.05
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Capitalization
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57
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Section 5.06
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Subsidiaries
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58
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Section 5.07
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SEC Filings and the Sarbanes-Oxley Act
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59
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Section 5.08
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Financial Statements and Financial Matters
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61
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Section 5.09
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Disclosure Documents
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61
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Section 5.10
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Absence of Certain Changes
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62
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Section 5.11
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No Undisclosed Material Liabilities
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62
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Section 5.12
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Litigation
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62
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Section 5.13
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Permits
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63
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Section 5.14
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Compliance with Laws
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63
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Section 5.15
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Regulatory Matters.
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63
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Section 5.16
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Specified Contracts
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65
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Section 5.17
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Intellectual Property
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65
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Section 5.18
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Finders’ Fees
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66
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Section 5.19
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No Ownership of Company Common Stock
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66
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Section 5.20
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Reorganization
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66
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Section 5.21
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Financing
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66
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Section 5.22
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No Other Representations and Warranties
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67
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ARTICLE VI COVENANTS OF THE COMPANY
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67
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Section 6.01
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Conduct of the Company
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67
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Section 6.02
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No Solicitation by the Company
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73
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Section 6.03
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Financing Assistance
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76
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ARTICLE VII COVENANTS OF PARENT, BIDCO AND MERGER SUBS
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79
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Section 7.01
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Conduct of Parent
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79
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Section 7.02
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No Solicitation by Parent
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81
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ii
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Section 7.03
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Obligations of Merger Subs
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84
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Section 7.04
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Director and Officer Liability
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84
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Section 7.05
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Employee Matters
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86
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Section 7.06
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Financing
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88
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Section 7.07
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CVR Agreement
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88
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ARTICLE VIII COVENANTS OF PARENT, MERGER SUBS AND THE COMPANY
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89
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Section 8.01
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Access to Information; Confidentiality
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89
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Section 8.02
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Filings, Consents and Approvals
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90
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Section 8.03
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Certain Filings; SEC Matters
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92
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Section 8.04
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Company Stockholder Meeting; Parent Shareholder Meeting
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95
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Section 8.05
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Public Announcements
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97
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Section 8.06
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Section 16 Matters
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98
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Section 8.07
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Transaction Litigation
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98
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Section 8.08
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Stock Exchange Delisting
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99
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Section 8.09
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Governance; Rare Diseases Business
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99
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Section 8.10
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State Takeover Statutes
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99
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Section 8.11
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Certain Tax Matters
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99
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ARTICLE IX CONDITIONS TO THE MERGERS
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100
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Section 9.01
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Conditions to the Obligations of Each Party
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100
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Section 9.02
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Conditions to the Obligations of Parent, Bidco and each Merger Sub
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101
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Section 9.03
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Conditions to the Obligations of the Company
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102
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ARTICLE X TERMINATION
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103
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Section 10.01
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Termination
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103
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Section 10.02
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Effect of Termination
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105
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Section 10.03
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Termination Payment
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106
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ARTICLE XI MISCELLANEOUS
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110
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Section 11.01
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Notices
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110
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Section 11.02
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Survival
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112
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Section 11.03
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Amendments and Waivers
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112
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Section 11.04
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Expenses
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112
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Section 11.05
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Disclosure Schedule References and SEC Document References
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113
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Section 11.06
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Binding Effect; Benefit; Assignment
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113
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Section 11.07
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Governing Law
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114
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Section 11.08
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Jurisdiction/Venue
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114
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Section 11.09
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WAIVER OF JURY TRIAL
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114
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Section 11.10
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Counterparts; Effectiveness
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115
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Section 11.11
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Entire Agreement
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115
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Section 11.12
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Severability
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115
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Section 11.13
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Specific Performance
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115
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Section 11.14
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Financing Provisions
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116
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iii
EXHIBITS
Exhibit A – Form of Parent Tax Certificate
Exhibit B – Form of Company Tax Certificate
iv
AGREEMENT AND PLAN OF MERGER
This AGREEMENT AND PLAN OF MERGER (this “Agreement”), dated as of December 12, 2020, is by and among AstraZeneca PLC, a public limited company incorporated under the laws of England and Wales (“Parent”), Delta Omega Sub Holdings Inc., a Delaware corporation and a wholly owned Subsidiary of Parent (“Bidco”), Delta Omega Sub Holdings Inc. 1, a Delaware corporation and a direct, wholly owned Subsidiary of Bidco (“Merger Sub I”), Delta Omega Sub Holdings LLC 2, a Delaware limited liability company and a direct, wholly owned Subsidiary of Bidco (“Merger Sub II” and, together with Merger Sub I, “Merger Subs”) and Alexion Pharmaceuticals, Inc., a Delaware corporation (the “Company”).
WHEREAS, the Board of Directors of the Company has unanimously (i) determined that this Agreement and the transactions contemplated hereby (including the Mergers) are fair to and in the best interests of the Company and its stockholders, (ii) approved, adopted and declared advisable this Agreement and the transactions contemplated hereby (including the Mergers), (iii) directed that the adoption of this Agreement be submitted to a vote at a meeting of the Company’s stockholders, and (iv) recommended the adoption of this Agreement by the Company’s stockholders;
WHEREAS, the Board of Directors (or a duly and unaninmously authorized committee of the Board of Directors) of Parent has unanimously (i) determined that this Agreement and the transactions contemplated hereby would most likely promote the success of Parent for the benefit of its shareholders as a whole, (ii) approved this Agreement and the transactions contemplated hereby, (iii) resolved that the approval of this Agreement and the transactions contemplated hereby be submitted to a vote at a meeting of Parent’s shareholders, and (iv) resolved to recommend the approval of this Agreement and the transactions contemplated hereby by Parent’s shareholders;
WHEREAS, the Boards of Directors of Bidco and Merger Sub I have unanimously (i) determined that this Agreement and the transactions contemplated hereby (including the Mergers) are fair to and in the best interests of their respective companies and stockholders, (ii) approved, adopted and declared advisable this Agreement and the transactions contemplated hereby (including the Mergers), and (iii) directed that this Agreement be submitted to their respective stockholders for its approval and adoption;
WHEREAS, the Board of Directors of Merger Sub II has unanimously (i) determined that this Agreement and the transactions contemplated hereby (including the Mergers) are fair to and in the best interests of such Merger Sub II and its sole member, (ii) approved, adopted and declared advisable this Agreement and the transactions contemplated hereby (including the Mergers), and (iii) directed that this Agreement be submitted to the sole member of Merger Sub II for its approval and adoption;
WHEREAS, for U.S. federal income tax purposes, it is intended that (i) the Mergers, taken together, shall qualify (A) as a “reorganization” within the meaning of Section 368(a) of the Code and (B) for an exception to the general rule of Section 367(a)(1) of the Code, and (ii) this Agreement be, and is hereby adopted as, a “plan of reorganization” for
purposes of Sections 354, 361 and 368 of the Code and the Treasury Regulations promulgated thereunder; and
WHEREAS, the Company, Parent, Bidco, Merger Sub I and Merger Sub II desire to make certain representations, warranties, covenants and agreements specified in this Agreement in connection with the transactions contemplated hereby (including the Mergers) and to prescribe certain conditions to the transactions contemplated hereby (including the Mergers).
NOW, THEREFORE, in consideration of the foregoing and the representations, warranties, covenants and agreements contained in this Agreement, the parties agree as follows:
ARTICLE I
DEFINITIONS
Section 1.01 Definitions.
(a) As used in this Agreement, the following terms have the following meanings:
“1933 Act” means the U.S. Securities Act of 1933.
“1934 Act” means the U.S. Securities Exchange Act of 1934.
“Affiliate” means, with respect to any Person, any other Person directly or indirectly controlling, controlled by, or under common control with such Person. The term “control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management and policies of a Person, whether through the ownership of voting securities, by contract or otherwise, and the terms “controlled” and “controlling” have meanings correlative thereto.
“Antitrust Laws” means the Sherman Act of 1890, the Clayton Act of 1914, the Federal Trade Commission Act of 1914, the HSR Act and all other federal, state and foreign Applicable Laws in effect from time to time that are designed or intended to prohibit, restrict or regulate actions having the purpose or effect of monopolization, lessening of competition or restraint of trade or regulating foreign investment.
“Applicable Law(s)” means, with respect to any Person, any federal, state, foreign or local law (statutory, common or otherwise), constitution, treaty, convention, ordinance, code, rule, regulation, executive order, Order or other similar requirement enacted, adopted, promulgated or applied by a Governmental Authority that is binding on or applicable to such Person, as the same may be amended from time to time unless expressly specified otherwise in this Agreement. References to “Applicable Law” or “Applicable Laws” shall be deemed to include the FDCA, the rules, regulations and administrative policies of or promulgated under the FDA, the PHSA, the EMA, the Bribery Legislation, the Sanctions Laws, the Antitrust Laws and the U.K. Code.
2
“Bribery Legislation” means all Applicable Laws relating to the prevention of bribery, corruption and money laundering, including the United States Foreign Corrupt Practices Act of 1977, the Organization For Economic Co-operation and Development Convention on Combating Bribery of Foreign Public Officials in International Business Transactions and related implementing legislation, the U.K. Bribery Act 2010 and the U.K. Proceeds of Crime Act 2002.
“Business Day” means a day, other than Saturday, Sunday or other day on which commercial banks in New York, New York or London, England are authorized or required by Applicable Law to remain closed.
“CA 2006” means the U.K. Companies Act 2006 and any statutory instruments made under it, and every statutory modification or re-enactment thereof for the time being in force.
“Code” means the U.S. Internal Revenue Code of 1986.
“Companies House” means the U.K. Registrar of Companies.
“Company Acquisition Proposal” means any indication of interest, proposal or offer from any Person or Group, other than Parent and its Subsidiaries, relating to any (i) direct or indirect acquisition (whether in a single transaction or a series of related transactions) of assets of the Company or any of its Subsidiaries (including securities of Subsidiaries) equal to 20% or more of the consolidated assets of the Company, or to which 20% or more of the revenues or earnings of the Company on a consolidated basis are attributable for the most recent fiscal year for which audited financial statements are then available, (ii) direct or indirect acquisition or issuance (whether in a single transaction or a series of related transactions) of 20% or more of the outstanding voting power of the Company or the outstanding shares of Company Common Stock, (iii) tender offer or exchange offer that, if consummated, would result in such Person or Group beneficially owning 20% or more of the outstanding voting power of the Company or the outstanding shares of Company Common Stock, or (iv) merger, consolidation, share exchange, business combination, joint venture, reorganization, recapitalization, liquidation, dissolution or similar transaction or series of related transactions involving the Company or any of its Subsidiaries, under which such Person or Group or, in the case of clause (B), the stockholders or equityholders of any such Person or Group would acquire, directly or indirectly, (A) assets equal to 20% or more of the consolidated assets of the Company, or to which 20% or more of the revenues or earnings of the Company on a consolidated basis are attributable for the most recent fiscal year for which audited financial statements are then available, or (B) beneficial ownership of 20% or more of the outstanding voting power of the Company or the surviving or resulting entity in such transaction, 20% or more of the outstanding equity or voting securities of the surviving or resulting entity in such transaction or 20% or more of the outstanding shares of Company Common Stock.
“Company Balance Sheet” means the unaudited consolidated balance sheet of the Company and its Subsidiaries as of September 30, 2020, and the footnotes to such consolidated balance sheet, in each case set forth in the Company’s report on Form 10-Q for the fiscal quarter ended September 30, 2020.
3
“Company Balance Sheet Date” means September 30, 2020.
“Company Common Stock” means the common stock, par value $0.0001 per share, of the Company.
“Company Disclosure Schedule” means the Company Disclosure Schedule delivered to Parent on the date of this Agreement.
“Company Employee Plan” means any (i) “employee benefit plan” as defined in Section 3(3) of ERISA, (ii) compensation, employment, consulting, severance, termination protection, change in control, transaction bonus, retention or similar plan, agreement, arrangement, program or policy or (iii) other plan, agreement, arrangement, program or policy providing for compensation, bonuses, profit-sharing, equity or equity-based compensation or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangement), medical, dental, vision, prescription or fringe benefits, life insurance, relocation or expatriate benefits, perquisites, disability or sick leave benefits, employee assistance program, workers’ compensation, supplemental unemployment benefits or post-employment or retirement benefits (including compensation, pension, health, medical or insurance benefits), in each case whether or not written (A) that is sponsored, maintained, administered, contributed to or entered into by the Company or any of its Subsidiaries for the current or future benefit of any director, officer, employee or individual consultant (including any former director, officer, employee or individual consultant) of the Company or any of its Subsidiaries or (B) for which the Company or any of its Subsidiaries has any direct or indirect liability and, in each case, other than any statutory plan, statutory program and other statutory arrangement.
“Company Equity Awards” means the Company Stock Options, the Company RSU Awards and the Company PSU Awards.
“Company ESPP” means the Company’s 2015 Employee Stock Purchase Plan.
“Company Intellectual Property” means the Intellectual Property Rights owned or purported to be owned by the Company or its Subsidiaries.
“Company Intervening Event” means any material event, change, effect, development or occurrence that (i) was not known or reasonably foreseeable to the Board of Directors of the Company as of or prior to the date of this Agreement and (ii) does not relate to or involve (A) any Company Acquisition Proposal, (B) any change in the market price or trading volume of the Company Common Stock (provided, that the underlying cause of such change may be taken into account, to the extent otherwise permitted by this definition), (C) any event, change or circumstance relating to Parent or any of its Affiliates (unless such event, change or circumstance constitutes a Parent Material Adverse Effect), (D) any change in conditions generally (including any regulatory changes) affecting the industries or sectors in which the Company, Parent or any of their respective Subsidiaries operates, (E) clearance of the Mergers under the Antitrust Laws or any matters relating thereto or arising therefrom, (F) the taking of any action required or expressly contemplated by this Agreement or (G) the fact, in and of itself, that the Company or any of its Subsidiaries has met or exceeded any internal or published
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projections, forecasts, estimates or predictions, revenues, earnings or other financial or operating metrics for any period (provided, that the underlying cause thereof may be taken into account, to the extent otherwise permitted by this definition).
“Company Material Adverse Effect” means any event, change, effect, circumstance, fact, development or occurrence that has a material adverse effect on the business, operations or financial condition of the Company and its Subsidiaries, taken as a whole; provided, that no event, change, effect, circumstance, fact, development or occurrence to the extent resulting from, arising out of, or relating to any of the following shall be deemed to constitute a Company Material Adverse Effect or shall be taken into account in determining whether there has been or would reasonably be expected to be a Company Material Adverse Effect: (i) any changes in general United States or global economic conditions or other general business, financial or market conditions, (ii) any changes in conditions generally affecting the industries in which the Company or any of its Subsidiaries operates, (iii) fluctuations in the value of any currency, (iv) any decline, in and of itself, in the market price or trading volume of the Company Common Stock (provided, that any events, changes, effects, circumstances, facts, developments or occurrences giving rise to or contributing to such decline that are not otherwise excluded from the definition of Company Material Adverse Effect may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), (v) regulatory, legislative or political conditions or conditions in securities, credit, financial, debt or other capital markets, in each case in the United States or any foreign jurisdiction, (vi) any failure, in and of itself, by the Company or any of its Subsidiaries to meet any internal or published projections, forecasts, estimates or predictions, revenues, earnings or other financial or operating metrics for any period (provided, that any events, changes, effects, circumstances, facts, developments or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of Company Material Adverse Effect may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), (vii) the execution and delivery of this Agreement, the public announcement or the pendency of this Agreement or the pendency or consummation of the transactions contemplated by this Agreement (including the Mergers), the taking of any action required or expressly contemplated by this Agreement (other than, to the extent not excluded by another clause of this definition, the Company’s compliance with its obligations pursuant to Section 6.01(a), except to the extent that Parent has unreasonably withheld a consent under Section 6.01(a)) or the identity of, or any facts or circumstances relating to Parent or any of its Subsidiaries, including the impact of any of the foregoing on the relationships, contractual or otherwise, of the Company or any of its Subsidiaries with Governmental Authorities, customers, suppliers, partners, officers, employees or other material business relations (provided, that the foregoing shall not apply with respect to any representation or warranty that is expressly intended to address the consequences of the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby (including Section 4.04(c)) or with respect to the condition to Closing contained in Section 9.02(b), to the extent it relates to such representations and warranties), (viii) any adoption, implementation, promulgation, repeal, modification, amendment, authoritative interpretation, change or proposal of any Applicable Law (or the interpretation thereof) of or by any Governmental Authority, (ix) any changes or prospective changes in GAAP (or authoritative interpretations thereof), (x) geopolitical conditions, the outbreak or escalation of hostilities, civil or political unrest, any acts of war, sabotage, cyberattack or terrorism, or any escalation or worsening of any such acts
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of war, sabotage, cyberattack or terrorism threatened or underway as of the date of this Agreement, (xi) any reduction in the credit rating of the Company or any of its Subsidiaries (it being understood and agreed that any events, changes, effects, circumstances, facts, developments or occurrences giving rise to or contributing to such reduction that are not otherwise excluded from the definition of Company Material Adverse Effect may be taken into account in determining whether there has been, or would reasonably be expected to be, a Company Material Adverse Effect), (xii) any epidemic, plague, pandemic or other outbreak of illness or public health event, hurricane, earthquake, flood, calamity or other natural disasters, acts of God or any change resulting from weather conditions (or any worsening of any of the foregoing), including the response of governmental and non-governmental entities, including any impact on new drug approval processes or drug trials, (xiii) any claims, actions, suits or proceedings arising from allegations of a breach of fiduciary duty or violation of Applicable Law relating to this Agreement or the transactions contemplated hereby (including the Mergers) or (xiv) any regulatory, preclinical, clinical, pricing or reimbursement, or manufacturing events, changes, effects, developments or occurrences relating to any Company Product or any product of a competitor of the Company, including (A) any suspension, rejection or refusal of, any request to refile or any delay in obtaining or making any regulatory application or filing, (B) any actions, requests, recommendations or decisions of (or the failure to take or delay in taking any actions or make any requests, recommendations or decisions by) any Governmental Authority, (C) any recommendations, statements or other pronouncements made, published or proposed by professional medical organizations, (D) any pre-clinical or clinical studies, tests or results or announcements thereof, (E) any decision or action by any Governmental Authority (or other payor) with respect to pricing and/or reimbursement, (F) any delay, hold or termination of any clinical trial or any delay, hold or termination of any planned application for marketing approval, (G) any delay, hold or termination of approval with respect to the manufacture, processing, packing or testing of any Company Product or with respect to any manufacturing facilities, or (H) any increased incidence or severity of any previously identified side effects, adverse effects, adverse events or safety observations or reports of new side effects, adverse effects, adverse events or safety observations, but excluding in the case of this clause (xiv) side effects, adverse effects, adverse events, safety observations or manufacturing events that result in a broad based product recall of, or withdrawal from the market of, ULTOMIRIS, SOLIRIS or STRENSIQ, except that the matters referred to in clauses (i), (ii), (iv), (v), (viii), (ix), (x) or (xii) may be taken into account (to the extent not excluded by another clause of this definition) to the extent that the impact of any such event, change, effect, circumstance, fact, development or occurrence on the Company and its Subsidiaries, taken as a whole, is disproportionately adverse relative to the adverse impact of such event, change, effect, circumstance, fact, development or occurrence on the operations in the biopharmaceutical industry of other participants in such industry, and then solely to the extent of such disproportionality.
“Company Product” means each product or product candidate that is being researched, tested, developed, commercialized, manufactured, sold or distributed by or on behalf of the Company or any of its Subsidiaries.
“Company Stock Plans” means any Company Employee Plan providing for equity or equity-based compensation, including the Company’s 2017 Incentive Plan, the Company’s Amended and Restated 2004 Incentive Plan, the Portola Pharmaceuticals, Inc. 2013 Equity
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Incentive Plan (as assumed by the Company), and the Portola Pharmaceuticals, Inc. Amended and Restated Inducement Plan (as assumed by the Company).
“Company Superior Proposal” means any bona fide, written Company Acquisition Proposal made after the date of this Agreement, in circumstances not involving a breach of this Agreement, from any Person (other than Parent and its Subsidiaries or Affiliates) to acquire, directly or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business combination or similar acquisition transaction, (i) all or substantially all of the non-”cash or cash equivalent” assets of the Company or (ii) more than fifty percent (50%) of the outstanding shares of Company Common Stock on terms that the Board of Directors of the Company determines in good faith, after consultation with its financial advisor and outside legal counsel, and taking into account all the terms and conditions of the Company Acquisition Proposal that the Board of Directors of the Company considers to be appropriate (including the identity of the Person making the Company Acquisition Proposal and the expected timing and likelihood of consummation, any governmental or other approval requirements (including divestitures and entry into other commitments and limitations), break-up fees, expense reimbursement provisions, conditions to consummation and availability of necessary financing (including, if a cash transaction (in whole or in part), the availability of such funds and the nature, terms and conditionality of any committed financing)), would result in a transaction that is more favorable to the Company’s stockholders than the Mergers and (A) is not subject to any financing or due diligence conditionality and (B) is reasonably capable of being completed on the terms proposed.
“Consent” means any consent, approval, waiver, license, permit, variance, exemption, franchise, clearance, authorization, acknowledgment, Order or other confirmation.
“Contract” means any contract, agreement, obligation, understanding or instrument, lease, license or other legally binding commitment or undertaking of any nature that is or is intended to be legally binding; provided, that “Contracts” shall not include any Company Employee Plan or Parent Employee Plan.
“Credit Agreement” means the Amended and Restated Credit Agreement, dated as of June 7, 2018, by and among Alexion Pharmaceuticals, Inc., as administrative borrower, the subsidiary borrowers party thereto, the lenders and other financial institutions party thereto and Bank of America, N.A., as administrative agent.
“CREST” means the relevant system (as defined in the United Kingdom Uncertificated Securities Regulations 2001) in respect of which Euroclear UK & Ireland Limited is the Operator (as defined in such regulations).
“CVR” means a CVR, as defined in the CVR Agreement (as in effect as of the date of this Agreement).
“CVR Agreement” means the Contingent Value Rights Agreement, dated as of January 28, 2020, among the Company and Computershare Inc.
“Deposit Agreement” means the Amended and Restated Deposit Agreement, dated as of February 6, 2020, by and among Parent, Deutsche Bank Trust Company Americas,
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acting in its capacity as depositary (the “ADS Depository”), and all holders and beneficial owners of Parent ADSs.
“DTRs” means the disclosure guidance and transparency rules made by the FCA acting under Part VI of FSMA (as set out in the FCA Handbook published by the FCA).
“Environmental Law” means any Applicable Law relating to (i) the protection, preservation or restoration of the environment (including air, surface water, groundwater, drinking water supply, surface land, subsurface land, plant and animal life or any other natural resource), or (ii) the exposure to, or the use, storage, recycling, treatment, generation, transportation, processing, handling, labeling, production, release or disposal of Hazardous Substances.
“Environmental Permits” means all permits, licenses, franchises, consents (including consents required by Contract), variances, exemptions, orders, certificates, approvals and other similar authorizations of Governmental Authorities required by Environmental Law and affecting, or relating to, the business of the Company or any of its Subsidiaries, or the business of Parent or any of its Subsidiaries, as applicable.
“Equity Award Exchange Ratio” means the sum, rounded to the four decimal places, equal to (i) the Exchange Ratio, plus (ii) the quotient of (A) the Cash Consideration, divided by (B) the Parent ADS Price.
“Equity Securities” means, with respect to any Person, (i) any shares of capital stock or other voting securities of, or other ownership interest in, such Person, (ii) any securities of such Person convertible into or exchangeable for shares of capital stock or other voting securities of, or other ownership interests in, such Person or any of its Subsidiaries, (iii) any warrants, calls, options or other rights to acquire from such Person, or other obligations of such Person to issue, any capital stock or other voting securities of, or other ownership interests in, or securities convertible into or exchangeable for capital stock or other voting securities of, or other ownership interests in, such Person or any of its Subsidiaries, or (iv) any restricted shares, stock appreciation rights, performance units, contingent value rights, “phantom” stock or similar securities or rights issued by or with the approval of such Person that are derivative of, or provide economic benefits based, directly or indirectly, on the value or price of, any capital stock or other voting securities of, other membership, partnership or other ownership interests in, or any business, products or assets of, such Person or any of its Subsidiaries.
“ERISA” means the Employee Retirement Income Security Act of 1974.
“ERISA Affiliate” means, with respect to any entity, any other entity that, together with such entity, would be treated as a single employer under Section 414 of the Code.
“Excepted Stockholder” means any stockholder of the Company that would be a “five-percent transferee shareholder” of Parent within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii) following the Mergers that does not enter into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8(c).
“FCA” means the United Kingdom Financial Conduct Authority.
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“FCPA” means the Foreign Corrupt Practices Act of 1977.
“Filing” means any registration, petition, statement, application, schedule, form, declaration, notice, notification, report, submission or other filing.
“Financing Sources” means the Persons that have entered into or will enter into commitment letters, credit agreements, indentures or other agreements with Parent and/or one or more subsidiaries of Parent in connection with the Debt Financing, including any applicable agents, arrangers, lenders, underwriters, initial purchasers and other entities that provide or arrange all or part of the Debt Financing and their respective Representatives, Affiliates, successors and assigns; provided, that neither Parent nor any Affiliate of Parent shall be a Financing Source.
“FRC” means the U.K. Financial Reporting Council.
“FSMA” means the U.K. Financial Services and Markets Act 2000.
“GAAP” means United States generally accepted accounting principles.
“Governmental Authority” means any transnational, domestic or foreign federal, state or local governmental, regulatory or administrative authority, department, court, agency, commission or official, including any political subdivision thereof, or any non-governmental self-regulatory agency, commission or authority and any arbitral tribunal.
“Group” means a “group” as defined in Section 13(d) of the 1934 Act.
“Hazardous Substance” means any substance, material or waste that is listed, defined, designated or classified as hazardous, toxic, radioactive, dangerous or a “pollutant” or “contaminant” or words of similar meaning under any Environmental Law or that is otherwise regulated by any Governmental Authority with jurisdiction over the environment or natural resources, including petroleum or any derivative or byproduct thereof, radon, radioactive material, asbestos or asbestos-containing material, urea formaldehyde, foam insulation or polychlorinated biphenyls.
“HSR Act” means the Hart-Scott-Rodino Antitrust Improvements Act of 1976.
“IFRS” means International Financial Reporting Standards as issued by the International Accounting Standards Board and as adopted by the European Union.
“Intellectual Property Rights” means any and all common law or statutory rights anywhere in the world arising under or associated with: (i) patents, patent applications (including all divisions, continuations, continuations-in-part, reissues and reexaminations, and any extensions and counterparts of patents), statutory invention registrations, registered designs, and similar or equivalent rights in inventions (“Patents”); (ii) trademarks, service marks, trade dress, trade names, logos, and other designations or indicia of origin, and all registrations and applications relating to the foregoing (“Marks”); (iii) domain names, uniform resource locators, Internet Protocol addresses, social media handles, and other names, identifiers, and locators associated with Internet addresses, sites, and services; (iv) registered and unregistered copyrights
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and any other equivalent rights in works of authorship (whether or not registerable, including rights in software as a work of authorship) and any other related rights of authors, all registrations and applications to register the same, and all renewals, extensions, reversions and restorations thereof (“Copyrights”); (v) trade secrets and industrial secret rights, and rights in know-how, data and confidential or proprietary business or technical information, including formulations, formulae, technical, research, clinical and other data, in each case, that derives independent economic value, whether actual or potential, from not being known to other Persons (“Trade Secrets”); and (vi) other similar or equivalent intellectual property or proprietary rights anywhere in the world.
“knowledge” means (i) with respect to the Company, the actual knowledge of those individuals set forth in Section 1.01 of the Company Disclosure Schedule and (ii) with respect to Parent, the actual knowledge of those individuals set forth in Section 1.01 of the Parent Disclosure Schedule. None of the individuals set forth in Section 1.01 of the Company Disclosure Schedule or Section 1.01 of the Parent Disclosure Schedule shall have any personal liability or obligations regarding such knowledge.
“Licensed Intellectual Property” means any and all Intellectual Property Rights owned by a Third Party and licensed (including sublicensed) or otherwise granted to the Company of any of its Subsidiaries.
“Lien” means, with respect to any property or asset, any mortgage, lien, pledge, charge, security interest or other encumbrance of any kind in respect of such property or asset.
“Listing Rules” means the listing rules made by the FCA pursuant to Part VI of the FSMA and contained in the FCA’s publication of the same name.
“LSE” means London Stock Exchange plc.
“MAR” means Regulation (EU) No 596/2014 of the European Parliament and of the Council of 16 April 2014 on market abuse.
“Order” means any order, writ, decree, judgment, award, injunction, ruling, settlement or stipulation issued, promulgated, made, rendered or entered into by or with any Governmental Authority (in each case, whether temporary, preliminary or permanent).
“Parent Acquisition Proposal” means any indication of interest, proposal or offer from any Person or Group, other than the Company and its Subsidiaries, relating to any (i) direct or indirect acquisition (whether in a single transaction or a series of related transactions) of assets of Parent or any of its Subsidiaries (including securities of Subsidiaries) equal to 50% or more of the consolidated assets of Parent, or to which 50% or more of the revenues or earnings of Parent on a consolidated basis are attributable for the most recent fiscal year for which audited financial statements are then available, (ii) direct or indirect acquisition or issuance (whether in a single transaction or a series of related transactions) of 50% or more of the outstanding voting power of Parent or the Parent Ordinary Shares, (iii) tender offer or exchange offer that, if consummated, would result in such Person or Group beneficially owning 50% or more of the outstanding voting power of Parent or the Parent Ordinary Shares, or (iv) merger, consolidation, share exchange, business combination, scheme of arrangement, joint venture, reorganization, recapitalization,
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liquidation, dissolution or similar transaction or series of related transactions involving Parent or any of its Subsidiaries, under which such Person or Group or, in the case of clause (B), the stockholders or equityholders of any such Person or Group would acquire, directly or indirectly, (A) assets equal to 50% or more of the consolidated assets of Parent, or to which 50% or more of the revenues or earnings of Parent on a consolidated basis are attributable for the most recent fiscal year for which audited financial statements are then available, or (B) beneficial ownership of 50% or more of the outstanding voting power of Parent or the surviving or resulting entity in such transaction, 50% or more of the outstanding equity or voting securities of the surviving or resulting entity in such transaction or 50% or more of the outstanding Parent Ordinary Shares.
“Parent ADS” means an American depositary share of Parent representing a beneficial interest in 0.5 Parent Ordinary Shares.
“Parent ADS Price” means the average of the volume weighted averages of the trading prices of Parent ADSs on Nasdaq (as reported by Bloomberg L.P. or, if not reported therein, in another authoritative source mutually selected by Parent and the Company in good faith) on each of the five consecutive trading days ending on (and including) the trading day that is two trading days prior to the Closing Date.
“Parent Balance Sheet” means the unaudited consolidated balance sheet of Parent and its Subsidiaries as of September 30, 2020, and the footnotes to such consolidated balance sheet, in each case set forth in Parent Public Documents.
“Parent Balance Sheet Date” means September 30, 2020.
“Parent Disclosure Schedule” means the Parent Disclosure Schedule delivered to the Company on the date of this Agreement.
“Parent Employee Plan” means any (i) “employee benefit plan” as defined in Section 3(3) of ERISA, (ii) compensation, employment, consulting, severance, termination protection, change in control, transaction bonus, retention or similar plan, agreement, arrangement, program or policy or (iii) other plan, agreement, arrangement, program or policy providing for compensation, bonuses, profit-sharing, equity or equity-based compensation or other forms of incentive or deferred compensation, vacation benefits, insurance (including any self-insured arrangement), medical, dental, vision, prescription or fringe benefits, life insurance, relocation or expatriate benefits, perquisites, disability or sick leave benefits, employee assistance program, workers’ compensation, supplemental unemployment benefits or post-employment or retirement benefits (including compensation, pension, health, medical or insurance benefits), in each case whether or not written (A) that is sponsored, maintained, administered, contributed to or entered into by Parent or any of its Subsidiaries for the current or future benefit of any director, officer, employee or individual consultant (including any former director, officer, employee or individual consultant) of Parent or any of its Subsidiaries or (B) for which Parent or any of its Subsidiaries has any direct or indirect liability and, in each case, other than any statutory plan, statutory program and other statutory arrangement.
“Parent Equity Awards” means the Parent Stock Options, the Parent ADS Options, the Parent RSU Awards and the Parent PSU Awards.
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“Parent Intellectual Property” means the Intellectual Property Rights owned or purported to be owned by Parent or its Subsidiaries.
“Parent Intervening Event” means any material event, change, effect, development or occurrence that (i) was not known or reasonably foreseeable to the Board of Directors of Parent as of or prior to the date of this Agreement and (ii) does not relate to or involve (A) any Parent Acquisition Proposal, (B) any change in the market price or trading volume of the Parent ADSs or Parent Ordinary Shares (provided, that the underlying cause of such change may be taken into account, to the extent otherwise permitted by this definition), (C) any event, change or circumstance relating to the Company or any of its Affiliates (unless such event, change or circumstance constitutes a Company Material Adverse Effect), (D) any change in conditions generally (including any regulatory changes) affecting the industries or sectors in which the Company, Parent or any of their respective Subsidiaries operates, (E) clearance of the Mergers under the Antitrust Laws or any matters relating thereto or arising therefrom, (F) the taking of any action required or expressly contemplated by this Agreement or (G) the fact, in and of itself, that Parent or any of its Subsidiaries has met or exceeded any internal or published projections, forecasts, estimates or predictions, revenues, earnings or other financial or operating metrics for any period (provided, that the underlying cause thereof may be taken into account, to the extent otherwise permitted by this definition).
“Parent Material Adverse Effect” means any event, change, effect, circumstance, fact, development or occurrence that has a material adverse effect on the business, operations or financial condition of Parent and its Subsidiaries, taken as a whole; provided, that no event, change, effect, circumstance, fact, development or occurrence to the extent resulting from, arising out of, or relating to any of the following shall be deemed to constitute a Parent Material Adverse Effect or shall be taken into account in determining whether there has been or would reasonably be expected to be a Parent Material Adverse Effect: (i) any changes in general United States or global economic conditions or other general business, financial or market conditions, (ii) any changes in conditions generally affecting the industries in which Parent or any of its Subsidiaries operates, (iii) fluctuations in the value of any currency, (iv) any decline, in and of itself, in the market price or trading volume of the Parent Ordinary Shares (provided, that any events, changes, effects, circumstances, facts, developments or occurrences giving rise to or contributing to such decline that are not otherwise excluded from the definition of Parent Material Adverse Effect may be taken into account in determining whether there has been, or would reasonably be expected to be, a Parent Material Adverse Effect), (v) regulatory, legislative or political conditions or conditions in securities, credit, financial, debt or other capital markets, in each case in the United States or any foreign jurisdiction, (vi) any failure, in and of itself, by Parent or any of its Subsidiaries to meet any internal or published projections, forecasts, estimates or predictions, revenues, earnings or other financial or operating metrics for any period (provided, that any events, changes, effects, circumstances, facts, developments or occurrences giving rise to or contributing to such failure that are not otherwise excluded from the definition of Parent Material Adverse Effect may be taken into account in determining whether there has been, or would reasonably be expected to be, a Parent Material Adverse Effect), (vii) the execution and delivery of this Agreement, the public announcement or the pendency of this Agreement or the pendency or consummation of the transactions contemplated by this Agreement (including the Mergers), the taking of any action required or expressly contemplated by this Agreement (other than, to the extent not excluded by another clause of this definition,
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Parent’s compliance with its obligations pursuant to Section 7.01(a), except to the extent that the Company has unreasonably withheld a consent under Section 7.01(a)) or the identity of, or any facts or circumstances relating to the Company or any of its Subsidiaries, including the impact of any of the foregoing on the relationships, contractual or otherwise, of Parent or any of its Subsidiaries with Governmental Authorities, customers, suppliers, partners, officers, employees or other material business relations (provided, that the foregoing shall not apply with respect to any representation or warranty that is expressly intended to address the consequences of the execution, delivery or performance of this Agreement or the consummation of the transactions contemplated hereby (including Section 5.04(c)) or with respect to the condition to Closing contained in Section 9.03(b), to the extent it relates to such representations and warranties), (viii) any adoption, implementation, promulgation, repeal, modification, amendment, authoritative interpretation, change or proposal of any Applicable Law (or the interpretation thereof) of or by any Governmental Authority, (ix) any changes or prospective changes in IFRS (or authoritative interpretations thereof), (x) geopolitical conditions, the outbreak or escalation of hostilities, civil or political unrest, any acts of war, sabotage, cyberattack or terrorism, or any escalation or worsening of any such acts of war, sabotage, cyberattack or terrorism threatened or underway as of the date of this Agreement, (xi) any reduction in the credit rating of Parent or any of its Subsidiaries (it being understood and agreed that any events, changes, effects, circumstances, facts, developments or occurrences giving rise to or contributing to such reduction that are not otherwise excluded from the definition of Parent Material Adverse Effect may be taken into account in determining whether there has been, or would reasonably be expected to be, a Parent Material Adverse Effect), (xii) any epidemic, plague, pandemic or other outbreak of illness or public health event, hurricane, earthquake, flood, calamity or other natural disasters, acts of God or any change resulting from weather conditions (or any worsening of any of the foregoing), including the response of governmental and non-governmental entities, including any impact on new drug approval processes or drug trials, (xiii) any claims, actions, suits or proceedings arising from allegations of a breach of fiduciary duty or violation of Applicable Law relating to this Agreement or the transactions contemplated hereby (including the Mergers) or (xiv) any regulatory, preclinical, clinical, pricing or reimbursement, or manufacturing events, changes, effects, developments or occurrences relating to any Parent Product or any product of a competitor of Parent, including (A) any suspension, rejection or refusal of, any request to refile or any delay in obtaining or making any regulatory application or filing, (B) any actions, requests, recommendations or decisions of (or the failure to take or delay in taking any actions or make any requests, recommendations or decisions by) any Governmental Authority, (C) any recommendations, statements or other pronouncements made, published or proposed by professional medical organizations, (D) any pre-clinical or clinical studies, tests or results or announcements thereof, (E) any decision or action by any Governmental Authority (or other payor) with respect to pricing and/or reimbursement, (F) any delay, hold or termination of any clinical trial or any delay, hold or termination of any planned application for marketing approval, (G) any delay, hold or termination of approval with respect to the manufacture, processing, packing or testing of any Parent Product or with respect to any manufacturing facilities, or (H) any increased incidence or severity of any previously identified side effects, adverse effects, adverse events or safety observations or reports of new side effects, adverse effects, adverse events or safety observations, but excluding in the case of this clause (xiv) side effects, adverse effects, adverse events, safety observations or manufacturing events that result in a broad based product recall of, or withdrawal from the market of, any Parent Product, except
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that the matters referred to in clauses (i), (ii), (iv), (v), (viii), (ix), (x) or (xii), may be taken into account (to the extent not excluded by another clause of this definition) to the extent that the impact of any such event, change, effect, circumstance, fact, development or occurrence on Parent and its Subsidiaries, taken as a whole, is disproportionately adverse relative to the adverse impact of such event, change, effect, circumstance, fact, development or occurrence on the operations in the pharmaceutical industry of other participants in such industry, and then solely to the extent of such disproportionality.
“Parent Ordinary Shares” means the ordinary shares, par value $0.25 per share, of Parent.
“Parent Product” means each product or product candidate that is being researched, tested, developed, commercialized, manufactured, sold or distributed by or on behalf of Parent or any of its Subsidiaries.
“Parent Prospectus” means a prospectus to be approved by the FCA and published by the Parent in accordance with PR 3.2 of the Prospectus Regulation Rules in connection with the transactions contemplated hereby, including any supplement or amendment thereto.
“Parent Shares Admission” means the admission of the Parent Ordinary Shares (including the Parent Ordinary Shares underlying the Parent ADSs) issuable pursuant to the Merger and, if required by the FCA, the readmission of the Parent Ordinary Shares outstanding immediately prior to the First Effective Time (i) to the premium segment of the Official List, and (ii) to trading on the LSE’s main market for listed securities.
“Parent Stock Plans” means any Parent Employee Plan providing for equity or equity-based compensation, including Parent’s Performance Share Plan 2020 and Parent’s Global Restricted Stock Plan.
“Parent Superior Proposal” means any bona fide, written Parent Acquisition Proposal made after the date of this Agreement, in circumstances not involving a breach of this Agreement, from any Person (other than the Company and its Subsidiaries or Affiliates) to acquire, directly or indirectly, pursuant to a tender offer, exchange offer, merger, consolidation or other business combination or similar acquisition transaction, (i) all or substantially all of the non-”cash or cash equivalent” assets of Parent or (ii) more than fifty percent (50%) of the outstanding Parent Ordinary Shares on terms that the Board of Directors of Parent determines in good faith, after consultation with its financial advisor and outside legal counsel, and taking into account all the terms and conditions of the Parent Acquisition Proposal that the Board of Directors of Parent considers to be appropriate (including the identity of the Person making the Parent Acquisition Proposal and the expected timing and likelihood of consummation, any governmental or other approval requirements (including divestitures and entry into other commitments and limitations), break-up fees, expense reimbursement provisions, conditions to consummation and availability of necessary financing (including, if a cash transaction (in whole or in part), the availability of such funds and the nature, terms and conditionality of any committed financing)), would result in a transaction that is more favorable to Parent’s shareholders than the Mergers and (A) is not subject to any financing or due diligence conditionality and (B) is reasonably capable of being completed on the terms proposed.
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“PBGC” means the Pension Benefit Guaranty Corporation.
“Permitted Lien” means (i) any Liens for utilities or Taxes (A) not yet due and payable or (B) which are being contested in good faith by appropriate proceedings and with respect to which adequate reserves have been established in accordance with GAAP, (ii) carriers’, warehousemen’s, mechanics’, materialmen’s, repairmen’s or other similar Liens, (iii) pledges or deposits in connection with workers’ compensation, unemployment insurance and other social security legislation, (iv) gaps in the chain of title evident from the records of the applicable Governmental Authority maintaining such records, easements, rights-of-way, covenants, restrictions and other encumbrances of record as of the date of this Agreement, (v) easements, rights-of-way, covenants, restrictions and other encumbrances incurred in the ordinary course of business that do not materially detract from the value or the use of the property subject thereto, (vi) statutory landlords’ liens and liens granted to landlords under any lease, (vii) non-exclusive licenses granted under Intellectual Property Rights in the ordinary course of business, (viii) any purchase money security interests, equipment leases or similar financing arrangements, (ix) any Liens which are disclosed on the Company Balance Sheet (in the case of Liens applicable to the Company or any of its Subsidiaries) or the Parent Balance Sheet (in the case of Liens applicable to Parent or any of its Subsidiaries), or the notes thereto, (x) any Liens that are discharged at or prior to the Closing or (xi) any Liens that are not material to the Company and its Subsidiaries or Parent and its Subsidiaries, as applicable, taken as a whole.
“Person” means any individual, corporation, partnership, limited liability company, association, trust or other entity or organization, including a government or political subdivision or an agency or instrumentality of such government or political subdivision.
“Personal Data” means any information defined as “personal data”, “personally identifiable information”, “personal information”, or “protected health information” under any Privacy Legal Requirement or Privacy Commitment, and all information that can reasonably be used to identify a natural person.
“Privacy Commitments” means (a) a contractual obligations to third parties with respect to Personal Data, and (b) any legally binding commitment (including any legally binding privacy policy) with respect to collection, processing, maintenance or transfer of Personal Data.
“Privacy Legal Requirement” means all Applicable Laws that pertain to privacy or the processing of Personal Data, including (i) HIPAA, (ii) the California Consumer Privacy Act, (iii) U.S. state data security laws and regulations such as the New York SHIELD Act, the Massachusetts Standards for the protection of personal information of residents of the Commonwealth, 201 CMR 17, all state data breach notification laws, and state biometric privacy laws; (iv) applicable requirements of comparable state and foreign Applicable Laws such as the EU Data Protection Directive 95/46/EC of 24 October 1995, the EU General Data Protection Regulation 2016/679/EU of April 27, 2016 and all corresponding member state legislation, the EU ePrivacy Directive 2002/58/EC of 12 July 2002 concerning the processing of personal data and the protection of privacy in the electronic communications sector as amended by Directive 2006/24/EC and Directive 2009/136/EC and the related implementing legislation of the EU Member States, (v) The United Kingdom’s Data Protection Act 2018, (vi) Section 5 of the
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Federal Trade Commission Act as it applies to the receipt, access, use, disclosure, and security of consumer Personal Data, (vii) the Swiss Federal Act on Data Protection of June 19, 1992 (DPA) and its ordinances, (viii) the Japanese Act on the Protection of Personal Information, and (ix) CAN-SPAM, the Telephone Consumer Protection Act, Canada’s anti-spam legislation and other similar Applicable Laws.
“Prospectus Regulation” means Regulation (EU) No 2017/1129 of the European Parliament and of the Council of 14 June 2018 on the prospectus to be published when securities are offered to the public or admitted to trading on a regulated market.
“Prospectus Regulation Rules” means the prospectus regulation rules made by the FCA pursuant to Part VI of FSMA (as set out in the FCA Handbook published by the FCA).
“Registered Intellectual Property” means all United States, international or foreign (i) Patents and Patent applications (including provisional applications, divisionals, reissues, reexaminations, continuations and continuations-in-part); (ii) registered Marks and applications to register Marks; (iii) registered Copyrights and applications for Copyright registration; (iv) registered Internet Properties; and (v) any other Intellectual Property Rights that are subject to any filing or recording with any state, provincial, federal, government or other public or quasi-public legal authority.
“Representatives” means, with respect to any Person, its officers, directors, employees, investment bankers, attorneys, accountants, auditors, consultants and other agents, advisors and representatives.
“Required Information” means in relation to any party such information with respect to the business, operations, trading, financial condition, projections, prospects, significant changes, risks, material contracts or material disputes of, or any persons associated with, such party (including expressions of opinion, intention or expectation in relation to any of the foregoing).
“Sanctioned Country” means any of Crimea, Cuba, Iran, North Korea, Sudan, and Syria.
“Sanctioned Person” means any Person with whom dealings are restricted or prohibited under any Sanctions Laws, including the Sanctions Laws of the United States, the United Kingdom, the European Union or the United Nations, including (i) any Person identified in any list of Sanctioned Persons maintained by (A) the United States Department of Treasury, Office of Foreign Assets Control, the United States Department of Commerce, Bureau of Industry and Security or the United States Department of State, (B) Her Majesty’s Treasury of the United Kingdom, (C) any committee of the United Nations Security Council, or (D) the European Union, (ii) any Person located, organized, or resident in, organized in, or a Governmental Authority or government instrumentality of, any Sanctioned Country and (iii) any Person directly or indirectly 50% or more owned or controlled by, or acting for the benefit or on behalf of, a Person described in clause (i) or (ii).
“Sanctions Laws” means all Applicable Laws concerning economic sanctions, including embargoes, export restrictions, the ability to make or receive international payments,
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the freezing or blocking of assets of targeted Persons, the ability to engage in transactions with specified Persons or countries or the ability to take an ownership interest in assets of specified Persons or located in a specified country, including any Applicable Laws threatening to impose economic sanctions on any person for engaging in proscribed behavior.
“Sarbanes-Oxley Act” means the Sarbanes-Oxley Act of 2002.
“SEC” means the U.S. Securities and Exchange Commission.
“Subsidiary” means, with respect to any Person, any entity of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other persons performing similar functions are directly or indirectly owned by such Person. For purposes of this Agreement, a Subsidiary shall be considered a “wholly owned Subsidiary” of a Person as long as such Person directly or indirectly owns all of the securities or other ownership interests (excluding any securities or other ownership interests held by an individual director or officer required to hold such securities or other ownership interests pursuant to Applicable Law) of such Subsidiary.
“Tax” means any income, gross receipts, franchise, sales, use, ad valorem, property, payroll, withholding, excise, severance, transfer, employment, estimated, alternative or add-on minimum, value added, stamp, occupation, premium, environmental or windfall profits taxes, and any other taxes or similar charges, fees, levies, imposts, customs, duties or other assessments, together with any interest, penalties and additions to tax, in each case, imposed in respect thereof by any federal, state, local, non-U.S. or other Taxing Authority.
“Tax Return” means any report, return, document, statement, declaration or other information filed or required to be filed with any Taxing Authority with respect to Taxes, including information returns, claims for refunds, and any documents with respect to or accompanying payments of estimated Taxes, and including any attachment thereto and any amendment thereof.
“Taxing Authority” means any Governmental Authority responsible for the imposition or collection of any Tax.
“Third Party” means any Person or Group, other than the Company, Parent or any of their respective Affiliates or Representatives.
“U.K. Code” means the United Kingdom City Code on Takeovers and Mergers.
“VAT” means (i) any tax charged or imposed pursuant to Council Directive 2006/112/EC or any national legislation implementing such Directive; and (ii) to the extent not included in (i), any value added tax imposed by the U.K. Value Added Tax Act 1994 and any related secondary legislation, regardless of whether or not the UK is a member of the European Union or continues to be subject to such Directive.
“Willful Breach” means a material breach of this Agreement that is the result of a willful or intentional act or failure to act where the breaching party knows, or could reasonably
17
be expected to have known, that the taking of such act or failure to act could result in a material breach of this Agreement.
(b) Each of the following terms is defined in the Section set forth opposite such term:
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Term
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Section
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ADS Depository
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1.01(a)
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Affected Employees
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7.05(a)
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Agreement
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Preamble
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Assumed PSU Award
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2.07(c)
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Assumed RSU Award
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2.07(b)(i)
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Bankruptcy and Equity Exceptions
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4.02(a)
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Benefits Continuation Period
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7.05(a)
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Bidco
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Preamble
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Bridge Facility Agreement
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5.21(a)
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Cancellation
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2.03(a)
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Cash Consideration
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2.03(a)
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Certificate
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2.03(d)
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Claim Expenses
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7.04(a)
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Closing
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2.01
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Closing Date
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2.01
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Company
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Preamble
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Company Additional Amounts
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10.03(g)
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Company Adverse Recommendation Change
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6.02(a)
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Company Approval Time
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6.02(b)
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Company Board Recommendation
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4.02(b)
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Company Material Contract
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4.16(a)
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Company No Vote Payment
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10.03(e)
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Company Organizational Documents
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4.01
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Company Payment
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10.03(f)
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Company Permits
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4.13
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Company Preferred Stock
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4.05(a)
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Company PSU Award
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2.07(c)
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Company Registered IP
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4.20(a)
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Company Regulatory Agency
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4.15(a)
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Company Regulatory Permits
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4.15(a)
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Company RSU Award
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2.07
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Company SEC Documents
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4.07
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Company Stock Option
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2.07(a)
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Company Stockholder Approval
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4.02(a)
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Company Stockholder Meeting
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8.04(a)
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Company Tax Certificate
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8.11(b)
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Company Tax Counsel
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9.03(d)
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Company Termination Payment
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10.03(a)
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Confidentiality Agreement
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8.01(a)
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Copyrights
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1.01(a)
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D&O Claim
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7.04(a)
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D&O Indemnified Parties
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7.04(a)
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D&O Indemnifying Parties
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7.04(a)
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Debt Financing
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6.03(a)
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Designated Directors
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8.09(a))
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DGCL
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2.02(a)
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Dissenting Shares
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2.06
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Dissenting Stockholders
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2.06
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DLLCA
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2.02(a)
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EMA
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4.15(d)
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End Date
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10.01(b)(i)
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Exchange Agent
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2.05(a)
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Exchange Agent Agreement
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2.05(a)
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Exchange Fund
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2.05(a)
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Exchange Ratio
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2.03(a)
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Excluded Shares
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2.03(a)
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FDA
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4.15(a)
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FDCA
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4.15(a)
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First Certificate of Merger
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2.02(a)
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First Effective Time
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2.02(a)
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First Merger
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2.02(b)
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First Surviving Corporation
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2.02(b)
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Foreign Antitrust Laws
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4.03
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Form F-4
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8.03(a)
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Form F-6
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8.03(a)
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internal controls
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4.07(h)
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Lease
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4.21
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Marks
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1.01(a)
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Maximum Premium
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7.04(b)
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Merger Consideration
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2.03(a)
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Merger Sub I
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Preamble
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Merger Sub II
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Preamble
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Merger Subs
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Preamble
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Mergers
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2.02(b)
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Nasdaq
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4.03
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Net Option Share
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2.07(a)
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New Company Plans
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7.05(a)
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Non-U.S. Plan
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4.18(h)
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Outside Counsel Only Material
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8.01(b)
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Parent
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Preamble
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Parent Additional Amounts
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10.03(g)
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Parent ADS Issuance
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5.02(a)
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Parent ADS Options
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5.05(a)
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Parent Adverse Recommendation Change
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7.02(a)
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Parent Approval Time
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7.02(b)
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Parent Board Recommendation
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5.02(b)
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Parent Circular
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8.03(a)
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Parent Non-SEC Documents
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5.07(a)
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Parent Organizational Documents
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5.01
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Parent Permits
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5.13
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Parent PSU Awards
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5.05(a)
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Parent Public Documents
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5.07(a)
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Parent Regulatory Agency
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5.15(a)
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Parent Regulatory Permits
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5.15(a)
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Parent RSU Awards
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5.05(a)
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Parent SEC Documents
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5.07(a)
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Parent Shareholder Approval
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5.02(a)
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Parent Shareholder Meeting
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8.04(b)
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Parent Specified Contracts
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5.16
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Parent Stock Options
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5.05(a)
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Parent Tax Certificate
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8.11(b)
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Parent Termination Payment
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10.03(c)
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Patents
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1.01(a)
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PHSA
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4.15(a)
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principal executive officer
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4.07(g)
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principal financial officer
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4.07(g)
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Prospective Closing Date
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2.01
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Proxy Statement/Prospectus
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8.03(a)
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Regulation S-K
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4.11
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Regulation S-X
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6.01(b)(xi)
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Required Financing Amount
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5.21(b)
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Second Certificate of Merger
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2.02(a)
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Second Effective Time
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2.02(a)
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Second Merger
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2.02(b)
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Second Request
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8.02(c)
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Share Consideration
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2.03(a)
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Surviving Company
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2.02(b)
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Trade Secrets
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1.01(a)
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Transaction Litigation
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8.07
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Uncertificated Share
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2.03(d)
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Section 1.02 Other Definitional and Interpretative Provisions. The following rules of interpretation shall apply to this Agreement: (i) the words “hereof”, “hereby”, “herein” and “hereunder” and words of like import used in this Agreement shall refer to this Agreement as a whole and not to any particular provision of this Agreement; (ii) the table of contents and captions in this Agreement are included for convenience of reference only and shall be ignored in the construction or interpretation hereof; (iii) references to Articles, Sections and Exhibits are to Articles, Sections and Exhibits of this Agreement unless otherwise specified; (iv) all Exhibits and schedules annexed to this Agreement or referred to in this Agreement, including the Company Disclosure Schedule and the Parent Disclosure Schedule, are incorporated in and made a part of this Agreement as if set forth in full in this Agreement; (v) any capitalized term used in any Exhibit or schedules annexed to this Agreement, including the Company Disclosure
20
Schedule or the Parent Disclosure Schedule, but not otherwise defined therein shall have the meaning set forth in this Agreement; (vi) any singular term in this Agreement shall be deemed to include the plural, and any plural term the singular, and references to any gender shall include all genders; (vii) whenever the words “include”, “includes” or “including” are used in this Agreement, they shall be deemed to be followed by the words “without limitation”, whether or not they are in fact followed by those words or words of like import; (viii) “writing”, “written” and comparable terms refer to printing, typing and other means of reproducing words (including electronic media) in a visible form; (ix) references to any Applicable Law shall be deemed to refer to such Applicable Law as amended from time to time and to any rules or regulations promulgated thereunder; (x) references to any Contract are to that Contract as amended, modified or supplemented from time to time in accordance with the terms hereof and thereof; provided, that with respect to any Contract listed on any schedule annexed to this Agreement, including the Company Disclosure Schedule or the Parent Disclosure Schedule, such references shall only include any such amendments, modifications or supplements that are made available to Parent or the Company, as applicable; (xi) references to any Person include the successors and permitted assigns of that Person; (xii) references to “from” or “through” any date mean, unless otherwise specified, “from and including” or “through and including”, respectively; (xiii) references to “dollars” and “$” means U.S. dollars; (xiv) references to “pounds” and “£” means United Kingdom pounds sterling; (xv) the term “made available” and words of similar import mean that the relevant documents, instruments or materials were (A) with respect to Parent, posted and made available to Parent on the Alexion Pharmaceuticals, Inc. due diligence data site (or in any “clean room” or as otherwise provided on an “outside counsel only” basis), or, with respect to the Company, posted or made available to the Company on the AstraZeneca PLC due diligence data site (or in any “clean room” or as otherwise provided on an “outside counsel only” basis), as applicable, in each case, at least one day prior to the date of this Agreement; (B) provided via electronic mail or in person at least one day prior to the date of this Agreement (including materials provided to outside counsel); or (C) filed or furnished to the SEC prior to the date of this Agreement; (xvi) the word “extent” in the phrase “to the extent” shall mean the degree to which a subject or other theory extends and such phrase shall not mean “if”; (xvii) it is understood that among the factors applicable to determining whether Parent or the Company has “unreasonably withheld, conditioned or delayed” consent under Section 6.01 or Section 7.01 of this Agreement, as applicable, are prevailing external economic, industry and regulatory circumstances; and (xviii) the parties hereto have participated jointly in the negotiation and drafting of this Agreement and, in the event an ambiguity or question of intent or interpretation arises, this Agreement shall be construed as jointly drafted by the parties hereto and no presumption or burden of proof shall arise favoring or disfavoring any party by virtue of the authorship of any provision of this Agreement.
ARTICLE II
CLOSING; THE MERGER
Section 2.01 Closing. The closing of the Mergers (the “Closing”) shall take place in New York City at the offices of Wachtell, Lipton, Rosen & Katz, 51 West 52nd Street, New York, New York, 10019 at 8:00 a.m., Eastern time, on (a) the fifth Business Day (the “Prospective Closing Date”) after the date the conditions set forth in Article IX (other than conditions that by their nature are to be satisfied at the Closing, but subject to the satisfaction or,
21
to the extent permitted by Applicable Law, waiver of such conditions by the party or parties entitled to the benefit thereof at the Closing) have been satisfied or, to the extent permitted by Applicable Law, waived by the party or parties entitled to the benefit thereof or (b) if the Prospective Closing Date would fall on or after the End Date, then, on the Business Day immediately preceding the End Date, or at such other place, at such other time or on such other date as Parent and the Company may mutually agree (the date on which the Closing occurs, the “Closing Date”).
Section 2.02 The Mergers.
(a) At the Closing, (i) the Company shall file a certificate of merger (the “First Certificate of Merger”) with the Delaware Secretary of State and make all other filings or recordings required by the General Corporation Law of the State of Delaware (the “DGCL”) in connection with the First Merger and (ii) immediately following the filing of the First Certificate of Merger, the First Surviving Corporation shall file a certificate of merger (the “Second Certificate of Merger”) with the Delaware Secretary of State and make all other filings or recordings required by the DGCL and Limited Liability Company Act of the State of Delaware (the “DLLCA”) in connection with the Second Merger. The First Merger shall become effective at such time (the “First Effective Time”) as the First Certificate of Merger is duly filed with the Delaware Secretary of State (or at such later time as Parent and the Company shall agree and is specified in the First Certificate of Merger) and the Second Merger shall become effective at such time (the “Second Effective Time”) as the Second Certificate of Merger is duly filed with the Delaware Secretary of State (or at such later time as Parent and the Company shall agree and is specified in the Second Certificate of Merger, but in any event following the First Effective Time and as soon as practicable following the First Effective Time).
(b) (i) At the First Effective Time, Merger Sub I shall be merged with and into the Company in accordance with the DGCL (the “First Merger”), whereupon the separate existence of Merger Sub I shall cease and the Company shall be the surviving corporation (the “First Surviving Corporation”), such that immediately following the First Merger, the First Surviving Corporation shall be a wholly owned direct subsidiary of Bidco and (ii) immediately (or as soon as practicable) following the First Merger, and as part of the same plan, at the Second Effective Time, the First Surviving Corporation shall be merged with and into Merger Sub II in accordance with the DGCL and DLLCA (the “Second Merger” and, together with the First Merger, the “Mergers”), whereupon the separate existence of the First Surviving Corporation shall cease and Merger Sub II shall be the surviving company (the “Surviving Company”), such that immediately following the Second Merger, the Surviving Company shall be a wholly owned direct subsidiary of Bidco.
(c) (i) From and after the First Effective Time, the First Surviving Corporation shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the Company and Merger Sub I, all as provided under the DGCL and (ii) from and after the Second Effective Time, the Surviving Company shall possess all the rights, powers, privileges and franchises and be subject to all of the obligations, liabilities, restrictions and disabilities of the First Surviving Corporation and Merger Sub II, all as provided under the DGCL and DLLCA.
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Section 2.03 Conversion and Cancellation of Shares in the First Merger. At the First Effective Time, by virtue of the First Merger and without any action on the part of Parent, Bidco, either Merger Sub, the Company or any holder of Company Common Stock, the common stock of Merger Sub I or limited liability interests in Merger Sub II:
(a) other than (i) shares of Company Common Stock to be cancelled or converted pursuant to Section 2.03(b) and (ii) Dissenting Shares (such shares together with the shares of Company Common Stock to be cancelled or converted pursuant to Section 2.03(b), collectively, the “Excluded Shares”), each share of Company Common Stock outstanding immediately prior to the First Effective Time shall be converted into, and shall thereafter represent only, the right to receive, (A) 2.1243 (the “Exchange Ratio”) Parent ADSs (the “Share Consideration”), subject to Section 2.09 with respect to fractional Parent ADSs, and (B) $60.00 in cash without interest (the “Cash Consideration” and, together with the Share Consideration, the “Merger Consideration”) and, immediately following such conversion, shall be automatically cancelled and cease to exist (the “Cancellation”);
(b) (i) each share of Company Common Stock held by the Company as treasury stock or owned by Parent, Bidco or by either Merger Sub immediately prior to the First Effective Time (other than any such shares owned by Parent, Bidco or either Merger Sub in a fiduciary, representative or other capacity on behalf of other Persons, whether or not held in a separate account) shall be cancelled and shall cease to exist, and no consideration shall be paid with respect thereto and (ii) each share of Company Common Stock held by any wholly owned Subsidiary of either the Company or Parent (other than Bidco and either Merger Sub) immediately prior to the First Effective Time shall be converted into a number of validly issued, fully paid and nonassessable Parent ADSs equal to the sum of (A) the Exchange Ratio and (B) the Cash Consideration divided by the Parent ADS Price;
(c) each share of common stock of Merger Sub I, par value $0.01 per share, issued and outstanding immediately prior to the First Effective Time shall be converted into and become one validly issued, fully paid and nonassessable share of common stock, par value $0.01 per share, of the First Surviving Corporation; and
(d) all outstanding shares of Company Common Stock shall no longer be outstanding and shall automatically be cancelled and retired and shall cease to exist, and (i) each share of Company Common Stock that was, immediately prior to the First Effective Time, represented by a certificate (each, a “Certificate”) and (ii) each uncertificated share of Company Common Stock that, immediately prior to the First Effective Time, was registered to a holder on the stock transfer books of the Company (an “Uncertificated Share”) shall (in each case, other than with respect to Excluded Shares) thereafter represent only the right to receive (A) the Merger Consideration and (B) with respect to the Share Consideration, the right to receive (1) any dividends or other distributions pursuant to Section 2.05(f) and (2) any cash in lieu of any fractional Parent ADSs pursuant to Section 2.09, in each case to be issued or paid in accordance with Section 2.05, without interest.
Section 2.04 Conversion of Shares in the Second Merger. At the Second Effective Time, by virtue of the Second Merger and without any action on the part of Parent, Bidco, either Merger Sub, the Company or any holder of common stock of the First Surviving
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Corporation or common stock of Merger Sub II, (i) each limited liability company interest of Merger Sub II issued and outstanding immediately prior to the Second Effective Time shall remain outstanding as a limited liability company interest of the Surviving Company and shall not be affected by the Second Merger and (ii) each share of common stock of the First Surviving Corporation issued and outstanding immediately prior to the Second Effective Time shall be cancelled and shall cease to exist, and no consideration shall be paid with respect thereto, such that, immediately following the Second Merger, the Surviving Company shall be a direct wholly owned subsidiary of Bidco.
Section 2.05 Surrender and Payment.
(a) Prior to the First Effective Time, Parent and Bidco shall appoint a commercial bank or trust company reasonably acceptable to the Company (the “Exchange Agent”) and enter into an exchange agent agreement with the Exchange Agent reasonably acceptable to the Company (the “Exchange Agent Agreement”) for the purpose of exchanging (i) Certificates or (ii) Uncertificated Shares for the Merger Consideration payable in respect of the shares of Company Common Stock. As of the First Effective Time, in consideration of and in exchange for the issuance to Parent by Bidco of 1,900 shares of common stock of Bidco and the Cancellation, Parent shall allot Parent Ordinary Shares which may be represented in uncertificated form in CREST or American depositary receipts evidencing (or evidence of Parent ADSs in book-entry form representing) the Parent ADSs issuable pursuant to Section 2.03(a). As of the First Effective Time, Parent (in the case of (x)) and Parent or Bidco (in the case of (y)) shall deposit or cause to be deposited with the Exchange Agent, for the benefit of the holders of shares of Company Common Stock, for exchange in accordance with this Section 2.05 through the Exchange Agent, (x) American depositary receipts evidencing (or evidence of Parent ADSs in book-entry form representing) the Parent ADSs issuable pursuant to Section 2.03(a) in exchange for outstanding shares of Company Common Stock and (y) cash sufficient to pay the aggregate Cash Consideration payable pursuant to Section 2.03(a). Parent agrees to make available, directly or indirectly, to the Exchange Agent from time to time as needed additional cash sufficient to pay any dividends or other distributions to which such holders are entitled pursuant to Section 2.05(f) and cash in lieu of any fractional Parent ADSs to which such holder is entitled pursuant to Section 2.09. Promptly after the First Effective Time (and in no event more than two Business Days following the Closing Date), Parent shall send, or shall cause the Exchange Agent to send, to each holder of shares of Company Common Stock at the First Effective Time a letter of transmittal and instructions (which shall be in a form reasonably acceptable to the Company and substantially finalized prior to the First Effective Time and which shall specify that (A) delivery shall be effected, and risk of loss and title shall pass, only on proper delivery of the Certificates or transfer of the Uncertificated Shares to the Exchange Agent) for use in such exchange and (B) each holder of shares of Company Common Stock may elect to receive a number of Parent Ordinary Shares in lieu of Parent ADSs as Share Consideration pursuant to Section 2.05(g). All certificates (or evidence of Parent ADSs in book-entry form) and cash deposited with the Exchange Agent pursuant to this Section 2.05 shall be referred to in this Agreement as the “Exchange Fund”. Parent shall cause, or shall procure that Bidco cause, the Exchange Agent to deliver the Merger Consideration contemplated to be issued or paid pursuant to this Article II out of the Exchange Fund. The Exchange Fund shall not be used for any other purpose. The Exchange Agent shall invest any cash included in the Exchange Fund as directed by Parent or Bidco; provided, that such cash shall only be invested in the
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manner provided in the Exchange Agent Agreement; provided, further, that no such investment or losses thereon shall affect the Merger Consideration payable to holders of Company Common Stock entitled to receive such consideration or cash in lieu of fractional interests and, to the extent necessary to pay the Merger Consideration, Parent shall promptly cause, or shall procure that Bidco cause, to be provided additional funds to the Exchange Agent for the benefit of holders of Company Common Stock entitled to receive such consideration in the amount of any such losses. Any interest and other income resulting from such investments shall be the property of, and paid to, Parent on termination of the Exchange Fund.
(b) Each holder of shares of Company Common Stock that have been converted into the right to receive the Merger Consideration shall be entitled to receive, on (i) surrender to the Exchange Agent of a Certificate, together with a properly completed and duly executed letter of transmittal, or (ii) receipt of an “agent’s message” by the Exchange Agent (or such other evidence, if any, of transfer as the Exchange Agent may reasonably request) in the case of a book-entry transfer of Uncertificated Shares, the Merger Consideration in respect of each share of the Company Common Stock represented by such Certificate or Uncertificated Share (including cash in lieu of any fractional Parent ADSs and any dividends and distributions with respect to the Share Consideration as contemplated by Section 2.05(f) and Section 2.09). The Parent ADSs constituting the Share Consideration, at Parent’s option, shall be in uncertificated book-entry form, unless a physical American depository receipt evidencing such Parent ADSs is requested by a holder of shares of Company Common Stock or is otherwise required under Applicable Law.
(c) If any portion of the Merger Consideration (or cash in lieu of any fractional Parent ADSs or any dividends and distributions with respect to the Share Consideration as contemplated by Section 2.05(f) and Section 2.09) is to be paid to a Person other than the Person in whose name the surrendered Certificate or the transferred Uncertificated Share is registered, it shall be a condition to such payment that (i) either such Certificate shall be properly endorsed or shall otherwise be in proper form for transfer or such Uncertificated Share shall be properly transferred and (ii) the Person requesting such payment shall pay to the Exchange Agent any stamp duty, stamp duty reserve tax, transfer or similar Taxes required as a result of such payment to a Person other than the registered holder of such Certificate or Uncertificated Share or establish to the satisfaction of the Exchange Agent that such stamp duty, stamp duty reserve tax, transfer or similar Taxes have been paid or are not payable.
(d) From and after the First Effective Time, there shall be no further registration of transfers of shares of Company Common Stock thereafter on the records of the Company. If, after the First Effective Time, Certificates or Uncertificated Shares are presented to Parent, the First Surviving Corporation, the Surviving Company or the Exchange Agent for any reason, they shall be cancelled and exchanged for the Merger Consideration (and cash in lieu of any fractional Parent ADSs and any dividends and distributions with respect to the Share Consideration as contemplated by Section 2.05(f) and Section 2.09) with respect thereto in accordance with the procedures set forth in, or as otherwise contemplated by, this Article II (including this Section 2.05).
(e) Any portion of the Exchange Fund that remains unclaimed by the holders of shares of Company Common Stock 12 months following the Closing Date shall be delivered
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to Parent or as otherwise instructed by Parent, and any such holder who has not exchanged shares of Company Common Stock for the Merger Consideration in accordance with this Section 2.05 prior to that time shall thereafter look only to Parent for payment of the Merger Consideration (and cash in lieu of any fractional Parent ADSs and any dividends and distributions with respect to the Share Consideration as contemplated by Section 2.05(f) and Section 2.09), without any interest thereon. Notwithstanding the foregoing, Parent and its Subsidiaries (including Bidco, the Surviving Company and its Subsidiaries) shall not be liable to any holder of shares of Company Common Stock for any amounts properly paid to a public official in compliance with applicable abandoned property, escheat or similar laws. Any amounts remaining unclaimed by holders of shares of Company Common Stock immediately prior to such time when the amounts would otherwise escheat to or become property of any Governmental Authority shall become, to the extent permitted by Applicable Law, the property of Parent free and clear of any claims or interest of any Person previously entitled thereto.
(f) Following the surrender of any Certificates, along with the delivery of a properly completed and duly executed letter of transmittal, or the transfer of any Uncertificated Shares, in each case as provided in this Section 2.05, Parent shall pay, or cause to be paid, without interest, to the Person in whose name the Parent ADSs constituting the Share Consideration have been registered, (i) in connection with the payment of the Share Consideration, (x) the amount of any cash payable in lieu of fractional shares to which such Person is entitled pursuant to Section 2.09, and (y) the aggregate amount of all dividends or other distributions payable with respect to such Parent ADSs, with a record date on or after the First Effective Time that were paid prior to the time of such surrender or transfer, and (ii) at the appropriate payment date after the payment of the Merger Consideration, the amount of all dividends or other distributions payable with respect to whole Parent ADSs constituting the Share Consideration with a record date on or after the First Effective Time and prior to the time of such surrender or transfer and with a payment date subsequent to the time of such surrender or transfer. No dividends or other distributions with respect to Parent ADSs constituting the Share Consideration, and no cash payment in lieu of fractional shares pursuant to Section 2.09, shall be paid to the holder of any Certificates not surrendered or of any Uncertificated Shares not transferred until such Certificates are surrendered and the holder thereof delivers a properly completed and duly executed letter of transmittal or such or Uncertificated Shares are transferred, as the case may be, as provided in this Section 2.05.
(g) Notwithstanding anything in this Section 2.05 to the contrary, Parent shall cooperate with the Exchange Agent and ADS Depository, as necessary, to provide for (i) the ability of holders of Company Common Stock to elect to receive Parent Ordinary Shares in lieu of Parent ADSs and (ii) the delivery of such Parent Ordinary Shares in lieu of Parent ADSs as the Share Consideration (and in satisfaction of such obligation) to the extent elected by the holders of shares of Company Common Stock pursuant to Section 2.05(a). The number of Parent Ordinary Shares to be delivered in lieu of Parent ADSs shall be the number of underlying Parent Ordinary Shares represented by such Parent ADSs, subject to the delivery of cash in lieu of fractional Parent Ordinary Shares in accordance with this Section 2.05 and Section 2.09 which sections shall be applied mutatis mutandis with respect to those holders of Company Common Stock that elect to receive Parent Ordinary Shares in lieu of Parent ADSs.
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Section 2.06 Dissenting Shares. Notwithstanding anything in this Agreement to the contrary, shares of Company Common Stock that are issued and outstanding immediately prior to the First Effective Time and that are held by a stockholder who is entitled to demand, and properly demands, appraisal of such shares pursuant to, and who complies in all respects with, the provisions of Section 262 of the DGCL (such stockholders, the “Dissenting Stockholders” and, such shares of Company Common Stock, the “Dissenting Shares”), shall not be converted into or be exchangeable for the right to receive the Merger Consideration, but instead such holder shall be entitled to payment of the fair value of such Dissenting Shares in accordance with the provisions of Section 262 of the DGCL (and, at the First Effective Time, such Dissenting Shares shall no longer be outstanding and shall automatically be cancelled and shall cease to exist, and such holder shall cease to have any rights with respect thereto, except the right to receive the fair value of such Dissenting Shares in accordance with the provisions of Section 262 of the DGCL), unless and until such holder shall have failed to perfect or shall have effectively waived, withdrawn or lost rights to appraisal under the DGCL. If any Dissenting Stockholders shall have failed to perfect or shall have effectively waived, withdrawn or lost such rights, the Dissenting Shares held by such Dissenting Stockholder shall thereupon be deemed to have been converted into, as of the First Effective Time, and shall thereafter represent only the right to receive, the Merger Consideration as provided in Section 2.03(a) (and cash in lieu of any fractional Parent ADSs and any dividends and distributions with respect thereto as contemplated by Section 2.05(f) and Section 2.09), without interest, and immediately following such cancellation shall be automatically cancelled and cease to exist. The Company shall give Parent prompt notice of any written demands for appraisal of any shares of Company Common Stock, attempted withdrawals of such demands and any other instruments served pursuant to the DGCL and received by the Company relating to stockholders’ rights of appraisal in accordance with the provisions of Section 262 of the DGCL, and Parent the opportunity to participate in all negotiations and proceedings with respect to all such demands. The Company shall not, except with the prior written consent of Parent, make any payment with respect to, settle or offer or agree to settle any such demands. Any portion of the Merger Consideration made available to the Exchange Agent pursuant to Section 2.05 to pay for shares of Company Common Stock for which appraisal rights have been perfected shall be returned to Parent (or to Bidco if Parent so directs) on demand.
Section 2.07 Company Equity Awards.
(a) Company Stock Options. At the First Effective Time, each compensatory option to purchase shares of Company Common Stock granted under any Company Stock Plan that is outstanding and unexercised immediately prior to the First Effective Time (each, a “Company Stock Option”), whether or not vested shall, by virtue of the First Merger and without further action on the part of the holder thereof, be cancelled in consideration for the right to receive, within five Business Days following the First Effective Time, the Merger Consideration, without interest and less applicable withholding Taxes, in respect of each Net Option Share subject to such Company Stock Option immediately prior to the First Effective Time. For purposes of this Agreement, “Net Option Share” means, with respect to a Company Stock Option, the quotient obtained by dividing (i) the product obtained by multiplying (A) the excess, if any, of the value of the Merger Consideration over the exercise price per share of Company Common Stock subject to such Company Stock Option immediately prior to the First Effective Time by (B) the number of shares of Company Common Stock subject to such Company Stock
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Option immediately prior to the First Effective Time by (ii) the value of the Merger Consideration. For purposes of the preceding sentence, the value of the component of the Merger Consideration that consists of Parent ADSs shall equal the product of (x) the Exchange Ratio and (y) the Parent ADS Price.
(b) Company Restricted Stock Units. At the First Effective Time, each restricted stock unit award with respect to shares of Company Common Stock outstanding under any Company Stock Plan that vests solely based on the passage of time (each, a “Company RSU Award”) shall be treated as set forth in this Section 2.07.
(i) At the First Effective Time, each Company RSU Award held by a non-employee director shall, by virtue of the First Merger and without further action on the part of the holder thereof, become fully vested and cancelled and converted into the right to receive, within five Business Days following the First Effective Time, the Merger Consideration, without interest and less applicable withholding Taxes, with respect to each share of Company Common Stock subject to such Company RSU Award (or portion thereof) immediately prior to the First Effective Time; provided, that if application of this Section 2.07(b)(i) to any such Company RSU Award (or portion thereof) would result in the imposition of a penalty under Section 409A of the Code, then such Company RSU Award (or portion thereof) shall instead be converted into an Assumed RSU Award in accordance with Section 2.07(b)(ii).
(ii) At the First Effective Time, each Company RSU Award (or portion thereof) that is not covered by Section 2.07(b)(i) shall be assumed by Parent and shall be converted into a restricted unit award (each, an “Assumed RSU Award”) that settles in a number of Parent ADSs equal to the number of shares of Company Common Stock underlying the Company RSU Award (or portion thereof) multiplied by the Equity Award Exchange Ratio, rounded up to the nearest whole number of shares. Each Assumed RSU Award shall continue to have, and shall be subject to, the same terms and conditions as applied to the corresponding Company RSU Award immediately prior to the First Effective Time (including any terms and conditions relating to accelerated vesting on a termination of the holder’s employment in connection with or following the Merger).
(c) Company Performance-Based Restricted Stock Units. At the First Effective Time, each restricted stock unit award with respect to shares of Company Common Stock outstanding under any Company Stock Plan that vests based on the achievement of performance goals (each, a “Company PSU Award”) shall, by virtue of the First Merger and without further action on the part of the holder thereof, be assumed by Parent and converted into a restricted unit award (each, an “Assumed PSU Award”) that settles in a number of Parent ADSs equal to the product of the number of shares of Company Common Stock underlying the Company PSU Award (with such number of shares determined by deeming the applicable performance goals to be achieved at the greater of (i) the target level and (ii) the actual level of achievement through the latest practicable date prior to the First Effective Time as determined by the Leadership and Compensation Committee of the Board of Directors of the Company prior to the First Effective Time), subject to a limit of 175% of target for Company PSU Awards granted in 2019 and subject to a limit of 150% of target for Company PSU Awards granted in 2020
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multiplied by the Equity Award Exchange Ratio, rounded up to the nearest whole number of shares. Each Assumed PSU Award shall continue to have, and shall be subject to, the same terms and conditions as applied to the corresponding Company PSU Award (other than performance-based vesting conditions) immediately prior to the First Effective Time (including any terms and conditions relating to accelerated vesting on a termination of the holder’s employment in connection with or following the Merger).
(d) Reservation of Shares. As soon as practicable following the Closing Date (but in no event more than five Business Days following the Closing Date), Parent shall file a registration statement on Form S-8 (or any successor form) or, if required, Form F-3 (or any successor form), with respect to the issuance of the Parent ADSs subject to the Assumed RSU Awards and the Assumed PSU Awards and shall use reasonable best efforts to maintain the effectiveness of such registration statement or registration statements (and maintain the current status of the prospectus or prospectuses contained therein) for so long as the Assumed RSU Awards and the Assumed PSU Awards remain outstanding.
(e) Board Actions. Prior to the First Effective Time, the Board of Directors of the Company (and/or the Leadership and Compensation Committee of the Board of Directors of the Company) and the Board of Directors of Parent (and/or the Remuneration Committee of the Board of Directors of Parent) shall adopt such resolutions as are necessary to give effect to the transactions contemplated by this Section 2.07.
(f) Company ESPP. As soon as practicable following the date of this Agreement, the Board of Directors of the Company (or, if appropriate, any committee administering the Company ESPP) shall adopt such resolutions or take such other actions as may be required so that (i) participation in the Company ESPP shall be limited to those employees who are participants on the date of this Agreement, (ii) except to the extent necessary to maintain the status of the Company ESPP as an “employee stock purchase plan” within the meaning of Section 423 of the Code and the Treasury Regulations thereunder, participants may not increase their payroll deduction elections or rate of contributions from those in effect on the date of this Agreement or make any separate non-payroll contributions to the Company ESPP on or following the date of this Agreement, (iii) no offering period shall be commenced after the date of this Agreement, and (iv) the Company ESPP shall terminate, effective on the earlier of the first purchase date following the date of this Agreement and the fifth trading day before the First Effective Time, but subsequent to the exercise of purchase rights on such purchase date (in accordance with the terms of the Company ESPP).
Section 2.08 Adjustments. Without limiting or affecting any of the provisions of Section 6.01 or Section 7.01, if, during the period between the date of this Agreement and the First Effective Time, any change in the outstanding Parent ADSs or outstanding Parent Ordinary Shares shall occur as a result of any reclassification, recapitalization, stock split (including reverse stock split), merger, offer (as defined in the U.K. Code), combination, scheme, exchange or readjustment of shares, subdivision or other similar transaction, or any stock dividend or distribution thereon with a record date during such period, the Merger Consideration and any other amounts payable pursuant to this Agreement shall be appropriately adjusted to provide the holders of shares of Company Common Stock and/or Company Equity Awards with the same economic effect as contemplated by this Agreement prior to such event.
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Section 2.09 Fractional ADSs. Notwithstanding anything in this Agreement to the contrary, no fractional Parent ADSs shall be issued in the First Merger. Each holder of shares of Company Common Stock who would otherwise have been entitled to receive as a result of the First Merger a fraction of a Parent ADS (after aggregating all shares represented by the Certificates and Uncertificated Shares delivered by such holder) shall receive, in lieu thereof, cash (without interest) in an amount (rounded down to the nearest cent) representing such holder’s proportionate interest in the net proceeds from the sale by the Exchange Agent on behalf of all such holders of fractional Parent ADSs that would otherwise be issued.
Section 2.10 Withholding Rights. Each of the Exchange Agent, Parent, Bidco, the First Surviving Corporation, the Surviving Company, and the Company shall be entitled to deduct and withhold from the consideration otherwise payable pursuant to this Agreement such amounts as are required to be deducted and withheld with respect to the making of such payment under any provision of federal, state, local or non-U.S. Tax law. To the extent amounts so deducted and withheld are paid over to the appropriate Taxing Authority, such amounts shall be treated for all purposes of this Agreement as having been paid to the Person in respect of which the deduction and withholding were made.
Section 2.11 Lost Certificates. If any Certificate shall have been lost, stolen or destroyed, on the making of an affidavit of that fact by the Person claiming such Certificate to be lost, stolen or destroyed and, if reasonably required by the Surviving Company or the Exchange Agent, the posting by such Person of a customary bond issued for lost, stolen or destroyed stock certificates, in such reasonable amount as the Surviving Company or the Exchange Agent may direct, as indemnity against any claim that may be made against the Surviving Company or the Exchange Agent, with respect to such Certificate, the Exchange Agent shall, if such holder has otherwise delivered a properly completed and duly executed letter of transmittal, issue, in exchange for such lost, stolen or destroyed Certificate, the Merger Consideration to be paid in respect of the shares of Company Common Stock represented by such Certificate, as contemplated by this Article II (including Section 2.05).
Section 2.12 Further Assurances. At and after the Second Effective Time, the officers and directors of the Surviving Company shall be authorized to execute and deliver, in the name and on behalf of the Company, any of its Subsidiaries or either Merger Sub, any deeds, bills of sale, assignments or assurances and to take and do, in the name and on behalf of the Company, any of its Subsidiaries or either Merger Sub, any other actions and things to vest, perfect or confirm of record or otherwise in the Surviving Company any and all right, title and interest in, to and under any of the rights, properties or assets of the Company acquired or to be acquired by the Surviving Company as a result of, or in connection with, the Mergers.
ARTICLE III
ORGANIZATIONAL DOCUMENTS; DIRECTORS AND OFFICERS
Section 3.01 Certificate of Incorporation and Bylaws of the First Surviving Corporation; Certificate of Formation and Limited Liability Company Agreement of the Surviving Company. Subject to Section 7.04, (a) the certificate of incorporation and bylaws of Merger Sub I, as in effect immediately prior to the First Effective Time, shall be the certificate of
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incorporation and bylaws, respectively, of the First Surviving Corporation from and after the First Effective Time until thereafter amended as provided therein or by Applicable Law and (b) the certificate of formation and limited liability company agreement of Merger Sub II, as in effect immediately prior to the Second Effective Time, shall be the certificate of formation and limited liability company agreement, respectively, of the Surviving Company from and after the Second Effective Time until thereafter amended as provided therein or by Applicable Law.
Section 3.02 Directors and Officers of the First Surviving Corporation and Surviving Company. (a) From and after the First Effective Time, until their respective successors are duly elected or appointed and qualified in accordance with Applicable Law, (i) the directors of Merger Sub I immediately prior to the First Effective Time shall be the directors of the First Surviving Corporation and (ii) the officers of the Company immediately prior to the First Effective Time shall be the officers of the First Surviving Corporation and (b) from and after the Second Effective Time, until their respective successors are duly elected or appointed and qualified in accordance with Applicable Law, (i) the directors of the First Surviving Corporation immediately prior to the Second Effective Time shall be the directors of the Surviving Company and (ii) the officers of the First Surviving Corporation immediately prior to the Second Effective Time shall be the officers of the Surviving Company.
ARTICLE IV
REPRESENTATIONS AND WARRANTIES OF THE COMPANY
Subject to Section 11.05, except (a) as disclosed in any Company SEC Document filed or furnished and publicly available on the SEC’s Electronic Data Gathering Analysis and Retrieval System since January 1, 2019 and prior to the date that was three business days prior to the date of this Agreement or (b) as set forth in the Company Disclosure Schedule, the Company represents and warrants to Parent that:
Section 4.01 Corporate Existence and Power. The Company is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware. The Company has all requisite corporate power and authority required to own or lease all of its properties or assets and to carry on its business as now conducted, except where the failure to have such power or authority would not reasonably be expected to, individually or in the aggregate, (a) have a Company Material Adverse Effect or (b) prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers. The Company is duly qualified to do business and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Prior to the date of this Agreement, the Company has made available to Parent true and complete copies of the certificate of incorporation and bylaws of the Company as in effect on the date of this Agreement (the “Company Organizational Documents”).
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Section 4.02 Corporate Authorization.
(a) The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated by this Agreement are within the corporate powers and authority of the Company and, except for the Company Stockholder Approval, have been duly authorized by all necessary corporate action on the part of the Company. The affirmative vote of the holders of at least a majority of the outstanding shares of Company Common Stock adopting this Agreement is the only vote of the holders of any of the Company’s capital stock necessary in connection with the consummation of the Mergers (the “Company Stockholder Approval”). This Agreement has been duly executed and delivered by the Company and (assuming due authorization, execution and delivery by Parent, Bidco and each Merger Sub) constitutes a valid, legal and binding agreement of the Company enforceable against the Company in accordance with its terms (subject to applicable bankruptcy, insolvency, reorganization, moratorium and similar laws affecting creditors’ rights and remedies generally, and subject to general principles of equity, regardless of whether enforcement is sought in a proceeding at law or in equity (collectively, the “Bankruptcy and Equity Exceptions”)).
(b) At a meeting duly called and held, the Board of Directors of the Company unanimously adopted resolutions (i) determining that this Agreement and the transactions contemplated hereby (including the Mergers) are fair to and in the best interests of the Company and its stockholders, (ii) approving, adopting and declaring advisable this Agreement and the transactions contemplated hereby (including the Mergers), (iii) directing that the adoption of this Agreement be submitted to a vote at a meeting of the Company’s stockholders, and (iv) recommending adoption of this Agreement by the Company’s stockholders (such recommendation, the “Company Board Recommendation”). Except as permitted by Section 6.02, the Board of Directors of the Company has not subsequently rescinded, modified or withdrawn any of the foregoing resolutions.
Section 4.03 Governmental Authorization. The execution, delivery and performance by the Company of this Agreement and the consummation by the Company of the transactions contemplated hereby require no action by or in respect of, Consents of, or Filings with, any Governmental Authority other than (a) the filing of the First Certificate of Merger and the Second Certificate of Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which the Company is qualified to do business, (b) compliance with any applicable requirements of the HSR Act, (c) compliance with and Filings under any applicable Antitrust Laws of any non-U.S. jurisdictions (collectively, “Foreign Antitrust Laws”), (d) compliance with any applicable requirements of the 1933 Act, the 1934 Act and any other applicable U.S. state or federal securities laws or pursuant to the rules of the NASDAQ Global Select Market (“Nasdaq”), and (e) any other actions, Consents or Filings the absence of which has not had and would not reasonably be expected to, individually or in the aggregate, (i) have a Company Material Adverse Effect or (ii) prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers.
Section 4.04 Non-contravention. Assuming compliance with the matters referred to in Section 4.03 and receipt of the Company Stockholder Approval, the execution,
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delivery and performance by the Company of this Agreement and the consummation of the transactions contemplated hereby do not and will not (a) contravene, conflict with, or result in any violation or breach of any provision of Company Organizational Documents, (b) contravene, conflict with or result in any violation or breach of any provision of any Applicable Law, (c) require any Consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which the Company or any of its Subsidiaries is entitled under, any provision of any Contract binding on the Company or any of its Subsidiaries, or (d) result in the creation or imposition of any Lien on any asset of the Company or any of its Subsidiaries, except, in the case of each of clauses (b) through (d), as (i) has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or consummate the Mergers.
Section 4.05 Capitalization.
(a) The authorized capital stock of the Company consists of (i) 290,000,000 shares of Company Common Stock and (ii) 5,000,000 shares of preferred stock, par value $0.0001 per share (“Company Preferred Stock”). As of the close of business on December 9, 2020, there were issued (A) 240,085,996 shares of Company Common Stock (of which 21,365,429 shares were held in treasury), (B) no shares of Company Preferred Stock, (C) Company Stock Options to purchase an aggregate of 2,372,634 shares of Company Common Stock, (D) 4,568,750 shares of Company Common Stock were subject to outstanding Company RSU Awards, (E) 1,056,176 shares of Company Common Stock were subject to outstanding Company PSU Awards, determined assuming target performance levels were achieved and 2,703,746 shares of Company Common Stock were subject to outstanding Company PSU Awards, determined assuming maximum performance levels were achieved, (F) (1) 9,502,104 additional shares of Company Common Stock were reserved for issuance pursuant to the Company Stock Plans and (2) 423,409 additional shares of Company Common Stock were reserved for issuance under the Company ESPP, (G) 152,681,745 CVRs subject to, and having the terms set forth in, the CVR Agreement. Except as set forth in this Section 4.05(a), as of the close of business on December 9, 2020, there are no issued, reserved for issuance or outstanding Equity Securities of the Company.
(b) All outstanding shares of capital stock of the Company have been, and all shares that may be issued pursuant to any Company Stock Plan will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued, fully paid and nonassessable and free of preemptive rights. No Subsidiary of the Company owns any shares of capital stock of the Company (other than any such shares owned by Subsidiaries of the Company in a fiduciary, representative or other capacity on behalf of other Persons, whether or not held in a separate account). There are no outstanding bonds, debentures, notes or other indebtedness of the Company having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which stockholders of the Company have the right to vote. There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities of the Company. Neither the Company nor
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any of its Subsidiaries is a party to any agreement with respect to the voting of any Equity Securities of the Company.
Section 4.06 Subsidiaries.
(a) Each Subsidiary of the Company is a corporation or other entity duly incorporated or organized, validly existing and in good standing (except to the extent such concept is not applicable under Applicable Law of such Subsidiary’s jurisdiction of incorporation, formation or organization, as applicable) under the laws of its jurisdiction of incorporation, formation or organization and has all corporate or other organizational powers and authority, as applicable, required to own, lease and operate its properties and assets and to carry on its business as now conducted, except for those jurisdictions where failure to be so duly incorporated or organized, validly existing and in good standing or to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Each such Subsidiary is duly qualified to do business and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) All of the issued and outstanding capital stock or other Equity Securities of each Subsidiary of the Company have been validly issued and are fully paid and nonassessable (except to the extent such concepts are not applicable under Applicable Law of such Subsidiary’s jurisdiction of incorporation, formation or organization, as applicable) and are owned by the Company, directly or indirectly, free and clear of any Lien (other than any restrictions imposed by Applicable Law) and free of preemptive rights, rights of first refusal, subscription rights or similar rights of any Person and transfer restrictions (other than transfer restrictions under Applicable Law or under the organizational documents of such Subsidiary). There are no outstanding obligations of the Company or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities of any Subsidiary of the Company. Except for the capital stock or other Equity Securities of its Subsidiaries and publicly traded securities held for investment that do not exceed five percent of the outstanding securities of any entity, the Company does not own, directly or indirectly, any capital stock or other Equity Securities of any Person.
Section 4.07 SEC Filings and the Sarbanes-Oxley Act.
(a) The Company has timely filed with or furnished to the SEC all reports, schedules, forms, statements, prospectuses, registration statements and other documents required to be filed with or furnished to the SEC by the Company since January 1, 2018 (collectively, together with any exhibits and schedules thereto and other information incorporated therein, the “Company SEC Documents”). No Subsidiary of the Company is required to file or furnish any report, schedule, form, statement, prospectus, registration statement or other document with the SEC.
(b) As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseding filing), the Company SEC
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Documents filed or furnished prior to the date of this Agreement complied, and each Company SEC Document filed or furnished subsequent to the date of this Agreement (assuming, in the case of the Proxy Statement/Prospectus, that the representations and warranties set forth in Section 5.09 are true and correct) will comply, in all material respects with the applicable requirements of Nasdaq, the 1933 Act, the 1934 Act and the Sarbanes-Oxley Act, as the case may be.
(c) As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseding filing), each Company SEC Document filed or furnished prior to the date of this Agreement did not, and each Company SEC Document filed or furnished subsequent to the date of this Agreement (assuming, in the case of the Proxy Statement/Prospectus, that the representations and warranties set forth in Section 5.09 are true and correct) will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(d) Each Company SEC Document that is a registration statement, as amended or supplemented, if applicable, filed pursuant to the 1933 Act, as of the date such registration statement or amendment became effective, and as of the date of such amendment or supplement, did not contain any untrue statement of a material fact or omit to state any material fact required to be stated therein or necessary to make the statements therein not misleading in any material respect.
(e) As of the date of this Agreement, there are no outstanding or unresolved comments received from the SEC staff with respect to any of the Company SEC Documents, and, to the knowledge of the Company, none of the Company SEC Documents are subject to ongoing SEC review.
(f) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company is, and since January 1, 2019 has been, in compliance with (i) the applicable provisions of the Sarbanes-Oxley Act and (ii) the applicable listing and corporate governance rules and regulations of Nasdaq.
(g) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company currently maintains disclosure controls and procedures (as defined in Rule 13a-15 under the 1934 Act) that are designed to provide reasonable assurance that all information required to be disclosed in the Company’s reports filed under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC and that all such information is accumulated and communicated to the Company’s management as appropriate to allow timely decisions regarding required disclosure and to enable each of the principal executive officer of the Company and the principal financial officer of the Company to make the certifications required under the 1934 Act with respect to such reports. For purposes of this Agreement, “principal executive officer” and “principal financial officer” shall have the meanings given to such terms in the Sarbanes-Oxley Act.
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(h) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company currently maintains a system of internal controls over financial reporting (as defined in Rule 13a-15 under the 1934 Act) (“internal controls”) designed to provide reasonable assurance regarding the reliability of the Company’s financial reporting and the preparation of the Company’s financial statements for external purposes in accordance with GAAP, and the Company’s principal executive officer and principal financial officer have disclosed, based on their most recent evaluation of such internal controls prior to the date of this Agreement, to the Company’s auditors and the audit committee of the Board of Directors of the Company (i) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect the Company’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in internal controls.
(i) Since January 1, 2018, each of the principal executive officer and principal financial officer of the Company (or each former principal executive officer and principal financial officer of the Company, as applicable) has made all certifications required by Rules 13a-14 and 15d-14 under the 1934 Act and Sections 302 and 906 of the Sarbanes-Oxley Act and any related rules and regulations promulgated by the SEC and Nasdaq.
Section 4.08 Financial Statements and Financial Matters.
(a) The audited consolidated financial statements and unaudited consolidated interim financial statements of the Company included or incorporated by reference in the Company SEC Documents (or, if any such Company SEC Document is amended or superseded by a filing prior to the date of this Agreement, such amended or superseding Company SEC Document) present fairly in all material respects, in conformity with GAAP applied on a consistent basis during the periods presented (except as may be indicated in the notes thereto), the consolidated financial position of the Company and its Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject, in each case, to normal and recurring year-end audit adjustments in the case of any unaudited interim financial statements).
(b) From January 1, 2018 to the date of this Agreement, the Company has not received written notice from the SEC or any other Governmental Authority indicating that any of its accounting policies or practices are or may be the subject of any review, inquiry, investigation or challenge by the SEC or any other Governmental Authority.
Section 4.09 Disclosure Documents.
(a) The information relating to the Company and its Subsidiaries that is provided in writing by the Company, any of its Subsidiaries or any of their respective Representatives for inclusion or incorporation by reference in the Form F-4 or the Proxy Statement/Prospectus will not (i) in the case of the Form F-4, at the time the Form F-4 or any amendment or supplement thereto becomes effective and at the time of the Company Stockholder Meeting or (ii) in the case of the Proxy Statement/Prospectus, at the time the Proxy Statement/Prospectus or any amendment or supplement thereto is first mailed to the stockholders
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of the Company and at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(b) The information relating to the Company and its Subsidiaries that is provided in writing by the Company, any of its Subsidiaries or any of their respective Representatives for inclusion or incorporation by reference in the Parent Circular will not, at the time the Parent Circular or any amendment or supplement thereto is submitted to the FCA, at the time the Parent Circular or any amendment or supplement thereto is first mailed to the shareholders of Parent and at the time of the Parent Shareholder Meeting, contain any information or any expression of opinion, belief, expectation or intention which is untrue or inaccurate or omit a fact, the omission of which renders any information or expression in the Parent Circular inaccurate or misleading.
(c) The information relating to the Company and its Subsidiaries that is provided in writing by the Company, any of its Subsidiaries or any of their respective Representatives for inclusion or incorporation by reference in a Parent Prospectus will not, at the time a Parent Prospectus or any amendment or supplement thereto is submitted to the FCA, at the time a Parent Prospectus or any amendment or supplement thereto is made available to the public in accordance with the Prospectus Regulation Rules and at the time the Parent Shares Admission becomes effective, contain any information or any expression of opinion, belief, expectation or intention which is untrue or inaccurate or omit a fact, the omission of which renders any information or expression in a Parent Prospectus inaccurate or misleading.
(d) Notwithstanding the foregoing provisions of this Section 4.09, no representation or warranty is made by the Company with respect to information or statements made or incorporated by reference in the Form F-4, the Proxy Statement/Prospectus, a Parent Prospectus (if so required) or the Parent Circular that were not supplied by or on behalf of the Company.
Section 4.10 Absence of Certain Changes.
(a) (i) Since the Company Balance Sheet Date through the date of this Agreement, except in connection with or related to the process in connection with which the Company and its Representatives discussed and negotiated this Agreement and the transactions contemplated hereby, the business of the Company and its Subsidiaries has been conducted in all material respects in the ordinary course of business and (ii) since the Company Balance Sheet Date, there has not been any event, change, effect, development or occurrence that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(b) Since the Company Balance Sheet Date through the date of this Agreement, there has not been any action taken by the Company or any of its Subsidiaries that, if taken during the period from the date of this Agreement through the First Effective Time without Parent’s consent, would constitute a breach of clause (ii), (iii)(C), (v), (vi), (vii) or (xi) of Section 6.01(b) (or solely with respect to the foregoing clauses, clause (xvi) of Section 6.01(b)).
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Section 4.11 No Undisclosed Material Liabilities. There are no liabilities or obligations of the Company or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, that would be required by GAAP to be reflected on the consolidated balance sheet of the Company and its Subsidiaries, other than (a) liabilities or obligations disclosed or provided for in the Company Balance Sheet or in the notes thereto, (b) liabilities or obligations incurred in the ordinary course of business since the Company Balance Sheet Date, (c) liabilities arising in connection with the transactions contemplated hereby or in connection with obligations under Contracts binding on the Company or any of its Subsidiaries (except to the extent such liabilities arose or resulted from a breach or a default of such Contract) or (d) other liabilities or obligations that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. As of the date of this Agreement, there are no off-balance sheet arrangements of any type pursuant to any off-balance sheet arrangement required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K promulgated under the 1933 Act (“Regulation S-K”) that have not been so described in the Company SEC Documents.
Section 4.12 Litigation. There is no claim, action, proceeding or suit or, to the knowledge of the Company, investigation pending or, to the knowledge of the Company, threatened against the Company, any of its Subsidiaries, any present or, to the knowledge of the Company, former officers, directors or employees of the Company or any of its Subsidiaries in their respective capacities as such, or any of the respective properties or assets of the Company or any of its Subsidiaries, before (or, in the case of threatened claims, actions, suits, investigations or proceedings, that would be before) any Governmental Authority, (a) that has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (b) that would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers; provided, that to the extent any such representations or warranties in the foregoing clauses (a) and (b) pertain to claims, actions, proceedings, suits or investigations that relate to the execution, delivery, performance or consummation of this Agreement or any of the transactions contemplated by this Agreement, such representations and warranties are made only as of the date hereof. There is (in the case of clause (ii), as of the date of this Agreement) no Order outstanding against the Company, any of its Subsidiaries, any present or, to the knowledge of the Company, former officers, directors or employees of the Company or any of its Subsidiaries in their respective capacities as such, or any of the respective properties or assets of any of the Company or any of its Subsidiaries or, to the knowledge of the Company, threatened against or affecting the Company, any of its Subsidiaries, any present or, to the knowledge of the Company, former officers, directors or employees of the Company in their respective capacities as such, or any of the respective properties or assets of any of the Company or any of its Subsidiaries, that (i) has had or would reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (ii) would reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers.
Section 4.13 Permits. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and each of its Subsidiaries hold all governmental licenses and Consents necessary for the operation of its respective businesses (the “Company Permits”). The Company and each of
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its Subsidiaries are, and since January 1, 2019 have been, in compliance with the terms of the Company Permits, except for failures to comply that have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. There is no claim, action, proceeding or suit or, to the knowledge of the Company, investigation pending, or, to the knowledge of the Company, threatened that seeks the revocation, cancellation, termination, non-renewal or adverse modification of any Company Permit, except where such revocation, cancellation, termination, non-renewal or adverse modification (i) has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers.
Section 4.14 Compliance with Laws. The Company and each of its Subsidiaries are, and since January 1, 2018 have been, in compliance with all Applicable Laws, except for failures to comply that (i) have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers. Nothing in this Section 4.14 is intended to or shall be treated as a representation or warranty given by the Company with respect to Privacy Legal Requirements.
Section 4.15 Regulatory Matters.
(a) Except (x) as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (y) that, individually or in the aggregate, as of the date of this Agreement, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers, (i) each of the Company and its Subsidiaries holds (A) all authorizations under the U.S. Food, Drug, and Cosmetic Act of 1938 (the “FDCA”), the U.S. Public Health Service Act (the “PHSA”), and the regulations of the U.S. Food and Drug Administration (the “FDA”) promulgated thereunder, and (B) authorizations of any applicable Governmental Authority that are concerned with the quality, identity, strength, purity, safety, efficacy, manufacturing, marketing, distribution, sale, pricing, import or export of any of the Company Products (any such Governmental Authority, a “Company Regulatory Agency”) necessary for the lawful operation of the businesses of the Company or any of its Subsidiaries as currently conducted (the “Company Regulatory Permits”); (ii) all such Company Regulatory Permits are valid and in full force and effect; and (iii) the Company and its Subsidiaries are in compliance with the terms of all Company Regulatory Permits. All Company Regulatory Permits are in full force and effect, except where the failure to be in full force and effect (A) has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect or (B) as of the date of this Agreement, individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers.
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(b) Neither the Company nor any of its Subsidiaries are party to any material corporate integrity agreements, monitoring agreements, consent decrees, settlement orders, or similar agreements with or imposed by any Company Regulatory Agency.
(c) All pre-clinical and clinical investigations in respect of a Company Product conducted or sponsored by the Company or any of its Subsidiaries are being, and since January 1, 2019 have been, conducted in compliance with all Applicable Laws administered or issued by the applicable Company Regulatory Agencies, including (i) FDA standards for the design, conduct, performance, monitoring, auditing, recording, analysis and reporting of clinical trials contained in Title 21 parts 50, 54, 56, 312, 314 and 320 of the Code of Federal Regulations and (ii) any Applicable Laws restricting the collection, use and disclosure of individually identifiable health information and personal information, except, in each case, for such noncompliance that has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(d) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, during the period beginning on January 1, 2019 and ending on the date of this Agreement, neither the Company nor any of its Subsidiaries has received any written notice from the FDA or the European Medicines Agency (the “EMA”) or any foreign agency with jurisdiction over the development, marketing, labeling, sale, use handling and control, safety, efficacy, reliability, or manufacturing of the Company Products that would reasonably be expected to lead to the denial, limitation, revocation, or rescission of any of the Company Regulatory Permits or of any application for marketing approval currently pending before the FDA or such other Company Regulatory Agency.
(e) Since January 1, 2019, all reports, documents, claims, permits and notices required to be filed, maintained or furnished to the FDA or any other Company Regulatory Agency by the Company and its Subsidiaries have been so filed, maintained or furnished, except where failure to file, maintain or furnish such reports, documents, claims, permits or notices have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. All such reports, documents, claims, permits and notices were true and complete in all material respects on the date filed (or were corrected in or supplemented by a subsequent filing). Since January 1, 2019, neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any officer, employee, agent or distributor of the Company or any of its Subsidiaries, has made an untrue statement of a material fact or a fraudulent statement to the FDA or any other Company Regulatory Agency, failed to disclose a material fact required to be disclosed to the FDA or any other Company Regulatory Agency, or committed an act, made a statement, or failed to make a statement, in each such case, related to the business of the Company or any of its Subsidiaries, that, at the time such disclosure was made, would reasonably be expected to provide a basis for the FDA to invoke its policy respecting “Fraud, Untrue Statements of Material Facts, Bribery, and Illegal Gratuities”, set forth in 56 Fed. Reg. 46191 (September 10, 1991) or for the FDA or any other Company Regulatory Agency to invoke any similar policy, except for any act or statement or failure to make a statement that has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, since
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January 1, 2019, (i) neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any officer, employee, agent or distributor of the Company or any of its Subsidiaries, has been debarred or convicted of any crime or engaged in any conduct for which debarment is mandated by 21 U.S.C. § 335a(a) or any similar Applicable Law or authorized by 21 U.S.C. § 335a(b) or any similar Applicable Law applicable in other jurisdictions in which material quantities of any of the Company Products are sold or intended by the Company to be sold; and (ii) neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any officer, employee, agent or distributor of the Company or any of its Subsidiaries, has been excluded from participation in any federal health care program or convicted of any crime or engaged in any conduct for which such Person could reasonably be expected to be excluded from participating in any federal health care program under Section 1128 of the Social Security Act of 1935 or any similar Applicable Law or program.
(f) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, as to each Company Product subject to the FDCA and the regulations of the FDA promulgated thereunder or any similar Applicable Law in any foreign jurisdiction in which material quantities of any of the Company Products are sold or intended by the Company or any of its Subsidiaries to be sold that is or has been developed, manufactured, tested, distributed or marketed by or on behalf of the Company or any of its Subsidiaries, each such Company Product is being or has been developed, manufactured, stored, distributed and marketed in compliance with all Applicable Laws, including those relating to investigational use, marketing approval, current good manufacturing practices, packaging, labeling, advertising, record keeping, reporting, and security. There is no action or proceeding pending or, to the knowledge of the Company, threatened, including any prosecution, injunction, seizure, civil fine, debarment, suspension or recall, in each case alleging any violation applicable to any Company Product by the Company or any of its Subsidiaries of any Applicable Law, except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(g) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) during the period beginning on January 1, 2019 and ending on the date of this Agreement, neither the Company nor any of its Subsidiaries have voluntarily or involuntarily initiated, conducted or issued, or caused to be initiated, conducted or issued, any material recall, field corrections, market withdrawal or replacement, safety alert, warning, “dear doctor” letter, investigator notice, or other notice or action to wholesalers, distributors, retailers, healthcare professionals or patients relating to an alleged lack of safety, efficacy or regulatory compliance of any Company Product and (ii) to the knowledge of the Company, neither the Company nor any of its Subsidiaries has received, any written notice from the FDA or any other Company Regulatory Agency during the period beginning on January 1, 2019 and ending on the date of this Agreement regarding (A) the recall, market withdrawal or replacement of any Company Product sold or intended to be sold by the Company or its Subsidiaries (other than recalls, withdrawals or replacements that are not material to the Company and its Subsidiaries, taken as a whole), (B) a material change in the marketing classification or a material change in the labeling of any such Company Products, (C) a termination or suspension of the manufacturing, marketing, or distribution of such Company Products, or (D) a material negative change in reimbursement status of a Company Product.
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Section 4.16 Material Contracts.
(a) Section 4.16(a) of the Company Disclosure Schedule sets forth a list as of the date of this Agreement of each of the following Contracts to which the Company or any of its Subsidiaries is a party or by which it is bound (each such Contract listed or required to be so listed, and each of the following Contracts to which the Company or any of its Subsidiaries becomes a party or by which it becomes bound after the date of this Agreement, a “Company Material Contract”):
(i) any Contract, including any manufacturing, supply or distribution agreement, that requires by its terms or is reasonably likely to require the payment or delivery of cash or other consideration by or to the Company or any of its Subsidiaries in an amount having an expected value in excess of $50,000,000 in the fiscal year ending December 31, 2020 or any fiscal year thereafter, which cannot be terminated by the Company or such Subsidiary on 60 days’ notice or less without material payment or penalty;
(ii) each Contract providing for or (in the case of subclause (B)) related to the acquisition or disposition of assets or securities by or from any Person or any business (or any contract providing for an option, right of first refusal or offer or similar rights with respect to any of the foregoing) (A) entered into since December 31, 2018 that involved or would reasonably be expected to involve the payment of consideration in excess of $50,000,000 in the aggregate with respect to such Contract or series of related Contracts, or (B) that contains (or would contain, in the case of an option, right of first refusal or offer or similar rights) ongoing representations, warranties, covenants, indemnities or other obligations (including “earn-out”, contingent value rights or other contingent payment or value obligations) that would involve or may reasonably be expected to require the receipt or making of payments or the issuance of any Equity Securities of the Company or any of its Subsidiaries, in each case having an expected value in excess of $50,000,000 in the fiscal year ending December 31, 2020;
(iii) any Contract between any Governmental Authority, on the one hand, and the Company or any of its Subsidiaries, on the other hand, involving or that would reasonably be expected to involve payments to or from such Governmental Authority in an amount having an expected value in excess of $50,000,000 in the fiscal year ending December 31, 2020 or any fiscal year thereafter;
(iv) any Contract that (A) limits or purports to limit, in any material respect, the freedom of the Company or any of its Subsidiaries to engage or compete in any line of business or with any Person or in any area or that would so limit or purport to limit, in any material respect, the freedom of Parent or any of its Affiliates after the First Effective Time, (B) contains material exclusivity or “most favored nation” obligations or restrictions or (C) contains any other provisions that restrict the ability of the Company or any of its Subsidiaries to sell, market, distribute, promote, manufacture, develop, commercialize, or test or research any Company Product, directly or indirectly through third parties, in any material respect, or that would so limit or purport to limit the ability of Parent or any of its Affiliates to sell, market, distribute, promote, manufacture,
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develop, commercialize, or test or research any Parent Product after the First Effective Time, directly or indirectly through third parties, in any material respect;
(v) any Contract relating to third-party indebtedness for borrowed money (including under any short-term financing facility) in excess of $20,000,000 (whether incurred, assumed, guaranteed or secured by any asset of the Company or any of its Subsidiaries) other than any Contract exclusively between or among the Company and any of its wholly owned Subsidiaries;
(vi) any Contract restricting the payment of dividends or the making of distributions in respect of any Equity Securities of the Company or any of its Subsidiaries or the repurchase or redemption of, any Equity Securities of the Company or any of its Subsidiaries;
(vii) any material joint venture, profit-sharing, partnership, collaboration, co-promotion, commercialization, research, development, license or other similar agreement;
(viii) any Contract with any Person (A) pursuant to which the Company or its Subsidiaries may be required to pay milestones, royalties or other contingent payments based on any research, testing, development, regulatory filings or approval, sale, distribution, commercial manufacture or other similar occurrences, developments, activities or events, or (B) under which the Company or its Subsidiaries grants to any Person any right of first refusal, right of first negotiation, option to purchase, option to license, or any other similar rights with respect to any Company Product or any material Intellectual Property Rights, in each case, which payments are in an amount having an expected value in excess of $50,000,000 in the fiscal year ending December 31, 2020;
(ix) any lease or sublease for real or personal property for which annual rental payments made by the Company or any of its Subsidiaries are expected to be in excess of $50,000,000 in the fiscal year ending December 31, 2020 or any fiscal year thereafter;
(x) all material Contracts pursuant to which the Company or any of its Subsidiaries (A) receives or is granted any license (including any sublicense) to, or covenant not to be sued under, any Intellectual Property Rights (other than licenses to commercially available software, including off-the-shelf software, or other technology) or (B) grants any license (including any sublicense) to, or covenant not to be sued under, any Company Intellectual Property (other than non-exclusive licenses granted in the ordinary course of business consistent with past practice), in the case of each of clauses (A) and (B), that (1) will involve aggregate payments by or to the Company or any of its Subsidiaries in excess of $10,000,000 in the fiscal year ending December 31, 2020 or (2) are material to the development, manufacture or sale of a Company Product;
(xi) any Contracts or other transactions with any record or, to the knowledge of the Company, beneficial owner of five percent or more of the voting securities of the Company, or (B) affiliate (as such term is defined in Rule 12b-2
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promulgated under the 1934 Act) or “associates” (or members of any of their “immediate family”) (as such terms are respectively defined in Rule 12b-2 and Rule 16a-1 of the 1934 Act) of any such director or beneficial owner;
(xii) any Contract involving the settlement of any claim, action or proceeding or threatened claim, action or proceeding (or series of related, claims actions or proceedings) which (A) will involve payments after the date of this Agreement in excess of $5,000,0000 or (B) will impose materially burdensome monitoring or reporting obligations to any other Person outside the ordinary course of business or material restrictions on the Company or any Subsidiary of the Company (or, following the Closing, on Parent or any Subsidiary of Parent);
(xiii) any settlement agreements by the Company or any of its Subsidiaries with Taxing Authorities entered into since January 1, 2020 and providing for payments in excess of $50,000,000; and
(xiv) any other Contract required to be filed by the Company pursuant to Item 601(b)(10) of Regulation S-K.
(b) All of the Company Material Contracts are, subject to the Bankruptcy and Equity Exceptions, (i) valid and binding obligations of the Company or a Subsidiary of the Company (as the case may be) and, to the knowledge of the Company, each of the other parties thereto, and (ii) in full force and effect and enforceable in accordance with their respective terms against the Company or its Subsidiaries (as the case may be) and, to the knowledge of the Company, each of the other parties thereto (in each case except for such Company Material Contracts that are terminated after the date of this Agreement in accordance with their respective terms, other than as a result of a default or breach by the Company or any of its Subsidiaries of any of the provisions thereof), except where the failure to be valid and binding obligations and in full force and effect and enforceable has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. To the knowledge of the Company, as of the date of this Agreement, no Person is seeking to terminate or challenging the validity or enforceability of any Company Material Contract, except such terminations or challenges which have not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any of the other parties thereto, has violated any provision of, or committed or failed to perform any act that (with or without notice, lapse of time or both) would constitute a default under any provision of, and neither the Company nor any of its Subsidiaries has received written notice that it has violated or defaulted under, any Company Material Contract, except for those violations and defaults (or potential defaults) that would not have had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. The Company has made available to Parent true and complete copies of each of Company Material Contract as in effect as of the date hereof.
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Section 4.17 Taxes. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(a) All Tax Returns required by Applicable Law to be filed with any Taxing Authority by the Company or any of its Subsidiaries have been filed when due (giving effect to all extensions) in accordance with all Applicable Law, and all such Tax Returns are true, correct and complete in all respects.
(b) Each of the Company and its Subsidiaries has paid (or has had paid on its behalf) all Taxes due and owing (whether or not shown on any Tax Return), except for Taxes being contested in good faith pursuant to appropriate procedures for which an adequate reserve has been established on the books and records of the Company or its applicable Subsidiary.
(c) Each of the Company and its Subsidiaries has duly and timely withheld all Taxes required to be withheld, and such withheld Taxes have been either duly and timely paid to the proper Taxing Authority or properly set aside in accounts for such purpose.
(d) There is no audit, claim, action, suit, proceeding or other investigation pending or, to the Company’s knowledge, threatened in writing against or with respect to the Company or its Subsidiaries in respect of Taxes.
(e) Except in the ordinary course of business, neither the Company nor any of its Subsidiaries has waived any statute of limitations with respect to Taxes or agreed to any extension of time with respect to a Tax assessment or deficiency, which waiver is still in effect.
(f) During the two year period ending on the date of this Agreement, the Company was not a “distributing corporation” or a “controlled corporation” (within the meaning of Section 355(a)(1)(A) of the Code) in a transaction intended to qualify for tax-free treatment under Section 355 of the Code.
(g) There are no Liens for Taxes (other than Permitted Liens) on any of the assets of the Company or any of its Subsidiaries.
(h) Neither the Company nor any of its Subsidiaries (i) has been a member of an affiliated, consolidated, combined or unitary group other than one of which the Company or any of its Subsidiaries was the common parent, (ii) is party to any agreement relating to the apportionment, sharing, assignment or allocation of Taxes (other than (x) an agreement solely between or among the Company and/or one or more of its Subsidiaries or (y) customary Tax indemnification provisions in ordinary course commercial agreements that are not primarily related to Taxes), (iii) has entered into a closing agreement pursuant to Section 7121 of the Code, or any similar provision of state, local or non-U.S. law or (iv) has any liability for the Taxes of any Person (other than the Company or any of its Subsidiaries) under Treasury Regulation Section 1.1502-6 (or any similar provision of state, local or non-U.S. law) or as a transferee or successor.
(i) Neither the Company nor any of its Subsidiaries will be required to include any material item of income in, or exclude any material item of deduction from, taxable income for any taxable period (or portion thereof) beginning after the Closing Date as a result of
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(i) any change in method of accounting occurring prior to the Closing pursuant to Section 481(a) of the Code (or any similar provision of state, local, or foreign Applicable Law), (ii) any installment sale or open transaction made prior to Closing, (iii) any intercompany transaction or excess loss account described in Treasury Regulations under Section 1502 of the Code (or any similar provision of state, provincial, local or foreign Applicable Law) entered into prior to or existing as of immediately prior to the Closing, (iv) any closing agreement pursuant to Section 7121 of the Code (or any similar provision of state, local or non-U.S. Law) entered into prior to the Closing, (v) any prepaid amount received or paid prior to the Closing, or (vi) any election pursuant to Section 108(i) of the Code.
(j) Neither the Company nor any of its Subsidiaries has engaged in any “listed transaction” within the meaning of Treasury Regulation Section 1.6011-4(b)(2).
(k) As of December 31, 2019, the Company and its Subsidiaries have not formed a compartmentalisation reserve for Dutch Tax purposes, and to the best of their knowledge they have not formed any such reserve between December 31, 2019 and the date of this Agreement.
(l) Within the past six years, no jurisdiction in which the Company or any of its Subsidiaries does not file a Tax Return has asserted in writing a claim that has not been resolved to the effect that the Company or such Subsidiary is subject to Taxes or required to file Tax Returns in such jurisdiction.
(m) Neither the Company nor any of its Subsidiaries has taken or agreed to take any action or knows of any fact, agreement, plan or other circumstance that is reasonably likely (i) to prevent the Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (ii) to cause the stockholders of the Company (other than any Excepted Stockholder) to recognize gain pursuant to Section 367(a)(1) of the Code.
Section 4.18 Employees and Employee Benefit Plans.
(a) Section 4.18(a) of the Company Disclosure Schedule sets forth a true and complete list as of the date of this Agreement of each material Company Employee Plan and each Company Employee Plan that is subject to ERISA. For each material Company Employee Plan and each Company Employee Plan that is subject to ERISA, the Company has made available to Parent a copy of such plan (or a description, if such plan is not written) and all amendments thereto and material written interpretations thereof, together with a copy of (if applicable) (i) each trust, insurance or other funding arrangement, (ii) each summary plan description and summary of material modifications, (iii) the most recently filed Internal Revenue Service Forms 5500, (iv) the most recent favorable determination or opinion letter from the Internal Revenue Service, (v) the most recently prepared actuarial reports and financial statements in connection with each such Company Employee Plan, and (vi) all documents and correspondence relating thereto received from or provided to the Department of Labor, the PBGC, the Internal Revenue Service or any other Governmental Authority during the past year.
(b) Neither the Company nor any of its ERISA Affiliates (nor any predecessor of any such entity) sponsors, maintains, administers or contributes to (or has any obligation to
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contribute to), or has, during the last six years, sponsored, maintained, administered or contributed to (or had any obligation to contribute to), any plan subject to Title IV of ERISA, including any multiemployer plan, as defined in Section 3(37) of ERISA.
(c) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Company Employee Plan that is intended to be qualified under Section 401(a) of the Code has received a favorable determination or opinion letter from the Internal Revenue Service or has applied to the Internal Revenue Service for such a letter within the applicable remedial amendment period or such period has not expired and, to the knowledge of the Company, no circumstances exist that would reasonably be expected to result in any such letter being revoked or not being reissued or a penalty under the Internal Revenue Service Closing Agreement Program if discovered during an Internal Revenue Service audit or investigation. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each trust created under any such Company Employee Plan is exempt from tax under Section 501(a) of the Code and has been so exempt since its creation.
(d) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, each Company Employee Plan has been maintained in compliance with its terms and all Applicable Law, including ERISA and the Code. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, no claim (other than routine claims for benefits), action, suit, investigation or proceeding (including an audit) is pending against or involves or, to the Company’s knowledge, is threatened against or reasonably expected to involve, any Company Employee Plan before any Governmental Authority, including the Internal Revenue Service, the Department of Labor or the PBGC.
(e) Except as provided under this Agreement or pursuant to Applicable Law, with respect to each director, officer, or employee (including each former director, officer, or employee) of the Company or any of its Subsidiaries, the consummation of the transactions contemplated by this Agreement will not, either alone or together with any other event: (i) entitle any such individual to any payment or benefit, including any bonus, retention, severance, retirement or job security payment or benefit, (ii) accelerate the time of payment or vesting or trigger any payment or funding (through a grantor trust or otherwise) of compensation or benefits under, or increase the amount payable or trigger any other obligation under, any Company Employee Plan, (iii) contractually limit or restrict the right of the Company or any of its Subsidiaries or, after the Closing, Parent to merge, amend or terminate any Company Employee Plan or (iv) result in the payment of any “excess parachute payment” (as defined in Section 280G(b)(1) of the Code).
(f) Neither the Company nor any of its Subsidiaries has any current or projected liability for, and no Company Employee Plan provides or promises, any post-employment or post-retirement medical, dental, disability, hospitalization, life or similar benefits (whether insured or self-insured) to any director, officer, or employee (including any former director, officer, or employee) of the Company or any of its Subsidiaries (other than coverage mandated by Applicable Law).
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(g) Neither the Company nor any of its Subsidiaries has any obligation to gross-up, indemnify or otherwise reimburse any Person for any Tax incurred by such Person under Section 409A or 4999 of the Code.
(h) With respect to any Company Employee Plan for the benefit of Company employees or dependents thereof who perform services or who are employed outside of the United States (a “Non-U.S. Plan”), except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect: (i) if required to have been approved by any non-U.S. Governmental Authority (or permitted to have been approved to obtain any beneficial Tax or other status), such Non-U.S. Plan has been so approved or timely submitted for approval; no such approval has been revoked (nor, to the knowledge of the Company, has revocation been threatened) and no event has occurred since the date of the most recent approval or application therefor that is reasonably likely to affect any such approval or increase the costs relating thereto; (ii) if intended to be funded and/or book reserved, such Non-U.S. Plan is fully funded and/or book reserved, as appropriate, based upon reasonable actuarial assumptions; (iii) no material liability exists or reasonably could be imposed upon the assets of the Company or any of its Subsidiaries by reason of such Non-U.S. Plan; and (iv) the financial statements of such Non-U.S. Plan (if any) accurately reflect such Non-U.S. Plan’s liabilities.
(i) On or prior to the date hereof, the Company has made available to Parent a list of each Company Equity Award outstanding as of December 9, 2020 that includes (A) the number of shares of Company Common Stock underlying such Company Equity Award (assuming achievement of the applicable performance goals at the target level in the case of any such Company Equity Award that is a Company PSU Award), (B) the exercise price of each such Company Equity Award that is a Company Stock Option, and (C) the vesting schedule of each such Company Equity Award that is unvested as of December 9, 2020.
Section 4.19 Labor Matters.
(a) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries are, and since January 1, 2018 have been, in compliance with all Applicable Laws relating to labor and employment, including those relating to labor management relations, wages, hours, overtime, employee classification, discrimination, sexual harassment, civil rights, affirmative action, work authorization, immigration, safety and health, information privacy and security, workers compensation, continuation coverage under group health plans, wage payment and the payment and withholding of Taxes.
(b) Neither the Company nor any of its Subsidiaries is, or from January 1, 2018 to the date of this Agreement has been, a party to or subject to, or is currently negotiating in connection with entering into, any collective bargaining agreement or any other similar agreement with any labor organization, labor union or other employee representative, and, to the Company’s knowledge, from January 1, 2018 through the date of this Agreement, there has not been any organizational campaign, card solicitation, petition or other unionization or similar activity seeking recognition of a collective bargaining or similar unit relating to any director, officer, or employee of the Company or any of its Subsidiaries. Except as has not had and would
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not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, as of the date of this Agreement, (i) there are no unfair labor practice complaints pending or, to the Company’s knowledge, threatened against the Company or any of its Subsidiaries before the National Labor Relations Board or any other Governmental Authority or any current union representation questions involving any director, officer, or employee (including any former director, officer, or employee) of the Company or any of its Subsidiaries with respect to the Company or its Subsidiaries, and (ii) since January 1, 2018 there has not been, and there is, no labor strike, slowdown, stoppage, picketing, interruption of work or lockout pending or, to the Company’s knowledge, threatened against or affecting the Company or any of its Subsidiaries.
(c) The Company and its Subsidiaries have not entered into any agreement with any works council, labor union, or similar labor organization that would require the Company to obtain the consent of, or provide advance notice, to such works council, labor union or similar labor organization of the transactions contemplated by this Agreement.
Section 4.20 Intellectual Property.
(a) The Company has made available to Parent a true and complete list, as of the date of this Agreement, of all Registered Intellectual Property that is Company Intellectual Property (the “Company Registered IP”). Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) each item of Company Registered IP is legally, beneficially and solely owned by the Company or one of its Subsidiaries, free and clear of all Liens (other than Permitted Liens), (ii) since January 1, 2020, none of the Company Registered IP has lapsed, expired, or been abandoned (including as a result of failure to pay the necessary renewal or maintenance fees) prior to the end of the applicable term of such Company Registered IP, except where the Company has made a reasonable business decision to not maintain such Company Registered IP, (iii) none of the Company Registered IP that has issued has, since January 1, 2020, subsequently been adjudged invalid or unenforceable, (iv) to the knowledge of the Company, all Company Registered IP is subsisting, and if registered, not invalid or unenforceable and (v) there is no opposition or cancellation proceeding pending or, to the knowledge of the Company, threatened against the Company or its Subsidiaries challenging or contesting the ownership, validity, scope or enforceability of any Company Registered IP (other than ordinary course proceedings related to the application for, or renewal of, any item of Company Registered IP).
(b) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company Intellectual Property and the Licensed Intellectual Property constitutes all of the material Intellectual Property Rights necessary to develop, manufacture or sell each material Company Product as currently developed, manufactured or sold by the Company and its Subsidiaries as of the date of this Agreement.
(c) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (i) none of the Company Intellectual Property is subject to any Order, claim, action, proceeding, suit or, to the knowledge of the Company, investigation pending or, to the knowledge of the Company, threatened, naming
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the Company or any of its Subsidiaries adversely affecting the use thereof or rights thereto by or of the Company or any of its Subsidiaries, (ii) to the knowledge of the Company, the operation of the business of the Company or any of its Subsidiaries does not infringe, misappropriate or otherwise violate and, since January 1, 2020, has not infringed, misappropriated or otherwise violated, any Intellectual Property Rights of any Third Party (other than with respect to Intellectual Property Rights owned, controlled or licensed to Third Parties by non-practicing entities or patent assertion entities), and (iii) to the knowledge of the Company, as of the date of this Agreement no Third Party has infringed, misappropriated or otherwise violated any material Company Intellectual Property or any Intellectual Property Rights exclusively licensed to the Company or any of its Subsidiaries and material to the development, manufacture or sale of a Company Product, in each case, except as has not had or would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect.
(d) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries have taken commercially reasonable steps to protect and maintain any material Trade Secrets included in the Company Intellectual Property (except for any Company Intellectual Property whose value would not reasonably be expected to be impaired in a material respect by disclosure), and to the knowledge of the Company, since January 1, 2020, there have been no material unauthorized uses or disclosures of any such Trade Secrets.
(e) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, to the knowledge of the Company (A) the Company and its Subsidiaries have complied with any and all obligations to the extent applicable pursuant to the Bayh-Dole Act, 35 U.S.C. §200—212, with respect to any Patents that are part of the Company Registered IP and are practiced by a Company Product, and (B) no funding, facilities or personnel of any Governmental Authority or any university, college, research institute or other educational institution has been used to create or develop any Patents that are part of the Company Registered IP and are practiced by a Company Product, except for any such funding or use of facilities or personnel that has not resulted in such Governmental Authority or institution any ownership interest in such Patents that are part of the Company Registered IP and are practiced by a Company Product.
(f) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect (as defined below in this Section 4.20(f)), neither the Company nor any of its Subsidiaries is party to any Contracts which, solely as a result of the consummation of the transactions contemplated by this Agreement, would grant to any Third Party any right to any material Intellectual Property Rights (other than Company Intellectual Property) owned by, or licensed to, Parent or any of its Affiliates. Solely for purposes of determining satisfaction of the conditions set forth in Section 9.02(b)(iv) with respect to this Section 4.20(f), “Company Material Adverse Effect” shall take into account any consequences to Parent or any of its Affiliates.
(g) Except as has not had, and would not reasonably be expected to have, a Company Material Adverse Effect, the Company and its Subsidiaries have obtained from all current or former employees, officers, consultants and contractors who have created or developed material Intellectual Property Rights for or on behalf of the Company or any of its
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Subsidiaries, valid assignments (or, in the case of consultants and contractors, assignment or license) of such parties’ rights in such Intellectual Property Rights to the Company or one of its Subsidiaries, to the extent permitted by applicable Law, or the Company and its Subsidiaries otherwise own such Intellectual Property Rights by operation of law.
(h) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, since January 1, 2019 through the date of this Agreement, (i) all collection, acquisition, use, storage, transfer (including any cross-border transfers), distribution, dissemination or other processing by or on behalf of the Company and any of its Subsidiaries of Personal Data are and have been in material compliance with all applicable Privacy Legal Requirements and Privacy Commitments, (ii) neither the Company nor any of its Subsidiaries has received any written notice alleging any material violation by the Company or any of its Subsidiaries of any Privacy Legal Requirement or Privacy Commitments, nor, to the knowledge of the Company, has the Company or any of its Subsidiaries been threatened in writing to be charged with any such violation by any Governmental Authority, (iii) neither the Company nor any of its Subsidiaries has received any material written complaint by any Person with respect to the collection, acquisition, use, storage, transfer (including any cross-border transfers), distribution, dissemination or other processing of Personal Data by the Company or any of its Subsidiaries, (iv) the Company and its Subsidiaries implements and maintains commercially reasonable written policies and procedures with respect to technical, organizational, administrative, and physical safeguards adequate to protect Personal Data against any unauthorized use, access or disclosure, and (v) to the knowledge of the Company, there has been no unauthorized use, access or disclosure of Personal Data.
(i) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, since January 1, 2020, to the knowledge of the Company, (i) the Company and its Subsidiaries implement and maintain commercially reasonable written policies and procedures with respect to technical, organizational, administrative, and physical safeguards adequate to protect the security, confidentiality, integrity and availability of Trade Secrets, Personal Data and information technology systems of the Company and its Subsidiaries, (ii) there have been no security breaches in the information technology systems of the Company nor any of its Subsidiaries, and (iii) there have been no material disruptions in any such information technology systems, that adversely affected the operations of the business of the Company or any of its Subsidiaries.
(j) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, any transfer of Personal Data in connection with the transactions contemplated by this Agreement (including the Mergers) will not violate in any material respect any applicable Privacy Legal Requirement or Privacy Commitment.
Section 4.21 Properties. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, (a) the Company and each of its Subsidiaries has good, valid and marketable fee simple title to, or valid leasehold interests in, as the case may be, each parcel of real property of the Company or any of its Subsidiaries, free and clear of all Liens, except for Permitted Liens, (b) each lease, sublease or license (each, a “Lease”) under which the Company or any of its Subsidiaries leases, subleases or
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licenses any real property is, subject to the Bankruptcy and Equity Exceptions, a valid and binding obligation of the Company or a Subsidiary of the Company (as the case may be) and, to the knowledge of the Company, each of the other parties thereto, and in full force and effect and enforceable in accordance with its terms against the Company or its Subsidiaries (as the case may be) and, to the knowledge of the Company, each of the other parties thereto (except for such Leases that are terminated after the date of this Agreement in accordance with their respective terms, other than as a result of a default or breach by the Company or any of its Subsidiaries of any of the provisions thereof), (c) neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any of the other parties thereto has violated or committed or failed to perform any act which (with or without notice, lapse of time or both) would constitute a default under any provision of any Lease, and (d) neither the Company nor any of its Subsidiaries has received written notice that it has violated or defaulted under any Lease.
Section 4.22 Environmental Matters. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect:
(a) Since January 1, 2018, no notice, notification, demand, request for information, citation, summons or order has been received, no complaint has been filed, no penalty has been assessed, and no claim, action or suit or, to the knowledge of the Company, proceeding or investigation (including a review) is pending or, to the knowledge of the Company, threatened by any Governmental Authority or other Person relating to the Company or any of its Subsidiaries that relates to, or arises under, any Environmental Law, Environmental Permit or Hazardous Substance; and
(b) the Company and its Subsidiaries are, and since January 1, 2019 have been, in compliance with all Environmental Laws and all Environmental Permits and hold all applicable Environmental Permits.
Section 4.23 FCPA; Anti-Corruption; Sanctions.
(a) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, neither the Company nor any of its Subsidiaries, nor, to the knowledge of the Company, any director, manager, employee, agent or representative of the Company or any of its Subsidiaries, in each case acting on behalf of the Company or any of its Subsidiaries, has, in the last five years, in connection with the business of the Company or any of its Subsidiaries, taken any action in violation of the FCPA or other applicable Bribery Legislation (in each case to the extent applicable).
(b) Neither the Company nor any of its Subsidiaries nor, to the knowledge of the Company, any director, manager or employee of the Company or any of its Subsidiaries, is, or in the last five years has been, subject to any actual or pending or, to the knowledge of the Company, threatened civil, criminal, or administrative actions, suits, demands, claims, hearings, notices of violation, investigations, proceedings, demand letters, settlements, or enforcement actions, or made any voluntary disclosures to any Governmental Authority, involving the Company or any of its Subsidiaries relating to applicable Bribery Legislation, including the FCPA.
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(c) The Company and each of its Subsidiaries has made and kept books and records, accounts and other records, which, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company and each of its Subsidiaries as required by the FCPA.
(d) The Company and each of its Subsidiaries has instituted policies and procedures reasonably designed to ensure compliance with the FCPA and other applicable Bribery Legislation and maintain such policies and procedures in force.
(e) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, none of the Company or any of its Subsidiaries, nor, to the knowledge of the Company, any of their respective directors, managers or employees (i) is a Sanctioned Person, (ii) has, in the last five years, engaged in, has any plan or commitment to engage in, direct or indirect dealings with any Sanctioned Person or in any Sanctioned Country on behalf of the Company or any of its Subsidiaries in violation of applicable Sanctions Law or (iii) has, in the last five years, violated, or engaged in any conduct sanctionable under, any Sanctions Law, nor to the knowledge of the Company, been the subject of an investigation or allegation of such a violation or sanctionable conduct.
Section 4.24 Insurance. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect, the Company and its Subsidiaries maintain insurance coverage with reputable insurers in such amounts and covering such risks as the Company reasonably believes, based on past experience, is adequate for the businesses and operations of the Company and its Subsidiaries (taking into account the cost and availability of such insurance).
Section 4.25 Transactions with Affiliates To the knowledge of the Company, since January 1, 2018 through the date of this Agreement, there have been no transactions, or series of related transactions, agreements, arrangements or understandings in effect, nor are there any currently proposed transactions, or series of related transactions, agreements, arrangements or understandings, that would be required to be disclosed under Item 404(a) of Regulation S-K that have not been otherwise disclosed in the Company SEC Documents filed prior to the date hereof.
Section 4.26 Antitakeover Statutes. Assuming the representations and warranties set forth in Section 5.19 are true and correct, neither the restrictions set forth in Section 203 of the DGCL nor any other “control share acquisition,” “fair price,” “moratorium” or other antitakeover laws enacted under Applicable Law apply to this Agreement or any of the transactions contemplated hereby.
Section 4.27 Opinions of Financial Advisors. BofA Securities, Inc., financial advisor to the Company, has delivered to the Board of Directors of the Company its oral opinion, to be confirmed by delivery of a written opinion, to the effect that, as of the date of such opinion and based on and subject to the various assumptions, limitations, qualifications and other matters set forth therein, the Merger Consideration to be received in the First Merger by the holders of Company Common Stock pursuant to this Agreement is fair, from a financial point of view, to
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such holders. A written copy of such opinion shall be delivered promptly to Parent after the date of this Agreement for informational purposes only.
Section 4.28 Finders’ Fees. Except for BofA Securities, Inc., there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of the Company or any of its Subsidiaries who might be entitled to any finders or similar fee or commission from the Company or any of its Affiliates in connection with the transactions contemplated by this Agreement.
Section 4.29 No Ownership of Parent Ordinary Shares. Neither the Company nor any of its Subsidiaries beneficially owns, directly or indirectly, any Parent Ordinary Shares or other securities convertible into, exchangeable for or exercisable for Parent Ordinary Shares, and neither the Company nor any of its Subsidiaries has any rights to acquire any Parent Ordinary Shares (other than any such securities owned by the Company or any of its Subsidiaries in a fiduciary, representative or other capacity on behalf of other Persons, whether or not held in a separate account). There are no voting trusts or other agreements or understandings to which the Company or any of its Subsidiaries is a party with respect to the voting of the capital stock or other Equity Securities of Parent or any of its Subsidiaries.
Section 4.30 No Other Representations and Warranties. Except for the representations and warranties made by the Company in this Article IV (as qualified by the applicable items disclosed in the Company Disclosure Schedule in accordance with Section 11.05 and the introduction to this Article IV) and in the certificate to be delivered by the Company pursuant to Section 9.02(c), neither the Company nor any other Person makes or has made any representation or warranty, expressed or implied, at law or in equity, with respect to or on behalf of the Company or its Subsidiaries, their businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding the Company or its Subsidiaries or any other matter furnished or provided to Parent or made available to Parent in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement or the transactions contemplated hereby. The Company and its Subsidiaries disclaim any other representations or warranties, whether made by the Company or any of its Subsidiaries or any of their respective Affiliates or Representatives. The Company acknowledges and agrees that, except for the representations and warranties made by Parent in Article V (as qualified by the applicable items disclosed in the Parent Disclosure Schedule in accordance with Section 11.05 and the introduction to Article V) and the certificate delivered by Parent pursuant to Section 9.03(c), neither Parent nor any other Person is making or has made any representations or warranty, expressed or implied, at law or in equity, with respect to or on behalf of Parent or its Subsidiaries, their businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding Parent or its Subsidiaries or any other matter furnished or provided to Parent or made available to the Company in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this
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Agreement, or the transactions contemplated hereby or thereby. The Company specifically disclaims that it is relying on or has relied on any such other representations or warranties that may have been made by any Person, and acknowledges and agrees that Parent and its Affiliates have specifically disclaimed and do hereby specifically disclaim any such other representations and warranties.
ARTICLE V
REPRESENTATIONS AND WARRANTIES OF PARENT, BIDCO AND MERGER SUBS
Subject to Section 11.05, except (a) as disclosed in any Parent Public Document filed or furnished and publicly available since January 1, 2019 and prior to the date that was three business days prior to the date of this Agreement or (b) as set forth in the Parent’s Disclosure Schedule, Parent, Bidco, Merger Sub I and Merger Sub II jointly and severally represent and warrant to the Company that:
Section 5.01 Corporate Existence and Power. Parent is a public limited company duly incorporated and validly existing under the laws of England and Wales, and each of Bidco and Merger Sub I is a corporation duly incorporated, validly existing and in good standing under the laws of the State of Delaware, and Merger Sub II is a limited liability company duly formed, validly existing and in good standing under the laws of the State of Delaware. Each of Parent, Bidco and each Merger Sub has all requisite corporate power and authority required to own or lease all of its properties or assets and to carry on its business as now conducted, except where the failure to have such power or authority would not reasonably be expected to, individually or in the aggregate, (a) have a Parent Material Adverse Effect or (b) prevent, materially delay or materially impair the ability of Parent, Bidco or either Merger Sub to perform its obligations under this Agreement or to consummate the Mergers. Each of Parent, Bidco and each Merger Sub is duly qualified to do business and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect. Parent directly or indirectly owns all of the outstanding shares of capital stock of Bidco and Bidco directly owns all of the outstanding shares of capital stock of Merger Sub I and all of the outstanding membership interests of Merger Sub II. Neither Bidco nor either Merger Sub has, since the date of its incorporation (or, with respect to Merger Sub II, its formation) engaged in any activities other than (i) in connection with the preparation, negotiation and execution of this Agreement or the consummation of the transactions contemplated hereby or as expressly contemplated by this Agreement or (ii) those incident or related to its incorporation (or, with respect to Merger Sub II, its formation). Prior to the date of this Agreement, Parent has made available to the Company true and complete copies of the memorandum and articles of association of Parent (the “Parent Organizational Documents”).
Section 5.02 Corporate Authorization.
(a) The execution, delivery and performance by Parent, Bidco and each Merger Sub of this Agreement and the consummation by Parent, Bidco and each Merger Sub of
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the transactions contemplated by this Agreement are within the corporate powers and authority of Parent, Bidco and each Merger Sub and, except for the Parent Shareholder Approval and the adoption of this Agreement by the sole stockholders of Bidco and Merger Sub I and the approval of this Agreement by the sole member of Merger Sub II, have been duly authorized by all necessary corporate action on the part of Parent, Bidco and each Merger Sub. The affirmative vote of at least a majority of the votes cast by the holders of outstanding Parent Ordinary Shares at a duly convened and held meeting of Parent’s shareholders at which a quorum is present approving the transactions contemplated by this Agreement (including, if required with respect to the issuance of Parent ADSs in connection with the First Merger (the “Parent ADS Issuance”)) is the only vote of the holders of any of Parent’s capital stock necessary in connection with the consummation of the Mergers (the “Parent Shareholder Approval”). This Agreement has been duly executed and delivered by each of Parent, Bidco and each Merger Sub and (assuming due authorization, execution and delivery by the Company) constitutes a valid, legal and binding agreement of each of Parent, Bidco and each Merger Sub enforceable against Parent, Bidco and each Merger Sub in accordance with its terms (subject to the Bankruptcy and Equity Exceptions).
(b) At a meeting duly convened and held, the Board of Directors (or a duly authorized committee of the Board of Directors) of Parent unanimously adopted resolutions that (i) this Agreement and the transactions contemplated hereby will most likely promote the success of Parent for the benefit of its shareholders as a whole, (ii) approved this Agreement and the transactions contemplated hereby, (iii) resolved that the approval of this Agreement and the transactions contemplated hereby be submitted to a vote at a meeting of Parent’s shareholders and (iv) resolved to recommend the approval of the transactions contemplated by this Agreement by Parent’s shareholders (such recommendation, the “Parent Board Recommendation”).
(c) The Boards of Directors of Bidco and Merger Sub I have unanimously adopted resolutions (i) determining that this Agreement and the transactions contemplated hereby (including the Mergers) are fair to and in the best interests of such companies and their respective stockholders, (ii) approving, adopting and declaring advisable this Agreement and the transactions contemplated hereby (including the Mergers), (iii) directing that the approval and adoption of this Agreement be submitted to a vote of their respective stockholders or member, as applicable, and (iv) recommending approval and adoption of this Agreement by their respective stockholders or member, as applicable.
(d) The Board of Directors of Merger Sub II has unanimously adopted resolutions (i) determining that this Agreement and the transactions contemplated hereby (including the Mergers) are fair to and in the best interests of such Merger Sub and its sole member, (ii) approving, adopting and declaring advisable this Agreement and the transactions contemplated hereby (including the Mergers), (iii) directing that the approval and adoption of this Agreement be submitted to a vote of such Merger Sub II’s sole member, and (iv) recommending approval and adoption of this Agreement by Merger Sub II’s sole member.
Section 5.03 Governmental Authorization. The execution, delivery and performance by each of Parent, Bidco and each Merger Sub of this Agreement and the consummation by each of Parent, Bidco and each Merger Sub of the transactions contemplated hereby require no action by or in respect of, Consents of, or Filings with, any Governmental
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Authority other than (a) the filing of the First Certificate of Merger and the Second Certificate of Merger with the Delaware Secretary of State and appropriate documents with the relevant authorities of other states in which Parent or such Merger Sub is qualified to do business, (b) compliance with any applicable requirements of the HSR Act, (c) compliance with and Filings under any applicable Foreign Antitrust Laws, (d) compliance with any applicable requirements of the 1933 Act, the 1934 Act and any other applicable U.S. state or federal securities laws or pursuant to the Listing Rules, the CA 2006, the DTRs, the MAR, the FSMA or the rules of Nasdaq, the LSE or Nasdaq Stockholm and (e) any other actions, Consents or Filings the absence of which (i) has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of Parent, Bidco or either Merger Sub to perform its obligations under this Agreement or to consummate the Mergers.
Section 5.04 Non-contravention. Assuming compliance with the matters referred to in Section 5.03 and receipt of the Parent Shareholder Approval, the execution, delivery and performance by each of Parent, Bidco and each Merger Sub of this Agreement and the consummation of the transactions contemplated hereby do not and will not (a) contravene, conflict with, or result in any violation or breach of any provision of the Parent Organizational Documents, the certificate of incorporation or bylaws of either Bidco or Merger Sub I or the certificate of formation or limited liability company agreement of Merger Sub II, (b) contravene, conflict with or result in any violation or breach of any provision of any Applicable Law, (c) require any Consent or other action by any Person under, constitute a default, or an event that, with or without notice or lapse of time or both, would constitute a default under, or cause or permit the termination, cancellation, acceleration or other change of any right or obligation or the loss of any benefit to which Parent or any of its Subsidiaries is entitled under, any provision of any Contract binding on Parent or any of its Subsidiaries, or (d) result in the creation or imposition of any Lien on any asset of Parent or any of its Subsidiaries, except, in the case of each of clauses (b) through (d), as (i) has not had and would not reasonably be expected to, individually or in the aggregate, have a Parent Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of Parent, Bidco or either Merger Sub to perform its obligations under this Agreement or to consummate the Mergers.
Section 5.05 Capitalization.
(a) As of the close of business on December 9, 2020, there were issued (A) 1,312,660,216 Parent Ordinary Shares (of which 0 shares were held in treasury), (B) 478,282,076 Parent ADSs (which Parent ADSs each represent 0.50 Parent Ordinary Shares), (C) 50,000 redeemable preference shares, par value £1.00 per share, of Parent, (D) options to purchase Parent Ordinary Shares (“Parent Stock Options”) with respect to an aggregate of 1,269,871 Parent Ordinary Shares, (E) options to purchase Parent ADSs (“Parent ADS Options”) with respect to an aggregate of 0 Parent ADSs, (F) 2,422,100 Parent Ordinary Shares and 9,868,320.66 Parent ADSs were subject to restricted stock unit awards under the Parent Stock Plans (“Parent RSU Awards”) and (G) 3,046,948.10 Parent Ordinary Shares and 4,873,891.85 Parent ADSs were subject to performance share units under the Parent Stock Plans (“Parent PSU Awards”), determined assuming target performance levels were achieved. When issued and
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delivered in accordance with the terms of this Agreement, the Parent ADSs issued as part of the Merger Consideration will have been validly issued in accordance with the terms of, and will entitle the holders thereof to the rights specified in, the Deposit Agreement and will be fully paid and nonassessable and the issuance thereof will be free of preemptive rights. Parent has authority to issue the Parent Ordinary Shares represented by such Parent ADSs and, when issued and delivered in accordance with the terms of this Agreement, such Parent Ordinary Shares will have been validly issued and will be fully paid and the issuance thereof will be free of preemptive rights. Except as set forth in this Section 5.05(a), as of the close of business on December 9, 2020, there are no issued, reserved for issuance or outstanding Equity Securities of Parent.
(b) All of the issued share capital of Parent has been, and of the share capital of Parent that may be issued pursuant to any employee stock option or other compensation plan or arrangement will be, when issued in accordance with the respective terms thereof, duly authorized and validly issued, fully paid and nonassessable (where such concept is applicable under Applicable Law) and free of preemptive rights. No Subsidiary of Parent owns any share capital of Parent (other than any such shares owned by Subsidiaries of Parent in a fiduciary, representative or other capacity on behalf of other Persons, whether or not held in a separate account). There are no outstanding bonds, debentures, notes or other indebtedness of Parent having the right to vote (or convertible into, or exchangeable for, securities having the right to vote) on any matters on which shareholders of Parent have the right to vote. There are no outstanding obligations of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities of Parent. Neither Parent nor any of its Subsidiaries is a party to any agreement with respect to the voting of any Equity Securities of Parent.
Section 5.06 Subsidiaries.
(a) Each Subsidiary of Parent is a corporation or other entity duly incorporated or organized, validly existing and in good standing (except to the extent such concept is not applicable under Applicable Law of such Subsidiary’s jurisdiction of incorporation, formation or organization, as applicable) under the laws of its jurisdiction of incorporation, formation or organization and has all corporate or other organizational powers and authority, as applicable, required to own, lease and operate its properties and assets and to carry on its business as now conducted, except for those jurisdictions where failure to be so duly incorporated or organized, validly existing and in good standing or to have such power or authority has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. Each such Subsidiary is duly qualified to do business and is in good standing in each jurisdiction where such qualification is necessary, except for those jurisdictions where failure to be so qualified or in good standing has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(b) All of the issued and outstanding capital stock or other Equity Securities of each Subsidiary of Parent have been validly issued and are fully paid and nonassessable (except to the extent such concepts are not applicable under Applicable Law of such Subsidiary’s jurisdiction of incorporation, formation or organization, as applicable) and are owned by Parent, directly or indirectly, free and clear of any Lien (other than any restrictions imposed by
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Applicable Law) and free of preemptive rights, rights of first refusal, subscription rights or similar rights of any Person and transfer restrictions (other than transfer restrictions under Applicable Law or under the organizational documents of such Subsidiary). There are no outstanding obligations of Parent or any of its Subsidiaries to repurchase, redeem or otherwise acquire any Equity Securities of any Subsidiary of Parent. Except for the capital stock or other Equity Securities of its Subsidiaries and publicly traded securities held for investment that do not exceed five percent of the outstanding securities of any entity, Parent does not own, directly or indirectly, any capital stock or other Equity Securities of any Person.
Section 5.07 SEC Filings and the Sarbanes-Oxley Act.
(a) Since January 1, 2018, Parent has (i) timely filed with or furnished to the SEC all reports, schedules, forms, statements, prospectuses, registration statements and other documents required to be filed with or furnished to the SEC (collectively, together with any exhibits and schedules thereto and other information incorporated therein, the “Parent SEC Documents”) and (ii) timely filed with or furnished or submitted to the FCA (and the National Storage Mechanism maintained by the FCA) all reports (including annual financial reports, half yearly financial reports and interim management statements), notices, resolutions, prospectuses, circulars and other documents required to be filed with, furnished or submitted to the FCA (collectively, together with any other information incorporated therein, the “Parent Non-SEC Documents” and the Parent Non-SEC Documents together with the Parent SEC Documents, the “Parent Public Documents”). No Subsidiary of Parent is required to file, furnish or submit any report, schedule, form, statement, prospectus, registration statement or other document with the SEC or the FCA. Since January 1, 2019, Parent has complied in all material respects with its disclosure obligations under Article 17 of the MAR.
(b) As of its filing or publication date (or, if amended or superseded by a filing or publication prior to the date of this Agreement, on the date of such amended or superseding filing or publication), the Parent Public Documents filed, published or furnished prior to the date of this Agreement complied, and each Parent Public Document filed, published or furnished subsequent to the date of this Agreement (assuming, in the case of each of the Form F-4, a Parent Prospectus and the Parent Circular, that the representations and warranties set forth in Section 4.09 are true and correct) will comply, in all material respects with the applicable requirements of Nasdaq, the LSE, the FCA, the 1933 Act, the 1934 Act, the Sarbanes-Oxley Act, the CA 2006 and the Listing Rules, as the case may be.
(c) As of its filing date (or, if amended or superseded by a filing prior to the date of this Agreement, on the date of such amended or superseding filing), each Parent SEC Document filed or furnished prior to the date of this Agreement did not, and each Parent SEC Document filed or furnished subsequent to the date of this Agreement (assuming, in the case of the Form F-4, that the representations and warranties set forth in Section 4.09 are true and correct) will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(d) As of its filing or publication date (or, if amended or superseded by a filing or publication prior to the date of this Agreement, on the date of such amended or
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superseding filing or publication), each Parent Non-SEC Document filed or furnished prior to the date of this Agreement did not, and each Parent Non-SEC Document filed, published or furnished subsequent to the date of this Agreement (assuming, in the case of each of any Parent Prospectus and the Parent Circular, that the representations and warranties set forth in Section 4.09 are true and correct) will not, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(e) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent (i) is, and since January 1, 2019 has been, in compliance with (A) the applicable provisions of the Sarbanes-Oxley Act and the CA 2006, (B) the applicable listing and corporate governance rules and regulations of the LSE and the FCA and (C) the Listing Rules, (ii) is, and since January 1, 2019 until November 24, 2020 has been, in compliance with the applicable listing and corporate governance rules and regulations of the New York Stock Exchange and (iii) is, and since November 25, 2020 has been, in compliance with the applicable listing and corporate governance rules and regulations of Nasdaq.
(f) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent currently maintains disclosure controls and procedures (as defined in Rule 13a-15 under the 1934 Act) that are designed to provide reasonable assurance that all information required to be disclosed in Parent’s reports filed under the 1934 Act is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, the CA 2006, the MAR and the Listing Rules and that all such information is accumulated and communicated to Parent’s management as appropriate to allow timely decisions regarding required disclosure and to enable each of the principal executive officer of Parent and the principal financial officer of Parent to make the certifications required under the 1934 Act, the MAR and the Listing Rules with respect to such reports.
(g) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent currently maintains a system of internal controls designed to provide reasonable assurance regarding the reliability of Parent’s financial reporting and the preparation of Parent’s financial statements for external purposes in accordance with IFRS, and Parent’s principal executive officer and principal financial officer have disclosed, based on their most recent evaluation of such internal controls prior to the date of this Agreement, to Parent’s auditors and the audit committee of the Board of Directors of Parent (i) all significant deficiencies and material weaknesses in the design or operation of internal controls which are reasonably likely to adversely affect Parent’s ability to record, process, summarize and report financial information and (ii) any fraud, whether or not material, that involves management or other employees who have a significant role in internal controls.
(h) Since January 1, 2018, each of the principal executive officer and principal financial officer of Parent (or each former principal executive officer and principal financial officer of Parent, as applicable) has made all certifications required by Rules 13a-14 and 15d-14 under the 1934 Act and Sections 302 and 906 of the Sarbanes-Oxley Act, the CA
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2006 and any related rules and regulations promulgated by the SEC, the FCA, Nasdaq and the LSE.
Section 5.08 Financial Statements and Financial Matters.
(a) The audited consolidated financial statements and unaudited consolidated interim financial statements of Parent included or incorporated by reference in the Parent Public Documents (or, if any such Parent Public Document is amended or superseded by a filing prior to the date of this Agreement, such amended or superseding Parent Public Document) present fairly in all material respects, in conformity with IFRS applied on a consistent basis during the periods presented (except as may be indicated in the notes thereto), the consolidated financial position of Parent and its Subsidiaries as of the dates thereof and their consolidated results of operations and cash flows for the periods then ended (subject, in each case, to normal and recurring year-end audit adjustments in the case of any unaudited interim financial statements).
(b) From January 1, 2018 to the date of this Agreement, Parent has not received written notice from the SEC, the FCA, the FRC, Companies House or any other Governmental Authority indicating that any of its accounting policies or practices are or may be the subject of any review, inquiry, investigation or challenge by the SEC, the FCA, the FRC, Companies House or any other Governmental Authority.
Section 5.09 Disclosure Documents.
(a) The information relating to Parent and its Subsidiaries that is provided in writing by Parent, any of its Subsidiaries or any of their respective Representatives for inclusion or incorporation by reference in the Form F-4 or the Proxy Statement/Prospectus will not (i) in the case of the Form F-4, at the time the Form F-4 or any amendment or supplement thereto becomes effective and at the time of the Company Stockholder Meeting or (ii) in the case of the Proxy Statement/Prospectus, at the time the Proxy Statement/Prospectus or any amendment or supplement thereto is first mailed to the stockholders of the Company and at the time of the Company Stockholder Meeting, contain any untrue statement of a material fact or omit to state any material fact necessary in order to make the statements made therein, in light of the circumstances under which they were made, not misleading.
(b) The information relating to Parent and its Subsidiaries that is provided in writing by Parent, any of its Subsidiaries or any of their respective Representatives for inclusion or incorporation by reference in the Parent Circular will not, at the time the Parent Circular or any amendment or supplement thereto is submitted to the FCA, at the time the Parent Circular or any amendment or supplement thereto is first mailed to the shareholders of Parent and at the time of the Parent Shareholder Meeting, contain any information or any expression of opinion, belief, expectation or intention which is untrue or inaccurate or omit a fact, the omission of which renders any information or expression in the Parent Circular inaccurate or misleading.
(c) The information relating to Parent and its Subsidiaries that is provided in writing by Parent, any of its Subsidiaries or any of their respective Representatives for inclusion or incorporation by reference in a Parent Prospectus will not, at the time a Parent Prospectus or any amendment or supplement thereto is submitted to the FCA, at the time a Parent Prospectus
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or any amendment or supplement thereto is made available to the public in accordance with the Prospectus Regulation Rules, and at the time the Parent Shares Admission becomes effective, contain any information or any expression of opinion, belief, expectation or intention which is untrue or inaccurate or omit a fact, the omission of which renders any information or expression in a Parent Prospectus inaccurate or misleading.
(d) Notwithstanding the foregoing provisions of this Section 5.09, no representation or warranty is made by Parent with respect to information or statements made or incorporated by reference in the Form F-4, the Proxy Statement/Prospectus, a Parent Prospectus (if so required) or the Parent Circular that were not supplied by or on behalf of the Parent, Bidco or either Merger Sub.
Section 5.10 Absence of Certain Changes. (a) Since the Parent Balance Sheet Date through the date of this Agreement, except in connection with or related to the process in connection with which Parent and its Representatives discussed and negotiated this Agreement and the transactions contemplated hereby, the business of Parent and its Subsidiaries has been conducted in all material respects in the ordinary course of business and (b) since the Parent Balance Sheet Date, there has not been any event, change, effect, development or occurrence that has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
Section 5.11 No Undisclosed Material Liabilities. There are no liabilities or obligations of Parent or any of its Subsidiaries of any kind whatsoever, whether accrued, contingent, absolute, determined, determinable or otherwise, that would be required by IFRS to be reflected on the consolidated balance sheet of Parent and its Subsidiaries, other than (a) liabilities or obligations disclosed or provided for in the Parent Balance Sheet or in the notes thereto, (b) liabilities or obligations incurred in the ordinary course of business since the Parent Balance Sheet Date, (c) liabilities arising in connection with the transactions contemplated hereby or in connection with obligations under Contracts binding on Parent or any of its Subsidiaries (except to the extent such liabilities arose or resulted from a breach or a default of such Contract) or (d) other liabilities or obligations that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. As of the date of this Agreement, there are no off-balance sheet arrangements of any type pursuant to any off-balance sheet arrangement required to be disclosed pursuant to Item 303(a)(4) of Regulation S-K that have not been so described in the Parent SEC Documents.
Section 5.12 Litigation. There is no claim, action, proceeding or suit or, to the knowledge of Parent, investigation pending or, to the knowledge of Parent, threatened against Parent or any of its Subsidiaries or any of the respective properties or assets of Parent or any of its Subsidiaries, any present or, to the knowledge of the Parent, former officers, directors or employees of Parent or any of its Subsidiaries in their respective capacities as such, or any of the respective properties or assets of the Company or any of its Subsidiaries, before (or, in the case of threatened claims, actions, suits, investigations or proceedings, that would be before) any Governmental Authority, (a) that has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (b) that would reasonably be expected to prevent, materially delay or materially impair the ability of Parent, Bidco or either Merger Sub to perform its obligations under this Agreement or to consummate the Mergers; provided, that to
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the extent any such representations or warranties in the foregoing clauses (a) and (b) pertain to claims, actions, proceedings, suits or investigations that relate to the execution, delivery, performance or consummation of this Agreement or any of the transactions contemplated by this Agreement, such representations and warranties are made only as of the date hereof. There is (in the case of clause (ii), as of the date of this Agreement) no Order outstanding against Parent, any of its Subsidiaries, any present or, to the knowledge of the Parent, former officers, directors or employees of Parent or any of its Subsidiaries in their respective capacities as such, or any of the respective properties or assets of any of Parent or any of its Subsidiaries or, to the knowledge of Parent, threatened against or affecting Parent or any of its Subsidiaries, any present or, to the knowledge of the Parent, former officers, directors or employees of Parent in their respective capacities as such, or any of the respective properties or assets of any of Parent or any of its Subsidiaries, that (i) has had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (ii) individually or in the aggregate, would reasonably be expected to prevent, materially delay or materially impair the ability of Parent, Bidco or either Merger Sub to perform its obligations under this Agreement or to consummate the Mergers.
Section 5.13 Permits. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, Parent and each of its Subsidiaries hold all governmental licenses and Consents necessary for the operation of its respective businesses (the “Parent Permits”). Parent and each of its Subsidiaries are, and since January 1, 2019 have been, in compliance with the terms of the Parent Permits, except for failures to comply that have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect. There is no claim, action, proceeding or suit or, to the knowledge of Parent, investigation pending, or, to the knowledge of Parent, threatened that seeks the revocation, cancellation, termination, non-renewal or adverse modification of any Parent Permit, except where such revocation, cancellation, termination, non-renewal or adverse modification (i) has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers.
Section 5.14 Compliance with Laws. Parent and each of its Subsidiaries are, and since January 1, 2018 have been, in compliance with all Applicable Laws, except for failures to comply that (i) have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (ii) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers.
Section 5.15 Regulatory Matters.
(a) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or that, individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of the Company to perform its obligations under this Agreement or to consummate the Mergers, (i) each of Parent and its Subsidiaries holds (A) all authorizations under the FDCA, the
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PHSA, and the regulations of the FDA promulgated thereunder, and (B) authorizations of any applicable Governmental Authority that are concerned with the quality, identity, strength, purity, safety, efficacy, manufacturing, marketing, distribution, sale, pricing, import or export of any of the Parent Products (any such Governmental Authority, a “Parent Regulatory Agency”) necessary for the lawful operation of the businesses of Parent or any of its Subsidiaries as currently conducted (the “Parent Regulatory Permits”); (ii) all such Parent Regulatory Permits are valid and in full force and effect; and (iii) Parent and its Subsidiaries are in compliance with the terms of all Parent Regulatory Permits. All Parent Regulatory Permits are in full force and effect, except where the failure to be in full force and effect (A) has not had, and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect or (B) individually or in the aggregate, would not reasonably be expected to prevent, materially delay or materially impair the ability of Parent to perform its obligations under this Agreement or to consummate the Mergers (in the case of this clause (B), as of the date of this Agreement).
(b) Neither Parent nor any of its Subsidiaries are party to any material corporate integrity agreements, monitoring agreements, consent decrees, settlement orders or similar agreements with or imposed by any Parent Regulatory Agency that have had or would reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(c) All pre-clinical and clinical investigations in respect of a Parent Product conducted or sponsored by Parent or any of its Subsidiaries are being, and since January 1, 2019 have been, conducted in compliance with all Applicable Laws administered or issued by the applicable Parent Regulatory Agencies, including (i) FDA standards for the design, conduct, performance, monitoring, auditing, recording, analysis and reporting of clinical trials contained in Title 21 parts 50, 54, 56, 312, 314 and 320 of the Code of Federal Regulations and (ii) any Applicable Laws restricting the collection, use and disclosure of individually identifiable health information and personal information, except, in each case, for such noncompliance that has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect.
(d) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, during the period beginning on January 1, 2019 and ending on the date of this Agreement, neither Parent nor any of its Subsidiaries has received any written notice from the FDA or the EMA or any foreign agency with jurisdiction over the development, marketing, labeling, sale, use handling and control, safety, efficacy, reliability, or manufacturing of the Parent Products that would reasonably be expected to lead to the denial, limitation, revocation, or rescission of any of the Parent Regulatory Permits or of any application for marketing approval currently pending before the FDA or such other Parent Regulatory Agency.
(e) Since January 1, 2019, all reports, documents, claims, permits and notices required to be filed, maintained or furnished to the FDA or any other Parent Regulatory Agency by Parent and its Subsidiaries have been so filed, maintained or furnished, except where failure to file, maintain or furnish such reports, documents, claims, permits or notices have not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material
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Adverse Effect. Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, since January 1, 2019, (i) neither Parent nor any of its Subsidiaries has been debarred or convicted of any crime or engaged in any conduct for which debarment is mandated by 21 U.S.C. § 335a(a) any similar Applicable Law or authorized by 21 U.S.C. § 335a(b) or any similar Applicable Law applicable in other jurisdictions in which material quantities of any of the Parent Products are sold or intended by Parent to be sold; and (ii) neither Parent nor any of its Subsidiaries has been excluded from participation in any federal health care program or convicted of any crime or engaged in any conduct for which such Person could reasonably be expected to be excluded from participating in any federal health care program under Section 1128 of the Social Security Act of 1935 or any similar Applicable Law or program.
(f) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, as to each Parent Product subject to the FDCA and the regulations of the FDA promulgated thereunder or any similar Applicable Law in any foreign jurisdiction in which material quantities of any of the Parent Products are sold that is or has been developed, manufactured, tested, distributed or marketed by or on behalf of Parent or any of its Subsidiaries, each such Parent Product is being or has been developed, manufactured, stored, distributed and marketed in compliance with Applicable Law.
Section 5.16 Specified Contracts. Section 5.16 of the Parent Disclosure Schedule sets forth a list as of the date of this Agreement of each Parent Specified Contract. “Parent Specified Contracts” has the meaning set forth on Section 5.16(a) of the Parent Disclosure Schedule. Parent has made available to the Company a true and complete copy of each Parent Specified Contract.
Section 5.17 Intellectual Property.
(a) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, as of the date of this Agreement (i) to the knowledge of Parent, the material Parent Products currently marketed and sold by Parent do not infringe, misappropriate or otherwise violate and, since January 1, 2020, have not infringed, misappropriated or otherwise violated, any Intellectual Property Rights of any Third Party (other than with respect to Intellectual Property Rights owned, controlled or licensed to Third Parties by non-practicing entities or patent assertion entities), and (ii) to the knowledge of Parent, since January 1, 2020, no Third Party has infringed, misappropriated or otherwise violated any material Parent Intellectual Property covering any material Parent Product marketed and sold by Parent.
(b) Except as has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect, since January 1, 2020, to the knowledge of Parent, as of the date of this Agreement (i) there have been no security breaches in the information technology systems of Parent nor any of its Subsidiaries, and (ii) there have been no material disruptions in any such information technology systems, that adversely affected the operations of the business of Parent or any of its Subsidiaries.
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Section 5.18 Finders’ Fees. Except as set forth in Section 5.18 of the Parent Disclosure Schedule, there is no investment banker, broker, finder or other intermediary that has been retained by or is authorized to act on behalf of Parent or any of its Subsidiaries who might be entitled to any finders or similar fee or commission from Parent or any of its Affiliates in connection with the transactions contemplated by this Agreement.
Section 5.19 No Ownership of Company Common Stock. Neither Parent nor any of its Subsidiaries beneficially owns, directly or indirectly, any shares of Company Common Stock or other securities convertible into, exchangeable for or exercisable for shares of Company Common Stock, and neither Parent nor any of its Subsidiaries has any rights to acquire any shares of Company Common Stock (other than any such securities owned by Parent or any of its Subsidiaries in a fiduciary, representative or other capacity on behalf of other Persons, whether or not held in a separate account). There are no voting trusts or other agreements or understandings to which Parent or any of its Subsidiaries is a party with respect to the voting of the capital stock or other Equity Securities of the Company or any of its Subsidiaries.
Section 5.20 Reorganization. Neither Parent nor any of its Subsidiaries has taken or agreed to take any action or knows of any fact, agreement, plan or other circumstance that is reasonably likely (i) to prevent the Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (ii) to cause the stockholders of the Company (other than any Excepted Stockholder) to recognize gain pursuant to Section 367(a)(1) of the Code.
Section 5.21 Financing.
(a) Parent has delivered to the Company a true and complete copy of the fully executed bridge facility agreement, dated on or before the date of this Agreement, among Parent and certain of its Subsidiaries and the Financing Sources party thereto (including all exhibits, schedules, and annexes to such agreement in effect as of the date of this Agreement), pursuant to which such Financing Sources have committed, on the terms and subject to the conditions set forth therein, to provide the debt financing described therein in connection with the transactions contemplated hereby (the “Bridge Facility Agreement”).
(b) Parent and its Subsidiaries have available to them upon funding of the Bridge Facility Agreement, and at the Closing will have available to them the funds necessary to consummate the transactions contemplated by this Agreement and to make all payments required to be made in connection therewith in an amount sufficient to enable Parent, Bidco and Merger Subs to pay in cash all amounts required to be paid by Parent, Bidco and Merger Subs in cash on the Closing Date including the payment of (i) the aggregate Cash Consideration in full in accordance with the terms of this Agreement (ii) the aggregate amount of obligations outstanding under the Credit Agreement at Closing to effect the payoff and termination of the Credit Agreement and (iii) any other amounts (including all payments, fees and expenses) required to be paid in connection with, related to or arising out of the consummation of the Mergers (collectively, the “Required Financing Amount”).
(c) Notwithstanding anything in this Agreement to the contrary, Parent, Bidco, and each Merger Sub acknowledge and agree that the receipt and availability of any funds
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or financing is not a condition to Closing under this Agreement nor is it a condition to Closing under this Agreement for Parent to obtain all or any portion of the Debt Financing or any other financing.
Section 5.22 No Other Representations and Warranties. Except for the representations and warranties made by Parent in this Article V (as qualified by the applicable items disclosed in the Parent Disclosure Schedule in accordance with Section 11.05 and the introduction to this Article V) and in the certificate to be delivered by Parent pursuant to Section 9.03(c), neither Parent nor any other Person (including either Merger Sub) makes or has made any representation or warranty, expressed or implied, at law or in equity, with respect to or on behalf of Parent or its Subsidiaries, their businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding Parent or its Subsidiaries or any other matter furnished or provided to the Company or made available to the Company in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement or the transactions contemplated hereby. Parent and its Subsidiaries disclaim any other representations or warranties, whether made by Parent or any of its Subsidiaries or any of their respective Affiliates or Representatives. Each of Parent, Bidco and each Merger Sub acknowledges and agrees that, except for the representations and warranties made by the Company in Article IV (as qualified by the applicable items disclosed in the Company Disclosure Schedule in accordance with Section 11.05 and the introduction to Article IV) and in the certificate to be delivered by the Company pursuant to Section 9.02(c), neither the Company nor any other Person is making or has made any representations or warranty, expressed or implied, at law or in equity, with respect to or on behalf of the Company or its Subsidiaries, their businesses, operations, assets, liabilities, financial condition, results of operations, future operating or financial results, estimates, projections, forecasts, plans or prospects (including the reasonableness of the assumptions underlying such estimates, projections, forecasts, plans or prospects) or the accuracy or completeness of any information regarding the Company or its Subsidiaries or any other matter furnished or provided to Parent or made available to Parent in any “data rooms,” “virtual data rooms,” management presentations or in any other form in expectation of, or in connection with, this Agreement, or the transactions contemplated hereby or thereby. Each of Parent, Bidco and each Merger Sub specifically disclaims that it is relying on or has relied on any such other representations or warranties that may have been made by any Person, and acknowledges and agrees that the Company and its Affiliates have specifically disclaimed and do hereby specifically disclaim any such other representations and warranties.
ARTICLE VI
COVENANTS OF THE COMPANY
Section 6.01 Conduct of the Company.
(a) From the date of this Agreement until the earlier of the First Effective Time and the termination of this Agreement, except (x) as prohibited or required by Applicable Law, (y) as set forth in Section 6.01 of the Company Disclosure Schedule, or (z) as otherwise
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required or expressly contemplated by this Agreement, unless Parent shall have given its prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall, and shall cause each of its Subsidiaries to, use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business and to preserve intact its business organization, keep available the services of its present key employees and maintain its existing relations and goodwill with material customers, members, suppliers, licensors, licensees and other Third Parties with whom it has material business relations; provided, that (i) no action by the Company or any of its Subsidiaries to the extent expressly permitted by an exception to any of Section 6.01(b)(i) through Section 6.01(b)(xvi) shall be a breach of this sentence and (ii) the Company’s or any of its Subsidiaries’ failure to take any action prohibited by any of Section 6.01(b)(i) through Section 6.01(b)(xvi) shall not be deemed to be a breach of this Section 6.01(a).
(b) From the date of this Agreement until the earlier of the First Effective Time and the termination of this Agreement, except (x) as prohibited or required by Applicable Law, (y) as set forth in Section 6.01 of the Company Disclosure Schedule, or (z) as otherwise required or expressly contemplated by this Agreement, without Parent’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), the Company shall not, and shall cause each of its Subsidiaries not to:
(i) adopt any change to its certificate of incorporation, bylaws or other organizational documents (whether by merger, consolidation or otherwise) (including the Company Organizational Documents);
(ii) (A) merge or consolidate with any other Person, other than any merger or consolidation between any Subsidiary of the Company and any other Person that does not involve the acquisition of assets, securities or property for consideration in an amount exceeding $100 million in the aggregate (including the value of any contingent payments potentially payable); provided, that, neither the Company nor any of its Subsidiaries shall engage in any merger or consolidation that is reasonably likely to result in the acquisition or disposition of, or any restriction or obligation related to, any product, service, activity or business in the field of oncology; (B) acquire (including by merger, consolidation, or acquisition of stock or assets) any interest in any corporation, partnership, other business organization or any division thereof or any assets, securities or property, other than (1) acquisitions of assets, securities or property for consideration in an amount not to exceed $100 million in the aggregate (including the value of any contingent payments potentially payable) for all such acquisitions, (2) acquisitions of securities consistent with the Company’s investment policy in effect as of the date of this Agreement, (3) transactions (I) solely among the Company and one or more of its wholly owned Subsidiaries or (II) solely among the Company’s wholly owned Subsidiaries and (4) acquisitions of inventory or equipment in the ordinary course of business consistent with past practice (provided that any of the acquisitions or transactions described in clauses (1) through (4) shall require the prior written consent of Parent if such acquisition or transaction would, individually or in the aggregate, reasonably be expected to prevent or materially delay the consummation of the transactions contemplated by this agreement) or (C) adopt a plan of complete or partial liquidation, dissolution, recapitalization or restructuring;
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(iii) (A) split, combine or reclassify any shares of its capital stock (other than transactions (1) solely among the Company and one or more of its wholly owned Subsidiaries or (2) solely among the Company’s wholly owned Subsidiaries), (B) amend any term or alter any rights of any of the outstanding Equity Securities of the Company, (C) declare, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or any combination thereof) in respect of any shares of its capital stock or other Equity Securities, other than dividends or distributions by a Subsidiary of the Company to the Company or a wholly owned Subsidiary of the Company, or (D) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of its Equity Securities or any Equity Securities of any Subsidiary of the Company, other than repurchases of shares of Company Common Stock in connection with the exercise of Company Stock Options or the vesting or settlement of Company RSU Awards or Company PSU Awards (including in satisfaction of any amounts required to be deducted or withheld under Applicable Law), in each case outstanding as of the date of this Agreement in accordance with the present terms of such Company Equity Awards or granted after the date of this Agreement to the extent permitted by this Agreement;
(iv) issue, deliver or sell, or authorize the issuance, delivery or sale of, any shares of its capital stock or any other Equity Securities, other than (A) the issuance of any shares of Company Common Stock upon the exercise of Company Stock Options or the vesting or settlement of shares of Company RSU Awards or Company PSU Awards that are, in each case outstanding as of the date of this Agreement in accordance with the present terms of such Company Equity Awards or granted after the date of this Agreement to the extent permitted by this Agreement, (B) the issuance of shares of Company Common Stock on the exercise of purchase rights under the Company ESPP in accordance with Section 2.07(f) or (C) with respect to Equity Securities of any Subsidiary of the Company, in connection with transactions (1) solely among the Company and one or more of its wholly owned Subsidiaries or (2) solely among the Company’s wholly owned Subsidiaries;
(v) authorize, make or incur any capital expenditures or obligations or liabilities in connection therewith, other than (A) from the date of this Agreement through December 2, 2021, (1) any capital expenditures contemplated by the capital expenditure budget of the Company and its Subsidiaries made available to Parent prior to the date of this Agreement and (2) capital expenditures (I) for an expenditure for which there is an individual line item, not in excess of 20% above the annual amount contemplated by such line item in such capital expenditure budget and (II) in any event, not in excess in the aggregate of 20% above the aggregate annual amount contemplated by such capital expenditure budget and (B) for 2022, capital expenditures not exceeding 20% above the aggregate quarterly amount set forth in such capital expenditure budget for the fourth quarter of 2021;
(vi) sell, lease, license, transfer or otherwise dispose of any Subsidiary or any division thereof or of the Company or any assets, securities or property (in each case, other than Intellectual Property Rights, which are addressed in Section 6.01(b)(xv)), other than (A) dispositions of securities under the Company’s investment portfolio
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consistent with the Company’s investment policy in effect as of the date of this Agreement, (B) sales or dispositions of inventory or tangible personal property (including equipment), in each case in the ordinary course of business, (C) dispositions of assets, securities or property in an amount not to exceed $100 million in the aggregate for all such dispositions; provided, that any such disposition of assets, securities or property of the Company or its Subsidiaries shall not relate to any business, product, activity or service in the fields of (1) oncology, (2) cardiovascular, renal and metabolism and (3) respiratory and immunology, or (D) transactions (1) solely among the Company and one or more of its wholly owned Subsidiaries or (2) solely among the Company’s wholly owned Subsidiaries;
(vii) (A) make any material loans, advances or capital contributions to, or investments in, any other Person, other than (1) loans, advances, capital contributions or investments (I) by the Company to or in, as applicable, one or more of its wholly owned Subsidiaries or (II) by any Subsidiary of the Company to or in, as applicable, the Company or any wholly owned Subsidiary of the Company, or (2) capital contributions required under the terms of Contracts in effect as of the date of this Agreement, or (B) incur, assume, guarantee or repurchase or otherwise become liable for any indebtedness for borrowed money or issue or sell any debt securities or any options, warrants or other rights to acquire debt securities (in each case, whether, directly or indirectly, on a contingent basis or otherwise), other than (1) additional borrowings under the Credit Agreement (as in effect as of the date of this Agreement) in accordance with the terms thereof, (2) intercompany indebtedness among the Company and its wholly owned Subsidiaries or among the Company’s wholly owned Subsidiaries, (3) indebtedness not to exceed $100 million in aggregate principal amount incurred to replace, renew, extend, refinance or refund any existing indebtedness of the Company or any of its Subsidiaries, which indebtedness is (I) prepayable without premium or penalty (other than customary LIBOR breakage amounts), (II) on terms that are substantially consistent with or not more restrictive than those contained in the indebtedness being replaced, renewed, extended, refinanced or refunded and (III) not in a principal amount greater than such indebtedness being replaced, renewed, extended, refinanced or refunded, or, in the case of any “revolving” credit facility, the aggregate amount that may be incurred under the credit agreement governing such indebtedness being replaced, renewed, extended, refinanced or refunded (as in effect as of the date hereof) and (4) guarantees of indebtedness of the Company or its wholly owned Subsidiaries outstanding on the date of this Agreement or otherwise incurred in compliance with this Section 6.01(b)(vii)(B);
(viii) (A) subject to clause (B) below, other than in the ordinary course of business, enter into, terminate (other than the expiration of any Company Material Contract in accordance with its terms), renew, extend or in any material respect modify or amend any Company Material Contract (including by amendment of any Contract that is not a Company Material Contract such that such Contract becomes a Company Material Contract) or waive, release or assign any material right or claim thereunder or (B) enter into, terminate (other than the expiration of any Company Material Contract in accordance with its terms), renew, extend or in any material respect modify or amend any Company Material Contract (including the entering into or amendment of any Contract
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that is not a Company Material Contract such that such Contract becomes a Company Material Contract) of the type described in clause (i), (iv), (vii), (viii), (x) or (xi) of Section 4.16(a) or set forth on Section 6.01(b)(viii) of the Company Disclosure Schedule (with respect to clauses (vii), (viii) and (x) of Section 4.16(a), solely if such Company Material Contract (1) involves payments (including any potential or contingent payments) to or from the Company or any of its Subsidiaries in an amount not exceeding $100,000,000 individually or $200,000,000 in the aggregate or (2) relates to any business, product, activity or service in the fields of oncology or waive, release or assign any material right or claim thereunder;
(ix) voluntarily (A) terminate, (B) suspend, (C) abrogate, (D) amend, (E) let lapse or (F) modify any material Company Permit in a manner materially adverse to the Company and its Subsidiaries, taken as a whole;
(x) except as required by Company Employee Plans as in effect as of the date of this Agreement, (A) grant any change in control, severance, retention or termination pay to (or amend any existing change in control, severance, retention or termination pay arrangement with) any of their respective directors, officers, employees, or individual consultants (including former directors, officers, employees, or individual consultants), (B) take any action to accelerate the vesting of, or payment of, any compensation or benefit under any Company Employee Plan, (C) establish, adopt or amend any Company Employee Plan or labor agreement, other than amendments of health or welfare benefit plans in the ordinary course of business consistent with past practice that would not increase the aggregate cost to the Company or any of its Subsidiaries of maintaining all Company Employee Plans that are health or welfare benefit plans by more than 5% in the aggregate for all such amendments, (D) increase the compensation, bonus opportunity or other benefits payable to any of their respective directors, officers, or employees (including former directors, officers, or employees), other than any annual merit and market-based increases or increases in connection with promotions, in each case, in the ordinary course of business and that would not increase the cost to the Company or any of its Subsidiaries of such compensation, bonus opportunities or other benefits by more than 5% in the aggregate on an annualized basis, (E) hire or terminate without cause any director, officer or employee holding a title above Vice President, or (F) in any calendar year, (1) increase the total number of employees of the Company and its Subsidiaries by more than 10% on a net basis, taking into account all employees hired during such calendar year and all employees who separate from employment for any reason during such calendar year, or (2) terminate (other than for cause) the employment of a number of employees of the Company and its Subsidiaries that exceeds 10% of the total number of employees of the Company and its Subsidiaries as of the first day of such calendar year;
(xi) make any material change in any method of financial accounting or financial accounting principles or practices, except for any such change required by reason of (or, in the reasonable good-faith judgment of the Company, advisable under) a change in GAAP or Regulation S-X under the 1934 Act (“Regulation S-X”), as approved by its independent public accountants;
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(xii) (A) make, change or revoke any material Tax election; (B) change any annual Tax accounting period; (C) adopt or change any material method of Tax accounting; (D) enter into any material closing agreement with respect to Taxes; or (E) settle or surrender or otherwise concede, terminate or resolve any material Tax claim, audit, investigation or assessment for an amount in excess of $3 million individually or $10 million in the aggregate; (F) amend any material Tax Returns; or (G) apply for a ruling from any Taxing Authority.
(xiii) settle or compromise any claim, action, suit, investigation or proceeding involving or against the Company or any of its Subsidiaries that is would reasonably be expected to have a material effect on the business of the Company or the combined business of the Company and Parent after the Closing Date (including any action, suit, investigation, or proceeding involving or against any employee, officer or director of the Company or any of its Subsidiaries in their capacities as such), other than any settlement or compromise that (A) does not involve payments (contingent or otherwise) by the Company or any of its Subsidiaries in excess of $5 million individually or $20 million in the aggregate and (B) does not involve any material non-monetary relief or obligations; provided, that this clause (xiii) shall not apply with respect to any claim, action, suit, investigation or proceeding (A) in respect of Taxes (which shall be governed exclusively by clause (xii)) or (B) brought by the stockholders of the Company against the Company and/or its directors relating to this Agreement and the transactions contemplated hereby, including the Mergers (which shall be governed exclusively by Section 8.07);
(xiv) take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to (A) prevent or impede the Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (B) cause the stockholders of the Company (other than any Excepted Stockholder) to recognize gain pursuant to Section 367(a)(1) of the Code;
(xv) (A) license or grant any rights under, sell, transfer or otherwise dispose of any material Company Intellectual Property other than nonexclusive licenses granted in the ordinary course of business, or (B) permit any material Company Registered IP to lapse, expire or become abandoned prior to the end of the applicable term of such Company Registered IP, except where the Company has made a reasonable business decision to not maintain such item of Company Registered IP, in each case, consistent with past practice; or
(xvi) agree, resolve, commit or propose to do any of the foregoing.
(c) Anything to the contrary set forth in this Agreement notwithstanding, the Company shall not, and shall cause its Affiliates not to, directly or indirectly (whether by merger, consolidation or otherwise), acquire, purchase, lease or license or otherwise enter into a transaction with (or agree to acquire, purchase, lease or license or otherwise enter into a transaction with) any business, corporation, partnership, association or other business organization or division or part thereof that has one or more products, whether marketed or in development, that compete, or if commercialized would compete, with one or more Parent
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Products, if doing so would reasonably be expected to (i) impose any material delay in the satisfaction of, or increase materially the risk of not satisfying the conditions set forth in Section 9.01(c) (to the extent related to any Antitrust Law) or the conditions set forth in Section 9.01(h); (ii) materially increase the risk of any Governmental Authority entering an Order prohibiting or enjoining the consummation of the Mergers; or (iii) otherwise prevent or materially delay the consummation of the Mergers (including the Debt Financing). The fact that a merger, acquisition or similar transaction requires approval under the Antitrust Laws shall not in and of itself restrict such transaction under this Section 6.01(c).
(d) Nothing contained in this Agreement shall give Parent, directly or indirectly, the right to control or direct the Company’s or any of its Subsidiaries’ businesses or operations, other than after Closing.
Section 6.02 No Solicitation by the Company.
(a) From the date of this Agreement until the earlier of the First Effective Time and the termination of this Agreement, except as otherwise set forth in this Section 6.02, the Company shall not, and shall cause its Subsidiaries and its and its Subsidiaries’ respective directors and officers to not, and shall use its reasonable best efforts to cause its and its Subsidiaries’ other respective Representatives to not, directly or indirectly, (i) solicit, initiate, knowingly facilitate or knowingly encourage (including by way of furnishing information) any inquiries regarding, or the making or submission of any Company Acquisition Proposal, (ii) (A) enter into or participate in any discussions or negotiations regarding, (B) furnish to any Third Party any information, or (C) otherwise assist, participate in, knowingly facilitate or knowingly encourage any Third Party, in each case, in connection with or for the purpose of knowingly encouraging or facilitating, a Company Acquisition Proposal, (iii) approve, recommend or enter into, or publicly or formally propose to approve, recommend or enter into, any letter of intent or similar document, agreement, commitment, or agreement in principle (whether written or oral, binding or nonbinding) with respect to a Company Acquisition Proposal, (iv) (A) withdraw or qualify, amend or modify in any manner adverse to Parent the Company Board Recommendation, (B) fail to include the Company Board Recommendation in the Proxy Statement/Prospectus or (C) recommend, adopt or approve or publicly propose to recommend, adopt or approve any Company Acquisition Proposal (any of the foregoing in this clause (iv), a “Company Adverse Recommendation Change”) or (v) take any action to make any “moratorium”, “control share acquisition”, “fair price”, “supermajority”, “affiliate transactions” or “business combination statute or regulation” or other similar anti-takeover laws and regulations of the State of Delaware, including Section 203 of the DGCL, inapplicable to any Third Party or any Company Acquisition Proposal.
(b) The foregoing notwithstanding, if at any time prior to the receipt of the Company Stockholder Approval (the “Company Approval Time”), the Board of Directors of the Company receives a bona fide written Company Acquisition Proposal made after the date of this Agreement that has not resulted from a violation of this Section 6.02, the Board of Directors of the Company, directly or indirectly through its Representatives, may (i) contact the Third Party that has made such Company Acquisition Proposal in order to ascertain facts or clarify terms for the sole purpose of the Board of Directors of the Company informing itself about such Company Acquisition Proposal and such Third Party and (ii) if the Board of Directors of the Company
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determines in good faith, after consultation with its financial advisor and outside legal counsel, that such Company Acquisition Proposal is or could reasonably be expected to lead to a Company Superior Proposal, (A) subject to compliance with this Section 6.02, engage in negotiations or discussions with such Third Party and (B) furnish to such Third Party and its Representatives and financing sources non-public information relating to the Company or any of its Subsidiaries pursuant to a confidentiality agreement that (1) does not contain any provision that would prevent the Company from complying with its obligation to provide disclosure to Parent pursuant to this Section 6.02 and (2) contains confidentiality and use provisions that, in each case, are no less favorable in the aggregate to the Company than those contained in the Confidentiality Agreement; provided, that all such non-public information (to the extent that such information has not been previously provided or made available to Parent) is provided or made available to Parent, as the case may be, substantially concurrently with the time it is provided or made available to such Third Party. Nothing contained herein shall prevent the Board of Directors of the Company from (x) taking and disclosing to the stockholders of the Company a position contemplated by Rule 14e-2(a), Rule 14d-9 or Item 1012(a) of Regulation M-A promulgated under the 1934 Act, or (y) making any required disclosure to the stockholders of the Company if the Board of Directors of the Company determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with Applicable Law; provided, that any such action or disclosure that constitutes a Company Adverse Recommendation Change shall be made in compliance with the applicable provisions of this Section 6.02. A “stop, look and listen” disclosure pursuant to Rule 14d-9(f) under the 1934 Act in connection with a tender or exchange offer shall not constitute a Company Adverse Recommendation Change.
(c) The Company shall notify Parent as promptly as practicable (but in no event later than 24 hours) after receipt by the Company (or any of its Representatives) of any Company Acquisition Proposal or any request for information relating to the Company or any of its Subsidiaries that, to the knowledge of the Company, has been or is reasonably likely to have been made in connection with any Company Acquisition Proposal, which notice shall be provided in writing and shall identify the Third Party making, and the material terms and conditions of, any such Company Acquisition Proposal or request. The Company shall thereafter (i) keep Parent reasonably informed, on a reasonably current basis, of any material changes in the status and details (or any changes to the type and amount of consideration) of any such Company Acquisition Proposal or request and (ii) as promptly as practicable (but in no event later than 24 hours after receipt) provide to Parent copies of any material written correspondence, proposals or indications of interest relating to the terms and conditions of such Company Acquisition Proposal or request provided to the Company or any of its Subsidiaries (as well as written summaries of any material oral communications relating to the terms and conditions of any Company Acquisition Proposal).
(d) Anything in this Agreement to the contrary notwithstanding, prior to the Company Approval Time, in response to a Company Acquisition Proposal that the Board of Directors of the Company determines in good faith constitutes a Company Superior Proposal, the Board of Directors of the Company may, subject to compliance with this Section 6.02(d), (i) make a Company Adverse Recommendation Change and/or (ii) terminate this Agreement in accordance with Section 10.01(d)(iii); provided, that (A) the Company shall first notify Parent in writing at least four Business Days before taking such action that the Company intends to take
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such action, which notice shall include an unredacted copy of such proposal and a copy of any financing commitments (in the form provided to the Company) relating thereto (and, to the extent not in writing, the material terms and conditions thereof and the identity of the person making any such proposal), (B) the Company shall make its Representatives reasonably available to negotiate with Parent and its Representatives during such four Business Day notice period, to the extent Parent wishes to negotiate, to enable Parent to propose revisions to the terms of this Agreement such that it would cause such Company Superior Proposal to no longer constitute a Company Superior Proposal, (C) upon the end of such notice period, the Board of Directors of the Company shall have considered in good faith any revisions to the terms of this Agreement committed to in writing by Parent, and shall have determined that the Company Superior Proposal would nevertheless continue to constitute a Company Superior Proposal if the revisions committed to in writing by Parent were to be given effect and (D) in the event of any change, from time to time, to any of the financial terms or any other material terms of such Company Superior Proposal, the Company shall, in each case, have delivered to Parent an additional notice consistent with that described in clause (A) of this proviso and a new notice period under clause (A) of this proviso shall commence each time, except each such notice period shall be three Business Days (instead of four Business Days), during which time the Company shall be required to comply with the requirements of this Section 6.02(d) anew with respect to each such additional notice, including clauses (A) through (D) above of this proviso.
(e) Anything in this Agreement to the contrary notwithstanding, at any time prior to the Company Approval Time, the Board of Directors of the Company may effect a Company Adverse Recommendation Change in response or relating to a Company Intervening Event if the Board of Directors of the Company determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under Applicable Law; provided, that (i) the Company shall first notify Parent in writing at least four Business Days before taking such action of its intention to take such action, which notice shall include a reasonably detailed description of such Company Intervening Event, (ii) if requested by Parent, the Company shall make its Representatives reasonably available to negotiate with Parent and its Representatives during such four Business Day period following such notice regarding any proposal by Parent to amend the terms of this Agreement in response to such Company Intervening Event, and (iii) the Board of Directors of the Company shall not effect any Company Adverse Recommendation Change involving or relating to a Company Intervening Event unless, after the four Business Day period described in the foregoing clause (ii), the Board of Directors of the Company determines in good faith, after consultation with its outside legal counsel and taking into account any written commitment by Parent to amend the terms of this Agreement during such four Business Day period, that the failure to take such action would continue to be reasonably likely to be inconsistent with its fiduciary duties under Applicable Law.
(f) The Company shall, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause its and its Subsidiaries’ Representatives to, cease immediately and cause to be terminated any and all existing discussions or negotiations, if any, with any Third Party conducted prior to or ongoing as of the date of this Agreement with respect to any actual or potential (including if such discussions or negotiations were for the purpose of soliciting any) Company Acquisition Proposal or with respect to any indication, proposal or inquiry that could reasonably be expected to lead to a Company Acquisition Proposal and shall use its reasonable
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best efforts to cause any such Third Party (and any of its Representatives) in possession of confidential information about the Company or any of its Subsidiaries that was furnished by or on behalf of the Company in connection with such discussions or negotiations to return or destroy all such information.
Section 6.03 Financing Assistance.
(a) Prior to the Closing, the Company shall, and shall cause its Subsidiaries to, use its and their commercially reasonable efforts to provide such cooperation that is customary as may be reasonably requested by Parent to assist Parent in arranging, obtaining or syndicating the debt financing provided by the Bridge Facility Agreement (or any financing intended to replace or refinance the debt financing provided by the Bridge Facility Agreement) or any other third party debt financing necessary or incurred by Parent, any wholly owned Subsidiary of Parent or any Merger Sub to consummate the transactions contemplated hereby (the “Debt Financing”) (provided, that such requested cooperation does not unreasonably interfere with the ongoing business or operations of the Company and its Subsidiaries or require the Company or any of its Subsidiaries to waive or amend any terms of this Agreement), including using commercially reasonable efforts to:
(i) reasonably cooperate with the customary marketing efforts or due diligence efforts of Parent in connection with all or any portion of the Debt Financing, including making available members of the management team with appropriate seniority and expertise to assist in preparation for and to participate in a mutually agreed number (on reasonable notice) of meetings, presentations, road shows, due diligence sessions, drafting sessions and sessions with proposed lenders, underwriters, initial purchasers, placement agents, investors and rating agencies,
(ii) on reasonable notice comment on customary offering memoranda, rating agency presentations, bank information memoranda, lender and investor presentations, road show materials, confidential information memoranda, registration statements, prospectuses, prospectus supplements, private placement memoranda, and similar documents customarily required in connection with the Debt Financing, including the marketing and syndication thereof,
(iii) cause the Company’s independent accountants and/or auditors to provide customary cooperation with the Debt Financing,
(iv) (I) to the extent customary for Parent to prepare marketing materials for any Debt Financing of the applicable type, furnish Parent and the applicable Financing Sources with (A) audited consolidated balance sheets and related audited statements of operations, comprehensive income, stockholders’ equity and cash flows of the Company for each of the three fiscal years most recently ended more than sixty (60) days prior to the Closing Date, (B) unaudited consolidated balance sheets and related unaudited consolidated statements of operations, comprehensive income, stockholders’ equity and cash flows of the Company for each subsequent interim quarterly period ended more than 40 days prior to the Closing Date, in the case of each of clauses (I)(A) and (I)(B), prepared in accordance with GAAP, and (C) if the Parent is pursuing a
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registered public offering of debt securities and has notified the Company of such election, such other historical financial and other information of the type required by Regulation S-X and Regulation S-K under the 1933 Act in each case that is customary for such offering or as otherwise necessary to permit the Company’s independent accountants and/or auditors to issue customary “comfort letters” to Parent’s Financing Sources in connection with such offering, including as to customary negative assurances required to consummate such offering (it being understood that the Company need only to provide information to assist the Parent in the preparation of pro forma financial information, and shall not in any event be required to provide pro forma financial statements, projections or pro forma adjustments), and (II) furnish Parent and its Financing Sources with such other customary information relating to the Company and its Subsidiaries that is reasonably requested by Parent and is customarily required in marketing materials for Debt Financings of the applicable type.
(v) provide to Parent and the Financing Sources promptly all documentation and other information about the Company and its Subsidiaries required by the Financing Sources or regulatory authorities with respect to the Debt Financing under applicable “know your customer” and anti-money laundering rules and regulations, including the PATRIOT Act, that is required under any Debt Financing to the extent such documentation and other information is requested in writing to the Company at least ten Business Days prior to the Closing Date,
(vi) subject to customary confidentiality provisions and disclaimers, provide customary authorization letters to the Financing Sources authorizing the distribution of information to prospective lenders or investors,
(vii) facilitate the payoff, discharge and termination in full substantially concurrently with Closing of obligations outstanding under the Credit Agreement (including, without limitation, using commercially reasonable efforts to facilitate the calculation of the amounts required to effect the payoff and termination of the Credit Agreement in full at Closing no less than three Business Days prior thereto); provided that (A) neither the Company nor any of its Subsidiaries shall have any obligation to make any payment in respect of the foregoing unless and until the Closing occurs and it being understood that at the Closing, Parent and its Subsidiaries shall provide the Company and its Subsidiaries with the funds necessary for the Company to actually effect such payoff and termination and (B) no such action shall be required unless it can be and is conditioned on the occurrence of the Closing, and
(viii) consent to the reasonable use of trademarks and logos of the Company or any of its Subsidiaries in connection with the Debt Financing; provided, that such trademarks and logos are used solely in a manner that is not intended to or is reasonably likely to harm or disparage the Company or its Subsidiaries or the reputation or goodwill of the Company or any of its Subsidiaries.
(b) The foregoing notwithstanding, neither the Company nor any of its Subsidiaries shall be required to (i) take or permit the taking of any action pursuant to Section 6.03(a) that (A) would require the Company, its Subsidiaries or any Persons who are directors or
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officers of the Company or its Subsidiaries to enter into or approve any definitive financing or purchase agreement for the Debt Financing effective prior to the Closing, pass resolutions or consents to approve or authorize the execution of the Debt Financing, execute or deliver any certificate, document, instrument or agreement or agree to any change or modification of any existing certificate, document, instrument or agreement, in each case, that is effective prior to the Closing, or that would be effective if the Closing does not occur (other than customary authorization letters to the Financing Sources authorizing the distribution of information to prospective lenders or investors); (B) would cause any representation or warranty in this Agreement to be breached by the Company or any of its Subsidiaries (unless waived by Parent); (C) would require the Company or any of its Subsidiaries to pay any commitment or other similar fee prior to the Closing or incur any other expense, liability or obligation in connection with the Debt Financing prior to the Closing; (D) could reasonably be expected to cause any director, officer or employee or stockholder of the Company or any of its Subsidiaries to incur any personal liability in their capacity as such; (E) conflict with the organizational documents of the Company or its Subsidiaries or any Applicable Law; or (F) could reasonably be expected to result in a material violation or breach of, or a default (with or without notice, lapse of time, or both) under, any Contract to which the Company or any of its Subsidiaries is a party; (ii) provide access to or disclose information that the Company or any of its Subsidiaries reasonably determines would jeopardize any attorney-client privilege of the Company or any of its Subsidiaries; (iii) prepare (A) any IFRS financial statements or reconciliations or otherwise provide financial information in a format other than in accordance with GAAP or (B) any other financial statements or information that are not reasonably available to it or that are not capable of being prepared by it without undue burden or otherwise with the use of commercially reasonable efforts; (iv) enter into any instrument or agreement with respect to the Debt Financing that is effective prior to the occurrence of the Closing or that would be effective if the Closing does not occur; or (v) prepare any projections or pro forma financial statements; or (vi) deliver or cause to be delivered any opinion of counsel in connection with the Debt Financing. Nothing contained in this Section 6.03 or otherwise shall require the Company or any of its Subsidiaries, prior to the Closing, to be an issuer or other obligor with respect to the Debt Financing.
(c) Parent and Merger Subs shall, on a joint and several basis, promptly on written request by the Company, reimburse the Company for all reasonable and documented out-of-pocket costs and expenses (including reasonable attorneys’ fees) incurred by the Company or any of its Subsidiaries in connection with the Debt Financing or satisfying its obligations under this Section 6.03, whether or not the Mergers are consummated or this Agreement is terminated (excluding, for the avoidance of doubt, the costs of the preparation of any annual or quarterly financial statements of the Company to the extent prepared in the ordinary course of its financial reporting practice). Parent and Merger Subs shall, on a joint and several basis, indemnify and hold harmless the Company and its Subsidiaries and their respective Representatives from and against any and all losses, claims, damages, liabilities, reasonable out-of-pocket costs, reasonable out-of-pocket attorneys’ fees, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) suffered or incurred in connection with the Debt Financing or otherwise in connection with any action taken by the Company, any of its Subsidiaries or any of their respective Representatives pursuant to this Section 6.03 (other than the use of any information provided by the Company, any of its Subsidiaries or any of their respective Representatives in writing for use in connection with the Debt Financing) whether or not the Mergers are
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consummated or this Agreement is terminated, except in the event such losses, claims, damages, liabilities, reasonable out-of-pocket costs reasonable out-of-pocket attorneys’ fees, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) arise out of or result from the gross negligence or willful misconduct of the Company or its Subsidiaries in fulfilling their obligations pursuant to this Section 6.03.
(d) Anything to the contrary in this Agreement notwithstanding,(i) the parties hereto acknowledge and agree that the provisions contained in this Section 6.03 represent the sole obligation of the Company, its Subsidiaries and their respective Representatives with respect to cooperation in connection with the arrangement of any financing (including the Debt Financing) to be obtained by Parent, Bidco or either Merger Sub with respect to the transactions contemplated by this Agreement and no other provision of this Agreement (including the Exhibits and Schedules hereto) shall be deemed to expand or modify such obligations; (ii) the Company’s breach of any of the covenants required to be performed by it under this Section 6.03 shall not be considered in determining the satisfaction of the condition set forth in Section 9.02(a) unless such breach is the primary cause of, or primarily resulted in, Parent being unable to consummate the Mergers; and (iii) the receipt and availability of any funds or financing is not a condition to Closing under this Agreement nor is it a condition to Closing under this Agreement for Parent to obtain all or any portion of the Debt Financing or any other financing.
(e) All confidential information provided by Company, its Subsidiaries and their respective Representatives shall be kept confidential in accordance with the Confidentiality Agreement, except that Parent shall be permitted to disclose such information as applicable to any number of Financing Sources as would be reasonable and customary in connection with any financing; provided, that all confidential information shared with Financing Sources shall be kept confidential and otherwise treated in accordance with the Confidentiality Agreement or other confidentiality obligations that are substantially similar to those contained in the Confidentiality Agreement (which, with respect to the Financing Sources, may be satisfied by the confidentiality provisions applicable thereto under the Bridge Facility Agreement or other customary confidentiality undertakings in the context of customary syndication practices from Financing Sources not party to the Bridge Facility Agreement).
ARTICLE VII
COVENANTS OF PARENT, BIDCO AND MERGER SUBS
Section 7.01 Conduct of Parent.
(a) From the date of this Agreement until the earlier of the First Effective Time and the termination of this Agreement, except (x) as prohibited or required by Applicable Law, (y) as set forth in Section 7.01 of the Parent Disclosure Schedule, or (z) as otherwise required or expressly contemplated by this Agreement, unless the Company shall have given its prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), Parent shall, and shall cause each of its Subsidiaries to, use commercially reasonable efforts to conduct its business in all material respects in the ordinary course of business; provided, that (i) no action by Parent or any of its Subsidiaries to the extent expressly permitted
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by an exception to any of Section 7.01(b)(i) through Section 7.01(b)(vi) shall be a breach of this sentence and (ii) Parent’s or any of its Subsidiaries’ failure to take any action prohibited by any of Section 7.01(b)(i) through Section 7.01(b)(vi) shall not be deemed to be a breach of this Section 7.01(a).
(b) From the date of this Agreement until the earlier of the First Effective Time and the termination of this Agreement, except (x) as prohibited or required by Applicable Law, (y) as set forth in Section 7.01 of the Parent Disclosure Schedule, or (z) as otherwise required or expressly contemplated by this Agreement, without the Company’s prior written consent (which consent shall not be unreasonably withheld, conditioned or delayed), Parent shall not, and shall cause each of its Subsidiaries not to:
(i) adopt or propose any change (A) to the Parent Organizational Documents that would adversely impact the rights of the holders of the Parent Ordinary Shares or the holders of the Parent ADSs, or (B) the organizational documents of Bidco or either Merger Sub;
(ii) (A) split, combine or reclassify any shares of Parent, (B) declare, set aside or pay any dividend or make any other distribution (whether in cash, stock, property or any combination thereof) in respect of any shares of Parent, other than regular cash dividends in the ordinary course of business consistent with past practice (including with respect to the timing of declaration, and the record and payment dates) in an amount not to exceed $1.60 per Parent ADS in any 12-month period (appropriately adjusted to reflect any stock dividends, subdivisions, splits, combinations or other similar events relating to the Parent ADSs), or (C) redeem, repurchase, cancel or otherwise acquire or offer to redeem, repurchase, or otherwise acquire any of the Equity Securities of Parent, other than repurchases of Parent Ordinary Shares or Parent ADSs (whether directly by Parent or by a third party employee benefit trust funded by Parent) in connection with the exercise, vesting or settlement of Parent Equity Awards (including in satisfaction of any amounts required to be deducted or withheld under Applicable Law), in each case outstanding as of the date of this Agreement in accordance with the present terms of such Parent Equity Awards or granted after the date of this Agreement to the extent permitted by this Agreement;
(iii) issue, deliver or sell, or authorize the issuance, delivery or sale of any shares of Parent, other than (A) the issuance of any shares of Parent Ordinary Shares or Parent ADSs on the exercise, vesting or settlement of Parent Equity Awards, (B) the grant of Parent Equity Awards to employees, directors or individual independent contractors of Parent or any of its Subsidiaries pursuant to Parent’s equity compensation plans or (C) in connection with the Parent ADS Issuance;
(iv) (A) sell substantially all of the consolidated assets of Parent, (B) adopt a plan of complete or partial liquidation or dissolution or (C) enter into a business combination transaction that provides for the pre-transaction Parent Ordinary Shares as of the closing such transaction, to no longer represent at least a majority of the outstanding voting power of Parent or its successor or, if there is a publicly traded parent
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company directly or indirectly holding Parent or its successor as a result of the transaction, of the publicly traded company;
(v) take any action or knowingly fail to take any action where such action or failure to act could reasonably be expected to (A) prevent or impede the Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (B) cause the stockholders of the Company (other than any Excepted Stockholder) to recognize gain pursuant to Section 367(a)(1) of the Code; or
(vi) agree, resolve, commit or propose to do any of the foregoing.
(c) Anything to the contrary set forth in this Agreement notwithstanding, Parent shall not, and shall cause its Affiliates not to, directly or indirectly (whether by merger, consolidation or otherwise), acquire, purchase, lease or license or otherwise enter into a transaction with (or agree to acquire, purchase, lease or license or otherwise enter into a transaction with) any business, corporation, partnership, association or other business organization or division or part thereof that has one or more products, whether marketed or in development, that compete, or if commercialized would compete, with one or more Company Products, if doing so would reasonably be expected to (i) impose any material delay in the satisfaction of, or increase materially the risk of not satisfying the conditions set forth in Section 9.01(c) (to the extent related to any Antitrust Law) or the conditions set forth in Section 9.01(h); (ii) materially increase the risk of any Governmental Authority entering an Order prohibiting or enjoining the consummation of the Mergers; or (iii) otherwise prevent or materially delay the consummation of the Mergers (including the Debt Financing). The fact that a merger, acquisition or similar transaction requires approval under the Antitrust Laws shall not in and of itself restrict such transaction under this Section 7.01(c).
Section 7.02 No Solicitation by Parent.
(a) From the date of this Agreement until the earlier of the First Effective Time and the termination of this Agreement, except as otherwise set forth in this Section 7.02, Parent shall not, and shall cause its Subsidiaries and its and its Subsidiaries’ respective directors and officers to not, and shall use its reasonable best efforts to cause its and its Subsidiaries’ other respective Representatives to not, directly or indirectly, (i) solicit, initiate, knowingly facilitate or knowingly encourage (including by way of furnishing information) any inquiries regarding, or the making or submission of any Parent Acquisition Proposal, (ii) (A) enter into or participate in any discussions or negotiations regarding, (B) furnish to any Third Party any information, or (C) otherwise assist, participate in, knowingly facilitate or knowingly encourage any Third Party, in each case, in connection with or for the purpose of knowingly encouraging or facilitating, a Parent Acquisition Proposal, (iii) approve, recommend or enter into, or publicly or formally propose to approve, recommend or enter into, any letter of intent or similar document, agreement, commitment, or agreement in principle (whether written or oral, binding or nonbinding) with respect to a Parent Acquisition Proposal, (iv) (A) withdraw or qualify, amend or modify in any manner adverse to the Company the Parent Board Recommendation, (B) fail to include the Parent Board Recommendation in the Parent Circular or (C) recommend, adopt or approve or publicly propose to recommend, adopt or approve any Parent Acquisition Proposal (any of the foregoing in this clause (iv), a “Parent Adverse Recommendation Change”) or (v)
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take any action to make any “moratorium”, “control share acquisition”, “fair price”, “supermajority”, “affiliate transactions” or “business combination statute or regulation” or other similar anti-takeover laws and regulations of the State of Delaware, including Section 203 of the DGCL, inapplicable to any Third Party or any Parent Acquisition Proposal.
(b) The foregoing notwithstanding, if at any time prior to the receipt of the Parent Shareholder Approval (the “Parent Approval Time”), the Board of Directors of Parent receives a bona fide written Parent Acquisition Proposal made after the date of this Agreement that has not resulted from a violation of this Section 7.02, the Board of Directors of Parent, directly or indirectly through its Representatives, may (i) contact the Third Party that has made such Parent Acquisition Proposal in order to ascertain facts or clarify terms for the sole purpose of the Board of Directors of Parent informing itself about such Parent Acquisition Proposal and such Third Party and (ii) if the Board of Directors of Parent determines in good faith, after consultation with its financial advisor and outside legal counsel, that such Parent Acquisition Proposal is or could reasonably be expected to lead to a Parent Superior Proposal, (A) subject to compliance with this Section 7.02, engage in negotiations or discussions with such Third Party and (B) furnish to such Third Party and its Representatives and financing sources non-public information relating to Parent or any of its Subsidiaries pursuant to a confidentiality agreement that (1) does not contain any provision that would prevent Parent from complying with its obligation to provide disclosure to the Company pursuant to this Section 7.02 and (2) contains confidentiality and use provisions that, in each case, are no less favorable in the aggregate to Parent than those contained in the Confidentiality Agreement; provided, that all such non-public information (to the extent that such information has not been previously provided or made available to the Company) is provided or made available to the Company, as the case may be, substantially concurrently with the time it is provided or made available to such Third Party. Nothing contained herein shall prevent the Board of Directors of Parent from (x) complying with either Rule 14e-2(a) under the 1934 Act or the U.K. Code, in each case, with regard to a Parent Acquisition Proposal, or (y) making any required disclosure to the shareholders of Parent, either if required by the UK Panel on Takeovers and Mergers, or otherwise if the Board of Directors of Parent determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with Applicable Law; provided, that any such action or disclosure that constitutes a Parent Adverse Recommendation Change shall be made in compliance with the applicable provisions of this Section 7.02. A “stop, look and listen” disclosure pursuant to Rule 14d-9(f) under the 1934 Act in connection with a tender or exchange offer shall not constitute a Parent Adverse Recommendation Change.
(c) Parent shall notify the Company as promptly as practicable (but in no event later than 24 hours) after receipt by Parent (or any of its Representatives) of any Parent Acquisition Proposal or any request for information relating to Parent or any of its Subsidiaries that, to the knowledge of Parent, has been or is reasonably likely to have been made in connection with any Parent Acquisition Proposal, which notice shall be provided in writing and shall identify the Third Party making, and the material terms and conditions of, any such Parent Acquisition Proposal or request. Parent shall thereafter (i) keep the Company reasonably informed, on a reasonably current basis, of any material changes in the status and details (or any changes to the type and amount of consideration) of any such Parent Acquisition Proposal or request and (ii) as promptly as practicable (but in no event later than 24 hours after receipt) provide to the Company copies of any material written correspondence, proposals or indications
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of interest relating to the terms and conditions of such Parent Acquisition Proposal or request provided to Parent or any of its Subsidiaries (as well as written summaries of any material oral communications relating to the terms and conditions of any Parent Acquisition Proposal).
(d) Anything in this Agreement to the contrary notwithstanding, prior to the Parent Approval Time, in response to a Parent Acquisition Proposal that the Board of Directors of Parent determines in good faith constitutes a Parent Superior Proposal, the Board of Directors of Parent may, subject to compliance with this Section 7.02, make a Parent Adverse Recommendation Change; provided, that (A) Parent shall first notify the Company in writing at least four Business Days before taking such action that Parent intends to take such action, which notice shall include an unredacted copy of such proposal and a copy of any financing commitments (in the form provided to Parent) relating thereto (and, to the extent not in writing, the material terms and conditions thereof and the identity of the person making any such proposal), (B) Parent shall make its Representatives reasonably available to negotiate with the Company and its Representatives during such four Business Day notice period, to the extent the Company wishes to negotiate, to enable the Company to propose revisions to the terms of this Agreement such that it would cause such Parent Superior Proposal to no longer constitute a Parent Superior Proposal, (C) upon the end of such notice period, the Board of Directors of Parent shall have considered in good faith any revisions to the terms of this Agreement committed to in writing by the Company, and shall have determined that the Parent Superior Proposal would nevertheless continue to constitute a Parent Superior Proposal if the revisions committed to in writing by the Company were to be given effect and (D) in the event of any change, from time to time, to any of the financial terms or any other material terms of such Parent Superior Proposal, Parent shall, in each case, have delivered to the Company an additional notice consistent with that described in clause (A) of this proviso and a new notice period under clause (A) of this proviso shall commence each time, except each such notice period shall be three Business Days (instead of four Business Days), during which time Parent shall be required to comply with the requirements of this Section 7.02(d) anew with respect to each such additional notice, including clauses (A) through (D) above of this proviso.
(e) Anything in this Agreement to the contrary notwithstanding, at any time prior to the Parent Approval Time, the Board of Directors of Parent may effect a Parent Adverse Recommendation Change in response or relating to a Parent Intervening Event if the Board of Directors of Parent determines in good faith, after consultation with its outside legal counsel, that the failure to take such action would be reasonably likely to be inconsistent with its fiduciary duties under Applicable Law; provided, that (i) Parent shall first notify the Company in writing at least four Business Days before taking such action of its intention to take such action, which notice shall include a reasonably detailed description of such Parent Intervening Event, (ii) if requested by the Company, Parent shall make its Representatives reasonably available to negotiate with the Company and its Representatives during such four Business Day period following such notice regarding any proposal by the Company to amend the terms of this Agreement in response to such Parent Intervening Event, and (iii) the Board of Directors of Parent shall not effect any Parent Adverse Recommendation Change involving or relating to a Parent Intervening Event unless, after the four Business Day period described in the foregoing clause (ii), the Board of Directors of Parent determines in good faith, after consultation with its outside legal counsel and taking into account any written commitment by the Company to amend the terms of this Agreement during such four Business Day period, that the failure to take such
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action would continue to be reasonably likely to be inconsistent with its fiduciary duties under Applicable Law.
(f) Parent shall, and shall cause its Subsidiaries to, and shall use its reasonable best efforts to cause its and its Subsidiaries’ Representatives to, cease immediately and cause to be terminated any and all existing discussions or negotiations, if any, with any Third Party conducted prior to or ongoing as of the date of this Agreement with respect to any actual or potential (including if such discussions or negotiations were for the purpose of soliciting any) Parent Acquisition Proposal or with respect to any indication, proposal or inquiry that could reasonably be expected to lead to a Parent Acquisition Proposal and shall use its reasonable best efforts to cause any such Third Party (and any of its Representatives) in possession of confidential information about Parent or any of its Subsidiaries that was furnished by or on behalf of Parent in connection with such discussions or negotiations to return or destroy all such information.
Section 7.03 Obligations of Merger Subs. (a) Until the First Effective Time, Bidco shall at all times be the direct owner of all of the outstanding shares of capital stock of Merger Sub I and Merger Sub II. Parent shall take all action necessary to cause Bidco and each Merger Sub to perform its obligations under this Agreement and to consummate the Mergers on the terms and subject to the conditions set forth in this Agreement. Promptly following the execution of this Agreement, Parent, in its capacity as the sole or majority stockholder of Bidco, and Bidco, in its capacity as the sole stockholder of Merger Sub I and sole member of Merger Sub II, shall each execute and deliver a written consent approving and adopting this Agreement in accordance with the DGCL and DLLCA, as applicable.
Section 7.04 Director and Officer Liability.
(a) For a period of not less than six years from the First Effective Time, Parent shall cause the First Surviving Corporation and the Surviving Company or any applicable Subsidiary thereof (collectively, the “D&O Indemnifying Parties”), to the fullest extent each such D&O Indemnifying Party is authorized or permitted by Applicable Law, to: (i) indemnify and hold harmless each person who is at the date of this Agreement, was previously, or during the period from the date of this Agreement through the date of the First Effective Time will be, serving as a director or officer of the Company (in the case of indemnification by the First Surviving Corporation and the Surviving Company) or any of its Subsidiaries (in the case of indemnification by such applicable Subsidiary) or, at the request or for the benefit of the Company or any of its Subsidiaries, as the case may be, as a director, trustee or officer of any other entity or any benefit plan maintained by the Company or any of its Subsidiaries, as the case may be (collectively, the “D&O Indemnified Parties”), as now or hereafter in effect, in connection with any D&O Claim and any losses, claims, damages, liabilities, Claim Expenses, judgments, fines, penalties and amounts paid in settlement (including all interest, assessments and other charges paid or payable in connection with or in respect of any thereof) relating to or resulting from such D&O Claim; and (ii) promptly advance to such D&O Indemnified Party any Claim Expenses incurred in defending, serving as a witness with respect to or otherwise participating with respect to any D&O Claim in advance of the final disposition of such D&O Claim, including payment on behalf of or advancement to the D&O Indemnified Party of any Claim Expenses incurred by such D&O Indemnified Party in connection with enforcing any
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rights with respect to such indemnification and/or advancement, in each case without the requirement of any bond or other security, but subject to the D&O Indemnifying Party’s receipt of a written undertaking by or on behalf of such D&O Indemnified Party to repay such Claim Expenses if it is ultimately determined under Applicable Law that such D&O Indemnified Party is not entitled to be indemnified. All rights to indemnification and advancement conferred hereunder shall continue as to a Person who has ceased to be a director or officer of the Company or any of its Subsidiaries after the date of this Agreement and shall inure to the benefit of such Person’s heirs, successors, executors and personal and legal representatives. As used in this Section 7.04: (x) the term “D&O Claim” means any threatened, asserted, pending or completed claim, action, suit, proceeding, inquiry or investigation, whether instituted by any party hereto, any Governmental Authority or any other Person, whether civil, criminal, administrative, investigative or other, including any arbitration or other alternative dispute resolution mechanism, arising out of or pertaining to matters that relate to such D&O Indemnified Party’s duties or service (A) as a director, officer or employee of the Company or the applicable Subsidiary thereof at or prior to the First Effective Time (including with respect to any acts, facts, events or omissions occurring in connection with the approval of this Agreement, the Mergers or the consummation of the other transactions contemplated by this Agreement, including the consideration and approval thereof and the process undertaken in connection therewith and any D&O Claim relating thereto) or (B) as a director, trustee, officer or employee of any other entity or any benefit plan maintained by the Company or any of its Subsidiaries (for which such D&O Indemnified Party is or was serving at the request or for the benefit of the Company or any of its Subsidiaries) at or prior to the First Effective Time; and (y) the term “Claim Expenses” means reasonable out-of-pocket attorneys’ fees and all other reasonable out-of-pocket costs, expenses and obligations (including experts’ fees, travel expenses, court costs, retainers, transcript fees, legal research, duplicating, printing and binding costs, as well as telecommunications, postage and courier charges) paid or incurred in connection with investigating, defending, being a witness in or participating in (including on appeal), or preparing to investigate, defend, be a witness in or participate in (including on appeal) any D&O Claim for which indemnification is authorized pursuant to this Section 7.04(a), including any action relating to a claim for indemnification or advancement brought by a D&O Indemnified Party. No D&O Indemnifying Party shall settle, compromise or consent to the entry of any judgment in any actual or threatened D&O Claim in respect of which indemnification has been sought by such D&O Indemnified Party hereunder unless such settlement, compromise or judgment includes an unconditional release of such D&O Indemnified Party from all liability arising out of such D&O Claim, or such D&O Indemnified Party consents thereto. Parent shall guarantee the foregoing obligations of the D&O Indemnifying Parties.
(b) Without limiting the foregoing, Parent agrees that all rights to indemnification, advancement of expenses and exculpation from liabilities for acts or omissions occurring at or prior to the First Effective Time now existing in favor of the current or former directors, officers or employees of the Company or any of its Subsidiaries as provided in the Company Organizational Documents, similar organizational documents of the Company’s Subsidiaries and indemnification agreements of the Company and its Subsidiaries shall survive the Mergers and shall continue in full force and effect in accordance with their terms. For a period of not less than six years from the First Effective Time, Parent shall cause the organizational documents of the Surviving Company and its Subsidiaries to contain provisions no less favorable with respect to indemnification, advancement of expenses and limitations on
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liability of directors and officers than are set forth in the Company Organizational Documents, which provisions shall not be amended, repealed or otherwise modified for a period of at least six years from the First Effective Time in any manner that would affect adversely the rights thereunder of any individuals who, at or prior to the First Effective Time, were directors, officers or employees of the Company or any of its Subsidiaries. The Company may purchase (and pay in full the aggregate premium for) a six-year prepaid “tail” insurance policy (which policy by its express terms shall survive the Mergers) of at least the same coverage and amounts and containing terms and conditions that are no less favorable to the covered individuals as the Company’s and its Subsidiaries’ existing directors’ and officers’ insurance policy or policies with a claims period of six years from the First Effective Time for D&O Claims arising from facts, acts, events or omissions that occurred on or prior to the First Effective Time; provided, that the premium for such tail policy shall not exceed three hundred percent of the aggregate annual amounts currently paid by the Company and its Subsidiaries for such insurance (such amount being the “Maximum Premium”). If the Company fails to obtain such tail policy prior to the First Effective Time, Parent or the Surviving Company shall obtain such a tail policy; provided, that the premium for such tail policy shall not exceed the Maximum Premium; provided, further, that if such tail policy cannot be obtained or can be obtained only by paying aggregate annual premiums in excess of the Maximum Premium, Parent, the Company or the Surviving Company shall only be required to obtain as much coverage as can be obtained by paying an annual premium equal to the Maximum Premium. Parent and the Surviving Company shall cause any such policy (whether obtained by Parent, the Company or the Surviving Company) to be maintained in full force and effect, for its full term, and Parent shall cause the Surviving Company to honor all its obligations thereunder.
(c) If any of Parent or the Surviving Company or any of their respective successors or assigns (i) consolidates with or merges with or into any other Person and shall not be the continuing or surviving company, partnership or other Person of such consolidation or merger or (ii) liquidates, dissolves or winds-up, or transfers or conveys all or substantially all of its properties and assets to any Person, then, and in each such case, proper provision shall be made so that the successors and assigns of Parent or the Surviving Company, as applicable, assume the obligations set forth in this Section 7.04.
Section 7.05 Employee Matters.
(a) From the Closing Date through the date that is 12 months following the Closing Date (the “Benefits Continuation Period”), the Surviving Company shall provide, and Parent shall cause the Surviving Company to provide, to each individual who is employed by the Company and its Subsidiaries immediately prior to the First Effective Time, while such individual continues to be employed by the Surviving Company, Parent or any of Parent’s Subsidiaries (including Subsidiaries of the Surviving Company) during the Benefits Continuation Period (collectively, the “Affected Employees”) (i) a base salary or wage rate that is not less than the base salary or wage rate provided to such Affected Employee immediately prior to the First Effective Time, (ii) cash and equity incentive compensation opportunities that are in the aggregate no less favorable than the aggregate cash and equity incentive compensation opportunities provided to such Affected Employee immediately prior to the First Effective Time, and (iii) employee benefits that are substantially comparable in the aggregate to the employee benefits provided to such Affected Employee under the Company Employee Plans immediately
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prior to the First Effective Time; provided, however, that no retention, change-in control or other special or non-recurring compensation or benefits provided prior to the First Effective Time shall be taken into account for purposes of this covenant.
(b) With respect to any employee benefit plan in which any Affected Employee first becomes eligible to participate on or after the First Effective Time (the “New Company Plans”), Parent shall: (i) use commercially reasonable efforts to waive all pre-existing conditions, exclusions and waiting periods with respect to participation and coverage requirements applicable to such Affected Employee under any New Company Plan that is a health or welfare plan in which such Affected Employee may be eligible to participate after the First Effective Time to the extent satisfied or waived under a comparable Company Employee Plan, (ii) recognize service of Affected Employees (to the extent credited by the Company or its Subsidiaries in any comparable Company Employee Plan) accrued prior to the First Effective Time for all purposes under (but not for the purposes of benefit accrual under any defined benefit pension plan) any New Company Plan in which such Affected Employees may be eligible to participate after the First Effective Time, provided, however, that in no event shall any credit be given to the extent it would result in the duplication of benefits for the same period of service, and (iii) if applicable, use commercially reasonable efforts to cause to be credited, in any New Company Plan that is a health plan in which Affected Employees participate, any deductibles or out-of-pocket expenses incurred by such Affected Employee and such Affected Employee’s beneficiaries and dependents during the portion of the calendar year in which such Affected Employee first becomes eligible for the New Company Plan that occurs prior to such Affected Employee’s commencement of participation in such New Company Plan with the objective that there be no double counting during the first year of eligibility of such deductibles or out-of-pocket expenses.
(c) The Company may provide to each employee who, immediately prior to the First Effective Time, is employed by the Company or a Subsidiary thereof and is eligible to participate in an annual bonus program of the Company or any of its Subsidiaries a pro-rated portion of the annual bonus with respect to the portion of the year of the Closing that occurs prior to the Closing, which bonus shall be determined based on actual performance through the latest practicable date prior to the Closing Date, as determined by the Company prior to the First Effective Time.
(d) Nothing contained in this Section 7.05 or elsewhere in this Agreement, express or implied (i) shall cause either Parent or any of its Affiliates to be obligated to continue to employ any Person, including any Affected Employees, for any period of time following the First Effective Time, (ii) shall prevent Parent or its Affiliates from revising, amending or terminating any Company Employee Plan, Parent Employee Plan or any other employee benefit plan, program or policy in effect from time to time, (iii) shall be construed as an amendment of any Company Employee Plan, Parent Employee Plan or any other employee benefit plan, program or policy in effect from time to time, or (iv) shall create any third-party beneficiary rights in any director, officer, employee or individual Person, including any present or former employee, officer, director or individual independent contractor of the Company or any of its Subsidiaries (including any beneficiary or dependent of such individual).
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Section 7.06 Financing.
(a) Each of Parent, Bidco and each Merger Sub shall use reasonable best efforts, and shall cause their respective Subsidiaries to use reasonable best efforts, to take or shall cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable to maintain the commitments under and to consummate the Debt Financing and obtain the proceeds thereof (including for the avoidance of doubt, the Bridge Facility Agreement or any replacement financing (provided, that (i) the conditions to the availability of any such replacement financing shall not be materially less favorable to Parent than those of the Bridge Facility Agreement and (ii) the other terms of such replacement financing shall not be materially less favorable to Parent than those of the Bridge Facility Agreement in any manner that materially adversely affects the ability or likelihood of Parent, Bidco or either Merger Sub from timely consummating the transactions contemplated by this Agreement)) in an amount sufficient, together with other funds available to the Parent and its Subsidiaries, to enable Parent or Bidco to pay in cash the Required Financing Amount at the Closing.
(b) (i) From time to time, upon the written request of the Company, Parent shall inform the Company in reasonable detail on the status of its efforts to arrange the Debt Financing and (ii) Parent shall give the Company prompt written notice of (A) any termination of the Bridge Facility Agreement (other than any termination in connection with a replacement financing thereof), (B) the receipt of any notice or other communication from any Financing Source with respect to such Financing Source’s failure or anticipated failure to fund its commitments under any definitive agreements relating to the Debt Financing (other than in connection with a replacement lender assuming the commitments of a defaulting lender pursuant to the documentation related to the applicable Debt Financing), (C) any material default or material breach by any party to the Debt Financing of which Parent, Bidco or either Merger Sub has become aware (other than in connection with a replacement lender assuming the commitments of a defaulting lender pursuant to the documentation related to the applicable Debt Financing) and (D) any condition precedent of the Debt Financing as to which Parent, Bidco or either Merger Sub believes will not be satisfied at Closing.
(c) Notwithstanding anything in this Agreement to the contrary, Parent, Bidco, and each Merger Sub acknowledge and agree that the receipt and availability of any funds or financing is not a condition to Closing under this Agreement nor is it a condition to Closing under this Agreement for Parent to obtain all or any portion of the Debt Financing or any other financing.
Section 7.07 CVR Agreement. From and after the First Effective Time, Parent shall expressly assume in writing all of the First Surviving Corporation’s obligations, duties and covenants under the CVR Agreement.
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ARTICLE VIII
COVENANTS OF PARENT, MERGER SUBS AND THE COMPANY
Section 8.01 Access to Information; Confidentiality.
(a) All information furnished pursuant to this Agreement shall be subject to the Amended and Restated Confidentiality Agreement, dated as of October 4, 2020 (as amended, supplemented or otherwise modified from time to time in accordance with its terms, the “Confidentiality Agreement”), between Parent and the Company. On reasonable notice, during normal business hours during the period from the date of this Agreement to the earlier of the First Effective Time or the termination of this Agreement, solely in connection with the Mergers and the other transactions contemplated hereby or integration planning relating thereto, (i) the Company shall, and shall cause its Subsidiaries to, afford to Parent and its Representatives reasonable access to its properties, books, contracts and records and (ii) the Company shall, and shall cause its respective Subsidiaries to, make available to Parent all other information not made available pursuant to clause (i) of this Section 8.01(a) concerning its businesses, properties and personnel, in the case of each of clause (i) and (ii), as the other party reasonably requests and in a manner so as to not unreasonably interfere with the normal business operations of the Company or any of its Subsidiaries. During such period described in the immediately preceding sentence, on reasonable notice and subject to Applicable Law and during normal business hours, the Company shall instruct its pertinent Representatives to reasonably cooperate with Parent in its review of any such information provided or made available pursuant to the immediately preceding sentence. No information or knowledge obtained in any review or investigation pursuant to this Section 8.01 shall affect or be deemed to modify any representation or warranty made by the Company or Parent pursuant to this Agreement.
(b) To the extent reasonably necessary for the Company to confirm the accuracy of the representations of Parent, Bidco and each Merger Sub set forth in Article V and the satisfaction of the conditions precedent set forth in Section 9.03(a) and Section 9.03(b), Parent shall, and shall cause its Subsidiaries to, afford to the Company and its Representatives reasonable access to its books, contracts and records and such other information as the Company may reasonably request, during normal business hours during the period from the date of this Agreement to the earlier of the First Effective Time or the termination of this Agreement, in a manner so as to not unreasonably interfere with the normal business operations of Parent or any of its Subsidiaries.
(c) Anything to the contrary in this Section 8.01, Section 8.02 or Section 8.03 notwithstanding, none of the Company, Parent, nor any of their respective Subsidiaries shall be required to provide access to, disclose information to or assist or cooperate with the other party, in each case if such access, disclosure, assistance or cooperation (i) would, as reasonably determined based on the advice of outside counsel, jeopardize any attorney-client, attorney-work product or other similar privilege with respect to such information, (ii) would contravene any Applicable Law or Contract to which the applicable party is a subject or bound, (iii) would result in the disclosure of any valuations of the Company or Parent in connection with the transactions contemplated by this Agreement or any other sale process, (iv) would result in the disclosure of any information in connection with any litigation or similar dispute between the parties hereto or
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(v) would result in the disclosure of any trade secrets; provided, that the Company and Parent shall, and each shall cause its Subsidiaries to, use reasonable best efforts to make appropriate substitute disclosure arrangements under circumstances in which such restrictions apply (including redacting such information (A) to remove references concerning valuation, (B) as necessary to comply with any Contract in effect on the date of this Agreement or after the date of this Agreement and (C) as necessary to address reasonable attorney-client, work-product or other privilege or confidentiality concerns) and to provide such information as to the applicable matter as can be conveyed. Each of the Company and Parent may, as each reasonably deems advisable and necessary, designate any competitively sensitive material provided to the other under this Section 8.01 or Section 8.02 as “Outside Counsel Only Material”. Such materials and the information contained therein shall be given only to the outside counsel of the recipient and, subject to any additional confidentiality or joint defense agreement the parties may mutually propose and enter into, shall not be disclosed by such outside counsel to employees, officers or directors of the recipient unless express permission is obtained in advance from the source of the materials (the Company or Parent, as the case may be) or its legal counsel.
Section 8.02 Filings, Consents and Approvals.
(a) Subject to the terms and conditions of this Agreement, each of the Company and Parent shall, and each shall cause its Subsidiaries to, use their respective reasonable best efforts to take, or cause to be taken, all actions and to do, or cause to be done, all things necessary, proper or advisable under Applicable Law to consummate the Mergers and other transactions contemplated hereby as promptly as reasonably practicable, including (i) (A) preparing and filing as promptly as practicable with any Governmental Authority or other Third Party all documentation to effect all Filings as are necessary, proper or advisable to consummate the Mergers and the other transactions contemplated hereby, (B) using reasonable best efforts to obtain, as promptly as practicable, and thereafter maintain, all Consents from any Governmental Authority or other Third Party that are necessary, proper or advisable to consummate the Mergers or other transactions contemplated hereby, and complying with the terms and conditions of each Consent (including by supplying as promptly as reasonably practicable any additional information or documentary material that may be requested pursuant to the HSR Act or other applicable Antitrust Laws), and (C) cooperating with the other parties hereto in their efforts to comply with their obligations under this Agreement, including in seeking to obtain as promptly as practicable any Consents necessary, proper or advisable to consummate the Mergers or the other transactions contemplated hereby and (ii) (A) defending any lawsuit or other legal proceeding, whether judicial or administrative, brought by any Governmental Authority or Third Party challenging this Agreement or seeking to enjoin, restrain, prevent, prohibit or make illegal consummation of the Mergers or any of the other transactions contemplated hereby and (B) contesting any Order that enjoins, restrains, prevents, prohibits or makes illegal consummation of the Mergers or any of the other transactions contemplated hereby.
(b) Parent shall have the right to (i) direct, devise and implement the strategy for obtaining any necessary Consent of, for responding to any request from, inquiry or investigation by (including directing the timing, nature and substance of all such responses), and lead all meetings and communications (including any negotiations) with, any Governmental Authority that has authority to enforce any Antitrust Law and (ii) control the defense and
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settlement of any litigation, action, suit, investigation or proceeding brought by or before any Governmental Authority that has authority to enforce any Antitrust Law, Parent shall consult with the Company in a reasonable manner and consider in good faith the views and comments of the Company in connection with the foregoing.
(c) In furtherance and not in limitation of the foregoing, each of the Company and Parent shall, and each shall cause its Subsidiaries to, as promptly as practicable following the date of this Agreement, make all Filings with all Governmental Authorities that are necessary, proper or advisable under this Agreement or Applicable Law to consummate and make effective the Mergers and the other transactions contemplated hereby, provided that the parties shall not have an obligation to file a notification and report form pursuant to the HSR Act with respect to the Mergers and the other transactions contemplated hereby until the 60th calendar day after the date hereof. In the event that the Company or Parent receives a request for information or documentary material pursuant to the HSR Act or any other Antitrust Law (a “Second Request”), each shall, and shall cause its respective Subsidiaries and Affiliates to, use reasonable best efforts (and shall cooperate with each other) to submit an appropriate response to such Second Request as promptly as reasonably practicable, and to make available their respective Representatives to, on reasonable request, any Governmental Authority in connection with (i) the preparation of any Filing made by or on their behalf to any Governmental Authority in connection with the Mergers or any of the other transactions contemplated hereby or (ii) any Governmental Authority investigation, review or approval process.
(d) Subject to Applicable Laws relating to the sharing of information and the terms and conditions of the Confidentiality Agreement, each of the Company and Parent shall, and each shall cause its Subsidiaries to, cooperate and consult with each other in connection with the making of all Filings pursuant to this Section 8.02, and shall keep each other apprised on a current basis of the status of matters relating to the completion of the Mergers and the other transactions contemplated hereby, including: (i) (A) as far in advance as practicable, notifying the other party of, and providing the other party with an opportunity to consult with respect to, any Filing or communication or inquiry it or any of its Affiliates intends to make with any Governmental Authority other than a Taxing Authority (or any communication or inquiry it or any of its Affiliates intends to make with any Third Party in connection therewith) relating to the matters that are the subject of this Agreement, (B) providing the other party and its counsel, prior to submitting any such Filing or making any such communication or inquiry, a reasonable opportunity to review, and considering in good faith the comments of the other party and such other party’s Representatives in connection with any such Filing, communication or inquiry, and (C) promptly following the submission of such Filing or making of such communication or inquiry, providing the other party with a copy of any such Filing, communication or inquiry, if in written form, or, if in oral form, a summary of such communication or inquiry; provided, that this Section 8.02(d) shall not apply to any initial filings made pursuant to the HSR Act; (ii) as promptly as practicable following receipt, furnishing the other party with a copy of any Filing or written communication or inquiry, or, if in oral form, a summary of any such communication or inquiry, it or any of its Affiliates receives from any Governmental Authority other than a Taxing Authority (or any communication or inquiry it receives from any Third Party in connection therewith) relating to matters that are the subject of this Agreement; and (iii) coordinating and reasonably cooperating with the other party in exchanging such information and providing such other assistance as the other party may reasonably request in connection with this Section 8.02.
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The Company, Parent or their respective Representatives shall notify and consult with the other party in advance of any meeting or conference (including by telephone or videoconference) with any Governmental Authority other than a Taxing Authority, or any member of the staff of any such Governmental Authority, in respect of any Filing, proceeding, investigation (including the settlement of any investigation), litigation or other inquiry regarding the Mergers or any of the other transactions contemplated hereby and, to the extent permitted by such Governmental Authority, enable the other party to participate. Materials provided to the other party pursuant to this Section 8.02 may be redacted to remove references concerning the valuation of Parent, the Company or any of their Subsidiaries.
(e) Anything in this Agreement to the contrary notwithstanding, Parent and its Affiliates shall take, or cause to be taken, all actions and shall do, or cause to be done, all things necessary, proper or advisable to eliminate each and every impediment under any Antitrust Law that is asserted by any Governmental Authority, obtain the consent or cooperation of any other Person and permit and cause the satisfaction of the conditions set forth in Section 9.01(c) (to the extent related to any Antitrust Law) or Section 9.01(h), in each of the foregoing cases, to permit the Closing to occur as promptly as reasonably practicable and in any event prior to the End Date, including: (i) proposing, negotiating, committing to, effecting and agreeing to, by consent decree, hold separate order, or otherwise, the sale, divestiture, license, holding separate, and other disposition of or restrictions on the businesses, assets, properties, product lines, and equity or other business interests of, or changes to the conduct of business of, the Company, Parent, and their respective Affiliates, and take all actions necessary or appropriate in furtherance of the foregoing, (ii) creating, terminating, unwinding, divesting or assigning, subcontracting or otherwise securing substitute parties for relationships, ventures, and contractual or commercial rights or obligations of the Company, Parent, and their respective Affiliates and (iii) otherwise taking or committing to take any action that would limit Parent’s freedom of action with respect to, or its ability to retain, hold or continue, directly or indirectly, any businesses, assets, properties, product lines, and equity or other business interests, relationships, ventures or contractual rights and obligations of the Company, Parent, and their respective Affiliates. In addition to and without limiting the foregoing, Parent shall take all steps relating to the matter referenced in Section 8.02(e) of the Parent Disclosure Schedule as promptly as reasonably practicable to the extent necessary or advisable to satisfy the condition set forth in Section 9.01(c) (to the extent related to any Antitrust Law) and Section 9.01(h) as promptly as reasonably practicable. Parent, the Company and their Affiliates shall not be required to agree to take or enter into any such action described in clauses (i) through (iii) that is not conditioned upon, or that becomes effective prior to, the Closing.
(f) Anything to the contrary notwithstanding, Parent’s obligations to take or cause to take any actions described in the first sentence of Section 8.02(e) shall be subject to the right of Parent, in Parent’s good faith reasonable discretion, to take reasonable periods of time in order to advocate and negotiate with Governmental Authorities with respect to such actions.
Section 8.03 Certain Filings; SEC Matters.
(a) As promptly as practicable following the date of this Agreement, (i) the Company shall prepare (with Parent’s reasonable cooperation) and file with the SEC a proxy statement relating to the Company Stockholder Meeting (together with all amendments and
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supplements thereto, the “Proxy Statement/Prospectus”) in preliminary form, (ii) Parent shall prepare (with the Company’s reasonable cooperation) and file with the SEC a Registration Statement on Form F-4 which shall include the Proxy Statement/Prospectus (together with all amendments and supplements thereto, the “Form F-4”) relating to the registration of the Parent ADSs and the Parent Ordinary Shares represented thereby to be issued to the stockholders of the Company pursuant to the Parent ADS Issuance, (iii) Parent shall prepare and shall cause the ADS Depository to file with the SEC a Registration Statement on Form F-6 (together with all amendments and supplements thereto, the “Form F-6”) relating to the registration of the Parent ADSs to be issued to the stockholders of the Company pursuant to the Parent ADS Issuance, (iv) Parent shall, if required by the FCA in order to carry out the transactions contemplated by this Agreement, prepare (with the Company’s reasonable cooperation) and submit to the FCA a Parent Prospectus and (v) Parent shall prepare (with the Company’s reasonable cooperation) and submit to the FCA a shareholder circular prepared under the Listing Rules relating to the Parent Shareholder Meeting (together with all amendments and supplements thereto, the “Parent Circular”) in draft form. The Proxy Statement/Prospectus, the Form F-4 and the Form F-6 shall comply as to form in all material respects with the applicable provisions of the 1933 Act, the 1934 Act and other Applicable Law, and any Parent Prospectus and the Parent Circular shall comply as to form in all material respects with the requirements of the Listing Rules and other Applicable Law.
(b) The Company and Parent shall cooperate with each other and use their respective reasonable best efforts (i) to have the Proxy Statement/Prospectus cleared by the SEC as promptly as practicable after its filing, (ii) to have the Form F-4 and the Form F-6 declared effective under the 1933 Act as promptly as practicable after its filing and keep the Form F-4 and Form F-6 effective for so long as necessary to consummate the Mergers, (iii) to have a Parent Prospectus (if required) formally approved by the FCA as promptly as practicable after its submission and (iv) to have the Parent Circular formally approved by the FCA as promptly as practicable after its submission. Each of the Company and Parent shall, as promptly as practicable after the receipt thereof, provide the other party with copies of any written comments and advise the other party of any oral comments with respect to the Proxy Statement/Prospectus, the Form F-4, the Form F-6, a Parent Prospectus and the Parent Circular received by such party from the SEC, the FCA or any other Governmental Authority, including any request from the SEC for amendments or supplements to the Proxy Statement/Prospectus, the Form F-4 or the Form F-6 or any request from the FCA for amendments or supplements to a Parent Prospectus or the Parent Circular, and shall provide the other with copies of all material or substantive correspondence between it and its Representatives, on the one hand, and the SEC, the FCA or any other Governmental Authority, on the other hand, related to the foregoing. The foregoing notwithstanding, prior to filing the Form F-4 or the Form F-6 or mailing the Proxy Statement/Prospectus or Parent Circular, or making a Parent Prospectus available to the public or responding to any comments of the SEC or the FCA with respect thereto, each of the Company and Parent shall reasonably cooperate and provide the other party and its counsel a reasonable opportunity to review such document or response (including the proposed final version of such document or response) and consider in a commercially reasonable manner the comments of the other party or such other party’s Representatives in connection with any such document or response. None of the Company, Parent or any of their respective Representatives shall agree to participate in any material or substantive meeting or conference (including by telephone) with the SEC or the FCA, or any member of the staff thereof, in respect of the Proxy
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Statement/Prospectus, the Form F-4, the Form F-6 or the Parent Circular or (if applicable) the Parent Prospectus unless it consults with the other party in advance and, to the extent permitted by the SEC or the FCA, as applicable, allows the other party to participate. Parent shall advise the Company, promptly after receipt of notice thereof, of the time of effectiveness of the Form F-4 and the Form F-6, and the issuance of any stop order relating thereto or the suspension of the qualification of Parent ADSs or the Parent Ordinary Shares represented thereby for offering or sale in any jurisdiction, and each of the Company and Parent shall use its reasonable best efforts to have any such stop order or suspension lifted, reversed or otherwise terminated.
(c) Each of the Company and Parent shall use its reasonable best efforts to take any other action required to be taken by it under the 1933 Act, the 1934 Act, the Listing Rules, the DGCL, the CA 2006 and the rules of Nasdaq in connection with the filing and distribution of the Proxy Statement/Prospectus, the Form F-4, the Form F-6, a Parent Prospectus (if required) and the Parent Circular, and the solicitation of proxies from the stockholders of the Company and the shareholders of Parent. Subject to Section 6.02, the Proxy Statement/Prospectus shall include the Company Board Recommendation, and, subject to Section 7.02, the Parent Circular shall include the Parent Board Recommendation.
(d) Parent shall use its reasonable best efforts to take, or cause to be taken, all actions, and to do or cause to be done all things, necessary, proper or advisable under Applicable Law and the rules and policies of Nasdaq and the SEC to enable the listing of the Parent ADSs being registered pursuant to the Form F-4 on Nasdaq no later than the First Effective Time, subject to official notice of issuance. Parent shall also use its reasonable best efforts to obtain all necessary state securities law or “blue sky” permits and approvals required to carry out the transactions contemplated by this Agreement.
(e) Each of the Company and Parent shall, on request, furnish to the other all information, documents, submissions or comfort concerning itself, its Subsidiaries, directors, officers and (to the extent reasonably available to the applicable party) stockholders or shareholders (including the Required Information) and such other matters as may be reasonably necessary or advisable in connection with any statement, Filing, notice or application made by or on behalf of the Company, Parent or any of their respective Subsidiaries, to the SEC, the FCA or Nasdaq in connection with the Mergers and the other transactions contemplated by this Agreement, including the Proxy Statement/Prospectus, the Form F-4, the Form F-6, any Parent Prospectus (if required) and the Parent Circular, in each case having due regard to the planned timing of publication of such document, the requirements of the CA 2006, the FSMA, the Listing Rules, the Prospectus Regulation Rules, the FCA, the Admission and Disclosure Standards of the LSE and any other Applicable Law, and reasonable and customary requirements of the Parent’s sponsor; provided, that neither party shall use any such information for any purposes other than those contemplated by this Agreement unless such party obtains the prior written consent of the other. In addition, each of the Company and Parent shall (i) use its reasonable best efforts to promptly provide information concerning it necessary to enable the Company and Parent to prepare required pro forma financial statements, working capital reports and related footnotes in connection with the preparation of the Proxy Statement/Prospectus, and Form F-4, the Parent Circular and (if required) a Parent Prospectus, (ii) assist with due diligence and, in the case of the Company, provide such information as Parent may reasonably request to enable Parent to prepare verification materials in relation to the preparation of the Parent Circular and (if
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required) a Parent Prospectus and (iii) enter into any agreement or execute any letter (including representation letters and letters of comfort) or other document which is customary and/or necessary in connection with the preparation of the Proxy Statement/Prospectus, Form F-4, a Parent Prospectus (if required) and the Parent Circular and, in each case, any amendment or supplement thereto or where such documents, information, and/or submissions are ancillary to the preparation of the Proxy Statement/Prospectus, the Form F-4, the Parent Circular or (if required) a Parent Prospectus. In addition, in relation to any Parent Prospectus, the Company shall use its reasonable best efforts to cause each of the Designated Directors to provide responsibility letters and duly completed director and officer questionnaires in a reasonable and customary form provided by the Parent’s sponsor.
(f) If at any time prior to the latter of the Company Approval Time and the Parent Approval Time, any information relating to the Company or Parent, or any of their respective Affiliates, officers or directors, should be discovered by the Company or Parent that (i) should be set forth in an amendment or supplement to the Proxy Statement/Prospectus, or the Form F-4 or the Form F-6 so that such documents would not include any misstatement of a material fact or omit to state any material fact necessary to make the statements therein, in light of the circumstances under which they were made, not misleading, (ii) constitutes a material change or material new matter that would require a supplement to the Parent Circular under Applicable Law or the Listing Rules, the party that discovers such information shall promptly notify the other party hereto, and each party shall use reasonable best efforts to, and reasonably cooperate with the other to, promptly prepare and file with the SEC or submit to the FCA, as applicable, an appropriate amendment or supplement describing such information and, to the extent required under Applicable Law, disseminate such amendment or supplement to the stockholders of the Company and/or the shareholders of Parent, or (iii) constitutes a material change or material new matter that would require a supplement to any Parent Prospectus under Applicable Law or the Prospectus Regulation Rules, the party that discovers such information shall promptly notify the other party hereto, and each party shall use reasonable best efforts to, and reasonably cooperate with the other to, promptly prepare and file with the SEC or submit to the FCA, as applicable, an appropriate amendment or supplement describing such information and, to the extent required under Applicable Law, disseminate such amendment or supplement to the stockholders of the Company or the shareholders of Parent, as the case may be, or make available such amendment or supplement in accordance with the Prospectus Regulation Rules.
Section 8.04 Company Stockholder Meeting; Parent Shareholder Meeting.
(a) As promptly as practicable following the effectiveness of the Form F-4 (but subject to Section 8.04(c)), the Company shall, in consultation with Parent, in accordance with Applicable Law and the Company Organizational Documents, (i) establish a record date for, duly call and give notice of a meeting of the stockholders of the Company entitled to vote on the adoption of this Agreement (the “Company Stockholder Meeting”) at which meeting the Company shall seek the Company Stockholder Approval (and will use reasonable best efforts to conduct “broker searches” in a manner to enable such record date to be held promptly following the effectiveness of the Form F-4), (ii) cause the Proxy Statement/Prospectus (and all other proxy materials for the Company Stockholder Meeting) to be mailed to its stockholders and (iii) duly convene and hold the Company Stockholder Meeting. Subject to Section 6.02, the Company shall use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be
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done all things, necessary, proper or advisable on its part to cause the Company Stockholder Approval to be received at the Company Stockholder Meeting or any adjournment or postponement thereof, and shall comply with all legal requirements applicable to the Company Stockholder Meeting. The Company shall not, without the prior written consent of Parent, adjourn, postpone or otherwise delay the Company Stockholder Meeting; provided, that the Company may, without the prior written consent of Parent, adjourn or postpone the Company Stockholder Meeting (A) if the Company believes in good faith that such adjournment or postponement is reasonably necessary to allow reasonable additional time to (1) solicit additional proxies necessary to obtain the Company Stockholder Approval, or (2) distribute any supplement or amendment to the Proxy Statement/Prospectus that the Board of Directors of the Company has determined (which determination and subsequent distribution shall be made as promptly as practicable) in good faith after consultation with outside legal counsel is necessary under Applicable Law and for such supplement or amendment to be reviewed by the Company’s stockholders prior to the Company Stockholder Meeting, (provided, that no such postponement or adjournment under this clause (2) may be to a date that is after the earlier of (I) the 10th Business Day before the End Date and (II) the 10th Business Day after the date of such distribution), (B) due to the absence of a quorum, (C) if and to the extent such postponement or adjournment of the Company Stockholder Meeting is required by an Order issued by any court or other Governmental Authority of competent jurisdiction in connection with this Agreement or (D) if the Parent Shareholder Meeting has been adjourned or postponed by Parent in accordance with Section 8.04(b), to the extent necessary to enable the Company Stockholder Meeting and the Parent Shareholder Meeting to be held within a single period of twenty-four consecutive hours as contemplated by Section 8.04(c). The foregoing notwithstanding, the Company may not, without the prior written consent of Parent, postpone or adjourn the Company Stockholder Meeting pursuant to clause (A)(1) or (B) of the immediately preceding sentence for a period of more than 10 Business Days on any single occasion or, on any occasion, to a date after the earlier of (x) 40 Business Days after the date on which the Company Stockholder Meeting was originally scheduled and (y) 10 Business Days before the End Date. Without the prior written consent of Parent, the matters contemplated by the Company Stockholder Approval shall be the only matters (other than matters of procedure and matters required by or advisable under Applicable Law to be voted on by the Company’s stockholders in connection therewith) that the Company shall propose to be voted on by the stockholders of the Company at the Company Stockholder Meeting.
(b) As promptly as practicable following the date on which the Parent Circular is formally approved by the FCA (but subject to Section 8.04(c)), Parent shall, in consultation with the Company, in accordance with Applicable Law and the Parent Organizational Documents, (i) establish a record date for, duly convene and give notice of a meeting of the shareholders of Parent entitled to vote on the approval of this Agreement and the transactions contemplated hereby (the “Parent Shareholder Meeting”) at which meeting Parent shall seek the Parent Shareholder Approval, (ii) cause the Parent Circular (and all other proxy materials for the Parent Shareholder Meeting) to be mailed to its shareholders and (iii) duly hold the Parent Shareholder Meeting. Subject to Section 7.02, Parent shall use its reasonable best efforts to take, or cause to be taken, all actions, and do or cause to be done all things, necessary, proper or advisable on its part to cause the Parent Shareholder Approval to be obtained at the Parent Shareholder Meeting or any adjournment or postponement thereof, and shall comply with all legal requirements applicable to the Parent Shareholder Meeting. Parent shall not, without the
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prior written consent of the Company, adjourn, postpone or otherwise delay the Parent Shareholder Meeting; provided, that Parent may, without the prior written consent of the Company, adjourn or postpone the Parent Shareholder Meeting (A) if Parent believes in good faith that such adjournment or postponement is reasonably necessary to allow reasonable additional time to (1) solicit additional proxies necessary to obtain the Parent Shareholder Approval, or (2) distribute any supplement to the Parent Circular that the Board of Directors of Parent has determined (which determination and subsequent distribution shall be made as promptly as practicable) in good faith after consultation with outside legal counsel is necessary under Applicable Law (including Rule 10.5.4 of the Listing Rules) and for such supplement to be reviewed by Parent’s shareholders prior to the Parent Shareholder Meeting (provided, that no such postponement or adjournment under this clause (2) may be to a date that is after the earlier of (I) the 10th Business Day before the End Date and (II) the 10th Business Day after the date of such distribution), (B) due to the absence of a quorum, (C) if and to the extent such postponement or adjournment of the Company Stockholder Meeting is required by an Order issued by any court or other Governmental Authority of competent jurisdiction in connection with this Agreement or (D) if the Company Stockholder Meeting has been adjourned or postponed by the Company in accordance with Section 8.04(a), to the extent necessary to enable the Company Stockholder Meeting and the Parent Shareholder Meeting to be held within a single period of twenty-four consecutive hours as contemplated by Section 8.04(c). The foregoing notwithstanding, Parent may not, without the prior written consent of the Company, postpone or adjourn the Parent Shareholder Meeting pursuant to clause (A)(1) or (B) of the immediately preceding sentence for a period of more than 10 Business Days on any single occasion or, on any occasion, to a date after the earlier of (x) 40 Business Days after the date on which the Parent Shareholder Meeting was originally scheduled and (y) 10 Business Days before the End Date. Without the prior written consent of the Company, the matters contemplated by the Parent Shareholder Approval shall be the only matters (other than matters of procedure and matters required by or advisable under Applicable Law to be voted on by Parent’s shareholders in connection therewith) that Parent shall propose to be voted on by the shareholders of Parent at the Parent Shareholder Meeting.
(c) It is the intention of the parties that, and each of the parties shall reasonably cooperate and use their commercially reasonable efforts to cause, the date and time of the Company Stockholder Meeting and the Parent Shareholder Meeting be coordinated such that they occur on the same calendar day (and in any event as close in time as possible).
(d) Any Company Adverse Recommendation Change or Parent Adverse Recommendation Change notwithstanding, the obligations of the Company and Parent under Section 8.03 and this Section 8.04 shall continue in full force and effect unless this Agreement is validly terminated in accordance with Article X.
Section 8.05 Public Announcements. The initial press release concerning this Agreement and the transactions contemplated hereby shall be a joint press release to be in the form agreed on by the Company and Parent prior to the execution of this Agreement. Following such initial press release, Parent and the Company shall consult with each other before issuing any additional press release, making any other public statement or scheduling any press conference, conference call or meeting with investors or analysts with respect to this Agreement or the transactions contemplated hereby and, except as may be required by Applicable Law or
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any listing agreement with or rule of any national securities exchange or association, shall not issue any such press release, make any such other public statement or schedule any such press conference, conference call or meeting before such consultation (and, to the extent applicable, shall provide copies of any such press release, statement or agreement (or any scripts for any conference calls) to the other party and shall consider in good faith the comments of the other party); provided, that the restrictions set forth in this Section 8.05 shall not apply to any release or public statement (a) made or proposed to be made by the Company in compliance with Section 6.02 with respect to the matters contemplated by Section 6.02, or made or proposed to be made by Parent in response or related to any such release or public statement that is not in violation of Section 7.02, (b) made or proposed to be made by Parent in compliance with Section 7.02 with respect to the matters contemplated by Section 7.02, or made or proposed to be made by the Company in response or related to any such release or public statement that is not in violation of Section 6.02, (c) in connection with any dispute between the parties regarding this Agreement, the Mergers or the other transactions contemplated hereby or (d) if the information contained therein substantially reiterates (or is consistent with) previous releases, public disclosures or public statements made by the Company and/or Parent in compliance with this Section 8.05.
Section 8.06 Section 16 Matters. Prior to the First Effective Time, the Company shall take all such steps as may be required (to the extent permitted under Applicable Law) to cause any dispositions of Company Common Stock (including derivative securities with respect to Company Common Stock) resulting from the transactions contemplated by this Agreement by each individual who is subject to the reporting requirements of Section 16(a) of the 1934 Act to be exempt under Rule 16b-3 promulgated under the 1934 Act.
Section 8.07 Transaction Litigation. Subject to the last sentence of this Section 8.07, each of the Company and Parent shall promptly notify the other of any stockholder or shareholder demands, litigations, arbitrations or other similar claims, actions, suits or proceedings (including derivative claims) commenced against it, its Subsidiaries and/or its or its Subsidiaries’ respective directors or officers relating to this Agreement or any of the transactions contemplated hereby or any matters relating thereto (collectively, “Transaction Litigation”) and shall keep the other party informed regarding any Transaction Litigation (including by promptly furnishing to the other party and such other party’s Representatives such information relating to such Transaction Litigation as may reasonably be requested). Each of the Company and Parent shall reasonably cooperate with the other in the defense or settlement of any Transaction Litigation, and shall give the other party the opportunity to consult with it regarding the defense and settlement of such Transaction Litigation, shall consider in good faith the other party’s advice with respect to such Transaction Litigation and shall give the other party the opportunity to participate (at the other party’s expense) in (but not control) the defense and settlement of such Transaction Litigation. Prior to the First Effective Time, other than with respect to any Transaction Litigation where the parties are adverse to each other or in the context of any Transaction Litigation related to or arising out of a Company Acquisition Proposal or a Parent Acquisition Proposal, neither the Company nor any of its Subsidiaries shall settle or offer to settle any Transaction Litigation without the prior written consent of Parent (which consent shall not be unreasonably withheld, conditioned or delayed). Notwithstanding anything to the contrary in this Section 8.07, (a) in the event of any conflict with any other covenant or agreement contained in Section 8.02 that expressly addresses the subject matter of this Section
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8.07, Section 8.02 shall govern and control, and (b) Section 8.07 shall be in addition to and not limit or otherwise modify the parties’ respective obligations under Section 6.02 or Section 7.02.
Section 8.08 Stock Exchange Delisting. Each of the Company and Parent agrees to cooperate with the other party in taking, or causing to be taken, all actions necessary to delist the Company Common Stock from the Nasdaq and terminate its registration under the 1934 Act; provided, that such delisting and termination shall not be effective until the First Effective Time.
Section 8.09 Governance; Rare Diseases Business.
(a) Parent shall take all necessary corporate action to cause, effective at the First Effective Time, two individuals who currently serve on the board of directors of the Company, as mutually agreed by the Company and Parent prior to the Closing, to have joined the board of directors of Parent, subject to such individuals’ having accepted offers from Parent to serve on the board of directors of Parent (such individuals, the “Designated Directors”).
(b) Parent intends to establish, as promptly as reasonably practicable after the Closing, a global rare diseases business unit initially comprising the “rare disease” activities of Parent, the Surviving Company and their respective Subsidiaries and for such unit to be initially headquartered in Boston, MA and led initially by members of the current senior management of the Company.
Section 8.10 State Takeover Statutes. Each of Parent, Bidco, each Merger Sub and the Company shall (a) take all action necessary so that no “moratorium,” “control share acquisition,” “fair price,” “supermajority,” “affiliate transactions” or “business combination statute or regulation” or other similar state anti-takeover laws or regulations, or any similar provision of the Company Organizational Documents or the Parent Organizational Documents, as applicable, is or becomes applicable to the Mergers or any of the other transactions contemplated hereby, and (b) if any such anti-takeover law, regulation or provision is or becomes applicable to the Mergers or any other transactions contemplated hereby, cooperate and grant such approvals and take such actions as are reasonably necessary so that the transactions contemplated hereby may be consummated as promptly as practicable on the terms contemplated hereby and otherwise act to eliminate or minimize the effects of such statute or regulation on the transactions contemplated hereby.
Section 8.11 Certain Tax Matters.
(a) Each of Parent and the Company shall use its reasonable best efforts to cause the Mergers, taken together, to qualify, and shall not take or knowingly fail to take (and shall cause its Affiliates not to take or knowingly fail to take) any action that could reasonably be expected to (i) prevent or impede the Mergers, taken together, from qualifying as a “reorganization” within the meaning of Section 368(a) of the Code or (ii) cause the stockholders of the Company (other than any Excepted Stockholder) to recognize gain pursuant to Section 367(a)(1) of the Code.
(b) Each of Parent and the Company shall use its reasonable best efforts and shall cooperate with one another to obtain the opinion referred to in Section 9.03(d) and any
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similar opinions required to be delivered in connection with the effectiveness of the Form F-4. In connection with the foregoing, (i) Parent shall (and shall cause Bidco and each Merger Sub to) deliver to Company Tax Counsel a duly executed letter of representation substantially in the form of the letter of representation included in Exhibit A, with such changes as may reasonably be agreed by Parent, the Company and Company Tax Counsel (the “Parent Tax Certificate”), and (ii) the Company shall deliver to Company Tax Counsel a duly executed letter of representation substantially in the form of the letter of representation included in Exhibit B, with such changes as may reasonably be agreed by Parent, the Company and Company Tax Counsel (the “Company Tax Certificate”), in the case of each of clause (i) and (ii), at such times as such counsel shall reasonably request (including on the effective date of the Form F-4 and at the Closing). Parent and the Company shall also provide such other information as reasonably requested by Company Tax Counsel for purposes of rendering any opinion described in this Section 8.11.
(c) Parent shall, and shall cause Bidco and the Surviving Company to, comply with the reporting requirements of Treasury Regulations Section 1.367(a)-3(c)(6) and shall make arrangements with each “five-percent transferee shareholder” of Parent within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), if any, to ensure that such shareholder will be informed of any disposition of any property that would require the recognition of gain under such person’s gain recognition agreement entered into under Treasury Regulations Section 1.367(a)-8.
ARTICLE IX
CONDITIONS TO THE MERGERS
Section 9.01 Conditions to the Obligations of Each Party. The obligations of the Company, Parent, Bidco and each Merger Sub to consummate the Mergers are subject to the satisfaction (or, to the extent permitted by Applicable Law, waiver) of the following conditions:
(a) the Company Stockholder Approval shall have been obtained;
(b) the Parent Shareholder Approval shall have been obtained;
(c) no injunction or other Order shall have been issued by any court or other Governmental Authority of competent jurisdiction that remains in effect and enjoins, prevents or prohibits the consummation of the Mergers, and no Applicable Law shall have been enacted, entered or promulgated by any Governmental Authority that remains in effect and prohibits or makes illegal consummation of the Mergers;
(d) the Form F-4 and the Form F-6 shall have been declared effective, no stop order suspending the effectiveness of the Form F-4 or the Form F-6 shall be in effect and no proceedings for such purpose shall be pending before the SEC;
(e) if confirmed by the FCA that a Parent Prospectus is required to be published in connection with the transactions contemplated hereby, including any supplement or amendment thereto, such Parent Prospectus shall have been approved by the FCA and made available to the public in accordance with the Prospectus Regulation Rules;
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(f) the Parent Circular, including any supplement or amendment thereto, shall have been approved by the FCA and made available to the shareholders of Parent in accordance with the Listing Rules and the Parent Organizational Documents;
(g) (i) the Parent ADSs (and the Parent Ordinary Shares represented thereby) to be issued in the Parent ADS Issuance shall have been approved for listing on Nasdaq, subject to official notice of issuance, (ii) the FCA shall have acknowledged to the Parent or its agent (and such acknowledgement shall not have been withdrawn) that the application for the admission of the Parent Ordinary Shares represented by the Parent ADSs and, if required by the FCA, the application for the readmission of the Parent Ordinary Shares outstanding immediately prior to the First Effective Time to the premium segment of the Official List shall have been approved and (after satisfaction of any conditions to which such approval is expressed to be subject) shall become effective as soon as a dealing notice has been issued by the FCA and any such conditions upon which such approval is expressed to be subject having been satisfied, and (iii) the LSE shall have acknowledged to the Parent or its agent (and such acknowledgement not having been withdrawn) that such Parent Ordinary Shares referred to in clause (ii) shall be admitted to trading on the LSE’s main market for listed securities; and
(h) any applicable waiting period under the HSR Act shall have expired or been terminated and any applicable waiting period or other Consent under the Foreign Antitrust Laws of the jurisdictions set forth on Section 9.01(h)(i) of the Company Disclosure Schedule relating to the transactions contemplated by this Agreement shall have expired, been terminated or been obtained, as applicable; provided, that Section 9.01(h)(i) of the Company Disclosure Schedule shall be deemed updated to include such additional jurisdictions from the list set forth on Section 9.01(h)(ii) of the Company Disclosure Schedule as mutually agreed in good faith by Parent and the Company within 15 days following the date of this Agreement.
Section 9.02 Conditions to the Obligations of Parent, Bidco and each Merger Sub. The obligations of Parent, Bidco and each Merger Sub to consummate the Mergers are subject to the satisfaction (or, to the extent permitted by Applicable Law, waiver by Parent) of the following further conditions:
(a) the Company shall have performed, in all material respects, all of its obligations hereunder required to be performed by it at or prior to the First Effective Time;
(b) (i) the representations and warranties of the Company contained in the first and last sentences of Section 4.01, Section 4.02, Section 4.04(a), Section 4.26, Section 4.27 and Section 4.28 shall be true and correct in all material respects at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing (or, if such representations and warranties are given as of another specific date, at and as of such date); (ii) the representations and warranties of the Company contained in Section 4.05(a) shall be true and correct at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing (or, if such representations and warranties are given as of another specific date, at and as of such date), except for any de minimis inaccuracies, (iii) the representations and warranties of the Company contained in Section 4.10(a)(ii) shall be true and correct in all respects at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing; and (iv) the other representations and warranties of the Company contained in
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Article IV (disregarding all qualifications and exceptions contained therein relating to materiality or Company Material Adverse Effect) shall be true and correct at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing (or, if such representations and warranties are given as of another specific date, at and as of such date), except, in the case of this clause (iv) only, where the failure of such representations and warranties to be true and correct has not had and would not reasonably be expected to have, individually or in the aggregate, a Company Material Adverse Effect; and
(c) Parent shall have received a certificate from an executive officer of the Company confirming the satisfaction of the conditions set forth in Section 9.02(a) and Section 9.02(b).
Section 9.03 Conditions to the Obligations of the Company. The obligations of the Company to consummate the Mergers are subject to the satisfaction (or, to the extent permitted by Applicable Law, waiver by the Company) of the following further conditions:
(a) each of Parent, Bidco and each Merger Sub shall have performed, in all material respects, all of its obligations hereunder required to be performed by it at or prior to the First Effective Time;
(b) (i) the representations and warranties of Parent contained in the first and last sentences of Section 5.01, Section 5.02, Section 5.04(a) and Section 5.18 shall be true and correct in all material respects at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing (or, if such representations and warranties are given as of another specific date, at and as of such date); (ii) the representations and warranties of Parent contained in Section 5.05(a) shall be true and correct at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing (or, if such representations and warranties are given as of another specific date, at and as of such date), except for any de minimis inaccuracies; (iii) the representations and warranties of Parent contained in Section 5.10(b) shall be true and correct in all respects at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing; and (iv) the other representations and warranties of Parent contained in Article V (disregarding all qualifications and exceptions contained therein relating to materiality or Parent Material Adverse Effect) shall be true and correct at and as of the date of this Agreement and at and as of the Closing as if made at and as of the Closing (or, if such representations and warranties are given as of another specific date, at and as of such date), except, in the case of this clause (iv) only, where the failure of such representations and warranties to be true and correct has not had and would not reasonably be expected to have, individually or in the aggregate, a Parent Material Adverse Effect;
(c) the Company shall have received a certificate from an executive officer of Parent confirming the satisfaction of the conditions set forth in Section 9.03(a) and Section 9.03(b); and
(d) the Company shall have received the opinion of Wachtell, Lipton, Rosen & Katz, or, if Wachtell, Lipton, Rosen & Katz is unable or unwilling to provide such opinion, Freshfields Bruckhaus Deringer US LLP (“Company Tax Counsel”), dated as of the Closing
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Date, in form and substance reasonably satisfactory to the Company, to the effect that, on the basis of facts, representations and assumptions set forth or referred to in such opinion, (i) the Mergers, taken together, will qualify as a “reorganization” within the meaning of Section 368(a) of the Code and (ii) the Mergers will not result in gain recognition to the stockholders of the Company pursuant to Section 367(a)(1) of the Code (assuming that in the case of any such stockholder who would be treated as a “five-percent transferee shareholder” of Parent within the meaning of Treasury Regulations Section 1.367(a)-3(c)(5)(ii), such stockholder enters into a five-year gain recognition agreement in the form provided in Treasury Regulations Section 1.367(a)-8(c) and complies with the requirements of that agreement and Treasury Regulations Section 1.367(a)-8 for avoiding the recognition of gain). In rendering such opinion, Company Tax Counsel may rely on the Parent Tax Certificate, the Company Tax Certificate and such other information provided to it by Parent and/or the Company for purposes of rendering such opinion.
ARTICLE X
TERMINATION
Section 10.01 Termination. This Agreement may be terminated and the Mergers and the other transactions contemplated hereby may be abandoned at any time prior to the First Effective Time (notwithstanding receipt of the Company Stockholder Approval or the Parent Shareholder Approval):
(a) by mutual written agreement of the Company and Parent;
(b) by either the Company or Parent, if:
(i) the Mergers have not been consummated on or before December 12, 2021 (as such date may be extended pursuant to the following proviso, the “End Date”); provided, that (A) if on such date, the conditions to the Closing set forth in Section 9.01(h) or Section 9.01(c) (if the injunction, other Order or Applicable Law relates to Antitrust Laws) shall not have been satisfied, but all other conditions to the Closing shall have been satisfied (or in the case of conditions that by their terms are to be satisfied at the Closing, shall be capable of being satisfied on such date) or waived, then the End Date may be extended by either Parent or the Company for a period of 90 days by written notice to the other party; provided, further, that the right to terminate this Agreement or to extend the End Date, as applicable, pursuant to this Section 10.01(b)(i) shall not be available to any party whose breach of any provision of this Agreement has been the proximate cause of the failure of the Mergers to be consummated by such time;
(ii) a court or other Governmental Authority of competent jurisdiction shall have issued an injunction or other Order that permanently enjoins, prevents or prohibits the consummation of the Mergers and such injunction or other Order shall have become final and non-appealable; provided, that the right to terminate this Agreement pursuant to this Section 10.01(b)(ii) shall not be available to any party whose breach of any provision of this Agreement has been the proximate cause of such injunction or other Order;
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(iii) the Company Stockholder Meeting (as it may be adjourned or postponed) at which a vote on the Company Stockholder Approval was taken shall have concluded and the Company Stockholder Approval shall not have been obtained; provided, that, unless the Parent Shareholder Approval shall have previously been obtained, the right to terminate this Agreement pursuant to this Section 10.01(b)(iii) shall not be available until 24 hours after the conclusion of such meeting.
(iv) the Parent Shareholder Meeting (as it may be adjourned or postponed) at which a vote on the Parent Shareholder Approval was taken shall have concluded and the Parent Shareholder Approval shall not have been obtained; provided, that, unless the Company Stockholder Approval shall have previously been obtained, the right to terminate this Agreement pursuant to this Section 10.01(b)(iv) shall not be available until 24 hours after the conclusion of such meeting; or
(c) by Parent:
(i) prior to the receipt of the Company Stockholder Approval, if (A) a Company Adverse Recommendation Change shall have occurred, (B) a tender or exchange offer subject to Regulation 14D under the 1934 Act that constitutes a Company Acquisition Proposal shall have been commenced (within the meaning of Rule 14d-2 under the Exchange Act) and the Company shall not have communicated to its stockholders, within ten Business Days after such commencement, a statement disclosing that the Company recommends rejection of such tender or exchange offer (or shall have withdrawn any such rejection thereafter) or (C) the Company has committed a Willful Breach of Section 6.02 or Section 8.04(a), provided, that this Agreement may not be terminated pursuant to this clause (C) if Parent, Bidco or either Merger Sub is then in breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach by Parent, Bidco or either Merger Sub would cause any condition set forth in Section 9.03(a) or Section 9.03(b) not to be satisfied;
(ii) if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of the Company set forth in this Agreement shall have occurred that would cause any condition set forth in Section 9.02(a) or Section 9.02(b) not to be satisfied, and such breach or failure to perform (A) is incapable of being cured by the End Date or (B) has not been cured by the Company within the earlier of (x) 45 days following written notice to the Company from Parent of such breach or failure to perform and (y) the End Date; provided, that this Agreement may not be terminated pursuant to this Section 10.01(c)(ii) if Parent, Bidco or either Merger Sub is then in breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach by Parent, Bidco or either Merger Sub would cause any condition set forth in Section 9.03(a) or Section 9.03(b) not to be satisfied;
(d) by the Company:
(i) prior to the receipt of the Parent Shareholder Approval, if (A) a Parent Adverse Recommendation Change shall have occurred, (B) an offer (as defined in the U.K. Code) or tender or exchange offer subject to Regulation 14D under the 1934 Act
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that constitutes a Parent Acquisition Proposal shall have been commenced and Parent shall not have communicated to its shareholders, within ten Business Days after such commencement, a statement disclosing that Parent recommends rejection of such offer or tender or exchange offer (or shall have withdrawn any such rejection thereafter); or (C) Parent, Bidco or either Merger Sub has committed a Willful Breach of Section 7.02 or Section 8.04(b), provided, that this Agreement may not be terminated pursuant to this clause (C) if the Company is then in breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach by the Company would cause any condition set forth in Section 9.02(a) or Section 9.02(b) not to be satisfied;
(ii) if a breach of any representation or warranty or failure to perform any covenant or agreement on the part of Parent, Bidco or either Merger Sub set forth in this Agreement shall have occurred that would cause any condition set forth in Section 9.03(a) or Section 9.03(b) not to be satisfied, and such breach or failure to perform (A) is incapable of being cured by the End Date or (B) has not been cured by Parent, Bidco or either Merger Sub, as applicable, within the earlier of (x) 45 days following written notice to Parent from the Company of such breach or failure to perform and (y) the End Date; provided, that this Agreement may not be terminated pursuant to this Section 10.01(d)(ii) if the Company is then in breach of any of its representations, warranties, covenants or agreements set forth in this Agreement, which breach by the Company would cause any condition set forth in Section 9.02(a) or Section 9.02(b) not to be satisfied; or
(iii) prior to obtaining the Company Stockholder Approval, in order to enter into a definitive agreement providing for a Company Superior Proposal promptly following such termination in accordance with, and subject to the terms and conditions of, Section 6.02.
The party desiring to terminate this Agreement pursuant to this Section 10.01 (other than pursuant to Section 10.01(a)) shall give written notice of such termination to the other party.
Section 10.02 Effect of Termination. If this Agreement is terminated pursuant to Section 10.01, this Agreement shall become void and of no effect without liability of any party (or any of its Affiliates or its or their respective stockholders or shareholders, as applicable, or Representatives) to the other party hereto, except as provided in Section 10.03; provided, that, subject to Section 10.03(g), neither Parent nor the Company shall be released from any liabilities or damages arising out of any (i) fraud by any party or (ii) the Willful Breach of any covenant or agreement set forth in this Agreement. The provisions of Section 6.03(c), the first sentence of Section 8.01(a), this Section 10.02, Section 10.03, Article XI (other than Section 11.13, except to the extent that Section 11.13 relates to the specific performance of the provisions of this Agreement that survive termination) and Section 1.01 (to the extent related to the foregoing) shall survive any termination of this Agreement pursuant to Section 10.01. In addition, the termination of this Agreement shall not affect the parties’ respective obligations under the Confidentiality Agreement.
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Section 10.03 Termination Payment.
(a) If this Agreement is terminated: (i) by Parent pursuant to Section 10.01(c)(i) or (ii) by the Company pursuant to Section 10.01(d)(iii), then the Company shall pay to Parent (or its designee), in cash and by way of compensation, a payment in an amount equal to $1,180,000,000 (the “Company Termination Payment”) at or prior to, and as a condition to the effectiveness of, the termination of this Agreement in the case of a termination pursuant to Section 10.01(d)(iii) or as promptly as practicable (and, in any event, within two Business Days following such termination) in the case of a termination pursuant to Section 10.01(c)(i).
(b) If (i) this Agreement is terminated by Parent or Company pursuant to Section 10.01(b)(iii), (ii) prior to such termination and after the date of this Agreement, a Company Acquisition Proposal shall have been publicly announced or publicly made known and shall not have been publicly withdrawn at least four Business Days prior to the Company Stockholder Meeting and (iii) on or prior to the twelve-month anniversary of such termination of this Agreement: (A) a transaction constituting a Company Acquisition Proposal is consummated; or (B) a definitive agreement relating to a Company Acquisition Proposal is entered into by the Company or any of its Affiliates (in each case, whether or not such Company Acquisition Proposal is the same as the original Company Acquisition Proposal publicly made known or publicly announced), then, the Company shall pay to Parent (or its designee) by way of compensation the Company Termination Payment no later than the consummation of such Company Acquisition Proposal; provided, that if the Company shall have actually paid the Company No Vote Payment pursuant to Section 10.03(e), then only the incremental amount between the Company No Vote Payment and the Company Termination Payment shall be payable. “Company Acquisition Proposal” for purposes of this Section 10.03(b) shall have the meaning assigned thereto in the definition thereof set forth in Section 1.01, except that references in the definition to “20%” shall be replaced by “50%”.
(c) If this Agreement is terminated by the Company pursuant to Section 10.01(d)(i), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to $1,415,000,000 (the “Parent Termination Payment”), subject to any adjustment in accordance with Section 10.03(i).
(d) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iv), Parent shall pay to the Company (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement (or such other later date as the Company has notified in writing to Parent on the date of termination), a payment in an amount equal to the Parent Termination Payment; provided, that such amount shall be payable only if either (i) the Company Stockholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iii) has not been satisfied at the time of such termination, (B) the Company has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iv).
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(e) If this Agreement is terminated by the Company or Parent pursuant to Section 10.01(b)(iii), the Company shall pay to Parent (or its designee), in cash and by way of compensation within three Business Days after the date of termination of this Agreement, a payment in an amount equal to $270,000,000 (the “Company No Vote Payment”); provided, that such amount shall be payable only if either (i) the Parent Shareholder Approval shall have previously been obtained or (ii) (A) the condition to termination under Section 10.01(b)(iv) has not been satisfied at the time of such termination, (B) Parent has complied with Section 8.04(c) and (C) more than 24 hours has passed since the satisfaction of the condition to termination under Section 10.01(b)(iii).
(f) Any payment of the Company Termination Payment or the Company No Vote Payment (each, a “Company Payment”) or the Parent Termination Payment shall be made by wire transfer of immediately available funds to an account designated in writing by Parent or the Company, as applicable. Any Company Payment or Parent Termination Payment shall be made free and clear of and without deduction or withholding of any Taxes; provided:
(i) in the case of the Company Payment, Parent has supplied the Company with a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to the payment of the Company Payment;
(ii) in the case of the Company Payment, in the event that deductions or withholdings on account of U.S. federal income Taxes should have been made under applicable law, then Parent shall bear the cost of such Taxes;
(iii) in the case of the Parent Termination Payment, in the event that deductions or withholdings on account of UK income Tax should have been made under applicable law, then the Company shall bear the cost of such Taxes; and
(iv) in the case of the Parent Termination Payment, Parent may deduct or withhold any amounts in respect of VAT required or permitted to be withheld in accordance with the following provisions of this Section 10.03.
(g) The parties agree and understand that (x) in no event shall the Company be required to pay the Company Termination Payment on more than one occasion or the Company No Vote Payment on more than one occasion, in each case under any circumstances, and the Company No Vote Payment shall be credited toward any subsequent payment of the Company Termination Payment, and in no event shall Parent be required to pay the Parent Termination Payment on more than one occasion under any circumstances, and (y) except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, in no event shall Parent be entitled, pursuant to this Section 10.03, to receive an amount greater than the Company Termination Payment and Company No Vote Payment, as applicable (subject to the understanding that the Company No Vote Payment is set off against the Company Termination Payment when the payment of the Company Termination Payment follows the payment of the Company No Vote Payment under Section 10.03(e)), and any applicable additional amounts pursuant to the last two sentences of this Section 10.03(g) (such
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additional amounts, collectively, the “Parent Additional Amounts”), and in no event shall the Company be entitled, pursuant to this Section 10.03, to receive an amount greater than the Parent Termination Payment and any applicable additional amounts pursuant to Section 6.03(c) and/or the last two sentences of this Section 10.3(g) (such additional amounts, collectively, the “Company Additional Amounts”). Notwithstanding anything to the contrary in this Agreement, except in the case of fraud or Willful Breach by the other party of any covenant or agreement set forth in this Agreement, (i) if Parent receives a Company Payment and any applicable Parent Additional Amounts from the Company pursuant to this Section 10.03, or if the Company receives the Parent Termination Payment and any applicable Company Additional Amounts from Parent pursuant to this Section 10.03, such payment shall be the sole and exclusive remedy of the receiving party against the paying party and its Subsidiaries and their respective former, current or future partners, equityholders, managers, members, Affiliates and Representatives, and none of the paying party, any of its Subsidiaries or any of their respective former, current or future partners, equityholders, managers, members, Affiliates or Representatives shall have any further liability or obligation, in each case relating to or arising out of this Agreement or the transactions contemplated hereby and (ii) if (A) Parent, Bidco or either Merger Sub receives any payments from the Company in respect of any breach of this Agreement and thereafter Parent receives a Company Payment pursuant to this Section 10.03 or (B) the Company receives any payments from Parent, Bidco or either Merger Sub in respect of any breach of this Agreement and thereafter the Company receives the Parent Termination Payment, the amount of such Company Termination Payment or such Parent Termination Payment, as applicable, shall be reduced by the aggregate amount of such payments made by the party paying the Company Payment or the Parent Termination Payment, as applicable, in respect of any such breaches (in each case, after taking into account any Parent Additional Amounts or Company Additional Amounts, as applicable). The parties acknowledge that the agreements contained in this Section 10.03 are an integral part of the transactions contemplated hereby, that, without these agreements, the parties would not enter into this Agreement and that any amounts payable pursuant to this Section 10.03 do not constitute a penalty. Accordingly, if any party fails to promptly pay any Company Payment or the Parent Termination Payment due pursuant to this Section 10.03, such party shall also pay any out-of-pocket costs and expenses (together with any irrecoverable VAT incurred thereon, and including reasonable legal fees and expenses) incurred by the party entitled to such payment in connection with a legal action to enforce this Agreement that results in a judgment for such amount against the party failing to promptly pay such amount. Any Company Payment or Parent Termination Payment not paid when due pursuant to this Section 10.03 shall bear interest from the date such amount is due until the date paid at a rate equal to the prime rate as published in The Wall Street Journal, Eastern Edition in effect on the date of such payment.
(h) The Parent Termination Payment and the Company Termination Payment (in each case if any) shall be VAT inclusive.
(i) The parties hereto intend that any payment of a Parent Termination Payment, being compensatory in nature, shall not be treated (in whole or in part) as consideration for a supply for the purposes of VAT and, accordingly, Parent shall:
(i) file its relevant VAT return on the basis that the payment of any such Parent Termination Payment falls outside the scope of VAT; and
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(ii) pay the full amount of any such Parent Termination Payment free and clear of any deduction or adjustment on account of VAT,
it being understood and agreed that if it is finally determined that the Parent Termination Payment is (in whole or in part) consideration for a supply for the purposes of VAT then:
(A) Parent shall (1) subject to having received the relevant amount from the Company as provided in sub-clause (C) below, promptly account for and pay to HMRC such VAT together with any associated interest and penalties; and (2) use its reasonable best efforts to recover (by refund, credit or otherwise) any such VAT at the residual recovery rate generally applied by Parent in respect of input VAT incurred on its overheads from time to time;
(B) the amount of the Parent Termination Payment payable by Parent shall be reduced so that the sum of (1) the Parent Termination Payment (as so reduced) and (2) any VAT reverse charge thereon that Parent certifies acting in good faith that it is not entitled to recover (by way of credit or repayment) as input tax (together with any related interest or penalties in respect of such VAT reverse charge but excluding any interest or penalties arising as a result of the unreasonable delay or default of Parent), is equal to the amount of the Parent Termination Payment that would be payable but for this subclause (B) (the amount of such reduction being the “Adjustment Amount”); and
(C) the Company covenants to pay to Parent on written demand and on an after-Tax basis an amount equal to the Adjustment Amount save to the extent that such Adjustment Amount has previously been adjusted by way of refund of such part of the Parent Termination Payment, the due date for payment of which shall be five Business Days after the date such written demand is received by the Company.
This section 10.03(i) is subject to the provisions of Section 10.03(i) of the Company Disclosure Schedule.
(j) Any reference in Section 10.03(i) or Section 10.03(i) of the Company Disclosure Schedule to Parent shall where applicable be regarded as referring to the representative member of any VAT group of which Parent is a member, and “finally determined” shall mean determined by HMRC or, if such determination is appealed, a court or tribunal in a decision or judgment in respect of which no right of appeal exists (or in relation to which any periods for appeal have expired) or, whether or not such determination is appealed, as provided in a binding agreement made with HMRC.
(k) The parties anticipate that any Company Payment shall be outside the scope of UK VAT and not otherwise subject to VAT.
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(l) For the purposes of Section 10.03(i)(ii)(C), and Section 10.03(i) of the Company Disclosure Schedule, a covenant or indemnity being given on an “after-Tax basis” means that the amount payable (the “Payment”) pursuant to such covenant or indemnity (as applicable) shall be calculated in such a manner as will ensure that, after taking into account: (A) any Tax required to be deducted or withheld from the Payment (save to the extent that Parent has not provided a W-8BEN-E when it was entitled to do so, and provision of a W-8BEN-E would have prevented such deduction or withholding being required) and any additional amounts required to be paid by the payer of the Payment in consequence of such withholding; (B) the amount and timing of any additional Tax which becomes (or would become, but for the use of any credit or other relief which would otherwise have been available to reduce the Tax liabilities of any member of the recipient’s Group) payable by the recipient of the Payment as a result of the Payment’s being chargeable to Tax in the hands of that person; and (C) the amount and timing of any Tax benefit which is obtained by the recipient of the Payment (or any member of the recipient’s Group) to the extent that such Tax benefit is attributable to the matter giving rise to the obligation to make the Payment or the receipt of the Payment, the recipient of the Payment is in the same position as that in which it would have been if the matter giving rise to the obligation to make a Payment under this Section 10.03(l) had not occurred, provided that if any party to this Agreement shall have assigned or novated the benefit of this Agreement in whole or in part or shall, after the date of this Agreement, have changed its Tax residence or the permanent establishment to which the rights under this Agreement are allocated then no Payment to that party shall be increased by reason of the operation of clauses (A) through (C) (inclusive) to any greater extent than would have been the case had no such assignment, novation or change taken place. In this Section 10.03(l), references to “Tax” shall exclude “VAT” and references to a “W-8BEN-E” shall mean a properly completed IRS Form W-8BEN-E, on which the Company is entitled to rely, claiming the benefits of, and establishing an exemption to withholding under, the income tax treaty between the United States and the United Kingdom prior to such Payment.
(m) None of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any Person that is an Affiliate of the Company prior to giving effect to the Mergers relating to or arising out of this Agreement or the Debt Financing, whether at law, or equity, in contract, in tort or otherwise, and neither the Company nor any Person that is an Affiliate of the Company prior to giving effect to the Mergers shall have any rights or claims directly against any of the Financing Sources hereunder or thereunder. The foregoing shall not impair, supplement, or otherwise modify any of the commitments and other obligations that the Financing Sources have under any definitive agreement related to the Debt Financing to Parent, Bidco or either Merger Sub or any of the rights of Parent, Bidco or either Merger Sub against any of the Financing Sources under any definitive agreement related to the Debt Financing.
ARTICLE XI
MISCELLANEOUS
Section 11.01 Notices. All notices, requests and other communications to any party hereunder shall be in writing (including facsimile or email transmission, the receipt of which is confirmed in writing) and shall be given,
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If to the Company, to:
Alexion Pharmaceuticals, Inc.
121 Seaport Boulevard
Boston, Massachusetts 02210
Attention: General Counsel
Email: ellen.chiniara@alexion.com
with a copy to (which shall not constitute notice):
Wachtell, Lipton, Rosen & Katz
51 West 52nd Street
New York, New York 10019
Attention: Daniel A. Neff
Mark Gordon
Sabastian V. Niles
Facsimile: (212) 403 2000
Email: DANeff@wlrk.com
MGordon@wlrk.com
SVNiles@wlrk.com
If to Parent, Bidco or either Merger Sub or, following the Closing, the Surviving Company, to:
AstraZeneca PLC
1 Francis Crick Avenue
Cambridge Biomedical Campus
Cambridge
CB2 0AA
Attention: Deputy General Counsel, Corporate
with a copy to Company Secretary
Email: legalnotices@astrazeneca.com
with a copy to (which shall not constitute notice):
Freshfields Bruckhaus Deringer US LLP
601 Lexington Avenue, 31st Floor
New York, NY 10022
Attention: Ethan A. Klingsberg
Sebastian L. Fain
John A. Fisher
Facsimile: (212) 277-4001
Email: ethan.klingsberg@freshfields.com
sebastian.fain@freshfields.com
john.fisher@freshfields.com
and:
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Freshfields Bruckhaus Deringer LLP
100 Bishopsgate
London EC2P 2S
United Kingdom
Attention: Julian G. Long
Kate Cooper
Facsimile: +44 20 7832 7001
Email: julian.long@freshfields.com
kate.cooper@freshfields.com
or to such other address, facsimile number or email address as such party may hereafter specify for the purpose by notice to the other parties hereto. All such notices, requests and other communications shall be deemed received on the date of receipt by the recipient thereof if received prior to 5:00 p.m. on a Business Day. Otherwise, any such notice, request or communication shall be deemed to have been received on the next succeeding Business Day.
Section 11.02 Survival. The representations, warranties, covenants and agreements contained in this Agreement and in any certificate or other writing delivered pursuant hereto shall not survive the First Effective Time, except for the covenants and agreements set forth in Article II, Section 6.03(c), Section 7.04, Section 7.05 and Section 7.07 and any other covenant or agreement that by its terms is to be performed in whole or in part after the First Effective Time.
Section 11.03 Amendments and Waivers.
(a) Any provision of this Agreement may be amended or waived prior to the First Effective Time if, but only if, such amendment or waiver is in writing and is signed, in the case of an amendment, by each party to this Agreement or, in the case of a waiver, by each party against whom the waiver is to be effective; provided, that after the Company Stockholder Approval or the Parent Shareholder Approval has been obtained, there shall be no amendment or waiver that would require the further approval of the stockholders of the Company or the shareholders of Parent under Applicable Law without such approval having first been obtained.
(b) No failure or delay by any party in exercising any right, power or privilege hereunder shall operate as a waiver thereof, nor shall any single or partial exercise thereof preclude any other or further exercise thereof or the exercise of any other right, power or privilege. The rights and remedies provided in this Agreement shall be cumulative and not exclusive of any rights or remedies provided by Applicable Law.
Section 11.04 Expenses. Except as otherwise provided in this Agreement, all costs and expenses incurred in connection with this Agreement shall be paid by the party incurring such cost or expense.
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Section 11.05 Disclosure Schedule References and SEC Document References.
(a) The parties hereto agree that each section or subsection of the Company Disclosure Schedule or the Parent Disclosure Schedule, as applicable, shall be deemed to qualify the corresponding section or subsection of this Agreement, irrespective of whether or not any particular section or subsection of this Agreement specifically refers to the Company Disclosure Schedule or the Parent Disclosure Schedule, as applicable. The parties hereto further agree that disclosure of any item, matter or event in any particular section or subsection of either the Company Disclosure Schedule or the Parent Disclosure Schedule shall be deemed disclosure with respect to any other section or subsection of the Company Disclosure Schedule or the Parent Disclosure Schedule, as applicable, to which the relevance of such disclosure would be reasonably apparent, notwithstanding the omission of a cross-reference to such other section or subsections.
(b) The parties hereto agree that in no event shall any disclosure contained in any part of any Company SEC Document or Parent SEC Document entitled “Risk Factors”, “Forward-Looking Statements”, “Cautionary Statement Regarding Forward-Looking Statements”, “Special Note Regarding Forward Looking Statements” or “Note Regarding Forward Looking Statements” or any other disclosures in any Company SEC Document or Parent SEC Document that are cautionary, predictive or forward-looking in nature be deemed to be an exception to (or a disclosure for purposes of or otherwise qualify) any representations and warranties of any party contained in this Agreement.
Section 11.06 Binding Effect; Benefit; Assignment.
(a) The provisions of this Agreement shall be binding upon and shall inure solely to the benefit of the parties hereto; other than: (i) only following the First Effective Time, each holder of shares of Company Common Stock or Company Equity Awards shall have the right, which shall be enforceable by each such holder, to receive, as applicable, (w) the Merger Consideration in respect of shares of Company Common Stock pursuant to Article II, (x) the Merger Consideration in respect of Company Stock Options pursuant to Section 2.07(a), (y) the Merger Consideration or Assumed RSU Awards, as applicable, in respect of the Company RSU Awards pursuant to Section 2.07(b), and/or (z) the Assumed PSU Awards in respect of the Company PSU Awards pursuant to Section 2.07(b), (ii) only following the First Effective Time, each D&O Indemnified Party shall have the right to enforce the provisions of Section 7.04, and (iii) each of the Financing Sources shall have the right to enforce the provisions of Section 10.03(i), Section 11.03(b), this Section 11.06(a), Section 11.07, Section 11.08(b) and Section 11.09.
(b) No party may assign, delegate or otherwise transfer any of its rights or obligations under this Agreement without the prior written consent of each other party hereto, except that Parent may transfer or assign its rights and obligations under this Agreement, in whole or from time to time in part, to one or more of its wholly owned Subsidiaries at any time or any other Person after the Closing; provided, that such transfer or assignment by Parent shall not relieve Parent of its obligations hereunder or otherwise alter or change any obligation of any other party hereto or delay the consummation of the Mergers or any of the other transactions contemplated hereby.
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Section 11.07 Governing Law. This Agreement, and all disputes, claims, actions, suits or proceedings based upon, arising out of or related to this Agreement or the transactions contemplated hereby, shall be governed by and construed in accordance with the laws of the State of Delaware, without regard to the conflicts of law rules or principles that would result in the application of the law of any other state.
Section 11.08 Jurisdiction/Venue. Each of the parties hereto irrevocably and unconditionally agrees that any legal action or proceeding with respect to this Agreement and the rights and obligations arising hereunder, or for recognition and enforcement of any judgment in respect of this Agreement and the rights and obligations arising hereunder brought by the other party hereto or its successors or assigns, shall be brought and determined exclusively in the Delaware Court of Chancery and any state appellate court therefrom within the State of Delaware (or, solely if the Delaware Court of Chancery declines to accept jurisdiction over a particular matter, any state or federal court within the State of Delaware). Each of the parties hereto hereby irrevocably and unconditionally submits with regard to any such action or proceeding for itself and in respect of its property to the personal jurisdiction of the aforesaid courts and agrees that it will not bring any action relating to this Agreement or any of the transactions contemplated by this Agreement in any court other than the aforesaid courts. Each of the parties hereto hereby irrevocably waives, and agrees not to assert, by way of motion, as a defense, counterclaim or otherwise, in any action or proceeding with respect to this Agreement, (a) any claim that it is not personally subject to the jurisdiction of the above named courts, (b) any claim that it or its property is exempt or immune from jurisdiction of any such court or from any legal process commenced in such courts (whether through service of notice, attachment prior to judgment, attachment in aid of execution of judgment, execution of judgment or otherwise) and (c) to the fullest extent permitted by Applicable Law, any claim that (i) the suit, action or proceeding in such court is brought in an inconvenient forum, (ii) the venue of such suit, action or proceeding is improper or (iii) this Agreement, or the subject matter hereof, may not be enforced in or by such courts. To the fullest extent permitted by Applicable Law, each of the parties hereto hereby consents to the service of process in accordance with Section 11.01; provided, that nothing herein shall affect the right of any party to serve legal process in any other manner permitted by Applicable Law.
Section 11.09 WAIVER OF JURY TRIAL. EACH PARTY ACKNOWLEDGES AND AGREES THAT ANY CONTROVERSY WHICH MAY ARISE UNDER THIS AGREEMENT IS LIKELY TO INVOLVE COMPLICATED AND DIFFICULT ISSUES, AND THEREFORE EACH SUCH PARTY HEREBY IRREVOCABLY AND UNCONDITIONALLY WAIVES ANY RIGHT SUCH PARTY MAY HAVE TO A TRIAL BY JURY IN RESPECT OF ANY LITIGATION DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, THE MERGERS OR THE OTHER TRANSACTIONS CONTEMPLATED HEREBY (INCLUDING WITH RESPECT TO THE FINANCING SOURCES). EACH PARTY CERTIFIES AND ACKNOWLEDGES THAT (A) NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER, (B) EACH PARTY UNDERSTANDS AND HAS CONSIDERED THE IMPLICATIONS OF THIS WAIVER, (C) EACH PARTY MAKES THIS WAIVER VOLUNTARILY, AND (D) EACH PARTY HAS BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY,
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AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION 11.09.
Section 11.10 Counterparts; Effectiveness. This Agreement may be signed in any number of counterparts, including by facsimile, by email with .pdf attachments, or by other electronic signatures (including, DocuSign and AdobeSign), each of which shall be an original, with the same effect as if the signatures thereto and hereto were upon the same instrument. This Agreement shall become effective when each party hereto shall have received a counterpart hereof signed and delivered (by electronic communication, facsimile or otherwise) by all of the other parties hereto. Until and unless each party has received a counterpart hereof signed by the other party hereto, this Agreement shall have no effect, and no party shall have any right or obligation hereunder (whether by virtue of any other oral or written agreement or other communication).
Section 11.11 Entire Agreement. This Agreement and the Confidentiality Agreement constitute the entire agreement between the parties with respect to the subject matter thereof and supersede all prior agreements and understandings, both oral and written, between the parties with respect to the subject matter thereof.
Section 11.12 Severability. If any term, provision, covenant or restriction of this Agreement is held by a court of competent jurisdiction or other Governmental Authority to be invalid, void or unenforceable, the remainder of the terms, provisions, covenants and restrictions of this Agreement shall remain in full force and effect and shall in no way be affected, impaired or invalidated so long as the economic or legal substance of the transactions contemplated hereby is not affected in any manner materially adverse to any party. Upon such a determination, the parties shall negotiate in good faith to modify this Agreement so as to effect the original intent of the parties as closely as possible in an acceptable manner in order that the transactions contemplated hereby be consummated as originally contemplated to the fullest extent possible.
Section 11.13 Specific Performance. The parties’ rights in this Section 11.13 are an integral part of the transactions contemplated by this Agreement. The parties acknowledge and agree that irreparable harm would occur and that the parties would not have any adequate remedy at law (a) for any breach of any of the provisions of this Agreement or (b) in the event that any of the provisions of this Agreement were not performed in accordance with their specific terms. It is accordingly agreed that (except where this Agreement is validly terminated in accordance with Section 10.01) the parties shall be entitled to an injunction or injunctions to prevent breaches or threatened breaches of this Agreement and to specifically enforce the terms and provisions of this Agreement, without proof of actual damages, and each party further agrees to waive any requirement for the securing or posting of any bond in connection with such remedy. The parties further agree that (x) by seeking the remedies provided for in this Section 11.13, a party shall not in any respect waive its right to any other form of relief that may be available to a party under this Agreement, including, subject to Section 10.03(g), monetary damages in the event that the remedies provided for in this Section 11.13 are not available or otherwise are not granted, and (y) nothing contained in this Section 11.13 shall require any party to institute any proceeding for (or limit any party’s right to institute any proceeding for) specific performance under this Section 11.13 before exercising any termination right under Section 10.01 (and/or pursuing damages), nor shall the commencement of any action pursuant to this
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Section 11.13 or anything contained in this Section 11.13 restrict or limit any party’s right to terminate this Agreement in accordance with the terms of Section 10.01 or pursue any other remedies under this Agreement that may be available then or thereafter. In no event shall the Company or Parent be entitled to both (i) specific performance to cause the other party to consummate the Closing and (ii) the payment of the Parent Termination Payment or the Company Termination Payment, as applicable.
Section 11.14 Financing Provisions. Notwithstanding anything in this Agreement to the contrary, the Company on behalf of itself, its Subsidiaries and each of its controlled Affiliates hereby: (a) agrees that, except as specifically set forth in the documents relating to the Debt Financing, any proceeding, whether in law or in equity, whether in contract or in tort or otherwise, involving the Financing Sources, arising out of or relating to, this Agreement, the Debt Financing or any of the agreements entered into in connection with the Debt Financing or any of the transactions contemplated hereby or thereby or the performance of any services thereunder shall be subject to the exclusive jurisdiction of any federal or state court in the Borough of Manhattan, New York, New York, so long as such forum is and remains available, and any appellate court thereof and each party hereto irrevocably submits itself and its property with respect to any such proceeding to the exclusive jurisdiction of such court, (b) agrees that, except as specifically set forth in the documents relating to the Debt Financing, any such proceeding shall be governed by the laws of the State of New York (without giving effect to any conflicts of law principles that would result in the application of the laws of another state), except as otherwise provided in the documents relating to the Debt Financing, (c) agrees not to bring or support or permit any of its controlled Affiliates to bring or support any proceeding of any kind or description, whether in law or in equity, whether in contract or in tort or otherwise, against any Financing Source in any way arising out of or relating to, this Agreement, the Debt Financing and the documents relating thereto or any of the transactions contemplated hereby or thereby or the performance of any services thereunder in any forum other than any federal or state court in the Borough of Manhattan, New York, New York, (d) agrees that service of process on the Company or its Subsidiaries in any such proceeding shall be effective if notice is given in accordance with Section 11.01, (e) irrevocably waives, to the fullest extent that it may effectively do so, the defense of an inconvenient forum to the maintenance of such proceeding in any such court, (f) knowingly, intentionally and voluntarily waives to the fullest extent permitted by applicable law trial by jury in any proceeding brought against the Financing Sources in any way arising out of or relating to, this Agreement, the Debt Financing and the documents relating thereto, or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, (g) agrees that none of the Financing Sources shall have any liability to the Company, any of its Subsidiaries or any of its controlled Affiliates (in each case, other than Parent and its Affiliates) relating to or arising out of this Agreement, the Debt Financing and the documents relating thereto, or any of the transactions contemplated hereby or thereby or the performance of any services thereunder, whether in law or in equity, whether in contract or in tort or otherwise and (h) agrees that the Financing Sources are express Third Party beneficiaries of, and may enforce, any of the provisions of Section 10.3(k) and this Section 11.14, and that such provisions shall not be amended, supplemented, waived or otherwise modified in any way adverse to the Financing Sources without the prior written consent of the Financing Sources.
[Remainder of page intentionally left blank; signature pages follow]
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IN WITNESS WHEREOF, the parties hereto have caused this Agreement to be duly executed by their respective authorized officers as of the day and year first above written.
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ASTRAZENECA PLC
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DELTA OMEGA SUB HOLDINGS INC.
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DELTA OMEGA SUB HOLDINGS LLC 2
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[Signature Page to Merger Agreement]
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ALEXION PHARMACEUTICALS, INC.
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By:
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Name:
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Title:
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[Signature Page to Merger Agreement]
Exhibit 4.8
12 December 2020
ASTRAZENECA PLC
as the Company
arranged by
MORGAN STANLEY BANK INTERNATIONAL LIMITED,
J.P. MORGAN SECURITIES PLC and
GOLDMAN SACHS BANK USA
with
MORGAN STANLEY BANK INTERNATIONAL LIMITED,
J.P. MORGAN SECURITIES PLC and
GOLDMAN SACHS BANK USA
as Bookrunner
and
J.P. MORGAN AG
acting as Facility Agent
$17,500,000,000
BRIDGE FACILITY AGREEMENT
CONTENTS
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CLAUSE
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PAGE
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Section 1 Interpretation
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1
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1
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Definitions and interpretation
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1
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Section 2 The Facility
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22
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2
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The Facility
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22
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3
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Purpose
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25
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4
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Extension of Facility
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25
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5
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Conditions of Utilisation
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26
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Section 3 Utilisation
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28
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6
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Utilisation
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28
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Section 4 Repayment, prepayment and cancellation
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29
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7
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Repayment
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29
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8
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Prepayment and cancellation
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29
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Section 5 Costs of utilisation
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35
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9
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Rate Switch
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35
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10
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Interest
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36
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11
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Interest Periods
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37
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12
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Changes to the Calculation of Interest
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38
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13
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Fees
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41
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Section 6 Additional payment obligations
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43
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14
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Tax gross-up and indemnities
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43
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15
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Increased Costs
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55
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16
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Other indemnities
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58
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17
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Mitigation by the Lenders
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60
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18
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Costs and expenses
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60
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Section 7 Guarantee
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61
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19
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Guarantee and indemnity
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61
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Section 8 Representations, undertakings and events of default
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64
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20
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Representations
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64
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21
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Information Undertakings
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68
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22
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General undertakings
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72
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23
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Events of Default
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77
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Section 9 Changes to parties
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81
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i
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24
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Changes to the Lenders
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81
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25
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Changes to the Obligors
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87
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Section 10 The Finance Parties
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89
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26
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Role of the Facility Agent and the Arranger
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89
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27
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Conduct of Business by the Finance Parties
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99
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28
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Sharing among the Finance Parties
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99
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Section 11 Administration
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101
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29
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Payment Mechanics
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101
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30
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Set-off
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106
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31
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Notices
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106
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32
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Calculations and Certificates
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108
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33
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Partial invalidity
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109
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34
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Remedies and waivers
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109
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35
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Amendments and waivers
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109
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36
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Confidentiality
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110
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37
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Confidentiality of Funding Rates and Reference Bank Quotations
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114
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38
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Lending affiliates
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116
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39
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USA Patriot Act
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123
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40
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Contractual recognition of bail-in
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123
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41
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Supported QFCs
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125
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42
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Counterparts
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127
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Section 12 Governing law and enforcement
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127
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43
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Governing law
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127
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44
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Enforcement
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127
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Schedule 1 The Original Parties
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129
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Schedule 2 Conditions Precedent
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131
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Schedule 3 Requests
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136
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Schedule 4 Form of Accession Letter
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138
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Schedule 5 Form of Resignation Letter
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139
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Schedule 6 Form of Transfer Certificate
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140
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Schedule 7 Form of Assignment Agreement
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144
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Schedule 8 Timetables
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148
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Schedule 9 Form of Increase Confirmation
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149
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Schedule 10 Material Subsidiaries
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152
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ii
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Schedule 11 Rate Switch Notice
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153
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Schedule 12 Compounded Rate Terms
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154
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Schedule 13 Daily Non-Cumulative Compounded RFR Rate
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157
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Schedule 14 Original Lending Affiliates
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159
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Schedule 15 Form of New Lending Affiliate Appointment Notice
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160
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Schedule 16 Form of Lending Affiliate Loan Notice
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164
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Schedule 17 Form of Lending Affiliate Resignation Notice
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165
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iii
THIS AGREEMENT is dated 12 December 2020 and made BETWEEN:
(1) ASTRAZENECA PLC (the Company);
(2) THE SUBSIDIARIES of the Company listed in Part I of Schedule 1 (The Original Parties) as original borrowers (together with the Company the Original Borrowers);
(3) ASTRAZENECA PLC as guarantor (the Guarantor);
(4) MORGAN STANLEY BANK INTERNATIONAL LIMITED, J.P. MORGAN SECURITIES PLC and GOLDMAN SACHS BANK USA as mandated lead arrangers (together the Arranger);
(5) MORGAN STANLEY BANK INTERNATIONAL LIMITED, J.P. MORGAN SECURITIES PLC and GOLDMAN SACHS BANK USA as bookrunners (the Bookrunner);
(6) THE FINANCIAL INSTITUTIONS listed in Part II of Schedule 1 (The Original Parties) as lenders (the Original Lenders);
(7) THE FINANCIAL INSTITUTIONS listed in Schedule 14 (The Original Lending Affiliates) as original lending affiliates; and
(8) J.P. MORGAN AG as agent of the other Finance Parties (the Facility Agent).
IT IS AGREED as follows:
Section 1
Interpretation
1 Definitions and interpretation
1.1 Definitions
In this Agreement:
Acceptable Bank means a bank or financial institution which has a rating for its long-term unsecured and non credit-enhanced debt obligations of BBB- or higher by S&P or Fitch Ratings Ltd or Baa3 or higher by Moody’s or a comparable rating from an internationally recognised credit rating agency;
Accession Letter means a document substantially in the form set out in Schedule 4 (Form of Accession Letter);
Acquisition means the acquisition of the Target pursuant to the terms of the Merger Agreement;
Additional Borrower means a company which becomes an Additional Borrower in accordance with Clause 25 (Changes to the Obligors);
Additional Business Day means any day specified as such in Schedule 12 (Compounded Rate Terms);
Affiliate means, in relation to any person, a Subsidiary of that person or a Holding Company of that person or any other Subsidiary of that Holding Company;
Anti-Corruption Laws means all laws, rules, and regulations from time to time concerning or relating to bribery or corruption, including but not limited to the U.S Foreign Corrupt Practices Act of 1977, the UK Bribery Act 2010 and all other applicable anti-bribery and corruption laws;
Assignment Agreement means an agreement substantially in the form set out in Schedule 7 (Form of Assignment Agreement) or any other form agreed between the relevant assignor and assignee;
Authorisation means an authorisation, consent, approval, resolution, licence, exemption, filing, notarisation or registration;
Availability Period means the period from and including the date of this Agreement to and including the final day of the Certain Funds Period;
Available Commitment means a Lender’s Commitment minus:
(a) the amount of its participation in any outstanding Loans; and
(b) in relation to any proposed Utilisation, the amount of its participation in any Loans that are due to be made on or before the proposed Utilisation Date;
Available Facility means the aggregate for the time being of each Lender’s Available Commitment;
Banking Day means any day specified as such in the Compounded Rate Terms;
Blocking Law means:
(a) any provision of Council Regulation (EC) No 2271/1996 of 22 November 1996 (or any law or regulation implementing such Regulation in any member state of the European Union or the United Kingdom (including any similar and applicable UK law, instrument or regulation created following the United Kingdom’s exit from the European Union)); or
(b) Section 7 of the German Foreign Trade Regulation (Außenwirtschaftsverordnung);
Board means the Board of Governors of the Federal Reserve System of the US or any successor thereof;
Borrower means an Original Borrower or an Additional Borrower unless it has ceased to be a Borrower in accordance with Clause 25 (Changes to the Obligors);
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Break Costs means, in respect of any Loan which is not a Compounded Rate Loan, the amount (if any) by which:
(a) the interest (exclusive of Margin) which a Lender should have received for the period from the date of receipt of all or any part of its participation in a Loan or Unpaid Sum to the last day of the current Interest Period in respect of that Loan or Unpaid Sum, had the principal amount or Unpaid Sum received been paid on the last day of that Interest Period;
exceeds:
(b) the amount which that Lender would be able to obtain by placing an amount equal to the principal amount or Unpaid Sum received by it on deposit with a leading bank in the Relevant Market for a period starting on the Business Day following receipt or recovery and ending on the last day of the current Interest Period;
Business Day means:
(a) a day (other than a Saturday or Sunday) on which banks are open for general business in London and New York; and
(b) (in relation to any day for payment or purchase of the Compounded Rate Currency, or in relation to the determination of the length of an Interest Period or an amount in the Compounded Rate Currency) an Additional Business Day;
Capital Markets Debt Instruments means Financial Indebtedness by way of any notes or bonds, whether or not convertible into share capital of any wholly-owned member of the Group, issued or to be issued by the Company or by any wholly-owned members of the Group (in each case other than to another member of the Group) and guaranteed by the Company (but excluding any Commercial Paper) provided that such amounts cannot be double counted for the purposes of this definition and the definition of “Syndicated Loans”;
Central Bank Rate has the meaning given to that term in the Compounded Rate Terms;
Central Bank Rate Adjustment has the meaning given to that term in the Compounded Rate Terms;
Certain Funds Period means the period commencing on the first day of the Availability Period and ending on the earlier of:
(a) close of business on the Closing Date;
(b) the date falling ten Business Days after the date of this Agreement if the Merger Agreement is not signed;
(c) the date of termination of the Merger Agreement;
(d) if the End Date Extension has not occurred, the date falling 12 months after the date of this Agreement; and
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(e) if the End Date Extension has occurred, the date falling 15 months after the date of this Agreement;
Certain Funds Utilisation means a Loan made or to be made during the Certain Funds Period;
Clean-Up Period means the period beginning on the date of this Agreement and ending on the date falling 120 days after the Closing Date;
Closing means the Closing of the Acquisition (as defined in the Merger Agreement);
Closing Date means the date on which Closing occurs;
Code means the US Internal Revenue Code of 1986, as amended, and the regulations promulgated and the rulings issued thereunder;
Commercial Paper means any commercial paper issued under any commercial paper programme;
Commitment means:
(a) in relation to an Original Lender, the amount set opposite its name in Part II of Schedule 1 (The Original Parties) and the amount of any other Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase); and
(b) in relation to any other Lender, the amount of any Commitment transferred to it under this Agreement or assumed by it in accordance with Clause 2.2 (Increase),
to the extent not cancelled, reduced or transferred by it under this Agreement;
Compounded Rate Currency means, subject to Clause 9 (Rate Switch), the currency in respect of which the Rate Switch Date has occurred;
Compounded Rate Loan means, subject to Clause 9 (Rate Switch) any Loan or, if applicable, Unpaid Sum made or to be made in the Compounded Rate Currency;
Compounded Rate Terms means in relation to:
(a) a currency;
(b) a Compounded Rate Loan or an Unpaid Sum;
(c) an Interest Period for such a Compounded Rate Loan or Unpaid Sum (or other period for the accrual of commission or fees); or
(d) any term of this Agreement relating to the determination of a rate of interest in relation to such a Compounded Rate Loan or Unpaid Sum,
the terms set out in Schedule 12 (Compounded Rate Terms);
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Compounded Reference Rate means, in relation to any Banking Day during the Interest Period of a Compounded Rate Loan, the percentage rate per annum which is the aggregate of:
(a) the Daily Non-Cumulative Compounded RFR Rate for that Banking Day; and
(b) the Credit Adjustment Spread;
Confidential Information means all information relating to the Company, any Obligor, the Group, the Target, the Finance Documents or the Facility of which a Finance Party becomes aware in its capacity as, or for the purpose of becoming, a Finance Party or which is received by a Finance Party in relation to, or for the purpose of becoming a Finance Party under, the Finance Documents or the Facility from either:
(a) any member of the Group or any of its advisers; or
(b) another Finance Party, if the information was obtained by that Finance Party directly or indirectly from any member of the Group or any of its advisers,
in whatever form, and includes information given orally and any document, electronic file or any other way of representing or recording information which contains or is derived or copied from such information but excludes:
(i) information that:
(A) is or becomes public information other than as a direct or indirect result of any breach by that Finance Party of Clause 36 (Confidentiality); or
(B) is identified in writing at the time of delivery as non-confidential by any member of the Group or any of its advisers; or
(C) is known by that Finance Party before the date the information is disclosed to it in accordance with paragraphs (a) or (b) above or is lawfully obtained by that Finance Party after that date, from a source which is, as far as that Finance Party is aware, unconnected with the Group and which, in either case, as far as that Finance Party is aware, has not been obtained in breach of, and is not otherwise subject to, any obligation of confidentiality; and
(ii) any Funding Rate or Reference Bank Quotation;
Confidentiality Undertaking means a confidentiality undertaking substantially in a recommended form of the LMA (LMA Form of Confidentiality Undertaking) or in any other form agreed between the Company and the Facility Agent;
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Consolidated Net Tangible Assets means the aggregate amount of consolidated total assets of the Company, after deducting therefrom (a) all liabilities due within one year (other than (x) short term borrowings and (y) long-term debt due within one year) and (b) all goodwill, trade names, trademarks, patents and other like intangibles, as shown on the audited consolidated balance sheet contained in the last annual report to shareholders of the Company;
Credit Adjustment Spread means, in respect of any Compounded Rate Loan, any rate which is specified as such in respect of the Interest Period of that Compounded Rate Loan in Schedule 12 (Compounded Rate Terms);
CTA means the Corporation Tax Act 2009;
Daily Non-Cumulative Compounded RFR Rate means, in relation to any Banking Day during an Interest Period for a Compounded Rate Loan, the percentage rate per annum determined by the Facility Agent (or by any other Finance Party which agrees to determine that rate in place of the Facility Agent) in accordance with the methodology set out in Schedule 13 (Daily Non-Cumulative Compounded RFR Rate);
Daily Rate means the rate specified as such in the Compounded Rate Terms;
Default means an Event of Default or any event or circumstance specified in Clause 23 (Events of Default) which would (with the expiry of a grace period, the giving of notice or any combination of the foregoing) be an Event of Default;
Defaulting Lender means any Lender:
(a) which has failed to make its participation in a Loan available or has notified the Facility Agent or the Company (which has notified the Facility Agent) that it will not make its participation in a Loan available by the Utilisation Date of that Loan in accordance with Clause 6.4 (Lenders’ participation);
(b) which has otherwise rescinded or repudiated a Finance Document; or
(c) with respect to which an Insolvency Event has occurred and is continuing,
unless, in the case of paragraph (a) and (b) above:
(i) its failure to pay is caused by:
(A) administrative or technical error; or
(B) a Disruption Event; and
payment is made within five Business Days of its due date; or
(ii) the Lender is disputing in good faith whether it is contractually obliged to make the payment in question;
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Disruption Event means either or both of:
(a) a material disruption to those payment or communications systems or to those financial markets which are, in each case, required to operate in order for payments to be made in connection with the Facility (or otherwise in order for the transactions contemplated by the Finance Documents to be carried out) which disruption is not caused by, and is beyond the control of, any of the Parties; or
(b) the occurrence of any other event which results in a disruption (of a technical or systems-related nature) to the treasury or payments operations of a Party preventing that, or any other Party:
(i) from performing its payment obligations under the Finance Documents; or
(ii) from communicating with other Parties in accordance with the terms of the Finance Documents,
(and which (in either such case)) is not caused by, and is beyond the control of, the Party whose operations are disrupted;
End Date Extension means that the End Date (as defined in the Merger Agreement in the form provided pursuant to Part I of Schedule 2 (Conditions Precedent)) has been extended to the date falling fifteen months after the date of the Merger Agreement pursuant to Section 10.01(b)(i) thereof as a result of the specific conditions detailed in such paragraph not having been satisfied by the date falling twelve months after the date of the Merger Agreement;
ERISA means the United States Employee Retirement Income Security Act of 1974, as amended, and the regulations promulgated and rulings issued thereunder;
ERISA Affiliate means any person treated as a single employer with any Obligor for the purpose of section 414 of the Code or section 4001 of ERISA;
Event of Default means any event or circumstance specified as such in Clause 23 (Events of Default);
Facility means the term loan facility made available under this Agreement as described in Clause 2.1 (The Facility);
Facility Office means:
(a) the office or offices notified by a Lender to the Facility Agent in writing on or before the date it becomes a Lender (or, following that date, by not less than five Business Days’ written notice) as the office or offices through which it will perform its obligations under this Agreement as a Lender; or
(b) in respect of any other Finance Party, the office in the jurisdiction in which it is resident for tax purposes;
7
FATCA means:
(a) sections 1471 to 1474 of the Code or any associated regulations;
(b) any treaty, law or regulation of any other jurisdiction, or relating to an intergovernmental agreement between the US and any other jurisdiction, which (in either case) facilitates the implementation of any law or regulation referred to in paragraph (a) above; or
(c) any agreement pursuant to the implementation of any treaty, law or regulation referred to in paragraphs (a) or (b) above with the US Internal Revenue Service, the US government or any governmental or taxation authority in any other jurisdiction;
FATCA Application Date means:
(a) in relation to a “withholdable payment” described in section 1473(1)(A)(i) of the Code (which relates to payments of interest and certain other payments from sources within the US), 1 July 2014; or
(b) in relation to a “passthru payment” described in section 1471(d)(7) of the Code not falling within paragraph (a) above, the first date from which such payment may become subject to a deduction or withholding required by FATCA;
FATCA Deduction means a deduction or withholding from a payment under a Finance Document required by FATCA;
FATCA Exempt Party means a Party that is entitled to receive payments free from any FATCA Deduction;
Fee Letter means any letter or letters dated on or about the date of this Agreement between the Arranger and the Company, or the Facility Agent and the Company, setting out any of the fees referred to in Clause 13 (Fees);
Finance Document means this Agreement, the Syndication Letter, any Fee Letter, any Accession Letter, any Resignation Letter and any other document designated as a “Finance Document” by the Facility Agent and the Company;
Finance Party means the Facility Agent, the Arranger or a Lender;
Financial Indebtedness means any indebtedness for or in respect of:
(a) moneys borrowed;
(b) any amount raised by acceptance under any acceptance credit facility or dematerialised equivalent;
(c) any amount raised pursuant to any note purchase facility or the issue of bonds, notes, debentures, loan stock or any similar instrument;
(d) the amount of any liability in respect of any lease or hire purchase contract which would, in accordance with GAAP, be treated as a balance sheet liability (other than any liability in respect of a lease or hire
8
purchase contract which would, in accordance with GAAP in force prior to 1 January 2019 have been treated as an operating lease);
(e) receivables sold or discounted (other than any receivables to the extent they are sold on a non-recourse basis or on a recourse basis if the right of recourse is limited to recourse for ineligible receivables only);
(f) any amount raised under any other transaction with a bank or a financial institution (including any forward sale or purchase agreement) required to be accounted for as borrowing;
(g) any derivative transaction entered into with a bank or a financial institution in connection with protection against or benefit from fluctuation in any rate or price (and, when calculating the value of any derivative transaction, only the marked to market value shall be taken into account);
(h) any counter-indemnity obligation in respect of a guarantee, indemnity, bond, standby or documentary letter of credit or any other instrument issued by a bank or financial institution;
(i) any amount raised by the issue of redeemable shares (but only to the extent such shares are redeemable at the shareholder’s option prior to the Termination Date); and
(j) (without double counting) the amount of any liability in respect of any guarantee or indemnity for any of the items referred to in paragraphs (a) to (i) above,
but excluding any indebtedness owed by one member of the Group to another member of the Group;
Funding Rate means any rate notified by a Lender to the Facility Agent pursuant to sub-paragraph (i)(B) of Clause 12.1(d) (Cost of funds);
GAAP means generally accepted accounting principles including IFRS in the United Kingdom or (where applicable) the US;
Group means the Company and its Subsidiaries for the time being;
Holding Company means, in relation to a person, any other person in respect of which it is a Subsidiary;
IFRS means international accounting standards within the meaning of the IAS Regulation 1606/2002 to the extent applicable to the relevant financial statements;
Impaired Agent means the Facility Agent at any time when:
(a) it has failed to make (or has notified a Party that it will not make) a payment required to be made by it under the Finance Documents by the due date for payment;
(b) the Facility Agent otherwise rescinds or repudiates a Finance Document;
9
(c) (if the Facility Agent is also a Lender) it is a Defaulting Lender under paragraph (a) or (b) of the definition of “Defaulting Lender”; or
(d) an Insolvency Event has occurred and is continuing with respect to the Facility Agent,
unless, in the case of paragraph (a) above:
(i) its failure to pay is caused by:
(A) administrative or technical error; or
(B) a Disruption Event; and
payment is made within five Business Days of its due date; or
(ii) the Facility Agent is disputing in good faith whether it is contractually obliged to make the payment in question;
Increase Confirmation means a confirmation substantially in the form set out in Schedule 9 (Form of Increase Confirmation);
Increase Lender has the meaning given to that term in Clause 2.2 (Increase);
Information Package means the document in the form approved by the Company for distribution in connection with syndication of the Facility;
Insolvency Event in relation to an entity means that the entity:
(a) is dissolved (other than pursuant to a consolidation, amalgamation or merger);
(b) becomes insolvent or is unable to pay its debts or fails or admits in writing its inability generally to pay its debts as they become due;
(c) makes a general assignment, arrangement or composition with or for the benefit of its creditors;
(d) institutes or has instituted against it, by a regulator, supervisor or any similar official with primary insolvency, rehabilitative or regulatory jurisdiction over it in the jurisdiction of its incorporation or organisation or the jurisdiction of its head or home office, a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation by it or such regulator, supervisor or similar official;
(e) has instituted against it a proceeding seeking a judgment of insolvency or bankruptcy or any other relief under any bankruptcy or insolvency law or other similar law affecting creditors’ rights, or a petition is presented for its winding-up or liquidation, and, in the case of any such proceeding or petition instituted or presented against it, such proceeding or petition is instituted or presented by a person or entity not described in paragraph (d) above and:
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(i) results in a judgment of insolvency or bankruptcy or the entry of an order for relief or the making of an order for its winding-up or liquidation; or
(ii) is not dismissed, discharged, stayed or restrained in each case within 30 days of the institution or presentation thereof;
(f) has a resolution passed for its winding-up, official management or liquidation (other than pursuant to a consolidation, amalgamation or merger);
(g) has a secured party take possession of all or substantially all its assets or has a distress, execution, attachment, sequestration or other legal process levied, enforced or sued on or against all or substantially all its assets and such secured party maintains possession, or any such process is not dismissed, discharged, stayed or restrained, in each case within 30 days thereafter;
(h) seeks or becomes subject to the appointment of an administrator, provisional liquidator, conservator, receiver, trustee, custodian or other such official for it or for all or substantially all its assets;
(i) causes or is subject to any event with respect to it which, under the applicable laws of any jurisdiction, has an analogous effect to any of the events specified in paragraphs (a) to (h) above; or
(j) takes any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any of the foregoing acts;
Interest Period means, in relation to a Loan, each period determined in accordance with Clause 11 (Interest Periods) and, in relation to an Unpaid Sum, each period determined in accordance with Clause 10.4 (Default interest);
Interpolated Screen Rate means, in relation to any Loan, the rate (rounded to four decimal places) which results from interpolating on a linear basis between:
(a) the applicable Screen Rate for the longest period (for which that Screen Rate is available) which is less than the Interest Period of that Loan; and
(b) the applicable Screen Rate for the shortest period (for which that Screen Rate is available) which exceeds the Interest Period of that Loan,
each as of the Specified Time on the Quotation Day for dollars;
investment company has the meaning given to it in the United States Investment Company Act of 1940;
ITA means the Income Tax Act 2007;
Lender means:
(a) any Original Lender; and
(b) any bank which has become a Party as a “Lender” in accordance with Clause 2.2 (Increase) or Clause 24 (Changes to the Lenders),
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which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement;
LIBOR means, in relation to any Term Rate Loan:
(a) the applicable Screen Rate as of the Specified Time on the Quotation Day for dollars and for a period equal in length to the Interest Period of that Loan; or
(b) as otherwise determined pursuant to Clause 12.1 (Unavailability of Screen Rate prior to Rate Switch Date),
and if, in either case, that rate is less than zero, LIBOR shall be deemed to be zero;
LMA means the Loan Market Association;
Loan means a loan made or to be made under the Facility or the principal amount outstanding for the time being of that loan;
Major Default means with respect to the Original Obligors only, any circumstances constituting a Default under any of Clause 23.1 (Non-payment); Clause 23.2 (Other obligations) insofar as it relates to a breach of Clauses 3.1 (Purpose) or Clause 22.1 (Authorisations); Clause 22.4 (Change of business); Clause 22.6 (Acquisition undertakings); Clause 23.3 (Misrepresentation) insofar as it relates to a breach of any Major Representation; Clause 23.5 (Insolvency); Clause 23.6 (Insolvency proceedings); Clause 23.7 (Creditors’ process); Clause 23.9 (Unlawfulness) or Clause 23.10 (Repudiation);
Major Representations means a representation or warranty with respect to the Original Obligors only under any of Clause 20.1 (Status), Clause 20.2 (Binding obligations), Clause 20.3 (Non-conflict) in respect of (a) and (b) only, Clause 20.4 (Power and authority), Clause 20.11 (Pari passu ranking), paragraph (a)(i) of Clause 20.14 (Sanctions) and 20.17 (Acquisition);
Majority Lenders means a Lender or Lenders whose Commitments aggregate more than 662/3 per cent of the Total Commitments (or, if the Total Commitments have been reduced to zero, aggregated more than 662/3 per cent of the Total Commitments immediately prior to the reduction);
Margin means the percentage rate per annum determined at such time to be the margin in accordance with Clause 12.3 (Margin);
Margin Regulations means Regulations U and X issued by the Board;
Margin Stock means “margin stock” or “margin securities” as defined in the Margin Regulations;
Material Adverse Effect means an event or circumstance reasonably likely to have a material adverse effect on the ability of the Obligors (taken together) to perform their payment obligations under the Finance Documents;
Material Subsidiary means, any wholly owned Subsidiary of the Company other than one principally engaged in leasing or financing instalment receivables
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or principally engaged in financing the operations of the Company and its consolidated Subsidiaries: (i) with substantially all of its property located within the United Kingdom or the US; and (ii) which owns a Relevant Asset, being at the date of the Original Financial Statements, those Subsidiaries identified in Schedule 10 (Material Subsidiaries). A notice delivered pursuant to Clause 21.8 (Notification of Material Subsidiaries) is prima facie evidence of the identity from time to time of the Material Subsidiaries. If there is a dispute as to whether a Subsidiary is or is not a Material Subsidiary, a report by the auditors of the Company that a Subsidiary is or is not a Material Subsidiary shall, in the absence of manifest error, be conclusive and binding on each Party;
Merger Agreement means the agreement and plan of merger between the Company, Delta Omega Sub Holdings Inc., Delta Omega Sub Holdings Inc 1, Delta Omega Sub Holdings LLC 2 and the Target;
Month means a period starting on one day in a calendar month and ending on the numerically corresponding day in the next calendar month, except that (unless expressly provided to the contrary in this Agreement):
(a) (subject to paragraph (c) below) if the numerically corresponding day is not a Business Day, that period shall end on the next Business Day in that calendar month in which that period is to end if there is one, or if there is not, on the immediately preceding Business Day;
(b) if there is no numerically corresponding day in the calendar month in which that period is to end, that period shall end on the last Business Day in that calendar month; and
(c) if an Interest Period begins on the last Business Day of a calendar month, that Interest Period shall end on the last Business Day in the calendar month in which that Interest Period is to end.
The above rules will only apply to the last Month of any period;
Moody’s means Moody’s Investors Service Limited;
Net Debt Proceeds means the proceeds in relation to (i) any Syndicated Loans or (ii) the issue of any Capital Markets Debt Instruments, in each case net of:
(a) fees, costs and expenses properly incurred by any member of the Group to third parties;
(b) any Taxes payable; and
(c) any reasonable provision properly made for Taxes or for the purpose of meeting any third party liability,
to the extent connected with the raising or incurrence of such Financial Indebtedness or such issuance;
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Net Disposal Proceeds means the proceeds in relation to any disposal, in each case net of:
(a) fees, costs and expenses properly incurred by any member of the Group or the Target (or its Subsidiaries) to third parties;
(b) any Taxes payable; and
(c) any reasonable provision properly made for Taxes or for the purpose of meeting any third party liability,
to the extent connected to the relevant disposal, where such net proceeds are in an amount of $500,000,000 or greater (or its equivalent in other currencies);
New Lender has the meaning given to that term in Clause 24 (Changes to the Lenders);
Obligor means a Borrower or the Guarantor;
OFAC means the Office of Foreign Assets Control of the US Department of the Treasury;
Original Financial Statements means the audited consolidated financial statements of the Group for the financial year ended 31 December 2019;
Original Obligor means an Original Borrower or the Guarantor;
Original Termination Date means the date falling 12 Months after the earlier of (a) the Closing Date and (b) the date falling 12 Months after the date of this Agreement;
Party means a party to this Agreement;
Plan means an employee pension benefit plan as defined in section 3(2) of ERISA (other than a “multiemployer plan” (as defined in Section 3(37) of ERISA)) subject to the provisions of Title IV of ERISA or Section 412 of the Code or Section 302 of ERISA:
(a) maintained by any Obligor or any ERISA Affiliate; or
(b) to which any Obligor or any ERISA Affiliate is required to make any payment or contribution;
Pre-Approved New Lender List means the list of potential New Lenders agreed in writing on or before the date of this Agreement by or on behalf of the Company and the Arranger;
Qualifying Lender has the meaning given to it in Clause 14 (Tax gross-up and indemnities);
Quotation Day means, in relation to any period for which an interest rate is to be determined two Business Days before the first day of that period unless market practice differs in the Relevant Market, in which case the Quotation Day will be determined by the Facility Agent in accordance with market practice in the Relevant Market (and if quotations would normally be given by leading
14
banks in the Relevant Market on more than one day, the Quotation Day will be the last of those days);
Rate Switch Date means the earlier of:
(a) any date that falls between 1 April 2021 and 30 September 2021 that is notified by the Company to the Facility Agent pursuant to Clause 9.3 (Rate Switch Notice);
(b) the date on which the applicable Screen Rate ceases to be published or otherwise becomes unavailable following the occurrence of a Rate Switch Trigger Event relating to the Reference Rate applicable to Term Rate Loans in dollars; and
(c) in relation to paragraph (e) of the definition of Rate Switch Trigger Event, the date on which the applicable Screen Rate ceases to be representative of the underlying market or economic reality that it is intended to measure (as determined by the supervisor of such Screen Rate;
Rate Switch Notice means a notice substantially in the form set out in Schedule 11 (Rate Switch Notice).
Rate Switch Trigger Event means in relation to a Screen Rate for the Reference Rate applicable to Term Rate Loans:
(a)
(i) the administrator of that Screen Rate or its supervisor publicly announces that such administrator is insolvent; or
(ii) information is published in any order, decree, notice, petition or filing, however described, of or filed with a court, tribunal, exchange, regulatory authority or similar administrative, regulatory or judicial body which reasonably confirms that the administrator of that Screen Rate is insolvent,
provided that, in each case, at that time, there is no successor administrator to continue to provide that Screen Rate;
(b) the administrator of that Screen Rate publicly announces that it has ceased or will cease, to provide that Screen Rate permanently or indefinitely and, at that time, there is no successor administrator to continue to provide that Screen Rate;
(c) the supervisor of the administrator of that Screen Rate publicly announces that such Screen Rate has been or will be permanently or indefinitely discontinued;
(d) the administrator of that Screen Rate or its supervisor publicly announces that that Screen Rate may no longer be used; or
(e) the supervisor of the administrator of that Screen Rate publicly announces or publishes information:
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(i) stating that that Screen Rate is no longer or, as of a specified future date will no longer be, representative of the underlying market or the economic reality that it is intended to measure and that such representativeness will not be restored (and as determined by such supervisor); and
(ii) with awareness that any such announcement or publication will engage certain triggers for fallback provisions in contracts which may be activated by any such pre-cessation announcement or publication;
Reference Bank Quotation means any quotation supplied to the Facility Agent by a Reference Bank;
Reference Bank Rate means the arithmetic mean of the rates (rounded upwards to four decimal places) as supplied to the Facility Agent at its request by the Reference Banks:
(a) (other than where paragraph (b) below applies) as the rate at which the relevant Reference Banks could borrow funds in the Relevant Market, in dollars and for the relevant period, were it to do so by asking for and then accepting interbank offers for deposits in reasonable market size in that currency and for that period; or
(b) if different, as the rate (if any and applied to the relevant Reference Bank and the relevant currency and period) which contributors to the applicable Screen Rate are asked to submit to the relevant administrator;
Reference Banks means, in relation to LIBOR, the principal London offices of three commercial banks each of which satisfy the ratings requirements set out in the definition of Acceptable Bank and which agree to act as reference banks as may be appointed by the Facility Agent in consultation with the Company;
Reference Rate means, in respect of any Loan:
(a) in respect of any Term Rate Loan, LIBOR; or
(b) in respect of any Compounded Rate Loan, the Compounded Reference Rate for that Loan;
Relevant Asset means any manufacturing plant or facility or any research facility which is located within the United Kingdom or the US and having a gross book value (before deducting any depreciation reserve), as at the date of determination, exceeding two per cent of the Company’s Consolidated Net Tangible Assets;
Relevant Market means:
(a) in relation to a Compounded Rate Currency, the market specified as such in respect of that currency in the Compounded Rate Terms; and
(b) in relation to any other currency, the London interbank market;
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Repeating Representations means each of the representations set out in Clauses 20.1 (Status) to 20.4 (Power and authority) (inclusive), Clause 20.11 (Pari passu ranking), Clause 20.13 (Anti-bribery and corruption), Clause 20.14 (Sanctions) and Clause 20.15 (Anti-money laundering);
Reportable Event means:
(a) an event specified as such in section 4043 of ERISA or any related regulation, other than an event in relation to which the requirement to give notice of that event is waived any regulation; or
(b) a failure to meet the minimum funding standard under section 412 or 430 of the Code or section 302 of ERISA, whether or not waived;
Representative means any delegate, agent, manager, administrator, nominee, attorney, trustee or custodian;
Resignation Letter means a letter substantially in the form set out in Schedule 5 (Form of Resignation Letter);
Restricted Party means a person that is:
(a) listed on or directly owned or controlled by a person listed on, a Sanctions List, or a person acting on behalf or at the direction of such a person;
(b) located in or organised under the laws of a Sanctions Country, or is owned or controlled by, or acting on behalf or at the direction of a person located in or organised under the laws of a Sanctions Country, to the extent that this would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions; or
(c) otherwise a subject of Sanctions;
S&P means Standard & Poor’s Rating Services, a division of The McGraw-Hill Companies Inc;
Sanctions means any trade, economic or financial sanctions laws, regulations, embargoes or restrictive measures, administered, enacted or enforced by a Sanctions Authority;
Sanctions Authority means:
(a) the Security Council of the United Nations;
(b) the US;
(c) the European Union;
(d) the United Kingdom; and
(e) the governments and official institutions or agencies of any of paragraphs(a) to (d) above, including OFAC, the US Department of State, and Her Majesty’s Treasury;
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Sanctions Country means a country or territory that is subject to country-wide or territory-wide Sanctions, which countries or territories as at the date of this Agreement include, but is not limited to, Crimea, Cuba, Iran, North Korea and Syria;
Sanctions List means the Specially Designated Nationals and Blocked Persons List, the Sectoral Sanctions Identifications List and the List of Foreign Sanctions Evaders maintained by OFAC, the Consolidated List of Financial Sanctions Targets maintained by Her Majesty’s Treasury, or any similar list maintained by a Sanctions Authority, each as amended, supplemented or substituted from time to time;
Screen Rate means the London interbank offered rate administered by ICE Benchmark Administration Limited (or any other person which takes over the administration of that rate) for dollars for the relevant period displayed (before any correction, recalculation or republication by the administrator) on pages LIBOR01 or LIBOR02 of the Thomson Reuters screen (or any replacement Thomson Reuters page which displays that rate) or on the appropriate page of such other information service which publishes that rate from time to time in place of Thomson Reuters. If such page or service ceases to be available, the Facility Agent may specify another page or service displaying the relevant rate after consultation with the Company;
Security means a mortgage, charge, pledge, lien or other security interest securing any obligation of any person or any other agreement or arrangement having a similar effect;
Selection Notice means a notice substantially in the form set out in Part II of Schedule 3 (Requests) given in accordance with Clause 11 (Interest Periods);
Specified Time means a day or time determined in accordance with Schedule 8 (Timetables);
Subsidiary means in relation to any company or corporation, a company or corporation:
(a) which is controlled, directly or indirectly, by the first mentioned company or corporation;
(b) more than half the issued share capital of which is beneficially owned, directly or indirectly by the first mentioned company or corporation; or
(c) which is a Subsidiary of another Subsidiary of the first mentioned company or corporation,
and for this purpose, a company or corporation shall be treated as being controlled by another if that other company or corporation is able to direct its affairs and/or to control the composition of its board of directors or equivalent body;
Syndicated Loans means Financial Indebtedness by way of loans or other credit raised by the Company, or by any wholly-owned member of the Group (in each case other than indebtedness owing to another member of the Group) and
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guaranteed by the Company save for any credit raised under bilateral credit lines provided that such amounts cannot be double counted for the purposes of this definition and the definition of “Capital Markets Debt Instruments”;
Syndication Letter means the letter dated on or about the date of this Agreement between the Arranger and the Company;
Target means Alexion Pharmaceuticals, Inc.;
Tax means any tax, levy, impost, duty or other charge or withholding of a similar nature (including any penalty or interest payable in connection with any failure to pay or any delay in paying any of the same);
Term Rate Loan means any Loan or, if applicable, Unpaid Sum which is not a Compounded Rate Loan;
Termination Date means the Original Termination Date or such later date as may be determined in accordance with Clause 4 (Extension of Facility);
Total Commitments means the aggregate of the Commitments, being $17,500,000,000 at the date of this Agreement;
Transfer Certificate means a certificate substantially in the form set out in Schedule 6 (Form of Transfer Certificate) or any other form agreed between the Facility Agent and the Company;
Transfer Date means, in relation to an assignment or a transfer, the later of:
(a) the proposed Transfer Date specified in the relevant Assignment Agreement or Transfer Certificate; and
(b) the date on which the Facility Agent executes the relevant Assignment Agreement or Transfer Certificate;
Unpaid Sum means any sum due and payable but unpaid by an Obligor under the Finance Documents;
US means the United States of America;
US Bankruptcy Code means the US Bankruptcy Code (Title 11 of the US Code), as amended;
US Bankruptcy Law means the US Bankruptcy Code and any other US Federal or State bankruptcy, insolvency or similar law;
US Borrower means any Borrower that is incorporated or organised under the law of any State of the United States or the District of Columbia;
US Tax Obligor means:
(a) a US Borrower; or
(b) any other Obligor some or all of whose payments under the Finance Documents are from sources within the US for US federal income tax purposes;
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Utilisation means a utilisation of the Facility;
Utilisation Date means the date of a Utilisation, being the date on which the relevant Loan is to be made;
Utilisation Request means a notice substantially in the form set out in Part I of Schedule 3 (Requests);
VAT means:
(a) any Tax charged in accordance with the Value Added Tax Act 1994, as may be amended or substituted from time to time;
(b) any Tax imposed in compliance with the Council Directive of 28 November 2006 on the common system of value added tax (EC Directive 2006/112); and
(c) any other Tax of a similar nature, whether imposed in substitution for, or levied in addition to, such tax referred to in paragraph (a) or (b) above, or imposed elsewhere.
1.2 Construction
(a) Unless a contrary indication appears any reference in this Agreement to:
(i) the “Arranger”, the “Bookrunner”, the “Borrower” the “Facility Agent”, any “Finance Party”, any “Lender “, any “Obligor “ or any “Party” shall be construed so as to include its successors in title, permitted assigns and permitted transferees to, or of, its rights and/or obligations under the Finance Documents;
(ii) “assets” includes present and future properties, revenues and rights of every description;
(iii) a “Finance Document” or any other agreement or instrument is a reference to that Finance Document or other agreement or instrument as amended, novated, supplemented, extended or restated;
(iv) a “group of Lenders” includes all the Lenders;
(v) “indebtedness” includes any obligation (whether incurred as principal or as surety) for the payment or repayment of money, whether present or future, actual or contingent;
(vi) a “person” includes any individual, firm, company, corporation, government, state or agency of a state or any association, trust, joint venture, consortium, partnership or other entity (whether or not having separate legal personality);
(vii) 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, compliance with which is customary) of any governmental, intergovernmental or
20
supranational body, agency, department or of any regulatory, self-regulatory or other authority or organisation;
(viii) a provision of law is a reference to that provision as amended or re-enacted from time to time; and
(ix) a time of day is a reference to London time.
(b) The determination of the extent to which a rate is “for a period equal in length” to an Interest Period shall disregard any inconsistency arising from the last day of that Interest Period being determined pursuant to the terms of this Agreement.
(c) Section, Clause and Schedule headings are for ease of reference only.
(d) Unless a contrary indication appears, a term used in any other Finance Document or in any notice given under or in connection with any Finance Document has the same meaning in that Finance Document or notice as in this Agreement.
(e) A Default and an Event of Default is “continuing” if it has not been remedied or waived.
(f) A reference in this Agreement to a page or screen of an information service displaying a rate shall include:
(i) any replacement page of that information service which displays that rate; and
(ii) the appropriate page of such other information service which displays that rate from time to time in place of that information service,
and, if such page or service ceases to be available, shall include any other page or service displaying that rate specified by the Facility Agent after consultation with the Company.
(g) A reference in this Agreement to a Central Bank Rate shall include any successor rate to, or replacement rate for, that rate.
1.3 Currency symbols and definitions
“$” and “dollars” denote the lawful currency of the United States of America.
1.4 Third party rights
(a) Unless expressly provided to the contrary in a Finance Document, a person who is not a Party has no right under the Contracts (Rights of Third Parties) Act 1999 (the Third Parties Act) to enforce or to enjoy the benefit of any term of this Agreement.
(b) Notwithstanding any term of any Finance Document, the consent of any person who is not a Party is not required to rescind or vary any Finance Document at any time.
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Section 2
The Facility
2 The Facility
2.1 The Facility
Subject to the terms of this Agreement, the Lenders make available to the Borrowers a dollar bridge term loan facility in an aggregate amount equal to the Total Commitments.
2.2 Increase
(a) The Company may by giving prior notice to the Facility Agent after the effective date of a cancellation of:
(i) the Available Commitments of a Defaulting Lender in accordance with Clause 8.8 (Right of cancellation in relation to a Defaulting Lender); or
(ii) the Commitments of a Lender in accordance with:
(A) Clause 8.1 (Illegality); or
(B) Paragraph (a) of Clause 8.7 (Right of replacement or repayment and cancellation in relation to a single Lender),
request that the Commitments be increased (and the Commitments shall be so increased) in an aggregate amount in dollars of up to the amount of the Commitments so cancelled as follows:
(iii) the increased Commitments will be assumed by one or more Lenders or other banks (each an Increase Lender) selected by the Company (which shall not be a member of the Group) and each of which confirms in writing (whether in the relevant Increase Confirmation or otherwise) its willingness to assume and does assume all the obligations of a Lender corresponding to that part of the increased Commitments which it is to assume, as if it had been an Original Lender in respect of those Commitments;
(iv) each of the Obligors and any Increase Lender shall assume obligations towards one another and/or acquire rights against one another as the Obligors and the Increase Lender would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume;
(v) each Increase Lender shall become a Party as a “Lender” and any Increase Lender and each of the other Finance Parties shall assume obligations towards one another and acquire rights against one another as that Increase Lender and those Finance
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Parties would have assumed and/or acquired had the Increase Lender been an Original Lender in respect of that part of the increased Commitments which it is to assume;
(vi) the Commitments of the other Lenders shall continue in full force and effect; and
(vii) any increase in the Commitments shall take effect on the date specified by the Company in the notice referred to above or any later date on which the Facility Agent executes an otherwise duly completed Increase Confirmation delivered to it by the relevant Increase Lender.
(b) The Facility Agent shall, subject to paragraph (c) below, as soon as reasonably practicable after receipt by it of a duly completed Increase Confirmation appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Increase Confirmation.
(c) The Facility Agent shall only be obliged to execute an Increase Confirmation delivered to it by an Increase Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assumption of the increased Commitments by that Increase Lender.
(d) Each Increase Lender, by executing the Increase Confirmation, confirms (for the avoidance of doubt) that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on which the increase becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as it would have been had it been an Original Lender.
(e) The Company shall promptly on demand pay the Facility Agent the amount of all costs and expenses (including legal fees) reasonably incurred by it in connection with any increase in Commitments under this Clause 2.2.
(f) The Increase Lender shall, on the date upon which the increase takes effect, pay to the Facility Agent (for its own account) a fee in an amount equal to the fee which would be payable under Clause 24.4 (Assignment or transfer fee) if the increase was a transfer pursuant to Clause 24.6 (Procedure for transfer) and if the Increase Lender was a New Lender,
(g) Clause 24.5 (Limitation of responsibility of Existing Lenders) shall apply mutatis mutandis in this Clause 2.2 in relation to an Increase Lender as if references in that Clause to:
(i) an “Existing Lender” were references to all the Lenders immediately prior to the relevant increase;
(ii) the “New Lender” were references to that “Increase Lender”; and
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(iii) a “re-transfer” and “re-assignment” were references to respectively a “transfer” and “assignment”.
2.3 Finance Parties’ rights and obligations
(a) The obligations of each Finance Party under the Finance Documents are several. Failure by a Finance Party to perform its obligations under the Finance Documents does not affect the obligations of any other Party under the Finance Documents. No Finance Party is responsible for the obligations of any other Finance Party under the Finance Documents.
(b) The rights of each Finance Party under or in connection with the Finance Documents are separate and independent rights and any debt arising under the Finance Documents to a Finance Party from an Obligor is a separate and independent debt in respect of which a Finance Party shall be entitled to enforce its rights in accordance with paragraph (c) below. The rights of each Finance Party include any debt owing to that Finance Party under the Finance Documents and, for the avoidance of doubt, any part of a Loan or any other amount owed by an Obligor which relates to a Finance Party’s participation in the Facility or its role under a Finance Document (including any such amount payable to the Facility Agent on its behalf) is a debt owing to that Finance Party by that Obligor.
(c) A Finance Party may, except as specifically provided in the Finance Documents, separately enforce its rights under or in connection with the Finance Documents.
2.4 Obligors’ Agent
(a) Each Obligor (other than the Company) by its execution of this Agreement or an Accession Letter irrevocably appoints the Company (acting through one or more authorised signatories) to act on its behalf as its agent in relation to the Finance Documents and irrevocably authorises:
(i) the Company on its behalf to supply all information concerning itself contemplated by this Agreement to the Finance Parties and to give all notices and instructions (including, in the case of a Borrower, Utilisation Requests), to make such agreements and to effect the relevant amendments, supplements and variations capable of being given, made or effected by any Obligor notwithstanding that they may affect the Obligor, without further reference to or the consent of that Obligor; and
(ii) each Finance Party to give any notice, demand or other communication to that Obligor pursuant to the Finance Documents to the Company,
and in each case the Obligor shall be bound as though the Obligor itself had given the notices and instructions (including, without limitation, any Utilisation Requests) or executed or made the agreements or effected the amendments, supplements or variations, or received the relevant notice, demand or other communication.
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(b) Every act, omission, agreement, undertaking, settlement, waiver, amendment, supplement, variation, notice or other communication given or made by the Company or given to the Company under any Finance Document on behalf of another Obligor or in connection with any Finance Document (whether or not known to any other Obligor and whether occurring before or after such other Obligor became an Obligor under any Finance Document) shall be binding for all purposes on that Obligor as if that Obligor had expressly made, given or concurred with it. In the event of any conflict between any notices or other communications of the Company and any other Obligor, those of the Company shall prevail.
3 Purpose
3.1 Purpose
Each Borrower shall apply all amounts borrowed by it under the Facility towards financing or refinancing:
(a) the amounts payable under the Merger Agreement;
(b) any financial indebtedness of the Target or its Subsidiaries; and
(c) any other fees, commissions, costs and expenses in relation to the Acquisition.
3.2 Monitoring
No Finance Party is bound to monitor or verify the application of any amount borrowed pursuant to this Agreement.
4 Extension of Facility
(a) The Company may:
(i) in the case of the first Extension Notice, on a date which is not more than 60 days nor fewer than 30 days before the date falling on the Original Termination Date; or
(ii) in the case of a second Extension Notice, on a date which is not more than 60 days nor fewer than 30 days before the date falling 18 months after the Original Termination Date,
deliver to the Facility Agent an irrevocable notice in writing that the Original Termination Date be extended (an Extension Notice):
(A) in the case of the first Extension Notice, so that the Termination Date falls on the date falling six months from the Original Termination Date;
(B) in the case of the second Extension Notice, the Termination Date falls on the date falling one year after the Original Termination Date,
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provided that notwithstanding anything contrary herein, if such Termination Date would fall on a day that is not a Business Day, such Termination Date shall be the immediately preceding Business Day.
(b) The Facility Agent shall forward a copy of an Extension Notice to each of the Lenders as soon as practicable after receipt of it.
(c) The Original Termination Date shall be extended to the day which is six months or one year (as applicable) from (and including) the Original Termination Date upon the Facility Agent providing the Extension Notice to the Lenders pursuant to paragraph (b) above, provided that:
(i) no Default is continuing on the date of the relevant Extension Notice;
(ii) the Repeating Representations are true in all material respects on the date of the relevant Extension Notice; and
(iii) the fee payable pursuant to Clause 13.4 (Extension fee) is paid when due.
5 Conditions of Utilisation
5.1 Initial conditions precedent
(a) No Borrower may deliver a Utilisation Request unless the Facility Agent has received all of the documents and other evidence listed in Part I and Part II of Schedule 2 (Conditions precedent), subject to paragraph (b) below, in form and substance reasonably satisfactory to the Facility Agent. The Facility Agent shall notify the Company and the Lenders promptly upon being so reasonably satisfied.
(b) The Merger Agreement provided under paragraph 2 of Part II of Schedule 2 (Conditions precedent) shall be deemed to be in a form satisfactory to the Facility Agent if it is in the form provided under paragraph 3(b) of Part I of Schedule 2 (Conditions precedent) with such amendments as would not materially adversely affect the Lenders’ interests.
(c) Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (a) above, the Lenders authorise (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
5.2 Further conditions precedent
The Lenders will only be obliged to comply with Clause 6.4 (Lenders’ participation) in relation to a Utilisation (other than one to which Clause 5.4 (Utilisations during the Certain Funds Period) applies) if on the date of the Utilisation Request and on the proposed Utilisation Date:
(a) no Default is continuing or would result from the proposed Loan; and
26
(b) the Repeating Representations to be made by each Obligor are true in all material respects.
5.3 Maximum number of Loans
(a) A Borrower may not deliver a Utilisation Request if as a result of the proposed Utilisation, 11 or more Loans would be outstanding.
(b) A Borrower may not request that a Loan be divided if, as a result of the proposed division, 11 or more Loans would be outstanding.
5.4 Utilisations during the Certain Funds Period
(a) Subject to Clause 5.1 (Initial conditions precedent), during the Certain Funds Period, the Lenders will only be obliged to comply with Clause 6.4 (Lenders’ participation) in relation to a Certain Funds Utilisation, if on the date of the Utilisation Request and on the proposed Utilisation Date:
(i) no Major Default is continuing or would result from the proposed Utilisation; and
(ii) all the Major Representations are true.
(b) During the Certain Funds Period (save in circumstances where, pursuant to paragraph (a) above, a Lender is not obliged to comply with Clause 6.4 (Lenders’ participation) and subject as provided in Clause 8.1 (Illegality), none of the Finance Parties shall be entitled to:
(i) cancel any of its Commitments to the extent to do so would prevent or limit the making of a Certain Funds Utilisation;
(ii) rescind, terminate or cancel this Agreement or the Facility or exercise any similar right or remedy or make or enforce any claim under the Finance Documents it may have to the extent to do so would prevent or limit the making of a Certain Funds Utilisation;
(iii) refuse to participate in the making of a Certain Funds Utilisation;
(iv) exercise any right of set-off or counterclaim in respect of a Utilisation to the extent to do so would prevent or limit the making of a Certain Funds Utilisation; or
(v) cancel, accelerate or cause repayment or prepayment of any amounts owing hereunder or under any other Finance Document to the extent to do so would prevent or limit the making of a Certain Funds Utilisation,
provided that immediately upon the expiry of the Certain Funds Period all such rights, remedies and entitlements shall be available to the Finance Parties notwithstanding that they may not have been used or been available for use during the Certain Funds Period.
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Section 3
Utilisation
6 Utilisation
6.1 Delivery of a Utilisation Request
A Borrower may utilise the Facility by delivery to the Facility Agent of a duly completed Utilisation Request not later than the Specified Time.
6.2 Completion of a Utilisation Request
(a) Each Utilisation Request is irrevocable and will not be regarded as having been duly completed unless:
(i) the proposed Utilisation Date is a Business Day within the Availability Period;
(ii) the currency and amount of the Utilisation comply with Clause 6.3 (Currency and amount); and
(iii) the proposed Interest Period complies with Clause 11 (Interest Periods).
(b) Multiple Utilisations may be requested in a Utilisation Request where the proposed Utilisation Date is the Closing Date. Only one Loan may be requested in each subsequent Utilisation Request.
6.3 Currency and amount
(a) The currency specified in a Utilisation Request must be dollars.
(b) The amount of the proposed Loan must be an amount which is not more than the Available Facility and which is a minimum of $25,000,000 or if less, the Available Facility.
6.4 Lenders’ participation
(a) If the conditions set out in this Agreement have been met, each Lender shall make its participation in each Loan available by the relevant Utilisation Date through its Facility Office.
(b) The amount of each Lender’s participation in each Loan will be equal to the proportion borne by its Available Commitment to the Available Facility immediately prior to making the Loan.
(c) The Facility Agent shall notify each Lender of the amount of each Loan and the amount of its participation in that Loan by the Specified Time.
6.5 Cancellation of Commitment
The Commitments which, at that time, are unutilised shall be immediately cancelled at the end of the Availability Period.
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Section 4
Repayment, prepayment and cancellation
7 Repayment
7.1 Repayment of Loans
The Borrowers shall repay the aggregate Loans in full on the Termination Date.
8 Prepayment and cancellation
8.1 Illegality
If, at any time, it is unlawful in any applicable jurisdiction for a Lender to perform any of its obligations as contemplated by this Agreement or to fund or maintain its participation in any Loan or it becomes unlawful for any Affiliate of a Lender for that Lender to do so:
(a) that Lender shall promptly notify the Facility Agent upon becoming aware of that event;
(b) upon the Facility Agent notifying the Company, each Available Commitment of that Lender will be immediately cancelled; and
(c) to the extent that the Lender’s participation has not been transferred pursuant to paragraph (d) of Clause 8.7 (Right of replacement or repayment and cancellation in relation to a single Lender), each Borrower shall repay that Lender’s participation in the Loans made to that Borrower on the last day of the Interest Period for each Loan occurring after the Facility Agent has notified the Company or, if earlier, the date specified by the Lender in the notice delivered to the Facility Agent (being no earlier than the last day of any applicable grace period permitted by law) and that Lender’s corresponding Commitment(s) shall be immediately cancelled in the amount of the participations repaid.
8.2 Change of control
(a) If any person or group of persons acting in concert gains control of the Company:
(i) the Company shall promptly notify the Facility Agent upon becoming aware of that event;
(ii) a Lender shall not be obliged to fund a Utilisation;
(iii) if a Lender so requires and notifies the Facility Agent within 30 days of the Company notifying the Facility Agent of the event, the Facility Agent shall, by not less than 30 days’ notice to the Company, cancel the Commitment of that Lender and declare the participation of that Lender in all Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents, immediately due and payable, whereupon each such Available Commitment will be immediately cancelled, any Commitment of that Lender shall
29
immediately cease to be available for further utilisation and all such Loans, accrued interest and other amounts shall become immediately due and payable.
(b) For the purpose of paragraph (a) above control means:
(i) the power (whether by way of ownership of shares, proxy, contract, agency or otherwise) to:
(A) cast, or control the casting of, more than one-half of the maximum number of votes that might be cast at a general meeting of the Company; or
(B) appoint or remove all, or the majority, of the directors or other equivalent officers of the Company; or
(C) give directions with respect to the operating and financial policies of the Company which the directors or other equivalent officers of the Company are obliged to comply with; or
(ii) the holding of more than one-half of the issued share capital of the Company (excluding any part of that issued share capital that carries no right to participate beyond a specified amount in a distribution of either profits or capital).
(c) For the purpose of paragraph (a) above acting in concert means, a group of persons who, pursuant to an agreement or understanding (whether formal or informal), actively co-operate, through the acquisition by any of them, either directly or indirectly, of shares in the Company, to obtain or consolidate control of the Company.
8.3 Voluntary cancellation
The Company may, if it gives the Facility Agent not less than three Business Days’ (or such shorter period as the Majority Lenders may agree) prior notice, cancel the whole or any part (being a minimum amount of $5,000,000) of the Available Facility. Any cancellation under this Clause 8.3 shall reduce the Commitments of the Lenders rateably.
8.4 Debt issuance
(a) The Company shall (unless the Majority Lenders otherwise agree) prepay Loans (or cancel Commitments) in an amount equal to the Net Debt Proceeds of:
(i) the issue of any Capital Markets Debt Instruments; and
(ii) any Syndicated Loans,
provided that such prepayment shall only be made if:
(A) the Net Debt Proceeds are greater than or equal to $500,000,000 (or its equivalent in other currencies) (when aggregated with any other Net Debt Proceeds over
30
the life of the Facility), in an amount equal to the Net Debt Proceeds received in excess of $500,000,000; and
(B) such issuance of Capital Markets Debt Instruments or Syndicated Loans are not solely for the purpose of refinancing or restructuring any Capital Markets Debt Instruments or Syndicated Loans existing at the date of this Agreement which are maturing within the next 12 months provided that the principal amounts thereof are not increased from the level as at the date of this Agreement (and in determining whether there has been any increase in the principal amount, an adjustment shall be made to such principal amount to reflect the amount of any economic savings or costs over the life of such Capital Markets Debt Instrument or Syndicated Loan, as the case may be, arising as a consequence of any margin or coupon differing from the levels under the refinanced Capital Markets Debt Instrument or Syndicated Loan); and
(C) any Syndicated Loan does not solely replace amounts made available under bilateral facilities as at the date of this Agreement in amounts no greater than under such bilateral facilities as at the date of this Agreement.
(b) If there are any outstanding Loans, the Company shall apply any amounts under paragraph (a) above to outstanding Loans as soon as is practicable (taking into account, without limitation, any then current Interest Periods) but in any event no later than the date falling five Business Days after receipt of such amount.
(c) If there are no outstanding Loans, the Company shall apply any amounts and/or commitments represented by the relevant Syndicated Loan or Capital Markets Debt Instrument under paragraph (a) above to cancel any outstanding Commitments as soon as is practicable but in any event no later than the date falling five Business Days after it has obtained the commitments under the relevant Syndicated Loan or proceeds under the Capital Markets Debt Instrument.
(d) The Company shall notify the Facility Agent promptly (and the Facility Agent, upon receiving such notice, shall notify the Lenders promptly) of any prepayment or cancellation to be made under this Clause 8.4.
8.5 Disposals prepayment
(a) The Company shall (unless the Majority Lenders otherwise agree) prepay Loans (or cancel Commitments) in an amount equal to the Net Disposal Proceeds of any disposal of any asset required by any government authority or agency as a condition to its approval of the Acquisition.
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(b) The Company shall apply any amounts under paragraph (a) above as soon as is practicable (taking into account, without limitation, any then current Interest Periods) but in any event no later than the date falling five Business Days after receipt of such amount.
(c) The Company shall notify the Facility Agent promptly (and the Facility Agent, upon receiving such notice, shall notify the Lenders promptly) of any prepayment or cancellation to be made under this Clause 8.5.
8.6 Voluntary prepayment
(a) Subject to paragraph (b) below, a Borrower may, if it gives the Facility Agent not less than:
(i) in the case of a Term Rate Loan, three Business Days’ prior notice; or
(ii) in the case of a Compounded Rate Loan, three Banking Days’ prior notice,
(or, in each case, such shorter period as the Majority Lenders may agree) prepay the whole or any part of any Loan (but, if in part, being an amount that reduces the amount of the Loan by a minimum amount of $5,000,000).
(b) In the case of a Compounded Rate Loan, the Borrowers may not make more than five voluntary prepayments in each 12-month period beginning on the date of this Agreement.
8.7 Right of replacement or repayment and cancellation in relation to a single Lender
(a) If:
(i) any sum payable to any Lender by an Obligor is or will be required to be increased under paragraph (c) of Clause 14.2 (Tax gross-up); or
(ii) any Lender claims or will be entitled to claim indemnification from the Company under Clause 14.3 (Tax indemnity) or Clause 15.1 (Increased costs),
the Company may, whilst the circumstance giving rise to the requirement for that increase or indemnification continues, give the Facility Agent notice of cancellation of the Commitment(s) of that Lender and its intention to procure the repayment of that Lender’s participation in the Loans or give the Facility Agent notice of its intention to replace that Lender in accordance with paragraph (d) below.
(b) On receipt of a notice of cancellation referred to in paragraph (a) above, the Available Commitment(s) of that Lender shall be immediately reduced to zero.
32
(c) On the last day of each Interest Period which ends after the Company has given notice of cancellation under paragraph (a) above (or, if earlier, the date specified by the Company in that notice), each Borrower to which a Loan is outstanding shall repay that Lender’s participation in that Loan and that Lender’s corresponding Commitment(s) shall be immediately cancelled in the amount of the participations repaid.
(d) If:
(i) any of the circumstances set out in paragraph (a) above apply to a Lender; or
(ii) an Obligor becomes obliged to pay any amount in accordance with Clause 8.1 (Illegality) to any Lender,
the Company may, on three Business Days’ prior notice to the Facility Agent and that Lender, replace that Lender by requiring that Lender to (and, to the extent permitted by law, that Lender shall) transfer pursuant to Clause 24 (Changes to the Lenders) all (and not part only) of its rights and obligations under this Agreement to a Lender or other bank which confirms its willingness to assume and does assume all the obligations of the transferring Lender in accordance with Clause 24 (Changes to the Lenders) for a purchase price in cash payable at the time of the transfer in an amount equal to the outstanding principal amount of such Lender’s participation in the outstanding Loans and all accrued interest (to the extent that the Facility Agent has not given a notification under Clause 24.10 (Pro rata interest settlement)), Break Costs and other amounts payable in relation thereto under the Finance Documents.
(e) The replacement of a Lender pursuant to paragraph (d) above shall be subject to the following conditions:
(i) the Company shall have no right to replace the Facility Agent;
(ii) neither the Facility Agent nor any Lender shall have any obligation to find a replacement Lender;
(iii) in no event shall the Lender replaced under paragraph (d) above be required to pay or surrender any of the fees received by such Lender pursuant to the Finance Documents; and
(iv) the Lender shall only be obliged to transfer its rights and obligations pursuant to paragraph (d) above once it is satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that transfer.
(f) A Lender shall perform the checks described in paragraph (e)(iv) above as soon as reasonably practicable following delivery of a notice referred to in paragraph (d) above and shall notify the Facility Agent and the Company when it is satisfied that it has complied with those checks.
33
8.8 Right of cancellation in relation to a Defaulting Lender
(a) If any Lender becomes a Defaulting Lender, the Company may, at any time whilst the Lender continues to be a Defaulting Lender, give the Facility Agent five Business Days’ notice of cancellation of each Available Commitment of that Lender.
(b) On the notice referred to in paragraph (a) above becoming effective, each Available Commitment of the Defaulting Lender shall immediately be reduced to zero.
(c) The Facility Agent shall as soon as practicable after receipt of a notice referred to in paragraph (a) above, notify all the Lenders.
8.9 Restrictions
(a) Any notice of cancellation or prepayment given by any Party under this Clause 8 shall be irrevocable and, unless a contrary indication appears in this Agreement, shall specify the date or dates upon which the relevant cancellation or prepayment is to be made and the amount of that cancellation or prepayment.
(b) Any prepayment under this Agreement shall be made together with accrued interest on the amount prepaid and, subject to any Break Costs, without premium or penalty.
(c) No Borrower may reborrow any part of the Facility which is prepaid.
(d) The Borrowers shall not repay or prepay all or any part of the Loans or cancel all or any part of the Commitments except at the times and in the manner expressly provided for in this Agreement.
(e) Subject to Clause 2.2 (Increase), no amount of the Total Commitments cancelled under this Agreement may be subsequently reinstated.
(f) If the Facility Agent receives a notice under this Clause 8 it shall promptly forward a copy of that notice to either the Company or the affected Lender, as appropriate.
(g) If all or part of any Lender’s participation in a Loan is repaid or prepaid and is not available for redrawing (other than by operation of Clause 5.2 (Further conditions precedent)), an amount of that Lender’s Commitment (equal to the amount of the participation which is repaid or prepaid) will be deemed to be cancelled on the date of repayment or prepayment. Any cancellation under this paragraph (g) shall reduce the Commitments of the Lenders rateably.
34
Section 5
Costs of utilisation
9 Rate Switch
9.1 Change of Reference Rate
(a) In accordance with the terms of this Agreement, the Reference Rate for Term Rate Loans in dollars may change.
(b) Following the occurrence of a Rate Switch Trigger Event in relation to a Screen Rate for the Reference Rate applicable to Term Rate Loans in a currency, the Facility Agent shall:
(i) promptly upon becoming aware of the occurrence of that Rate Switch Trigger Event, notify the Company of that occurrence; and
(ii) promptly upon becoming aware of the Rate Switch Date applicable to that Rate Switch Trigger Event, notify the Company of that date.
(c) Subject to Clause 9.2 (Existing Term Rate Loans), on and from the Rate Switch Date:
(i) Term Rate Loans shall be Compounded Rate Loans; and
(ii) the Reference Rate for Term Rate Loans shall be the applicable Compounded Reference Rate and the rate of interest on Loans shall be determined pursuant to Clause 10.2 (Calculation of interest — Compounded Rate Loans).
9.2 Existing Term Rate Loans
(a) To the extent that the Rate Switch Date falls before the last day of an Interest Period for a Term Rate Loan:
(i) that Loan shall continue to be a Term Rate Loan for that Interest Period;
(ii) the Reference Rate for that Loan for that Interest Period shall continue to be the Reference Rate that was applicable to that Loan on the first day of that Interest Period and the rate of interest on that Loan shall continue to be determined pursuant to Clause 10.1 (Calculation of interest — Term Rate Loans); and
(iii) on and from the first day of the next Interest Period (if any) for that Loan:
(A) that Loan shall be a Compounded Rate Loan; and
(B) the Reference Rate for that Loan shall be the applicable Compounded Reference Rate and the rate of interest on that Loan shall be determined pursuant to Clause 10.2 (Calculation of interest — Compounded Rate Loans).
9.3 Rate Switch Notice
(a) Provided that no Rate Switch Trigger Event has occurred, the Company may deliver to the Facility Agent a Rate Switch Notice specifying the Rate Switch Date.
35
(b) The Rate Switch Date must be a Business Day which falls between 1 April 2021 and 30 September 2021.
(c) The Rate Switch Notice shall take effect in accordance with its terms on the date on which it is delivered to the Facility Agent, which must be at least five Business Days, and not more than 20 Business Days, before the Rate Switch Date contained in the Rate Switch Notice.
(d) Once delivered, the Rate Switch Notice shall be irrevocable.
10 Interest
10.1 Calculation of interest — Term Rate Loans
The rate of interest on each Term Rate Loan for each Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(a) Margin; and
(b) LIBOR.
10.2 Calculation of interest — Compounded Rate Loans
(a) The rate of interest on each Compounded Rate Loan for any day during an Interest Period is the percentage rate per annum which is the aggregate of the applicable:
(i) Margin; and
(ii) Compounded Reference Rate for that day.
(b) If any day during an Interest Period for a Compounded Rate Loan is not a Banking Day, the rate of interest on that Compounded Rate Loan for that day will be the rate applicable to the immediately preceding Banking Day.
10.3 Payment of interest
The Borrower to which a Loan has been made shall pay accrued interest on that Loan on the last day of each Interest Period (and, if the Interest Period is longer than six Months, on the dates falling at six-Monthly intervals after the first day of the Interest Period).
10.4 Default interest
(a) If an Obligor fails to pay any amount payable by it under a Finance Document on its due date, interest shall accrue on the overdue amount from the due date up to the date of actual payment (both before and after judgment) at a rate which, subject to paragraph (b) below, is one per cent per annum higher than 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 successive Interest Periods, each of a duration selected by the Facility Agent (acting reasonably). Any interest accruing under this Clause 10.4 shall be immediately payable by the Obligor on demand by the Facility Agent.
36
(b) If any overdue amount consists of all or part of a Term Rate Loan which became due on a day which was not the last day of an Interest Period relating to that Loan:
(i) the first Interest Period for that overdue amount shall have a duration equal to the unexpired portion of the current Interest Period relating to that Loan; and
(ii) the rate of interest applying to the overdue amount during that first Interest Period shall be one per cent per annum higher than the rate which would have applied if the overdue amount had not become due.
(c) Default interest (if unpaid) arising on an overdue amount will be compounded with the overdue amount at the end of each Interest Period applicable to that overdue amount but will remain immediately due and payable.
10.5 Notification of rates of interest
(a) Subject to Clause 37.1 (Confidentiality and disclosure), the Facility Agent shall promptly notify the relevant Lenders and the relevant Borrower of the determination of a rate of interest relating to a Term Rate Loan under this Agreement.
(b) Other than where paragraph (d) below applies, the Facility Agent shall promptly upon such total amount of interest being determinable, notify the relevant Lenders and the relevant Borrower of:
(i) the determination of the total amount of accrued interest that:
(A) relates to a Compounded Rate Loan; and
(B) is, or is scheduled to become, payable under any Finance Document; and
(ii) the applicable rate of interest for each day relating to that determination.
(c) The Facility Agent shall promptly notify the relevant Borrower of each Funding Rate relating to a Loan.
(d) This Clause 10.5 shall not require the Facility Agent to make any notification to a Borrower on a day which is not a Business Day.
11 Interest Periods
11.1 Selection of Interest Periods
(a) A Borrower (or the Company on behalf of a Borrower) may select an Interest Period for a Loan in the Utilisation Request for that Loan or (if the Loan has already been borrowed) in a Selection Notice.
(b) Each Selection Notice for a Loan is irrevocable and must be delivered to the Facility Agent by the Borrower (or the Company on behalf of a
37
Borrower) to which that Loan was made not later than the Specified Time.
(c) If a Borrower (or the Company) fails to deliver a Selection Notice to the Facility Agent in accordance with paragraph (b) above, the relevant Interest Period will be one Month.
(d) Subject to this Clause 11, a Borrower (or the Company) may select an Interest Period of one, two, three or six Months for any Term Rate Loan or an Interest Period of one Month for any Compounded Rate Loan or, in each case, any other period agreed between the Company and the Facility Agent (acting on the instructions of all the Lenders).
(e) An Interest Period for a Loan shall not extend beyond the Termination Date.
(f) Each Interest Period for a Loan shall start on the Utilisation Date or (if already made) on the last day of its preceding Interest Period.
11.2 Non-Business Days
If an Interest Period would otherwise end on a day which is not a Business Day, that Interest Period will instead end on the next Business Day in that calendar month (if there is one) or the preceding Business Day (if there is not).
11.3 Consolidation and division of Loans
(a) Subject to paragraph (b) below, if two or more Interest Periods:
(i) relate to Loans made to the same Borrower; and
(ii) end on the same date,
(b) those Loans will, unless that Borrower (or the Company on its behalf) specifies to the contrary in the Selection Notice for the next Interest Period, be consolidated into, and treated as, a single Loan on the last day of the Interest Period.
(c) Subject to Clause 5.3 (Maximum number of Loans) and Clause 6.3 (Currency and amount), if a Borrower (or the Company on its behalf) requests in a Selection Notice that a Loan be divided into two or more Loans, that Loan will, on the last day of its Interest Period, be so divided into the amounts specified in that Selection Notice, being an aggregate amount equal to the amount of the Loan immediately before its division.
12 Changes to the Calculation of Interest
12.1 Unavailability of Screen Rate prior to Rate Switch Date
(a) Unavailability of Screen Rate
(i) Interpolated Screen Rate: If no Screen Rate is available for LIBOR for the Interest Period of a Loan, the applicable LIBOR shall be the Interpolated Screen Rate for a period equal in length to the Interest Period of that Loan.
38
(ii) Reference Bank Rate: If no Screen Rate is available for LIBOR for dollars for the Interest Period of a Loan and it is not possible to calculate the Interpolated Screen Rate, the applicable LIBOR shall be the Reference Bank Rate as of the Specified Time and for a period equal in length to the Interest Period of that Loan.
(iii) Cost of funds If paragraph (ii) above applies but no Reference Bank Rate is available for the relevant currency or Interest Period, there shall be no LIBOR for that Loan and paragraph (d) (Cost of funds) shall apply to that Loan for that Interest Period.
(b) Calculation of Reference Bank Rate
(i) Subject to paragraph (ii) below, if LIBOR is to be determined on the basis of a Reference Bank Rate but a Reference Bank does not supply a quotation by the Specified Time, the Reference Bank Rate shall be calculated on the basis of the quotations of the remaining Reference Banks.
(ii) If at or about noon on the Quotation Day none or only one of the Reference Banks supplies a quotation, there shall be no Reference Bank rate for the relevant Interest Period.
(c) Market disruption
In the case of a Term Rate Loan, if before close of business in London on the Quotation Day for the relevant Interest Period, the Facility Agent receives notifications from a Lender or Lenders (whose participations in a Loan exceed 40 per cent of that Loan) that the cost to it of funding its participation in that Loan from whatever source it may reasonably select in the Relevant Market would be in excess of LIBOR then paragraph (d) (Cost of funds) shall apply to that Loan for that Interest Period.
(d) Cost of funds
(i) If this paragraph (d) applies, the rate of interest on each Lender’s share of the relevant Loan for the relevant Interest Period shall be the percentage rate per annum which is the sum of:
(A) the Margin; and
(B) the rate notified to the Facility Agent by that Lender as soon as practicable and in any event before interest is due to be paid in respect of that Interest Period, to be that which expresses as a percentage rate per annum the cost to that Lender of funding its participation in that Loan from whatever source it may reasonably select.
(ii) If this paragraph (d) (Cost of funds) applies the Facility Agent shall, as soon as is practicable, notify the Company.
(iii) If this paragraph (d) applies and the Facility Agent or the Company so requires, the Facility Agent and the Company shall enter into negotiations (for a period of not more than 30 days)
39
with a view to agreeing a substitute basis for determining the rate of interest.
(iv) Any alternative basis agreed pursuant to paragraph (ii) above shall, with the prior consent of all the Lenders and the Company, be binding on all Parties.
12.2 Break Costs
(a) In respect of a Loan which is not a Compounded Rate Loan:
(i) Each Borrower shall, within three Business Days of demand by a Finance Party, pay to that Finance Party its Break Costs attributable to all or any part of a Loan or Unpaid Sum being paid by that Borrower on a day other than the last day of an Interest Period for that Loan or Unpaid Sum.
(ii) Each Lender shall, as soon as reasonably practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its Break Costs for any Interest Period in which they accrue.
(b) Break Costs shall not apply to any Compounded Rate Loan.
12.3 Margin
(a) The initial Margin is 0.30 per cent. per annum.
(b) The Margin will subsequently be set as the percentage rate per annum set out below for the relevant time:
|
Period
|
|
% per annum
|
|
|
|
|
|
|
|
From the date of this Agreement to and including the date falling three months after the date of this Agreement
|
|
0.30
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling three months after the date of this Agreement to and including the date falling six months after the date of this Agreement
|
|
0.40
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling six months after the date of this Agreement to and including the date falling nine months after the date of this Agreement
|
|
0.50
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling nine months after the date of this Agreement to and including the date falling 12 months after the date of this Agreement
|
|
0.60
|
%
|
40
|
Period
|
|
% per annum
|
|
|
|
|
|
|
|
From (but excluding) the date falling 12 months after the date of this Agreement to and including the date falling 15 months after the date of this Agreement
|
|
0.75
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 15 months after the date of this Agreement to and including the date falling 18 months after the date of this Agreement
|
|
0.90
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 18 months after the date of this Agreement and including the date falling 21 months after the date of this Agreement
|
|
1.05
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 21 months after the date of this Agreement to and including the date falling 24 months after the date of this Agreement
|
|
1.20
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 24 months after the date of this Agreement to and including the date falling 27 months after the date of this Agreement
|
|
1.35
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 27 months after the date of this Agreement to and including the date falling 30 months after the date of this Agreement
|
|
1.45
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 30 months after the date of this Agreement to and including the date falling 33 months after the date of this Agreement
|
|
1.55
|
%
|
|
|
|
|
|
|
From (but excluding) the date falling 33 months after the date of this Agreement
|
|
1.65
|
%
|
13 Fees
13.1 Ticking fee
(a) The Company shall pay to the Facility Agent (for the account of each Lender) a fee in dollars computed at the percentage rate per annum on each Lenders’ Available Commitment set out below for the relevant period set out below:
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|
Period
|
|
% of the applicable
Margin per annum
|
|
|
|
|
|
|
|
From the date of this Agreement to and including the date falling three months after the date of this Agreement
|
|
0
|
|
|
|
|
|
|
|
From (but excluding) the date falling three months after the date of this Agreement to and including the date falling six months after the date of this Agreement
|
|
10
|
|
|
|
|
|
|
|
From (but excluding) the date falling six months after the date of this Agreement to and including the date falling nine months after the date of this Agreement
|
|
20
|
|
|
|
|
|
|
|
From (but excluding) the date falling nine months after the date of this Agreement
|
|
30
|
|
(b) The accrued ticking fee is payable on the last day of each successive period of three Months which ends on or prior to the earlier of:
(i) the first Utilisation Date; and
(ii) the date on which the Facility is cancelled in full.
13.2 Mandated Lead Arranger fee
The Company shall pay to the Arrangers a mandated lead arranger fee in the amount and at the times agreed in a Fee Letter.
13.3 Agency fee
The Company shall pay to the Facility Agent (for its own account) an agency fee in the amount and at the times agreed in a Fee Letter.
13.4 Extension fee
If the Original Termination Date is extended:
(a) pursuant to paragraph (a)(ii)(A) of Clause 4 (Extension of Facility), the Company shall, on the Original Termination Date, pay to the Facility Agent (for the account of each Lender) a fee in dollars computed at the rate of 0.05 per cent of the Total Commitments as at the Original Termination Date; and
(b) pursuant to paragraph (a)(ii)(B) of Clause 4 (Extension of Facility), the Company shall, on the date of the extension, pay to the Facility Agent (for the account of each Lender) a fee in dollars computed at the rate of 0.10 per cent of the Total Commitments as at the date of extension.
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Section 6
Additional payment obligations
14 Tax gross-up and indemnities
14.1 Definitions
(a) In this Agreement:
Borrower DTTP Filing means an HM Revenue & Customs’ Form DTTP2 duly completed and filed by the relevant Borrower, which:
(a) where it relates to a Treaty Lender that is an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated opposite that Lender’s name in Part II of Schedule 1 (The Original Parties), and
(i) where the Borrower is an Original Borrower, is filed with HM Revenue & Customs within 30 days of the date of this Agreement; or
(ii) where the Borrower is an Additional Borrower, is filed with HM Revenue & Customs within 30 days of the date on which that Borrower becomes an Additional Borrower; or
(b) where it relates to a Treaty Lender that is not an Original Lender, contains the scheme reference number and jurisdiction of tax residence stated in respect of that Lender in the documentation which it executes on becoming a Party as a Lender; and
(i) where the Borrower is a Borrower as at the date on which that Treaty Lender becomes a Party as a Lender, is filed with HM Revenue & Customs within 30 days of that date; or
(ii) where the Borrower is not a Borrower as at the date on which that Treaty Lender becomes a Party as a Lender, is filed with HM Revenue & Customs within 30 days of the date on which that Borrower becomes an Additional Borrower;
Protected Party means a Finance Party which is or will be subject to any liability, or required to make any payment, for or on account of Tax in relation to a sum received or receivable (or any sum deemed for the purposes of Tax to be received or receivable) under a Finance Document;
Qualifying Lender means:
(a) a Lender which is beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document and is:
(i) a Lender:
(A) which is a bank (as defined for the purpose of section 879 of the ITA) making an advance under a Finance Document and is within the charge to United Kingdom corporation tax as respects any payments of interest made
43
in respect of that advance or would be within such charge as respects such payments apart from section 18A of the CTA; or
(B) in respect of an advance made under a Finance Document by a person that was a bank (as defined for the purpose of section 879 of the ITA) at the time that that advance was made and the Lender is within the charge to United Kingdom corporation tax as respects any payments of interest made in respect of that advance; or
(ii) a Lender which is:
(A) a company resident in the United Kingdom for United Kingdom tax purposes;
(B) a partnership each member of which is:
(I) a company so resident in the United Kingdom; or
(II) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(C) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company; or
(iii) a Treaty Lender; or
(b) a Lender which is a building society (as defined for the purpose of section 880 of the ITA) making an advance under a Finance Document;
Tax Confirmation means a confirmation by a Lender that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax purposes;
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent
44
establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company;
Tax Credit means a credit against, relief or remission for, or repayment of any Tax;
Tax Deduction means a deduction or withholding for or on account of Tax from a payment under a Finance Document other than a FATCA Deduction;
Tax Payment means either the increase in a payment made by an Obligor to a Finance Party under Clause 14.2 (Tax gross-up) or a payment under Clause 14.3 (Tax indemnity);
Treaty Lender means a Lender which:
(a) is treated as a resident of a Treaty State for the purposes of a Treaty;
(b) does not carry on a business in the United Kingdom through a permanent establishment with which that Lender’s participation in the Loan is effectively connected; and
(c) meets all other requirements in the Treaty for full exemption from Tax imposed by the United Kingdom on interest payable under the Finance Documents, subject to completion of procedural formalities;
Treaty State means a jurisdiction having a double taxation agreement (a Treaty) with the United Kingdom which makes provision for full exemption from tax imposed by the United Kingdom on interest;
UK Non-Bank Lender means a Lender which gives a Tax Confirmation in the documentation which it executes on becoming a Party as a Lender;
US Qualifying Lender means in respect of payments of interest by a US Borrower, a Lender which is:
(a) a “United States person” within the meaning of section 7701(a)(30) of the Code;
(b) engaged through a US office in a US trade or business with which such interest is “effectively connected” within the meaning of the Code;
(c) entitled to treat such payments as payments of “portfolio interest” within the meaning of Section 871(h) or Section 881(c) of the Code;
(d) a US Treaty Lender; or
45
(e) otherwise entitled to a full exemption from US withholding taxes (excluding FATCA) and fulfils any necessary procedural requirements,
and in the case of a Lender that is not treated as the beneficial owner of the payment (or a portion thereof) under the Code, the term “US Qualifying Lender” shall mean the person who is so treated as the beneficial owner of the payment (or portion thereof);
US Treaty Lender means a Lender which:
(a) is treated as a resident of a US Treaty State for the purposes of the relevant US Treaty and is entitled under the provisions of that US Treaty to receive payments of interest from the relevant US Borrower without a Tax Deduction;
(b) does not carry on a business in the US through a permanent establishment with which that Lender’s participation in the Loan is effectively connected; and
(c) fulfils any other conditions which must be fulfilled under the US Treaty by residents of the relevant US Treaty State for such residents to obtain exemption from Tax imposed on interest by the United States such that any payment of interest may be made by the relevant US Borrower to that Lender without a Tax Deduction;
US Treaty State means a country having a double taxation agreement in force with the United States (a US Treaty) which makes provision for full exemption from tax imposed by the United States on interest.
(b) Unless a contrary indication appears, in this Clause 14 a reference to “determines” or “determined” means a determination made in the absolute discretion of the person making the determination.
14.2 Tax gross-up
(a) Each Obligor shall make all payments to be made by it without any Tax Deduction, unless a Tax Deduction is required by law.
(b) The Company shall promptly upon becoming aware that an Obligor must make a Tax Deduction (or that there is any change in the rate or the basis of a Tax Deduction) notify the Facility Agent accordingly. Similarly, a Lender shall notify the Facility Agent on becoming so aware in respect of a payment payable to that Lender. If the Facility Agent receives such notification from a Lender it shall notify the Company and that Obligor.
(c) If a Tax Deduction is required by law to be made by an Obligor, the amount of the payment due from that Obligor shall be increased to an amount which (after making any Tax Deduction) leaves an amount equal to the payment which would have been due if no Tax Deduction had been required.
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(d) A payment shall not be increased under paragraph (c) above by reason of a Tax Deduction for or on account of Tax imposed by the United Kingdom, if on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a Qualifying Lender, but on that date that Lender is not or has ceased to be a Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or Treaty or any published practice or published concession of any relevant taxing authority; or
(ii) the relevant Lender is a Qualifying Lender solely by virtue of sub-paragraph (i)(B) of the definition of Qualifying Lender; and:
(A) an officer of HM Revenue & Customs has given (and not revoked) a direction (a Direction) under section 931 of the ITA which relates to the payment and that Lender has received from the Obligor making the payment or from the Company a certified copy of that Direction; and
(B) the payment could have been made to the Lender without any Tax Deduction if that Direction had not been made; or
(iii) the relevant Lender is a Qualifying Lender solely by virtue of sub-paragraph (i)(B) of the definition of Qualifying Lender and:
(A) the relevant Lender has not given a Tax Confirmation to the Company; and
(B) the payment could have been made to the Lender without any Tax Deduction if the Lender had given a Tax Confirmation to the Company, on the basis that the Tax Confirmation would have enabled the Company to have formed a reasonable belief that the payment was an “excepted payment” for the purpose of section 930 of the ITA; or
(iv) the relevant Lender is a Treaty Lender and the Obligor making the payment is able to demonstrate that the payment could have been made to the Lender without the Tax Deduction had that Lender complied with its obligations under paragraph (h) or (i) (as applicable) below.
(e) In respect to a payment made by a US Borrower, such payment shall not be increased under paragraph (c) above by reason of a Tax Deduction in respect of Tax imposed by the United States, if on the date on which the payment falls due:
(i) the payment could have been made to the relevant Lender without a Tax Deduction if the Lender had been a US Qualifying
47
Lender, but on that date that Lender is not, or has ceased to be, a US Qualifying Lender other than as a result of any change after the date it became a Lender under this Agreement in (or in the interpretation, administration, or application of) any law or US Treaty or any published practice or published concession of any relevant taxing authority; or
(ii) the payment could have been made to the relevant Lender without a Tax Deduction had that Lender complied with its obligations under paragraph (m) below.
(f) If an Obligor is required to make a Tax Deduction, that Obligor shall make that Tax Deduction and any payment required in connection with that Tax Deduction within the time allowed and in the minimum amount required by law.
(g) Within 30 days of making either a Tax Deduction or any payment required in connection with that Tax Deduction, the Obligor making that Tax Deduction shall deliver to the Facility Agent for the Finance Party entitled to the payment a statement under section 975 of the ITA or other evidence reasonably satisfactory to that Finance Party that the Tax Deduction has been made or (as applicable) any appropriate payment paid to the relevant taxing authority.
(h)
(i) Subject to sub-paragraph (ii) below, a Treaty Lender and each Obligor which makes a payment to which that Treaty Lender is entitled shall co-operate in completing any procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.
(ii)
(A) a Treaty Lender which is an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Part II of Schedule 1 (The Original Parties); and
(B) a Treaty Lender which is not an Original Lender and that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence in the documentation which it executes on becoming a Party as a Lender,
and, having done so, that Lender shall be under no obligation pursuant to sub-paragraph (i) above.
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(i) If a Lender has confirmed its scheme reference number and its jurisdiction of tax residence in accordance with sub-paragraph (h)(ii) above and:
(i) an Obligor making a payment to that Lender has not made a Borrower DTTP Filing in respect of that Lender; or
(ii) an Obligor making a payment to that Lender has made a Borrower DTTP Filing in respect of that Lender but:
(A) that Borrower DTTP Filing has been rejected by HM Revenue & Customs; or
(B) HM Revenue & Customs has not given the Obligor authority to make payments to that Lender without a Tax Deduction within 60 days of the date of the Borrower DTTP Filing; or
(C) HM Revenue & Customs has given the Obligor authority to make payments to that Lender without a Tax Deduction but such authority has subsequently been revoked or expired (or is due to expire within three months),
and in each case, the Obligor has notified that Lender in writing, that Lender and the Obligor shall co-operate in completing any additional procedural formalities necessary for that Obligor to obtain authorisation to make that payment without a Tax Deduction.
(j) If a Lender has not confirmed its scheme reference number and jurisdiction of tax residence in accordance with sub-paragraph (h)(ii) above, no Obligor shall make a Borrower DTTP Filing or file any other form relating to the HMRC DT Treaty Passport scheme in respect of that Lender’s Commitment(s) or its participation in any Loan unless the Lender otherwise agrees.
(k) A Borrower shall, promptly on making a Borrower DTTP Filing, deliver a copy of that Borrower DTTP Filing to the Facility Agent for delivery to the relevant Lender.
(l) A UK Non-Bank Lender shall promptly notify the Company and the Facility Agent if there is any change in the position from that set out in the Tax Confirmation.
(m) Each Lender shall, to the extent it is legally entitled to do so, on or prior to the date of the signing of this Agreement or the date on which such Lender becomes a Lender under this Agreement, deliver to each US Borrower an executed original of a properly completed Internal Revenue Service Form W-8BEN, Form W-8BEN-E, Form W-8ECI, Form W-8EXP, Form W-8IMY (with all required attachments) or Form W-9, as applicable, as will demonstrate, in accordance with applicable regulations, that payments of interest by a US Borrower pursuant to this
49
agreement will be exempt from United States federal withholding taxes, including, in the case of each US Treaty Lender with respect to the United States providing a Form W-8BEN or Form W-8BEN-E, a claim for the benefits of the applicable US Treaty in part II of the Form W-8BEN or part III of the Form W-8BEN-E. Each Lender claiming exemption from withholding under the portfolio interest exemption shall deliver to each US Borrower a statement certifying that such Lender is not a person described in section 871(h)(3)(B) or section 881(c)(3) of the Code. Each Lender agrees that if any form or certification it previously delivered expires or becomes obsolete or inaccurate in any respect, it shall update such form or certification, or promptly notify the US Borrower in writing of its legal inability to do so.
14.3 Tax indemnity
(a) The Company shall (within three Business Days of demand by the Facility Agent) pay to a Protected Party an amount equal to the loss, liability or cost which that Protected Party, acting reasonably, determines will be or has been (directly or indirectly) suffered for or on account of Tax by that Protected Party in respect of a Finance Document.
(b) Paragraph (a) above shall not apply:
(i) except to the extent the Tax arises by reason of a change after the date of this Agreement in the law of the relevant taxing jurisdiction;
(ii) with respect to any Tax assessed on a Finance Party:
(A) under the law of the jurisdiction in which 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
(B) under the law of the jurisdiction in which 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 (but not any sum deemed to be received or receivable) by that Finance Party; or
(iii) to the extent a loss, liability or cost:
(A) is compensated for by an increased payment under Clause 14.2 (Tax gross-up); or
(B) would have been compensated for by an increased payment under Clause 14.2 (Tax gross-up) but was not so compensated solely because one of the exclusions in paragraph (d) of Clause 14.2 (Tax gross-up) applied; or
(C) is (i) in respect of an amount of stamp duty, registration or other similar Tax or (ii) attributable to VAT (which
50
shall be dealt with in accordance with Clause 14.6 (Stamp taxes) and Clause 14.7 (Value added tax) respectively); or
(D) relates to a FATCA Deduction required to be made by a Party.
(c) A Protected Party making, or intending to make a claim under paragraph (a) above shall promptly notify the Facility Agent of the event which will give, or has given, rise to the claim, following which the Facility Agent shall notify the Company.
(d) A Protected Party shall, on receiving a payment from an Obligor under this Clause 14.3, notify the Facility Agent.
14.4 Tax Credit
If an Obligor makes a Tax Payment and the relevant Finance Party determines that:
(a) a Tax Credit is attributable to an increased payment of which that Tax Payment forms part, to that Tax Payment or to a Tax Deduction in consequence of which that Tax Payment was required; and
(b) that Finance Party has obtained and utilised that Tax Credit,
the Finance Party shall pay an amount to the Obligor which that Finance Party determines will leave it (after that payment) in the same after-Tax position as it would have been in had the Tax Payment not been required to be made by the Obligor.
14.5 Lender status confirmation
Each Lender which becomes a Party to this Agreement after the date of this Agreement shall indicate, in the Transfer Certificate, Assignment Agreement, Increase Confirmation or other documentation which it executes on becoming a Party as a Lender, and for the benefit of the Facility Agent and without liability to any Obligor, which of the following categories it falls in:
(a) With respect to a Borrower other than a US Borrower:
(i) not a Qualifying Lender;
(ii) a Qualifying Lender (other than a Treaty Lender); or
(iii) a Treaty Lender; and
(b) With respect to a US Borrower:
(i) not a US Qualifying Lender;
(ii) a US Qualifying Lender (other than a US Treaty Lender); or
(iii) a US Treaty Lender.
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If a New Lender fails to indicate its status in accordance with this Clause 14.5 then such New Lender shall be treated for the purposes of this Agreement (including by each Obligor) as if it is not a Qualifying Lender and not a US Qualifying Lender until such time as it notifies the Facility Agent which category applies (and the Facility Agent, upon receipt of such notification, shall inform the Company). For the avoidance of doubt, a Transfer Certificate, Assignment Agreement or Increase Confirmation shall not be invalidated by any failure of a Lender to comply with this Clause 14.5.
14.6 Stamp taxes
The Company shall pay and, within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability that Finance Party incurs in relation to all stamp duty, registration and other similar Taxes payable in respect of any Finance Document.
14.7 Value added tax
(a) All amounts set out, or expressed to be payable under a Finance Document by any Party to a Finance Party which (in whole or in part) constitute the consideration for any supply for VAT purposes are deemed to be exclusive of any VAT which is chargeable on that supply, and accordingly, subject to paragraph (b) below, if VAT is or becomes chargeable on any supply made by any Finance Party to any Party under a Finance Document and such Finance Party is required to account to the relevant tax authority for the VAT, that Party must pay to such Finance Party (in addition to and at the same time as paying any other consideration for such supply) an amount equal to the amount of the VAT (and such Finance Party must promptly provide an appropriate VAT invoice to that Party).
(b) If VAT is or becomes chargeable on any supply made by any Finance Party (the Supplier) to any other Finance Party (the Recipient) under a Finance Document, and any Party other than the Recipient (the Relevant Party) is required by the terms of any Finance Document to pay an amount equal to the consideration for that supply to the Supplier (rather than being required to reimburse or indemnify the Recipient in respect of that consideration):
(i) (where the Supplier is the person required to account to the relevant tax authority for the VAT) the Relevant Party must also pay to the Supplier (at the same time as paying that amount) an additional amount equal to the amount of the VAT. The Recipient must (where this sub-paragraph (i) applies) promptly pay to the Relevant Party an amount equal to any credit or repayment the Recipient receives from the relevant tax authority which the Recipient reasonably determines relates to the VAT chargeable on that supply; and
(ii) (where the Recipient is the person required to account to the relevant tax authority for the VAT) the Relevant Party must promptly, following demand from the Recipient, pay to the
52
Recipient an amount equal to the VAT chargeable on that supply but only to the extent that the Recipient reasonably determines that it is not entitled to credit or repayment from the relevant tax authority in respect of that VAT.
(c) Where a Finance Document requires any Party to reimburse or indemnify a Finance Party for any cost or expense, that Party shall reimburse or indemnify (as the case may be) such Finance Party for the full amount of such cost or expense, including such part thereof as represents VAT, save to the extent that such Finance Party reasonably determines that it is entitled to credit or repayment in respect of such VAT from the relevant tax authority.
(d) Any reference in this Clause 14.7 to any Party shall, at any time when such Party is treated as a member of a group for VAT purposes, include (where appropriate and unless the context otherwise requires) a reference to the person who is treated as making the supply, or (as appropriate) receiving the supply, under the grouping rules as provided for in Article 11 of Council Directive 2006/112/EC (or as implemented by a member state of the European Union) or the Value Added Tax Act 1994, as may be amended or substituted from time to time.
(e) In relation to any supply made by a Finance Party to any Party under a Finance Document, if reasonably requested by such Finance Party, that Party must promptly provide such Finance Party with details of that Party’s VAT registration and such other information as is reasonably requested in connection with such Finance Party’s VAT reporting requirements in relation to such supply.
14.8 FATCA information
(a) Subject to paragraph (c) below, each Party shall, within ten Business Days of a reasonable request by another Party:
(i) confirm to that other Party whether it is:
(A) a FATCA Exempt Party; or
(B) not a FATCA Exempt Party; and
(ii) supply to that other Party such forms, documentation and other information relating to its status under FATCA as that other Party reasonably requests for the purposes of that other Party’s compliance with FATCA; and
(iii) supply to that other Party such forms, documentation and other information relating to its status as that other Party reasonably requests for the purposes of that other Party’s compliance with any other law, regulation, or exchange of information regime.
(b) If a Party confirms to another Party pursuant to sub-paragraph (a)(i) above that it is a FATCA Exempt Party and it subsequently becomes
53
aware that it is not, or has ceased to be a FATCA Exempt Party, that Party shall notify that other Party reasonably promptly.
(c) Paragraph (a) above shall not oblige any Finance Party to do anything which would or might in its reasonable opinion constitute a breach of:
(i) any law or regulation;
(ii) any fiduciary duty; or
(iii) any duty of confidentiality.
(d) If a Party fails to confirm whether or not it is a FATCA Exempt Party or to supply forms, documentation or other information requested in accordance with paragraph (a)(i) or (a)(ii) above (including, for the avoidance of doubt, where paragraph (c) above applies), then such Party shall be treated for the purposes of the Finance Documents (and payments under them) as if it is not a FATCA Exempt Party until such time as the Party in question provides the requested confirmation, forms, documentation or other information .
(e) If a Borrower is a US Tax Obligor, or the Facility Agent reasonably believes that its obligations under FATCA or any other applicable law or regulation require it, each Lender shall, within ten Business Days of:
(i) where an Original Borrower is a US Tax Obligor on a date which any other Lender becomes a Party as a Lender, that date;
(ii) the date a new US Tax Obligor accedes as a Borrower;
(iii) where a Borrower is a US Tax Obligor and the relevant Lender is a New Lender, the relevant Transfer Date; or
(iv) where the Borrower is not a US Tax Obligor, the date of a request from the Facility Agent,
supply to the Facility Agent:
(v) a withholding certificate on Form W-8 or Form W-9 (or any successor form) (as applicable); or
(vi) any withholding statement and other documentation, authorisations and waivers as the Facility Agent may require to certify or establish the status of such Lender under FATCA or that other law or regulation.
(f) The Facility Agent shall provide any withholding certificate, withholding statement, documentation, authorisations and waivers it receives from a Lender pursuant to this paragraph (f) to the relevant Borrower.
(g) If any withholding certificate, withholding statement, document, authorisation or waiver provided to the Facility Agent by a Lender pursuant to paragraph (f) above is or becomes materially inaccurate or incomplete, that Lender shall promptly update it and provide such
54
updated withholding certificate, withholding statement, document, authorisation or waiver to the Facility Agent unless it is unlawful for the Lender to do so (in which case the Lender shall promptly notify the Facility Agent). The Facility Agent shall provide any such updated withholding certificate, withholding statement, document, authorisation or waiver to the relevant Borrower.
(h) The Facility Agent may rely on any withholding certificate, withholding statement, document, authorisation or waiver it receives from a Lender pursuant to paragraph (f) or (g) above without further verification. The Facility Agent shall not be liable for any action taken by it under or in connection with paragraphs (e), (f) or (g) above.
14.9 FATCA Deduction
(a) Each Party may make any FATCA Deduction it is required to make by FATCA, and any payment required in connection with that FATCA Deduction, and no Party shall be required to increase any payment in respect of which it makes such a FATCA Deduction or otherwise compensate the recipient of the payment for that FATCA Deduction.
(b) Each Party shall promptly, upon becoming aware that it must make a FATCA Deduction (or that there is any change in the rate or the basis of such FATCA Deduction) notify the Party to whom it is making the payment and, in addition, shall notify the Company and the Facility Agent and the Facility Agent shall notify the other Finance Parties.
15 Increased Costs
15.1 Increased Costs
(a) Subject to Clause 15.3 (Exceptions) the Company shall, within three Business Days of a demand by the Facility Agent, pay for the account of a Finance Party the amount of any Increased Costs incurred by that Finance Party or any of its Affiliates as a result of:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation after the date of this Agreement; or
(ii) compliance with any law or regulation made after the date of this Agreement.
(b) In this Agreement:
(i) Increased Costs means:
(A) a reduction in the rate of return from the Facility or on a Finance Party’s (or its Affiliate’s) overall capital;
(B) an additional or increased cost; or
(C) a reduction of any amount due and payable under any Finance Document,
55
which is incurred or suffered by a Finance Party or any of its Affiliates to the extent that it is attributable to that Finance Party having entered into its Commitment or funding or performing its obligations under any Finance Document; and
(ii) Basel III means:
(A) the agreements on capital requirements, a leverage ratio and liquidity standards contained in “Basel III: A global regulatory framework for more resilient banks and banking systems”, “Basel III: International framework for liquidity risk measurement, standards and monitoring” and “Guidance for national authorities operating the countercyclical capital buffer” published by the Basel Committee on Banking Supervision in December 2010, each as amended, supplemented or restated; and
(B) the rules for global systemically important banks contained in “Global systemically important banks: assessment methodology and the additional loss absorbency requirement — Rules text” published by the Basel Committee on Banking Supervision in November 2011 as amended, supplemented or restated; and
(C) any further guidance or standards published by the Basel Committee on Banking Supervision relating to Basel III; and
(iii) CRD IV means:
(A) Regulation (EU) No 575/2013 of the European Parliament and of the Council of 26 June 2013 on prudential requirements for credit institutions and investment firms; and
(B) Directive 2013/36/EU of the European Parliament and of the Council of 26 June 2013 on access to the activity of credit institutions and the prudential supervision of credit institutions and investment firms, amending Directive 2002/87/EC and repealing Directives 2006/48/EC and 2006/49/EC.
15.2 Increased Cost claims
(a) A Finance Party intending to make a claim pursuant to Clause 15.1 (Increased Costs) shall notify the Facility Agent of the event giving rise to the claim, following which the Facility Agent shall promptly notify the Company.
(b) Each Finance Party shall, as soon as practicable after a demand by the Facility Agent, provide a certificate confirming the amount of its
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Increased Costs and provide such information (together with any supporting evidence) as the Company shall reasonably require evidencing the circumstances and amount of such Increased Costs.
(c) In respect of Clause 15.1 (Increased costs), this Clause 15.2 and the payment of any Increased Costs attributable to the implementation of or compliance with (a) Basel III or (b) CRD IV, the obligation to pay such costs to a Finance Party shall be subject to such Finance Party confirming to the Company, at the relevant time that any such costs are due, that the payment of such costs is consistent with the general approach that such Finance Party is taking for similar facilities with similarly rated obligors.
(d) Nothing in paragraphs (b) and (c) above shall require a Finance Party to disclose any information which is of a price sensitive nature or where such Finance Party is under a contractual duty of confidentiality or where the provision of such information will result in a breach of law or regulation.
15.3 Exceptions
Clause 15.1 (Increased Costs) does not apply to the extent any Increased Cost is:
(a) Tax or is attributable to Tax;
(b) attributable to a FATCA Deduction required to be made by a Party;
(c) compensated for by Clause 14.3 (Tax indemnity) (or would have been compensated for under Clause 14.3 (Tax indemnity) but was not so compensated solely because any of the exclusions in paragraph (b) of Clause 14.3 (Tax indemnity) applied);
(d) attributable to the implementation or application of or compliance with the “International Convergence of Capital Measurement and Capital Standards, a Revised Framework” published by the Basel Committee on Banking Supervision in June 2004 in the form existing on the date of this Agreement (but excluding any amendment arising out of Basel III) (Basel II) or any other law or regulation which implements Basel II (whether such implementation, application or compliance is by a government, regulator, Finance Party or any of its Affiliates);
(e) not notified to the Company within three Months after the date on which it is suffered;
(f) in respect of an amount of (i) stamp duty, registration or other similar Tax or (ii) VAT (which shall be dealt with in accordance with Clause 14.6 (Stamp taxes) and Clause 14.7 (Value added tax) respectively); or
(g) attributable to the wilful breach by the relevant Finance Party or its Affiliates of any law or regulation.
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16 Other indemnities
16.1 Currency indemnity
(a) If any sum due from an Obligor under the Finance Documents (a Sum), or any order, judgment or award given or made in relation to a Sum, has to be converted from the currency (the First Currency) in which that Sum is payable into another currency (the Second Currency) for the purpose of:
(i) making or filing a claim or proof against that Obligor;
(ii) obtaining or enforcing an order, judgment or award in relation to any litigation or arbitration proceedings,
that Obligor shall as an independent obligation, within three Business Days of demand, indemnify each Finance Party to whom that Sum is due against any cost, loss or liability arising directly (unless suffered by reason of the negligence or wilful default of a Finance Party) out of or as a result of the conversion including any discrepancy between (A) the rate of exchange used to convert that Sum from the First Currency into the Second Currency and (B) the rate or rates of exchange available to that person at the time of its receipt of that Sum.
(b) Each Obligor waives any right it may have in any jurisdiction to pay any amount under the Finance Documents in a currency or currency unit other than that in which it is expressed to be payable.
16.2 Other indemnities
(a) The Company shall (or shall procure that an Obligor will), within three Business Days of demand, indemnify each Finance Party against any cost, loss or liability incurred by that Finance Party directly (unless suffered by reason of the gross negligence or wilful default of that Finance Party) as a result of:
(i) the occurrence of any Event of Default;
(ii) a failure by an Obligor to pay any amount due under a Finance Document on its due date, including without limitation, any cost, loss or liability arising as a result of Clause 28 (Sharing among the Finance Parties);
(iii) funding, or making arrangements to fund, its participation in a Loan requested by a Borrower in a Utilisation Request but not made by reason of the operation of any one or more of the provisions of this Agreement (other than by reason of default or negligence by that Finance Party alone); or
(iv) a Loan (or part of a Loan) not being prepaid in accordance with a notice of prepayment given by a Borrower or the Company.
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(b)
(i) The Company shall, within three Business Days of demand, indemnify each Finance Party, each Affiliate of a Finance Party and each officer or employee of a Finance Party or its Affiliate, against any cost, loss or liability incurred by that Finance Party or its Affiliate (or officer or employee of that Finance Party or Affiliate) in connection with or arising out of the Acquisition or the funding of the Acquisition (including but not limited to those incurred in connection with any litigation, arbitration or administrative proceedings or regulatory enquiry concerning the Acquisition), unless such cost, loss or liability is caused by the gross negligence or wilful misconduct of that Finance Party or its Affiliate (or employee or officer of that Finance Party or Affiliate) or such cost, loss or liability is in respect of Tax, which shall be dealt with in accordance with Clause 14 (Tax gross-up and indemnities). Any Affiliate or any officer or employee of a Finance Party or its Affiliate may rely on this Clause 16.2 subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.
(ii) If any event occurs in relation to which indemnification may be sought from the Company under sub-paragraph (b)(i) above, upon a senior officer, senior director or senior employee of the relevant Finance Party with knowledge of the Facility becoming aware of such event, the relevant Finance Party shall notify the Company in writing within a reasonable period of time (taking into account any potential cost, loss or liability being the subject of any indemnity under sub-paragraph (b)(i) above).
(iii) Following any notification under sub-paragraph (b)(ii) above, the relevant Finance Party shall, where any such consultation would not be reasonably expected to materially prejudice the relevant Finance Party’s interests, consult with the Company in good faith with respect to the conduct of the relevant action, claim, investigation or proceeding and shall conduct such action, claim, investigation or proceeding properly and diligently. The relevant Finance Party shall consult with the Company prior to settling any action, claim, investigation or proceeding. Any required response to communication from the Company in connection with, or as part of any consultation shall not be unreasonably withheld or delayed.
(iv) No Finance Party shall be required to comply with the provisions of sub-paragraph (b)(ii) and/or sub-paragraph (b)(iii) above to the extent that any such action is not permitted by law, such Finance Party is not lawfully permitted to make any such notification, engage in any such consultation or disclose any such information or to the extent that such action would breach legal professional privilege or would be reasonably likely to
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prejudice the relevant Finance Party in respect of any action, claim, investigation or proceeding with respect to the Company.
(v) The Company shall keep all information and communications provided by any Finance Party pursuant to sub-paragraph (b)(ii) and/or sub-paragraph (b)(iii) above strictly confidential and shall not disclose any such information or communications to any person (other than its legal counsel or to the extent required by applicable law or regulation) without the prior consent of the relevant Finance Party.
16.3 Indemnity to the Facility Agent
The Company shall promptly indemnify the Facility Agent against any cost, loss or liability incurred by the Facility Agent (acting reasonably) as a result of:
(a) investigating any event which it reasonably believes is a Default;
(b) acting or relying on any notice, request or instruction which it reasonably believes to be genuine, correct and appropriately authorised; or
(c) instructing lawyers, accountants, tax advisers, surveyors or other professional advisers or experts as permitted under this Agreement.
17 Mitigation by the Lenders
17.1 Mitigation
(a) Each Finance Party shall, in consultation with the Company, take all reasonable steps to mitigate any circumstances which arise and which would result in any amount becoming payable under or pursuant to, or cancelled pursuant to, any of Clause 8.1 (Illegality), Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased Costs) including (but not limited to) transferring its rights and obligations under the Finance Documents to another Affiliate or Facility Office.
(b) Paragraph (a) above does not in any way limit the obligations of any Obligor under the Finance Documents.
17.2 Limitation of liability
(a) The Company shall indemnify each Finance Party for all costs and expenses reasonably incurred by that Finance Party as a result of steps taken by it under Clause 17.1 (Mitigation).
(b) A Finance Party is not obliged to take any steps under Clause 17.1 (Mitigation) if, in the opinion of that Finance Party (acting reasonably), to do so might reasonably be expected to be prejudicial to it.
18 Costs and expenses
18.1 Transaction expenses
The Company shall promptly on demand pay the Facility Agent and the Arranger the amount of all costs and expenses (including legal fees) reasonably
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and properly incurred by any of them in connection with the negotiation, preparation, printing, execution and syndication of:
(a) this Agreement and any other documents referred to in this Agreement; and
(b) any other Finance Documents executed after the date of this Agreement.
18.2 Amendment costs
If (a) an Obligor requests an amendment, waiver or consent or (b) an amendment is required pursuant to Clause 29.10 (Change of currency), the Company shall, within three Business Days of demand, reimburse the Facility Agent for the amount of all costs and expenses (including legal fees) reasonably and properly incurred by the Facility Agent in responding to, evaluating, negotiating or complying with that request or requirement.
18.3 Enforcement costs
The Company shall, within three Business Days of demand, pay to each Finance Party the amount of all costs and expenses (including legal fees) incurred by that Finance Party in connection with the enforcement of, or the preservation of any rights under, any Finance Document.
Section 7
Guarantee
19 Guarantee and indemnity
19.1 Guarantee and indemnity
The Guarantor irrevocably and unconditionally:
(a) guarantees to each Finance Party punctual performance by each Borrower of all that Borrower’s obligations under the Finance Documents;
(b) undertakes with each Finance Party that whenever a Borrower does not pay any amount when due under or in connection with any Finance Document, the Guarantor shall within two Business Days of demand pay that amount as if it was the principal obligor; and
(c) agrees with each Finance Party that if any obligation guaranteed by it is or becomes unenforceable, invalid or illegal, it will, as an independent and primary obligation, indemnify that Finance Party immediately on demand against any cost, loss or liability it incurs as a result of a Borrower not paying any amount which would, but for such unenforceability, invalidity or illegality, have been payable by it under any Finance Document on the date when it would have been due. The amount payable by the Guarantor under this indemnity will not exceed the amount it would have had to pay under this Clause 19 if the amount claimed had been recoverable on the basis of a guarantee.
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19.2 Continuing guarantee
This guarantee is a continuing guarantee and will extend to the ultimate balance of sums payable by any Obligor under the Finance Documents, regardless of any intermediate payment or discharge in whole or in part.
19.3 Reinstatement
If any discharge, release or arrangement (whether in respect of the obligations of any Obligor or any security for those obligations or otherwise) is made by a Finance Party in whole or in part on the basis of any payment, security or other disposition which is avoided or must be restored in insolvency, liquidation, administration or otherwise, without limitation, then the liability of the Guarantor under this Clause 19 will continue or be reinstated as if the discharge, release or arrangement had not occurred.
19.4 Waiver of defences
(a) The obligations of the Guarantor under this Clause 19 will not be affected by an act, omission, matter or thing which, but for this Clause, would reduce, release or prejudice any of its obligations under this Clause 19 (without limitation and whether or not known to it or any Finance Party) including:
(i) any time, waiver or consent granted to, or composition with, any Obligor or other person;
(ii) the release of any other Obligor or any other person under the terms of any composition or arrangement with any creditor of any member of the Group;
(iii) the taking, variation, compromise, exchange, renewal or release of, or refusal or neglect to perfect, take up or enforce, any rights against, or security over assets of, any Obligor or other person or any non-presentation or non-observance of any formality or other requirement in respect of any instrument or any failure to realise the full value of any security;
(iv) any incapacity or lack of power, authority or legal personality of or dissolution or change in the members or status of an Obligor or any other person;
(v) any amendment, novation, supplement, extension, restatement (however fundamental and whether or not more onerous) or replacement of any Finance Document or any other document or security including without limitation any change in the purpose of, any extension of or any increase in any facility or the addition of any new facility under any Finance Document or other document or security;
(vi) any unenforceability, illegality or invalidity of any obligation of any person under any Finance Document or any other document or security; or
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(vii) any insolvency or similar proceedings.
(b) In the event that any Borrower becomes subject to any proceeding under the US Bankruptcy Code, the Guarantor agrees that, as between the Guarantor and the Finance Parties, all or any portion of the amounts owing under this Agreement by such Borrower may be declared to be forthwith due and payable as provided in Clause 23.11 (US Bankruptcy Law proceedings) (and shall be deemed to have become automatically due and payable in the circumstances described in Clause 23.11 (US Bankruptcy Law proceedings)) for purposes of this Clause 19, notwithstanding any stay (including under the US Bankruptcy Code), injunction or other prohibition preventing the same as against such Borrower and that, in such event, all such amounts (whether or not due and payable by such Borrower) shall forthwith become due and payable by the Guarantor for purposes of this Clause 19.
19.5 Immediate recourse
The Guarantor waives any right it may have of first requiring any Finance Party (or any trustee or agent on its behalf) to proceed against or enforce any other rights or security or claim payment from any person before claiming from the Guarantor under this Clause 19. This waiver applies irrespective of any law or any provision of a Finance Document to the contrary.
19.6 Appropriations
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full, each Finance Party (or any trustee or agent on its behalf) may:
(a) refrain from applying or enforcing any other moneys, security or rights held or received by that Finance Party (or any trustee or agent on its behalf) in respect of those amounts, or apply and enforce the same in such manner and order as it sees fit (whether against those amounts or otherwise) and the Guarantor shall not be entitled to the benefit of the same; and
(b) hold in an interest-bearing suspense account any moneys received from the Guarantor or on account of the Guarantor’s liability under this Clause 19.
19.7 Deferral of Guarantor’s rights
Until all amounts which may be or become payable by the Obligors under or in connection with the Finance Documents have been irrevocably paid in full and unless the Facility Agent otherwise directs, the Guarantor will not exercise any rights which it may have by reason of performance by it of its obligations under the Finance Documents or by reason of any amount being payable, or liability arising, under this Clause 19:
(a) to be indemnified by an Obligor;
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(b) to claim any contribution from any other guarantor of any Obligor’s obligations under the Finance Documents;
(c) to take the benefit (in whole or in part and whether by way of subrogation or otherwise) of any rights of the Finance Parties under the Finance Documents or of any other guarantee or security taken pursuant to, or in connection with, the Finance Documents by any Finance Party;
(d) to bring legal or other proceedings for an order requiring any Obligor to make any payment, or perform any obligation, in respect of which the Guarantor has given a guarantee, undertaking or indemnity under Clause 19.1 (Guarantee and indemnity);
(e) to exercise any right of set-off against any Obligor; and/or
(f) to claim or prove as a creditor of any Obligor in competition with any Finance Party.
If the Guarantor receives any benefit, payment or distribution in relation to such rights it shall hold that benefit, payment or distribution to the extent necessary to enable all amounts which may be or become payable to the Finance Parties by the Obligors under or in connection with the Finance Documents to be repaid in full on trust for the Finance Parties and shall promptly pay or transfer the same to the Facility Agent or as the Facility Agent may direct for application in accordance with Clause 29 (Payment mechanics).
19.8 Additional security
This guarantee is in addition to and is not in any way prejudiced by any other guarantee or security now or subsequently held by any Finance Party.
Section 8
Representations, undertakings and events of default
20 Representations
Each Obligor makes the representations and warranties set out in this Clause 20 to each Finance Party on the date of this Agreement or, in relation to the representation and warranty set out in Clause 20.9 (No misleading information) on the date of the Information Package.
20.1 Status
(a) It is a corporation, duly incorporated and validly existing under the law of its jurisdiction of incorporation.
(b) It has the power to own its assets and carry on its business as it is being conducted.
20.2 Binding obligations
The obligations expressed to be assumed by it in each Finance Document and by it under the Merger Agreement are, subject to any general principles of law
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or affecting creditors’ rights generally, legal, valid, binding and enforceable obligations.
20.3 Non-conflict with other obligations
The entry into and performance by it of the Finance Documents and by it of the Merger Agreement do not and will not conflict with:
(a) any law or regulation applicable to it;
(b) its constitutional documents; or
(c) any agreement or instrument binding upon it or any of its Subsidiaries or any of its or any of its Subsidiaries’ assets, where such conflict would have a Material Adverse Effect.
20.4 Power and authority
It has the power to enter into, perform and deliver, and has taken all necessary action to authorise its entry into, performance and delivery of, the Finance Documents to which it is a party and the Merger Agreement (if it is a party).
20.5 Validity and admissibility in evidence
All Authorisations required:
(a) to enable it lawfully to enter into, exercise its rights and comply with its obligations in both the Finance Documents to which it is a party and the Merger Agreement (if it is a party); and
(b) to make the Finance Documents to which it is a party and the Merger Agreement (if it is a party) admissible in evidence in its jurisdiction of incorporation,
have been obtained or effected and are in full force and effect.
20.6 Governing law and enforcement
The choice of English law as the governing law of the Finance Documents will be recognised and enforced in its jurisdiction of incorporation.
20.7 No filing or stamp taxes
Under the law of its jurisdiction of incorporation it is not necessary that the Finance Documents be filed, recorded or enrolled with any court or other authority in that jurisdiction or that any stamp, registration or similar tax be paid on or in relation to the Finance Documents.
20.8 No default
(a) No Event of Default is continuing or might reasonably be expected to result from the making of any Utilisation or the entry into or performance of the Merger Agreement.
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(b) No other event or circumstance is outstanding which constitutes a default under any other agreement or instrument which is binding on it or any of its Subsidiaries or to which its (or any of its Subsidiaries’) assets are subject which might reasonably be expected to have a Material Adverse Effect.
20.9 No misleading information
(a) To the best of its knowledge and belief, any material factual information provided by or on behalf of any member of the Group for the purposes of the Information Package was true and accurate in all material respects taken as a whole as at the date it was provided or as at the date (if any) at which it is stated.
(b) To the best of its knowledge and belief, any financial projections or forecasts contained in the Information Package have been prepared on the basis of recent historical information and on the basis of assumptions believed by it at the time to be reasonable.
(c) To the best of its knowledge and belief, nothing has occurred or been omitted from the Information Package and no information has been given or withheld that results in the information contained in the Information Package being untrue or misleading in any material respect as at its date.
20.10 Financial statements
(a) The Original Financial Statements were prepared in accordance with GAAP.
(b) The Original Financial Statements fairly represent the consolidated financial condition and operations of the Group during the relevant financial year.
(c) There has been no material adverse change in the business or the consolidated financial condition of the Group since the published unaudited consolidated financial statements of the Group for the six month period ending 30 June 2020.
20.11 Pari passu ranking
Its payment obligations under the Finance Documents rank at least pari passu with the claims of all its other unsecured and unsubordinated creditors, except for obligations mandatorily preferred by law applying to companies generally.
20.12 No proceedings pending or threatened
Save as disclosed in the Original Financial Statements, and any subsequent quarterly results announcements of the Company, no litigation, arbitration or administrative proceedings of or before any court, arbitral body or agency which, if adversely determined, might reasonably be expected to have a Material Adverse Effect have (to the best of its knowledge and belief) been started or threatened against it or any of its Subsidiaries.
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20.13 Anti-bribery and corruption
Save as disclosed in the Original Financial Statements, and any subsequent quarterly results announcements of the Company, each member of the Group has conducted its businesses in all material respects in compliance with the Anti-Corruption Laws and has instituted and maintained policies and procedures designed to promote and achieve compliance with such laws.
20.14 Sanctions
(a) Except as disclosed to the Facility Agent in writing prior to the date of this Agreement, neither the Company nor any of its Subsidiaries:
(i) is a Restricted Party;
(ii) has, to the relevant Obligor’s knowledge, violated or is violating any applicable Sanctions;
(iii) is knowingly engaging or has knowingly engaged in any transaction that evades or avoids, or has the purpose of evading or avoiding, or breaches or attempts to breach, directly or indirectly, any Sanctions; or
(iv) has knowingly engaged or is knowingly engaging, directly or indirectly, in any trade, business or other activities which is in breach of any Sanctions.
(b) This Clause 20.14 shall not apply to or in favour of any person if and to the extent that it would result in a breach by, or in respect of that person, of any applicable Blocking Law.
20.15 Anti-money laundering
Any amount borrowed hereunder, and the performance of the obligations of each Obligor under the Finance Documents, will not involve any breach of any law or regulatory measure relating to “money laundering” as defined in Article 1 of the Directive (2005/60/EEC) of the Council of the European Communities (Anti-Money Laundering Laws).
20.16 United States laws
No Obligor is:
(a) required to be registered as an investment company or subject to regulation under the United States Investment Company Act of 1940; or
(b) subject to regulation under any United States Federal or State law or regulation that limits its ability to incur indebtedness.
20.17 Acquisition
The Merger Agreement contains all material terms of the Acquisition.
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20.18 Repetition
The Repeating Representations are deemed to be made by each Obligor (by reference to the facts and circumstances then existing) on:
(a) the date of each Utilisation Request and the first day of each Interest Period; and
(b) in the case of an Additional Borrower, the day on which the company becomes (or it is proposed that the company becomes) an Additional Borrower.
21 Information Undertakings
The undertakings in this Clause 21 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
21.1 Financial statements
The Company shall supply to the Facility Agent in sufficient copies for all the Lenders:
(a) as soon as the same become available, but in any event within 180 days after the end of each of its financial years its audited consolidated financial statements for that financial year;
(b) as soon as the same become available, but in any event within 90 days after the end of the first half of each of its financial years, its published consolidated financial statements for that financial half year; and
(c) if requested by the Facility Agent, as soon as they become available (if produced) in respect of any financial year, the audited financial statements for each other Obligor for that financial year.
21.2 Requirements as to financial statements
(a) Each set of financial statements delivered by the Company pursuant to Clause 21.1(a) (Financial statements) shall give a true and fair view of the Obligors and fairly represent its financial condition as at the date at which those financial statements were drawn up.
(b) Each set of financial statements delivered by the Company pursuant to Clause 21.1(b) (Financial statements) shall fairly present its financial condition as at the date at which those financial statements were drawn up.
(c) The Company shall procure that each set of financial statements delivered pursuant to Clause 21.1(a) and (b) (Financial statements) is prepared using GAAP.
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21.3 Information: miscellaneous
The Company shall supply to the Facility Agent (in sufficient copies for all the Lenders, if the Facility Agent so requests):
(a) all documents dispatched by the Company to its shareholders (or any class of them) or its creditors generally at the same time as they are dispatched; and
(b) promptly, such further information regarding the financial condition, business and operations of any member of the Group as any Finance Party (through the Facility Agent) may reasonably request.
21.4 Notification of default
(a) Each Obligor shall notify the Facility Agent of any Default (and the steps, if any, being taken to remedy it) promptly upon becoming aware of its occurrence (unless that Obligor is aware that a notification has already been provided by another Obligor).
(b) Promptly upon a request by the Facility Agent, the Company shall confirm to the Facility Agent that no Default is continuing (or if a Default is continuing, specifying the Default and the steps, if any, being taken to remedy it).
21.5 Use of websites
(a) The Company may satisfy its obligation under this Agreement to deliver any information in relation to those Lenders (the Website Lenders) who accept this method of communication by posting this information onto an electronic website designated by the Company and the Facility Agent (the Designated Website) if:
(i) the Facility Agent expressly agrees (after consultation with each of the Lenders) that it will accept communication of the information by this method;
(ii) both the Company and the Facility Agent are aware of the address of and any relevant password specifications for the Designated Website; or
(iii) the Designated Website is the “Investors” section of the Company’s website,
the information is in a format previously agreed between the Company and the Facility Agent.
If any Lender (a Paper Form Lender) does not agree to the delivery of information electronically then the Facility Agent shall notify the Company accordingly and the Company shall supply the information to the Facility Agent (in sufficient copies for each Paper Form Lender) in paper form. In any event the Company shall supply the Facility Agent with at least one copy in paper form of any information required to be provided by it.
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(b) The Facility Agent shall supply each Website Lender with the address of and any relevant password specifications for the Designated Website (if applicable) following designation of that website by the Company and the Facility Agent.
(c) The Company shall promptly upon becoming aware of its occurrence notify the Facility Agent if:
(i) the Designated Website cannot be accessed due to technical failure;
(ii) the password specifications for the Designated Website change (if applicable);
(iii) any new information which is required to be provided under this Agreement is posted onto the Designated Website;
(iv) any existing information which has been provided under this Agreement and posted onto the Designated Website is amended; or
(v) the Company becomes aware that the Designated Website or any information posted onto the Designated Website is or has been infected by any electronic virus or similar software.
If the Company notifies the Facility Agent under sub-paragraph (c)(i) or sub-paragraph (c)(v) above, all information to be provided by the Company under this Agreement after the date of that notice shall be supplied in paper form unless and until the Facility Agent and each Website Lender is satisfied that the circumstances giving rise to the notification are no longer continuing.
(d) Any Website Lender may request, through the Facility Agent, one paper copy of any information required to be provided under this Agreement which is posted onto the Designated Website. The Company shall comply with any such request within ten Business Days.
21.6 Direct electronic delivery by Company
The Company may satisfy its obligation under this Agreement to deliver any information in relation to a Lender by delivering that information directly to that Lender in accordance with Clause 31.6 (Electronic communication) to the extent that Lender and the Facility Agent agree to this method of delivery.
21.7 Know your customer checks
(a) If:
(i) the introduction of or any change in (or in the interpretation, administration or application of) any law or regulation made after the date of this Agreement;
(ii) any change in the status of an Obligor (or of a Holding Company of an Obligor) after the date of this Agreement; or
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(iii) a proposed assignment or transfer by a Lender of any of its rights and obligations under this Agreement to a party that is not a Lender prior to such assignment or transfer,
obliges the Facility Agent or any Lender (or, in the case of sub-paragraph (iii) above, any prospective new Lender) to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or, in the case of the event described in sub-paragraph (iii) above, on behalf of any prospective new Lender) in order for the Facility Agent, such Lender or, in the case of the event described in sub-paragraph (iii) above, any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(b) Each Lender shall promptly upon the request of the Facility Agent supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself) in order for the Facility Agent to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
(c) The Company shall, by not less than 10 Business Days’ prior written notice to the Facility Agent, notify the Facility Agent (which shall promptly notify the Lenders) of its intention to request that one of its Subsidiaries becomes an Additional Borrower pursuant to Clause 25 (Changes to the Obligors).
(d) Following the giving of any notice pursuant to paragraph (c) above, if the accession of such Additional Borrower obliges the Facility Agent or any Lender to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, the Company shall promptly upon the request of the Facility Agent or any Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by the Facility Agent (for itself or on behalf of any Lender) or any Lender (for itself or on behalf of any prospective new Lender) in order for the Facility Agent or such Lender or any prospective new Lender to carry out and be satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the accession of such Subsidiary to this Agreement as an Additional Borrower.
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21.8 Notification of Material Subsidiaries
The Company shall, with each set of audited consolidated financial statements delivered to the Lender pursuant to paragraph (a) of Clause 21.1 (Financial statements), deliver to the Facility Agent a list of Subsidiaries which are Material Subsidiaries (determined on the basis of such audited consolidated financial statements and the corresponding financial statements of each member of the Group).
22 General undertakings
The undertakings in this Clause 22 remain in force from the date of this Agreement for so long as any amount is outstanding under the Finance Documents or any Commitment is in force.
22.1 Authorisations
Each Obligor shall promptly:
(a) obtain, comply with and do all that is necessary to maintain in full force and effect; and
(b) on request, supply certified copies to the Facility Agent of,
any Authorisation required under any law or regulation of its jurisdiction of incorporation to enable it to perform its obligations under the Finance Documents and to ensure the legality, validity, enforceability or admissibility in evidence in its jurisdiction of incorporation of any Finance Document.
22.2 Compliance with laws
Each Obligor shall comply in all respects with all laws to which it may be subject, if failure so to comply would have a Material Adverse Effect.
22.3 Negative pledge
In this Clause 22.3 Quasi-Security means an arrangement or transaction described in paragraph (b) below.
(a) No Obligor shall (and the Company shall ensure that no other member of the Group will) create or permit to subsist any Security over any of its assets.
(b) No Obligor shall (and the Company shall ensure that no other member of the Group will):
(i) sell, transfer or otherwise dispose of any of its assets on terms whereby they are or may be leased to or re-acquired by an Obligor or any other member of the Group;
(ii) sell, transfer or otherwise dispose of any of its receivables on recourse terms;
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(iii) enter into any arrangement under which money or the benefit of a bank or other account may be applied, set-off or made subject to a combination of accounts; or
(iv) enter into any other preferential arrangement having a similar effect,
in circumstances where the arrangement or transaction is entered into primarily as a method of raising Financial Indebtedness or of financing the acquisition of an asset.
(c) Paragraphs (a) and (b) above do not apply to:
(i) any Security or Quasi-Security provided by any member of the Group in the ordinary course of its banking arrangements for the purpose of netting debit and credit balances or otherwise in the ordinary course of its treasury activities;
(ii) any payment or close out netting or set-off arrangement pursuant to any hedging transaction entered into by a member of the Group for the purpose of:
(A) hedging any risk to which any member of the Group is exposed in its ordinary course of trading; or
(B) its interest rate or currency management operations which are carried out in the ordinary course of business and for non-speculative purposes only,
excluding, in each case, any Security or Quasi-Security under a credit support arrangement in relation to a hedging transaction;
(iii) any lien arising by operation of law and in the ordinary course of business;
(iv) any Security or Quasi-Security over or affecting any asset acquired by a member of the Group after the date of this Agreement if:
(A) the Security or Quasi-Security was not created in contemplation of the acquisition of that asset by a member of the Group;
(B) the principal amount secured has not been increased in contemplation of, or since the acquisition of that asset by a member of the Group; and
(C) the Security or Quasi-Security is removed or discharged within six Months of the date of acquisition of such asset;
(v) any Security or Quasi-Security over or affecting any asset of any company which becomes a member of the Group after the date of this Agreement, where the Security or Quasi-Security is
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created prior to the date on which that company becomes a member of the Group, if:
(A) the Security or Quasi-Security was not created in contemplation of the acquisition of that company;
(B) the principal amount secured has not increased in contemplation of or since the acquisition of that company; and
(C) the Security or Quasi-Security is removed or discharged within six Months of that company becoming a member of the Group;
(vi) any Security or Quasi-Security arising under any retention of title, hire purchase or conditional sale arrangement or arrangements having similar effect in respect of goods supplied to a member of the Group in the ordinary course of trading and on the supplier’s standard or usual terms and not arising as a result of any default or omission by any member of the Group;
(vii) any Security or Quasi-Security arising pursuant to the purchase and sale agreement dated 2 February 2017 between Portola Pharmaceuticals, Inc. as seller and the entities managed by Healthcare Royalty Management, LLC set out therein as purchaser;
(viii) any Security or Quasi-Security over or affecting any Margin Stock; and
(ix) any Security or Quasi-Security securing indebtedness the principal amount of which (when aggregated with the principal amount of any other indebtedness which has the benefit of Security given by any member of the Group other than any permitted under paragraphs (i) to (viii) above) does not exceed 15 per cent of the Consolidated Net Tangible Assets (or its equivalent in another currency or currencies).
22.4 Change of business
The Company shall ensure that no substantial change is made to the general nature of the core business of the Group from that carried on at the date of this Agreement.
22.5 Insurance
The Company shall maintain insurances on and in relation to its business and assets with reputable underwriters or insurance companies against those risks and to the extent the Company reasonably considers necessary which may include an element of self-insurance (or insurance through a captive insurer).
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22.6 Acquisition undertakings
The Original Obligors shall:
(a) comply in all material respects with all applicable laws and regulations relevant in the context of the Acquisition including in relation to all required filings;
(b) not make any material variations or amendments or provide any waivers of the terms or conditions of the Merger Agreement, other than in a manner which would not materially and adversely affect the interests of the Lenders; and
(c) promptly supply to the Facility Agent any other information regarding the progress of the Acquisition as the Facility Agent may reasonably request, except to the extent that it is prohibited from doing so by the terms of a confidentiality undertaking or by any applicable law or regulation.
22.7 Anti-bribery and corruption
(a) The Company shall not (and shall procure that no other member of the Group shall) knowingly directly or indirectly use the proceeds of the Facility for any purpose which would breach the Anti-Corruption Laws.
(b) The Company shall (and shall procure that each other member of the Group shall):
(i) conduct its businesses in all material respects in compliance with applicable Anti-Corruption Laws; and
(ii) maintain policies and procedures designed to promote and achieve compliance with such laws.
22.8 Sanctions
(a) The Company shall not (and shall procure that no other member of the Group shall):
(i) knowingly use, lend, contribute or otherwise make available all or any part of the proceeds of any Utilisation or other transaction contemplated by this Agreement directly or indirectly:
(A) for the purpose of financing or facilitating any trade, business or other activities, to the extent such financing or facilitation or other activities would be prohibited by Sanctions or would otherwise cause any person to be in breach of Sanctions; or
(B) in any other manner that would reasonably be expected to result in any person, including but not limited to the Lender, being in breach of any Sanctions or becoming a Restricted Party;
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(ii) knowingly engage in any transaction that evades or avoids, or has the purpose of evading or avoiding, or breaches or attempts to breach, directly or indirectly, any Sanctions; or
(iii) fund all or part of any payment in connection with a Finance Document out of proceeds derived from any action which is in breach of any Sanctions.
(b) Each member of the Group must ensure that appropriate controls and safeguards are in place designed to prevent any action being taken that would be contrary to paragraph (a) above.
(c) This Clause 22.8 shall not apply to or in favour of any person if and to the extent that it would result in a breach by, or in respect of that person, of any applicable Blocking Law.
22.9 Anti-money laundering
(a) The Company shall (and shall ensure that each other member of the Group shall) conduct its businesses in all material respects in compliance with Anti-Money Laundering Laws.
(b) The Company will not (and shall procure that no member of its Group shall), knowingly directly or indirectly, use all or any of the proceeds of the Facility, or lend, permit, contribute or otherwise make available such proceeds to any person in furtherance of any offer, payment, promise to pay, or authorisation of the payment or giving of money, or anything else of value, to any person in violation of any Anti-Money Laundering Laws,
in this Clause 22.9 reference to “Anti-Money Laundering Laws” has the same meaning given to that term in Clause 20.13 (Anti-money laundering).
22.10 United States laws
(a) No Obligor may:
(i) extend credit for the purpose, directly or indirectly, of buying or carrying Margin Stock in violation of the Margin Regulations; or
(ii) use any Loan, directly or indirectly, to buy or carry Margin Stock in violation of the Margin Regulations or for any other purpose in violation of the Margin Regulations.
(b) Except as would not reasonably be expected to have a Material Adverse Effect, each Obligor must be, and remain, in compliance with all laws and regulations relating to each of its Plans.
(c) Each of the Obligors must ensure that no event or condition exists at any time in relation to a Plan which is reasonably likely to result in the imposition of a lien or other encumbrance on any of its assets which is reasonably likely to have a Material Adverse Effect.
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(d) None of the following events have occurred or will occur with respect to any of the Obligors which is reasonably likely to have a Material Adverse Effect, and each Obligor must promptly upon becoming aware of it notify the Facility Agent of any of the following that is reasonably likely to have a Material Adverse Effect:
(i) any Reportable Event;
(ii) the termination of or withdrawal from, or any circumstances reasonably likely to result in the termination of or withdrawal from, any Plan subject to Title IV of ERISA; and
(iii) the engagement in any non-exempt prohibited transaction within the meaning of section 4975 of the Code or section 406 of ERISA.
23 Events of Default
Each of the events or circumstances set out in this Clause 23 is an Event of Default (save for Clause 23.12 (Acceleration) and Clause 23.13 (Clean-Up Period)).
23.1 Non-payment
An Obligor does not pay on the due date any amount payable pursuant to a Finance Document at the place and in the currency in which it is expressed to be payable unless:
(a) its failure to pay is caused by:
(i) administrative or technical error; or
(ii) a Disruption Event; and
(b) payment is made within three Business Days of its due date.
23.2 Other obligations
(a) An Obligor does not comply with any provision of the Finance Documents (other than those referred to in Clause 23.1 (Non-payment)) (or in relation to a provision that is not subject to materiality, an Obligor does not comply in all material respects).
(b) No Event of Default under paragraph (a) above will occur if the failure to comply is capable of remedy and is remedied within 20 Business Days of the Facility Agent giving notice to the Company or an Obligor becoming aware of the failure to comply.
23.3 Misrepresentation
Any representation or statement made or deemed to be made by an Obligor in the Finance Documents or any certificate provided in satisfaction of any condition precedent contained in Schedule 2 (Conditions Precedent) is or proves to have been incorrect or misleading in any material respect when made or
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deemed to be made, provided that no Event of Default will occur under this Clause 23.3 if the failure to comply is capable of being remedied and is remedied within 20 Business Days of the Facility Agent giving notice to the Company or an Obligor becoming aware of the failure to comply.
23.4 Cross acceleration
(a) Any Financial Indebtedness of an Obligor or a Material Subsidiary is not paid when due nor within any originally applicable grace period.
(b) Any Financial Indebtedness of an Obligor or a Material Subsidiary is declared to be or otherwise becomes due and payable prior to its specified maturity as a result of an event of default (however described).
(c) Any commitment for any Financial Indebtedness of an Obligor or a Material Subsidiary is cancelled or suspended by a creditor of an Obligor or a Material Subsidiary as a result of an event of default (however described).
No Event of Default will occur under this Clause 23.4 if the aggregate amount of Financial Indebtedness or commitment for Financial Indebtedness falling within paragraphs (a) to (c) above is less than $100,000,000 (or its equivalent in any other currency or currencies).
23.5 Insolvency
(a) An Obligor or any Material Subsidiary is unable or admits inability to pay its debts as they fall due, suspends making payments on any of its debts or, by reason of actual or anticipated financial difficulties, commences negotiations with one or more of its creditors (excluding any Finance Party in its capacity as such) with a view to rescheduling any of its indebtedness.
(b) A moratorium is declared in respect of any indebtedness of an Obligor or any Material Subsidiary.
23.6 Insolvency proceedings
Any corporate action, legal proceedings or other procedure or step is taken in relation to:
(a) the suspension of payments, a moratorium of any indebtedness, winding-up, dissolution, administration or reorganisation (by way of voluntary arrangement, scheme of arrangement, restructuring plan, voluntary or involuntary case under US Bankruptcy law or otherwise) of an Obligor or any Material Subsidiary other than a solvent liquidation or reorganisation of an Obligor or any Material Subsidiary;
(b) a composition, compromise, assignment or arrangement with any creditor of an Obligor or any Material Subsidiary by reason of actual or anticipated financial difficulties;
(c) the appointment of a liquidator (other than in respect of a solvent liquidation of a Material Subsidiary), receiver, administrative receiver,
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administrator, compulsory manager, monitor or other similar officer in respect of an Obligor or a Material Subsidiary or any of their assets; or
(d) enforcement of any Security over any assets of an Obligor or any Material Subsidiary, having an aggregate value of $50,000,000 (or its equivalent in any other currency or currencies).
or any analogous procedure or step is taken in any jurisdiction.
This Clause 23.6 shall not apply to any winding up petition which is frivolous or vexatious and is discharged, stayed or dismissed within 45 days of commencement.
23.7 Creditors’ process
Any expropriation, attachment, sequestration, distress or execution affects any asset or assets of an Obligor or any Material Subsidiary having an aggregate value of $50,000,000 (or its equivalent in any other currency or currencies) by reason of creditor action and is not discharged within 21 days.
23.8 Ownership of the Obligors
An Obligor (other than the Company) is not or ceases to be a Subsidiary of the Company.
23.9 Unlawfulness
It is or becomes unlawful for an Obligor to perform any of its obligations under the Finance Documents.
23.10 Repudiation
An Obligor repudiates a Finance Document or evidences in writing an intention to repudiate a Finance Document.
23.11 US Bankruptcy Law proceedings
If any Borrower becomes subject to a proceeding under US Bankruptcy Law:
(a) the Total Commitments in relation to such Borrower shall immediately be cancelled; and
(b) all of the Loans made to such Borrower, accrued interest thereon, and any other sum then payable under this Agreement and any of the other Finance Documents by such Borrower shall be immediately due and payable,
in each case automatically and without any direction, notice, declaration or other act.
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23.12 Acceleration
On and at any time after the occurrence of an Event of Default and whilst it is continuing the Facility Agent may, and shall if so directed by the Majority Lenders, by notice to the Company:
(a) cancel each Available Commitment of each Lender whereupon each such Available Commitment shall immediately be cancelled and the Facility shall immediately cease to be available for further utilisation;
(b) declare that all or part of the Loans, together with accrued interest, and all other amounts accrued or outstanding under the Finance Documents be immediately due and payable, at which time they shall become immediately due and payable; and/or
(c) declare that all or part of the Loans be payable on demand, at which time they shall immediately become payable on demand by the Facility Agent on the instructions of the Majority Lenders.
23.13 Clean-Up Period
Notwithstanding any other provision of any Finance Document:
(a) any breach of a representation or an undertaking under any Finance Document; or
(b) any Event of Default,
which occurs during the Clean-Up Period will be deemed not to be a breach of representation or warranty, a breach of covenant or an Event of Default (as the case may be) if:
(i) it would have been (if it were not for this Clause 23.12) a breach of representation or warranty, a breach of covenant or an Event of Default only by reason of circumstances relating exclusively to the Target or any Subsidiary of the Target;
(ii) it is capable of remedy and reasonable steps are being taken to remedy it;
(iii) the circumstances giving rise to it have not been procured by or approved by the Company or any Original Obligor; and
(iv) it is not reasonably likely to have a Material Adverse Effect.
If the relevant circumstances are continuing on or after the end of the Clean-Up Period, there shall be a breach of representation or warranty, breach of covenant or Event of Default, as the case may be notwithstanding the above (and without prejudice to the rights and remedies of the Finance Parties).
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Section 9
Changes to parties
24 Changes to the Lenders
24.1 Assignments and transfers by the Lenders
Subject to this Clause 24, a Lender (the Existing Lender) may:
(a) assign any of its rights; or
(b) transfer by novation any of its rights and obligations,
to another bank (the New Lender).
24.2 Conditions of assignment or transfer
(a) The consent of the Company is required for an assignment or transfer by an Existing Lender, unless:
(i) the assignment or transfer is to another Lender or an Affiliate of a Lender and:
(A) the Lender or Lender’s Affiliate has the same, or better, external credit rating as the Existing Lender; or
(B) if the Lender or Lender’s Affiliate is an unrated entity, the obligations of that entity under this Agreement must be guaranteed by an entity which has the same, or better, external credit rating as the Existing Lender (or the entity providing a guarantee of the Existing Lender, if relevant); or
(ii) the assignment or transfer is during primary syndication of the Facility and to an entity on the Pre-Approved New Lender List; or
(iii) the assignment or transfer is made at a time when an Event of Default is continuing.
(b) The consent of the Company to an assignment or transfer will be granted at the Company’s sole discretion.
24.3 Other conditions of assignment or transfer
(a) Each assignment or transfer of any Lender’s participation shall be in a minimum amount of $25,000,000 unless the assignment or transfer is of the whole amount of that Lender’s participation under this Agreement and an assignment or transfer of part of a Lender’s participation must be in such amount that the amount of that Lender’s remaining participation (when aggregated with its Affiliates’ participation) in respect of the Facility is in a minimum amount of $25,000,000.
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(b) An assignment will only be effective on:
(i) receipt by the Facility Agent (whether in the Assignment Agreement or otherwise) of written confirmation from the New Lender (in form and substance satisfactory to the Facility Agent) that the New Lender will assume the same obligations to the other Finance Parties as it would have been under if it had been an Original Lender; and
(ii) performance by the Facility Agent of all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to such assignment to a New Lender, the completion of which the Facility Agent shall promptly notify to the Existing Lender and the New Lender.
(c) A transfer will only be effective if the procedure set out in Clause 24.6 (Procedure for transfer) is complied with.
(d) If:
(i) a Lender assigns or transfers or sub-participates any of its rights or obligations under the Finance Documents or changes its Facility Office; and
(ii) as a result of circumstances existing or changes proposed at the date the assignment, transfer or change occurs, an Obligor would be obliged to make a payment to the New Lender, Lender who has sub-participated any of its rights or obligations under the Finance Documents or Lender acting through its new Facility Office under Clause 14 (Tax gross-up and indemnities) or Clause 15 (Increased Costs),
then the New Lender, Lender who has sub-participated any of its rights or obligations under the Finance Documents or Lender acting through its new Facility Office is only entitled to receive payment under those Clauses to the same extent as the Existing Lender or Lender acting through its previous Facility Office would have been if the assignment, transfer, sub-participation or change had not occurred. This paragraph (d) shall not apply in relation to Clause 14.2 (Tax gross-up), to a Treaty Lender that has included a confirmation of its scheme reference number and its jurisdiction of tax residence in accordance with sub-paragraph (h)(ii) of Clause 14.2 (Tax gross-up) if the Borrower making the payment has not made a Borrower DTTP Filing in respect of that Treaty Lender. This paragraph (d) shall not apply in respect of an assignment or transfer made in the ordinary course of primary syndication of the Facility to an entity on the Pre-Approved New Lender List.
(e) Each New Lender, by executing the relevant Transfer Certificate or Assignment Agreement, confirms, for the avoidance of doubt, that the Facility Agent has authority to execute on its behalf any amendment or waiver that has been approved by or on behalf of the requisite Lender or Lenders in accordance with this Agreement on or prior to the date on
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which the transfer or assignment becomes effective in accordance with this Agreement and that it is bound by that decision to the same extent as the Existing Lender would have been had it remained a Lender.
24.4 Assignment or transfer fee
The New Lender shall, on the date upon which an assignment or transfer takes effect, pay to the Facility Agent (for its own account) a fee of $2,500.
24.5 Limitation of responsibility of Existing Lenders
(a) Unless expressly agreed to the contrary, an Existing Lender makes no representation or warranty and assumes no responsibility to a New Lender for:
(i) the legality, validity, effectiveness, adequacy or enforceability of the Finance Documents or any other documents;
(ii) the financial condition of any Obligor;
(iii) the performance and observance by any Obligor of its obligations under the Finance Documents or any other documents; or
(iv) the accuracy of any statements (whether written or oral) made in or in connection with any Finance Document or any other 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 shall continue to make) its own independent investigation and assessment of the financial condition and affairs of each Obligor and its related entities in connection with its participation in this Agreement and has not relied exclusively on any information provided to it by the Existing Lender in connection with any Finance Document; and
(ii) will continue to make its own independent appraisal of the creditworthiness of each Obligor and its related entities whilst any amount is or may be outstanding under the Finance Documents or any Commitment is in force.
(c) Nothing in any Finance Document obliges an Existing Lender to:
(i) accept a re-transfer or re-assignment from a New Lender of any of the rights and obligations assigned or transferred under this Clause 24; or
(ii) support any losses directly or indirectly incurred by the New Lender by reason of the non-performance by any Obligor of its obligations under the Finance Documents or otherwise.
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24.6 Procedure for transfer
(a) Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) and Clause 24.3 (Other conditions of assignment or transfer) a transfer is effected in accordance with paragraph (c) below when the Facility Agent executes an otherwise duly completed Transfer Certificate delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Transfer Certificate appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Transfer Certificate.
(b) The Facility Agent shall only be obliged to execute a Transfer Certificate delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the transfer to such New Lender.
(c) Subject to Clause 24.10 (Pro rata interest settlement), on the Transfer Date:
(i) to the extent that in the Transfer Certificate the Existing Lender seeks to transfer by novation its rights and obligations under the Finance Documents each of the Obligors and the Existing Lender shall be released from further obligations towards one another under the Finance Documents and their respective rights against one another under the Finance Documents shall be cancelled (being the Discharged Rights and Obligations);
(ii) each of the Obligors and the New Lender shall assume obligations towards one another and/or acquire rights against one another which differ from the Discharged Rights and Obligations only insofar as that Obligor and the New Lender have assumed and/or acquired the same in place of that Obligor and the Existing Lender;
(iii) the Facility Agent, the Arranger, the New Lender and the other Lenders shall acquire the same rights and assume the same obligations between themselves as they would have acquired and assumed had the New Lender been an Original Lender with the rights and/or obligations acquired or assumed by it as a result of the transfer and to that extent the Facility Agent, the Arranger and the Existing Lender shall each be released from further obligations to each other under the Finance Documents; and
(iv) the New Lender shall become a Party as a “Lender”.
24.7 Procedure for assignment
(a) Subject to the conditions set out in Clause 24.2 (Conditions of assignment or transfer) and Clause 24.3 (Other conditions of assignment or transfer) an assignment may be effected in accordance
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with paragraph (c) below when the Facility Agent executes an otherwise duly completed Assignment Agreement delivered to it by the Existing Lender and the New Lender. The Facility Agent shall, subject to paragraph (b) below, as soon as reasonably practicable after receipt by it of a duly completed Assignment Agreement appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that Assignment Agreement.
(b) The Facility Agent shall only be obliged to execute an Assignment Agreement delivered to it by the Existing Lender and the New Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to the assignment to such New Lender.
(c) Subject to Clause 24.10 (Pro rata interest settlement), on the Transfer Date:
(i) the Existing Lender will assign absolutely to the New Lender the rights under the Finance Documents expressed to be the subject of the assignment in the Assignment Agreement;
(ii) the Existing Lender will be released by each Obligor and the other Finance Parties from the obligations owed by it (the Relevant Obligations) and expressed to be the subject of the release in the Assignment Agreement; and
(iii) the New Lender shall become a Party as a “Lender” and will be bound by obligations equivalent to the Relevant Obligations.
(d) Lenders may utilise procedures other than those set out in this Clause 24.7 to assign their rights under the Finance Documents (but not, without the consent of the relevant Obligor or unless in accordance with Clause 24.6 (Procedure for transfer), to obtain a release by that Obligor from the obligations owed to that Obligor by the Lenders nor the assumption of equivalent obligations by a New Lender) provided that they comply with the conditions set out in Clause 24.2 (Conditions of assignment or transfer) and Clause 24.3 (Other conditions of assignment or transfer).
24.8 Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company
The Facility Agent shall, as soon as reasonably practicable after it has executed a Transfer Certificate, Assignment Agreement or Increase Confirmation, send to the Company a copy of that Transfer Certificate, Assignment Agreement or Increase Confirmation as the case may be.
24.9 Security over Lenders’ rights
In addition to the other rights provided to Lenders under this Clause 24, each Lender may without consulting with or obtaining consent from any Obligor, at any time charge, assign or otherwise create Security in or over (whether by way
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of collateral or otherwise) all or any of its rights under any Finance Document to secure obligations of that Lender including, without limitation:
(a) any charge, assignment or other Security to secure obligations to a federal reserve or central bank; and
(b) in the case of any Lender which is a fund, any charge, assignment or other Security granted to any holders (or trustee or representatives of holders) of obligations owed, or securities issued, by that Lender as security for those obligations or securities,
except that no such charge, assignment or Security shall:
(i) release a Lender from any of its obligations under the Finance Documents or substitute the beneficiary of the relevant charge, assignment or Security for the Lender as a party to any of the Finance Documents; or
(ii) require any payments to be made by an Obligor other than or in excess of, or grant to any person any more extensive rights than, those required to be made or granted to the relevant Lender under the Finance Documents.
24.10 Pro rata interest settlement
(a) If the Facility Agent has notified the Lenders that it is able to distribute interest payments on a “pro rata basis” to Existing Lenders and New Lenders then (in respect of any transfer pursuant to Clause 24.6 (Procedure for transfer) or any assignment pursuant to Clause 24.7 (Procedure for assignment) the Transfer Date of which, in each case, is after the date of such notification and is not on the last day of an Interest Period):
(i) any interest or fees in respect of the relevant participation which are expressed to accrue by reference to the lapse of time shall continue to accrue in favour of the Existing Lender up to but excluding the Transfer Date (Accrued Amounts) and shall become due and payable to the Existing Lender (without further interest accruing on them) on the last day of the current Interest Period (or, if the Interest Period is longer than six Months, on the next of the dates which falls at six-Monthly intervals after the first day of that Interest Period); and
(ii) the rights assigned or transferred by the Existing Lender will not include the right to the Accrued Amounts, so that, for the avoidance of doubt:
(A) when the Accrued Amounts become payable, those Accrued Amounts will be payable to the Existing Lender; and
(B) the amount payable to the New Lender on that date will be the amount which would, but for the application of this
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Clause 24.10, have been payable to it on that date, but after deduction of the Accrued Amounts.
(b) In this Clause 24.10 references to “Interest Period” shall be construed to include a reference to any other period of accrual of fees.
(c) An Existing Lender which retains the right to the Accrued Amounts pursuant to this Clause 24.10 but which does not have a Commitment shall be deemed not to be a Lender for the purposes of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or other vote of Lenders under the Finance Documents.
24.11 Disclosure of information
Any Lender may disclose to any of its Affiliates and any other person:
(a) to (or through) whom that Lender assigns or transfers (or may potentially assign or transfer) all or any of its rights and obligations under this Agreement;
(b) with (or through) whom that Lender enters into (or may potentially enter into) any sub-participation in relation to, or any other transaction under which payments are to be made by reference to, this Agreement or the Obligors; or
(c) to whom, and to the extent that, information is required to be disclosed by any applicable law or regulation,
any information about the Company, the Obligors, the Group and the Finance Documents as that Lender shall consider appropriate if, in relation to paragraphs (a) and (b) above, the person to whom the information is to be given has entered into a Confidentiality Undertaking.
24.12 Sub-Participation
A Lender may grant funded or unfunded sub-participations to any person of any of its rights or obligations provided that the Lender retains absolute discretion with regards to the exercise of voting rights under this Agreement.
25 Changes to the Obligors
25.1 Assignments and transfer by Obligors
No Obligor may assign any of its rights or transfer any of its rights or obligations under the Finance Documents.
25.2 Additional Borrowers
(a) Subject to compliance with the provisions of paragraphs (a) and (b) of Clause 21.7 (Know your customer checks), the Company may request that any of its wholly-owned Subsidiaries becomes an Additional Borrower. That Subsidiary shall become an Additional Borrower if:
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(i) (A) that Subsidiary is incorporated in England and Wales or the US, or (B) the Lenders approve the addition of that Subsidiary;
(ii) the Company delivers to the Facility Agent a duly completed and executed Accession Letter;
(iii) the Company confirms that no Default is continuing or would occur as a result of that Subsidiary becoming an Additional Borrower; and
(iv) the Facility Agent has received all of the documents and other evidence listed in Part III of Schedule 2 (Conditions Precedent) in relation to that Additional Borrower, each in form and substance satisfactory to the Facility Agent.
(b) The Facility Agent shall notify the Company and the Lenders promptly upon being satisfied that it has received (in form and substance satisfactory to it) all the documents and other evidence listed in Part III of Schedule 2 (Conditions Precedent).
(c) Other than to the extent that the Majority Lenders notify the Facility Agent in writing to the contrary before the Facility Agent gives the notification described in paragraph (b) above, the Lenders authorise (but do not require) the Facility Agent to give that notification. The Facility Agent shall not be liable for any damages, costs or losses whatsoever as a result of giving any such notification.
25.3 Resignation of a Borrower
(a) The Company may request that a Borrower (other than the Company) ceases to be a Borrower by delivering to the Facility Agent a Resignation Letter.
(b) The Facility Agent shall accept a Resignation Letter and notify the Company and the Lenders of its acceptance if:
(i) no Default is continuing or would result from the acceptance of the Resignation Letter (and the Company has confirmed this is the case); and
(ii) the Borrower is under no actual or contingent obligations as a Borrower under any Finance Documents,
whereupon that company shall cease to be a Borrower and shall have no further rights or obligations under the Finance Documents.
25.4 Repetition of Representations
Delivery of an Accession Letter constitutes confirmation by the relevant Subsidiary that the Repeating Representations are true and correct in relation to it as at the date of delivery as if made by reference to the facts and circumstances then existing.
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Section 10
The Finance Parties
26 Role of the Facility Agent and the Arranger
26.1 Appointment of the Facility Agent
(a) Each other Finance Party appoints the Facility Agent to act as its agent under and in connection with the Finance Documents.
(b) Each other Finance Party authorises the Facility Agent to perform the duties, obligations and responsibilities and to exercise the rights, powers, authorities and discretions specifically given to the Facility Agent under or in connection with the Finance Documents together with any other incidental rights, powers, authorities and discretions.
26.2 Instructions
(a) The Facility Agent shall:
(i) unless a contrary indication appears in a Finance Document, exercise or refrain from exercising any right, power, authority or discretion vested in it as Facility Agent in accordance with any instructions given to it by:
(A) all Lenders if the relevant Finance Document stipulates the matter is an all Lender decision; and
(B) in all other cases, the Majority Lenders; and
(ii) not be liable for any act (or omission) if it acts (or refrains from acting) in accordance with paragraph (i) above.
(b) The Facility Agent shall be entitled to request instructions, or clarification of any instruction, from the Majority Lenders (or, if the relevant Finance Document stipulates the matter is a decision for any other Lender or group of Lenders, from that Lender or group of Lenders) as to whether, and in what manner, it should exercise or refrain from exercising any right, power, authority or discretion and the Facility Agent may refrain from acting unless and until it receives those instructions or that clarification.
(c) Save in the case of decisions stipulated to be a matter for any other Lender or group of Lenders under the relevant Finance Document and unless a contrary indication appears in a Finance Document, any instructions given to the Facility Agent by the Majority Lenders shall override any conflicting instructions given by any other Parties and will be binding on all Finance Parties.
(d) The Facility Agent may refrain from acting in accordance with any instructions of any Lender or group of Lenders until it has received any indemnification and/or security that it may in its discretion require (which may be greater in extent than that contained in the Finance
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Documents and which may include payment in advance) for any cost, loss or liability which it may incur in complying with those instructions.
(e) In the absence of instructions, the Facility Agent may act (or refrain from acting) as it considers to be in the best interest of the Lenders.
(f) 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 relating to any Finance Document.
26.3 Duties of the Facility Agent
(a) The Facility Agent’s duties under the Finance Documents are solely mechanical and administrative in nature.
(b) Subject to paragraph (c) below, the Facility Agent shall promptly forward to a Party the original or a copy of any document which is delivered to the Facility Agent for that Party by any other Party.
(c) Without prejudice to Clause 24.8 (Copy of Transfer Certificate, Assignment Agreement or Increase Confirmation to Company), paragraph (b) above shall not apply to any Transfer Certificate, any Assignment Agreement or any Increase Confirmation.
(d) 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.
(e) If the Facility Agent receives notice from a Party referring to this Agreement, describing a Default and stating that the circumstance described is a Default, it shall promptly notify the other Finance Parties.
(f) If the Facility Agent is aware of the non-payment of any principal, interest, commitment fee or other fee payable to a Finance Party (other than the Facility Agent or the Arranger) under this Agreement it shall promptly notify the other Finance Parties.
(g) The Facility Agent shall have only those duties, obligations and responsibilities expressly specified in the Finance Documents to which it is expressed to be a party (and no others shall be implied).
(h) The Facility Agent shall provide to the Company, within five Business Days of a request by the Company (but no more frequently than once per calendar month), a list (which may be in electronic form) setting out the names of the Lenders as at the date of that request, their respective Commitments, the address and email address (and the department or officer, if any, for whose attention any communication is to be made) of each Lender for any communication to be made or document to be delivered under or in connection with the Finance Documents, the electronic mail address and/or any other information required to enable the transmission of information by electronic mail or other electronic means to and by each Lender to whom any communication under or in connection with the Finance Documents may be made by that means and
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the account details of each Lender for any payment to be distributed by the Facility Agent to that Lender under the Finance Documents.
(i) In addition to the requirement in paragraph (h) above, the Facility Agent, acting solely for this purpose as an agent of the Obligors, shall maintain at one of its offices a register for the recordation of the names and addresses of the Lenders, and the Commitments of, and principal amounts (and stated interest) of the Loans owing to, each Lender pursuant to the terms hereof from time to time (the Register). The entries in the Register shall be conclusive absent manifest error, and the Obligors, the Facility Agent and the Lenders shall treat each Person whose name is recorded in the Register pursuant to the terms hereof as a Lender hereunder for all purposes of this Agreement. The Register shall be available for inspection by the Obligors and any Lender, at any reasonable time and from time to time upon reasonable prior notice.
26.4 Role of the Arranger
Except as specifically provided in the Finance Documents, the Arranger has no obligations of any kind to any other Party under or in connection with any Finance Document.
26.5 No fiduciary duties
(a) Nothing in any Finance Document constitutes the Facility Agent or the Arranger as a trustee or fiduciary of any other person.
(b) Neither the Facility Agent nor the Arranger shall be bound to account to any Lender for any sum or the profit element of any sum received by it for its own account.
26.6 Business with the Group
The Facility Agent and the Arranger may accept deposits from, lend money to and generally engage in any kind of banking or other business with any member of the Group.
26.7 Rights and discretions
(a) The Facility Agent may:
(i) rely on any representation, communication, notice or document believed by it to be genuine, correct and appropriately authorised;
(ii) assume that:
(A) any instructions received by it from the Majority Lenders, any Lenders or any group of Lenders are duly given in accordance with the terms of the Finance Documents; and
(B) unless it has received notice of revocation, that those instructions have not been revoked; and
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(iii) rely on a certificate from any person:
(A) as to any matter of fact or circumstance which might reasonably be expected to be within the knowledge of that person; or
(B) to the effect that such person approves of any particular dealing, transaction, step, action or thing,
as sufficient evidence that that is the case and, in the case of paragraph (A) above, may assume the truth and accuracy of that certificate.
(b) The Facility Agent may assume (unless it has received notice to the contrary in its capacity as agent for the Lenders) that:
(i) no Default has occurred (unless it has actual knowledge of a Default arising under Clause 23.1 (Non-payment));
(ii) any right, power, authority or discretion vested in any Party or any group of Lenders has not been exercised; and
(iii) any notice or request made by the Company (other than a Utilisation Request or Selection Notice) is made on behalf of and with the consent and knowledge of all the Obligors.
(c) The Facility Agent may engage and pay for the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts.
(d) Without prejudice to the generality of paragraph (c) above or paragraph (e) below, the Facility Agent may at any time engage and pay for the services of any lawyers to act as independent counsel to the Facility Agent (and so separate from any lawyers instructed by the Lenders) if the Facility Agent in its reasonable opinion deems this to be necessary.
(e) The Facility Agent may rely on the advice or services of any lawyers, accountants, tax advisers, surveyors or other professional advisers or experts (whether obtained by the Facility Agent or by any other Party) and shall not be liable for any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of its so relying.
(f) The Facility Agent may act in relation to the Finance Documents through its officers, employees and agents.
(g) Unless a Finance Document expressly provides otherwise the Facility Agent may disclose to any other Party any information it reasonably believes it has received as agent under this Agreement.
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(h) Without prejudice to the generality of paragraph (g) above, the Facility Agent:
(i) may disclose; and
(ii) on the written request of the Company shall, as soon as reasonably practicable, disclose,
the identity of a Defaulting Lender to the Company.
(i) Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to do or omit to do anything if it would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty or duty of confidentiality.
(j) Notwithstanding any provision of any Finance Document to the contrary, the Facility Agent is not obliged to expend or risk its own funds or otherwise incur any financial liability in the performance of its duties, obligations or responsibilities or the exercise of any right, power, authority or discretion if it has grounds for believing the repayment of such funds or adequate indemnity against, or security for, such risk or liability is not reasonably assured to it.
26.8 Responsibility for documentation
Neither the Facility Agent nor the Arranger is responsible or liable for:
(a) the adequacy, accuracy or completeness of any information (whether oral or written) supplied by the Facility Agent, the Arranger, an Obligor or any other person in or in connection with any Finance Document or the Information Package or the transactions contemplated in the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or
(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; or
(c) any determination as to whether any information provided or to be provided to any Finance Party is non-public information the use of which may be regulated or prohibited by applicable law or regulation relating to insider dealing or otherwise.
26.9 No duty to monitor
The Facility Agent shall not be bound to enquire:
(a) whether or not any Default has occurred;
(b) as to the performance, default or any breach by any Party of its obligations under any Finance Document; or
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(c) whether any other event specified in any Finance Document has occurred.
26.10 Exclusion of liability
(a) Without limiting paragraph (b) below (and without prejudice to any other provision of any Finance Document excluding or limiting the liability of the Facility Agent), the Facility Agent will not be liable for:
(i) any damages, costs or losses to any person, any diminution in value, or any liability whatsoever arising as a result of taking or not taking any action under or in connection with any Finance Document, unless directly caused by its gross negligence or wilful misconduct;
(ii) exercising, or not exercising, any right, power, authority or discretion given to it by, or in connection with, any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with, any Finance Document, other than by reason of its gross negligence or wilful misconduct; or
(iii) without prejudice to the generality of paragraphs (i) and (ii) above, any damages, costs or losses to any person, any diminution in value or any liability whatsoever arising as a result of:
(A) any act, event or circumstance not reasonably within its control; or
(B) the general risks of investment in, or the holding of assets in, any jurisdiction,
including (in each case and without limitation) such damages, costs, losses, diminution in value or liability arising as a result of: nationalisation, expropriation or other governmental actions; any regulation, currency restriction, devaluation or fluctuation; market conditions affecting the execution or settlement of transactions or the value of assets (including any Disruption Event); breakdown, failure or malfunction of any third party transport, telecommunications, computer services or systems; natural disasters or acts of God; war, terrorism, insurrection or revolution; or strikes or industrial action.
(b) No Party (other than the Facility Agent) 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 relation to any Finance Document and any officer, employee or agent of the Facility Agent may rely on this Clause subject to Clause 1.4 (Third party rights) and the provisions of the Third Parties Act.
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(c) The Facility Agent will not be liable for any delay (or any related consequences) in crediting an account with an amount required under the Finance Documents to be paid by the Facility Agent if the Facility Agent has taken all necessary steps as soon as reasonably practicable to comply with the regulations or operating procedures of any recognised clearing or settlement system used by the Facility Agent for that purpose.
(d) Nothing in this Agreement shall oblige the Facility Agent or the Arranger to carry out:
(i) any “know your customer” or other checks in relation to any person; or
(ii) any check on the extent to which any transaction contemplated by this Agreement might be unlawful for any Lender,
on behalf of any Lender and each Lender confirms to the Facility Agent and the Arranger that it is solely responsible for any such checks it is required to carry out and that it may not rely on any statement in relation to such checks made by the Facility Agent or the Arranger.
(e) Without prejudice to any provision of any Finance Document excluding or limiting the Facility Agent’s liability, any liability of the Facility Agent arising under or in connection with any Finance Document shall be limited to the amount of actual loss which has been suffered (as determined by reference to the date of default of the Facility Agent or, if later, the date on which the loss arises as a result of such default) but without reference to any special conditions or circumstances known to the Facility Agent at any time which increase the amount of that loss. In no event shall the Facility Agent be liable for any loss of profits, goodwill, reputation, business opportunity or anticipated saving, or for special, punitive, indirect or consequential damages, whether or not the Facility Agent has been advised of the possibility of such loss or damages.
26.11 Lenders’ indemnity to the Facility Agent
Each Lender shall (in proportion to its share of the Total Commitments or, if the Total Commitments are then zero, to its share of the Total Commitments immediately prior to their reduction to zero) indemnify the Facility Agent, within three Business Days of demand, against any cost, loss or liability (including, without limitation, for negligence or any other category of liability whatsoever) incurred by the Facility Agent (otherwise than by reason of the Facility Agent’s gross negligence or wilful misconduct) (or, in the case of any cost, loss or liability pursuant to Clause 29.11 (Disruption to payment systems etc.) notwithstanding the Facility Agent’s negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) in acting as Facility Agent under the Finance Documents (unless the Facility Agent has been reimbursed by an Obligor pursuant to a Finance Document).
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26.12 Resignation of the Facility Agent
(a) The Facility Agent may, following consultation with the Company, resign and appoint one of its Affiliates acting through an office in the United Kingdom as successor by giving notice to the Lenders and the Company.
(b) Alternatively the Facility Agent may, following consultation with the Company, resign by giving 30 days’ notice to the Lenders and the Company, in which case the Majority Lenders (after consultation with the Company) may appoint a successor Facility Agent.
(c) If the Majority Lenders have not appointed a successor Facility Agent in accordance with paragraph (b) above within 20 days after notice of resignation was given, the retiring Facility Agent (after consultation with the Company) may appoint a successor Facility Agent (acting through an office in the United Kingdom).
(d) The Facility Agent shall resign in accordance with paragraph (b) above (and, to the extent applicable, shall use reasonable endeavours to appoint a successor Facility Agent pursuant to paragraph (c) above) if on or after the date which is three Months before the earliest FATCA Application Date relating to any payment to the Facility Agent under the Finance Documents, either:
(i) the Facility Agent fails to respond to a request under Clause 14.8 (FATCA information) and the Company or a Lender reasonably believes that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date;
(ii) the information supplied by the Facility Agent pursuant to Clause 14.8 (FATCA information) indicates that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date; or
(iii) the Facility Agent notifies the Company and the Lenders that the Facility Agent will not be (or will have ceased to be) a FATCA Exempt Party on or after that FATCA Application Date,
and (in each case) the Company or a Lender reasonably believes that a Party will be required to make a FATCA Deduction that would not be required if the Facility Agent were a FATCA Exempt Party, and the Company or that Lender, by notice to the Facility Agent, requires it to resign.
(e) The retiring Facility Agent shall 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 Facility Agent under the Finance Documents.
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(f) The Facility Agent’s resignation notice shall only take effect upon the appointment of a successor.
(g) Upon the appointment of a successor, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (e) above) but shall remain entitled to the benefit of Clause 16.3 (Indemnity to the Facility Agent) and this Clause 26 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date). Any successor and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
26.13 Replacement of the Facility Agent
(a) After consultation with the Company, the Majority Lenders may, by giving 30 days’ notice to the Facility Agent (or, at any time the Facility Agent is an Impaired Agent, by giving any shorter notice determined by the Majority Lenders) replace the Facility Agent by appointing a successor Facility Agent (acting through an office in the United Kingdom).
(b) The retiring Facility Agent shall (at its own cost if it is an Impaired Agent and otherwise at the expense of the Lenders) 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 Facility Agent under the Finance Documents.
(c) The appointment of the successor Facility Agent shall take effect on the date specified in the notice from the Majority Lenders to the retiring Facility Agent. As from this date, the retiring Facility Agent shall be discharged from any further obligation in respect of the Finance Documents (other than its obligations under paragraph (b) above) but shall remain entitled to the benefit of Clause 16.3 (Indemnity to the Facility Agent) and this Clause 26 (and any agency fees for the account of the retiring Facility Agent shall cease to accrue from (and shall be payable on) that date).
(d) Any successor Facility Agent and each of the other Parties shall have the same rights and obligations amongst themselves as they would have had if such successor had been an original Party.
26.14 Confidentiality
(a) In acting as Facility Agent for the Finance Parties, the Facility Agent shall be regarded as acting through its agency division which shall be treated as a separate entity from any other of its divisions or departments.
(b) If information is received by another division or department of the Facility Agent, it may be treated as confidential to that division or department and the Facility Agent shall not be deemed to have notice of it.
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(c) Notwithstanding any other provision of any Finance Document to the contrary, neither the Facility Agent nor the Arranger is obliged to disclose to any other person (i) any confidential information or (ii) any other information if the disclosure would or might in its reasonable opinion constitute a breach of any law or regulation or a breach of a fiduciary duty.
26.15 Relationship with the Lenders
(a) Subject to Clause 24.10 (Pro rata interest settlement), the Facility Agent may treat the person shown in its records as Lender at the opening of business (in the place of the Facility Agent’s principal office as notified to the Finance Parties from time to time) as the Lender acting through its Facility Office:
(i) entitled to or liable for any payment due under any Finance Document on that day; and
(ii) entitled to receive and act upon any notice, request, document or communication or make any decision or determination under any Finance Document made or delivered on that day,
unless it has received not less than five Business Days’ prior notice from that Lender to the contrary in accordance with the terms of this Agreement.
(b) Any Lender may by notice to the Facility Agent appoint a person to receive on its behalf all notices, communications, information and documents to be made or despatched to that Lender under the Finance Documents. Such notice shall contain the address, email address and (where communication by other electronic means is permitted under Clause 31.6 (Electronic communication)) any other information required to enable the transmission of information by that means (and, in each case, the department or officer, if any, for whose attention communication is to be made) and be treated as a notification of a substitute address, electronic mail address (or such other information), department and officer by that Lender for the purposes of Clause 31.2 (Addresses) and paragraph (a)(ii) of Clause 31.6 (Electronic communication) and the Facility Agent shall be entitled to treat such person as the person entitled to receive all such notices, communications, information and documents as though that person were that Lender.
26.16 Credit appraisal by the Lenders
Without affecting the responsibility of any Obligor for information supplied by it or on its behalf in connection with any Finance Document, each Lender confirms to the Facility Agent and the Arranger that it has been, and will continue to be, solely responsible for making its own independent appraisal and investigation of all risks arising under or in connection with any Finance Document including but not limited to:
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(a) the financial condition, status and nature of each member of the Group;
(b) the legality, validity, effectiveness, adequacy or enforceability of any Finance Document and any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document;
(c) whether that Lender has recourse, and the nature and extent of that recourse, against any Party or any of its respective assets under or in connection with any Finance Document or the transactions contemplated by the Finance Documents or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document; and
(d) the adequacy, accuracy or completeness of the Information Package and any other information provided by the Facility Agent, any Party or by any other person under or in connection with any Finance Document, the transactions contemplated by any Finance Document or any other agreement, arrangement or document entered into, made or executed in anticipation of, under or in connection with any Finance Document.
26.17 Deduction from amounts payable by the Facility Agent
If any Party owes an amount to the Facility Agent under the Finance Documents the Facility Agent may, after giving notice to that Party, deduct an amount not exceeding that amount from any payment to that Party which the Facility Agent would otherwise be obliged to make under the Finance Documents and apply the amount deducted in or towards satisfaction of the amount owed. For the purposes of the Finance Documents that Party shall be regarded as having received any amount so deducted.
27 Conduct of Business by the Finance Parties
No provision 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 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 computations in respect of Tax.
28 Sharing among the Finance Parties
28.1 Payments to Finance Parties
If a Finance Party (a Recovering Finance Party) receives or recovers any amount from an Obligor other than in accordance with Clause 29 (Payment mechanics) (a Recovered Amount) and applies that amount to a payment due under the Finance Documents then:
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(a) the Recovering Finance Party shall, within three Business Days, notify details of the receipt or recovery, to the Facility Agent;
(b) the Facility Agent shall determine whether the receipt or recovery is in excess of the amount the Recovering Finance Party would have been paid had the receipt or recovery been received or made by the Facility Agent and distributed in accordance with Clause 29 (Payment mechanics), without taking account of any Tax which would be imposed on the Facility Agent in relation to the receipt, recovery or distribution; and
(c) the Recovering Finance Party shall, within three Business Days of demand by the Facility Agent, pay to the Facility Agent an amount (the Sharing Payment) equal to such receipt or recovery less any amount which the Facility Agent determines may be retained by the Recovering Finance Party as its share of any payment to be made, in accordance with Clause 29.6 (Partial payments).
28.2 Redistribution of payments
The Facility Agent shall treat the Sharing Payment as if it had been paid by the relevant Obligor and distribute it between the Finance Parties (other than the Recovering Finance Party) (the Sharing Finance Parties) in accordance with Clause 29.6 (Partial payments) towards the obligations of that Obligor to the Sharing Finance Parties.
28.3 Recovering Finance Party’s rights
On a distribution by the Facility Agent under Clause 28.2 (Redistribution of payments) of a payment received by a Recovering Finance Party from an Obligor as between the relevant Obligor and the Recovering Finance Party, an amount of the Recovered Amount equal to the Sharing Payment will be treated as not having been paid by that Obligor.
28.4 Reversal of redistribution
If any part of the Sharing Payment received or recovered by a Recovering Finance Party becomes repayable and is repaid by that Recovering Finance Party, then:
(a) each Sharing Finance Party shall, upon request of the Facility Agent, pay to the Facility Agent for the account of that Recovering Finance Party an amount equal to the appropriate part of its share of the Sharing Payment (together with an amount as is necessary to reimburse that Recovering Finance Party for its proportion of any interest on the Sharing Payment which that Recovering Finance Party is required to pay) (the Redistributed Amount); and
(b) as between the relevant Obligor and each relevant Sharing Finance Party, an amount equal to the relevant Redistributed Amount will be treated as not having been paid by that Obligor.
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28.5 Exceptions
(a) This Clause 28 shall not apply to the extent that the Recovering Finance Party would not, after making any payment pursuant to this Clause 28, have a valid and enforceable claim against the relevant Obligor.
(b) A Recovering Finance Party is not obliged to share with any other Finance Party any amount which the Recovering Finance Party has received or recovered as a result of taking legal or arbitration proceedings, if:
(i) it notified that other Finance Party of the legal or arbitration proceedings; and
(ii) that other Finance Party had an opportunity to participate in those legal or arbitration proceedings but did not do so as soon as reasonably practicable having received notice and did not take separate legal or arbitration proceedings.
Section 11
Administration
29 Payment Mechanics
29.1 Payments to the Facility Agent
(a) On each date on which an Obligor or a Lender is required to make a payment under a Finance Document, that Obligor or Lender shall make the same available to the Facility Agent (unless a contrary indication appears in a Finance Document) for value on the due date at the time and in such funds specified by the Facility Agent as being customary at the time for settlement of transactions in the relevant currency in the place of payment.
(b) Payment shall be made to such account in the principal financial centre of the country of that currency with such bank as the Facility Agent specifies.
29.2 Distributions by the Facility Agent
Each payment received by the Facility Agent under the Finance Documents for another Party shall, subject to Clause 29.3 (Distributions to an Obligor), Clause 29.4 (Clawback and pre-funding) and Clause 26.17 (Deduction from amounts payable by the Facility Agent) be made available by the Facility Agent as soon as practicable after receipt to the Party entitled to receive payment in accordance with this Agreement (in the case of a Lender, for the account of its Facility Office), to such account as that Party may notify to the Facility Agent by not less than five Business Days’ notice with a bank specified by that Party in the principal financial centre of the country of that currency.
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29.3 Distributions to an Obligor
The Facility Agent may (with the consent of the Obligor or in accordance with Clause 30 (Set-off)) apply any amount received by it for that Obligor in or towards payment (on the date and in the currency and funds of receipt) of any amount due from that Obligor under the Finance Documents or in or towards purchase of any amount of any currency to be so applied.
29.4 Clawback and pre-funding
(a) Where a sum is to be paid to the Facility Agent under the Finance Documents for another Party, the Facility Agent is not obliged to pay that sum to that other Party (or to enter into or perform any related exchange contract) until it has been able to establish to its satisfaction that it has actually received that sum.
(b) Unless paragraph (c) below applies, if the Facility Agent pays an amount to another Party and it proves to be the case that the Facility Agent had not actually received that amount, then the Party to whom that amount (or the proceeds of any related exchange contract) was paid by the Facility Agent shall on demand refund the same to the Facility Agent together with interest on that amount from the date of payment to the date of receipt by the Facility Agent, calculated by the Facility Agent to reflect its cost of funds.
(c) If the Facility Agent is willing to make available amounts for the account of a Borrower before receiving funds from the Lenders then if and to the extent that the Facility Agent does so but it proves to be the case that it does not then receive funds from a Lender in respect of a sum which it paid to a Borrower:
(i) the Facility Agent shall notify the Company of that Lender’s identity and the Borrower to whom that sum was made available shall on demand refund it to the Facility Agent; and
(ii) the Lender by whom those funds should have been made available or, if that Lender fails to do so, the Borrower to whom that sum was made available, shall on demand pay to the Facility Agent the amount (as certified by the Facility Agent) which will indemnify the Facility Agent against any funding cost incurred by it as a result of paying out that sum before receiving those funds from that Lender.
29.5 Impaired Agent
(a) If, at any time, the Facility Agent becomes an Impaired Agent, the Obligor or a Lender which is required to make a payment under the Finance Documents to the Facility Agent in accordance with Clause 29.1 (Payments to the Facility Agent) may instead either:
(i) pay that amount direct to the required recipient(s); or
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(ii) if in its absolute discretion it considers that it is not reasonably practicable to pay that amount direct to the required recipient(s), pay that amount or the relevant part of that amount to an interest-bearing account held with an Acceptable Bank and in relation to which no Insolvency Event has occurred and is continuing, in the name of the Borrower or the Lender making the payment (the Paying Party) and designated as a trust account for the benefit of the Party or Parties beneficially entitled to that payment under the Finance Documents (the Recipient Party or Recipient Parties).
In each case such payments must be made on the due date for payment under the Finance Documents.
(b) All interest accrued on the amount standing to the credit of the trust account shall be for the benefit of the Recipient Party or the Recipient Parties pro rata to their respective entitlements.
(c) A Party which has made a payment in accordance with this Clause 29.5 shall be discharged of the relevant payment obligation under the Finance Documents and shall not take any credit risk with respect to the amounts standing to the credit of the trust account.
(d) Promptly upon the appointment of a successor Facility Agent in accordance with Clause 26.13 (Replacement of the Facility Agent), each Paying Party shall (other than to the extent that that Party has given an instruction pursuant to paragraph (e) below) give all requisite instructions to the bank with whom the trust account is held to transfer the amount (together with any accrued interest) to the successor Facility Agent for distribution to the relevant Recipient Party or Recipient Parties in accordance with Clause 29.2 (Distributions by the Facility Agent).
(e) A Paying Party shall, promptly upon request by a Recipient Party and to the extent:
(i) that it has not given an instruction pursuant to paragraph (b) above; and
(ii) that it has been provided with the necessary information by that Recipient Party,
give all requisite instructions to the bank with whom the trust account is held to transfer the relevant amount (together with any accrued interest) to that Recipient Party.
29.6 Partial payments
(a) If the Facility Agent receives a payment that is insufficient to discharge all the amounts then due and payable by an Obligor under the Finance Documents, the Facility Agent shall apply that payment towards the obligations of that Obligor under the Finance Documents in the following order:
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(i) first, in or towards payment pro rata of any unpaid fees, costs and expenses of the Facility Agent and the Arranger under the Finance Documents;
(ii) secondly, in or towards payment pro rata of any accrued interest, fee or commission due but unpaid under this Agreement;
(iii) thirdly, in or towards payment pro rata of any principal 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 shall, if so directed by the Majority Lenders, vary the order set out in sub-paragraphs (a)(ii) to (iv) above.
(c) Paragraphs (a) and (b) above will override any appropriation made by an Obligor.
29.7 No set-off by Obligors
All payments to be made by an Obligor under the Finance Documents shall be calculated and be made without (and free and clear of any deduction for) set-off or counterclaim.
29.8 Business Days
(a) Any payment under the Finance Documents which is due to be made on a day that is not a Business Day shall be made on 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 or Unpaid Sum under this Agreement interest is payable on the principal or Unpaid Sum at the rate payable on the original due date.
29.9 Currency of account
(a) Subject to paragraphs (b) and (c) below, dollars is the currency of account and payment for any sum due from an Obligor under any Finance Document.
(b) Each payment in respect of costs, expenses or Taxes shall be made in the currency in which the costs, expenses or Taxes are incurred.
(c) Any amount expressed to be payable in a currency other than dollars shall be paid in that other currency.
29.10 Change of currency
(a) Unless otherwise prohibited by law, if more than one currency or currency unit are at the same time recognised by the central bank of any country as the lawful currency of that country, then:
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(i) any reference in the Finance Documents to, and any obligations arising under the Finance Documents in, the currency of that country shall be translated into, or paid in, the currency or currency unit of that country designated by the Facility Agent (after consultation with the Company); and
(ii) any translation from one currency or currency unit to another shall be at the official rate of exchange recognised by the central bank for the conversion of that currency or currency unit into the other, rounded up or down by the Facility Agent (acting reasonably).
(b) If a change in any currency of a country occurs, this Agreement will, to the extent the Facility Agent (acting reasonably and after consultation with the Company) specifies to be necessary, be amended to comply with any generally accepted conventions and market practice in the Relevant Market and otherwise to reflect the change in currency.
29.11 Disruption to payment systems etc.
If either the Facility Agent determines (in its discretion) that a Disruption Event has occurred or the Facility Agent is notified by the Company that a Disruption Event has occurred:
(a) the Facility Agent may, and shall if requested to do so by the Company, consult with the Company with a view to agreeing with the Company such changes to the operation or administration of the Facility as the Facility Agent may deem necessary in the circumstances;
(b) the Facility Agent shall not be obliged to consult with the Company in relation to any changes mentioned in paragraph (a) if, in its reasonable opinion, it is not practicable to do so in the circumstances and, in any event, shall have no obligation to agree to such changes;
(c) the Facility Agent may consult with the Finance Parties in relation to any changes mentioned in paragraph (a) but shall not be obliged to do so if, in its opinion, it is not practicable to do so in the circumstances;
(d) any such changes agreed upon by the Facility Agent and the Company shall (whether or not it is finally determined that a Disruption Event has occurred) be binding upon the Parties as an amendment to (or, as the case may be, waiver of) the terms of the Finance Documents notwithstanding the provisions of Clause 35 (Amendments and waivers);
(e) the Facility Agent shall not be liable for any damages, costs or losses whatsoever (including, without limitation for negligence, gross negligence or any other category of liability whatsoever but not including any claim based on the fraud of the Facility Agent) arising as a result of its taking, or failing to take, any actions pursuant to or in connection with this Clause 29.11; and
(f) the Facility Agent shall notify the Finance Parties of all changes agreed pursuant to paragraph (d) above.
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30 Set-off
A Finance Party may set off any matured obligation due from an Obligor under the Finance Documents (to the extent beneficially owned by that Finance Party) against any matured obligation owed by that Finance Party to that Obligor, 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.
31 Notices
31.1 Communications in writing
Any communication to be made under or in connection with the Finance Documents shall be made in writing and, unless otherwise stated, may be made by email or letter.
31.2 Addresses
The address and email address (and the department or officer, if any, for whose attention the communication is to be made) of each Party for any communication or document to be made or delivered under or in connection with the Finance Documents is:
(a) in the case of the Company, that identified with its name below;
(b) in the case of each Lender or any other Obligor, that notified in writing to the Facility Agent on or prior to the date on which it becomes a Party; and
(c) in the case of the Facility Agent, that identified with its name below,
or any substitute address or email address or department or officer as the Party may notify to the Facility Agent (or the Facility Agent may notify to the other Parties, if a change is made by the Facility Agent) by not less than five Business Days’ notice.
31.3 Delivery
(a) Any communication or document made or delivered by one person to another under or in connection with the Finance Documents will only be effective:
(i) if by way of email, when received in readable form; or
(ii) if by way of letter, when it has been left at the relevant address or five Business Days after being deposited in the post postage prepaid in an envelope addressed to it at that address,
and, if a particular department or officer is specified as part of its address details provided under Clause 31.2 (Addresses), if addressed to that department or officer.
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(b) Any communication or document to be made or delivered to the Facility Agent will be effective only when actually received by the Facility Agent and then only if it is expressly marked for the attention of the department or officer identified with the Facility Agent’s signature below (or any substitute department or officer as the Facility Agent shall specify for this purpose).
(c) All notices from or to an Obligor shall be sent through the Facility Agent.
(d) Any communication or document made or delivered to the Company in accordance with this Clause will be deemed to have been made or delivered to each of the Obligors.
(e) Any communication or document which becomes effective, in accordance with paragraphs (a) to (d) above, after 5.00pm in the place of receipt shall be deemed only to become effective on the following day.
31.4 Notification of address and email address
Promptly upon receipt of notification of an address and email address or change of address or email address pursuant to Clause 31.2 (Addresses) or changing its own address or email address, the Facility Agent shall notify the other Parties.
31.5 Communication when Facility Agent is Impaired Agent
If the Facility Agent is an Impaired Agent the Parties may, instead of communicating with each other through the Facility Agent, communicate with each other directly and (while the Facility Agent is an Impaired Agent) all the provisions of the Finance Documents which require communications to be made or notices to be given to or by the Facility Agent shall be varied so that communications may be made and notices given to or by the relevant Parties directly. This provision shall not operate after a replacement Facility Agent has been appointed.
31.6 Electronic communication
(a) Any communication or document to be made or delivered by one Party to another under or in connection with the Finance Documents may be made or delivered by electronic mail or other electronic means (including, without limitation, by way of posting to a secure website) if those two Parties:
(i) notify each other in writing of their electronic mail address and/or any other information required to enable the transmission of information by that means; and
(ii) notify each other of any change to their address or any other such information supplied by them by not less than five Business Days’ notice.
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(b) Any such electronic communication or delivery as specified in paragraph (a) above to be made between an Obligor and a Finance Party may only be made in that way to the extent that those two Parties agree that, unless and until notified to the contrary, this is to be an accepted form of communication or delivery.
(c) Any such electronic communication or document as specified in paragraph (a) above made or delivered by one Party to another will be effective only when actually received (or made available) in readable form and in the case of any electronic communication or document made or delivered by a Party to the Facility Agent only if it is addressed in such a manner as the Facility Agent shall specify for this purpose.
(d) Any electronic communication or document which becomes effective, in accordance with paragraph (c) above, after 5.00pm in the place in which the Party to whom the relevant communication or document is sent or made available has its address for the purpose of this Agreement shall be deemed only to become effective on the following day.
(e) Any reference in a Finance Document to a communication being sent or received or a document being delivered shall be construed to include that communication or document being made available in accordance with this Clause 31.6.
31.7 English language
(a) Any notice given under or in connection with any Finance Document must be in English.
(b) All other documents provided under or in connection with any Finance Document must be:
(i) in English; or
(ii) if not in English, and if so required by the Facility Agent, accompanied by a certified English translation and, in this case, the English translation will prevail unless the document is a constitutional, statutory or other official document.
32 Calculations and Certificates
32.1 Accounts
In any litigation or arbitration proceedings arising out of or in connection with a Finance Document, the entries made in the accounts maintained by a Finance Party are prima facie evidence of the matters to which they relate.
32.2 Certificates and determinations
(a) Any certification or determination by a Finance Party of a rate or amount under any Finance Document is, in the absence of manifest error, prima facie evidence of the matters to which it relates.
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(b) Certificates granted on behalf of the Company shall be given without personal liability on part of the officer signing them.
32.3 Day count convention
Any interest, commission or fee accruing under a Finance Document will accrue from day to day and is calculated on the basis of the actual number of days elapsed and a year of 360 days or, in any case where the practice in the Relevant Market differs, in accordance with that market practice.
33 Partial invalidity
If, at any time, any provision of a Finance Document is or becomes illegal, invalid or unenforceable in any respect under any law of any jurisdiction, neither the legality, validity or enforceability of the remaining provisions nor the legality, validity or enforceability of such provision under the law of any other jurisdiction will in any way be affected or impaired.
34 Remedies and waivers
No failure to exercise, nor any delay in exercising, on the part of any Finance Party, any right or remedy under a Finance Document shall operate as a waiver of any such right or remedy or constitute an election to affirm any of the Finance Documents. No election to affirm any of the Finance Documents on the part of any Finance Party shall be effective unless it is in writing. No single or partial exercise of any right or remedy shall prevent any further or other exercise or the exercise of any other right or remedy. The rights and remedies provided in each Finance Document are cumulative and not exclusive of any rights or remedies provided by law.
35 Amendments and waivers
35.1 Required consents
(a) Subject to Clause 35.2 (Exceptions) any term of the Finance Documents may be amended or waived only with the consent of the Majority Lenders and the Obligors and any such amendment or waiver will be binding on all Parties.
(b) The Facility Agent may effect, on behalf of any Finance Party, any amendment or waiver permitted by this Clause.
(c) Paragraph (c) of Clause 24.10 (Pro rata interest settlement) shall apply to this Clause 35.
35.2 Exceptions
(a) An amendment or waiver that has the effect of changing or which relates to:
(i) the definition of “Majority Lenders” in Clause 1.1 (Definitions);
(ii) an extension to the date of payment of any amount under the Finance Documents;
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(iii) a reduction in the Margin or a reduction in the amount of any payment of principal, interest, fees or commission payable;
(iv) an increase in or an extension of any Commitment or any requirement that a cancellation of Commitments reduces the Commitments of the Lenders rateably under the Facility;
(v) a change to the Borrowers or Guarantors other than in accordance with Clause 25 (Changes to the Obligors);
(vi) Clause 43 (Governing law) or Clause 44.1 (Jurisdiction);
(vii) any provision which expressly requires the consent of all the Lenders;
(viii) Clause 2.3 (Finance Parties’ rights and obligations), Clause 24 (Changes to the Lenders) or this Clause 35; or
(ix) the nature or scope of the guarantee and indemnity granted under Clause 19 (Guarantee and indemnity),
shall not be made without the prior consent of all the Lenders.
(b) An amendment or waiver which relates to the rights or obligations of the Facility Agent, the Arranger or a Reference Bank may not be effected without the consent of the Facility Agent, the Arranger or that Reference Bank as the case may be.
36 Confidentiality
36.1 Confidential Information
Each Finance Party agrees to keep all Confidential Information confidential and not to disclose it to anyone, save to the extent permitted by Clause 36.2 (Disclosure of Confidential Information) and Clause 36.3 (Disclosure to numbering service providers), and to ensure that all Confidential Information is protected with security measures and a degree of care that would apply to its own confidential information.
36.2 Disclosure of Confidential Information
Any Finance Party may disclose:
(a) to any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives such Confidential Information as that Finance Party shall consider appropriate if any person to whom the Confidential Information is to be given pursuant to this paragraph (a) is informed in writing of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of the information or is otherwise bound by requirements of confidentiality in relation to the Confidential Information;
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(b) to any person:
(i) to (or through) whom it assigns or transfers (or may potentially assign or transfer) all or any of its rights and/or obligations under one or more Finance Documents or which succeeds (or which may potentially succeed) it as Facility Agent and, in each case, to any of that person’s Affiliates, Representatives and professional advisers;
(ii) with (or through) whom it enters into (or may potentially enter into), whether directly or indirectly, any sub-participation in relation to, or any other transaction under which payments are to be made or may be made by reference to, one or more Finance Documents and/or one or more Obligors and to any of that person’s Affiliates, Representatives and professional advisers;
(iii) appointed by any Finance Party or by a person to whom sub-paragraph (b)(i) or (ii) above applies to receive communications, notices, information or documents delivered pursuant to the Finance Documents on its behalf (including, without limitation, any person appointed under paragraph (b) of Clause 26.15 (Relationship with the Lenders));
(iv) who invests in or otherwise finances (or may potentially invest in or otherwise finance), directly or indirectly, any transaction referred to in sub-paragraph (b)(i) or (b)(ii) above;
(v) to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation;
(vi) to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes;
(vii) to whom or for whose benefit that Finance Party charges, assigns or otherwise creates Security (or may do so) pursuant to Clause 24.9 (Security over Lenders’ rights);
(viii) who is a Party; or
(ix) with the consent of the Company;
in each case, such Confidential Information as that Finance Party shall consider appropriate if:
(A) in relation to sub-paragraphs (b)(i), (b)(ii) and (b)(iii) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking except that there shall be no requirement for a Confidentiality Undertaking if the recipient is a
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professional adviser and is subject to professional obligations to maintain the confidentiality of the Confidential Information;
(B) in relation to sub-paragraph (b)(iv) above, the person to whom the Confidential Information is to be given has entered into a Confidentiality Undertaking or is otherwise bound by requirements of confidentiality in relation to the Confidential Information they receive and is informed that some or all of such Confidential Information may be price-sensitive information;
(C) in relation to sub-paragraphs (b)(v), (b)(vi) and (b)(vii) above, the person to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of that Finance Party, it is not practicable so to do in the circumstances;
(c) to any person appointed by that Finance Party or by a person to whom sub-paragraph (b)(i) or (b)(ii) above applies to provide administration or settlement services in respect of one or more of the Finance Documents including without limitation, in relation to the trading of participations in respect of the Finance Documents, such Confidential Information as may be required to be disclosed to enable such service provider to provide any of the services referred to in this paragraph (c) if the service provider to whom the Confidential Information is to be given has entered into a confidentiality agreement substantially in the form of the LMA Master Confidentiality Undertaking for Use With Administration/ Settlement Service Providers or such other form of confidentiality undertaking agreed between the Company and the relevant Finance Party;
(d) to any rating agency (including its professional advisers) such Confidential Information as may be required to be disclosed to enable such rating agency to carry out its normal rating activities in relation to the Finance Documents and/or the Obligors if the rating agency to whom the Confidential Information is to be given is informed of its confidential nature and that some or all of such Confidential Information may be price-sensitive information.
36.3 Disclosure to numbering service providers
(a) Any Finance Party may disclose to any national or international numbering service provider appointed by that Finance Party to provide identification numbering services in respect of this Agreement, the Facility and/or one or more Obligors the following information:
(i) names of the Obligors;
(ii) country of domicile of Obligors;
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(iii) place of incorporation of the Obligors;
(iv) date of this Agreement;
(v) Clause 43 (Governing law);
(vi) the names of the Facility Agent and the Arranger;
(vii) date of each amendment and restatement of this Agreement;
(viii) amounts of, and names of, the Facility (and any tranches);
(ix) amount of Total Commitments;
(x) currency of the Facility;
(xi) type of Facility;
(xii) ranking of Facility;
(xiii) Termination Date for the Facility;
(xiv) changes to any of the information previously supplied pursuant to sub-paragraphs (i) to (xiii) above; and
(xv) such other information agreed between such Finance Party and the Company,
to enable such numbering service provider to provide its usual syndicated loan numbering identification services.
(b) The Parties acknowledge and agree that each identification number assigned to this Agreement, the Facility and/or one or more Obligors by a numbering service provider and the information associated with each such number may be disclosed to users of its services in accordance with the standard terms and conditions of that numbering service provider.
(c) The Facility Agent shall notify the Company and the other Finance Parties of:
(i) the name of any numbering service provider appointed by the Facility Agent in respect of this Agreement, the Facility and/or one or more Obligors; and
(ii) the number or, as the case may be, numbers assigned to this Agreement, the Facility and/or one or more Obligors by such numbering service provider.
36.4 Entire agreement
This Clause 36 constitutes the entire agreement between the Parties in relation to the obligations of the Finance Parties under the Finance Documents regarding Confidential Information and supersedes any previous agreement, whether express or implied, regarding Confidential Information.
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36.5 Inside information
Each of the Finance Parties acknowledges that some or all of the Confidential Information is or may be price-sensitive information and that the use of such information may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and each of the Finance Parties undertakes not to use any Confidential Information for any unlawful purpose.
36.6 Notification of disclosure
Each of the Finance Parties agrees (to the extent permitted by law and regulation) to inform the Company:
(a) of the circumstances of any disclosure of Confidential Information made pursuant to sub-paragraph (b)(v) of Clause 36.2 (Disclosure of Confidential Information) except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(b) upon becoming aware that Confidential Information has been disclosed in breach of this Clause 36 (Confidentiality).
36.7 Continuing obligations
The obligations in this Clause 36 (Confidentiality) are continuing and, in particular, shall survive and remain binding on each Finance Party for a period of 12 Months from the earlier of:
(a) the date on which all amounts payable by the Obligors under or in connection with this Agreement have been paid in full and all Commitments have been cancelled or otherwise cease to be available; and
(b) the date on which such Finance Party otherwise ceases to be a Finance Party.
37 Confidentiality of Funding Rates and Reference Bank Quotations
37.1 Confidentiality and disclosure
(a) The Facility Agent and each Obligor agree to keep each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) confidential and not to disclose it to anyone, save to the extent permitted by paragraphs (b), (c) and (d) below.
(b) The Facility Agent may disclose:
(i) any Funding Rate (but not, for the avoidance of doubt, any Reference Bank Quotation) to the relevant Borrower pursuant to Clause 10.5 (Notification of rates of interest); and
(ii) any Funding Rate or any Reference Bank Quotation to any person appointed by it to provide administration services in
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respect of one or more of the Finance Documents to the extent necessary to enable such service provider to provide those services if the service provider to whom that information is to be given has entered into a confidentiality agreement either based on an applicable LMA form or such other form of confidentiality undertaking agreed between the Facility Agent and the relevant Lender or Reference Bank, as the case may be.
(c) The Facility Agent may disclose any Funding Rate or any Reference Bank Quotation and each Obligor may disclose any Funding Rate, to:
(i) any of its Affiliates and any of its or their officers, directors, employees, professional advisers, auditors, partners and Representatives if any person to whom that Funding Rate or Reference Bank Quotation is to be given pursuant to this sub-paragraph (i) is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no such requirement to so inform if the recipient is subject to professional obligations to maintain the confidentiality of that Funding Rate or Reference Bank Quotation or is otherwise bound by requirements of confidentiality in relation to it;
(ii) any person to whom information is required or requested to be disclosed by any court of competent jurisdiction or any governmental, banking, taxation or other regulatory authority or similar body, the rules of any relevant stock exchange or pursuant to any applicable law or regulation if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances;
(iii) any person to whom information is required to be disclosed in connection with, and for the purposes of, any litigation, arbitration, administrative or other investigations, proceedings or disputes if the person to whom that Funding Rate or Reference Bank Quotation is to be given is informed in writing of its confidential nature and that it may be price-sensitive information except that there shall be no requirement to so inform if, in the opinion of the Facility Agent or the relevant Obligor, as the case may be, it is not practicable to do so in the circumstances; and
(iv) any person with the consent of the relevant Lender or Reference Bank, as the case may be.
(d) The Facility Agent’s obligations in this Clause 37 relating to Reference Bank Quotations are without prejudice to its obligations to make notifications under Clause 10.5 (Notification of rates of interest) provided that (other than pursuant to paragraph (b)(i) above) the
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Facility Agent shall not include the details of the individual Reference Bank Quotation as part of any such notification.
37.2 Other obligations
(a) The Facility Agent and each Obligor acknowledge that each Funding Rate (and, in the case of the Facility Agent, each Reference Bank Quotation) is or may be price-sensitive information and that its use may be regulated or prohibited by applicable legislation including securities law relating to insider dealing and market abuse and the Facility Agent and each Obligor undertake not to use any Funding Rate or, in the case of the Facility Agent, any Reference Bank Quotation for any unlawful purpose.
(b) The Facility Agent and each Obligor agree (to the extent permitted by law and regulation) to inform the relevant Lender or Reference Bank, as the case may be:
(i) of the circumstances of any disclosure made pursuant to sub-paragraph (c)(ii) of Clause 37.1 (Confidentiality and disclosure) above except where such disclosure is made to any of the persons referred to in that paragraph during the ordinary course of its supervisory or regulatory function; and
(ii) upon becoming aware that any information has been disclosed in breach of this Clause 37.
37.3 No Event of Default
No Event of Default will occur under Clause 23.2 (Other obligations) by reason only of an Obligor’s failure to comply with this Clause 37.
38 Lending affiliates
38.1 Lending Affiliate definitions
In this Agreement:
Appointing Lender means:
(a) in relation to an Original Lending Affiliate, the Lender specified as an Original Lender opposite that Original Lending Affiliate’s name in Schedule 14 (Original Lending Affiliates); and
(b) in relation to a New Lending Affiliate, the Lender which is party to the New Lending Affiliate Appointment Notice relating to that New Lending Affiliate.
Appointment Date means, in relation to the appointment of a New Lending Affiliate, the later of:
(a) the proposed Appointment Date specified in the relevant New Lending Affiliate Appointment Notice; and
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(b) the date on which the Facility Agent executes the relevant New Lending Affiliate Appointment Notice.
Lending Affiliate means, in relation to a Lender:
(a) an Original Lending Affiliate of that Lender; and
(b) a New Lending Affiliate of that Lender,
which in each case has not ceased to be a Party as such in accordance with the terms of this Agreement.
Lending Affiliate Loan means, in relation to a Lending Affiliate, a Loan in which that Lending Affiliate has been nominated to participate pursuant to Clause 38.6 (Nomination of Lending Affiliate Loans).
Lending Affiliate Loan Notice means a notice substantially in the form set out in Schedule 16 (Form of Lending Affiliate Loan Notice).
Lending Affiliate Resignation Notice means a notice substantially in the form set out in Schedule 17 (Form of Lending Affiliate Resignation Notice).
New Lending Affiliate means, in relation to a Lender, an entity which has become a Party as a “New Lending Affiliate” of that Lender in accordance with Clause 38.3 (Appointment of New Lending Affiliates).
New Lending Affiliate Appointment Notice means a notice substantially in the form set out in Schedule 15 (Form of New Lending Affiliate Appointment Notice).
Original Lending Affiliate means, in relation to an Original Lender, any entity specified as an Original Lending Affiliate opposite that Original Lender’s name in Schedule 14 (Original Lending Affiliates).
38.2 Original Lending Affiliate tax status confirmations
(a) Each Original Lending Affiliate which is a Treaty Lender that holds a passport under the HMRC DT Treaty Passport scheme, and which wishes that scheme to apply to this Agreement, shall confirm its scheme reference number and its jurisdiction of tax residence opposite its name in Schedule 14 (Original Lending Affiliates).
(b) Confirmation of a scheme reference number and jurisdiction of tax residence pursuant to paragraph (a) above shall be deemed to be confirmation of those details pursuant to paragraph (h)(ii)(B) of Clause 14.2 (Tax gross-up) and the reference in the definition of “Borrower DTTP Filing” in Clause 14.1 (Definitions) to Part II of Schedule 1 (The Original Parties) shall be construed to include Schedule 14 (Original Lending Affiliates).
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38.3 Appointment of New Lending Affiliates
(a) Subject to this Clause 38.3 an entity shall become a Party as a “New Lending Affiliate” of a Lender on the relevant Appointment Date if:
(i) that entity is an Affiliate of that Lender;
(ii) that Affiliate is a bank or financial institution or is a trust, fund or other entity which is regularly engaged in or established for the purpose of making, purchasing or investing in loans, securities or other financial assets;
(iii) that Lender and that Affiliate deliver to the Facility Agent a duly completed New Lending Affiliate Appointment Notice in relation to that Affiliate; and
(iv) the Facility Agent executes that New Lending Affiliate Appointment Notice.
(b) The Facility Agent shall, subject to paragraph (c) below, as soon as reasonably practicable after receipt by it of a duly completed New Lending Affiliate Appointment Notice appearing on its face to comply with the terms of this Agreement and delivered in accordance with the terms of this Agreement, execute that New Lending Affiliate Appointment Notice.
(c) The Facility Agent shall only be obliged to execute a New Lending Affiliate Appointment Notice delivered to it by a Lender and an Affiliate of that Lender once it is satisfied it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations in relation to that Affiliate becoming a Party as a New Lending Affiliate.
(d) The Facility Agent shall, as soon as reasonably practicable after it has executed a New Lending Affiliate Appointment Notice, send to the Company a copy of that New Lending Affiliate Appointment Notice.
(e) If a proposed appointment of an Affiliate of a Lender as a New Lending Affiliate obliges that Affiliate to comply with “know your customer” or similar identification procedures in circumstances where the necessary information is not already available to it, each Obligor shall promptly upon the request of that Lender supply, or procure the supply of, such documentation and other evidence as is reasonably requested by that Lender (on behalf of that Affiliate) in order for that Affiliate to carry out and be satisfied that it has complied with all necessary “know your customer” or other similar checks under all applicable laws and regulations pursuant to the transactions contemplated in the Finance Documents.
38.4 Lending Affiliates as Lenders
(a) Subject to this Clause 38, any reference in a Finance Document to a “Lender” shall be construed to include a Lending Affiliate and any reference to an “Original Lender” shall be construed to include an Original Lending Affiliate.
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(b) An Appointing Lender and each of its Lending Affiliates shall be treated as a single Lender for the purposes of:
(i) determining an Appointing Lender’s Available Commitment; and
(ii) Clause 8.1 (Illegality), Clause 8.2 (Change of control), Clause 8.7 (Right of replacement or repayment and cancellation in relation to a single Lender), and paragraph (d) of Clause 11.1 (Selection of Interest Periods).
38.5 Nomination of Lending Affiliate Loans
(a) Each Original Lending Affiliate is nominated by its Appointing Lender to participate in any Loan, or class of Loan, specified opposite the name of that Original Lending Affiliate in Schedule 14 (Original Lending Affiliates).
(b) An Appointing Lender may, by delivery of a duly completed Lending Affiliate Loan Notice to the Facility Agent and the Company no later than the time specified in paragraph (c) below, nominate any of its Lending Affiliates to participate in any Loan, or class of Loan, specified in that Lending Affiliate Loan Notice.
(c) Any Lending Affiliate Loan Notice delivered pursuant to paragraph (b) above shall be delivered no later than 3 Business Days before the proposed Utilisation Date of any Loan specified in that Lending Affiliate Loan Notice, or at such later time agreed by the Facility Agent and the Company.
(d) A Loan, or class of Loan, may only be specified pursuant to paragraphs (a) or (b) above by reference to any of:
(i) the Borrower(s) of that Loan or those Loans;
(ii) the jurisdiction of incorporation of the Borrower(s) of that Loan or those Loans; or
(iii) in the case of the specification of an individual Loan, the proposed Utilisation Date of that Loan.
(e) Clause 24 (Changes to the Lenders) shall not apply to any nomination of a Lending Affiliate Loan or to the effects of that nomination pursuant to this Clause 38.
38.6 Participation by Lending Affiliate
(a) An Appointing Lender which nominates its Lending Affiliate to participate in any Loan, or class of Loan, pursuant to Clause 38.6 (Nomination of Lending Affiliate Loans) will be released from its obligations under the Finance Documents which relate to that Loan, or class of Loan, and that Lending Affiliate will be bound by obligations equivalent to those obligations.
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(b) Without prejudice to Clause 26.11 (Lenders’ indemnity to the Facility Agent) an Appointing Lender shall not be responsible for, or liable for any damages, costs or losses to any person arising as a result of, the non-performance by any Lending Affiliate of that Appointing Lender of that Lending Affiliate’s obligations under the Finance Documents.
38.7 Payments
(a) Notwithstanding Clause 26.15 (Relationship with the Lenders) (and subject to paragraph (b) below) any obligation under any Finance Document to pay an amount to a Lender, or to the Facility Agent on a Lender’s behalf, in relation to a Lending Affiliate Loan shall be construed as an obligation to pay that amount to the Lending Affiliate nominated by that Lender to participate in that Lending Affiliate Loan or to the Facility Agent on behalf of that Lending Affiliate.
(b) Each Lending Affiliate appoints its Appointing Lender as its agent for the purpose of receipt of payments under the Finance Documents and, notwithstanding Clause 29.2 (Distributions by the Facility Agent), and subject to Clause 29.4 (Clawback and pre-funding), each payment received by the Facility Agent under the Finance Documents for a Lending Affiliate shall be made available by the Facility Agent as soon as practicable after receipt to the Appointing Lender of that Lending Affiliate to such account as that Appointing Lender may notify to the Facility Agent by not less than five Business Days’ notice with a bank specified by that Appointing Lender in the principal financial centre of the country of that currency (or, in relation to euro, in the principal financial centre of a Participating Member State or London, as specified by that Appointing Lender).
38.8 Commitments and voting
(a) Without prejudice to Clause 38.6 (Participation by Lending Affiliate), a Lending Affiliate has no Commitment and any portion of a Commitment which relates to any Lending Affiliate Loan of that Lending Affiliate remains part of the Commitment of the Appointing Lender of that Lending Affiliate.
(b) Any term of this Agreement which acts to cancel or reduce a Commitment on the repayment or prepayment of a Loan shall, in the case of the repayment or prepayment of a Lending Affiliate Loan of a Lending Affiliate, operate to cancel or reduce the corresponding portion of the Commitment of the Appointing Lender of that Lending Affiliate.
(c) No reference in a Finance Document to a “Lender” shall be construed to include any Lending Affiliate for the purposes of ascertaining whether the agreement of any specified group of Lenders has been obtained to approve any request for a consent, waiver, amendment or any other vote of Lenders under the Finance Documents. The agreement of any Lending Affiliate is not required to approve a request for any such consent, waiver, amendment or vote.
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38.9 Effect on assignments and transfers
(a) Any assignment or transfer by an Appointing Lender pursuant to Clause 24 (Changes to the Lenders) of its rights and/or obligations under the Finance Documents which relate to that portion of its Commitment which relates to a Lending Affiliate Loan shall be construed to include an assignment or transfer, as the case may be, by it, on behalf of its Lending Affiliate nominated to participate in that Lending Affiliate Loan, of that Lending Affiliate’s rights and/or obligations under the Finance Documents which relate to that Lending Affiliate Loan.
(b) Subject to paragraph (c) below the rights and/or obligations of a Lending Affiliate under the Finance Documents may not be assigned or transferred other than pursuant to an assignment or transfer by its Appointing Lender described in paragraph (a) above.
(c) A Lending Affiliate (the Existing Lending Affiliate) may, subject to Clause 24 (Changes to the Lenders), assign any of its rights under any Finance Document which relate to an outstanding Lending Affiliate Loan to another Lending Affiliate of its Appointing Lender (the Alternative Lending Affiliate) or to its Appointing Lender.
(d) An assignment described in paragraph (c) above will only be effective on receipt by the Facility Agent of written confirmation from the Alternative Lending Affiliate or, as the case may be, the Appointing Lender (in form and substance satisfactory to the Facility Agent) that the Alternative Lending Affiliate or, as the case may be, the Appointing Lender will assume the same obligations to the other Finance Parties as it would have been under if, in the case of an Alternative Lending Affiliate, it had been nominated to participate in that Lending Affiliate Loan or, in the case of an Appointing Lender, the Existing Lending Affiliate had not been nominated to participate in that Lending Affiliate Loan.
(e) Paragraph (b)(i) of Clause 24.3 (Other conditions of assignment or transfer) shall not apply to an assignment described in paragraph (c) above.
38.10 Communications
(a) Each Lending Affiliate shall be represented by its Appointing Lender for all administrative purposes under the Finance Documents and each Lending Affiliate shall deal with each other Party exclusively through its Appointing Lender.
(b) The Facility Agent shall be entitled to carry out all dealings with a Lending Affiliate through the Appointing Lender of that Lending Affiliate and may give to that Appointing Lender any notice, document or other communication required to be given by the Facility Agent to that Lending Affiliate.
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38.11 Defaulting Lenders
An Appointing Lender shall be treated as a Defaulting Lender if any Lending Affiliate of that Appointing Lender is a Defaulting Lender and a Lending Affiliate shall be treated as a Defaulting Lender if its Appointing Lender is a Defaulting Lender.
38.12 Other adjustments
(a) Any obligation under this Agreement for a Lending Affiliate to transfer its rights and obligations under this Agreement shall be construed as an obligation for the Appointing Lender of that Lending Affiliate to transfer its rights and obligations under this Agreement which relate to that portion of its Commitment which relates to any Lending Affiliate Loan of that Lending Affiliate.
(b) If:
(i) a Lending Affiliate is nominated to participate in any Loan, or class of Loan, pursuant to the delivery of a Lending Affiliate Loan Notice; and
(ii) as a result of circumstances existing at the date of delivery of that Lending Affiliate Loan Notice an Obligor would be obliged to make a payment to that Lending Affiliate under Clause 14 (Tax Gross-Up and Indemnities) or Clause 15 (Increased Costs),
then that Lending Affiliate is only entitled to receive payment under those Clauses in respect of a Lending Affiliate Loan which is the subject of that Lending Affiliate Loan Notice to the same extent as its Appointing Lender would have been if that Loan had not been a Lending Affiliate Loan. This paragraph (b) shall not apply in relation to Clause 14.2 (Tax gross-up), with respect to payments to a Lending Affiliate that is a Treaty Lender and that has included a confirmation of its scheme reference number and its jurisdiction of tax residence in accordance with paragraph (a) of Clause 38.2 (Original Lending Affiliate tax status confirmations) or paragraph (h)(ii)(B) of Clause 14.2 (Tax gross-up) if the Obligor making the payment has not made a Borrower DTTP Filing in respect of that Treaty Lender.
(c) References to an Affiliate of a Lender (the Relevant Lender) or to a Lender which is an Affiliate of the Relevant Lender in:
(i) paragraphs (b) and (c) of Clause 8.1 (Illegality);
(ii) Clause 8.2 (Change of control); and
(iii) Clause 8.7 (Right of replacement or repayment and cancellation in relation to a single Lender),
shall not include either a Lending Affiliate of the Relevant Lender in its capacity as such or, if the Relevant Lender is a Lending Affiliate, the Appointing Lender of the Relevant Lender in its capacity as such.
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38.13 Resignation of Lending Affiliate
(a) If no Lending Affiliate Loan in respect of which a Lending Affiliate has rights or obligations under this Agreement is outstanding, that Lending Affiliate and its Appointing Lender may request that such Lending Affiliate (the Resigning Lending Affiliate) ceases to be a Lending Affiliate by delivering to the Facility Agent a Lending Affiliate Resignation Notice.
(b) The Facility Agent shall as soon as reasonably practicable after receipt by it of a duly completed Lending Affiliate Resignation Notice appearing on its face to comply with the terms of this Agreement, and delivered in accordance with the terms of this Agreement, accept that Lending Affiliate Resignation Notice and notify the Appointing Lender of that Resigning Lending Affiliate and the Company of its acceptance.
(c) Upon notification by the Facility Agent to that Appointing Lender and the Company of its acceptance of the resignation of that Resigning Lending Affiliate:
(i) that Resigning Lending Affiliate shall cease to be a Lending Affiliate and shall have no further rights or obligations under the Finance Documents as a Lending Affiliate; and
(ii) any nomination of that Lending Affiliate to participate in any Loan, or class of Loan, shall be cancelled.
(d) A Lending Affiliate shall, and its Appointing Lender shall procure that such Lending Affiliate will, resign pursuant to this Clause 38.13 if:
(i) that Lending Affiliate ceases to be an Affiliate of its Appointing Lender; or
(ii) its Appointing Lender ceases to be a Party.
39 USA Patriot Act
Each Finance Party notifies the Obligors that pursuant to the requirements of the USA PATRIOT Act (Title III of Pub. L. 107-56), and its implementing regulations, it is required to obtain, verify and record information that identifies the Obligors, which information includes the name and address of the Obligors and other information that will allow such Finance Party to identify the Obligors in accordance with the provisions of that Act. Each Obligor agrees that it will provide each Finance Party with information as it may request in order for such Finance Party to satisfy the requirements of the USA PATRIOT Act.
40 Contractual recognition of bail-in
(a) Notwithstanding any other term of any Finance Document or any other agreement, arrangement or understanding between the Parties, each Party acknowledges and accepts that any liability of any Party to any other Party under or in connection with the Finance Documents may be subject to Bail-In Action by the relevant Resolution Authority and acknowledges and accepts to be bound by the effect of:
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(i) any Bail-In Action in relation to any such liability, including (without limitation):
(A) a reduction, in full or in part, in the principal amount, or outstanding amount due (including any accrued but unpaid interest) in respect of any such liability;
(B) a conversion of all, or part of, any such liability into shares or other instruments of ownership that may be issued to, or conferred on, it; and
(C) a cancellation of any such liability; and
(ii) a variation of any term of any Finance Document to the extent necessary to give effect to any Bail-In Action in relation to any such liability.
(b) In this Clause 40:
Article 55 BRRD means Article 55 of Directive 2014/59/EU establishing a framework for the recovery and resolution of credit institutions and investment firms;
Bail-In Action means the exercise of any Write-down and Conversion Powers;
Bail-In Legislation means:
(a) in relation to an EEA Member Country which has implemented, or which at any time implements, Article 55 BRRD, the relevant implementing law or regulation as described in the EU Bail-In Legislation Schedule from time to time; and
(b) in relation to any state other than such an EEA Member Country or (to the extent that the United Kingdom is not such an EEA Member Country) the United Kingdom, any analogous law or regulation from time to time which requires contractual recognition of any Write-down and Conversion Powers contained in that law or regulation;
EEA Member Country means any member state of the European Union, Iceland, Liechtenstein and Norway;
EU Bail-In Legislation Schedule means the document described as such and published by the Loan Market Association (or any successor person) from time to time;
Resolution Authority means any body which has authority to exercise any Write-down and Conversion Powers;
UK Bail-In Legislation means (to the extent that the United Kingdom is not an EEA Member Country which has implemented, or implements, Article 55 BRRD) Part I of the United Kingdom Banking Act 2009 and any other law or regulation applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their
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affiliates (otherwise than through liquidation, administration or other insolvency proceedings);
Write-down and Conversion Powers means:
(a) in relation to any Bail-In Legislation described in the EU Bail-In Legislation Schedule from time to time, the powers described as such in relation to that Bail-In Legislation in the EU Bail-In Legislation Schedule;
(b) in relation to any other applicable Bail-In Legislation:
(i) any powers under that Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii) any similar or analogous powers under that Bail-In Legislation; and
(c) in relation to any UK Bail-In Legislation:
(i) any powers under that UK Bail-In Legislation to cancel, transfer or dilute shares issued by a person that is a bank or investment firm or other financial institution or affiliate of a bank, investment firm or other financial institution, to cancel, reduce, modify or change the form of a liability of such a person or any contract or instrument under which that liability arises, to convert all or part of that liability into shares, securities or obligations of that person or any other person, to provide that any such contract or instrument is to have effect as if a right had been exercised under it or to suspend any obligation in respect of that liability or any of the powers under that UK Bail-In Legislation that are related to or ancillary to any of those powers; and
(ii) any similar or analogous powers under that UK Bail-In Legislation.
41 Supported QFCs
To the extent that the Finance Documents provide support, through a guarantee or otherwise, for any other agreement or instrument that is a QFC (such support, QFC Credit Support and each such QFC a Supported QFC), the Parties acknowledge and agree as follows with respect to the resolution power of the Federal Deposit Insurance Corporation under the Federal Deposit Insurance Act
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and Title II of the Dodd-Frank Wall Street Reform and Consumer Protection Act (together with the regulations promulgated thereunder, the U.S. Special Resolution Regimes) in respect of such Supported QFC and QFC Credit Support:
(a) in the event a Covered Entity that is party to a Supported QFC (each, a Covered Party) becomes subject to a proceeding under a U.S. Special Resolution Regime, the transfer of such Supported QFC and the benefit of such QFC Credit Support (and any interest and obligation in or under such Supported QFC and such QFC Credit Support, and any rights in property securing such Supported QFC or such QFC Credit Support) from such Covered Party will be effective to the same extent as the transfer would be effective under the U.S. Special Resolution Regime if the Supported QFC and such QFC Credit Support (and any such interest, obligation and rights in property) were governed by the laws of the US or a state of the US. In the event a Covered Party or a BHC Act Affiliate of a Covered Party becomes subject to a proceeding under a U.S. Special Resolution Regime, Default Rights under the Finance Documents that might otherwise apply to such Supported QFC or any QFC Credit Support that may be exercised against such Covered Party are permitted to be exercised to no greater extent than such Default Rights could be exercised under the U.S. Special Resolution Regime if the Supported QFC and the Finance Documents were governed by the laws of the US or a state of the US. Without limitation of the foregoing, it is understood and agreed that the rights and remedies of the Parties with respect to a Defaulting Lender shall in no event affect the rights of any Covered Party with respect to a Supported QFC or any QFC Credit Support.
(b) In this Clause 41:
BHC Act Affiliate of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
Covered Entity means any of the following:
(i) a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(ii) a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(iii) a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
Default Right has the meaning given to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1.
QFC has the meaning given to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
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42 Counterparts
Each Finance Document may be executed in any number of counterparts, and this has the same effect as if the signatures on the counterparts were on a single copy of the Finance Document.
Section 12
Governing law and enforcement
43 Governing law
This Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
44 Enforcement
44.1 Jurisdiction
(a) The courts of England have exclusive jurisdiction to settle any dispute arising out of or in connection with this Agreement (including a dispute relating to the existence, validity or termination of this Agreement) or any non-contractual obligation arising out of or in connection with this Agreement) (a Dispute).
(b) The Parties agree that the courts of England are the most appropriate and convenient courts to settle Disputes and accordingly no Party will argue to the contrary.
(c) Notwithstanding paragraphs (a) and (b) above, no Finance Party shall be prevented from taking proceedings relating to a Dispute in any other courts with jurisdiction (including the Federal and State courts in the State of New York to whose jurisdiction each Obligor irrevocably submits). To the extent allowed by law, the Finance Parties may take concurrent proceedings in any number of jurisdictions.
(d) EACH PARTY HEREBY WAIVES, TO THE FULLEST EXTENT PERMITTED BY APPLICABLE LAW, ANY RIGHT THAT IT MAY HAVE TO A TRIAL BY JURY IN ANY LEGAL PROCEEDING IN A COURT LOCATED IN THE UNITED STATES DIRECTLY OR INDIRECTLY ARISING OUT OF OR RELATING TO THIS AGREEMENT, ANY OTHER FINANCE DOCUMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY OR THEREBY (WHETHER BASED ON CONTRACT, TORT OR ANY OTHER THEORY). EACH PARTY HERETO (A) CERTIFIES THAT NO REPRESENTATIVE, AGENT OR ATTORNEY OF ANY OTHER PARTY HAS REPRESENTED, EXPRESSLY OR OTHERWISE, THAT SUCH OTHER PARTY WOULD NOT, IN THE EVENT OF LITIGATION, SEEK TO ENFORCE THE FOREGOING WAIVER AND (B) ACKNOWLEDGES THAT IT AND THE OTHER PARTIES HERETO HAVE BEEN INDUCED TO ENTER INTO THIS AGREEMENT BY, AMONG OTHER THINGS, THE MUTUAL WAIVERS AND CERTIFICATIONS IN THIS SECTION.
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44.2 Service of process
Without prejudice to any other mode of service allowed under any relevant law, each Obligor (other than an Obligor incorporated in England and Wales):
(a) irrevocably appoints the Company as its agent for service of process in relation to any proceedings before the English courts in connection with any Finance Document; and
(b) agrees that failure by a process agent to notify the relevant Obligor of the process will not invalidate the proceedings concerned.
This Agreement has been entered into on the date stated at the beginning of this Agreement.
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Schedule 1
The Original Parties
Part I The Original Obligors
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Name of Original Borrower
|
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Registration number (or equivalent, if any)
|
|
|
|
|
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AstraZeneca PLC
|
|
02723534
|
|
|
|
|
|
Delta Omega Sub Holdings Inc.
|
|
|
129
Part II The Original Lenders
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Name of Original Lender
|
|
Commitment ($)
|
|
Treaty Passport scheme
reference number and
jurisdiction of tax
residence (if applicable)
|
|
|
Morgan Stanley Senior Funding, Inc.
|
|
7,625,000,000
|
|
13/M/227953/DTTP
USA Tax residence
|
|
|
|
|
|
|
|
|
|
Morgan Stanley Bank NA
|
|
2,000,000,000
|
|
13/M/307216/DTTP
USA Tax residence
|
|
|
|
|
|
|
|
|
|
JPMorgan Chase Bank, N.A., London Branch
|
|
6,125,000,000
|
|
|
|
|
|
|
|
|
|
|
|
Goldman Sachs Bank USA
|
|
1,750,000,000
|
|
13/G/351779/DTTP
USA Tax residence
|
|
|
|
|
|
|
|
|
|
Total
|
|
17,500,000,000
|
|
|
|
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Schedule 2
Conditions Precedent
Part I Conditions Precedent to Signing this Agreement
1. Original Obligors
(a) A copy of the constitutional documents of each Original Obligor.
(b) A copy of a resolution of the board of directors of each Original Obligor:
(i) approving the terms of, and the transactions contemplated by, the Finance Documents to which it is a party, the Merger Agreement and associated documents and resolving that it execute, deliver and perform the Finance Documents to which it is a party, the Merger Agreement and associated documents;
(ii) authorising a specified person or persons to execute the Finance Documents, the Merger Agreement and associated documents to which it is a party on its behalf; and
(iii) authorising a specified person or persons, on its behalf, to sign and/or despatch all documents and notices (including, if relevant, any Utilisation Request and Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents to which it is a party.
(c) A specimen of the signature of each person authorised to sign and actually signing any Finance Documents.
(d) A certificate of the Company (signed by an authorised signatory) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on any Original Obligor to be exceeded.
(e) A certificate of an authorised signatory of the relevant Original Obligor certifying that each copy document relating to it specified in this Part I of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of this Agreement.
(f) A good standing certificate of each Obligor incorporated in the US from its jurisdiction of incorporation or organisation, dated not earlier than 5 Business Days prior to the date of this Agreement.
(g) A certificate of an authorised signatory of the US Borrower certifying as to the solvency of the company after consummation of the transactions contemplated by the Finance Documents.
2. Legal opinions
(a) A legal opinion of Allen & Overy LLP, legal advisers to the Arranger and the Facility Agent in England, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
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(b) A legal opinion of Freshfields Bruckhaus Deringer US LLP, legal advisers to the Company in the US, substantially in the form distributed to the Original Lenders prior to signing this Agreement.
3. Other documents and evidence
(a) The Original Financial Statements.
(b) Form of Merger Agreement.
(c) Executed Fee Letters.
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Part II Conditions Precedent to Initial Utilisation
1. Evidence that the fees, costs and expenses then due from the Company pursuant to Clause 13 (Fees) and Clause 18 (Costs and expenses) have been paid or will be paid (in accordance with the Fee Letters where relevant), by the first Utilisation Date.
2. The executed Merger Agreement.
3. Confirmation from the Company that the Merger Agreement has not been amended, varied, waived or supplemented from the form provided to the Facility Agent under Part I of Schedule 1 (Conditions Precedent) other than in a manner which may not materially adversely affect the Lenders.
4. Confirmation from the Company that it has received all required consents in relation to the Acquisition and all conditions to Closing have been satisfied or waived by it (other than, in each case, as may not materially adversely affect the interests of the Lenders) and that the Acquisition will be consummated substantially simultaneously with the first Utilisation under this Agreement.
5. Confirmation from the Company that it has the funds available to the Group in order to meet the cash requirements in the Merger Agreement.
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Part III Conditions Precedent required to be delivered by an Additional Borrower
1. An Accession Letter, duly executed by the Additional Borrower and the Company.
2. A copy of the constitutional documents of the Additional Borrower.
3. A copy of a resolution of the board of directors of the Additional Borrower:
(a) approving the terms of, and the transactions contemplated by, the Accession Letter and the Finance Documents and resolving that it execute the Accession Letter;
(b) authorising a specified person or persons to execute the Accession Letter on its behalf; and
(c) authorising a specified person or persons, on its behalf, to sign and/or despatch all other documents and notices (including any Utilisation Request or Selection Notice) to be signed and/or despatched by it under or in connection with the Finance Documents.
4. A specimen of the signature of each person authorised by the resolution referred to in paragraph 3 above.
5. A certificate of the Additional Borrower (signed by a director) confirming that borrowing or guaranteeing, as appropriate, the Total Commitments would not cause any borrowing, guaranteeing or similar limit binding on it to be exceeded.
6. A certificate of an authorised signatory of the Additional Borrower certifying that each copy document listed in this Part III of Schedule 2 is correct, complete and in full force and effect as at a date no earlier than the date of the Accession Letter.
7. A copy of any other Authorisation or other document, opinion or assurance which the Facility Agent considers to be necessary or desirable in connection with the entry into and performance of the transactions contemplated by the Accession Letter or for the validity and enforceability of any Finance Document.
8. If available, the latest audited financial statements of the Additional Borrower.
9. A legal opinion of the legal advisers to the Arranger and the Facility Agent in England.
10. If the Additional Borrower is incorporated in a jurisdiction other than England and Wales or any State of the US, a legal opinion of the legal advisers to the Arranger and the Facility Agent in the jurisdiction in which the Additional Borrower is incorporated.
11. If the Additional Borrower is incorporated or organised under the law of any State of the US or the District of Columbia, a legal opinion of the legal advisers to such Additional Borrower in the jurisdiction in which such Additional Borrower is incorporated or organised.
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12. A good standing certificate of each Additional Borrower incorporated or organised in the US from its jurisdiction of incorporation or organisation, dated not earlier than 5 Business Days prior to the date of the relevant Accession Letter.
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Schedule 3
Requests
Part I Utilisation Request
From: [Borrower]
To: [·] as the Facility Agent
Dated: [·]
Dear Sirs,
AstraZeneca PLC — $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This is a Utilisation Request. Terms defined in the Agreement have the same meaning in this Utilisation Request unless given a different meaning in this Utilisation Request.
2. We wish to borrow a Loan on the following terms:
|
Proposed Utilisation Date:
|
|
[·] (or, if that is not a Business Day, the next Business Day)
|
|
|
|
|
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Amount:
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$[·] or, if less, the Available Facility
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|
|
|
|
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Interest Period:
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[·]
|
3. We confirm that each condition specified in Clause 5.2 (Further conditions precedent) of the Agreement is satisfied on the date of this Utilisation Request.
4. The proceeds of this Loan should be credited to [account].
5. This Utilisation Request is irrevocable.
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Yours faithfully
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|
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|
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|
|
|
|
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authorised signatory for
|
|
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[Borrower]
|
|
136
Part II Selection Notice
From: [AstraZeneca PLC]/[Borrower]
To: [·] as the Facility Agent
Dated: [·]
Dear Sirs,
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·]
(the Agreement)
1. We refer to the Agreement. This is a Selection Notice. Terms defined in the Agreement have the same meaning in this Selection Notice unless given a different meaning in this Selection Notice.
2. We refer to the following Loan[s] with an Interest Period ending on [·].*
3. [We request that the above Loan[s] be divided into [·] Loans with the following amounts and Interest Periods:]**
or
[We request that the next Interest Period for the above Loan[s] is [·]].***
4. This Selection Notice is irrevocable.
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Yours faithfully
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|
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|
|
|
|
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authorised signatory for
|
|
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[AstraZeneca PLC]/[Borrower]
|
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* Insert details of all Loans which have an Interest Period ending on the same date.
** Use this option if division of Loans is requested.
*** Use this option if sub-division is not required.
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Schedule 4
Form of Accession Letter
To: [·] as the Facility Agent
From: [Subsidiary] and [Company]
Dated: [·]
Dear Sirs,
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·]
(the Agreement)
1. We refer to the Agreement. This is an Accession Letter. Terms defined in the Agreement have the same meaning in this Accession Letter unless given a different meaning in this Accession Letter.
2. [Subsidiary] agrees to become an Additional Borrower and to be bound by the terms of the Agreement as an Additional Borrower pursuant to Clause 25.2 (Additional Borrowers) of the Agreement. [Subsidiary] is a company duly incorporated under the laws of [name of relevant jurisdiction].
3. The Company confirms that no Default is continuing or would occur as a result of [Subsidiary] becoming an Additional Borrower.
4. [Subsidiary’s] administrative details are as follows:
Address:
Email address:
Attention:
5. This Accession Letter and any non-contractual obligations arising out of or in connection with it are governed by English law.
[This Accession Letter is entered into by deed.]
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[Company]
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[Subsidiary]
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By:
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By:
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138
Schedule 5
Form of Resignation Letter
To: [·] as the Facility Agent
From: [resigning Obligor] and [Company]
Dated: [·]
Dear Sirs,
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·]
(the Agreement)
1. We refer to the Agreement. This is a Resignation Letter. Terms defined in the Agreement have the same meaning in this Resignation Letter unless given a different meaning in this Resignation Letter.
2. Pursuant to Clause 25.3 (Resignation of a Borrower) of the Agreement, we request that [resigning Obligor] be released from its obligations as a Borrower under the Agreement.
3. We confirm that:
(a) no Default is continuing or would result from the acceptance of this request; and
(b) [resigning Obligor] is under no actual or contingent obligations as a Borrower under any Finance Documents.
4. This Resignation Letter and any non-contractual obligations arising out of or in connection with it are governed by English law.
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[Company]
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[Subsidiary]
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By:
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By:
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139
Schedule 6
Form of Transfer Certificate
To: [·] as Facility Agent and [the Company]
From: [The Existing Lender] (the Existing Lender) and [The New Lender] (the New Lender)
Dated: [·]
AstraZeneca PLC — $17,500,000,000 Facility Agreement dated [·]
(the Agreement)
1. We refer to the Agreement. This is a Transfer Certificate. Terms defined in the Agreement have the same meaning in this Transfer Certificate unless given a different meaning in this Transfer Certificate.
2. We refer to Clause 24.6 (Procedure for transfer) of the Agreement:
(a) The Existing Lender and the New Lender agree to the Existing Lender transferring to the New Lender by novation, and in accordance with Clause 24.6 (Procedure for transfer) of the Agreement, all of the Existing Lender’s rights and obligations under the Agreement and other Finance Documents which relate to that portion of the Existing Lender’s Commitment(s) and participations in Loans under the Agreement as specified in the Schedule in accordance with Clause 24.6 (Procedure for transfer) of the Agreement.
(b) The proposed Transfer Date is [·].
(c) The Facility Office and address, email address and attention details for notices of the New Lender for the purposes of Clause 31.2 (Addresses) of the Agreement are set out in the Schedule.
3. The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 24.5 (Limitation of responsibility of Existing Lenders) of the Agreement.
4. The New Lender confirms, for the benefit of the Facility Agent and without liability to any Obligor, that it is:
(a) with respect to a Borrower other than a US Borrower:
(i) [a Qualifying Lender (other than a Treaty Lender);]
(ii) [a Treaty Lender;]
(iii) [not a Qualifying Lender].(1)
(1) Delete as applicable - each New Lender is required to confirm which of these three categories it falls within.
140
(b) with respect to a US Borrower:
(i) [a US Qualifying Lender (other than a Treaty Lender);]
(ii) [a US Treaty Lender;]
(iii) [not a US Qualifying Lender].(2)
5. [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax purposes;
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.](3)
[[5]. The New Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [·]) and is tax resident in [·](4), so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax.](5)
[5/6]. This Transfer Certificate may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Transfer Certificate.
[5/6]. This Transfer Certificate and any non-contractual obligations arising out of or in connection with it are governed by English law.
(2) Delete as applicable - each New Lender is required to confirm which of these three categories it falls within.
(3) Include if New Lender comes within paragraph (i)(B) of the definition of Qualifying Lender in Clause 14.1 (Definitions).
(4) Insert jurisdiction of tax residence.
(5) Include if New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement.
141
[6/7]. This Transfer Certificate has been entered into on the date stated at the beginning of this Transfer Certificate.
142
The Schedule
Commitment/rights and obligations to be transferred
[insert relevant details]
[Facility Office address, email address and attention details for notices and account details for payments,]
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[Existing Lender]
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[New Lender]
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By:
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By:
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This Transfer Certificate is accepted by the Facility Agent and the Transfer Date is confirmed as [·].
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[Facility Agent]
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This Transfer Certificate is accepted by the Company.
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[Company]
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By:
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143
Schedule 7
Form of Assignment Agreement
To: [·] as Facility Agent and [·] as Company
From: [the Existing Lender] (the Existing Lender) and [the New Lender] (the New Lender)
Dated: [·]
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This is an Assignment Agreement. Terms defined in the Agreement have the same meaning in this Assignment Agreement unless given a different meaning in this Assignment Agreement.
2. We refer to Clause 24.7 (Procedure for assignment) of the Agreement:
(a) The Existing Lender assigns absolutely to the New Lender all the rights of the Existing Lender under the Agreement and the other Finance Documents which relate to that portion of the Existing Lender’s Commitment(s) and participations in Loans under the Agreement as specified in the Schedule.
(b) The Existing Lender is released from all the obligations of the Existing Lender which correspond to that portion of the Existing Lender’s Commitment(s) and participations in Loans under the Agreement specified in the Schedule.
(c) The New Lender becomes a Party as a Lender and is bound by obligations equivalent to those from which the Existing Lender is released under paragraph (b) above.
3. The proposed Transfer Date is [·].
4. On the Transfer Date the New Lender becomes Party to the Finance Documents as a Lender.
5. The Facility Office and address, email address and attention details for notices of the New Lender for the purposes of Clause 31.2 (Addresses) of the Agreement are set out in the Schedule.
6. The New Lender expressly acknowledges the limitations on the Existing Lender’s obligations set out in paragraph (c) of Clause 24.5 (Limitation of responsibility of Existing Lenders) of the Agreement.
7. The New Lender confirms, for the benefit of the Facility Agent and without liability to any Obligor, that it is:
(a) with respect to a Borrower other than a US Borrower:
(i) [a Qualifying Lender (other than a Treaty Lender);]
(ii) [a Treaty Lender;]
144
(iii) [not a Qualifying Lender]
(b) with respect to a US Borrower:
(i) [a US Qualifying Lender (other than a Treaty Lender);]
(ii) [a US Treaty Lender;]
(iii) [not a US Qualifying Lender.]
8. [The New Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax purposes; or
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]
9. [The New Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [·]) and is tax resident in [·](6), so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax.](7)
[8/9]. This Assignment Agreement acts as notice to the Facility Agent (on behalf of each Finance Party) and, upon delivery in accordance with Clause 24.8 (Copy of Transfer Certificate or Assignment Agreement or Increase Confirmation to Company) of the Agreement, to the Company (on behalf of each Obligor) of the assignment referred to in this Assignment Agreement.
[9/10]. This Assignment Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Assignment Agreement.
(6) Insert jurisdiction of tax residence.
(7) Include if New Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement.
145
[10/11] This Assignment Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
[11/12] This Assignment Agreement has been entered into on the date stated at the beginning of this Assignment Agreement.
146
The Schedule
Rights to be assigned and obligations to be released and undertaken
[insert relevant details]
[Facility Office address, email address and attention details for notices and account details for payments]
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[Existing Lender]
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[New Lender]
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By:
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By:
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This Assignment Agreement is accepted by the Facility Agent and the Transfer Date is confirmed as [·].
Signature of this Assignment Agreement by the Facility Agent constitutes confirmation by the Facility Agent of receipt of notice of the assignment referred to herein, which notice the Facility Agent receives on behalf of each Finance Party.
This Assignment Agreement is accepted by the Company.
147
Schedule 8
Timetables
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Loans in Dollars
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Delivery of a duly completed Utilisation Request (Clause 6.1 (Delivery of a Utilisation Request)) or a Selection Notice (Clause 11.1 (Selection of Interest Periods))
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U-2
9.30am
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Facility Agent notifies the Lenders of the Loan in accordance with Clause 6.4 (Lenders’ participation)
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U-2
10.30am
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LIBOR is fixed
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Quotation Day as of 11.00am
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Reference Bank Rate calculated by reference to available quotations in accordance with Clause 12.1(b) (Calculation of Reference Bank Rate)
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Noon on the Quotation Day
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148
Schedule 9
Form of Increase Confirmation
To: [·] as Facility Agent, and [·] as the Company
From: [the Increase Lender] (the Increase Lender)
Dated: [·]
AstraZeneca PLC — $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This agreement (the Increase Agreement) shall take effect as an Increase Confirmation for the purpose of the Agreement. Terms defined in the Agreement have the same meaning in this Increase Agreement unless given a different meaning in this Agreement.
2. We refer to Clause 2.2 (Increase) of the Agreement.
3. The Increase Lender agrees to assume and will assume all of the obligations corresponding to the Commitment(s) specified in the Schedule (the Relevant Commitment(s)) as if it had been an Original Lender under the Agreement in respect of the Relevant Commitment(s).
4. The proposed date on which the increase in relation to the Increase Lender and the Relevant Commitment(s) is to take effect (the Increase Date) is [·].
5. On the Increase Date, the Increase Lender becomes party to the relevant Finance Documents as a Lender.
6. The Facility Office and address, email address and attention details for notices to the Increase Lender for the purposes of Clause 31.2 (Addresses) of the Agreement are set out in the Schedule.
7. The Increase Lender expressly acknowledges the limitations on the Lenders’ obligations referred to in paragraph (f) of Clause 2.2 (Increase) of the Agreement.
8. The Increase Lender confirms, for the benefit of the Facility Agent and without liability to any Obligor, that it is:
(a) with respect to a Borrower other than a US Borrower:
(i) [a Qualifying Lender (other than a Treaty Lender);]
(ii) [a Treaty Lender;]
(iii) [not a Qualifying Lender].*
(b) with respect to a US Borrower:
(i) [a US Qualifying Lender (other than a Treaty Lender);]
(ii) [a US Treaty Lender;]
(iii) [not a US Qualifying Lender.]*
149
9. [The Increase Lender confirms that the person beneficially entitled to interest payable to that Lender in respect of an advance under a Finance Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax purposes;
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.]**
10. [The Increase Lender confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [·]) and is tax resident in [·]***, so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax:
[9/10] This Increase Agreement may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this Increase Agreement.
[10/11] This Increase Agreement and any non-contractual obligations arising out of or in connection with it are governed by English law.
[11/12] This Increase Agreement has been entered into on the date stated at the beginning of this Increase Agreement.
150
The Schedule
Relevant Commitment(s)/rights and obligations to be assumed by the Increase Lender
[insert relevant details]
[Facility Office address, email address and attention details for notices and account details for payments]
This Increase Agreement is accepted as an Increase Confirmation by the Facility Agent and the Increase Date is confirmed as [·].
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For and on behalf of
Facility Agent
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By:
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NOTES:
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*
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Delete as applicable - each Increase Lender is required to confirm which of these three categories it falls within.
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**
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Include only if the Increase Lender is a UK Non-Bank Lender ie falls within paragraph (a)(ii) of the definition of “Qualifying Lender” in Clause 14.1 (Definitions).
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***
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Insert jurisdiction of tax residence.
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****
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This confirmation must be included if the Increase Lender holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement.
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151
Schedule 10
Material Subsidiaries
AstraZeneca Pharmaceuticals LP
AstraZeneca UK Limited
MedImmune Limited
MedImmune LLC
152
Schedule 11
Rate Switch Notice
To: [·] as Facility Agent
From: [·] as the Company
Dated:
Dear Sir/ Madam,
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This is a Rate Switch Notice. Terms defined in the Agreement have the same meaning in this Rate Switch Notice unless given a different meaning in this Rate Switch Notice.
2. We refer to Clause 9.3 (Rate Switch Notice) of the Agreement. We notify you that the Rate Switch Date is [·] 2021.
3. This Rate Switch Notice is irrevocable.
4. This Rate Switch Notice and any non-contractual obligations arising out of or in connection with it are governed by English law.
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By:
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[Company]
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Authorised signatory
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153
Schedule 12
Compounded Rate Terms
DEFINITIONS
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Additional Business Day:
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A Banking Day.
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Banking Day:
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Any day other than:
(a) a Saturday or Sunday; and
(b) a day on which the Securities Industry and Financial Markets Association (or any successor organisation) recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in US Government securities.
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Break Costs:
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None specified.
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Central Bank Rate:
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means:
(a) the short-term interest rate target set by the US Federal Open Market Committee as published by the Federal Reserve Bank of New York from time to time; or
(b) if that target is not a single figure, the arithmetic mean of:
(i) the upper bound of the short-term interest rate target range set by the US Federal Open Market Committee and published by the Federal Reserve Bank of New York; and
(ii) the lower bound of that target range.
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Central Bank Rate Adjustment:
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means, in relation to the Central Bank Rate prevailing at close of business on any Banking Day, the 20 per cent trimmed arithmetic mean (calculated by the Facility Agent) of the Central Bank Rate Spreads for the five most immediately preceding Banking Days for which SOFR is available.
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Central Bank Rate Spread:
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means, in relation to any Banking Day, the difference (expressed as a percentage rate per annum) calculated by the Facility Agent between:
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154
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(a) SOFR for the Banking Day; and
(b) the Central Bank Rate prevailing at the close of business on that Banking Day.
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Credit Adjustment Spread:
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The percentage rate per annum calculated as follows:
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Interest Period
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Credit Adjustment Spread
(per cent. per annum)
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1 month
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0.115
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Daily Rate:
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means, in relation to any Banking Day:
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(a) SOFR for that Banking Day; or
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(b) if SOFR is not available for that Banking Day, the percentage rate per annum which is the aggregate of:
(i) the Central Bank Rate for that Banking Day; and
(ii) the applicable Central Bank Rate Adjustment,
(c) if paragraph (b) above applies but the Central Bank Rate for that Banking Day is not available, the percentage rate per annum which is the aggregate of:
(i) the most recent Central Bank Rate for a day which is no more than five Banking Days before that Banking Day; and
(ii) the applicable Central Bank Rate Adjustment,
rounded, in either case, to five decimal places and if, in either case, the aggregate of that rate and the Credit Adjustment Spread is less than zero, the Daily Rate shall be deemed to be such a rate that the aggregate of the Daily Rate and the Credit Adjustment Spread is zero.
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Relevant Market:
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The market for overnight cash borrowing collateralised by US Government securities.
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SOFR:
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means the secured overnight financing rate administered by the Federal Reserve Bank of New York (or any other
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155
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person which takes over the administration of that rate) published by the Federal Reserve Bank of New York (or any other person which takes over the publication of that rate).
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156
Schedule 13
Daily Non-Cumulative Compounded RFR Rate
The Daily Non-Cumulative Compounded RFR Rate for any Banking Day “i” during an Interest Period for a Compounded Rate Loan is the percentage rate per annum (without rounding) calculated as set out below:
where:
UCCDRi means the Unannualised Cumulative Compounded Daily Rate for that Banking Day “i”;
UCCDRi-1 means, in relation to that Banking Day “i”, the Unannualised Cumulative Compounded Daily Rate for the immediately preceding Banking Day (if any) during that Interest Period;
dcc means 360;
ni means the number of calendar days from, and including, that Banking Day “i” up to, but excluding, the following Banking Day; and
the Unannualised Cumulative Compounded Daily Rate for any such Banking Day “i” during the Interest Period of that Compounded Rate Loan (the Cumulated Banking Day) is the percentage rate per annum (without rounding) calculated as set out below:
where:
ACCDR means the Annualised Cumulative Compounded Daily Rate for that Cumulated Banking Day;
tni means the number of calendar days from, and including, the first day of the Cumulation Period to, but excluding, the Banking Day which immediately follows the last day of the Cumulation Period;
Cumulation Period means the first Banking Day of that Interest Period to, and including, the Cumulated Banking Day;
dcc has the meaning given to that term above; and
the Annualised Cumulative Compounded Daily Rate for that Cumulated Banking Day is the percentage rate per annum (without rounding) calculated as set out below:
157
where:
d0 means the number of Banking Days in the Cumulation Period;
Cumulation Period has the meaning given to that term above;
i means a series of whole numbers from one to d0, each representing the relevant Banking Day in chronological order in the Cumulation Period;
DailyRatei-LP means, for any Banking Day “i” during the Cumulation Period, the Daily Rate for the Banking Day which is five Banking Days prior to that Banking Day “i”;
ni means, for any Banking Day “i” during the Cumulation Period, the number of calendar days from, and including, that Banking Day “i” up to, but excluding, the following Banking Day (so that on most days ni will be 1 but on a Friday it will generally be 3 and it will also be larger than 1 on the Banking Day before a holiday);
dcc has the meaning given to that term above; and
tni has the meaning given to that term above.
158
Schedule 14
Original Lending Affiliates
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Name of Original
Lender
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Name of
Original
Lending
Affiliate(s)
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Treaty Passport
scheme reference
number and
jurisdiction of tax
residence (if
applicable) of
Original Lending
Affiliate
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Lending
Affiliate
Loan(s)
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None
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159
Schedule 15
Form of New Lending Affiliate Appointment Notice
To: [ ] as Facility Agent
From: [The Appointing Lender] (the Appointing Lender) and [The New Lending Affiliate] (the New Lending Affiliate)
Dated:
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This is a New Lending Affiliate Appointment Notice. Terms defined in the Agreement have the same meaning in this New Lending Affiliate Appointment Notice unless given a different meaning in this New Lending Affiliate Appointment Notice.
2. We refer to Clause 38.3 (Appointment of New Lending Affiliates) of the Agreement:
(a) The Appointing Lender appoints the New Lending Affiliate as a party to the Agreement as a New Lending Affiliate of the Appointing Lender and the New Lending Affiliate agrees to that appointment.
(b) The proposed Appointment Date is [ ].
(c) The Facility Office of the New Lending Affiliate is set out in the Schedule.
3. The New Lending Affiliate confirms, for the benefit of the Facility Agent and without liability to any Obligor, that it is:
(a) with respect to a Borrower other than a US Borrower:
(i) [a Qualifying Lender (other than a Treaty Lender);]
(ii) [a Treaty Lender;]
(iii) [not a Qualifying Lender].(8)
(b) with respect to a US Borrower:
(i) [a US Qualifying Lender (other than a Treaty Lender);]
(ii) [a US Treaty Lender;]
(iii) [not a US Qualifying Lender].(9)
(8) Delete as applicable - each New Lending Affiliate is required to confirm which of these three categories it falls within.
(9) Delete as applicable - each New Lending Affiliate is required to confirm which of these three categories it falls within.
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4. [The New Lending Affiliate confirms that the person beneficially entitled to interest payable to that New Lending Affiliate in respect of an advance under a Finance Document is either:
(a) a company resident in the United Kingdom for United Kingdom tax purposes;
(b) a partnership each member of which is:
(i) a company so resident in the United Kingdom; or
(ii) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account in computing its chargeable profits (within the meaning of section 19 of the CTA) the whole of any share of interest payable in respect of that advance that falls to it by reason of Part 17 of the CTA; or
(c) a company not so resident in the United Kingdom which carries on a trade in the United Kingdom through a permanent establishment and which brings into account interest payable in respect of that advance in computing the chargeable profits (within the meaning of section 19 of the CTA) of that company.](10)
5. [The New Lending Affiliate confirms that it holds a passport under the HMRC DT Treaty Passport scheme (reference number [ ]) and is tax resident in [ ]*, so that interest payable to it by borrowers is generally subject to full exemption from UK withholding tax and requests that the Company notify:
(a) each Borrower which is a Party as a Borrower as at the Appointment Date; and
(b) each Additional Borrower which becomes an Additional Borrower after the Appointment Date,
that it wishes that scheme to apply to the Agreement.]**
[6/7]. This New Lending Affiliate Appointment Notice may be executed in any number of counterparts and this has the same effect as if the signatures on the counterparts were on a single copy of this New Lending Affiliate Appointment Notice.
[8/9]. This New Lending Affiliate Appointment Notice and any non-contractual obligations arising out of or in connection with it are governed by English law.
(10) Include if the New Lending Affiliate comes within paragraph (a)(ii) of the definition of Qualifying Lender in Clause 14.1 (Definitions).
* Insert jurisdiction of tax residence.
** Include if the New Lending Affiliate holds a passport under the HMRC DT Treaty Passport scheme and wishes that scheme to apply to the Agreement.
161
[9/10]. This New Lending Affiliate Appointment Notice has been entered into on the date stated at the beginning of this New Lending Affiliate Appointment Notice.
162
THE SCHEDULE
[New Lending Affiliate’s Facility Office [and account details for payments](11)]
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[Appointing Lender]
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[New Lending Affiliate]
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By:
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By:
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This New Lending Affiliate Appointment Notice is accepted by the Facility Agent and the Appointment Date is confirmed as [ ].
(11) Include if the Facility Agent is to make payments direct to Lending Affiliates. Facility Agent to confirm.
163
Schedule 16
Form of Lending Affiliate Loan Notice
To: [ ] as Facility Agent and [ ] as Company
From: [The Appointing Lender] (the Appointing Lender) and [the Lending Affiliate] (the Lending Affiliate)
Dated:
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This is a Lending Affiliate Loan Notice. Terms defined in the Agreement have the same meaning in this Lending Affiliate Loan Notice unless given a different meaning in this Lending Affiliate Loan Notice.
2. We refer to Clause 38.5 (Nomination of Lending Affiliate Loans) of the Agreement. The Appointing Lender nominates the Lending Affiliate to participate in:
[specify, by reference to one or more of the criteria listed in paragraph (d) of Clause 38.5 (Nomination of Lending Affiliate Loans) of the Agreement, each individual Loan, or class of Loan, in which the Lending Affiliate is to participate in place of the Appointing Lender]
(the Lending Affiliate Loan[s]).
3. The Lending Affiliate confirms that it is a Party as a Lending Affiliate, acknowledges the nomination described in paragraph 2 above and confirms that it shall participate in the Lending Affiliate Loan[s].
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[Appointing Lender]
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By:
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[Lending Affiliate]
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By:
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164
Schedule 17
Form of Lending Affiliate Resignation Notice
To: [ ] as Facility Agent
From: [Resigning Lending Affiliate] (the Resigning Lending Affiliate) and [Appointing Lender] (the Appointing Lender)
Dated:
AstraZeneca PLC - $17,500,000,000 Facility Agreement dated [·] 2020
(the Agreement)
1. We refer to the Agreement. This is a Lending Affiliate Resignation Notice. Terms defined in the Agreement have the same meaning in this Lending Affiliate Resignation Notice unless given a different meaning in this Lending Affiliate Resignation Notice.
2. We refer to Clause 38.13 (Resignation of Lending Affiliate) of the Agreement and request that the Resigning Lending Affiliate cease to be a Lending Affiliate under the Agreement.
3. We confirm that:
(a) no Lending Affiliate Loan in respect of which the Resigning Lending Affiliate has rights or obligations under the Agreement is outstanding; and
(b) any nomination of the Lending Affiliate to participate in any Loan, or class of Loan, shall be cancelled on the Facility Agent’s acceptance of this Lending Affiliate Resignation Notice.
4. This Lending Affiliate Resignation Notice and any non-contractual obligations arising out of or in connection with it are governed by English law.
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[Resigning Lending Affiliate]
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By:
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[Appointing Lender]
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By:
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165
Signatures
THE COMPANY
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ASTRAZENECA PLC
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By:
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Address:
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1 Francis Crick Avenue
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Cambridge Biomedical Campus
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Cambridge
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CB2 0AA
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Attention:
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Group Treasurer
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Email:
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aztbo@astrazeneca.com
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THE BORROWERS
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ASTRAZENECA PLC
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By:
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Address:
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1 Francis Crick Avenue
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Cambridge Biomedical Campus
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Cambridge
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CB2 0AA
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Attention:
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Group Treasurer
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Email:
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aztbo@astrazeneca.com
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DELTA OMEGA SUB HOLDINGS INC.
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By:
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Address:
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1209 Orange Street
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Wilmington, County of New Castle
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Delaware 19801
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USA
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Attention:
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Treasurer
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Email:
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aztbo@astrazeneca.com
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THE GUARANTOR
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ASTRAZENECA PLC
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By:
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Address:
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1 Francis Crick Avenue
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Cambridge Biomedical Campus
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Cambridge
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CB2 0AA
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Attention:
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Group Treasurer
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Email:
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aztbo@astrazeneca.com
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THE ARRANGERS
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MORGAN STANLEY BANK
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INTERNATIONAL LIMITED
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By:
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Address:
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J.P. MORGAN SECURITIES PLC
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By:
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Address:
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GOLDMAN SACHS BANK USA
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By:
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Address:
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THE BOOKRUNNERS
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MORGAN STANLEY BANK
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INTERNATIONAL LIMITED
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By:
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Address:
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J.P. MORGAN SECURITIES PLC
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By:
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Address:
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GOLDMAN SACHS BANK USA
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By:
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Address:
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THE FACILITY AGENT
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J.P. MORGAN AG
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By:
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Address:
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Email address:
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Attention:
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THE ORIGINAL LENDERS
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MORGAN STANLEY BANK
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SENIOR FUNDING, INC.
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By:
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Address:
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MORGAN STANLEY BANK NA
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By:
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Address:
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JPMORGAN CHASE BANK, N.A.,
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LONDON BRANCH
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By:
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Address:
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GOLDMAN SACHS BANK USA
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By:
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Address:
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